Honestly, I do NOT believe the property bubble crash predictions. I prefer to look at the potential signs by myself instead. Even if I may not be right all the time, I also do not look too highly at predictions by property people or even academicians. The signs? Read here: Understanding 3 property bubble signs and more
I also do not believe anyone telling me that property prices will drop because of unsold property numbers or even overhang. I always ask the home owners who are not facing any financial difficulties this question. “Would you sell your property at lower prices just because someone tells you that the unsold property numbers are going up?” The answer is a clear, NO. Earlier article here: Of course prices can drop if we sell lower than the price we bought
However if someone were to tell me that property prices will always be going up, I will believe. It’s not even due to demand and supply. It’s simply because of inflation. My mother told me that her monthly salary was at one time just RM150. Today, a salary of RM1,500 is said to be insufficient to even survive. The semi-detached home my parents bought was just RM35,000 long time ago but today, it is easily RM550,000. Thus, inflation and the value of money meant that property prices will keep rising in the future.
If someone were to predict a certain year that property prices will rise, I think we should take it as a reference and not a firm direction. Let’s see what’s the prediction by a few hundred Malaysian real estate agents yeah.
Article in nst.com.my A survey of 386 Malaysian real estate agents showed that they believe that Malaysia’s residential real estate prices, rents, and sales numbers will increase significantly next year and in 2021. The survey was conducted in November 2019 by Juwai IQI, one of the largest real estate groups in Southeast Asia with more than 7,000 agents.
Juwai.com executive chairman Georg Chmiel said Malaysia is attracting companies and operations that otherwise might have gone to China. He added, “The lower price threshold for foreign buyer purchasing will also help absorb some of the unsold inventory that has been weighing on the market. While the price thresholds are only being lowered for one year, hopefully that will give foreign investors enough time to purchase.” Please read the Article in nst.com.my
It’s always a good idea to compare prices per sq ft for similar properties within the same neighbourhood to understand if we are buying high or low. If prices are similar, then it’s time to contrast. Look at the features; facilities, maintenance, year of built and more. It’s quite usual for older condos to be priced slightly lower because its design may not look so contemporary anymore.
However, a lower price simply because of design alone represents value yeah especially if you do not mind about the outdated design for example. Happy understanding before we buy any property yeah.
Next suggested article: Property prices rising too fast is bad for the banks and for the owners too unless
Header image from shutterstock photo by Andrii Yalanskyi