If you do not know this story, it’s okay. You can read a very short one here. In brief, a poor farmer and his wife saved money slowly and one day he has enough for a goose. He hopes the goose will lay him eggs which he could then sell in the market. The next day, he found out the goose lays golden eggs! He could sell those for a lot more money and soon the farmer and his wife got richer and their lives got better. However, they feel that it is too slow. They decided to cut the goose open to take all the golden eggs at one go. When they cut the goose open, there were no more eggs inside… Greed has destroyed what they could have had.
In the property market, we have seen this time and again. Someone somehow got a little lucky with the timing and because of this got a huge windfall when the property price moved up by double digits in those few years. What does he do with the windfall? Well, spending it fast is one but what he does next is that he will now buy a FEW UNITS at one go because he wants more money gains, quickly. This may not happen again yeah.
When everyone does the same and the whole development is full of people thinking of doing just that (sell quick for high profits based on previous experience), imagine what will happen when the keys are handed over? Yes, the jostling to sell among majority of all the home owners will start. Very soon the pressure to sell at lower prices will start when some people start to face problems with their mortgage payments. When transactions start to happen at lower prices, then more will follow and soon the prices are dumped and any profits are now a foregone conclusion. It’s more of cutting losses now.
In the end, what will the person learnt is that property “investment” is not rewarding at all. Seriously, is this the truth? That property investment is NOT rewarding? Or that property investment gives super high and fast returns? Property prices should just rise slowly with higher salaries and inflation every year. Read this for understanding: Property investment is not low risk and low returns In other words, it should mirror the golden goose with a golden egg every day. Happy finding your ‘golden goose’ from the property market.
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