There is an interesting article in FMT today entitled “Houses at half price, anyone?” by Thean Lee Cheng. Recently a Chinese developer at Danga Bay cut its prices by a whopping 50% for six weeks to boost sales in a sluggish market. Elsewhere other developers in KL and Selangor are doing the same, cutting asking prices in light of market where there are few buyers.
So is it time to buy now that prices are starting to fall? The writer, to her credit, asks a more pertinent question : Will property prices drop even further ?
The 3 bedroom unit I bought at auction at about RM200psf was in pretty poor condition when I finally got to see it after I paid the auction price. It might be hard to believe, but I was the only bidder. There was a reason of course why it was going dirt cheap. First I was buying it “blind,” IE I had no idea what lay beyond the locked doors of the 10F unit. Enquiries at the management office revealed the previous owner had stopped paying the loan installments many years ago. It was hinted the unit had been vacant for years.
Another reason was the apartment had no view. The view from the balcony was literally facing the facade of another Bukit Ceylon condominium just 20-30m away. Because there were just 44 units, the monthly service charges were also high, about RM850 if my aging memory is correct.
But the property was in the heart of the city. Jalan Alor was just a 4m walk away, and it was close to offices along Jalan Raja Chulan. So I budgeted some money to fix it up, called my bank, and made a bid. Of course I waited for the second auction. When there is no bidder, the auctioneer appointed by the bank that repossessed the property is usually instructed to cut the price by 10%.
I wasn't, of course, the only person who spotted a buying opportunity. A savvy Property Agent I got to know very well later also snapped up a couple of units for around the same price. When prices rose a bit, an IT guy and his banker wife also bought 4-5 units. They were far more experienced than yours truly in property investment. But to my surprise, were happy to answer my questions. Thanks a lot, Sean.
The EdgeProp portal last month I think quoted some experts saying property prices in KL and KLCC are not going to fall by 50-60%. The stock argument was the old chestnut trotted out by experts that are unwilling or perhaps ignorant - prices of even freehold properties in choice locations in the city center can plummet 40-50% when there are no buyers: “There is little land left for development in the city center. “
Then perhaps it might be salutatory to note the previous owner of my 10F unit paid around RM700,000, if my aging memory is correct..
I rented out my fixed up unit for a number of years. Then made a YouTube video to market it. It eventually found a buyer about 10 years ago