HLIB Research: Property upcycle has started

HLIB Research: Property upcycle has started

I am someone who does not believe too much about buying properties based on the cycle. I don’t know when is the lowest point and I certainly would not know when is the highest point. I am very sure when I bought a property way back in 2007, I did not know that the upcycle would be coming in 2008 and it will continue until around 2013.

By the way, the buyers who bought in 2014 may not realise that 2013 was already considered a peak and prices after that may have been too high to sustain and that explains why many buyers who ‘speculated’ got into financial troubles after that because no one is willing to pay even higher for their properties which they have paid higher than market for.

Yes, one good friend is still holding to a property she bought for RM950 per sq ft in some amazing area. My heart sank when she told me and today she is using that office instead of selling. So, at least that’s a positive. Now… a research bank is saying that the property upcycle has now started and it has also given some reasons why it said so.

Article in themalaysianreserve.com A MULTI-YEAR property upcycle is now set in motion driven by a number of factors, including  the rise in industrial developments, providing developers a new avenue of growth and alleviating pressure on residential developments.

Elaborating on the property upcycle, it said the second reason was the decentralisation of economic development and rise of second tier cities, providing new development opportunities in new areas and relieving overbuilding pressure in the Klang Valley.

The third factor was the rising land value arising from industrial developments, economic developments in new regions and solar farms development potential.

Commenting further on the rise of industrial developments, the report said the seed of the current sector rally was sown back in 2018 with the onset of US-China trade war. Do read the full report with more details here: Article in themalaysianreserve.com

A few key things were mentioned

“rise of second tier cities” – I could not find any such formal classifications of a second tier city here in Malaysia. I personally think cities such as Batu Pahat, Ipoh, Melaka, Batu Kawan should all be considered second tier cities. Or it could be places like Rawang, Semenyih, Bangi, Kajang etc? Since the article mentioned to relieve overbuilding pressure in the Klang Valley.

I know this fact though. If we have more Foreign Direct Investments (FDI), especially with all the positive reports recently, then we will have more job opportunities (hopefully higher valued ones) and with more people having money to spend, of course the demand for properties would also rise. Even the currency everyone said was the worst in the world (which I totally disagree and written many times) is now the best if not one of the best performing currencies here in Asia. Here are the few articles about ringgit earlier.

All the different forecasts about ringgit. Up or down?

Update about the worst currency in the world.

Big Mac as an inflation check across all the countries. Where is Malaysia?