Originally Posted by
Hakuho
In making a decision to buy, a (rational) buyer normally should first assess the downside risks. Most downside risks can be measured. He can't do much about the upside potential.
So, he made sure that his downside is protected and hope that he read the market correctly to reap future benefits.
What are the downside risks in buying a property? (In this context, I will leave out the subject of leveraging)
The main one is obviously an assessment of the market condition, "is the market bottoming?" someone has asked. And other risks related to financing (maybe he will be laid off etc), well-being (maybe face with a major illness with huge medical bills etc), the known unknown risks I written earlier. Etc etc...
All these can happen within the SSD window, used to be 4 years now improved to 3 years. If he assessed the market condition wrongly, not a disaster as long as there is provisions set aside. But other risks are pretty much beyond his control, and sometimes expectation.
The SSD penalty is huge. And don't forget in buying the property for investment, he has paid substantial ABSD earlier. There are cases/records of people having to pay the SSD, even for within the 1st year of purchase. So, the threat of the overhanging penalty is real.
So, what will he do? To mitigate the downside risks he will opt to buy new launch. Naturally.
The time period required to build the project coincides with the SSD window, more importantly the progressive outlays are easier until TOP etc.
Of course I am speaking of a buyer in general and it may not apply to everyone. Especially it seems not to apply to the buyers in this forum, kudos haha.