Should You Buy in a Declining Market?
Advantages
1. You can negotiate aggressively
- Sellers are facing longer days on market and rising carrying costs.
- Investors who bought pre‑construction at peak pricing are under pressure.
2. Better selection
- Oversupply means you can be picky about floorplans, exposure, and building quality.
3. Lower risk of bidding wars
- Demand has “disappeared” in many markets.
4. Potential to buy below replacement cost
- When resale prices fall below what it costs to build new, long‑term upside improves.
Risks to Manage
1. Prices may continue to fall
Economists expect a prolonged soft period. Buying too early can mean short‑term paper losses.
2. Investor-heavy buildings may underperform
Many condos were “built to invest in – not to live in”.
These buildings often:
- Have higher turnover
- Face more rental competition
- See slower appreciation
3. Pre‑construction is especially risky
With oversupply and declining demand, some developers may delay projects or struggle with financing.