One of the search keywords to kopiandproperty.my recently happened to be “when will 2014 recession end“. Haha. I assume this is for Malaysia. How can it end if it has not started. Just like the question of when will the property bubble stop. Property bubble will stop only when it bursts, most of the time, unless the cooling measures work. So far, lookig at the transaction numbers, it does seem that a bursting property bubble is becoming a distant potential. Oh yeah, in the market today, the answer for whether there’s a property bubble or not ranges from definitely yes and no. The clever research analysts would say, ‘Bubble is building up and it may be bursting in 2015, failing which it will just cool and the market may bounce back in 2016.’ Haha. So much for a prediction based on statistics which are again something manipulated based on how you want the results to be. Not many bank research analysts would keep on painting a gloomy picture because they would soon be out of a job. This is like a Penangite saying, ‘Eh Chan Be Si’. It means if you can still complain, it means you are still doing ok. Truth is, if you are no longer doing fine, there’s just no time for you to even complain. You would be trying your best to save the situation.
Coming back to the 2014 recession. Based on the usual answer from an economist, recession would only be a recession when there are negative growth for two consecutive quarters. Based on the quarter to quarter growth for Malaysia thus far, we are pretty far away. In fact for 2014, we may be having a 5.7% growth before slowing down to 5% and by 2016 down further to 4.6%. This is based on UBS Investment Bank’s predictions earlier this week. (Dec 2014). Read here: Not such a good news for property market, Malaysia Since the recession has not started, it cannot end but would there be a possibility of a recession? Personally I feel that recession can happen in Malaysia only if it happens in the whole Asia. Why it would happen to the whole of Asia would be due to China slowing down even further and European countries all going into a recession first. Besides that, USA would also have to go into a negative growth first because its current economy remains very vulnerable even if the latest statistics has been positive. So, I guess the answer from me, is no, I do not think so. Malaysia cannot suddenly go into a recession by herself.
Okay, if recession is not starting, perhaps everyone should go into the market and buy properties then? Haha. Buying or not buying, it depends on the buyer’s objective and never because of recession. For example, a couple just got married, their parents would most probably be pressuring them to get a property whether there are recession or not. Another example, you are buying in a popular area because the prices are coming down and you would want to rent it out, you better buy during a recession! For those who are looking to upgrade and has accumulated some savings, the best time to buy may actually be during a recession, as long as you think your job is secure enough. Well, come to think of it, no wonder everyone has always been saying buy when others are fearful and sell when others are greedy. Recession is also a time when a lot of pretty rich people become super rich after it has passed. Remember Bursa (then known as KLSE) was once 200 points? The ones who dared to buy then, you can guess what happened as soon as the market recovered. Happy guessing on when recession would end, oops, I mean start.
written on 12 Dec 2014
Next suggested article: 65% probability – recession by end 2015
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