Has desperation in the property market started?

I read an article from themalaymailonline.com which a friend forwarded to me. The article started by telling people with some spare cash to buy condominiums as there are now many for sale at bargain prices. It then said that the buyers are selling because they have lost confidence about the Malaysian economy. The report then quoted ONE real estate agent who said that the trend of selling below market value started four months ago. The agent said that there are sellers with 10 properties who are trying to dispose their properties as soon as possible and hold cash because they are worried about the economy for the next two years.
Then, the real estate said something which I think everyone should take note. He said that even the group investors with HOLDING power are selling because these groups normally flip within two months. Many examples were then given, for example, Sentul’s Capers condominium which was completed in early 2015 were being sold at up to 20 percent discount versus its market value just a year ago. She said she has recently sold a unit of 1,281 sq ft for RM850,000 (RM663.5 psf) and this is way below the bank valuation which is above RM1 million or RM800 per square feet (psf). Another units with 6 car parks were being put up for sale at just RM1.15 million. The usual price is Rm1.4 million and usually comes with just 2 car parks.
Worried yet? Well, according to the latest report by the Valuation and Property Services (JPPH), overhang residential numbers in Kuala Lumpur for H1 2015 increased to 1,346 units worth RM1.23 billion.This is up whopping 28.7 per cent in volume and 28.1 per cent in value compared to H1 2014. Transactions however is on a downtrend. It contracted by 7.4 percent in volume compared to the same period last year. Another real estate agent said that despite some people believing that this a good time for bargain hunting, there are not a lot of properties which are being sold under market value as there are still demand.
Have you identified that luxury property that you want to buy yet? Most probably it has to be a condo which has already increased in value compared to when it was bought just 3-4 years ago. If you have identified, have you determined a price that you are willing to buy? If you have determined the price you want to buy, have you started browsing through property adverts for potential viewing? From these viewings, you can start to offer your pre-determined price. I do not think the selling frenzy has started based on conversations with many industry friends thus far. Besides, those who could afford these units are definitely not the typical middle-class people. However, there is little doubt that for those who just want to cash out fast, these sellers would definitely be willing to give huge discounts. 20 percent is definitely possible. Happy viewing and offering.
written on 10 Dec 2015
Next suggested article: Ready, Steady, Grab the opportunity.(KLCC area)


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