Property price movement? Landed vs high-rise, again? 2016 – 2021?

Property price movement? Landed vs high-rise, again?

Just a few days ago, a close friend told me that he would be buying a high-rise for RM1.4 million. I gave him my views slowly (because he is a close friend) and told him that since it will be his home for a long time, it’s up to him. Even if many could not afford that RM1.4 million property today, chances are they could in the future. Mostly due to inflationary pressure as well as salary increase and successful entrepreneurs becoming richer too.

Then for the next question, would high-rise units also increase in price? Do property price increase also included high-rise? Which type of property has the highest property price increase? Let’s not debate. Let’s just look at actual numbers from our National Property Information Centre (NAPIC)’s latest data yeah. If you suddenly feel scared that the lines are going downwards, please look at the detail to have an idea whether it is a negative number or positive yeah.

Terraced is the winner lah for Q2 2021

It’s the ONLY one in positive while all the rest are in negative lah.  So, please do remember to stop saying landed properties are better than high rise because even within landed properties, everything was negative except for terraced home.

Then, if we look at the INDEX POINT which is super important, we need to realise a few important facts too.

Between Q1 2016 to Q2 2021, Detached homes actually suffered a slight drop.

Between Q1 2016 to Q2 2021, OVERALL house price increased by 26.1 index points. Yes, it’s a positive number yeah.

Between Q1 2016 to Q2 2021, Terraced house price increased by a whopping 48 index points! Now you know why overall prices went up though detached showed a drop?

Between Q1 2016 to Q2 2021, High-Rise house price increased by 9.1 index points. Yes, even during the periods of 2016 till today, High-Rise is still showing an increase yeah. Think about it.

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NAPIC Property price

So, buy high-rise or buy landed?

If we refer to just the numbers in NAPIC chart above, then it’s terraced home lah. However, always remember that overpriced properties exist in ALL categories. Buying one without comparing it to similar properties and then realising that the price was too high later on is indeed a big mistake yeah. One major reason why Terraced Homes are in favour is also because Covid-19 pushed many to work from home and people started realising that they could survive easily even if they moved a little further from the city centre too.

Another reason was because these homes are usually affordably priced and it’s further away versus within the first 25km from the city centre. So, that has helped the acceptance (price vs distance) and this meant that many of these terraced home projects were quickly snapped up. Transactions for terraced homes were also the highest yeah in recent times.

 

Insider price offered may be offered to many others

Sometimes, we got a little mesmerised by the fact that a director related to the project offered us an insider price. Just need to remember that all the other directors in the company (no idea how many in total) may also be offering insider price to a few other people. If there are 8 directors offering to just 4 people, that’s already 32 people having insider deals. Erm… not so insider anymore right. Yea, this is why go back to the basics. Is the property worth of the price. it’s not the amount of discount we are receiving from the insider deals.

Until next article, happy scouting and please take care.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.