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Showing posts with label affordability. Show all posts
Showing posts with label affordability. Show all posts

Monday, November 18, 2024

Govt intervention won’t fix housing prices

 

Every adult should sensibly secure a home as everyone needs a roof over their head ■ Residential properties in prime locations undergoing ‘shrinkflation’, with sustained higher prices despite new units getting smaller

Greyscale low angle view of a highrise building with glass windows under sunlight


THE indirect discussion on multiple-home ownership between Housing and Local Government Minister Nga Kor Ming and former Cabinet member Khairy Jamaluddin over various media channels has ignited interest among Malaysians.

The latter wondered on his podcast Keluar Sekejap last week if limiting property purchases could help alleviate the crisis in affordable housing by addressing the surplus of unsold high-end homes that contribute to inflated prices.

Nga countered by dismissing the proposal, arguing it is not the government’s role to restrict investments in the real estate sector, which has proven to be an effective hedge against inflation and a means of wealth preservation.

He cautioned that such restrictions could harm the property sector and negatively impact some 200 industries connected to real estate, including contracting, plumbing, banking and legal services.

From a foreign perspective, if one were to speak to ordinary Hong Kong residents, it would come as no surprise to find that opinions are mixed on tycoon Li Ka-shing, the billionaire founder of CK Hutchison Holdings Ltd.

Although Li – whose name is synonymous with wealth in the former British colony – is a highly regarded businessperson, many in Hong Kong put the blame for the city’s exorbitant property prices on ultra-rich individuals like him, who made their fortunes by flipping properties in the densely populated region.

In fact, there is a local saying that goes:

“The houses in Hong

Kong are not meant to be inhabited.

They are meant to be ‘fried’ (slang for flipping at a higher price in Cantonese).”

This, of course, is in addition to the fact that most

Hong Kong residents live in high-rise units that can feel claustrophobic.

This may explain why many of them enjoy being out on the streets as long as possible, even into the early hours of the morning.

Back home, if one were to drive around our own cities of Kuala Lumpur, Petaling Jaya, Georgetown and Johor Baru, one can’t help but notice the significant number of high-rise residential buildings under construction.

This prompts one to ask a pressing question: Who is actually buying these units?

In addition, it is reasonable to wonder if property investment is truly so lucrative, what will happen to the prices of these high-rise accommodations in the future, especially in view of the government’s goal to encourage homeownership among the youth?

In fact, just a couple of months ago, before Khairy’s comments on his podcast, this writer – who has never advocated for socialist practices in any way – had wondered out loud to his spouse whether the government might need to step in and limit the “frying” of residential property prices.

So, is Malaysia heading in the same direction as Hong Kong?

At first glance, maybe not, but a deeper look may reveal a different story.

Reports in The Star earlier this week indicated that Malaysian residential properties in prime locations are undergoing “shrinkflation”, characterised by a sustained increase in property prices even though new units are getting smaller.

This trend places a heavier burden on buyers, especially on young Malaysians intending to buy their first home.

However, property prices and social responsibilities aside, it is easy to understand why investing in real estate is so attractive: for one, it is more tangible than stocks, bonds or mutual funds, and the thrill of monthly rental collection appeals to those seeking regular returns.

On the other hand, equities and bonds are much easier to liquidate, and there is significantly less legwork involved as members of the public do not normally run the companies whose shares they own, as opposed to property owners who bear the cost of maintaining their assets.

Furthermore, for those interested in steady income, there are blue-chip banking stocks that offer healthy dividend yields, often with lower upfront costs compared to real estate.

Seasoned investor Ian Yoong, whose portfolio regularly achieves a compounded annual growth rate of 23%, believes that Malaysian property prices have increased at a healthy rate over the past few decades.

He points out that restricting residential-property ownership could suppress prices, ultimately discouraging investment in the sector.

“Malaysia’s property market overhang improved slightly in the first half of 2024 (1H24) compared with 2H23, with the total number of unsold units falling by 12.3% and their aggregate value declining by 19.5%.

“The current property overhang itself will cap the rise of residential property prices over the next couple of years.

“The government should therefore not impose any limits on home ownership,” he tells Starbiz 7.

Yoong emphasises that the current property overhang will naturally limit the rise of residential property prices in the coming years.

He advises the government to refrain from imposing any restrictions on homeownership, as doing so could hinder market growth.

A cursory check supports Yoong’s claim, revealing that high-rise residential property prices in many areas of Kuala Lumpur and Petaling Jaya have stagnated compared with 15 to 20 years ago, when the property market was experiencing a boom.

This is despite the completion of both Mass Rapid Transit (MRT) lines 1 and 2 in recent years, which many investors felt could have improved prices, particularly in neighbourhoods near the MRT stations.

While it is understandable that Yoong would prefer to invest in equities given his success and the comparatively less field work, he strongly advises every Malaysian adult to obtain a home.

“Save for a down payment and apply for a bank loan to buy a residential property that is within your means. It matters little whether it is a lowcost flat or a terrace house.

“While this might not be the best investment strategy, it is a sensible move. Every adult needs a roof over their head,” he says.

Yoong says that the monthly loan repayment acts as a form of forced savings.

He stressed that in reality, not everyone is meant to be a successful investor, but almost everyone can be a property owner.

“Once home ownership is out of the way, one can then focus on investing surplus funds in shares, properties, cryptocurrencies and the like,” he advises.

The Star - StarBiz
KEITH HIEW keith.hsk@thestar.com.my

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Owning a home beyond reach of most millennials (Poll Inside)

Saturday, October 31, 2015

China ends one-child policy, are you ready for another child?

China to allow two children for all couples


http://english.cntv.cn/2015/10/30/VIDE1446156842305273.shtml
http://english.cntv.cn/2015/10/31/VIDE1446246722803731.shtml




Dialogue 10/30/2015 One-child policy ends

Are you ready for another child?

Most young couples can provide the best learning and growth environment for only one child. When you decide to have another child, you should plan your budget in advance. If you or your parents can’t take care of your baby, you have to at least spend an extra 5000 yuan per month to hire a nanny. If the gender of your new baby is different from your first one, you have to prepare another bedroom. If you want to send your kids to study abroad, you have to save another 1 million yuan. I think most young Chinese couples cannot afford the expense.
Are you ready for another child?
A girl with her younger brother. [Photo by Wang Nina/Provided to chinadaily.com.cn]
Bcnu (US)
If you aren't terribly happy parenting one child –don’t have the second. Two is more than twice the work, there's no guaranteeing they'll share interests; they could very well fight or want to head off in completely different directions. If you find you love the second one more than the first, I don't see how that could possibly make life simple, as children are very sensitive to that sort of thing. Having a second child will also extend the number of years until your nest will be empty again.
It's very unrealistic to expect that you will love your second child if you're having trouble loving the first. My advice is to take care of yourself and take time for your love for the first child to relax and grow before even thinking about having a second child.
Are you ready for another child?
A couple with their two children in this file photo. [Photo by Li Chuanping/Asianewsphoto]
Luciana (UK)
Being a one-child family allows me to keep a good balance between my family life and my job. It gives me the joy of being a mother, but it’s not too overwhelming to the point where I don't have any time for myself or my husband. Financial barriers were also a factor in my decision. With a mortgage, and two cars, we have to be a two-income family. Having another child is financially just not an option for us.
Are you ready for another child?
The two-child policy was put into practice in early 2014 and did not lead to a baby boom in many provinces in China. [Photo by Zou Zhongpin/for China Daily]
Steven (US)
Sometimes we make some choices not because we prefer them but because we have no other choices to make. The twists and turns of life always narrow your choices or eliminate them completely. I always thought having two kids sounded perfect. But when my daughter was born with life-threatening health problems I know she would be my only kid. Raising our daughter was going to take a lot of emotional, physical, and financial resources. If I had any more children, I didn't think I could handle it.
Are you ready for another child?
He Shaodong (L) and his wife Zhou Jun show their birth certificate for a second child in Hefei, capital of east China's Anhui province, Feb. 14, 2014. [Photo/Xinhua]
William (China)
Under the one-child policy carried out in China for three decades, many kids are spoilt by their parents. The “litter emperors” have no idea of sharing and giving and many of them even become self-centered. If we have another child, the first one will learn something about responsibility, sharing and caring for others.
Are you ready for another child?
A girl poses for a photograph at a commercial area of downtown Shanghai, in this November 28, 2012. [Photo/Agencies

- China Daily