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5 reasons why buying further can still be okay.

Just a week ago, I wrote about property price when it comes to distance and size. I think it has above average clicks and I am sure many Malaysians are aware that they do not have unlimited funds and thus would have to choose between distance (further away) or size (much smaller sizes) Well, let’s also look into some advantages of buying a home in a neighbourhood further away from the city centre.

Here are 5 reasons why buying further is still a good choice and we are not going to suffer very badly.

#1 Further means less demand currently. This is why the prices that we buy will usually be lower priced (gross or price per sq ft) than if we were to buy somewhere already popular and wanted by everyone we know. True for both high-rise or landed. New townships will usually start with landed and high-rise will start to follow when the area’s popularity and population starts to rise. The reason is also because by then, the parcels of undeveloped land are smaller in sizes.

#2 Appreciation is still applicable yeah whether they are popular or not so popular areas. Just do not buy the totally-will-not-have-a-chance kind of area lah. People often tell me that the hotspot they bought into appreciated RM200,000 within the past 3 years. If we are talking about investment, it’s also the % as well. Example, RM800,000 increasing by RM200,000 (is 25% up) is slightly slightly behind RM300,000 increasing by RM80,000 (is 26.7% up). Which one has a higher potential for such an increase?

#3 Further means bigger (size wise).  Developers will usually have a much bigger piece of land and they can be more generous with the use of it. A smaller piece of land in the middle of a mature neighbourhood would have to be fully maximised and this is why the built-up for landed would usually be smaller while if it’s a high-rise, it’s either higher density to be cheaper or super expensive and lower density. Land cost usually determines the gross development value.

#4 Affordability is the key for future demand. It’s true that prices for mature neighbourhoods are far higher than that of newer areas. The reason is not because of demand alone, it’s more of fixed supply. There’s just no new land to build new supply of homes in these mature neighbourhoods. Thus to buy into such areas, one has to be willing to fork out higher prices. Fewer supply versus higher demand means higher prices.

#5 Appreciation of the extras… I remember a Cheras friend once told me that Cheras is the best. It’s close enough to the city centre and it’s mature and there’s continuous development. It’s everything great about Cheras. Guess what, a few years back, she bought a landed property in Semenyih and is now staying there a few days every week. Why? It’s modern and it’s new. (emotion) It’s gated & guarded and the guards wear nice uniforms! (safety)

It has parks after parks after parks and all her friends love her new place. Yes, she has to drive 50km on a working day but truth is, it’s not like she could wake up at 7am in Cheras during a working day anyway…

There are a lot of cons in buying further too yeah but there’s already many of those articles written. Just google for them to read yeah. Oh yeah, if money is not an issue for me and I have too much of it, I will choose to stay in hotels instead and with full concierge service. I will not be choosing to stay in a luxury condo in city centre and having to walk down the street or through a covered walkway to the nearest LRT / MRT  station. Then again, I am just another working professional like most Malaysians. We watch what we buy and we try to maximise what we get from what we buy. Happy thinking.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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