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Simply booking and cancelling affordable units? Barred for One (1) Year.

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When you book a unit of affordable housing and cancelling them when you have been offered one, would anything happen to you? For example, PR1MA? Well, nothing would happen to you here in Malaysia but in Singapore, there is a provision where these booking and cancellations would cause you to be barred from buying any new BTO (Built to Order) flats for one year. According to Singapore’s National Development Minister, Khaw Boon Wan this is to stop buyers from frivolous bookings and thus causing genuine flat buyers to lose out due to their behaviour. I think this is a very good measure and should be considered for any buyers of affordable units in Malaysia. The reason? Well, I know of some who are saying, ‘book first lar, cancel later’. Oh yeah, how many of these buyers were barred? 3,500 of them!

Besides that, it was also revealed that Housing Development Board (HDB)’s resale flats are 31 percent more expensive than new BTO ones in the suburbs. FYI, suburbs typically meant newer areas in Singapore. In Singapore, development is extremely well planned and every inch of land is used to its fullest. While many say they are efficient, I think it also have to do with the amount of land they possess. Look at how you use your money when you have a lot versus when you have just RM10 and you still have to eat two meals before your next paycheck arrives. Familiar with this situation?

Coming back to the property prices, especially the HDB flats, the sellers have become more aware that if they were to sell, they would have to sell lower. Not that they would be suffering losses because the prices has been increasing fora few years. The expectation is that the prices would continue to inch downwards for 2014. According to PropNex Realty chief executive officer Mohamed Ismail, he expects prices to soften 6 to 7 per cent for this full year. Next year, the Singaporean government would build less BTO units! Haha. They can even predict this in advance. Singapore government’s cooling measures are already working.

What about Malaysia’s? Well, transactions wise, it seems to have worked but prices wise, not yet. Perhaps the pressure on the sellers are just not high because the prices they paid could have been much lower and thus even the mortgage repayments would not trouble them as much. I would believe though that if transactions continue to be slow, sooner or later, prices would have to inch downwards. Especially those which are 1,000sf but is already priced at RM1 million or higher. I do not believe that there are many buyers in the market who are looking or even can afford these units. Let’s see how resilient this high end to luxury segment is for a few more months.

written on 4 Nov 2014

Next suggested article: Increasing stock, Increasing vacant units and HDB prices dropped 6 months consecutively

 

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