Is Pre-Construction Still Worth It in 2025? What Buyers Need to Know

Pre-construction homes have long been a favourite among investors and first-time buyers alike — offering the allure of locking in a future home with a smaller upfront investment. But with rising costs, delays, and shifting home values, many Canadians are asking:

“Is buying pre-construction still a smart move in 2025?”

Let’s break it down — the pros, the risks, and how to protect yourself before you sign on the dotted line.

What Is a Pre-Construction Property?

A pre-construction home is exactly what it sounds like — a property you agree to buy before it’s built (or before it’s completed). You usually put down a deposit between 5–20%, then wait 1–3 years (or more) for the builder to finish construction before you take ownership and get your mortgage.

The Upside of Buying Pre-Construction

1. Lower Upfront Costs: You typically don’t need a full mortgage until the property is ready, giving you more time to save.

2. New, Modern Builds: You get a brand-new unit with the latest designs, materials, and warranties.

3. Potential Price Growth: If the market rises while your home is being built, you may gain equity before you even move in.

4. Time to Plan: You can lock in a home without needing to move right away — great for future planning.

The New Risks in 2025

While pre-construction used to be a low-risk bet in a rising market, 2025 brings new challenges:

1. Falling Appraised Values

In some cities, especially in Ontario and BC, buyers are discovering that their newly built units are worth less than what they agreed to pay two or three years ago.

📉 For example, a buyer who agreed to pay $800,000 in 2021 may now see their property appraised at $730,000 in 2025. That $70K gap needs to be covered in additional down payment — and fast.

2. Trouble Closing

Many buyers are scrambling to secure extra funds or find a co-signer just to close the deal — and some are at risk of losing their deposits.

3. Construction Delays

Labour shortages, permit issues, and rising material costs have caused significant delays. What was supposed to be a 2024 move-in could now be 2026 or beyond.

4. Interest Rate Surprises

You may have planned your purchase assuming low mortgage rates — but by the time you close, rates may be much higher than expected (though they are slowly trending down again in 2025).

What a Smart Buyer Should Do in 2025

Here’s how to reduce your risk — and make the most of a pre-construction purchase:

✅ 1. Get Pre-Approved Early — And Stress-Test

Talk to a mortgage broker like Swivel before you sign. We’ll stress test your numbers at today’s rates (and higher) to make sure you’re prepared — even if values drop.

✅ 2. Work with a Realtor Who Specializes in Pre-Con

Make sure you’re buying from a reputable builder, and your contract includes protections around delays, assignments, and financing.

✅ 3. Have a Backup Plan

Will you have access to extra funds if your appraisal comes in low? Could you use a co-signer, gift from family, or short-term loan?

✅ 4. Understand Assignment Rules

Some buyers are flipping contracts through “assignment sales.” Know the tax and legal implications — and that these sales aren’t guaranteed.

When Pre-Construction Still Makes Sense

Pre-construction can still be a solid strategy if:

• You have a strong financial cushion

• You’re flexible on timelines

• You believe the area will grow in value over the long term

• You’re working with a trusted mortgage team who can guide you through financing hurdles

Final Thoughts

Pre-construction isn’t “bad” — but it’s no longer the sure win it once was. In 2025, it takes careful planning, smart financial prep, and expert advice to make it work in your favour.

At Swivel Mortgage Group, we’ve helped hundreds of Canadians successfully navigate pre-construction financing — even through tough markets. Let us walk you through your options and make sure you’re protected, no matter what the future brings.