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Your Trusted Guide to Buying Pre-Construction Condos in Real Estate Canada

Pre-construction condos are an attractive investment option for those seeking long-term financial growth in Canada. From capital appreciation and tax advantages to rental income potential, these properties offer a range of benefits. However, investors must conduct due diligence, work with reputable developers, and consult professionals to make informed investment decisions. By carefully navigating the real estate market, investors can reap rewards by investing in pre-construction condos in Canada.

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Save Max explores the world of pre-construction condos, guides you on the best options in Real Estate Canada and how to buy them.

Why are Pre-construction Condos Popular?

Preconstruction condos are popular investment choices due to advantages like potential price appreciation, a wide range of unit options, customization opportunities, lower maintenance costs, and portfolio diversification.

Despite risks such as construction delays and market fluctuations, thorough research of the developer and project can help mitigate these concerns. Overall, the benefits outweigh the risks, making pre-construction condos an attractive option for the first-time home buyer and the seasoned investor alike.

Resale vs. Pre-Construction

Resale condos offer immediate availability, established market prices, and the chance to physically inspect the property before purchase. On the other hand, pre-construction condos provide the advantage of customization, potential appreciation, modern features, and lower maintenance costs.

While both have their merits, pre-construction condos hold a slight edge due to the opportunity for personalization and potential long-term investment gains. The ability to choose finishes and upgrades per your preferences can create a truly personalized living space. Additionally, purchasing at current prices allows for potential appreciation as the property is completed and the market grows. The modern amenities and lower maintenance costs associated with newer construction also contribute to the appeal of pre-construction condos.

How Do You Buy a Pre-Construction Condo?

Though there are similarities, buying pre-construction condos in Brampton or Mississauga can throw up challenges in the process. We walk you through the critical steps in purchasing a pre-construction condo, providing insights into the purchase.

1.      Discover Your Dream Spot

Start by identifying your preferred location, amenities, and budget. Research upcoming pre-construction projects in your desired area to find the perfect development that best suits your needs and preferences.

2.      Partner with an Expert

Engage a real estate agent experienced in pre-construction condo purchases. They can provide valuable insights, guide you through the process, and help you navigate important considerations.

3.      Choose Your Perfect Pick

Review the floor plans, pricing, and features of the available units within the pre-construction project. Consider factors such as size, layout, view, and upgrades offered. Consult with your agent to make an informed decision.

4.      Sign and Seal the Deal

Once you’ve chosen your unit, it’s time to sign the purchase agreement with the developer. Carefully review all terms and conditions, including deposit requirements, payment schedule, closing dates, and cancellation provisions.

Buying a Pre-Construction Condo in Canada

5.      Get Financial Backing

Secure your mortgage pre-approval from a financial institution to determine your budget, cash flow and financing options. Be aware that pre-construction condos often require higher deposits compared to resale properties.

6.      Make Timely Payments

Follow the payment schedule outlined in the purchase agreement, making the required deposits at specified milestones during construction. Ensure you understand the timelines and have the necessary funds available.

7.      Stay in the Loop for Updates

Stay connected with the developer and your agent throughout the construction period to receive regular updates on the project’s progress, any changes, and critical milestones such as occupancy dates.

8.      Yay! Claim Your Condo

The developer will notify you of the closing date upon completion and final inspections. You’ll arrange for the final mortgage approval and complete the necessary paperwork with your lawyer or notary at this stage. Once closed, you can finally take possession of your pre-construction condo.

Paying for a Pre-construction Condo

When financing a pre-construction condo purchase, the minimum down payment required is typically 20% of the unit’s price, spread out over multiple payments.

Generally, the payment plan for pre-construction condos is a series of four equal payments, with a $5,000 deposit at signing. Let’s take an example to illustrate how the payment plan works.

Suppose the unit price for a pre-construction condo is $700,000. Here is a breakdown of the payment schedule:

  • $5,000 deposit when you sign the contract (refundable within the cooling-off period of 10 days).
  • 5% of the unit price ($35,000) minus the $5,000 deposit, payable within 30 days.
  • Another 5% ($35,000) is due within 3-6 months.
  • A further 5% ($35,000) is payable within 9-18 months.
  • The remaining 5% ($35,000) is due during the occupancy period.

It’s important to note that this payment structure may vary depending on the developer’s requirements and any promotional offers they may have. For example, the down payment amount or payment frequency may change for a limited-time promotion.

Securing a mortgage pre-approval is often necessary to ensure a unit assignment, assuring the developer. Lenders will evaluate your credit history and debt service ratios to determine your eligibility and mortgage rates. Maintaining a good credit score and minimizing other debts before applying for a mortgage is crucial.

During the occupancy period, interim occupancy fees are paid as rent until ownership is transferred. Closing costs, which are variable but typically around 10% of the purchase price, should also be considered.

You can explore capping or setting a maximum limit on closing costs to mitigate the risk of unexpected expenses or cost escalations during construction. When considering a hard or soft cap, opt for a hard cap to establish a definite maximum amount for development charges. A soft cap may only limit the increase in charges, potentially leaving you responsible for the original charge amount plus the total soft cap if the municipality raises development charges by that much.

Because payment structures and costs may vary based on the developer’s requirements and promotions, it is a good idea to consult with your lawyer and mortgage lender to understand the specific payment plan and closing costs associated with your pre-construction condo purchase.

Choose a Reliable Builder

Choosing the right builder for your pre-construction condo is crucial because you are trusting in a project yet to be built. You need confidence that the builder will fulfil their commitments, deliver on their promises, and construct the condo to the expected standards. Trustworthy builders inspire confidence and provide reassurance that your investment will be handled professionally and responsibly.

Conduct thorough research on their background and reputation to ensure you choose a reputable builder. Look into their past projects and gather feedback from previous buyers. Visit completed projects to assess the quality of their work firsthand. Verify that they possess the necessary licenses and certifications and check their financial stability. Seek recommendations from trusted sources and evaluate their professionalism and communication skills.

Small or inexperienced builders may need more resources to complete the project. Similarly, lawsuits or cancellations of previous projects are a big no-no. We recommend that you consult a local Realtor with experience in pre-construction projects before investing in new condos for sale in Vancouver or other metros.


Government initiatives and measures support buyers of a pre-construction condo in Canada offers. The Tarion Warranty Corporation provides warranty protection, and the provincial Condo Acts outline rights and obligations. Consumer protection legislation safeguards purchasers, while deposit protection programs and construction performance guidelines ensure security and quality. Builder licensing and regulation add an extra layer of protection. Mandatory disclosures by developers provide essential information, and incentives may be available.

Despite the recent rising costs, pre-construction condos for sale in Toronto remain a lucrative investment option due to potential price appreciation, choice of units, customization options, lower maintenance costs, and portfolio diversification opportunities. Thorough research, selecting a reliable builder, and understanding terms and conditions help mitigate risks.

Save Max is committed to providing the best services and guidance in navigating Real Estate Canada. Whether you’re interested in pre-construction condos or other real estate opportunities, we are here to help.

Check out our blog on pre-construction condos to gain valuable insights and stay informed about the latest developments in the industry. With our expertise and up-to-date information via our series of blogs, you can make informed investment decisions and maximize your returns. Trust Save Max to be your trusted guide in Canada’s dynamic real estate world.

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