Pre-Launch Sales behind speculation?

Today, Minister Datuk Seri Wahid Omar advised REHDA to get their members to stop pre-launch sales. The reason he said so was because he believed this was one of the ways in which the prices of properties were driven up. The reason was because these pre-launch sales typically attracted more property investors than genuine buyers.
REHDA president, Datuk Seri Michael Yam however defended pre-launch sales because this may be a way for developers to get registration, get a response as to whether the project is viable or not. If the reasons are genuine, then it should be allowed. He also said Putrajaya should provide some guidelines because these kind of sales does come under a gray area.
Personally, I feel that pre-launch sales should not be stopped. However, it is very true that there are just too many property investors who are much more eager and ready when it comes to pre-launch sales. They would register well in advance, they would have their own networks which help each other monitor when are sales launches and they are also much more daring and willing compared to more genuine buyers. Typically, genuine buyers would need time to think, if the location is suitable for them. Is the property the best buy out of the many launchings today. They may even need to consult their parents. Once the genuine buyers do all these versus the property investors who has made advanced study or may not even make any study, they would already be much slower than these property investors.
Now, what happens when these property investors manage to snap up the property? Well, when the property is completed, they will sell it higher. It would not be 5% higher. It will be 20-30% higher or even higher! If we want to control these speculative activities, I think limiting the number of properties any person can buy would be much more effective. Secondly, developers may want to also stop selling in bulk to any one buyer. There is just no reason for any buyer to suddenly wanting to own 10 units? If they continue to sell this way, the developers may earn their profits faster but once every developer does that, imagine what would happen to the market? In the end, think carefully, which party may be jeopardising their very own long term future? Come on, NO ONE in the business world should earn extraordinary profits. This includes property investors, property developers and any other stakeholders as well.
Remember again and again, the reasons for the mortgage crisis in America. Only one word; greed. Everyone wanted ever higher, ever faster profits. This would never last.
written on 23 Jan 2014
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