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Property Prices too high? YOU might be the main reason.

This is not a joke. Seriously, during my talk in a Singaporean bank, a few of the participants were talking with me after my talk and we came to the issue of property prices being too high. It’s true, in some areas, RM1,000 psf is STILL considered very attractive while in other areas, even a RM400,000 landed property is considered not attractive. Attractively priced versus attractively placed. Just could not mix together right? Well, it really depends on individual. My ex manager stays in just an apartment without facilities and despite having bought another condo, she said she is selling the condo but staying in her apartment. Her balcony gives her views of a huge cemetery. From the price she bought, the property has appreciated 50%. She is truly happy there, its near to places she would like to go, it’s convenient for her mother to be looked after by other relatives and many more reasons which some of us have never thought of.

Coming back to property prices being way too high in certain areas. Do you think the cause is the land price? The construction costs? The greedy developers or the state government which did not do its job in controlling the price? Well, what about it’s all because of YOU? Disagree? Sure, go ahead because I also disagree with you. Haha. Look at the property portals and you would find many units below RM300,000 which in terms of size and convenience would surely meet your expectations but NOT the area which the property is situated. So, what do you do? You skip this area and look at the popular ones which everyone wants. When everyone wants to buy in the same area, the prices would of course be higher. The sellers would try to sell ever higher. In your mind, you think, RM30,000 extra is ok. Divided into 30 years, this is very little! Yet, few units later, the prices went up another RM30,000 and this cycle repeats itself until voila, RM1,000 psf is considered ok!

Step back and think for a while. What if, the demand for these hot spots is halved. Do you think the prices would still shoot up so fast? How about spreading it into slightly not as popular areas? Some areas where there are slightly more flats, slightly further away (10 minutes duration), mall is not next your home and schools are 10 minutes away? Suddenly, your choice widens, your monthly installment goes down and you helped to make a less popular area become slightly more popular. Of course, once more people stay in that less popular area, what will happen? After a few months, you would have already gotten use to it and after a while, it is just another home sweet home. There are going to be more malls being built, not less. If you love private hospitals, guess what, there’s more being built every year and there’s bound to be one within less than 20 minutes from you even if you stay in less popular areas today.

Yeah sure, if you insist that you can still afford the usual few hotspots, please go ahead. It’s your choice to feel superior anyway. Since you are already earning so much, you should treat yourself better. At least, that’s what you think. I still think my cheaper huge condo and my awesome park beats your expensive and tiny small condo in a perceived high end area.  I have always been a ‘low end’ person. It’s ok.  🙂

written on 5 Nov 2014

Next suggested article: Buying terrace houses in Rawang below RM300,000

 

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