How's it Going With the House Hunting, Zoomer Canadians?
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I work in residential development as a lender so pre-sales is a large part of my job since they're a requirement to do the developments I lend to.
I would say 85% of presales are in fact regular Joes. Only 15% of presales are "investors". Most new developments, besides high-rises aren't on a 5 year timeframe. They're more like ~12 months on average. Most people can afford to wait 12 months before they get into their new house. Still, even on the high-rises, that's still a 24-months timeline NOT 5 years. Even 24-months most people can afford to wait. Some people even prefer waiting. Maybe you put 5% down and then 24-months later you have enough saved for 20% down to complete your purchase. If you've been renting for 10 years, what's another 12-24 months?
I'll default to your actual insider expertise then and admit my observation was likely incorrect for the greater populace.
But I have had numerous suburbs in my area that have had plural year "Sold" signs up on lots that don't even have foundational work done. And thanks to Mexican Work Standards, work on anything (housing or other) takes far longer than it should. Perhaps there is something else at play there, or just them outright lying about it being sold to drive demand. Just where my observation came from.
I will say though, by the time I went in to buy a house I couldn't wait 12 months. Heck I couldn't do 6. Rent prices were rising year by year and if I didn't get into the house now, then I wouldn't be able to save anything as the cost of living outpaced my raises. Perhaps pre-sales are different in that regard.
Yeah, I would say there's something else going on. I probably write 1 new $5m deal a month on average with the occasional $15-30m deal here or there. Most projects I lend to are ~10 units but I've done up to 100. The 100 unit one I did, ALL, and I do mean ALL of them were presold to regular people. The developer actually refused to sell to investors/companies and wanted people who wanted to live there as their main home buy because it was also where the developer was going to live and house his mother too. That's a one-off unique situation but still, I see new developments all the time and most people buying are not investors or companies. Companies typically buy the whole building and usually do the development themselves. Investors do buy from time-to-time, sometimes in hot markets and don't even intend to buy the house, they're just looking to flip the presale...
Anyway, I think your specific situation has some unique reasons for why it happened to be that way but it's not normally only investors buying. Still, a lot of people buying houses are buying a second home or a rental too as you can see from the numbers above so it happens but it's not usually any sort of sophisticated super-rich scheme. A lot of people buying rental properties are just people like your mom or dad deciding to buy a second property for their retirement. They aren't super rich by any stretch.
I think your situation regarding "can't wait" is unique also. Lots of people are in 12-month leases and can often negotiate month-to-month... so if they pre-buy a property, they don't need to worry about rent going up because they're in a lease. By the time the lease is up their house is ready or maybe they go month-to-month a few months or have to break a little early.
I think you're looking at this a little too "investor-like" yourself. Lots of people buying these new developments want the house in that area and want something new. They'd rather pay a little more in rent for a year to wait for their dream-home rather than buy something they don't really want because they care to save some money in rent.
Also, a lot of the people buying these presales are upgrading homes. They bought something cheap before and are looking to buy their forever home. They can wait for their forever home as long as it's exactly what they want.
Man I've been through a lot of rentals in my life and not once was there a "negotiation", ha. There was a lot of "if you don't I got 5 others waiting" though. And at the end of that lease there was usually a "cost of living increase, keeping up with the average" increase to rent. Which then followed with the prior "if you don't, fuck if I care I got 10 others desperate." And a hearty laugh in your face if you ask for "month by month."
Many of which came from those "mom or dads buying for retirement" who then give it over to a property management company while they live states away. Which I'd almost take a Chinese Firm over, because at least they don't pretend to care and I know the answer to "can we fix this" will be no instead of "we will talk to them." Even the local old man who I rented from once was stuck in a cycle of "city raised taxes and utility costs again, I can't afford this place myself if I don't raise the rent."
And I'm from the poorest area of the country and live in the poor part of a good area of the country now. Nobody I have ever met has ever even come close to a "dream/forever home" or even entertained the idea. They've managed a "can fit all my kids" and a "doubt I'll ever find better" which is impressive and worth being proud of in their own way, but far and away nothing like you describe. "Paying more in rent" would mean just not eating.
So I think our disconnect comes from being on the complete opposite ends of the spectrum of class.