Few years back when properties cost only about RM400,000 to RM600,000 (setting condominium for this case). And, due to demand factor and various other reasons the price of the properties had increased greatly over these years to about RM700,000 to RM900,000 and even hitting a million in no time.
Group A of people ("A") who was young adult and working his ass off during the RM400,000 to RM600,000 time, finally bought his first property and sold to the market because of high demand with a profit of 10 to 20%.
A has the privilege of enjoying a lower cost properties and by then accumulated certain pile of wealth and making his 2nd, 3rd or maybe even 4th properties for, precisely, investment purpose.
When Group B ("B") finally come into picture as a young adult and looking for a property, this is where the problem set in!
Vomiting RM60,000 is still possible back then when A has more time and less attraction. But when it comes to instant 50% hike, this is really not the case whereby vomiting RM90,000 from a young adult or young couple is feasible unless with the aids provided from his predecessor(s).
And, bearing in mind that, A is now holding a senior managerial or assuming a management post in their courier path or as far as a businessman who accumulated more pile from his ass-off-time since one or two decade(s) back. Who is now, having his the 6th or 6 property(ies) (for investment purpose).
Without further delay, the Government has come into picture and mentioned "Shit Thing is not going to get any further seriousness (discussing about hike), let's aids B by building affordable properties (in the remote area)". So, B ended up staying an hour or half more from the city where he traveled to earn his living. Ain't anyone got time for that!
Then, developer awake, properties costing RM800,000 with 10% discount, B may only need to pay RM5,000 to own his first property cannot be anymore happier for this shit arrangement!
So now, who is going to pay RM90,000 to own a second-hand property when you can get just tell your bank to advance you some RM5,000 in cash with the interest rate of 8% p.a. or get from your saving to own a property cost more than 140 times of RM5,000! Which is completely new! Half hour drive to reach your desk! Come with free air-cond! And maybe kitchenette! 2 free car park! Best view in the city! A lot more facilities from the RM90,000 one!
So, ain't anybody got money to buy my (A's) 2nd, 3rd, 4th, 5th and 6th properties? IDK about that! Since I just sold my 4th properties, my plan is to get the 7th and 8th one for my mighty milestone - earning my first million in my life (and happily retire ever after)! And, here I sign!
Meanwhile, "We must get the final piece of land in the city center built then we move one step farther from the city and continue our journey" the developer shouted this in their mind which is almost blown by repeating!
"Your project is my investment!" slogan had never fade in A's mind, 9th property signed!
Then "I have managed to sell another investment of mine today, this would allow me to free from thinking of servicing our investments' monthly installment for the next 6 months" A told his wife after their sexy time that night, "with this, we can finally have our long planned vacation to Australia (everything cost your 3.5 times more)".
B continue to think hard for 8% p.a.!
The question is, how long will it take for A to notice the remaining properties of his will not be selling at his favourable price for 2 months after the chill of 6 months' time. Whereby, he is definitely not going to dispose off his investment at an unfavourable price despite challenging time.
And, when B started to learn from A for owing his 3rd property and then the new born of Group C ("C") is struggling with gathering documents for the 8% p.a.!
More and more vacant second hand properties exists in the market with the remaining 25 years of installment to go! Even though he is willing to sell at the original price, majority of B and C will still not entertaining, because of RM5,000 v RM90,000 or maybe is RM100,000, mind you! But some to think for nights.
When this happen, it is the time when A goes fucked up bankruptcy; banker would have to auction these retarded properties, which is not going to generate short-term, liquid return to the banker; and market will be floating with properties! And, C thinks he is probably a retard as well, as 2 months ago, he signed a RM800,000 sale and purchase agreement ("SPA") with the developer which the unit next to his now is auctioning for about RM600,000. So, C forfeited its RM5,000 and called off the SPA for the RM600,000, as this still saving C 195,000 in RM! Told you right? RM60,000 is still okay for one to vomit out in 5th paragraph, didn't I?
1 more idle unit in the market, because C called off his unit, and developer now is struggling with how to push off the remaining 158 units on hand. And, he needs funding for his new project!
And, B is crying in his bed as he paid RM800,000 for now-a-RM600,000 property but nothing can be turned around as he need the now-a-RM600,000 property as a nest for Group D ("D") to be fully blown.
And, how will this spread to other cities?
The question is very much depend on how active did A and B goes for their investment plan.
And so on!
Kthxbye
The above is for discussion purpose only.
