Many friends love to ask if they should sell their property now? My answer has always been “do you have a reason to sell your property now?” They would then give some reasons such as, ‘if can sell at a good price, why not?’ Well, if can get a good price, then what’s stopping them to sell, right?
The median age for Malaysia is 30.4 years (DOSM 2021 data). We can go into any supermarket today and take a look at the diaper brands. If you did not notice, the number of brands and diversity are still increasing. It meant that the demand for healthcare from the new babies are still increasing.
A few years ago, a friend asked me whether it’s still a good time to buy a property. I asked him why he asked such a question. He said the overhang is getting higher and higher. I asked him if he’s interested in any of the overhang properties. By the way, this is how overhang properties are defined.
A good friend of mine has just left Rahim & Co nd joined another organisation. However, just before he left, he sent me a comprehensive report from Rahim & Co which I think i want to share with more people. Thus, I have looked through them and chosen some relevant charts for us to understand the property market a little better versus just listening to our FB friends who may be speaking from what they heard in their FB pages. Haha. Below are all charts based on actual numbers.
Typical Homeowner: I want to sell as high as I could. My property is a very good property.
Typical Homebuyer: Please sell me at a lower price. Market is slow, I want better prices before I buy.
Homeowner with an overpriced property: If I sell at this price, I will lose money. If I do not sell, then I have to keep paying the monthly mortgage. Property investment is such a bad investment.
Homeowner with an in-demand property: I prefer to have that extra RM50,000 even if I know if I reduce it by RM50,000 I could sell quickly. Let’s look at some of the offers first.
Well, the answer depends. If you found a neighbour selling their home which is right next to your parents’ home and you want to be close to them because it’s now time to take care of them (since they have taken care of us for a very long time), then you would buy even if BNM increases the rates by 1 percent. Before you ask, but how much is this 1 percent increase? What if I could not afford this increase then? The calculation is right at the end of this article. In the mean time, take a look at what fluctuation in rate would do to the property transactions in the largest economy in the world. As at 2023, it is definitely still the United States yeah.
Typical Homeowner: I want to sell as high as I could. My property is a very good property.
“Do you want to own a mall without needing to buy the whole mall?” Yea, it’s possible if you are to invest into a real estate investment trust fund via the stock market. There are plenty of choices actually. Okay, it’s not like hundreds of choices but I think there’s enough for us to pick. Here’s the list of REITs and all the other necessary details to know before you invest into one. I think it is comprehensively explained at dividendmagic.com
There are many sites offering the calculation. I think this one by loanstreet.com (click here to go there) is straightforward and simple to use and refer. Do take a look at below:
Malaysia property market is a small one. Ours is also not so advanced. People still think anywhere above 20km away from the city centre as VERY FAR. Haha. I always encourage everyone to take a look at the suburbs in some advanced countries to understand that even 50km is not considered as ‘impossible’ and meanwhile 30km from the city centre is considered normal.
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People say, “never put all your eggs into one basket” because the risks are very high that if the basket were to fall, all the eggs would be broken. It’s the same for investments. Diversification is necessary. My personal opinion is that dieversification is necessary but investment into property is compulsory. The last I remembered, not many people prefer to stay in a cave or under the bridge these days.