Developers Getting Aggressive With Buyer Incentives
Resale prices have dropped, sales figures are a fraction of what they were a year ago, and buyers are out there but reluctant to pull the trigger. What’s a Toronto condo developer to do?
In a slow market, developers are loathe to actually lower their prices as it devalues the entire project, pisses off previous purchasers and investors, and is generally considered to be a major sign of weakness. So how does one sell condos en masse in this market? More and more developers are getting creative with buyer incentive programs.
The Ritz-Carlton just started a promotion where, for the next 10 units sold, buyers will receive $250,000 in travel vouchers, redeemable in $25,000 increments every year for the next 10 years at for visits to any Ritz-Carlton hotel in the world. Wow. Even I am impressed by that. There are 29 units still available, ranging from $1.3-million to $9-million for 1,400 to 6,000 square feet. One of two lower penthouses is still available.
Bloor Street Neighbourhood and Casa – both projects by Cresford near Yonge and Bloor under construction and occupying in about 12 months – are offering purchasers of 2 bedroom units to ‘live free for a year’. How this works out is a credit upon closing that is equivalent to 1 years worth of mortgage payments on your condo. Doing the math on the purchase of a $660,000 unit, this promotion amounts to roughly $31,000 or 4.7% of the purchase price. Not too shabby and certainly much better than anything that was available to purchasers in the fall of ’08.
Expect to see more and more of these incentives popping up at new developments as developers and marketers attempt to lure would-be buyers off the fence and into a new condo.
Photo from Urban Toronto member Solaris