We have often heard of property experts’ predictions on the recovery of the Malaysian property market. Here’s one of them. Property market 2018: Crisis or Recovery Most of the time, it’s based on their estimation based on some sets of numbers, perhaps experience and sometimes their belief based on their on the ground interactions. Another one here: Property Malaysia: Slight price drop and rental market growth for 2017 How about another research, based on numbers and conducted by academics? I think in this case, it should be most neutral. I read an article in theedgeproperty today about University Tunku Abdul Rahman’s (UTAR) research about the property market of Malaysia. It was funded by the Higher Education Ministry’s Fundamental Research Grant Scheme.
In brief, we learnt from their research that property prices are still dropping. However, recovery is expected to start in Q12018. These are some of their findings. Current property market downturn is considered tame in comparison to two decades ago. Housing market is on a “gradual down slide.” This is a signal to buy because no one has a method to pinpoint when the market would rise again. When backlog starts to clear, the sudden supply squeeze would push prices up. The number one push would be when the economy starts going into full steam. Two positive developments recently include oil prices rising and China’s investments into Malaysia. It concluded by saying, “As the impact of these development projects on the economy starts to kick in, and barring changes in the local political scene, we expect market confidence and sentiment to start improving by the first quarter of 2018.”
If we believe the research, I think the window to buy a secondary property is within the next 9 months. This is because we still need time to view, negotiate and start the process. For leasehold properties, it might take up easily 3-4 months. Surely, we are not waiting for prices to start rising before we start chasing? Haha. I think this will be the usual situation. When nobody buys, I am scared to buy. When everyone starts buying, I will buy even if I needed to pay a premium. True for property market and true for shares. As for primary market, I think the prices cannot suddenly increase in Q1 2018. In fact, the current negative sentiment persisting in the market needs to change before developers dare to launch more aggressively or more expensive properties. As at currently, affordability remains key to better sales and nothing else. Not buying is perfectly fine! Just don’t spend the money……… Happy believing and taking appropriate actions.
written on 13 Jan 2017
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