The President of MIEA Ms. Chan Ai Cheng with reference to an article ‘Suicide to buy a house published on an online portal in 2017 says the topic continues to be discussed till today and would like to readdress the issue in a different way.
In response to this statement, the Malaysian Institute of Estate Agents likes to present an alternative view on this matter. Quoting, Franklin Roosevelt Ai Cheng said “Real estate investment cannot be lost or stolen, nor can it be taken away. Purchased with common sense and managed with reasonable care it is the safest investment in the world”.
She further reiterated that based on the twenty-year NAPIC JPPH house price index it shows rising values over the years (double-digit in some years, some less but over time property has increased in value) meaning prices have been escalating over the years. Purchasers must understand that property is a medium to long-term investment and not one based on speculations. Purchasing or renting are both great options; Renting gives you flexibility and purchasing builds equity and hedges against inflation.
The fundamental rule in investing in property is that one should never purchase a property based on other people’s opinion, the purchase should always be based on their personal needs and most importantly on their financial ability. If the purchasers are not sure of their job and financial stability then they should rent.
Ai Cheng further stressed that property prices have adjusted due to the pandemic and barring any unforeseen circumstances we don’t envisage the prices going down further. According to the Department of statistics, the building materials cost index (BCI) has gone up by 0.3% to 3.1% giving rise to the cost of construction and coupled with the shortage of labour, will pressure the increase of prices. Our members are already experiencing this in the landed residential homes sector. It is a known fact that property prices go up and fluctuate over periods of time and it is now at one of its lowest points. It’s our view that it’s an opportune moment to purchase if you have the need and ability to do so. The longer you wait the higher the price will be, then it will be out of reach for many.
The economic condition is yet another critical factor. The Malaysian economy is expected to strengthen between 5.5% and 6.5% as per the Economic Report 2022. The Finance Ministry said this expansion will be supported by significant improvement in global trade, stabilized commodity prices, containment of the pandemic issue, and gradual improvement in consumer and business sentiments.
This gives confidence to the market and we foresee that many new purchasers will enter the market as they have waited for two years now, many have saved money for this purpose and most importantly they have a need for a roof over their head. It is said there is never a good or bad time to purchase a property, all it takes is having sufficient funds to lay the initial capital, secure a loan and have the heart and commitment to see through the payments.
When it comes to purchasing a property, it is no longer generic data or general knowledge, you got to get down to the specific data by property type, or by the location that you plan to purchase to determine the right price to enter the market. The reason being while some locations are experiencing price adjustments, others are steadily rising in value and that goes to the type of property as well.
