Luxury properties, anyone? Specifically overseas buyers?

Super luxury properties are not the best form of investment, seriously. For the majority anyway. One has to really super-wealthy, say a billionaire to even afford to buy a 100 million ringgit property. Even then, it meant that we have just spent 10% of our wealth on a property which we intend to stay? Or host parties? At least if we stay, we save on rentals. (Haha) If we host parties, better spend a bit more and do not just order the usual fried meehoon and some curry chicken. (Yea, that’s me usually). Anyway, assuming we intend to buy it as an investment, I think it is very possible. (smile…) The reason is simple, there are many other billionaires who may have the same thoughts as us. So, they would buy from us at a price higher than RM100 million and they would then sell to the next billionaire at a price which is higher than the higher than RM100 million that the second buyer paid for. (statement is grammatically correct though pun intended). Other than all these billionaires, well the rest of the people including me would continue to work very hard to ensure we can have a good overseas vacation once in a while. There’s really an article talking about the super wealthy buying super expensive properties; luxury properties.
One article in www.ft.com here: ‘The gilded glut: falling demand hits luxury property market’ talks about the state of the super-luxury properties globally. (too bad, it’s by subscription only, sorry). In brief, it tells of the story of how there are now many surplus units of luxury properties in London, New York and other cities because the overseas buyers have retreated. It tells of some horror cases where the developers have had to provide a huge discount to shift units. Some developers were trapped because they bought expensive land. 1MDB was mentioned. In fact there’s a so-called ‘Singapore-upon-Thames’ project too in London. It also shared the news that for many developers to build affordable homes, it has to be built together with luxury units (as these provide the profits necessary from the negative returns from affordable units). Battersea Power Station Development Corporation was said to have applied to delay the building of affordable homes as well as to review its other affordable housing commitments. Well, in conclusion, this is not the best time for luxury properties. Another article here from business.financialpost.com
Before all of us feel too negative, there’s actually a positive where luxury properties in Kuala Lumpur are concerned. This is the article in NST. Glamour returns to luxury properties  Reported in the article was Knight Frank International residential research partner Kate Everett-Allen who shared that despite the world’s current state of political and economic flux (very slow….) , there was still a degree of safe-haven investments flowing into luxury property markets. The positive is more on the pricing side. Out of 41 cities tracked byKnight Frank’s Prime Global Cities Index, KL was ranked 31st LEAST expensive. Currency definitely plays a part which to me is an advantage to developing property markets like ours when we look at the article in FT above. In Malaysia, foreigners are also expected to buy only the more expensive ones instead of the usual bread and butter properties for middle income Malaysians. It’s the same in Singapore too where there are many limitations and the luxury properties bought by foreigners are usually in Sentosa island too. Happy following and happy buying luxury properties. (If KL is ranked so low… perhaps there’s a lot of rooms for growth?)
written on 10 June 2017
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