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Déjà vu in property market Malaysia?

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This interesting description Déjà vu is described as such by wikipedia: Déjà vu is the feeling that one has lived through the present situation before. The phrase translates literally as “already seen”. Although some interpret déjà vu in a paranormal context, mainstream scientific approaches reject the explanation of déjà vu as “precognition” or “prophecy”. I think many articles have appeared saying that the property price drop in 2020 could just be as bad or worse when compared to 1998.

So, for people as old as me, then you may just remember how bad 1998 was and now they say 2020 property market may be as bad if not worse. By the way, the numbers represent average for the whole of Malaysia yeah. This is not just Penang property or Kuala Lumpur property but all states in Malaysia in total. Of course, the largest would have to be Selangor.

This image has an empty alt attribute; its file name is image-42.png
Source: https://www.ceicdata.com/en/indicator/malaysia/real-residential-property-price-index-growth

By the way, 1998 was indeed a bad year for the property market. The image above would show very clearly too. In 1998, the property price fell by double digits! If someone somehow still could buy a property in 1997 and managed to get a home loan, then the person would suddenly have a huge paper loss in 1998. If he sold it, then it would have been a huge loss. A RM300,000 property would have lost probably RM45,000 in price?

Now, before everyone now deciding to jump into the stock market instead, we also need to look at the property market from 1990 all the way to 2018 to make a good decision yeah. The price DECREASE in 1998 was also cushioned by the price INCREASE by an equal number in 2016. In other words, if one were to buy in 2015 and hold the property until the end of 2000, (5 years not very long in property investment yeah) then one has not lost much money.

Property price started increasing again in 1999 and by year 2000, the loss would have been minimal if any. What has happened since then? Well, we can see that on an overall basis, property prices have certainly continued its climb and there were the double digit rises in 2013 and 2014. That’s definitely a sense of deja-vu as well because what has happened may happen again in the future. So, it’s not just the fall which we should know but we should also look at the rise as well. Stay focused on a long term investment. Stop thinking too much about deja-vu too much.

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