Lately, there are many offer from the developer on DIBS...mean, once you sign on the dotted line, u do not need to pay a single interest payment until you get the vacant possession key.
Interesting huh?
Let' think of it.. Who will bear the interest? Not the bank, not the developer, it YoU!... The name of developer interest bearing scheme, for me, it is just a marketing tool.. Someone need to bear the interest...
Similar system that currently accepted by all of us the 24 month interest free.. Same concept..all the cost divided by 24 month.. So we thought it's interest free.. And feel good factor..
Recently, I had the chance to review the I-SOVO at icon city near PJ.. A very massive project which started back in 2011 and it offer DIBS scheme for 4 years.. As the today, the cost is about RM900 psf and for a small size of 745 sqf, a whooping RM760,000...
My analysis.. No doubt the area a hotspot and in a very strategic location, imagine the amount interest that accumulate within that 4 years.. I have no idea what was the basis, but say 25% of the cost is due to the interest.. Assuming 5% per year and additional 5% of the VP is delay
That would work out as RM190000 alone just for the interest.. If you minus the original price.. The actual price you have to pay is only RM570000... That is a lot of different when making the right investment choice...
I had come across the some study mentioning DIBS cater for at least 5% to 20% of the total property cost... So, next time you want to buy a house with DIBS, evaluate properly..
What worries me is that, with the current price build in, we are actually paying future value... And screw the overall market price...
Do you think our grandchild will able to survive?
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