2014, 2015 were UNFAVOURABLE years. 2016 is MIXED.

A good friend who was a real estate negotiator in Penang quit his job a few months back to take up UBER driving in the Klang Valley. He said, he will earn enough money toby a property in Kuala Lumpur. For a few months he drove 14 hours a day and he struggled with the ever lower incentives and last month, he decided to quit UBER and is now back to his old job; real estate negotiator. His girlfriend quit her job in a manufacturing concern and decided to rejoin as real estate negotiators too. So, is the market bad for real estate negotiators? Seriously, I believe this is the best time for good negotiators to shine. Many of their competitors would have quit….

According to an official survey from PropertyGuru’s Malaysia Property Market Sentiment Survey Report H1 2016, the years 2014 and 2015 were not favourable for the real estate industry in Malaysia. As for 2016, they are having mixed feelings. Many are expecting improvements as buyers have started thinking about buying a property again. 6 out of 10 are planning to buy a property within the next 6 months. This is despite the fact that 6 out of 10 saying that the market for 2016 is more negative compared to 2014. My personal view remains the same. Read here: In a slowing market, sanity returns.How true

As per the survey, the top 5 reasons for people investing in properties are for higher yields on rentals (56%), good capital appreciation (55%), retirement planning (46%), better environment (46%) and to own a house due to affordable pricing (36%). My number one reason is for potential capital appreciation and hedging against the inflation. I believe even if I do not gain a lot, the house price increase would allow me to stay on top inflation numbers versus just savings. Location is key and 55% of all buyers already own properties within the Klang Valley. Yes, this includes me too.

Besides location, the other factors that influence the buyer’s decisions are:

59% – PSF or per square foot price;
58% – scope of future development in the area;
57% – size of property/unit;
57% – reputation of the builder;
57% – potential rental yield;
56% – security and safety of the location;
55% – loan eligibility;
54% – potential capital appreciation

The Malaysian public are also feeling more satisfied with the Malaysian real estate property market. This is because of the following top 5 reasons:

49% of people feel that there is a good long-term prospect for capital appreciation;
28% feel that the real estate market is stable and resilient;
27% feel satisfied because the properties are well developed;
20% of people feel satisfied in the face of rising real estate prices;
19% feel satisfied due to good financing option

The survey also revealed many reasons why people are not buying. I will not state them here. You can droopy propertyguru.com.my for the full article too. I just hope they realise that the best time to buy would have been 20 years ago but the second best time is always when we are ready and is able to identify a good one to buy. Happy following all these surveys as they dogive us some indications how the market is feeling right now. To many seasoned investors, they are happy with worsening markets actually. Happy investing.

written on 26 May 2016

Next suggested article:  Survey: Property investment still attractive but recovery takes time

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