Oversupply of residential property due to speculation may slow down market
PETALING JAYA: The secondary residential property market could face a slowdown in transactions within the next six to 12 months due to oversupply of properties caused by speculative buyers.
Malaysian Institute of Estate Agents (MIEA) deputy president Siva Shanker said “secondary properties in secondary locations,” namely apartments within the RM150,000 to RM300,000 price range, could be difficult to sell as an oversupply situation has resulted.
“A lot of these properties were sold in the last two to three years and developers made a roaring business out of it. However, they’re now struggling a bit,” he told StarBiz in an interview.
“A lot of people in the past would have bought these properties for speculation,” said Siva.
He said many people bought these properties with the sole intention of selling them immediately once the development was completed.
“The buying public in Malaysia are like sheep. A few people buy, and then everyone will rush in to do the same!
“However, when everyone tries to flip it (sell for a higher price) at the same time, that’s when you create an oversupply situation.”
Siva cites an example of a 300-unit apartment block, where half, for instance, are placed on the market simultaneously by the initial (speculative) buyers.
One seller will lower the price because he can’t hold it, and then the prices start coming down.”
Siva pointed out that because transactions start slowing down, there is a misconception that property prices will crash.
“It’s not what people think – that property prices are crashing. A person buys an apartment for RM300,000 and after two years, wants to sell for RM400,000 and puts it on the market. But then, others also start doing the same and the buyer gets spoilt for choice.”
He said because everyone puts the property on the market, the RM400,000 price-tag would not be achievable.
“Perhaps at the end of the day, instead of RM400,000, you sell it for RM350,000 and in the eyes of the buying public, prices have fallen!
“But in actuality, prices didn’t fall. You bought at RM300,000 and sold it at RM350,000. You tried to flip the property, but you didn’t get the level of profit you thought you could get. But you walked away with a profit nevertheless.”
Source: The Star
oh, too bad it is realizing, luckily didn’t bet with gut feeling..hee hee hee… Let see how is the response of those bunch of newly launched projects.. hee hee hee..
I don’t think this is happening. Just a news for newspaper reporter to filling some empty pages.
Is all boils down to holding power..
soon is goin to be 650 psf for any land in the orient
@JK
Yes yes, let’s get your cash ready and bet… now there are lots of projects lining up for you to grab… don’t miss the opportunity to flip for quick return 3 years later….hee hee hee….
Hello uncle Siva. I don’t know how u can become the president. Where to find so many 150-300k property? Totally different market la…
I’m still wondering when the Government mentioned about the amount increase in the housing loan application to RM300,000 for anyone with a basic salary of RM3,000 in KL. Reasonable meh? How that person is going to survive? No car? Only eat once a day? Is this for real?
And one more thing in Penang, the current properties (new/ old) are sold at a minimum RM400,000 a unit.What’s the average monthly salary of Penangites?Can afford meh?N plus with hundreds of RMmillions properties, there are so many Penangites who are so rich to buy that?
Government recently said announced that the loan amount will be increased from RM220k to RM400k. And also want to fight 1% interest under gov loan. How about those not working in gov sector? When Gov made such remark, no way housing price will go down beyond RM220k already. Then in budget gov will said increase interest rate to control the price. Who will die faster? Those not in gov sector workers. One hand said give 100% loan on the other hands do another matter which most of us sometimes forget. Gimmick tricks from gov.
Even RM3k salary… look at this URL. How to buy? http://www.iproperty.com.my/news/3598/%E2%80%98My-First-Home-Scheme%E2%80%99-%E2%80%93-Practical-Aspects
This dude is saying nonsense, where to get 300k houses? he’s not qualify to give comments at all while he doesn’t even do proper research on the market
@Albert
Sorry to get the number wrong. My opinion is from what i feel and roughly observation. Kindly please do correct me.
@Elmo Thank you for the correction and information. And i totally agreed with you.
By the way, how much is the margin for these property developers gain? Does the valuation of the properties are over done?
Don’t worry, there are lots of “investors” with free cash flow (at least for 10% downpayment) to support the new launched projects.. Most projects are DIBS and they plan to sell it once OC obtained. So government raise interest rate or not, they no need to care lah…
@Albert
Yes, you are right…. He still live in the past.. RM300K is the price 2 years ago.. now those RM300K properties now has all gone up to RM500K already.. hee hee hee… but may be he still get it right on the oversupply, just the price range is wrong…hee hee hee..
Yup there may be an over supply of property especially in terms of apartment/condo cause the prices has gone up to an unimaginable level.
The big question mark is even the cooling off effect comes in where prices will fall but to what extent and for how long before it goes up again.
Btw i doubt prices of landed property on PG island will drop, cause of land scarcity.
This Siva guy is ridiculous, what kind of research he has made to conduct such a unreasonable statement?
@Albert
Use common sense also can tell the same conclusion lah… why worry if his statement doesn’t make sense? hee hee hee. You are welcome to continue support the new launch projects and also the price hike… hee hee hee….
This Siva not dare to tell when is the peak. Thing go up will down, after hit bottom it will grow again. I also know down will come soon, but I do not know when the market will reach the peak. This kind of statement just like a politician talks. Many of us also have the talent to write the same thing. Nothing else.
@WTH
Very easy lah..refer to history mah.. for example N-Park, its price was underwater(<RM150K) after completion in 1997/98, probably until year 2008…and year 2009 onwards see the price sharply rise to almost double now… so history tell may be about can down 10 years lah..if you can hold it long enough and wait for another cycle, it should not be a problem…hee hee hee… compounded Returm on Investment may be still better than FD, provided yon can hold long long lah.. hee hee hee..
@heehee
Stupid reference. I bought 1 unit single story shop 15yrs ago at my kampung. Only 40k only. Sold it at 230k last 2 years. This my experienced. You never consider the depreciation of money that gov keep printing money to pay dept.
@WTH
Hee hee hee, Why trying to deny the fact/history and call it stupid? Where is your kampung? So good then you should go back there and invest more lah. You know Penang projects some are very risky one. If last time you bought Megamall or Bukit Jambul Complex shoplot, you want to give out for free also nobody dare to take. The maintenance fee can kill! Even now also got some projects where some banks also considered it high risk until refuse to be panel bank…hee hee hee, you better get back to your old kampung & invest lor,,,,
@Ah Cat
The message is you are looking on short return, just like buy 4D or you are really invest your money or for your own use. Last 15years was also before the crisis on 1998 and this was the real return.
Your words shown me you are a selfish people and not admitted peoples did made the money or people got better things that you do not have it. I do happy if everyone did a great profit or even success in their life(not about the money). Come on life is not long, have you find the meaning of your life? Why still living so passive and selfish.
@WTH
Hee hee hee, morale of the story is choose the right time to buy, and also wisely choose the projects. If not ended up holding long long like Hongkie call “Dai Chap Hai” (a type of crab)….
Since you are so generous, please share the name of your kampung that with profit return so good, so that other can invest there too and help your kampung to prosper as well. Don’t always talk this and that but no fact…FACT please. Get back to reality, Don’t always creating fantasy there…
If I want to give u the place, u already got it early. Pls ask a smart question instead of talked childish. This is reality I saw from u. Good luck.
@WTH
Talk so much and you even cannot prove your own example? hee hee hee…You are empty talk only…My N-Park example is 100% real..you can go & verify..
@Ah Cat
Buying property where got sure gain one? But generally it will go up, good location go up faster, bad location go up abit only la. If you are bad luck, your project can’t even complete on time or abandoned!
Morale of the story is stop hoping to buy at lowest and sell at highest…
@hoohoo
Agreed. Not all the investment will get more than 100% return in short time. Location, timing and 20% of luck.
I think this Ah Cat is same guy of Hee Hee. Talked nonsense. What proof he wanted, he thought all ppls jz talked like him, empty tank. The attitude of passive mindset will always lead the ppl to go wrong way in their life. This ah cat is one of the example. Let him wait long long, when economy down badly, see he still can smile or he dare to buy the property or still waiting the price go down further. The worst is if he loss this income…..I think this should be his plan.
@WTH
why so secretive about your kampung’a name just to prove you do not lie about your example? You keep avoiding to answer that. Are your kampung in “Wonderland”? hee hee hee?
@Ah Cat
Can you give me your address, hp number and real name since you are so interest, I should meet you face to face.
@WTH
It is just the name of a place or area (your kampung), can’t be used to identify who you are. why so defensive?? just a supporting prove for your word nia.
Why so afraid to give be you details?
Why so afraid to give me your details?
This is a property blog, we all talk about properties and trends, and prefer to talk with solid evidence rather than empty talk. If got proof then just provide. Why need to ask people’s details while avoiding simple question for the name of a place?
@Ah Cat
Setiawan… hee hee hee…
@Ah Cat
I couldn’t understand why you are so interested but not dare to givme details. This this not property talk but a stupid question. I will recommend you drop a email to our home minister and ask him whr is the best location if you want to make profit. If just want to know, this question is stupid to me. Remark: I not interesting on (peoples) detail, only you.
hai yah, why u guys so troublesome ask for this & that, no point to argue… like I always suggest, investors should always continue to support the new projects. I always advise my “in law” to sapu & bet on the new launch if he has lots of spare cash on hand…high risk high gain, burnt hand a bit also nevermind since it is spare cash. For own stay need to cautious a bit at this time lor, take a second thought, if really want, may be subsales a lower risk alternative lah, get to see the real unit and can move in fast, and usually more worth the money with better location. No need to rush for new projects lah. Some how already oversupply.
@heehee
Ai yoh, ask people to buy subsales again. Sure fatt tatt la you. hee hee hee…
@hoohoo
Now already oversupply, why still more & more projects launch to enlarge the supply gap? It is like musical chair game, those get in later will kena…hee hee hee.. still can jack up price at current market condition, only developers fatt tatt lah..hee hee hee
@heehee
people buy new launch, developer fatt tatt. people buy subsales, agents fatt tatt… as long as got people buy… hee hee hee…
For sub-sales – you can blog in by your own if want to save the 2% commision. Same goes to the buyer, they can search the web at mudah, blog…etc to save on 1%.
When you play “poison parcel”, do you remember the last one always loses……..caught with pants down, no more cash and bankers at your door. Don’t be that loser !