fbpx
Previous
Next

Advertisement Banner

Land price going higher, home price going higher, right?

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
secondary property market

Do we believe property prices are going up because developers had to pay ever higher prices for the land which the development is to be built? I do not think so but my opinion does not matter. Let’s look at some numbers. The below is a very clear image showing how land price increase seem to also be a major reason why property prices are increasing too. At least for Selangor. Numbers are fromCIDB, NAPIC and www.brickz.my (Yes, I refer to this site a lot for information.)

Image source: iproperty.com.my

The image is part of a Very comprehensive article. Happy reading it in iproperty.com.my here. I love what the writer, Dr. Foo Chee Hung said in this following few lines. He has explained is very briefly and yet so easy to understand that the current prices are not primarily due to just land costs yeah, not even other material costs for example.

He wrote, “Based on Figure 1 (below), we can see that costs for the elements of development such as labour, materials, machinery and equipment have increased only slightly in the same period. Such disproportionate increases have led to the conclusion that – the developer’s profit margin increase and the inefficiency of the country’s housing construction industry are directly responsible for the skyrocketing house prices. While this is inevitable, one should not overlook other elements of development cost, particularly the impact of land cost on house price.”  

Image source: iproperty.com.my

Please do refer to the long and comprehensive article for reference reading yeah. the article in iproperty.com.my here.

Of course, we must also note that property prices could also rise during those periods of 2008 – 2012 because prices then and the prices now are worlds’ apart too. In 2007, I bought a condo of 1,258 sq ft in Penang for RM247,000. Then, in 2008, I bought a condo of 1155 sq ft in Kelana Jaya for RM183,000. See those prices? Today, it’s more like 2.5 times higher. It’s really not possible to expect it to be another 2.5 times higher because salary did not rise suddenly over a couple of years yeah. Yes, I am very happy if prices could just follow the salary increment % moving forward. (Read here) Happy understanding.

Please LIKE kopiandproperty.com FB page or Sign Up for free to get daily updates about the property market.

Next suggested article:  Just a hedge against inflation. Super important hedge…

1 thought on “Land price going higher, home price going higher, right?”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

We love to hear from you (Facebook Comment)

LIKE us for property news update, FREE.

Previous
Next

Advertisement Banner

kopiandproperty.com

kopiandproperty.com

kopiandproperty.com is everything about property related writings and news. Enjoy reading with a latte.
Previous
Next

Advertisement Banner

LIKE us for property news update, FREE.

Property investment news everyday? Subscribe for free!

An article a day, keeps updated all the way.

Join 1,533 other subscribers

Property investment news everyday?

An article a day, keeps updated all the way. Subscribe for free!

join the family

Like us for daily investment news and more

Hit the like

%d bloggers like this: