This article was written for propsocial.my and was published 2 months ago. When is the best time to buy a property? I am sure everyone has his/her personal answers based on their experience.
Look for Opportunities
For people who have not bought a property, the best time may yet to come—hopefully, it will be one day soon. For now, they are still waiting. A senior management of a top developer in Malaysia once told me that the best time was 20 years ago; the second best time may just be today.
For seasoned property investors, the best time is when they find a distressed seller selling below market value. It may also be a property they found in an auction where there are no other bidders and the property is 20 percent below the market price! These seasoned property investors almost always keep their eyes and ears open for any potential opportunity.
The Worst Time?
When is the worst time to buy a property? For a first-time home buyer, the worst time may be during some crisis right after they bought their first property. During a crisis, the prevailing sentiment is negative and they may find out that the property they paid for RM400,000 just a few months ago is now in the market for only RM360,000.
Best advice? Ignore the market and just keep paying and enjoying the stay. Recovery will come soon after. Past crises have shown that recovery is a certainty here in Malaysia. From the 1980s to the 1997 US subprime mortgage crisis, nothing has bothered our property market for more than a few years.
For the seasoned investors, the worst time is when they could have bought but did not. I still remember the time I bought a condo in Kelana Jaya. The year was 2007. The units were over 1,000 sf and most were below RM200,000. I bought one for RM183,000 and wanted to buy another unit at RM192,000. After negotiating, I could not get the price I wanted and the transaction did not happen. Fast-forward just a few years later and the same condo is now RM400,000. I sold my unit for RM460,000 after the RPGT period. If only I proceeded with the second unit…, right?
Maybe one day
I have friends who tell me that they will be buying a property “some time” in the future. When asked when, the answer will always be vague, and the “some time” never turns into the first time. If we look at advanced property markets in the world today, the fact remains that without a property to our name when we retire, it will be a tough time. Property may just be the ticket out of poverty in many countries.
In Silicon Valley, for example, the monthly salary of a security officer is US$2,400 but he would struggle every month because of property. The typical rental for a one-room place is US$2,400. He could share a room with others, but I am worried for him when he gets old or when he has a family.
Remember, when we retire, our income stops and it’s going to be a struggle paying for rental every month. However, if we turn that “some time” into “the first time”, the property would have been completely paid for at the end of 30 years. By the way, a RM200,000 property at just 2% increase per year will still become RM500,000 at the end of 30 years. It’s very true that inflation would have eaten a lot of the RM300,000 increase in value, but I want to also remind everyone that not many Malaysians could save RM500,000 in their bank when they retire.
Be Ready
The best time to buy is when we are ready to buy. The worst time is when we have spent everything we have every month and then we find a property we’d love to buy but have to abandon the idea because we just could not afford it. Please discard the “some time” thought and focus on making that first-time property purchase a success.
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Happy deciding.
written for propsocial.my over 2 months ago
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