WOW. Property price is 30% higher than the peak in 2007. Nope, this is not Selangor property or Kuala Lumpur property. This stats is for the UK.
So, what happened in 2007 and why was it said to be the peak? If you did not know what happened after that, it was the 2008 mortgage crisis which crashed the property market. Property prices should move up but should not up like a Formula 1 car. That spells disastrous no matter how we want to be positive about it.
The reason for this higher price according to Zoopla is this: Stock shortages are helping to push up prices and houses are out-performing flats.
There are two parts to this Zoopla message yeah. First, there’s a stock shortage. So it meant that supply is not coming in or demand is just too high, suddenly. Secondly, it says that landed properties are performing better than flats. It did not say flats are not performing yeah. Haha.
Anyway, this is the article in theguardian.co.uk The property website Zoopla said the average price of a home was now £230,700 (RM1.35 million) and this is 5.4% higher than the same month one year ago. (Okay, 5.4% does not seem that out of the ordinary)
The report said that home prices in UK in June hit a new high and this price was 30% higher than the peak before it was hit by the 2008 financial crisis. (Ok, they like to say it’s financial crisis but truth is, it’s a mortgage crisis due to greed and started from one country)
This sharp increase had come as the number of homes being put on the market for sale had dropped by 25% in the first half of the year compared with the same period in 2020. At the same time, demand for houses was more than double in the years before the pandemic and family homes were particularly popular. Do read the article in full here: article in theguardian.co.uk
Demand can also be sudden because of circumstances
If the whole Malaysia did not have Mamee for 2 years, when Mamee supply comes back, it will be hard to get our hands on one pack. People may just go crazy, buy way too many and eat until… suddenly.. they realise that Mamee will still be around from now onwards.
Pent-Up Demand, maybe
Property market will definitely be vibrant if there has been no activities for 6 months… or more. What we need to really see is whether this demand will continued to be supported by real economic growth of just that impulse to buy and the inflated demand because all of the demand came at once. If we were to average out the demand for the first few months, maybe the numbers may be almost the same on a monthly basis yeah.
Same advice, be safe and rational
I repeat the same advice people give about the stock market. If too many people got too carried away and start buying as if the market will reach the sky, that’s when the market will crash. Property price is a function of salary. If salary stays almost the same or lower but property prices goes up, then be ready. The support is unlikely to last. Happy understanding.