I could not afford a house, yet.

In an article by quite a famous online news site, it gave many reasons why many middle and low income earners could not afford a property. One major reason was because of the fast price increases in Malaysia for the past few years. In fact, many are postponing their house buying plans and save money for a few more years instead. Then, it said that rental in some big cities like Kuala Lumpur is high and thus this may be causing those who rent not able to buy in the future. A few questions were then asked Have the prices reached its top limit? When will prices fall? When would be the best time to buy a house and even would there be a housing bubble?

Have the prices reached its top limit? This is the same question many asked about stock market. Until today, no one has ever able to answered that. Truth is, if anyone can answer this, that person would have been rich long time ago. There is no such thing as top limit. BUY when you can afford or be objective if you cannot afford the expensive areas.

When will prices fall? Due to the huge potential demand, any fall in price would meant that the property in question is quickly snapped up. Thus, it is not possible for property prices to fall too much. I term too much as above 15%. In hot areas, even a fall of 10 percent in a normal economic condition meant that the deposit would have been paid on the same day.

When would be the best time to buy a house? I quote a top management of a top 5 largest developer in Malaysia. He once said, ‘the best time to plant a tree might have been 20 years ago. The second best time is today.’ As soon as you can afford to buy one, please buy one. That ‘way too highly priced’ condo that you are aiming at will be even more ‘too highly priced’ a few years down the road.

Would there be a housing bubble? Even though so many reports have emerged about the state of economy in Malaysia. Despite all the ratings from international rating agencies, no one is ever sure about whether is there bubble or not. Perhaps best for you to know what is a bubble and how it forms and when would it burst. Read here: How to spot property bubble?

My personal question would be, ‘Are you able to buy objectively.’ If you are able to answer this objectively, I think you should do just fine. Just remember, property is for the long term. If your mind tells you that you can suddenly become millionaire by buying that one property, stop dreaming. I also do not prescribe to any property guru in the market which kept telling you that with the right strategy you can be a multi-millionaire in a few years. That’s when you are LUCKY. Of course, if you are really able to be a multi-millionaire in a few years, I would still be happy for you. Happy thinking or investing.

written on 15 Mar 2015

next suggested article: Bubble is still brewing in Malaysia? – Some reasons given.

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