Waiting For The Fed

As I write, investors are waiting to see if the Fed will hike US interest rates by 0.75%. The Fed's decision is just hours away at 1600 GMT today. Stock markets and property prices have already been pummeled by expectations the Fed needs to push interest rates much higher to rein in inflation, now spiking above 8%. The Dow Index officially slipped into bear market territory on Monday.

Charles Tan of the popular property news portal kopiandproperty.com wonders why are property buyers still waiting?

Aren't property prices low enough? Well, yours truly thinks there are a couple of reasons why high end property investors are still sitting on the sidelines :

1. Auction property prices keep falling lower. I watch the KL auction property because I have, of course, a vested interest. A 3800+ SF freehold unit at Kirana Residence is up for auction in June at RM632 PSF. According to Malaysia's leading property search portal, Kirana Residence is the epitome of a luxury KLCC condominium : " Everything you need for a modern lifestyle is a hop, skip and a jump from your doorstep. "

2. If the US goes into recession next year, will Malaysia follow suit?

3. Unlike other property markets in Australia, Red Dot Island, UK and US which all saw house prices up 10-20% last year, KL property prices fell 6% according to Knight Frank. Local property experts can't pin this on the pandemic, folks. Some of the reasons for KL's divergent property market performance are Ringgit depreciation, and the property overhang.

Disclaimer

1 Since 2000, I have owned a unit at Kirana Residence. I served on the Kirana MC committee for two years from 2010-2012.

2 I am not a registered real estate agent. If you are interested in buying an auction property please contact a BOVEA registered valuer or real estate agent.