Someone must have bought it earlier, else how could that someone be ‘rich’ today?

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Someone told me that if someone bought a property in 2008, that someone would be rich today. He said that all these people were very lucky because they bought earlier. This is because the property price in 2008 is still much lower than today even though the property market has slowed since 2013. I thank that someone for his prediction for all the someones who bought a property in 2008. Well, what about those who bought even earlier? Say in 2004? Would they be rich too? Well, perhaps nothing too spectacular happened between 2004 – 2006 for the property market but they would still be rich, right? I mean comparing the prices in 2004 versus today.

Looking back further, what about those who bought even earlier!? Like my parents’ semi-detached landed single storey in Ipoh for RM85,000? It was bought in 1990 I think. My brother bought a unit just a few units away from my parents’ home 2 years ago (2016) for RM540,000. Last year (2017), my neighbour’s home which is double-storey and extensively renovated is in the market for RM1 million. Okay, there has been viewings but no deals concluded yet. So, that neighbour has yet to be rich but assuming they take a 20 percent cut and sold it for RM800,000 instead, I seriously think they would have earned a lot more than the price they paid.

As we can see, there is no end to this assumption because if we look even further, in 1970, the homes may be even cheaper! If I remember correctly, my two late grandfathers’ homes (one in Sitiawan and another in Teluk Intan) was less than RM20,000! My parents’ first super huge semi-detached home in Teluk Intan was only RM35,000. Today, it’s easily 10 times more.  We can revisit all these ‘someone bought some property earlier and therefore that someone is rich today’ many more times, depending on our age but seriously, we have not learnt from history?

I know, someone famous said a home is a liability unless it gives us positive returns and it does not even belong to us until we have fully paid our home loan from the bank. However, all these ‘someone bought earlier’ stories also started with liability!  Well, unless if they bought the homes with cash. If they had bought the home with cash and they are staying in it, then they would have used up a huge chunk of their money which could have been invested in some other potential assets. Chicken and egg story yeah. Perhaps I just wait for the next someone got rich story in 2026. That’s when the High Speed Rail will be ready. Hopefully at the time, I could also be that someone who sold a property and got good returns instead of someone who did not buy any. Happy looking back.

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written on 7 April 2018

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