Saw this piece a news today:-
The oversupply of properties due to buyers' speculation may cause the secondary residential property market to slow down in the next six to 12 months.
Siva Shanker, Deputy President of Malaysian Institute of Estate Agents (MIEA), noted that the oversupply would make "secondary properties in secondary locations," difficult to sell.
"A lot of these properties were sold in the last two to three years and developers made a roaring business out of it. However, they're now struggling a bit."
He noted that an oversupply situation is created when property buyers try to flip the property for a higher price.
A misconception that property prices will crash arises as one seller start to lower the price and then others follow.
"It's not what people think - that property prices are crashing. A person buys an apartment for RM300,000 and after two years, wants to sell for RM400,000 and puts it on the market. But then, others also start doing the same and the buyer gets spoilt for choice," Siva said, citing an example of a 300-unit apartment block for sale.
He said that the RM400,000 price tag is impossible to achieve, hence the property would be sold for RM350,000, making the buying public believe that prices have gone down.
"But in actuality, prices didn't fall. You bought at RM300,000 and sold it at RM350,000. You tried to flip the property, but you didn't get the level of profit you thought you could get. But you walked away with a profit nevertheless," he added.
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