As we wind down towards the end of the year, I thought that I would keep today’s article light and easy. Sitting at my table, thinking about what to write, my mind wandered far and wide. As much as I am looking forward to the year-end, I was at the same time wondering where it had gone... this year, I mean. The year came and went in the blink of an eye.
Somehow each year seems to go away faster than the year before. I think this is a phenomenon of growing old. As you grow older, time seems to fly by faster.
It was been a tumultuous year for the property market. Actually, I feel it has been a tumultuous year for every industry. No one has been spared. The cost of living continues to rise and salaries aren’t able to keep up.
One of my habits on a Sunday morning is to go to the local market in Sg Long and buy some “chee cheong fun” for breakfast. My wife and kids prefer nasi lemak. So I get three packets of that as well. And while I’m there, I would usually buy some fruits and biscuits. And this little outing would cost me no less than RM50.
It’s amazing how prices of daily goods and food have escalated in the last few years. Why is this so? Ask 10 people and you are likely to get 10 different theories.
No wonder the bottom 40 segment is constantly complaining about the price of everything. At this rate, I believe the middle 40 segment will also find it hard to enjoy a decent lifestyle.
So, both these segments are complaining that the prices of houses are too high and they are not able to afford anything. Are these grouses valid? Are property prices really that high? I agree that property prices have moved alarmingly upwards in the last few years. But that steep escalation has somewhat stabilised now. In the last couple of years, prices haven’t really moved upwards significantly. In fact, in some locations, they may actually have come down a bit.
So, if you had planned to make a property purchase this year, and hadn’t done so, you are probably asking yourself the same question I am... where has the year gone?
For the property investor looking to buy, last year and this year would have been great years to invest. The market was flooded with sellers. Every segment of the market had many choices available for the potential purchaser. Supply was certainly higher than demand.
I believe next year will continue to see a slow market. I think the down-slide will end and the market will stabilise. With some luck, we will see small improvements in the property market in the second half of the year. This improvement, although slow, will maintain a consistent pace into 2019 and 2020.
As the market matures, we will begin to see less speculation in properties. Property investors will begin to see and understand that real estate is a long-term play. They will begin to accept that any quick profit you make from property speculation is an unaccepted gain, which happens only in an upward climbing market. You could just as easily lose money if the market situation turns.
If you understand that property is a long-term play, there is very little chance that you could lose money. Even if the market turns against you, all you need to do is to hang on to your investment and wait. Like everything else, the real estate market works in cycles. Just hang on, and the upward climb will happen.
Happy hunting and may the force be with you.