Just off Westshore Parkway next to Langford Lake, a row of townhomes are being built. But with high-interest rates and inflation slowing sales, one development company is getting creative.
“It’s difficult to sell in this economy because people are challenged,” said Richard Weldon, a managing partner of Romspen Investments which oversees Liberty Ridge Homes. “So here’s an incentive to come in.”
No, it’s not rent-to-own, Liberty Ridge Homes are offering deposit-to-own for those who can afford the mortgage payments but don’t have the capital for a big down payment.
“A buyer is able to come in and do a low deposit, two $5,000 deposits. And then once the project is ready for occupancy the new homeowner is going to get their set of keys. They’re going to hand over 12 monthly deposit cheques and instead of paying rent for that year, they’re going to make deposit payments that go directly to their down payment,” said Sean McLintock, a real estate agent with Remax who is spearheading the sales.
On top of the program, the development company will also be knocking out strata fees for a year.
The monthly payments range from $2,600 to $4,200 depending on the unit, a number similar to what the subsequent mortgage payments will be like.
The extra incentive of deposit-to-own is unique in B.C. right now and perhaps Canada.
“I’ve heard of programs like this in the ’80s when interest rates shot up, but I haven’t seen this recently,” said McLintock.
“I think we’re the only ones that are doing it because other people feel that it’s beyond their comfort zone but we believe in our buyers and we believe in our market,” said Weldon.
And while profit may not be high, the development company and its parent company are willing to bet in a cooling market the deposit-to-own program will move units.
“In a tougher market, you gotta work a little harder, you gotta be more sympathetic. So if margins are down that’s just the way it is,” said Weldon.
The program has already generated a lot of interest within the real estate world. The 212 units will go live on the market in two weeks.
“We’re actually in the position to take holds. So if you have a family member or somebody who wants to take advantage of this they can reach out to me,” said McLintock.