On and off, we hear the grumbles from some of our friends that the property prices are expensive. Then, when I pointed out that it is not true and that they can still buy apartments for less than RM200,000. Their answer was, they wanted a condo instead. Then, when I pointed out that for a little bit more, a condo is reachable but they have to buy further away, their answer is, ‘its too far’ or ‘that area I don’t like’. Do you see what I see now? Are the buyers desperate? Oh yeah, two friends even commented that those affordable schemes that either the federal government or the state government is running are too few, it’s impossible to get one. Both of them said, they have not yet submitted their application. What the ……… ?
In Hong Kong, when any unit is put up for sale and is 10% below market price, it will be snapped up almost immediately. In Singapore, the same situation would also happen to HDB flats. However, in Malaysia, even up till today despite the fact the secondary market has not gone up like the primary market, people are still not buying. If people are buying, why are there still so many listings for properties below RM400,000 in Iproperty, Propertyguru, or Propwall? Who are we trying to kid here? On one hand, everyone is saying that anything above Rm400,000 is a definite no-no but on the other hand, those properties which are still way below Rm400,000 are still lying everywhere!
Let me give you a real example. As I was not rushing to sell, I put up my condo in Penang for RM640,000. It comes with 2 car parks. Size is 1,258 sf. In other words RM508 per sf. Today, you cannot find ANY new launches for such a size and car parks for this price in Penang. Yet, people are still waiting for the prices to go down. My agent laughed together with me too because I told him, since buyers are not desperate, I am ok to wait and as soon as markets start moving up, I will adjust my price. For those buyers who wants such a size and 2 car parks and by a reputable developer, I sincerely think you will lose this opportunity. I know, some would say there are a few projects which are below this price! Let me tell you in advance, ‘Please proceed to buy THAT project’. SMILE.
Transactions have gone down. Prices has inched up. Buyers are still looking, waiting and they are not desperate. It is perfectly fine because if you look at the base price of a few years ago, it also meant that the sellers are also rather comfortable even at this current situation. Malaysia is nowhere near America. Here, if you do not qualify for loan from local banks you will not get the loan. The failure rate for new home loans are close to 50% for all new launchings. (developer’s info). If I have extra cash, I will not wait. My next purchase is going to be for rental purpose as I think there are still a lot of gems in the market today.
written on 26 April 2014
Next suggested article: Positive Rental Yield in Kepong
Are buyers really desperate?
Comments
-
Hello friend
i am agree with you that transactions sales are getting less and less with even smaller number of ppl getting loans approved
you are the best property guru in malaysia, thank you my dear guruji
Good luck bro -
Hi Chialih,
Thanks for your article in describing the situation, Yes, i agree with your comment, when you see those people with this type behavior, in fact, they are not really a serious buyer nor study on the property for own stay/investment, they are most likely a type of people who like to join the crowd and used to make a lot of comment (mostly about negative about skyrocket of property price, market is speculated and etc), but in fact, there is nothing much can be counted on them, they are likely to share more negative than solution, indirectly, it influences the mood of the day : ) , IF there is a good deal dropping from sky to them, i guess that they may still in a doubt on the deal and likely to leak out the opportunity away. in fact, they have not even ready but stand still and dream of price to go down in one day.
Based on my observation, i have also encountered the same type of people with this behavior in my surrounding, they tend to follow wind and used to be manipulated by rumors, joining the crowd is their priority in discussing about about this topic, unfortunately, they are not even know what they wanted to buy nor objective of what they are really looking for either, in other word, they are not ready and mainly join for fun, or maybe they are in hesitation to step further due to uncertainty and keep hoping the market to collapse, then they will only snap it up by the time. Sorry, i am not trying to offend anyone, but it is based on my observation and my opinion with no offend.
As reality and matter of fact, everyone has their own way of doing this and opinion, as it is freedom country, they can freely comment as a human right as long as it is legal and no offensive, however, we have the right and choose to ignore rather than wasting of time with this. my 2 cents-
Haha. Not 2 cents. It’s 50 cents.
-
-
Most property buyers in Penang always believe that the new launches will increase in price 20% – 30% after completion, so they feel safe with the idea of buying new properties (and its brand new woh!). So whenever they look at secondary properties, they cant help but to compare it with new properties. They will be more motivated to buy secondary properties if there is a trusted way for them to know the future return.
-
Wow, Y.E, your full statement very true. However for secondary, everyone must understand it will not be double digit. But single digit growth is still very good if u count roi. For example, even a 1% growth for a rm300,000 apt is rm3,000 per year. If u invested 30,000 as down payment, that’s a gross return of 10%. Happy investing.
-
90% loan?? I got a phobia. Not all properties make profit; some wrong investment (in malls) actually get you stuck and the reverse happens; ending up paying service charges without anyone renting it…. sending chills up my spine. Happy investing
-
-
Leave a Reply