"Too many units to be finished at the same time (by 2017) will create some challenges for developers who have built the houses but haven’t sold off their finished units on time.
According to 96 percent of sold-to-completion ratio of 2016, 4 percent of the finished are still unsold. This unsold rate among the finished projects will further increase by 2017 if the slow rate of absorption still persist in 2017 or through to 2018.
Therefore, some of developers will face financial constraints that lead them to either settling down with very flexible payment schemes or lowering home prices in order to stimulate their sales so that they can use the revenues to cover their construction spending.
Pilot test of market stimuli (minimal or zero-downpayment schemes) have proved successful among some developers. But that will be helpful in the short run because it has helped keep the market going.
In the long run, this practice might lead to mortgage risks if the system isn’t well managed to qualify the buyers, look at the stability of the job and economy, and scrutinize other risk factors."
Director of Research, VTrust Appraisal