The Timeline For Toronto Luxury Pre-Construction Condos

If you’re looking for a luxury condo in Toronto, you have a lot of options. But pre-construction is the only way to go if you want to customize your investment from the ground up.

There are many benefits to going the pre-con route, but there’s also a major drawback: you can’t take ownership right away. But what kind of wait times can you expect? And what are waiting for, anyway?

From breaking ground to occupancy, here are the pre-construction phases your condo will go through before you can take ownership.

 

Pre-Construction Phases

There are several pre-construction phases. Before developers can start building, they have to obtain necessary building permits and approvals. They can’t secure the financing they need to begin construction without approval from the city and pre-sold units.

It’s not unheard of for buyers to wait a year or more, only to learn that their condo building won’t be constructed due to failure to secure necessary permits. But this is rare with seasoned development firms.

What happens after construction begins?

Foundation

The site is excavated, and concrete is poured. It can take a while—usually around one-third of total construction time. If the building you’ve chosen is going to have a parking garage, the process can take even longer.

At some point during this stage, unit owners are usually consulted about the finishes they want in their condos.

Framing & Utilities

At this stage, the floors, walls, and general structure are constructed. This stage usually takes an additional third of overall construction time. Electricity, water, and other utilities are also installed.

Exterior

During this phase, builders complete windows, doors, and other exterior features. Landscaping begins.

Finishes

This is where all of those finishes you chose near the beginning of the process will come in. Flooring, fixtures, cabinetry—it all get installed during this phase.

 

Construction delays

If you’re going the pre-construction route, you should know that most buildings are delayed by at least 12-18 months. This trend is likely to continue, in part because the average unit is shrinking. Constructing many small units in a large building is labour-intensive, which can lead to hold-ups.

You may be less likely to face construction delays with luxury projects, since they’re typically smaller buildings with fewer units. On the other hand, some luxury developers are moving in the opposite direction, constructing towers that reach soaring heights (Aura and The One come to mind). These buildings are more likely to be delayed.

When you get down to it, delays are the norm, whether you’re a luxury buyer or not. But residents waiting for penthouse units and townhouses should expect the longest waits.

 

Occupancy periods

The span of time between occupancy and closing is known as the interim occupancy period. At this stage, you don’t technically own your condo, but you’re paying occupancy fees (also known as “phantom rent”).

Phantom rent includes common expenses, property tax (in some cases), and interest on your unpaid loan from the builder. Why do you owe this interest? Because the bank won’t pay the builder your balance until you take ownership of your condo.

As a luxury buyer, you should keep occupancy fees in mind when you’re budgeting. You’ll almost certainly be paying a higher-than-average price for your gorgeous new digs, which means your phantom rent could be significant.

This period shouldn’t last very long, but it can. While 3-6 months is pretty typical, the wait can sometimes be up to 18 months.

Luxury buyers looking for a penthouse view take note: occupants on lower floors usually get to move in first. Building construction often continues as these new residents are unpacking. Of course, they likely won’t have access to your building’s high-end amenities, which will also probably be under construction.

 

Planning for delays

For many luxury buyers, the opportunity to customize your new home or investment makes pre-construction worth the wait. If you go this route, you should plan for the possibility of delays. But there are steps you can take to reduce the likelihood that they’ll occur. The biggest is working with an agent who knows the market and what to look for in a high-end developer.

 

Need help navigating Toronto’s luxury pre-construction market or just want to know more about pre-construction phases? We can help! Send us a message and we can get started.