Property prices are dropping! (except one type).

Property prices are dropping! (except one type)

It’s for the comparison of Q1 2024 vs Q1 2025. Read on to understand in detail and then take appropriate action.

Sound the alarm! Drop the intention. Stop the signing.

From the numbers as per Q1 2025 versus Q1 2024, it seems that the property price is dropping for three main house types! It has dropped for High-Rise, Semi-Detached and also Detached. The only one which is bucking the trend strongly is Terraced. Does this mean we should only buy Terraced moving forward then since this is the only type which is increasing in price? Well, if we do, then I do think the average prices will continue to rise and maybe rising even faster too.

How are the property transaction numbers derived?

One word answer? Mathematics. All the numbers below are based on average yeah. It means if there are a lot more transactions happening for lower priced ones, then the average will drop. If more transactions are happening at higher prices, then the average prices will rise. Simple mathematics. This does NOT mean every unit is dropping in price or every Terraced unit is increasing in price.

That’s why it will not work if we try and pressure any seller to sell lower simply because the average price is dropping. The seller (including me) will politely ask the potential buyer to enjoy the weekend by flying kite.

Why do I think prices for Terrace homes are rising?

People prefer landed homes over high-rise. They do believe landed will increase in price versus high-rise. They will claim that the stats also substantiate their claim that only landed will increase in price while high-rise is showing a reduction in average price. Never mind that the data for both the other two landed types also showing decrease in price. Never mind that for some townships, even the queue for the high-rise units are long. Never mind that the fact remains that majority of Malaysians will be buying high-rise units too.

What happens when everyone ONLY want to buy landed?

If everyone buys landed, I am very sure our suburbs would soon cover a location which is 60km away. Right now, as soon as talk about Rawang which is 31km away from city centre, they say TOO FAR. Okay, so landed’s out or in? If it’s in, then stay further… If it’s too far, then stay high-rise. Choose one lah. This is property market. We want landed, we prefer gated and guarded, we want it cheaper, we want it nearer to the office. No wonder many of the ‘we’ is still looking for a property lah.

Means landed should be the type we buy since there are far fewer, right?

If we could afford and that landed meets all our other expectations, yes. If we could not but we know renting means all the money is gone, then we should still proceed with a high-rise unit instead. No need to ask about price increase because all the stats have continued to show that over a period of time, prices will always move up.

Do we know why? Is it because of speculation?

Land prices will increase because land owners know how much his / her neighbor sold their piece of land for. No one wants to sell at a lower price. Once a developer buys a more expensive piece of land, they could choose to pass the cost to buyers or they could choose to absorb it. If I am a developer and I am forced to absorb it, then I will go do other things lah. Why would I want to be so pitiful? Pushed by landowners to pay higher and pushed by buyers to sell lower. If business is always like this, best not to do business yeah.

Construction costs will keep increasing. Please check cement, steel, bricks, sand and more. Prices of all these continue to rise. If it rises, then property developer could cut their margins or sell higher. When they sell higher for new properties, the secondary properties would also rise in-tandem too. Let’s not forget that people working in the construction industry also wants pay increase too. No industry is considered a charity. Even not-for-profir organizations must keep paying competitive salaries or else they lose their people to for-profit organizations.

Happy deciding. Both are just fine whether landed or high-rise. Both have the wrong types of properties, just skip those.

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