A friend has a bungalow in Damansara
Heights; he was advised that his property is worth M$6-7 million. He is renting
out for M4K a month. The yield is less than 1%.
I recently took a look at a very
ordinary apartment in Section 16. The asking price was M1.5 million. How much
could I get in rent? Net may be $4K a month? (Even then, tenants are hard to
come by.) Yield worked out to be less than 3%.
My son’s neighbour has upgraded
himself to a different neighbourhood. He put up his old house, which is a
two-storey terrace house in Shah Alam’s Bukit Jelutong, for sale for more than
M$1 million. It is still empty today, although it has been in the market for more
than a year. But he just won’t give an inch in his asking price.
And all these asking prices are said
to be supported by valuations that are acceptable to banks!
In another scene, the villas that had
been built next to my apartment block in Saujana Resort were sold by the
developer for more than M$4 million each. They are already about five years
old; yet 70% of them have been left empty since built.
What’s happening?
Many people are still earning about
M$5K a month. Everything is getting very expensive now. How many can afford
houses now? Yet houses prices remain astronomically high.
There are still a lot of very
cash-rich people in the country. Banks pay peanuts and the stock market is
hovering at dazzling heights. Where else to put your money? In real estate, of
course!
Never mind if there is no rental
income; capital appreciation alone is enough to protect your investment.
So thinks everybody.
No wonder!
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