Recently the Toronto condo news is all about 2 developments converting from up-and-coming condos to rental buildings leaving buyers out in the cold with their investments. According to what I read, in both cases they will be reimbursed with interest for their deposits but people are still angry because they miss out on a better investment in the meanwhile.
One has to keep in mind that investing in a condo years before it is built is somewhat risky in every case. You’re betting on making money when it has completed and you sell (or rent). Although I don’t know the details, it appears these 2 developers decided they could make more money by creating purpose-built rental buildings. This could be clever in a very tight rental market. If they register the building as a condo, rent out the whole building in the meanwhile, then maybe change their mind again at a later date. The developer purchase agreements are full of statements about such changes.
Out of the hundreds of condo developments in the city in the last 5 or 10 years, a very small percentage have failed or even changed ownership midstream. In my opinion, if you’ve invested in a condo in a good pocket by a decent developer you have a good chance of making money, don’t buy in a pocket with thousands of identical (poorly built) units. Follow the better developers (Daniels, Streetcar, Tridel, Minto, CityCore …) on their projects and maybe look for something different that will appeal to older buyers. Proximity to mass transit is always a plus as is “walkability”. Better yet, get some people on your side to help guide the decisions. Or keep your feet warm and buy a resale condo.