4 Things Real Estate Investors Can Expect in 2016
One of the most lucrative investments to make a few years ago was in real estate when the bubble was still fully intact, but as everyone knows, it burst eventually. However, as the economy and the property industry it self continues to recover, prospectors are once again looking to market for potential investment opportunities. The overview of 2016 for real estate is that the market is still evening out and regulating itself. The GDP will show a little less growth than in 2015, but unlike an economic crisis, it’s not fluctuating wildly. Keeping the market steady is important, and as 2017 creeps up, it’s more essential than ever to continue to monitor trends. Here are four things that investors can expect in the Malaysian real estate market for the rest of the year.
1. What Was Expected, and What to
Expect
To
summarize the Malaysia
property market, PropertyGuru Malaysia simplifies matters by stating that
the national economy is slated to slow down in 2016. However, that also doesn’t
mean that the market is about to crash. The growth of the GDP will grow by a
predicted four to five percent this year, as opposed to a solid five percent in
2015. This isn’t an indicator of a downward spiral, but rather, a slow
recovery. However, although this is good news in the long run, that doesn’t
mean that it’s the perfect time to invest. Generally speaking, there are a lot
of pros and cons when it comes to real estate investment at all times, no
matter what the economy is doing. However, the reasoning behind purchasing real
estate for investors versus would-be homeowners is very different. While the
market isn’t bad for people who are looking to purchase property they intend to
reside in, investors should be more wary.
2. Property Market Trends and
Predictions
According
to the Malay
Mail Online, experts predicted earlier this year that for 2016, the first
half would see real estate transactions total at RM35 billion, as compared to
RM36.38 billion in the first half of the previous year. In other words, the
market will not fluctuate wildly, nor will it crash. Although seeing profits
skyrocket is always desirable, in the long-term, it’s actually best for
investors to allow the market to stabilize and develop again, rather than
forging forward without recognizing the trends. Right now, the market is not
prime for investors, but it’s not continuing to spiral downward. The state of
other economies as well, such as China and Singapore, will also directly impact
how real estate fares in the second half of 2016.
3. The Current State of the Real
Estate Sector
The
Star Online points out that although investors might be willing to pay high
prices for choice real estate, there’s no guarantee that rental prices will
then match the amount. This is another way of saying that if you’re hoping to
break even with only a small margin of error allowed, it’s not the right time
to invest. Buyers with more leeway to absorb losses and who can afford to fail,
but want to try nonetheless, are the only major real estate investors in the
current market. Any smart investor will wait until market prices match what
rental incomes can be, and then go from there. If you’re an investor with a
solid but humble financial portfolio, now is not the right time to purchase
property. Watch the market as it recovers, and wait for demand to also meet
supply. In order to adjust due to the Malaysian real estate bubble pop a few
years ago, many developers halted building new units until the residential
housing market was ready to pick back up. As such, if you’re being financially
conservative, then don’t jump in when the market is still cloudy and in
recovery.
4. Continued Power of Online
Search Portals
As
is to be expected, the power of the Internet continues to be a force to be
reckoned with even outside price trends and market values. Sites that allow
investors to search properties and compare prices at the click of a button
empower buyers and brokers alike, presenting a snapshot day by day of what the
real estate market is actually doing. Keeping in tune with these tools is
especially important to investors monitoring the mood of the market, including
both buyers and renters.
Overall,
real estate can be a risky business if you
jump in headfirst without a plan. Many investors just a few years ago were
rash, completely absorbed into the fantasy world of when real estate was at its
peak and garnering huge profits. However, that all ended after the worldwide
economic recession and the backlash of the Malaysian real estate bubble
popping. The best advice investors can take in 2016 and going into next year is
that sure and steady is the best advice possible. Keep your eye on exactly what
you want your investment to bring you and for a time when the market is up.
That’s the time to invest.
6 Comments
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