Homebuilders Deals & Incentives on New Construction
Mike and Crystal Green couldn’t have picked a worse time to look for a new home. In mid-February, Mike was offered a promotion to be a regional sales manager at a computer security company. The catch was the couple would need to relocate
The Greens accepted an offer on their home two days after it went on the market in early March. But by then, the Greens didn’t feel safe flying to check out houses given the coronavirus pandemic. The government was urging workers to stay home if possible and practice social distancing when out in public to combat the spread of the coronavirus.
That wound up working in their favour. The Greens went online and took a virtual tour of a home they liked. It was in a new development. They were able to choose custom details via Zoom and email—and got a discount on their new home
If they closed in March, and the builder would throw in a free Whirlpool refrigerator, washer, and dryer as well.
The Greens have plenty of company on the receiving end of a wave of aggressive incentives for buyers of new construction. With a global health crisis raging and the ensuing financial fallout with many workers laid off, homebuilders around North America are offering discounts, throwing in freebies, and covering closing costs to attract buyers and close deals.
They had to do something. Tours of new-homes have dropped and more potential buyers deciding to put off their new home searches until things truly settle.
CMHC
2020 summer edition of the Housing Market Outlook report provides forecasts for Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal. It builds on the Spring 2020 edition that focused on housing market activity for Canada and the provinces.
These reports give high and low range projections on new construction, home sales, house prices and rental market activity.
Housing forecast overview for Canada’s major urban centres
- Sales and construction have dropped
- House prices will likely fall because of uncertainty over the economy’s path
- It is possible that vacancy rates increase in the rental market
- Recovery in major markets is highly uncertain and will vary considerably
For Canada’s 3 largest cities, there had been steep employment declines according to Statistics Canada:
- 18% in Montreal
- 17% in Vancouver
- 15% in Toronto
Such large employment and income declines, coupled with uncertainty over the future trajectory of the virus, will lower the demand for housing in the urban centres. Housing starts should rebound by year-end, as projects, settled before the pandemic, should be starting soon. Rental apartment starts will benefit from the slowdown in the demand for homeownership.
By 2022, housing prices should be following a slight upward trend and even exceed their pre-pandemic levels.
Buyers may also get deals on custom homes
While deals on newly constructed homes abound, buyers can also shop around for discounted lots where they can have their dream homes built.