‘Stronger’ 2H expected, ahead of GST

What happens if kopiandproperty.com tells you that 2nd half of 2014 is going to be better than first half? Please read other news to see if it is true. However, if a top developer in Malaysia says so? Well, I think we can believe it slightly more. Mah Sing Group Bhd said that buying momentum is likely to be stronger as potential buyers are expected to buy before the GST implementation next year. This may be to hedge against the potential inflation once GST starts next year. Mah Sing said that house prices in Malaysia grew some 3% from 2001 to 2009, and subsequently 6.7% in 2010, 9.9% in 2011, 11.8% in 2012 and 11.6% in 2013. For this year, in the first quarter, prices went up 8%.

As usual, developers will always tell you that prices will only be going up and buyers will always tell you that they cannot afford. Let me tell you a story. My friend said that REITs are not good. The reason is because REITs typically gives a dividend of around 7%. She also said FD is the worst, it gives just 4% at max. GST is only rumoured to be 6%. Please do not tell me that you are buying a half million property because you are worried too much about the 6% GST? For those who are not buying because they feel that the prices would come down, you may get your chance if the properties you are waiting are those luxury ones. If it is the RM400,000 condominium, I have to wish you all the best. If it comes down, just like you, I would also buy.

Transactions has been slowing down since 2012 and not 2013. This slowing down of transaction was because of two things. It went up way too fast from 2009 – 2011 and the prices also doubled and in some instances tripled. However, be reminded that before it went up, the prices was considered very low by any world standard, since we always want to talk about world standard. The perception that the prices went up too much meant some are holding back. The sentiment is thus bearish. However, look at any statistics in terms of actual potential demand and you can see that not everyone wants to continue to rent. To be honest, my father in law would not even let me marry her daughter if I did not buy a property just before I married her.

Always remember Warren Buffett’s classic rules: “Be fearful when others are greedy, and be greedy when others are fearful.” No idea if it can be used for property market? Think about it.

written on 21 June 2014

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5 thoughts on “‘Stronger’ 2H expected, ahead of GST

  1. Hi Chialih,

    What about the situation prior to GST in 2014, my opinion would tell me that people will be rushing to buy more or ahead, for instance, home appliance, furniture and so on. it is likely that the sale may increased, what do you think after GST, should we grab now or after GST in term of cost saving?

    • Ang, my suggestion remain, if u need it now buy it now. If our decision is based on the gst, I think we are really not objective enough in what we really need or our investment objective. We buy because we hav a preset objective of what we want to achieve. Not because of gst. Just my view.

  2. Correction….

    Hi Chialih,

    What about the situation prior to GST in April 2015, my opinion would tell me that people will be rushing to buy more or ahead, for instance, home appliance, furniture and so on. it is likely that the sale may increased, what do you think after GST, should we grab now or after GST in term of cost saving?

  3. Hi Chialih,

    Thanks for your comment, agree with you, of course, actually, it is kind of combination from “need it” and “cost saving” standpoint, it is still tolerable if I don’t buy now, however, I just worrying about the significant of price increase after GST, as a whole, it is more toward cost saving than just buying for the sake of GST. therefore, I am trying to justifying when to buy.

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