A presale condo is purchased before the building is constructed. Buyers have to rely on floor plans, renderings, and materials from a presentation centre to understand the project's vision, which is subject to a certain level of change during construction. But what it does allow is the opportunity to secure a property in advance, often at a locked-in price, which can be beneficial if it ends up being in a rising market.

In addition to this, presales often come with options for customization, such as selecting finishes and layouts, which can mean more personalization for future homes. But, what buyers should also be aware of is the long construction timelines with deposit payments made at certain intervals, plus the possibility of delays. It can be a higher risk venture for these reasons and others.

A resale condo is a previously owned unit in an existing building. This purchase process is generally faster than a presale while also allowing buyers to physically inspect the property and evaluate its condition firsthand before making a final decision.

While older units may not have the latest features or designs, they often boast larger square footage and can offer unique character and charm. However, if they are pretty out of date or out of fashion, you may have to factor in potential maintenance or upgrades.

Presale Condos

• Lower Initial Payments: Smaller down payments are often spread over several installments during construction, making presale contracts more accessible for buyers who don’t have as large an amount of upfront capital.
• Price Adjustments: Final prices can vary due to construction costs and market fluctuations. Additional costs may include upgrades, parking, and storage. It’s important to keep this in mind as the process continues.
• Taxes: GST/HST applies to new construction but may be partially recoverable through the New Housing Rebate if you meet the eligibility criteria.

Resale Condos

• Fixed Purchase Price: Buyers benefit from an exact and upfront purchase price that can be negotiated directly with the condo sellers.
• Lower Closing Costs: Generally less than the GST/HST on presales, though older units may need immediate maintenance or renovations, adding to initial expenses. So, they won’t always have lower costs, but often do.

Presale Condos

Delayed Occupancy: Buyers may have to wait several years for construction to finish before they can use the property, which can be a big disadvantage for those needing immediate housing, and it's a loss of potential revenue from rent during this time for owners planning to rent out their condo. This delay, however, provides an extended period for financial planning and saving, which can help with financial planning.

Additionally, during this time, buyers can lock in prices, potentially benefiting from market appreciation by the time construction is completed. For some, this waiting period can also offer an opportunity to customize unit features and work better for their investment goals.

Resale Condos

Quick Occupancy: Ideal for buyers with urgent housing needs, as the closing process is typically faster and the move-in ready date much sooner. Resale condos also offer the advantage of being able to see the completed unit, its surrounding environment, and any potential issues upfront. Basically, there are not as many surprises.

This immediacy allows buyers to settle into their new homes without extended delays, making it particularly advantageous for those who are looking to make a time-sensitive move.

Presale Condos

• Market Risks: Especially in a volatile market like Vancouver’s, the value of a condo during its construction period can vary significantly, potentially leading to financial shock when you do gain access to the finished unit. Buyers have to be mindful of broader economic trends and local real estate conditions to properly prepare for a presale purchase.
• Construction Delays: These are common and may extend occupancy timelines. Delays can last anywhere from six months to multiple years depending on the severity of the problem. What this can mean for some buyers is additional carrying costs as they have to pay interest rates on their finances.
• Developer Reliability: The risk of developer bankruptcy, though less likely with reputable companies, still exists. That’s why it’s always key to review a developer’s track record and financial stability, to minimize the chances of being hit by a seller default. Thankfully, BC law does insure against the brunt of this loss.

Resale Condos

• Building Condition: Unlike with presale condos, you can directly inspect the building and unit condition with a resale condo. The downside with an older condo is that it may need major repairs or upgrades, which can add up the costs. Older buildings, while often more affordable upfront, often don’t have as much potential with their location or neighborhood either, as they may not be growing and changing as much as the area a presale condo is being developed in.
• Lower Construction Risks: With a resale, you do get to avoid the uncertainties tied to unfinished projects, meaning more immediate and tangible value. Resale units also benefit from having a securely established community and known amenities, helping to evaluate real value better.

Scenario 1 - First-Time Buyer with Limited Savings: A young professional with a stable income but limited savings might be better suited to looking at presale condos due to their lower initial payments spread over time, getting them on the ‘ground floor’ so to speak of an earlier market entry.

Scenario 2 - Buyer Needing Immediate Housing: A relocating family needing immediate housing is much better off with a resale condo, as it has a quick closing process and immediate occupancy. A presale not only normally takes a year or more before completion, but may have delays.

Scenario 3 - Investor Seeking Long-Term Appreciation: An investor with a long-term horizon might prefer a presale condo in a developing area. It’s speculative and riskier than a resale condo, but the value of such a condo can raise substantially given a 5 to 10 year horizon.

Scenario 4 - Buyer Prioritizing Certainty and Control: A buyer valuing certainty and wanting to avoid construction-related risks may prefer a resale condo, as they can inspect the property directly and negotiate a fixed price. Essentially, you know what you’re getting with a resale with fewer surprises.

Many buyers in the Vancouver real estate market are interested in the properties due to their potential as an investment. Not only can you rent out the properties, but for the last two decades, real estate in Vancouver

Presale Condos

Presale developments often feature modern amenities designed to attract buyers. Typically, this is features like state-of-the-art fitness centers, coworking spaces, rooftop lounges, and smart home technology. Sometimes, these features are gimmicks and won’t appreciate the value, but other times residents appreciate the value-add the amenities provide compared with similar sized condos.

Resale Condos

Resale condos may not offer the latest amenities, especially in older buildings. However, some well-maintained properties boast unique features and ‘charm’ that some buyers really appreciate, such as larger unit sizes, mature landscaping, and established community spaces. When considering a resale condo, you should ask yourself about the trade-offs between modern conveniences and the character of an older property and which is most important to you.

Presale Condos

Presale purchases typically involve phased deposit payments over the construction period, usually about 5 to 10% of the price in 2 to 3 different deposits adding up to 20%-25% of the total. This structure helps reduce the initial financial burden and lets buyers prepare in stages. Basically, you can manage your finances more flexibly while preparing for the mortgage at completion. However, what’s difficult is that interest rates and market conditions can change dramatically during the waiting period, which could affect their final financing terms when it comes to getting the mortgage itself.

Resale Condos

Resale purchases require a more immediate financial commitment, as the full down payment (5-20% of the purchase price depending) and your mortgage approval is needed at closing. While this can be challenging for some buyers, it offers greater stability and predictability. For many people, this is a lot more reasonable than the more speculative and risky purchase of a presale unit. Additionally, resale buyers may have the opportunity to negotiate price reductions or request seller concessions to offset costs, a process that usually isn’t possible with a presale.

Always with real estate purchases, due diligence is essential. Every bit of research put in will pay dividends in the long run, as there can be huge differences between the right and wrong purchase when it comes to condo sales.

Not only that, but you’ll be better prepared for the challenges ahead - such as prepping in advance for possible construction delays or repairs needed. Here’s a list of due diligence steps you may want to take with each presale and resale:

For Presales:

1. Review Key Documents: Examine the disclosure statement for details on completion dates, unit specifications, and risks. Seek legal advice if needed.
2. Research Developer Reputation: Look into past projects and reviews for timely delivery and quality.
3. Understand Contracts: Consult a lawyer to clarify terms like price adjustments or delays, and mitigating surprises.
4. Check Warranties: Know the warranty coverage for structural and workmanship issues in case they crop up.

For Resales:

1. Inspect the Unit: Hire a certified inspector to uncover hidden issues.
2. Review Strata Records: Understand the building’s management and upcoming repairs through strata minutes.
3. Verify Title: Ensure the property is free from liens or disputes with a title search.
4. Evaluate Reserves: A strong reserve fund indicates readiness for future repairs.

Choosing between a presale and resale condo in Vancouver involves a lot of different factors that are impossible to sum up here, including your individual circumstances, priorities, and risk tolerance. Still, we hope to have provided a good starting point and outline for deciding between the two and seeing the differences between what they are offering.

Presales offer lower initial costs and potential appreciation in growing areas but come with construction delays and market risks. Resales provide immediate occupancy and greater certainty but require a larger upfront investment and an assessment of the property’s condition.

Through some good due diligence, we believe any buyer can make an informed decision that aligns with their financial goals and housing needs even in Vancouver's competitive real estate market.