Rising Property Prices vs Average Salary Increase Rate [Q&A Part 3/3]

Question: From Vanessa Tshai’s successful story, the properties she bought earlier were quite cheap, below RM150K. I think now we are no longer able to get such property prices at good locations. Our salary increase rate doesn’t grow that fast, do you think it is a bit hard to buy property for investment? And how to value whether the property price is reasonable?

Answer: Vanessa Tshai bought her first property, 400 sq ft studio apartment cost RM110,000 in 2006. RM275 psf, does it sounds cheap for property prices at four years back? I’m pretty sure, plenty of people were complaining about the expensive price for a 400sf small size studio unit.

Perhaps you may try to apply Ho Chin Soon’s real estate manta “Location, Timing and Branding” in analyzing where to buy, when to buy and what property to buy in Malaysia. The formula works well for me!

I agree with you, average salary increase rate in Malaysia is relatively low compare to the rising property prices and it is not easy to invest property without a strong credit score. Therefore, it’s important for investor to maintain good credit report to convince bank for lending you more money.

How to determine the property price is reasonable or overpriced? Seek advice from property valuers to understand the Open Market Value (OMV).

Besides, local property agents are one of the good options to collect information on the latest property transaction price in market. This is important to know the fair price tag that buyers are willing to pay for the properties there.

Other than that, try to build up the good relationship with banker and mortgage officer; utilize their free property valuation services to get an idea how much is bank willing to finance your housing loan.

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