Nick, the co-founder of Property Talk & Lifestyle Malaysia commented about a Kopi and Property article posted on Facebook that touched on the subject of skyrocketing property prices causing people to rent instead.
He said, “(A) House is a necessity in life, you can’t live without it…you either own it or rent it.”
Another Facebook user left a comment to Nick’s which said either renting or owning a unit was healthy and that hopefully the market would recover soon.
Nick replied to this comment saying, “(A) million dollar question, how soon is soon?”
We often hear people say they will do this or that “very soon”. Frankly, without setting a timeline, the “soon” will not be coming anytime soon.
Anyway, for today, let’s just answer three usual questions and remember, this is NOT necessarily applicable to everyone.
How soon is soon when it comes to the property market?
Some say the property market is so slow at present that every developer is desperate and unsold units are at a record high.
Some even say that many owners are willing to sell at a much lower price.
In this scenario, is it time to wait and look for good deals? Or is this a bad time because the market is going to crash soon? Anyway, here are some usual signs of an impending property market crash.
Unsold units do not usually cause the property market to crash. Only when we lose our jobs will we stop paying mortgages, and only then will the market crash when we can no longer hold on to our properties.
A video at the end of this article strives to give readers a clearer understanding of why this happens.
Which brings us to the next question – how low is low?
When do we buy – when property prices are low, lower or lowest? Well, no one in the world knows when property prices will hit rock-bottom. As for low and lower, this depends on one’s own assessment.
If you find a place where the rental is giving yields of 8% based on the property price, should you wait until the yield is 10% or higher before buying?
If you love a certain area and know the going price, but suddenly see a property going for 10% lower than the usual, should you buy or wait a while longer?
In the auction market, someone may have the opportunity to buy at 10% lower but chooses to wait for the next auction when prices go down a further 10% from the previous auction price.
However, by the time the next auction rolls around, there will be more than five potential bidders because the price of the property just became far more attractive. The first bidder now will likely have lost the opportunity.
So how does one decide? Better yet, when is the best time to enter? Actually, no one knows. That’s why it may be better to give solutions to that question instead.
You should decide what kind of property you prefer. Decide on the areas you want to concentrate on and even the price that you find attractive enough for you to enter.
When you have all these in place, you will then be ready to grab opportunities as soon as they come along. It’s not about waiting for the best time anymore.
What happens then if all the things you settled on do not take place and the market suddenly recovers and you lose all opportunities to buy or worse yet, have to settle on buying a property before the price gets too high?
This is how the market moves. This is also why 20% of property buyers usually hold 80% of the wealth in the world. This is also why we often hear, “I should have…”
As for how to decide, that’s up to the individual.
Keep reading, and comparing and evaluating the property market and soon, you will be knowledgeable enough about that certain area you are looking at.
You’ll soon see that this is way better than anything some of the property experts in some property shows say.
This article first appeared in kopiandproperty.com
Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.