Author’s Blurb: The world of property buying is still one that’s utterly foreign to me, and I can safely say I’m quite disinterested in it. However, it still remains an ambition of many Malaysians to own a home (or several), whether to stay in or as an investment to flip or rent out.
In a live Facebook video, Sheldon, Country Manager of PropertyGuru Malaysia, and Joe, CEO of MyProperty Data got together to answer one main question property buyers had right now: to buy or not to buy property post COVID-19?
PropertyGuru Malaysia is a proptech company that makes finding real estate transparent and straightforward, while MyProperty Data is a property data, analytics and solutions provider to various stakeholders in the real estate scene including financial institutions, credit rating agencies, developers, and more.
From their answers and other knowledge shared, we’ve broken down the breadth of information into several points as seen below.
1. The Market Is Sure To Recover
Sheldon first shared the current situation of properties in Malaysia, saying that we were seeing a short-term slow down with prospects for recovery in the future.
He took the example of what happened to the property market after the 1997 Asian financial crisis and the 1998-1999 Nipah virus outbreak in Malaysia.
These two major events definitely impacted the property market negatively, but Sheldon said that it eventually rebounded (better in several aspects than others) and that our financial system is a lot healthier now and better equipped to handle something like this.
2. High-Rises & Terraced Houses Do Well
After the two crises, Sheldon also shared that terraced houses and high-rises had better rebounds than detached homes.
Joe then pitched in with another example, this time one that took place after 9/11. The property market did well because people gravitated towards brick and mortar, he shared.
High-rises also tend to be centred around the city, being close to where the action is. For landed property, people like being able to have land, because while the building degrades and depreciates, the land will appreciate instead. This makes both types of property particularly resilient in crises.
3. It’ll Be A Good Time To Buy For Certain People
Post-MCO and COVID-19, it will still be a good time to buy property, but only for owner-occupiers and long-term investors who can still afford to do so.
Sheldon referred to PropertyGuru Malaysia’s Property Market Index that they release every quarter for some data.
Since Q4 2016, asking prices have been decreasing so we already weren’t in the best of scenarios, and now this pandemic has come along, to boot.
But based on historical data, we rebound quickly, within the timeframe of a year or two, so given this situation, Sheldon anticipates that property development will be adding value to drive the take-up of their projects.
The reason for naming only owner-occupiers and long-term investors as suitable homebuying candidates after this crisis is because property investment is long-term.
You’d want to be well positioned financially before diving into investing in property.
4. What’s The ‘Best’ Time To Buy?
When falling asking prices reverse and start rising again, Sheldon answered.
You should be trying to catch the bottom out effect, and in the past we’ve seen that happen within 6 months to a year post-crisis.
Therefore, Sheldon added that it’s a good time to start looking, weighing your options, and preparing financially.
However, do note that prospects still vary by area and are difficult for anyone to predict. Nonetheless, PropertyGuru has analysed historical data, which we can make predictions from.
5. Subsale Properties Or New Developments?
This is a question that many first-time homebuyers would probably have, whether to buy subsale property (properties purchased from an existing owner) or new developments (fresh off the developer’s construction site).
Given the surveys that PropertyGuru Malaysia has done, they’ve noticed that people have a preference towards new developments for various reasons.
There’s less capital outlay, more financing options, and sometimes when developers package things, you can get more bang for your buck.
However, there are also some good assets in the subsale sector centred around asking prices and that are dependent on whether you can get a good deal or not.
In the end, it’s down to the individual—if you need property urgently and right now, you’d have to go for something that’s readily available (subsale), but if you can wait and you’re looking to invest in property, you should weigh your options based on what’s coming up (new developments) and how you can get a good deal out of it.
Sheldon personally shared that if he were to house hunt post-MCO, he would keep his options open.
6. Take Advantage Of Bank Initiatives
Bank Negara Malaysia’s initiatiaves such as its revision of the Overnight Policy Rate (OPR) to 2.50%, the reduction of the Statutory Reserve Requirement Ratio (SRR) to 2.00%, and the 6-month loan repayment moratorium are some that will be helpful for present and to-be homeowners.
This stimulus into the market should encourage financing and allow people to borrow more, so Sheldon shared that it would be great if you could leverage on these currently.
Bottom Line: I’m definitely not in a position to consider buying a home right now (and I have no need to either), and I still have this mindset that I’d rather rent than buy in the future. I will admit though that having the know-how of property buying is important as property investment still seems to be a popular form of investment.
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Featured Image Credit: PropertyGuru Malaysia