When coffee prices go up and gets accepted…

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I think Gen-Xers like me are from a lucky generation. We have the best of both worlds. We understand why our parents think RM1.80 for a cup of coffee is expensive today and we also understand that RM15 for a latte in a comfortable cafe is well, acceptable if not affordable to many. There were times when a cup of coffee with friends is usually at the local kopi-tiam or even the friendly mamak stall.

These days, if it’s the first time you are dating a girl, it’s better to bring her to a cafe… Certainly not to a hot kopi-tiam where both you and the girl starts sweating halfway through the conversation? The noisy environment also does not help too. Plus new customers standing next to your table waiting for you to leave so that they could sit at your table? I have not seen people standing next to my table in a cafe waiting for me to leave before. Haha.

What has an ever more expensive cup of coffee to do with property prices? Actually there are lots of connection. One example? In Ipoh, there were many old and dilapidated buildings in the city centre. Nowadays, many of these have been ‘rescued’ and ‘transformed’ into cafes. These cafes mix and match modernity and the days of yesterday while serving you a cup of freshly brewed latte.

One latte may cost you RM12.50 per cup (300% more than our usual Old Town White coffee) but if the cafe is doing brisk business, then the property which the cafe now occupies may now be worth RM1 Million due to a rental of RM5,000 per month. This is way better than when it was still an eye-sore and not many people wanted to do anything with it. This has not happened only in Ipoh but also in Penang and in Kuala Lumpur, it’s not just cafes but also the bubble-tea craze of today too.

Acceptance without any question, of the ‘new’ price of coffee. For the generation still stuck in the kopi-o times and prices of yesterday, none would ever accept a new condo for RM800 or 1,000 per sq ft. Definitely not a SOHO of 350sf and a price tag of RM400,000. However, for the generation who has embraced and accepted the fact that coffee is now a lifestyle and not just a drink, they have also accepted that a small unit which is tastefully decorated and with good facilities is worth the RM400,000 that is being sold today. Renting such units for RM1,800 or RM2,000 is perfectly matching with their lifestyle too. For these yuppies, a RM400,000 home very far away from the city centre for example may not appeal to them instead.

Coffee beans, coffee grinder and coffee machine and the luxurious landed property.  Every morning, my good friend grinds his 100% Arabica beans with his European made grinder before using his Japanese made machine to brew it to perfection; at just below 90 degree Celcius. The total price for this luxury gives you an idea why he has no issue with paying RM1.6 million for his current home, a landed property. He’s part of the new workforce of today. With technology advancement comes jobs which pays much higher and thus the mindset that a cup of coffee is no longer just a cup of coffee but is also an enjoyment. How do you price an enjoyment?

I still love Kopi-O, especially one made by the old uncles who has been doing it for many years. However, if I am going out with some friends and we would like to have a coffee chat session, it would definitely not be at a sweltering hot restaurant with an oily floor. Most probably it would be a proper coffee place with the barista greeting you while asking you to upgrade your size. The bill? RM16.50 for Asian Dolce Latte. Is the price reasonable? I think so.

Meanwhile the property scene continue to change as well. Gone are the days when landed homes meant rows of houses plus a simple field. These days, a modern landed home will most probably come with a centrally located water feature (most probably a nice lake) as well as a club house plus all the other stuffs like a cycling track and even hiking trails! It will also most probably be patrolled by guards in uniforms too. This is also the reason why prices will continue to move up as people see the value for such an offering versus a basic home of yesterday.

I think I can adapt. I know very well that my kids will not be happy without facilities where they could go crazy in the kids pool or just cycling round and round the garden. Thus, even if I move to a landed home, it will have to come with all these extra facilities. Just a basic home without a proper clubhouse, even if it’s in a mature neighbourhood will not be enough for me and my family. I seriously do think the story of coffee and property will continue to evolve too. Happy deciding on both the best cafe and the best property to your liking yeah. Cheers.

edited and rewritten 28 October 2019. (first written on 26 feb 2014)

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