Someone read ONE (1) article and Whatsapped me this question. “How could property prices be rising forever?” I am not sure where did I ever imply that property prices will be rising forever in the article but then again, let me tell everyone what’s my actual wish for property prices. I have just 3 wishes, not too greedy and the last wish is not to have 3 more wishes. 🙂
Wish 1: Property prices to rise only by half of the income increments. In other words, if the income rises by 5% per year, then property prices should ONLY rise by 2.5% per year. Example, for people earning RM2,000 per month and could afford a RM200,000 property, every year they may get a 5% increment which is RM2,000 x 5% up = RM100 extra per month. The property price meanwhile will increase by 2.5% which is RM200,000 x 2.5% = RM5,000 per year. Divided into a 30-year mortgage, this RM5,000 extra is equivalent to extra RM18 per month. Mortgage calculation as per image. Courtesy of iProperty.com.my
Wish 2: Property MUST be made affordable to all, especially the B40. A developer friend told me that his affordable apartment project of 500 units had to be sold over 2,000 times. The reason? Loan approval issue. Frankly, any Malaysian needing help to own a home should have access to affordable homes. Many times, a property is the cause for future poverty and it’s also the cure for poverty. Remember, a RM200k home today, at 3% up every year (average) will be half a million (RM491k) at the end of 30 years. Interest is also inside the RM491k but frankly speaking how many B40 households could have a fully paid RM491k asset by the time they retire? EPF alone is not enough.
Wish 3: Have just ONE agency which is in charge of affordable homes for the people. Affordable homes which are built but NOT stayed in by qualified people is worst than unbuilt homes.The latter did not use funds meant of the affordable homes. This agency should also ENFORCE the maintenance of the units. There’s no need to look too far, just use Singapore’s HDB as a good benchmark. This same agency should also provide guidance to first-time home buyers so that they understand buying a home is a NECESSITY and not a gamble; get rich quick scheme. Every Malaysian needing a home should get a home.
Oh yeah, will property prices be rising forever? Let’s understand that even HDB’s flats are rising to new highs all the time yeah. Just look at what was the price in the beginning to understand that property prices will continue rising. This is why the government should intervene proactively. NOT building it but really understanding what’s really happening and planning for more homes to be built based on needs. Subsidy in this case will most probably be necessary but always take swift actions against those who took the assistance but neglected to pay back for example. Please do not go the route of the PTPTN which is currently extremely messy. Regardless of who we owe, debts must be paid. By the way, the PTPTN funds come from the rakyat’s tax money. Yes, that includes me! Happy understanding.
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written on 14 Nov 2018
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