One of the most significant benefits when purchasing a new home is appreciation as a result of time. This is more applicable to pre-sale conditions as you are purchasing a home that will not be completed for a substantial amount of time (anywhere from eight months to two years, depending on the type and scale of the project). In many cases time can become a significant ally, especially in a vibrant market.
Here’s an example: When a developer initially releases a project, they wish to ensure that they attain enough pre-sales to satisfy their financing requirements with their lenders. As such, their initial offering tends to be quite aggressive with pricing. After all, those who purchase first take a higher form of risk because it is not built and should benefit with lower prices. The propensity for greater appreciation increases with an early purchase, particularly if the economy and real estate market is strong and demand is excessive. These conditions may lead to a significant gain in value once the project is built and completed.
*Note: these types of conditions vary significantly as there are several intrinsic factors including state of the economy, interest rates, supply, future developments etc.
