With the current COVID-19 still in our midst, the sentiment has remained negative. Most messages on Facebook are about how bad the situation is. When we look at the property market, we have some who say that developers must start focusing on digital marketing so that they could sell. We even have people saying that even with the PENJANA incentives, there’s no way that the property market will move up.
Maybe we look deeper and we maybe we could see that for the market recovery to start, we need to look at three different groups of potential buyers and get them to buy. In my opinion, there are three distinct groups of potential buyers. They are as follows:
#1 – Who could buy. (buying is within their capability) These are usually people who still have jobs, still have salaries and still have savings and usually already paying for that home they are staying today. I think they are small business owners (business still doing fine) or working professional couples. In other words, they could buy if they are convinced that the situation is safe for them to buy. They may even decide to upgrade their current home into a bigger one. For this to happen, they need to be assured that the window to buy may just be now.
#2 – Who can buy (more than capable to just decide). These are people who have already diversified their investment portfolios. They continue to look for investment opportunities and property is just one of those choices, not the most loved ones, not at the moment anyway. They may choose to evaluate a little longer than usual because they know this is the investors’ / buyers’ market. Stock market has good valuations. Property prices are not going anywhere. How do we tell them that now the window of opportunity has opened? An earlier article showed some of these people: Buy Buy Buy Singapore to Sydney
#3 – Who needs to buy (has actual need to buy) These are the first-time home buyers. They could be couples expecting a baby but their current home (maybe rented) is too small or too uncomfortable. They could already be considering to buy to upgrade for some time but is still worried if they should do it now. They do not have enough experience and too many people say the property market is in deep trouble. So, the decision continued to be delayed… How do we tell them that the time to make that decision may be now? (By the way, rental they pay does not build up any wealth yeah…)
Group 3, unfortunately may not be the first group to decide. However, when they read more good news about property market (because of groups 1 and 2 buying), then they may now join the purchase. Group 3 is truly the largest group in any market and Malaysia, being a developing nation meant that the demand for homes remain very strong. However, in order for the market to move, we need catalysts yeah.
This is no different from most other businesses. For example, that biggest manufacturer may decide to build a new base in a new country. When they have started operating successfully, many of the smaller ones could see this happening and they know that it’s safe and all of them would start to come in and operate in the same country as well. This can be known as the Flying Geese effect too. The geese flies in a V-shaped formation but it has to start with that one leader goose.
Let’s just see what happens in the next couple of months with these three distinct groups of property buyers yeah. Happy understanding and even if we are not the target to buy properties, if we help to spend a bit for holidays within Malaysia, this will also help boost employment which will then potentially boost the property market in the future. Not immediately lah. Cheers.
Next suggested article: 4 BAD reasons for property investment. Real ones