Do you trust the opinion of real estate agents or are they all just trying to sell, sell, sell? A recent article by Property Hunter sparked a conversation on the outlook of the property market in Sabah. The opinion of homeowners is sometimes different from professionals, depending on their experience.
Here’s a look at a discussion between some homeowners and a friendly neighbourhood REN after reading the PH article on Sabah Outlook. Let us know your thoughts below!
Homeowner 1: Hard to speculate actually, all depends on unsold completed units, besides that depends how the government wants to rebound the economy, sooner or later holding power will decrease due to cash flow. But the super rich will be holding. How I look at it property price goes up or down doesn’t really make any sense now, with the pandemic pay cuts and all we wouldn’t know when will “salaries” will be back to before, and don’t know who can afford all these properties later in the future, people will move to houses that are smaller and smaller. Sad
Homeowner 2: yea maybe partitioning rooms more and more existing properties due to affordability issues
Homeowner 1: Yup, there are less and less rentals ady, a lot of tenants move out. Need to reduce rental soon. One of my units got ask for rental reduction 3 times since last year June.
Homeowner 3: Very true. The pandemic and our political climate makes things very hard to predict. Rental rates are being slashed, while REHDA has said prices have hit rock bottom. Theres a lot of incentives out there to stimulate the economy but only time will tell if the stream will flow back into the real estate market.
Homeowner 1: REHDA says prices have reach rock bottom? They must be joking. I look at it is almost 10-15 years back when the trend “investment” in property came into play caused the problem where real estate price sky rocketed, and now with this pandemic I think property price cannot justify with the local earning power. Property price will drop further, at least a 15-20% from current value. I pity new home owners where if property price drops further they might have a risk of being asked to top up.
Homeowner 4: All this property advisers must b hallucinating.
Homeowner 1: They create story so that those with money can continue invest mah. Like the Chinese saying “sell flower say flower smell nice”.
Homeowner 3: Mr Wong from Azmi & Co does make that point though in the article. That prices will drop about 15%
Homeowner 1: Their prediction is based on bank valuation vs market transacted price, but I predict bank valuation (actual value) will drop further. Fingers crossed.
Friendly Neighborhood REN: In Sabah, not many properties will drop in price, especially landed properties.
For few reasons.
- KK properties focused too much on areas like Luyang, Likas, KK and Penampang. Everyone want to buy these few areas. The demand still high hence even if there's a drop, it will only be those who really desperate or the condition is really bad.
- Most of the prime areas are old areas where most owners do not have any loan on the property anymore. They willing to wait for a better price than to sell at a low price. The holding power of this group is better.
However, we do notice some drop in price especially high rise properties. But the drop of price are due to property owners willing to accept a lower price and not because of the market value drop. But of cos，as what valuers mentioned, it just a matter of time we will see the drop of valuation of properties between 10% to 20% in the coming years if the transaction values continue to drop.
Just my 3 cents
[replying to Homeowner 1 “sell flower say flower smell nice” comment:] This one not so much applicable anymore. Cos we see more and more new project launches and design wise it's more or less the same. The only differences is the launching price as well as the packages offered
[replying to Homeowner 1 “bank valuation vs. market transacted price” comment:] Yes. Valuers use the transacted price as a guide for valuation. If the transaction price continues to drop, we will see a lower market value for the properties.
In KK we have yet to see what happened in KL and Selangor. Where after collecting the keys, the value dropped 10% to 20%
Homeowner 1: We just have to see about it then. Few years back I wanted to sell this unit but my parents say don’t sell, good price , got money also cannot buy back, that time don’t know who said here transacting price 750-800k but bank value 550-600. What I feel condos in KK town area (10km) all over priced.
Friendly Neighborhood REN: If you look at those commercial title units, yes as commercial units are not under the jurisdiction of HDA. The developers can mark up whatever price they want.
[After discussing comparibles] Up to aug 2020, for 1302sqft, the highest price transacted was back in 18 sept 2019 at RM780K. Block A. The last recorded was RM750K in July 2020 for block C unit.
Homeowner 1: Wow. Sell the unit and rent back better. Put in Fd can cover rental.
Friendly Neighborhood REN: Hahaha.. that's what people think. But remember, today rental is low so a lot of people rather rent. But when the rental start to increase, how much do you think the price of property going to be? Rental will increase depending on market demand and economy situation but once you purchased, the instalment won't change too much. Just look at angkasa apartment.. previously rental about RM650 for an empty unit, now it's done up to RM800 for an empty unit. Reason being more people looking for that area due to lower rental. But now it's slowly increased too. My advise is, always have at least 1 unit of own property. For own stay after retirement. If got extra money then get another one for rental collection.
Homeowner 1: Got 4
Friendly Neighborhood REN: Good... If all fully paid, can retire Liao. We average one unit rent our RM1600. 4 units can get you RM6400 laio.. deduct management fees and other fees also enough laio
Homeowner 1: Let’s say I put the amount of money in some trust fund let’s say public mutual which previously have a track record of 8-11% now maybe 6% I still make 3% each year and with complied interest in 10 years I still gain 35% of what I invested in and I have the freedom to shift house whenever I want.
Friendly Neighborhood REN: Provided the price of property doesn't increase. All types of investment has their pros and cons. It's all depending on each individual. As for property, I think people buy as it's the only investment that you can leverage on other people's money.
Comment your thoughts below!