A reader wrote in and asked if those buyers who bought properties nearby the cancelled 6 stations in LRT 3 will now face a big problem. Frankly, on a longer term, the answer is no. Knee-jerk reaction as of currently and perhaps for a while more, most probably. I believe it is extremely vital that everyone understands that property buying is an investment and not a speculation. In other words, there should not be ONE magical reason (in this case one particular LRT station) which will give us super-huge returns. In other words, if we rely on only ONE reason to buy a property, we are assuming the highest risk possible and yet the returns need not be huge and for this case, if it was due solely to the cancelled LRT stations, then the buyer is in real trouble. Remember that higher risks does not equate to higher returns.
Fortunately for most of the buyers, there are certainly some other complementary reasons to buy. This is why I say, on a longer term, the buyer should not face a big trouble. As long the area is within the coverage of the LRT Line 3, even if it’s another 5-8km away, it is STILL connected yeah. Question is whether the tenant wishes to ride his bike, drive his car, GRAB or even wait for the transit buses to take the LRT. (Hopefully the planners have this in their radar; transit buses). If the question is whether rental yield will be lower, then the answer is maybe because it depends very much on whom the property is targeted for. If it was solely targeted at single working professionals who wants ONLY to walk to the nearest station, then this group is out. However, why not make it more worthwhile for them to rent the place? Say, provide it fully furnished instead? If I am that single professional, I will not prefer to rent an empty home lah. I would prefer to pay a slight premium but I can move in or move out with just my suitcase…
Next very important point is that this is what the Transport Ministry said about the cancelled stations. “On the suspension of five stations due to a forecast ridership of below 1,500 passengers per day per in 2020, the ministry said they would be built progressively, according to increase in demand. The stations are Lien Hoe, Temasya, Persiaran Hishamuddin, SIRIM, Bukit Raja and Bandar Botanic.” Full article in TheSunDaily.my here. So, perhaps the buyers can now heave a sigh of relief because if the demand is proven to be there, those cancelled stations today could be built tomorrow. There were property speakers who shared that buying into places where there are traffic jams is better than an isolated area. They are right, PEOPLE (population) plays an important part on the future of the area. This is also the major reason why those stations were cancelled too. Happy investing.
written on 17 July 2018
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