I read in The Star online today. (15 Feb) We have yet another prediction. 🙂 Depending on which report or news you read, the opinions are quite varied. Today, Siva Shanker, the MIEA President said that the cooling measures may have sent the market into a tailspin but Malaysians have a short memory and thus, by Q3, the market will rebound. Just few weeks ago, he was reported by The Star to have said that prices would only recover in 2016. If it is Q3 2013 versus 2016, it meant that the market will be recovering faster than thought. Do Malaysian investors have short memory? I think Malaysian investors are more on ‘herd mentality’. Not many understand what they are really buying. They buy because everyone else is buying and they are scared when every report paints a negative picture. Everyone kept forgetting that if majority can be right, then why are the minority holding the world’s wealth?
Hwang DBS reported that price increase would now moderate to just 3% per year. If this is true I like it. In fact I welcome this kind of growth instead of Malaysian property prices be ranked in the top 12 of real estate price increase. Actually, prices of property has to increase. The reason is, the cost of construction in terms of materials and labour is always rising year after year. Today, if you have any developer friend you will know that none of them would build if their gross margin is less than 30%. The reason being they may suddenly find themselves losing money if some units were unsold and their costs went up due to material costs going up. However, for any prices to rise 10% per year continuously is absurd. If this continues, every property would be unaffordable and bubble will not just build but will burst.
To understand some of the signs of bubble, you can read my article here: How to spot property bubble I have first hand info about the slowing market because I have put up a property for sale and for the price which is very attractive during good times, people are now viewing and viewing and viewing instead of offering. As for the few who offered, their offer is ok but not something I wanted. I am still deliberating whether I should hold until Q2 or Q3. Perhaps I will decide the next month. Who knows, another prediction may come up saying that property transactions has started to inch upwards?
written on 15 Feb 2014
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