So, now is a good time to buy property? Why? <\/strong><\/p>\nI believe now represents an excellent time for people to buy properties. General sentiment out there is pretty bad, so there are less buyers looking at properties today, which means less competition.<\/p>\n
When demand drops, prices will start falling. We have been able to find good deals almost on a weekly basis now compared to 12 months ago.<\/p>\n
Having said that, one must equip themselves with the right knowledge before buying and avoid buying blindly. I believe that if an investor is skilled enough, they won\u2019t have problems buying in a good or a bad market.<\/p>\n
Are there any advantages in buying property amid economic uncertainties? If yes, what are they?<\/strong><\/p>\nOf course there are. Anyone who bought properties in 2009 (the last time we witnessed a recession) would be glad that they did.<\/p>\n
A decreasing number of buyers and slowing demand will force desperate owners to reduce asking prices to more reasonable prices and allow us to creatively structure deals to our advantage.<\/p>\n
This applies to both primary and secondary property markets.<\/p>\n
What are your thoughts on property flipping?<\/strong><\/p>\nActually, I don\u2019t recommend property flipping at all. If you run by the numbers, a property flipper will find it hard to beat returns of someone who buys and keeps maybe five properties for 20 to 25 years.<\/p>\n
So I have always advocated buying properties and keeping them for at least 10 to 15 years. With a longer investment horizon, economic cycles and taxes will matter less.<\/p>\n
I have always advocated buying properties and keeping them for at least 10 to 15 years. With a longer investment horizon, economic cycles and taxes will matter less.Faizul Ridzuan<\/footer><\/blockquote>\nIn your opinion, what will be the likely effects of the depreciating Ringgit on the property market?<\/strong><\/p>\nA few things will happen due to depreciating Ringgit:<\/p>\n
\nFor the primary market, it will mean higher cost for the developer to build something as their imports will become more expensive.<\/li>\n There will be greater interest from foreign buyers, especially from Singapore.<\/li>\n Sentiment of local investors will be weak as they will be looking to park their cash in different markets due to the depreciating Ringgit.<\/li>\n<\/ol>\nHas your firm, FAR Capital seen an increase in demand from foreign investors in recent months?<\/strong><\/p>\nAbsolutely. We have received more enquiries about our services from foreign clients in the last three months compared to the whole of 2014.<\/p>\n
Confidence from foreign investors has not waned. The current political scenario will not last, and some foreign publication and investors are already under the opinion that the Ringgit was oversold.<\/p>\n
The housing price index fell to 4.10% in the first quarter (Q1) of 2015, from 7% in the fourth quarter (Q4) in 2014, and from 12.2% in the third quarter (Q3) in 2013. Screenshot is taken from www.tradingeconomics.com<\/em><\/p><\/div>\nIt is common knowledge that property prices have stagnated in recent years, and the property market is increasingly congested, so why do developers keep building? Is there actual demand for (residential) property, or are developers targeting mainly investors?<\/strong><\/p>\nIf we look at the recently published Property Price Index, growth in property prices have moderated in 2014 compared to 2013 or 2012. It is still growing, but at a slower pace now.<\/p>\n
Developers continue to build even in a slowing market due to the high holding cost of keeping the land.<\/p>\n
I hope they will start building more housing projects for the mass market from 2015 onwards as we don\u2019t have enough supply to meet the upcoming urban migration needs.<\/p>\n
Recent reports indicate that while home prices have stagnated, the value as well as rental rates are showing no signs of declining \u2013 are they likely to stay that way?\u00a0<\/strong><\/p>\nRentals have actually started to decline for properties in the medium and high-end categories.<\/p>\n
Like many of us, Faizul Ridzuan was a regular employee who aspired to be financially free. By age 30, he bought 23 properties, starting with only RM2,000 capital.<\/p><\/div>\n
Last I read in your book,\u00a0Property WTF,<\/em> you were headed towards commercial real estate investments. How has that been working out for you? What are some of the investment strategies you\u2019ve adopted?<\/strong><\/p>\nI am still sticking largely to residential properties, because for most commercial properties out there today, the yields no longer make sense at 3%. I also tend to stay away from properties with a high negative cash flow possibility.<\/p>\n
Also, some reports suggest that there has been an oversupply of commercial and retail properties \u2013 what are the likely repercussions that could emerge from this?<\/strong><\/p>\nThe industry will consolidate and retail space owners will need to be more creative to rent out their unit, fast.<\/p>\n
Finally, what are your thoughts on the property bubble? <\/strong><\/p>\nWe have been in a property bubble since 2009, especially in selective areas like KLCC.<\/p>\n
![\"going-out-242812_1280\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/10\/faizulridzuansmall.jpg\")
Faizul Ridzuan, <\/strong>Chief Executive Officer at FAR Capital and author of WTF? 23 Properties by 30\u00a0<\/em><\/strong>![\"house\"](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2015\/10\/house.jpg\")
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