Is is true that with more developments, prices would increase continuously? Perhaps up to a level deemed too high? If this is the case, perhaps we should not have developments. Should just stay at levels where everything is cheap and at worst, affordable. The reason this topic came up was because a colleague and I were talking about the price of ‘harmai. (dried shrimp)’ Take a look at the image beside. This kind of dried shrimp is considered a premium as it is of the whole prawn and its bigger too. Totally different from the ones we normally see in markets or hypermarkets where it’s normally already in bits and pieces and most of the time, ‘sandy.’ Even those would already be easily RM40 per kg or even higher.
I told her that the price of the dried shrimp this quality is just RM40 per kg at max. I was in Sandakan. She said that in her hometown, a small town in Peninsular Malaysia, this quality is at least RM80 per kg. She said the reason is because of the pace of development. Her hometown has grown very fast and thus the prices of everything has gone up. I replied, there’s no such thing. There’s just greed which was built up by the never ending demand. The buyer is willing to pay more for higher quality and the seller willingly sell higher every year, saying the costs have been increasing. Seriously, what costs?
Manpower? Well, I seldom hear of people receiving increments of more than 10 percent every year. Diesel price? If it’s diesel price, it should be reducing, no? Cost of boats? I am not sure if the cost of buying a boat in Peninsular is going to be higher than using a boat here in Sandakan. From my understanding, it’s usually cheaper to buy these kind of stuffs in Peninsular Malaysia instead. Oh, perhaps it’s because the sellers in Peninsular needed to buy a BIGGER home, FASTER cars. Do browse online and understand that prices of homes in Sabah on average is one of the highest in Malaysia, vs the average household income.
Since there are no further reasons, it comes back to just greed plus the demand. Can prices drop a bit? Yes, of course, with competition it would. Another way? Lower demand. Finally, when the prices have really become so unaffordable that the sellers have no choice but to sell lower. Think property developers who are offering rebates or even discounts which can reach double digits today. Remember last year I wrote an article about developers warning that with GST, prices will just have to increase? Sigh… Read here: Increase selling price due to GST? It depends on margin Honestly, in a hot property market, please get ready to book your unit in 3 minutes…. That’s the reality. Seriously, we should stop accepting the reasons that EVERYTHING is increasing in price because of development. Most of the time, it’s just because we are still buying, that’s all.
written on 16 Feb 2016
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