THE time is now right to invest in property as prices are relatively stable and likely to peak in the next few years, according to property researcher Ho Chin Soon.
He said based on the Valuation and Property Services Department's house price index, an extrapolation of the previous 13-year economic cycle on a strategic chart revealed that property prices would start moving upwards again from 2007.
If the rate of improvement in the next few years is repeated like the last cycle, a price index of about 180 today (base year 1990 at 100) could translate into an index of 300 in 2010.
If the trend continues, investment in property would be a wise move now. Over the next few years, prices will climb in single digit or gradually but once the sector booms, prices could go up by as much as 10% to 15% a year, Ho told StarBiz in an interview.
Ho, who conducted a seminar on Klang Valley vs South Johor, Getting Ready For The Coming Boom Years in Kuala Lumpur yesterday, also highlighted the importance of timing and branding to ensure the success of a real estate development.
The two factors may hold the key to why some property projects are instant successes while others are considered non-buys by the market, he said.
According to Ho, the time has come for a paradigm shift from the traditional real estate mantra of Location, Location and Location to Location, Timing and Branding.
He said that in the past when the market was imperfect and lacked reliable information, it would require a lot of effort to identify the right location for a development, and making a wrong choice of location could be a very expensive mistake.
However, with information on land use and ownership more readily available today, evaluating the surroundings and conceiving the future surroundings of any parcel of land was much easier, he said.
With data input for the location factor much improved, no developer has an edge over another in terms of deciding on where to build. Instead, other factors, especially timing and branding, could determine which developer would emerge the winner in a competitive market, he said.
Ho said the concept of timing, the period when an entry was made, was an important consideration as price and value fluctuated according to which part of the cycle a transaction occurred.
He said branding the total sum of all the images that people have of a certain developer (personality) or type of development (product) could determine whether a developer would remain successful in good or tough times.
Ho said a branded product included a type of development that would promote a certain lifestyle or a unique feature not found in other competitive products, while a branded person was one who had achieved a certain level of recognition for the value-added features he was associated with.
Branded products include a gated community, botanic park, strata bungalows, lake parks, wetland and hill parks, riverside access and lifestyle.
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