Ian Watt blogs about the reasons why People Buy Vancouver PreSales when it doesn’t make financial sense when resale condos are so much cheaper. Reason 1 they just need to get their money in the country. Reason 2 because they don’t really have the money now and they believe their financial situation will be better in 3 years.
Ian Watt: Hi good afternoon it’s Ian Watt in Downtown Vancouver. I want to talk to you about the presale market in Downtown Vancouver which is typically five hundred I shouldn’t even say typically which is now five hundred dollars of square foot more than what you can get on the retail and the reason why it’s so much more and the reason why these building is are selling out is because they’re two typical buyers. Of course there’s whole bunch of buyers but there’s two that we really see. One is a group of people that are not residents of Canada that are trying to move money into Canada because they’re afraid because that their government is going to take away their money back home. So they put it into a safe haven like Canada which is kind a like swiss bank account of real estate. And they move their money in they can put in 20% and for some reason they qualify for mortgage later on or maybe they don’t even need a mortgage. The second group of people that buying pre sales in Downtown Vancouver typically are kids from the bank of mom and dad. Mom and dad are giving them a hundred thousand, two hundred thousand dollars to put down in a presale. If they were smart they would probably buy a resale property because the resale property is so much cheaper but they’re hoping that their lifestyle and their lives and their income will be that much better in three years when the building is complete and they’re also hoping that real estate would be better so they can make some money but chances are of anyone buying a presale this days the chances they are going up from fifteen hundred or two thousand dollars a square foot to two thousand to twenty five hundred dollars a square foot is very slim because we're at numbers we’ve never seen before. Numbers that are un court off in most places around the world but this people are buying a pre sales in hopes that tomorrow would be better than today. It’s kind a scary to see what’s going on. My name is Ian Watt and if you have any questions you can always email me at ianwatt@ianwatt.ca. Thank you very much and have a great day!