I have been asked nearly daily on what will happen to the property market since 2015 has been a bad year and 2016 is going to be another year we want to forget. Let’s not forget, 2014 was also a “so so” year and 2013 was the start of it all. My answer is as good as everything you read in the media; 2016 is another flat year. However, allow me to now ask all of us three questions.
Is demand for properties increasing or reducing? Based on transactions, it does seem to point to a decreasing trend? Do a survey among all your younger colleagues. Are majority renting or already paying for a property? If majority are renting, it meant potentially they may be buying one in the future. If they are already paying for a property currently, chances that they will be buying the next one or upgrading in the future is there as well. Yes, beyond the slowdown ‘haze’ the ‘rainbow’ remains present.
Has any financial crisis been forever? From the 80s to the 90s to the 2008 and potentially 2016 world economic recession. Read here: Getting ready for the next global recession? The answer is a brief, no. The crisis will come and affect every one. It will cause lots of hardship. Some economies may collapse or nearly collapsing. Some people may lose everything they have due to some greedy decisions. Well, there would also be many who would become richer after the crisis. The banking sector may be strengthened. There are always two sides to a coin.
Third question, do we really only want to invest in stocks, commodities, currencies and whatever other stuffs which we could not really ‘open the door, touch the walls and feel so enchanted that we own a place we call our own?’ I think property would always be an important variety in the investment world. Is this not what diversification or even don’t keep all your eggs in the same basket meant? Oh yeah, even if we intend to only invest in REITS, guess what, someone in that REIT organisation would still have to buy properties.
There is no need to look at it as the worst time or the best time. During the best time, majority of whatever you invest in may give you good returns. During bad times, a smaller percentage of what we invest in may give us huge returns. Only caution? Understand before we invest. Simply buying or following friends do not work in both good times or bad times. If you gain, it’s just pure luck. Just do not hope to be lucky all the time…….
written on 1 Jan 2016
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