Should I buy off-the-plan from a developer, or a resale apartment? Warren Buffet has an interesting view in relation to IPOs and stocks, from his letter to shareholders in 1992, that I have adapted below for residential real estate:
"The secondary market which is periodically ruled by mass folly, is constantly setting a 'clearing' price. No matter how foolish that price may be, it's what counts for the holder of property who needs or wishes to sell, of whom there are always going to be a few at any moment. In may instances, properties worth $X in value have sold at 1/2 or less.
The new off-the-plan market, on the other hand, is ruled by developers, who can usually select the timing of offerings or, if the market looks unfavourable, avoid an offering altogether. Understandably, these sellers are not going to offer any bargains; it is rare you'll find X for 1/2 X here."