Amazing Post Brendan, I have always been conflicted on the need for more supply and the apparent trend of developers with approved permit ready projects that are unable to launch until they feel their projects can sell at a certain price.
There is a pipeline of ready to build condos that would provide the supply we need but they are not being launched in order to prevent the prices from falling.
I can't speak for every project, but generally if you don't hit a certain sale price you will not be able to get a construction loan. The banks need to make sure there is sufficient margin in case of cost overruns or delays. Lenders will not allow a developer to build at a loss. There are a handful of developers with legacy sites and low carrying costs, but that is the minority. Most developers have high carrying costs and want to start construction as soon as it can be financed.
Amazing Post Brendan, I have always been conflicted on the need for more supply and the apparent trend of developers with approved permit ready projects that are unable to launch until they feel their projects can sell at a certain price.
There is a pipeline of ready to build condos that would provide the supply we need but they are not being launched in order to prevent the prices from falling.
What are your thoughts on this?
I can't speak for every project, but generally if you don't hit a certain sale price you will not be able to get a construction loan. The banks need to make sure there is sufficient margin in case of cost overruns or delays. Lenders will not allow a developer to build at a loss. There are a handful of developers with legacy sites and low carrying costs, but that is the minority. Most developers have high carrying costs and want to start construction as soon as it can be financed.