MRT3 Circle Line: Buy, Buy and Buy? Push up property price?

MRT3 Circle Line: Buy, Buy and Buy? Push up property price?

Increase in property price

First of all, many things could push up property prices. Think periods of 2008 all the way to 2013. The years when everyone thought prices could go up forever and developers launching as if there’s no tomorrow. The years when buying a property meant queuing up starting the day before or even days before! Or paying someone to stand in line for you. (Yes, this actually happened when I was still based in Penang)

Dropping property prices

Many things could also push down property prices too. Think of financial crisis, whether 1997 or the 2008 Mortgage Crisis. Those were the days when the interest rates were also sky-high and everyone who over-stretched was having sleepless nights too. Think of the days when every buyer of one whole condo block were all investors and none wanted to stay and all refused to pay maintenance fee. Prices will drop tremendously…

These could happen but when it comes to property investment and our mindset is trying to ‘speculate’ or ‘catch the highest point or the lowest point possible,’ then it’s better for us to look at the stock market instead. Let me share why.

So much money, so many things and so long wait

Assuming you are right about a certain potential and the property price is RM500,000 and could reach 30 percent higher within 12 months, this involves you doing the following.

1. Have enough downpayment so that you can qualify for a loan and wait.
2. Sign all the papers, wait for all the approvals
3. Inability to do anything else but to wait and wait and wait

Are we sure this is the way we invest into properties? For a potential 30 percent increase which is uncertain? In the stock market, you could have already gained the necessary returns in days or weeks or months. Maybe lose them all but if it’s for quick in and quick out, skip property investments. Property investment is always for the long term. Hold it long enough and the seller does not even need to worry about real property gains tax!

Reality in terms of timing

Nothing much, really. The land acquisition is likely to take a significant time, maybe even up till next year. Some owners may think their land is worth much more than what the government intends to pay… The construction can only start once every detail has already been presented, edited and is finally ready. There will always be some unforeseen circumstances for a project of this scale. Let’s remember that not all MRT projects may be completed on time even if MRT 1 was completed ahead of its scheduled completion date.

Reality in terms of other potential property investments

Still many units where the buyers could have overpaid many years ago and may now be “encouraged” to sell. Just need to keep looking, comparing and buying. Still many auction deals where the property remains unsold and could now be seen as very attractively priced. Still many launches where the property developers are still providing many attractive incentives to buyers. Even more secondary market properties where we can see, touch and check out before we buy.

By the way, if we are renting a room now, then it may be better to buy a place and rent out one or two rooms instead of just paying rental and lose all the money we pay for rental even after a few years. That’s a lot of money yeah. RM24,000 a year is RM100,000 in just 4 years… In other words, there are a lot more choices and things we can do and it does not necessarily be the ones right next to the MRT Line 3.

Where is MRT Line 3?

Below shows all the lines we have so that we can also realize we have public transport yeah.

Conclusion is I am sure MRT 3 Circle Line will help make some areas more attractive. Thus, the attractiveness would help people to pay more for the property lah. However, do not rely on this as your only decision to buy yeah. If the economy is not good, MRT 3 cannot stop your property price dropping. If the whole world suffers from another crisis, MRT 3 cannot stop your property price dropping. In fact, even more importantly, the WRONG Property will always be wrong property yeah. It cannot suddenly be a great property just because there’s a new MRT station nearby.

Happy buying yeah.

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