What happens in the property market?
Property market needs to depend on transactions (owners and buyers). Transactions happen when buyers could afford to buy. Or they have a job which pays them enough salary to buy a property with a home loan. The home loan needs to be approved by the bank and the bank would want to manage their risks too, so they may not want to lend if the property price is just too high to their liking. This means that the property market should just behave in an orderly manner and everyone would be happy. Or is it?
How about looking at a country whose property market is more advanced than ours? It is said that the UK property market is now stalling.
Article in nst.com.my. Image shows the PROPERTY PRICES increase over the last year.
U.K. house prices stalled in February 2021 and this is indicating that market is losing momentum after a surge last year. Prices were virtually unchanged following nine consecutive monthly increases as per the Office for National Statistics. The average U.K. house price was 250,341 pounds (RM1.42 million) in February 2021. This is an increase of 19,732 pounds (RM112,000) from a year ago. London’s home prices remain most expensive with an average value of 496,269 pounds (RM2.82 million). Do read the full article with ore details here: Article in nst.com.my
Property price and property market
The reason I showed the chart first before the commentary was just to remind everyone that with those kind of price increases, it’s best that the property prices stop / slow down currently. Seriously, how many of the working professionals in the UK received a salary increment of 10 percent last year? How could they afford such an increase in house prices if this house price increase is continuing?
By the way, a prediction using a survey of 18,000 employers in the UK showed that the salary increase for the UK private working professionals for 2021 is 2.4 percent. Yes, it’s less than 3 percent. Hopefully now you realise why I think the market has better slow down in terms of property price increase yeah. Here’s that report in full about the salary increase in employeebenefits.co.uk
I also hope the same situation prevails for Malaysia as well. There is really no need to have high property price increase in current situation or in any situation. Double digit price increase? Keep that away please. It does not help and will just increase the potential for a bubble in the market. In the meantime, stay safe and happy viewing some homes this weekend.
Next suggested article: Property market Malaysia. Latest Update 2.