No matter what the economic or market conditions are, the big question on people’s minds is always, “Is this the right time to buy a house?”
Covid-19 has added to the normal considerations, what with the catastrophic effects on the economy because of the Movement Control Orders, record unemployment, pay cuts and a volatile stock market.
It may not be a good time for those affected by the economic fallout of the pandemic to buy property, but for those with a secure job and some savings, now is actually not such a bad time.
Independent blogger, Charles Tan Chia Lih, of kopiandproperty.com, told Property Advisor the right time for some might not be the best time for others.
“In the current slow market, first-time home buyers could be considered spoilt for choice, but not all the choices are affordable enough.
“For it to be the right time to buy, it has to the right property at the right price. It would be good for those thinking of buying a property to list five to 10 criteria and evaluate all properties based on this list,” he said.
While now is a good time for first-time homebuyers, he said, he cautioned them against waiting until the market heats up again and the incentives, such as the Home Ownership Campaign, are no longer available.
“And they should expand their search and not focus entirely on the primary market. The secondary market has many good choices too,” he added.
For sellers, Tan said they needed to understand the opportunity cost if they wanted to sell in this market. “Sell now, or wait until a better price comes along? This is a dilemma for many investors in the present market.”
With the current low interest rates, this is a good time to take a housing loan, depending on eligibility.
REI Group CEO Dr Daniele Gambero, said now is definitely a good time to buy, provided the correct choice is made.
“There are very real risks of delays or projects being abandoned. Look carefully at the developer, the location of the project, infrastructure provided – fibre-optic cables and good internet reception are a must.
“Do not buy a unit that is too small. It should be not less than 850 sq ft. Potential buyers should also double check their loan eligibility with the banks before planning a visit to the sales gallery,” he said.
He advises buyers not to accept large discounts or rebates as they might not be as advantageous as they seem.
According to Gambero, this is a good time to invest in residential properties priced at RM200,000 to RM800,000. “Avoid office, retail and projects selling ‘Airbnb-ready’ tourism-related small office, home office units and small studios.
“Demand for residential units is still strong … In the next 15 to 20 years, the country will see a population increase of six to eight million, and the number of senior citizens will grow from the current seven million to more than 14 million, generating additional demand.”
Gambero believes now is definitely the best time to buy as values are dropping and developers are willing to let go of unsold units.
“What matters most is being able to get a loan and being in a position to hold the unit on delivery if getting tenants in is not easy or fast.”
CBRE | WTW says it may take more than five years for current unsold residential units to be absorbed into the market.
The current overnight policy rate is at an all-time low of 1.75% since it was introduced as the financial system’s interest rate framework in 2004, with total cuts of 125 basis points so far this year, to help cushion the economic impact of the Covid-19 pandemic.
Low bank lending rates are a big advantage for those looking to take out a loan to buy a property now, as it could reduce monthly repayments by over RM1,000, or more for larger mortgages.
The consensus seems to be that this is a good time for first-time homebuyers as well as those with financial and job security, provided both the property and the price are right.
