Quote:
Originally Posted by Hmoob
The investors add value by assuming the risk to finance the project. Developers like Westbank could take on that risk themselves (assuming they're financially able) but they generally choose offload it. Do you think Westbank or any developer would (or should be required to) sell a $700k unit in 2019 for $400k because that was the prevailing market rates when they started the project in 2017? What if the market went the other direction during the course of construction? There's an entire industry built around pricing/valuing risk. It's called insurance.
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If Westbank is so sure investors will buy, they should have no problem making the leap to assume end-users will buy direct as well. As should the developers' banks.
However the points you and other's raise is how flawed our system that relies on private development firms is. Publicly held companies would have no problem raising the money, and exist in most other countries. Why are saddled with private owners relying on offshore money to build housing?
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