I have quite a number of friends who laughed when told about the potential property bubble bursting. They earn their living from the real estate industry. I also have a few friends who are confidently telling me that when the property bubble bursts, they will enter the property market and buy all the properties at fire-sale prices. Whichever group we are in actually does not really matter. These are 7 things to do while waiting for the property bubble to burst.
#1 – Identify the signs and keep ourselves updated always. It’s not that wise listening to both those who said there are NO property bubble or those who predict a YES to property bubble. Here are the few signs that should happen before a property bubble bursts. Remember yeah, if another world financial crisis happens, Malaysia could not escape unscathed.
#2 – Check out the prices. There are already overpriced properties in the market today. That’s why its prices have already dropped even without a property bubble bursting. However there are also properties in a mature neighbourhood, owned by owners who bought many years back. Whether a bubble bursts or not, these owners do not usually sell at 20-30% lower unless they themselves are in financial trouble. This meant that certain choices may still NOT be available even when the property bubble bursts.
#3 – Read, Read and Read. By the way, when property bubble do burst, it’s not just property prices which will be dropping. Many other potential investments will also open up too. First up may be the stocks of developers. Usually the whole stock market will drop first before the property market crashing. It’s not so usual for property market to burst first while stock market is okay.
#4 – Have you driven around all the areas you believe is pretty attractive to buy into or for own stay? Buy nearer or buy further? Buy more facilities or buy more space? That’s usually a choice of ‘cheaper’ due to property bubble bursting or ‘much cheaper’ when it’s further away. Some reasons here.
#5 – Identify the type of properties you like to buy. High-rise for positive rental yields. Landed homes for own stay. Both will providecapital appreciation, not just either one. There are so many choices today that we may still miss out because when property prices suddenly drop, many people will also be entering the market too.
#6 – Save as much as you can. When the property prices suddenly ‘jumped down the building,’ then cash becomes king. So, assuming a RM500,000 property becomes RM400,000 suddenly, one would need RM40,000 as downpayment…
#7 – Do pray / hope that the government is successful in ensuring the property market is orderly and we do not have any property bubble bursting scene in the near future. At the moment, both the Bank Negara Malaysia and the government are doing okay with their cooling measures and affordable homes plan respectively.
Just in case we found some undervalued property somehow in some upcoming auctions, it’s already worth some serious actions yeah. Especially when we look at the price, compare it to the median transacted prices in brickz.my and realised that it’s already 30 percent below the prices of all previous transactions. Happy investing.
written on 13 Dec 2018
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