A few days ago, a colleague shared a photo of people queuing up for an about to be launched high-rise. He remarked, ‘Sure or not. Nowadays still got queue? Must be the developer pay for these people to queue. Some so young, don’t look like can afford.” I told him that how long the queue or how short the queue is not the main issue. The main issue is whether that particular property is worth buying or not. If the majority is right, then why are only the minority rich? By the way, the reason why hotspot become hotspot is also because way too many people wants to crowd and pay ever higher prices for them. So, do we follow? Haha.
During lunch today, another colleague shared with me about one particular third-tier city in China in which her friend was working in. Just a few years ago, every new project launch would be full of people and the queue would be extremely long. Needless to say some even got into fights over the queuing spots. Today, many of the developments in this particular city is empty because the whole development was purchased by INVESTORS and not for own stay. I think it’s going to be a long long road to recovery for these kind of purchase, if at all.
Due diligence must be done objectively. It’s not based on queues alone. In fact these days, I think people are definitely more rational. Perhaps even paranoid over parting with their hard earned money for a new high-rise. Ms. Olivia Lim, the CEO of 88home.co was telling me just the other day that I seem to be writing less about bad news and more about good news. I told her that when we look at the whole market today, the situation is pretty bad but it’s still in the black. Unless unemployment rate rises, bank’s non-performing loan starts to spike or Starbucks patrons decreases, times are really not that bad. Sentiment is negative, granted. Buyers are available but extremely cautious and uncertain. I will continue to share good news based on facts and stats. As for bad news, log on to Facebook. Don’t look for queues when we buy a property. Look for all the WHYs……instead.
written on 6 Sept 2016
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