4 Things You Need To Know Before Buying A Property Post Covid-19
To buy or not to buy a property post Covid-19? Let us give you a piece of advice in this article.
Landed and High-Rise Properties are Resilient
It was observed in the 1998 Asian financial crisis that terrace houses, condominiums and apartments did not decline by so much as compared to detached home prices, with -4.8 to -6.2 percent for high-rise buildings and -13.6 percent for detached houses. High-rise buildings are also most likely to be located in the city or around the city, which makes life more convenient as many things could be obtained in the city.
People also adore landed properties as they could have their own lands. It is also a good investment for terrace houses or other forms of landed properties as the land will appreciate. Clearly, these are the reasons why prices for these properties remain relatively stable even in the midst of a financial crisis. High-rises also tend to be centred around the city, being close to where the action is.
Who Should Buy Properties Post Covid-19?
It is likely that prices of properties will decrease post MCO, according to PropertyGuru Malaysia country manager Sheldon Fernandez. Developers of property will also be likely to add value to their projects and units offered. It is encouraged that those who buy properties to buy them in the short term post Covid-19, but only for those who could afford it over a long period of time, as buying property requires long term investment and commitment, and also to take into consideration the financial crisis post Covid-19.
However, it is also observed from historical data that we would rebound in a year or two.
As a summary, post-MCO and COVID-19 is still a good time to buy property, yet it is only for those who could afford and invest for the long term, as property investment is long term.
What Is Your Preference – New or Subsale Property
Many people may be asking whether they should get a new property or a subsale one (properties previously owned by another person)/ The key is to find out which kind of location would you prefer. It is claimed that good school district are more likely to add value in a declining market and increase when the local market is strong. Subsale properties tend to be in the city, where everything is convenient, with schools, hospitals, eateries, malls nearby. Whereas for new properties, they are usually located at new spacious land. Many people would also opt for new properties because the asking prices are usually lower, and sometimes they may have some good deals as well.
Another way to decide is to ask whether you are looking for a property real quick, then you would have to go for a subsale which is already available. If not, you can still keep your options open, and wait and see what is coming up, perhaps you could get some good deals out of it.
Plan Your Budget Before Buying
Although it is foreseen that property prices will decline post Covid-19 and post MCO, it does not mean that you could spend beyond what you could afford.
It is crucial to ensure that the financing you obtain is on terms that work for you now, as you would want to be in a good position before investing in properties. It is also good news that Bank Negara Malaysia’s has revised the Overnight Policy Rate (OPR) to 2.50%, the Statutory Reserve Requirement Ratio (SRR) to 2.00%, and the 6-month loan repayment moratorium. This would take the burdens off the shoulders of current property owners and new owners. Take advantage of these benefits, and plan your spendings ahead.
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