Here in Malaysia, people debate with me why they believe renting is better than buying. At least currently when the market seems to be saturated with completed condos which the owners are not staying. Their main point? Landlords / Owners are desperate and that it is easy to find a RM1,500 monthly rental for a condo of RM400,000 or higher. (mortgage would have been RM1,800 or higher if one has 10% downpayment) Another is renting RM2,500 but the condo’s value is actually RM600,000. (mortgage of at least RM2,800 or higher if one has 10% downpayment) Well, in some large cities in a developed nation, there’s now a protest against landlords for renting their homes too high.
Article in rt.com here. Germans in large cities are protesting against unfair influence of large landlords on the housing market. Within the past years, Germans sawa wave of gentrification and rising rent levels. Tenants who could not keep up had to move out and for some, after they moved out the owners will tear down the home and build newer and more expensive properties. This will generate more profits. In Berlin, rent doubled within a decade. (Imagine that RM2,500 per month we are paying increase to RM5,000 10 years later). Due to this, a public protest movement against this ‘rent insanity’ started. The issue is due to a few large landlords controlling the market. (Hopefully this do not happen in Malaysia yeah) Do read here for the full article. Article in rt.com here.
Ladies and gentlemen enjoying low rentals currently should be still okay for a while. However, let’s understand that it was just a few years ago when my real estate friend was telling me that RM1,600 meant an empty condo in Kelana Jaya. Today, some tells me that even the expats are looking at cheaper rentals versus a few years ago. One day in the future, when the owners could increase their rental, they will because many are renting their units out at below their monthly mortgages and this is not financially healthy for them. Let’s just remember that this cycle will favour the owners in the end because the unit is theirs. Earlier article here: Renting High Never Buy . Happy renting if that’s what we really think is the best value.
<Featured Image is courtesy of Stock Photos from By designer491>
written on 5 April 2019
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