Should we be happy if the current lacklustre property market is expected to recover only in 2020 or 2021? Many may actually be hoping so because this would help salary increments to catch up with property price increases. You know, those complaints about property prices being WAY TOO HIGH? Or that due to it being so high, no one could afford to buy any property? Recent article: Values still up even when transactions are down Some working professionals who bought a property one or two years back would need time to save up for their next property. This new downpayment savings could not and should not happen over a few weeks yeah, even if some people may tell you otherwise. According to RHB Research Institute property analyst Loong Kok Wen, the property market may recover only in 2020 or 2021. Full article in TheStar here.
She shared that the recovery will happen when a fresh cycle starts again with a new wave of demand. According to her, current Ringgit’s strengthening and even a rebound in crude oil prices would not be enough to restore confidence in the property market. (In my humble opinion, I think the current property market sentiment was NOT caused by the ringgit or even the oil prices. It was more probably caused by property prices which went up way too fast and too soon and starts to make every new launch become impossible to buy for the majority. This meant demand could NOT afford the supply. At the same time, Bank Negara Malaysia started cooling measures and one of it was to ensure banks lend responsibly and developers stop the Developers Interest Bearing Scheme. (DIBS). ) She added, “With no prospects of near-term appreciation in property prices, potential investors are likely to stay out, while some genuine buyers may hold back on their purchases as they expect some correction in prices.”
While Loong did not say where the strategic locations are, I would assume these would be locations where there are public transport accessibility. The reason is very simple. Those popular and mature areas would not be able to offer the ‘right price.’ It’s usually priced above most other areas already. If these properties are offered at the ‘right price,’ then it could not offer the ‘right size.’ Always a combination of size, area, price, affordability. It may also be a location where the expressway is easily accessible too even if paying toll is not really welcomed. Higher prices would continue to alter acceptability of more of these ‘strategic’ areas as long as there are accessibility. This question, ‘For the same price, would we buy in less popular areas or more popular areas,’ does not exist. No one would choose to buy in less popular areas when everything else is the same. Happy selecting carefully.
written on 23 March 2018
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