Source: York Forum

A high-rise apartment developer in Surrey is launching a buyback program in an effort to attract buyers in the sluggish presale apartment market.

Allure Ventures said its "SkyLiving" tower project has sold enough units to begin construction. The company will offer new buyers two options, neither of which involves direct price cuts or incentives such as renovation subsidies.

In detail, buyers can sign a supplementary agreement: the developer commits to repurchase the unit at the original contract price, or rent it back at a rate equivalent to 20% of the original purchase price within 24 months (provided the unit can be rented at this rate).

For example, if a buyer purchases a two-bedroom unit for 750,000 Canadian dollars through presale, even if the market value declines after delivery and final transaction several years later, they can still sell it back to Allure at the original price.

Source: vancouversun

The rental option allows buyers to receive a cash flow of 6,250 Canadian dollars per month within two years, with Allure responsible for tenant management and maintenance.

Mohamed Mansour, vice president of sales at Allure Ventures, said: "We conducted in-depth research on past buyers, market intermediaries, and potential buyers, finding that they believe the current presale risks are entirely borne by the buyer - the purchaser must bear all uncertainties alone."

Previously, reports indicated that some buyers had to reapply for loans or pay additional cash due to the assessed price being lower than the presale contract price agreed upon years ago.

Mansour said that the plan, which will launch on May 31st, is an attempt to show buyers that Allure has confidence in the current housing prices and future value of the units. This move highlights the efforts of some developers to attract buyers amid overall market uncertainty.

Influenced by economic uncertainty caused by trade wars, rising interest rates, falling house prices, and a market once dominated by investors now faces a chill. Some developers have suspended presales and returned deposits due to failing to sell enough units to secure construction financing.

Notable real estate company Rennie Marketing (specializing in presale apartments) recently announced a 25% workforce reduction, as the number of unsold completed and nearly completed presale units continues to increase.

Rennie Intelligence research shows that as of April, there are 2,503 unsold apartment units in Greater Vancouver, and another 2,337 near-completion project units remain unsold, totaling 4,480 units.

Mansour introduced that the "Sky Living" project is a 32-story high-rise located in Surrey, within walking distance of the University of British Columbia (UBC) and Simon Fraser University (SFU) campuses.

He refused to disclose the number of units covered by the plan, stating that each project and developer's situation varies - including location, land cost, timing, competition from other projects, etc. - which may make it difficult for other developers to replicate Allure's approach in the "Sky Living" project.

"We are not blindly implementing this plan; rather, we base our judgment on research that the risks are controllable, so we are willing to share risks with buyers," he said. "Developers with equal confidence in the price, location, leasing potential, and market demand of their projects are better suited to try this model."

Source:

https://vancouversun.com/news/surrey-developer-buy-back-or-rent-out-presale-condos-at-current-prices

Original article: https://www.toutiao.com/article/7507654493392192011/

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