When it comes to the issue of size, always buy only what you can afford. Buy the largest size possible for our money today. It may not yet be apparent but “bigger will always be further” while “nearer means smaller”.
Don’t predict, just look at the future by looking at advanced property markets. Look at the suburbs in Sydney and Melbourne to understand why buying within a central business district (CBD) will mean high-rises and not landed homes.
In an article in The Star, it was reported that Hong Kongers’ interest in micro-apartments had dissipated. These units are usually less than 200 sq ft.
The South China Morning Post used data by Dataelements to monitor the sale of new flats in Hong Kong and revealed that since 2016, out of 976 units that were added, 461 remained unsold as of late December 2018.
The data showed that this started in 2014, because of a shortage that caused home prices to spiral. In fact, this gave developers a reason to keep increasing prices.
For example, CK Asset Holdings, the flagship company of retired tycoon Li Ka-shing, sold out its Mont Vert project in Fanling at HK$1.29 million after a 15% discount. The smallest unit was 165 sq ft.
Then Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor started to “cool” the market.
She introduced a vacancy tax to force developers to release their units. Banks began raising mortgage rates for the first time in 12 years. Due to the surplus on the developers’ side, they began offering discounts across all property types.
In end December 2018, Lam’s administration offered 2,545 units of subsidised housing in Cheung Sha Wan for sale, at discounts of up to 58% off market prices, offering the smallest 184-sq ft unit, for HK$930,000.
To qualify for the government’s subsidies, an applicant cannot earn more than HK$11,540 per month or own more than HK$249,000 in assets while the threshold for a couple is HK$17,600 in monthly income and combined assets of HK$338,000, The Star reported.
Under the 4Ps (People, Price, Policy and Preference), “policy” has the power to impact the market.
This is usually what the government will implement to help turn the direction of the property market to something more preferable or desirable.
Singapore’s HDB flats are one such “policy”. It ensures most Singaporeans in need of an affordable home based on their salaries, gets one.
We should monitor the direction of affordable homes for the majority, shaped by policy here in Malaysia.
Source: Free Malaysia Today