Property investors should be able to hold on to their properties for at least 10 years in order that they may see the value of their assets appreciate.
“Our view is that if you want to buy a property, you must be willing to hold it for at least 10 years. Anything lower than that, you might end up selling it at a wrong price and time,” said Faizul Ridzuan, Founder and CEO of boutique consulting firm FAR Capital Sdn Bhd.
In fact, now is not a great time for investors to flip their properties.
This comes as the property market is currently in a “winter season”.
“It is a horrible time for short-term investors who want to flip the properties they bought five years ago. We’ve just changed the government and there are a number of uncertainties in the market,” he told The Malaysian Reserve.
“This means people don’t really want to commit to a RM500,000 or RM1 million property. It is not about being confident or not. People are adopting a wait-and-see approach in buying expensive homes.”
Faizul expects Malaysia to witness slower growth this year – which means that there would also be slower growth in wages and property prices.
“That’s just how the economy works. In terms of the property market, it is not about being in a bad or good situation. It is a cycle. And the cycle that we are in right now is winter.”
Notably, the economy rose 4.5 percent in Q2 2018, down from the estimates of about 4.9 percent.
Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus attributed the slower growth to commodity-specific shocks in the agriculture and mining sectors.
With this, BNM lowered its growth projections for this year to five percent from between 5.5 and six percent previously, on the back of anticipation for low production in agriculture and prolonged disruptions in oil and gas production.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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