Saturday, April 23, 2016

The state of capitalism and developers

For the past few years, construction costs are in DECLINE OR IN STATIC but the prices of properties still go up. Except for lands at prime areas, most developers bought or own landbanks BEFORE the property bubble started. Issue of lands getting expensive is basically just a push to justify jacked up selling price. They owned the lands BEFORE it got expensive.

This is capitalism at it's best where supply and demand push prices sky high and developers gain >200% of revenues. Before the property bubble it's normal to get just 50% revenues which is already a lot to be honest (but if we are being realistic then we should acknowledge that every business want to get as much revenue as they can).

 This is why you see every other companies that are not in construction before like F&N, Jakel, biscuit factory owner, or anyone that have substantial or strategic landbanks all rushed in to get into the property business. It's very very very profitable.

Unless there's a property crash, realistically we will never get to see property prices go down ever. That being said, all the properties at all the good locations are getting snapped at at neck breaking speed.

Will you succumb to the greediness of the businesses? kalau loan bank lulus, of course :P

Just a rant *sigh*

references:
- http://www.therakyatpost.com/business/2015/08/24/khazanah-house-price-controls-needed-for-5-years/
- http://www.themalaysianinsider.com/malaysia/article/malaysias-home-prices-seriously-unaffordable-says-khazanah-research
- http://krinstitute.org/KRI_Maps_-%E2%97%98-_Data-@-Construction_costs_fall,_yet_house_prices_rise_.aspx
- http://www.thestar.com.my/Business/Business-News/2015/08/25/Houses-in-KL-too-expensive/?style=biz

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