Double digit increase in prices even with the current slowdown?

It’s not easy to convince those who has yet to buy a property that prices are not likely to drop as much as it has risen. It’s far easier to convince those who already own more than 2 properties to stop and think a bit more before buying. Haha. Well, except for another financial crisis, prices will not be singing ‘if only I could turn back, time.’ (Song by Aqua) This is regardless of the current market sentiment, which is negative and likely to remain the same for 2017 or beyond. Some predictions?  Luxury high rise? Rising higher next year Perhaps just show them some numbers reported by a major property site, with actual numbers? Actual transaction prices versus prices being offered today? Here’s one in theedgemarkets.com KL condos that defied the slowdown in 2016. 

What the article shared was a list of some properties that has defied the current slowdown and is still going up in price. In fact all are growing by double digits within the past 12 months. Prices per sq ft? Except for one which was over RM1,200 per sq ft, the rest are the normal ones, ranging from around RM400 to slightly over RM500 per sq ft. These are from the secondary market. It’s not all positive though. There were also a total of 78 condos which suffered a drop in sale prices between 2.2% to 11.7% y-o-y. Some of those projects include the Platinum Lake PV10 in Setapak, Abadi Indah Apartment in Taman Desa, G Residence in Desa Pandan, Seringin Residences in Kuchai Lama and Idaman Residence @ KLCC. It quoted PA International managing director Jerome Hong who observed that properties that registered high growth were all below RM500,000. A good property according to Hong would have three aspects: the education catalyst, transit-oriented developments (TOD) and integrated developments with various components. The full article is pretty long and comprehensive. Do read it here. 

As for new launches today, the typical price would already be around RM500 per sq ft, depending on the size. Usually, smaller sized condos would have a higher price per sq ft. The reason is because of affordability. Not all condos are offering two car parks yet though but RM500 per sq ft today is already higher than some older secondary units. When it’s completed 4 years later, with the usual inflation rate, the prices should inch up further. I personally think the double digit growth days will not happen anymore. The salaries are not rising fast enough to accommodate any sudden increase anymore. Dangerous, when property turns affordable  Here’s that article again. Note though that buying secondary units would also mean one has to take care of the usual wear and tear too. Here are some tips on inspecting secondary condos. Not all condos are the same. This is the reason why we need to evaluate before we buy. Happy viewing.

written on 14 Aug 2017

Next suggested article: Developers are unlikely to reduce prices drastically? True, but..

 

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