First time investing rather than buying to live in. The plan I keep being sold is to buy at launch, pay the first instalments, and sell on before handover.
A launch near me apparently sold out quickly and there is another starting nearby, and the pitch is that the second will do what the first did.
Is that still how it works, or am I hearing a sales script?
A launch selling quickly tells you about demand at launch. It tells you nothing about whether there is a buyer for your unit two years later, which is the only thing that matters to your exit.
The number I would look at is the ratio of off-plan sales to completed sales in the same area. Where off-plan transactions run many times higher than ready ones, the secondary market is thin, and at handover a lot of owners discover they are all selling the same layout in the same month.
Then look at what is still to be delivered nearby before your handover date. If the pipeline is close to double what exists now, you are not competing with today's market, you are competing with a much larger one.
Blunt version: if you cannot comfortably hold it through a soft patch, you are not an investor with a short horizon, you are the distressed seller somebody else is waiting for.
Nothing wrong with off-plan. Plenty wrong with off-plan bought on the assumption that an exit will be there exactly when you need it.
Ask the agent telling you it will flip what happens if it does not. If the answer is that you hold it and rent it, work out today whether the rent covers the payments, the service charge and the mortgage. If it does, the plan has a floor under it. If it does not, the plan only works if you are right about the timing.
Fair. I will slow down and look at the ready market in the same area first.