What Cycle of the Economy is Best to Buy Property?

• Economic Downturns

Economies usually go through repetitive up and down cycles, and there will be certain times when the market slows down, and businesses tend to have fewer profits. Slower economies lead to a domino effect that trickles down and affect people who are employed the most. Some may suffer pay cuts or lose their jobs, which leads to a higher number of people desperate to sell off property for quick cash to cover loans and living expenses.

Additionally, there will be business owners willing to let go of commercial properties for a more affordable prices, especially if they need a quick solution to cover business losses. This means that you’ll stand a better chance of getting a lower price, or at least one that isn’t inflated.

• When the Property Markets Cool

For various reasons, the property market itself will go through cycles of intense demand, followed by decreasing demands. When the property markets slow down, this is your chance to obtain certain units before the market picks up again.

Despite the fact that property prices hardly ever depreciate, there are times when their appreciation rate aren’t as rapid. In the past 10 years in Malaysia, property prices have not depreciated, but have gone through periods of booming prices followed by periods of stagnation. You’ll have to be alert and ready to purchase a property in the short ‘stagnant’ period.

• When Supply Exceeds Demand

Just like other aspects of the property market, supply and demand of properties undergo a cyclical process, with low demand causing developers to be less aggressive in pursuing new projects, thereby causing demand to increase within a short period and supply to decrease.

Watch out for periods of time when there is a glut of developments in your area, with low or unsatisfactory occupation rates. You’ll notice shop lots with little or no business occupants or apartment buildings with very few lights on during a weekday night. This is a sign that demand has slumped, and the price of that particular property may come down soon, or at least it won’t appreciate any further.

• Before a Property is Launched

Obtaining a unit from developers before the official completion and launch of a project can save you a small percentage, and the faster you purchase the lot, the better as property prices tend appreciate significantly in the period following a launch.

In fact, the earlier you decide to invest in a piece of property, the better as developers usually increase the prices of property at several stages, starting with the early booking phase, followed by the pre-launch, launching and so on. Once a property in launched, developers will very quickly try to catch up with the current market value, and so the price of the units will soar.

Conclusion

In short, there’s no better time to buy property than the present, since property prices won’t depreciate anytime soon. This pattern has been proven over the past decades in Malaysia, so it’s best not to waste any time and start hunting for your residential or commercial property as soon as possible. If you wait, the bargain price for property may forever past you by.