This article was first published in Property Queen magazine Issue 02 2018
Buying our first property is usually quite scary. Not many people have bought a RM500,000 car before and assuming they bought a Toyota Vios, that is still just RM70,000. A home meanwhile, even the affordable ones would usually be 5 times the Vios; RM350,000 or higher. What if after we buy, the property market collapses and we lose everything we have? What if we lose out job and could no longer afford the mortgage payments? By the way, the ‘What Ifs’ have no end. It will just continue forever. However, for those who believe a property investment is a great investment, it is time to read on. I represent a working professional just like majority of Malaysians and I do not have any course / workshop to sell you. 😉
Buy first, upgrade later. There is no need to wait for the perfect property. The lowest price and the best location, biggest size and top notch facilities. Chances are it will never happen. I bought my first property in Penang when I was 26 years old. It was from the secondary market as I needed a property as soon as possible. Without a property, my father-in-law was not too happy to let her daughter get married to me. It has a gym with some rusted equipments and a huge pool which is a plus. The size was just 730sq ft. It was nowhere near a prime area. Everyone I met would then ask me why not buy some other area instead? I stayed there, happily for 4 years and on my 3rd year staying there, I upgraded to a bigger place, a condo with full facilities. My first apartment was then rented out and my property investment journey started.
Risky to buy now? Will property prices be falling 40 percent next year? In numbers, this would be a RM500,000 property falling down to RM300,000. Honestly, when we refer to all the more advanced property markets of the world, this kind of fall in property prices would mean that the country is in some sort of a crisis. Else, we can google for property price trends for all the typical countries and it is very clear that over a longer period of time, the prices continue to inch upwards. Assuming the country really spins into such a crisis, I think it is best we do our best to keep our job instead of thinking about a RM300,000 property since many Malaysians are going to lose their jobs during a crisis. So, if you ask me, I do not foresee a crisis happening anytime soon.
Waiting for prices to fall? There are people who believe that the cooling measures are meant to reduce the house prices. Frankly, cooling measures are not to push down prices but to make sure prices do not keep going up too fast. Secondly, for those popular areas, the prices could not fall because the demand (people who want to buy) would forever be far higher than the supply (owners willing to sell). Ask ourselves this question. Do banks love it when the property prices fall? Do developers love property prices to fall? The buyers may love property prices to fall but as soon as they buy, they would become owners…. and owners do not like prices to fall.
Read more to gain a better understanding of the property market. View more to understand the opportunities available. Actually, the owners are more open to negotiations today, unlike a few years ago when the owners would refuse to budge when it comes to price negotiations. Discuss more with friends who own properties to know what are the advantages and disadvantages of their area. We do not need to only focus on those few areas. Opportunities usually exist only in areas which others have not seen, view and buy yet.
Last but not least, I believe we should take actions based on what we believe in. If we do nothing, then we would get nothing. If we want to believe the crisis would come soon, then make sure we work hard so that the company would keep us and fire others. At that time, we would be confident enough to buy that property at the price that we have been waiting for. Your actions determine your success. Just remember to guide your actions objectively. Buying the wrong property, irregardless of good times or bad times is still a disaster.
written for Property Queen, Jan 2018.
Next suggested article: Sometimes, secondary property is a better choice