If we have saved enough down payment for a home, it’s always good to include secondary market as one of the choices too. Major reason is because of the prices which is really attractive when we compare it to buying a new property which will be completed a few years later. Here’s that earlier article: 6 reasons I love secondary properties So, what has happened in the secondary market thus far? Actually, when the whole market sentiment is negative, it affects not just the primary market; new properties from developers. It affects the owners who are trying to sell their properties too. This is why occasionally, we get to hear of a certain secondary property being sold at a very attractive price because sometimes, the owner themselves could not wait. They may be migrating, may need the cash etc. Perhaps we lopok at what experts have to say about the market?
Article in themalaysianreserve.com PPC International Sdn Bhd MD Datuk Siders Sittampalam said the first quarter of 2019 saw a marginal improvement. “Certainly, the market did pick up to some extent. It is not like what we saw in 2015, but it will gradually see some appreciation in the market. What is good to see in the secondary market now, is that it is driven by fundamentals rather than sentiment.”
SuperiorWealth Resources Sdn Bhd founder and CEO Dr Alan Poon said the property prices in the secondary market are fairly competitive because of the downward pressure from primary market. He said, “Having said that, the demand is still there and the secondary market consists of a lot of investors and buyers who wants to release their properties quickly. So, they would have to give attractive discounts and prices to match the supply that has been available in the market.”
Based on the data from National Property Information Centre data, the secondary property market makes up 80% of all residential property transactions in the country. Where pricing is concerned, in a report released by the Ministry of Finance last year, house prices continued to record a steady increase as the Malaysian House Price Index remained at 193.3 points in 2018, up by 3.1 points against 2017. Home prices in Johor and Selangor rose 5.6% and 3.3% respectively. Please do read the article which is a long one and contains more numbers too. Article in themalaysianreserve.com .
It’s extremely important to understand that when we buy a property today, it’s not prudent to buy anything above the typical market prices because the prices have actually dropped in many areas. This is the time when they say it’s the BUYERS’ market if we buy wisely. However, if the goal is still to buy something in a popular area and we are still willing to pay a high premium for it and then we want to rent it out, then be ready to top up the mortgage payments every month. Let’s not debate about whether the prices will increase later since this is a popular area. Just understand that rental should be the gauge for the property price. If it’s too far away… Here’s an earlier article: Rental as a determinant of property price. Sounds clearer. Happy investing.
<Featured Image is courtesy of Stock Photos from Antonio Guillem>
Next suggested article: When we have to pay rental, it’s forever.