Time to buy property NOW?

Yours truly saw a LinkedIn inmail from PG DataSense with the title "Current market conditions and headwinds expected ahead, make for an window of opportunity to purchase a property now.."

Well maybe PropertyGuru is right about subsale properties in Puchong, Kota Damansara, etc etc. But is it the right time to buy high end investment properties in KLCC now?

My "Short" answer is No.

For my "Long" answer please read "5 solid reasons NOT to purchase a KL high end investment property NOW":

1. Ringgit depreciation concerns

If you don't know much the Ringgit has deprecated against major currencies since 2008 (Asian Financial Crisis), please Google. These days you can get a lot of free information on the internet.

Is the Ringgit going to depreciate further in the future? Who knows? (🤠 took a module on Forex Trading & Financial Management 101 in his MBA, but slept through the lectures)

2. Sure, property developers claim construction material costs are increasingly (inflation is picking up worldwide by the way according to the Economist ). But for RM2,000+ PSF Branded Serviced Residences in KL, construction costs account for much less than 50% compared to developers margins, land costs, marketing costs, finance costs etc. Why not ask your developer or their real estate agents marketing these $$$ NEW PROJECT properties what percentage does construction costs (I mean for example iron rebars, cement, bricks, sand, M&E ) comprise actually of the Construction Valuation PSF is? You might be surprised...

3. Dwindling expat tenant pool. The pandemic has closed borders, affecting leisure travellers that used to rent AirBnB accommodation in KLCC serviced residences, and demand.

4. More supply of high end residential units coming on stream in 2022-2023 in KL.

5. MM2H policy flip flops. Yes existing MM2H visa holders are now allowed to stay on despite not meeting the new much higherr income requirements, nor the requirement to have a much higher RM bank deposit. But anectodal evidence suggests many expats have decided to pull out FDs, have liquidated stock portfolios and are thinking of selling up.

What do YOU think ?

Post Script

1.If you are buying a property to stay, some of the above reasons might not apply.

2. Bonus reason NOT to buy. After hovering at historic lows for much of the past decade due to Bank Negara Malaysia's expansionist credit policy, real interest rates are projected to rise in 2022. That means loan installments will automatically reprice, meaning the cost of servicing housing instalments will increase.

Link is here