The beginning point, property prices and current scenario

Everyone knows transactions are down but prices are up. For Malaysia, it has been subdued beginning 2012. Recently (Aug 2014), in the Knight Frank’s Prime Global Index, Kuala Lumpur did enough to be ranked 19, ahead of cities such as Delhi (23rd), Mumbai (25th), Tokyo (26th), Hong Kong (30th) and even Singapore (32nd). The %? 3.1% increase year on year as at June 2014 compared to a year ago. This is not surprising since Singapore’s HDB prices dropped to 29th month low. (just reported on TV here in Singapore by Asia News Network). Highest in the world, with a crazy number is Jakarta, at 27.3%. Fortunately it’s in Rupiah versus the following which will make your jaw drop. New York (18.4 percent), Los Angeles (17.8 percent), Beijing (13.2 percent), Sydney (10.9 percent) and London (8.1 percent)

Our neighbour up north, despite the current power crisis still beat us. Bangkok is at 6.4%. Global average is at 6.2% which meant that prices are still growing fast. Actually too fast for me. I had hoped that the average would be much lower. As for Malaysia, I seriously think this kind of % may be maintained till next year. Especially with the potential GST effect and potential slowing down further of the market post GST like many other countries which have gone through GST. I wrote about it here earlier. With GST, demand may slow down next year. True?

Oh yeah, the lesson to be learnt here? About the prices increase and about certain countries being higher than the rest. The lesson that I learnt from this set of numbers told me that there’s no such thing as trying to pinpoint where exactly to buy. However, I seriously feel that some countries which are already high are still growing prices like there’s no tomorrow. My friends have been saying that Penang property market has a bubble since many years back. Especially when prices doubled and tripled in some areas. Make no mistake about tripling from a low base versus continuous high single digit growth every year in a place where the prices have already TRIPLED. Look at Penang today, the new launches are no longer at ever higher prices per sf. In fact, the developers are actually reducing the prices. Schemes such as ‘Special prices for Limited Units’. If it’s limited units, just asking staffs to sell would do, especially if it is really that attractive. Oh yeah, the ‘limited units’ seemed like ‘many units’ because it has been ‘limited units’ for many weeks. Another ‘funny’ developer tricked my cousin sister to buy in Ipoh, saying it’s the last day for special price. For the next three weeks, the SAME developer advertises in the newspaper of the same special price they offered to my cousin sister. Fortunately, she said she is okay with the price and location, it is ok.

written on 10 Aug 2014

Next suggested article: MIER, The ‘cooling phase’ and the right price and right attitude

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