You know, there was this quite viral piece of news just a few days back. It says that the property prices may fall 10 – 20%. My views about it here: Property prices expected to fall due to COVID-19 and recession Some agents say that their buyers have started to ask them about such properties. Some even ask for specific dates / months that the drop will happen. WOW… can anyone really predict to such accuracy, if at all? 😛
Some objective comments from real estate people for my article in FB include the following:
“Only problem properties will be sold cheaply; family disputes, dying owners, divorce cases, highly indebted individuals”
“The property price might be down. But how about the buyer? How many left with purchasing power?”
“Don’t think it’s nearly a crash for property market now . Crash for property market will only happen when tons of ppl lost job and business close down”
Frankly, these buyers (who are waiting for prices to fall) should continue to search for those properties. Tell your real estate negotiators. Keep looking at new property listings online. Maybe you could find some fresh listings with very much lower prices than the market. No one knows if they may get lucky somehow because there are definitely more people thinking of selling. As for the sellers, it may not even be due to desperate sellers alone. Some of these sellers just wanted to quickly sell so that they could sell at current price level before the prices start falling 10 -20% as what all those people say.
It’s no different from the stock market okay. If you believe the stock market is going to fall very soon, of course you will sell even if selling now may incur 10% loss for example. This is because you do not want to have 30-40% losses, right? It’s to MINIMIZE losses and this is why stock prices fall very fast as soon as sentiment turns from positive to negative. It is NOT because the companies suddenly have losses when they have just reported profits last month!
The current moratorium of 6 months till end of September 2020 is not going to be much help if one was already in financial difficulties prior to COVID-19 pandemic. For most of the people (businesses and employees) however, this moratorium was 6 months and not 2 months because it assumes that restarting the economy will take some time even after the Movement Control Order (MCO) is lifted. Thus, this gives businesses some breathing space so that as business starts to come back, they have time to prepare to start repaying their loans. People who got lower pay or lost their job may also get a higher pay or have time to get back a job once the MCO is over too. This is why I think the moratorium was a good pre-emptive move by our Bank Negara Malaysia (BNM).
As for the desperate sellers, they could be selling their properties even currently. There is no need to wait till after the end of the moratorium. By then, maybe their financial situation have improved. Yes, of course I would wish for that to happen (financial situation improving for all Malaysians). I do not wish to wish that people drop into financial difficulties just so that I could get to buy their properties at clearance sale prices. I am just another Malaysian. Happy understanding.
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Next suggested article: Lower mortgage rates and lower FD rates too. Oops