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Will the market get better? Does it even matter?

Somewhere in Kuala Lumpur some days back. “Charles, do you think the property market will improve in 2018?” I answered, ‘Of course NOT! It should continue to slow down for a few more years because I need time to save downpayment for the next one.’ My good friend laughed and I laughed too. Anyway, seriously, when we are buying a home because we need a home, we do not need the market to be better. If we are upgrading to a bigger home, we also do not need to wait for time to get better. Even IF we are buying for investment purpose, why are we waiting for the property market to get better? I know, we want to ‘ride the wave’ of optimism, where the wave will lift all boats regardless of whether the boats have holes in them or not, right? Well, if this is the case, the more important thing would be to buy the RIGHT property instead of waiting for the RIGHT timing. If it’s a good property, just need to ride out the slow times. If it’s the wrong property, we need to pray for the next WAVE; not such a good thought actually.

Please do not think too much about all these timings. We are not in some Ponzi schemes where the earliest gets the best deal and the last few usually will lose everything.  This is property INVESTMENT. It’s for quite a number of years and based on the usual trends in all advanced property markets, the prices inch upwards. For Malaysia, it’s around 6 percent on average. Please look at the actual area we are buying and not all these average numbers. Sometimes not because the property is extremely attractive but because of inflation, costs are going up (land, labour and materials..) and also because of newer property launches which are usually slightly more expensive than the older ones. Certainly the decision should not even be remotely affected by the General Election never ending news in FB yeah.

Personally, I hope I am right yeah. Investments from China for the One Belt One Road will continue even if we have a new government. This is part of an ASIAN agenda, not just because it’s China. The Malaysian economy will still achieve the GDP growth in 2018 as predicted by IMF (5.3 percent), World Bank (5.4 percent) and even our very own Bank Negara Malaysia (5.5 – 6.0 percent) if the current government remains. That property that we own will still be under our name too yeah. Oh yeah, I really do think that for some developers, it may be more prudent to take a ‘haircut’ if the property happened to be in a not so attractive location. As for the buyers, do remember those good times when the developers were much more confident cum arrogant? Demand vs supply is a revolving trend, never a one-sided story. Just look at the advanced property markets to understand how things have been moving for the past 30 years for example. One day, our property market will get to the ‘today point for the advanced property markets. Till then, better to invest and wait instead of waiting to invest.

written on 19 April 2018

Next suggested article:  Soft market does not mean buyers jump in (it’s not the area they want!)

 

 

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