A lack of trust among buyers and investors in the pre-sale condo market is leading developers to offer increasingly creative incentives, including programs to help protect the value of the investments.

Surrey-based Allure Ventures is among these companies. It has introduced a pair of protections for buyers as part of its sales process at SkyLiving, a 32-storey luxury condo project in Central Surrey which is to deliver 324 homes. The building will be located at the corner of 138A St. and 100th Ave.

Mohamed Mansour, vice-president of sales with Allure Ventures, told RENX the company's team has been regularly hearing from realtors and other industry leaders in the region that even the most seasoned investors are “frozen right now”.

"I think people are scared, not just of real estate, but of making the wrong move (because of) the market shifts, (interest) rates, headlines," Mansour told RENX in an interview.

Buyers are not saying no to real estate investments, they just aren't saying anything right now, Mansour said. "They feel like the pre-sale market, the pre-sale offering, feels very one-sided. Buyers are expected to take the leap. They're expected to carry all the uncertainty, and (are) just told to trust the process."

To ease those concerns, Allure has introduced a buy-back program and a rent-back program to serve as assurances for buyers at SkyLiving. 

Allure's buy-back and rent-back programs

The buy-back program provides buyers at the time of purchase the option to sign a secondary agreement in which Allure agrees to repurchase the unit at the original contract price, excluding applicable taxes and fees. This provides a contingency should the buyer change their mind at completion of the building.

The buy-back would happen within 30 days of the completion of the initial sale.

Second, following project completion, buyers have the option through the rent-back program to lease the unit back to Allure at a premium rental rate, returning to the buyer the equivalent of 20 per cent of the original purchase price over a 24-month period. All property management would be handled by an Allure-approved firm.

Owners would receive monthly income without managing tenants, leases or maintenance, the company says. 

"A lot of underwriting, and a lot of due diligence had to go into this, as you can imagine, both because the lender has to be comforted, as well as our investors,” Mansour said. 

He said the message is that Alllure has faith in the location, the building, and in Surrey’s future. “This allows us to offer this and share in the risk with the purchaser."

He noted the programs are available for a limited time. 

Mansour said the programs are not designed to make somebody enter the pre-sale market who isn’t already looking. "This is designed for . . . a large amount of people out there who want to invest, (but) who have been sitting on the sidelines waiting for an opportunity," he said. 

Sales started on May 31. 

Allure maintains hyperfocus on Surrey market

Allure Ventures launched in 2021 and its entire portfolio is focused on Surrey, Mansour said. 

He said Allure is a vertically-integrated developer with its own construction arm. “We not only acquire the land, develop the land, work it, and sell the (homes), but we also build the product," he said. 

Elsewhere in Surrey, Allure just finished a residential highrise called The Grand on King George, a 46-storey condo tower that also includes office and commercial space. "Completion of that was this January,” Mansour said.

He said SkyLiving is the firm's next project, with construction starting this month. 

"After that, we've got Emerald Gardens, which is one of the largest single communities that will be built in Surrey," Mansour said. "It's a three-tower site connected by a podium."

He said the company has plans for two to three other residential projects in the city, but isn't able to share details yet. 

Mansour said the family ownership behind Allure is also based in Surrey.

"They believe in this city,” he said. "I can tell you the dream of real estate (in the Lower Mainland) is alive and well."

He said this incentive program is about a developer standing behind its project. 

"It's just the uncertainty right now that's causing people to not be able to make a decision. We had to look at that and say: ‘what would solve that?’ " he explained.

"And it's not reducing prices, it's not telling people we don't believe in the sticker price we're offering, because that's the message you're sending when you're reducing the price.”