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Future predictions? How about looking directly at the ‘future?’

Posted in Starting Property Investing

Predictions, predictions and predictions. Of course usually the bad ones get forwarded many more times than the good ones. Except if the good ones are meant to help in selling some services which sells exceptionally well when the expectations must be a positive one. A very real example, we do NOT invest in properties in some countries unless we believe it’s future outlook is positive. Else, we lose everything because we could not just move the property elsewhere and liquidating it requires months!  This is true even in Usually the negative articles are ready many more times than the good ones. I have no idea why. The world is already pretty negative. What are some of the negatives?

Some countries have ‘crazy’ leaders. I said SOME, not one or two. It does not need to be in Asia too and can even be advanced nations ok.   😛  Some countries have ‘everlasting’ leaders who does not retire unless voted out somehow. I said SOME, not just one or two and definitely is in MORE than one country within ASIA. Oh yeah, just days ago, Financial Times (FT) asked readers to ‘Start preparing for the next financial crisis now.’ It seems that it may just be around the next bend? The writer of the article in FT is not a journalist in Financial Times but William White who is currently the chairman of the Economic and Development Review Committee at the OECD which makes policy recommendations to associated countries. What happens if the country that we are trying to predict is NOT yet an advanced nation? Perhaps my dear Malaysia? (Yes, I have rejected no less than 3 invitations to attend some migration talks to some advanced nations. Those two lah as usual. )

Instead of the overall economy, how about if it’s just to predict the potential for property investment? One very good example. ‘Severely unaffordable property market.’ This is Malaysia, as some friends who does not yet have a property have rightly pointed out. Most wanted to buy sub RM500,000 landed homes in Petaling Jaya.  Well, this tag is also given to these countries too. Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States. Here’s that full report.  Under this comprehensive report, Malaysia’s not mentioned at all in the top 1`0. What about ‘how high can prices go?’ At RM1,500 per sq ft, there are only one small area in Greater KL with this pricing currently. This kind of pricing, even if we do not look at currency is ALREADY pretty common in many of the top 10 nations mentioned above. In case everyone has forgotten to notice, the ‘severely unaffordable’ in the other countries was NOT based on ringgit but on the local currency. People earn AU$ and they use properties in AU$.  If they earn S$, they buy properties in S$… Even then, their property prices are still regarded as severely unaffordable.

What if the property prices suddenly drop a lot!?  Please look at all these advanced nations over the years. When property prices do drop because of some kind of crisis, what happens within the next few years after that? We are very fortunate because Malaysia’s property market is only a ‘follower.’ We are nowhere near those top property markets. There is little need to do too much predictions. What has happened and may happen, has already happened earlier in many advanced property markets. Someone asked me this question about the Penang property market many years ago. ‘How do you know Penang property market will continue growing?’  I asked him how many years would he rank Penang properties behind the Singaporean property market? He answered, ‘Fifteen.’ I asked if he believe Singaporean property market will continue to grow for the next 15 years.  He said, ‘Of course!’  I smiled and said, you already have your answer. Happy predicting.

written on 20 Feb 2018

Next suggested article: Currency risk to Malaysia. Budget deficit and uncertainty




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