Reported in an English daily quoting someone in the property industry. Ringgit is depreciating, therefore property prices would be hiked up? Reason given is because the materials are becoming more expensive and workers are asking for even higher pay. Assuming that I agree with this assessment, it is best for anyone who says so to give a detail breakdown of the actual increase due to Ringgit’s depreciation. After all, transparency should be a virtue for both the public and the private sectors. Only by having this that both sides can continue to provide honest feedbacks as wells check and balance versus simply giving a statement which sounded really hollow. Am I right?
A few suggestions were given to help the property developers to cope with this increase as well as to ensure the vibrancy of the property market. They include abolishing the cooling measures implemented including Real Properties Gains Tax (RPGT), foreign own ownership minimum price levels and the tight lending rules. It is believed that when more foreigners can buy properties here, it would help stabilise the ringgit. This is because the demand for ringgit would go up. Besides that, without RPGT, demand would increase for sure as many are reluctant to be tied for 5 years. As for tight lending rules, I disagree. There are plenty of choices and one should also consider cheaper secondary properties too.
Ringgit down has sparked a downtrend of the share market. To a lesser extent, it has also dampened sentiment in the property market. It has however not done much to the actual property prices, at least even till Q1 2015, not yet. Thus, whether property prices would trend upwards or downwards would depend on the demand. The demand meanwhile would depend also on locations. Secondary locations would remain second choice. A prominent speaker told me that other day about landed properties being less than RM400,000 but the banks are only willing to end maximum 80%. I think the sign is clear. Prices are not on the way up unless of course everyone is so blinded to buy just that few popular hotspots. I am however not a developer. Maybe they know things I do not. We shall see.
written on 1 Sept 2015
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