Why buy a pre-construction home in Toronto?

So you are thinking of buying a new home in Toronto? One question many people in the market for a new home ask themselves, regardless of if they are looking for a condo, townhouse, multi-residential, semi-detached or detached home, is do I buy pre-construction, newly built or previously lived in?

Like any set of choices, each of the above scenarios has its own pros and cons. A lot will depend on your current housing situation. Do you need a home that is move-in ready asap? Or are you able to make-do with your current living situation for a while longer? If you have some flexibility with your move-in date, a pre-construction home carries a number of distinct advantages. In today’s post, we will explore the benefits of buying a pre-construction new home.

Better pricing and the possibility that your new home will appreciate in value

Pre-construction homes are typically priced lower than comparable homes that are already built. This is because the buyer is assuming some of the project risk with the developer. If home prices were guaranteed to go up, developers would have no incentive to offer pre-construction deals.

With that said, Toronto’s housing market has been in a pretty consistent upward trend for the past 30+ years. Although there are never any guarantees that your property will appreciate, in Toronto’s market, the odds are certainly good.

TREB Toronto Housing Market Graph

source: https://trreb.ca/files/market-stats/housing-charts/TREB_Housing_Market_Charts-March_2021.pdf

The peace of mind of a new home warranty

When comparing the pros and cons of buying a new build home to a previously lived in home, one should always consider what potential issues and repair costs are waiting down the line.

Just like most material things, the longer something is around, the more it begins to deteriorate and require maintenance and repairs. Buying pre-construction or new, you are moving into a home that is in its prime, pristine, virgin condition, and likely won’t require major repairs anytime soon.

When you buy a previously lived in home, depending on the contract, you will likely have little to no recourse if issues are discovered once you move in. If however, you purchase a pre-construction or new build home, you have the assurance of a 7-year Tarion new home warranty.

All of Tarion’s new home warranties include several periods of coverage including 1-year, 2-year and 7-year protection.

We suggest you take a look at Tarion’s website for more details on what is covered in each of the periods of coverage.

Make it your own

It is pretty rare to find a new build home, let alone a previously lived in home, with your exact taste in finishings. Another major benefit to buying pre-construction is that many developers will allow you to select certain finishes and in some cases, even modify the designs slightly.

When investing hundreds of thousands, or even millions, of dollars in a home you plan to live in for many years to come, you want to love every aspect of it. Buying a pre-construction home will give you the most say in how your home ultimately looks, short of hiring a contractor to gut and refinish an already built home.

An extended deposit structure

When purchasing a pre-construction home, the standard 15-20% deposit developers require is spread out in a payment schedule.

Typically a 5% deposit is all you need to secure the home. The payment schedules vary, but typically range from  6-9 months for detached and semi-detached homes, and upwards of several years for some multi-residential and condo projects.

By not having to put all 15-20% down at once, and instead pay the deposit over a longer period, it allows you time to save. Additionally, during the time it takes to build your new home, there is no mortgage obligation until it closes, again freeing up some financial obligations during that period.

An added benefit for those who use savings for their deposit, is that you own a property without affecting your debt ratio or your ability to access debt from a lender while your pre-construction home is being built.

So why buy a pre-construction home? 

Buying a new home in Toronto is no easy task. There are many options and obstacles to consider. If you have some flexibility as far as when you move into your new home, buying a pre-construction new build home may make the most sense.

To re-cap the benefits of buying a pre-construction home;

  • you will likely get a better price and have your investment appreciate in value even before you move in.
  • You will have the added peace of mind knowing your future home has a 7-year warranty.
  • You have the opportunity to select finishes that you truly love.
  • Finally, buying a pre-construction home requires a smaller down deposit, giving you time to save and prepare for mortgage obligations and/or other financial goals.


Are you interested in a pre-construction new build home in Toronto? While there are many pre-construction high-rise condos available, there are far fewer pre-construction low-rise multi-residential, semi-detached and detached new build homes in Toronto. URBINCO has a number of low-rise pre-construction opportunities available. Contact us today for more details.

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