Saturday, April 14 2012 stated in the star news online property prices are rising tremendously
in the big cities throughout the world, especially in the developing countries.
Malaysia is one of the developing countries and the property prices in the
cities like Kuala Lumpur, Penang and Johor Bahru are seen to be rising rapidly
recently. Properties are segregated into residential, commercial and
industrial.
The main reason for the rise of the residential property price is
that the human population is increasing and the land size remains the same. Property is a basic human necessity when you call it shelter and
every society aspires for a minimum standard of comfort. But it is more than
shelter – it’s a lifestyle, it’s luxury, and it caters to the rich, the poor,
the middle class and the working class. Therefore the
demand is always increasing. When the demand is higher than the supply, the
price will increase. The rise in the price for commercial and industrial
building is due to more and more commercial and industrial building are in
demand as the country moves towards the direction of a develop country.
Allowing foreign buyers is also one of the factors to this issue because they
speculate the market price and want to make profit by selling and purchasing
properties. This will cause the property price to shoot up.
The rise in property prices is a hot
topic among the Malaysia’s citizen as it brings both advantages and
disadvantages to the individual and business operated in Malaysia. For the
individual that have already own a property or more, this rise in property
prices will benefit the individual because he/she is making profit from the
property investment. Individuals that are investing in properties will make a
large profit out of this provided there is demand. Whereas, for an individual
that have not own any property yet, it will increase the burden of the
individual because the increase in salary will not be able to catch up with the
rise of the living cost in the cities. Singapore is a good example in this
scenario. Because there is such a lot of foreign
demand for houses from foreigners, most Singaporeans are stuck to their Housing
Development Board flats with no chance of moving higher up in more ways than
one. Lastly, this will also caused individuals to declare bankruptcy
when they fail to return the bank loan to purchase the property.
The rising property price will
definitely benefit the developers. This is because the houses or building built
can be sold at higher prices and the developers will make a larger profit out
of it. The rising property price will also benefit the property agencies
because it shows a higher demand in properties. In this case, the business in
the construction line will also gain benefits out from it as more properties
are being constructed. On the other hand, the rising properties will bring
disadvantages to those business that rent a shop house / office building to
operate. This is because the rise in property price will definitely increase
the rental. Therefore, it is expensive to rent a shop house / office building
in the city centre. The owner of the business will have to terminate the
business if the revenue is not able to cover the cost. To sustain the business,
the owner often increase the price of the service or goods provided and this is
the reason why living cost in the city is much higher than in the outskirt
area.
Property
is a strange thing. As much as it can keep the economy
going and get prosperity levels up and up, it can send them all crashing down
at other times. As much as property developers and banks contribute to societal
well-being, they can just as well destroy it. Thus, the price of the properties
should be monitored as well as the demand. If the property market spectaculars
outnumbered the people who actually want to stay there, the property market
will crash. We definitely do not want this to happen. We should be looking
forward for rising of property prices reflecting underlying economic trends.
Property prices should increase along with the real demand for them, which
means actual people staying in them and paying for them or the rental for the
properties. The recent drop in property prices around the Petronas twin towers
area should be an example and we should learn from it. When property prices
rise because of hype and speculation without real people to occupy them; it’s a
matter of time that the price will fall. As economic prosperity increases and
everyone becomes richer, property prices will increase by themselves and keep
in pace with the overall increase in incomes. In this case, even property
prices increase, they will still remain affordable. This is the scenario that
we should be looking forward for.
As
years goes by, houses in the city area in Malaysia will be harder to afford. So
what happens if more people are not capable of affording a house? The living
standard of the people will drop if they cannot afford the cost of living.
Therefore, our government should take necessary actions and precautions to deal
with this issue. The government can make it harder for the property market
spectaculars to boost the price by changing the requirement to apply for a
housing / property loan. Lastly, we should not allow foreign buyers to buy the
residential properties. Only commercial and industrial properties should be
sold to foreigners as it benefit the countries growth. This is because Malaysia
is our home and our land, and there will always be only this much of land. We,
Malaysians are suppose to be the one staying in our land and not get our
property prices manipulated by the foreigners. Actions should be taken now to
make sure that our future generation will have a home to stay.
Posted by, Calista Yee Pui Ching
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