Is It Really Wise To Purchase An Apartment Under Construction On Contract?

Signing a contract for an apartment that is yet to be constructed is much like a lottery ticket. On the basic principles, it’s a profitable endeavour since a fundamental belief when it comes to real estate is that the value of property increases with time, which is true in most cases but you need to apply basic economics to your purchase. If the supply of the product is in excess, the demand will go down.
A lot of things can change within a few years
For your off-plan real estate endeavour to come to fruition, if would take a couple of years. If one of the reasons why you purchased the building was due to an establishment close by, let’s say like a school, to provide you with a tenant or a possible buyer due to the ease of access to their establishments.
Within the two to three years it takes to finish the construction on your off-plan real estate, the establishment could get shifted or closed all together. You should also consider the fact that a real estate agency gets their architects to design at least 200 apartments in one batch in which you own just one apartment. From there itself you have one in two hundred chance of selling your apartment but at least fifty percent of the purchases would be people who intend to settle down in those apartments so your competition will be cut by half so doubling the chance of selling your apartment. Most buyers intend to let their apartments for rent, which unless you’re planning to do so as well, will further increase Your chances of selling your apartment however the real estate agency themselves keep around 50 apartments to on hold to be sold and reach a satisfactory profit so this puts you on the same spot again.
To add to your troubles, what if nearby to your own block of apartments, a new set of apartment’s gets opened by a separate real estate agency? That would miniscule your chances of selling your apartment so you might as well consider renting it since the surplus of apartments available in the area would seriously affect the capital of an apartment in that area, which would mean the value might drop from the price you initially bought it for.
Purchasing an apartment that is yet under construction is a big risk as you cannot be sure whether you might profit from it or not. If you do plan on carrying forward with such a purchase, I heavily recommend researching thoroughly about the area and the projects planned to be constructed within that area.