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Decision to buy a property? These 3 things DO NOT MATTER, please.

Decision to buy a property? These 3 things DO NOT MATTER, please.

Property market Malaysia’s trend

Someone sent an article into a whatsapp chat group and suddenly many people were debating about it. The article was about the Malaysian property market, whether it will be going up, going down or staying stagnant. Click here to read. Some say property market will not be good for the next 12-24 months. Some say it will be better once we relax the lockdowns. Want to hear what I say?

If property market is stagnant? If the property market is stagnant, it means transactions are not happening. Means even if there are property buyers, there are no property sellers. Alternatively, maybe we have many property sellers but there are no property buyers. Last but not least, we just have no buyer, no sellers and basically nothing happens in the market.

Plus, the developers are not launching any new properties at all. Maybe they have finished selling all their properties and have nothing new to launch? I hope that by now you should realise that the property market CANNOT be stagnant yeah.

As for the latest number from the market, in Q1 the total transactions numbered over 80,000 transactions. Forget this yeah. Market is very far away from being stagnant.

Napic

What if property market is DOWN then?

When property market is down, it means transactions are dropping. It also meant that there must be some comparisons, right? Else, how do we say it’s down? In 2020, we had a total of close to 296,000 transactions. This is roughly 74,000 transactions per quarter. Is this LOWER or higher than Q1 of 2021? Can we now conclude that property market for Q1 2021 is not considered on a downtrend? Thank you for agreeing.

By the way, there are definitely many ways of doing the comparison yeah. Maybe if we compare this to those years when the transactions were ‘crazily’ high, then the 80,000 units in Q1 2021 is considered on a downtrend. It’s your choice yeah. For me, Q1 2021 is not on a downtrend.

NAPIC 2020

What if the property market is on an uptrend then?

Actually, when the property market is on an uptrend, we do not need to write much lah. At that time, Bank Negara Malaysia (BNM) will be more alert and will start to implement some measures to contain the sudden rise in transactions. For now, BNM is maintaining the Overnight Policy Rate (OPR) at 1.75% which is clearly a sign that it is trying to encourage more economic activities.

So, the property market cannot be considered on an uptrend too. Haha. So, what is the market doing today? Perhaps it’s best to ask three even more important questions instead.

  1. Are we buying a property because we need a property? If Yes, then go ahead lah, it’s for long term anyway.
  2. Have we done sufficient due diligence and we know the price we pay for the property is not overpriced? If yes, then go ahead lah, it’s for the long term anyway.
  3. Are we buying because we believe our friend? If yes, then think again lah. What your friend need and what you need may be different yeah.

Our decision to buy has to include many other things. However, it should not include whether the property market is stagnant, on a downtrend or even going up. Bad decision exists in all markets. Wrong properties or overpriced properties also exist in all markets. Last but not least, buying without knowing and simply relying on the market means it like gambling too. Happy understanding.

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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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