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Would you feel confident buying a condo that hasn't yet been built?

by Gia (follow)
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Condo, morgueFile

It's s gamble buying a pre-construction condo. Would you feel confident buying into a building that hasn't yet been built?

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No. I want to see the house I'm going to live in. Plus, I would want a period house rather than a new build.
Yes, if you already know about the builders and if you have proper details, it is not a bad idea. Hundreds of people do that as an investment.
by BK
The idea makes me a bit nervous since sometimes they don't end up getting built.
Plus I think in some cases one gets a discount.....for buying off the plans.
It wouldn't bother me as long as I was confident of the developers longevity - a little precarious in this day and age.
I would be very cautious and do my study before buying off a plan.
by Vee
I am still a touch person so I would need to see it before it is built

Buying off of the plan pre construction is ok with single house and land packages as the equity is secure in the land .
When you purchase a strata unit in a high rise the risk is a lot higher. If you purchase in a rising market it may work out provided that the value is good at the point of purchase.
Many people have experienced the value fall leaving you with a loss that the bank may not want to accept leaving you in a tight spot. When an over supply of apartments hits a market place apartments have been known to have massive reductions in value. Check out the empty ghost cities in China to understand how bad this can get. The contracts some times have very harsh penalties in them if you fail to settle. Be sure you are not required to pick up all the loss if the developer sells your apartment at auction generating a huge market loss.
If a unit block remains empty and you are one of the few stakeholders invested this is also an issue across the cost of maintaining the project. The strata fees can impact across the costs and value of the project and need to be included in your calculations.
The swings across value are often large so the purchase needs to be researched very carefully especially supply and demand going forwards.
The size of the projects often generates over supply especially if a lot of projects go up at the same time. Understanding the conditions in the sales contract is the key.
Equity is in land under the home so this is the safe option to choose carefully.
Building a new single level house currently in my location can be done for about $1200 per m/2 plus the land. The land will in a normal market remain stable or rise in value.
The purchase cost per m/2 of an apartment is often as much as $4000, or even $7000, a m/2 with a little share in the land component.
Maybe. Would take advice from Financial Advisor, firstly, though.
Not really - only from the point of view that I would really want to see the finished product to see if I like it. I realise you can view pictures and be advised about the apartment size etc. but i would really need to see it to get the proper feel of it.
I probably would but would need to see the full specifications and find out what fittings etc were being installed first.
by Finy
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