Monday, August 22, 2011

Owning Asset?

I am of opinion that the landscape of malaysia economy is evolving very fast. The wealth is transfer from the group of lower income to middle income, and from the middle income to group of rich. With asset (especially land and house) appreciated very high and fast, we may face the situation something like Hong Kong and Singapore, where lower income and middle income group struggle to own a shelter. While the rich enjoy the most as their asset being land, house or share appreciate substantially. If this situation persist for years, it is very dangerous to those did not own any asset. Keeping cash is something not wise, provided you are prepared to snatch some asset if prices corrected.

Some think that property market today is a bubble, i do agreed partially especially those recently launched high rises. However, material prices and land cost also increase recently although is not as high as the property prices. I will not surprise if Bank Negara implement more control on property purchase.

I am worrying for those do not own any asset being share or property. Asset free person going to lose the most as asset price keep on inflated. It is true that the market can move up and go down, but if you failed to capitalize, then how? Because property is trending up over long term. Similar to good stocks also, long term it is trending up.

I am of opinion owning asset is way to move ahead. At least you get hurt some and gain some.

3 comments:

  1. Some think that property market today is a bubble, i do agreed partially especially those recently launched high rises. However, material prices and land cost also increase ...agreed on the 1st, mistake on the 2nd part (correct me if I m wrong)...

    material prices and land cost also increase ...yes, but price of property depend on the supply and demand, not on the cost of building. Take US for example, properties are selling below cost; I m new in property, bought a house to rent out, at the same time hope to have long term capital gain. What happen was the developer builded more and more, almost 30% are unoccupied and empty, causing no second value in the area and the area turned into a 'cheap foreign worker' district...so no local really like living there and .....u know :(

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  2. Property is like stock market, some lousy stocks is highly sought after with ridiculous price. Some average stocks is traded at average market valuation. Some good stocks is highly priced, some good stocks is reasonably priced, and some is attractively priced. So on and so on.......

    It is depend on which group you prefer to join.

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