Buying a property. Way too Far, too High and too Soon (updated)

Just last week, someone told me that no one should buy properties if they are not ready. I asked what does it mean by not being ready? He said, lots of reasons, especially these days when the money is insufficient and the cost of goods are all so high. Furthermore properties are also so expensive. How to buy? I immediately showed him iproperty.com.my and browsed for secondary properties below RM300,000 and chose Selangor. I said, there are still MANY choices. He said, who wants all these old properties. The young people nowadays prefer new properties. Haha. Ok, I said nothing further. Well, just to reiterate three points why people said they did not buy yet.
Too Far – Unless you buy in a place without roads, it is very hard to find a ‘too far’ place for property. Even property developers would never build in places whereby it’s impossible to access. Think about it. Many years ago, Mon’t Kiara was nothing more than just……. nothing. Sunway was nothing but mines, mines and mines. You only go Sungai Buloh only when you really have nothing to do. Today, these places are still growing, especially in terms of price per sf. Even Rawang is now firmly into the picture especially with Rubber Research Institute of Malaysia having moved out and leaving a huge and prime piece of land for development.
Too expensive – I remembered when condo prices hit RM250,000 in Penang many years ago. Imagine this, in 2007, RM237,000 condominium, with FULL FACILITIES, I could wait for over 1 month before going back to buy back the exact same unit! At that time however, everyone was saying, how can a property without a land of its own be so highly priced? Local Penangites especially was the most critical as they have never seen condo prices being close to RM300,000 for a high level unit. Today, even RM500,000 for a 1,000 sf condo is considered cheap if not very cheap. Availability is nearly none. I am talking about Penang island.
Too soon – This has no meaning, truthfully. Buy if you can afford. Not buy things which stretched you thin or speculatively buy. Thus, the question of too soon does not appear. It’s just a question of can you afford it at that point in time. What age should you buy? 30? 40? No one can answer because everyone is different. Some may be lucky to have support from ‘PAMA’ (father and mother) bank so you can buy slightly bigger but if you are ready to buy instead of rent, you should proceed. If you do not, the money saved will go to Iphones, Samsung Notes etc anyway.
Property may not be for everyone because it’s very sticky. It may be high risk if you bought wrongly and many other negative reasons. How about investing in REITs? It’s safe, it’s easy to buy and it’s affordable and low risk. Alternatively unit trusts or even PNB’s funds. Diversification is key to lowering your risk. Please do not speculate. Happy investing.
written on 24 Oct 2014
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