Now that we are in the turmoil of COVID-19 pandemic and economy downturn, is buying a home now a good idea? Or should you put the plan on hold? Especially during this trying time, most will focus on saving their money for survival. It is understandable as many people are already struggling with pay cuts or worse, loss of employment. With no stable income, many are forced to live hand-to-mouth.

However, we should commend our government for their quick response by introducing many measures such as revised EPF voluntary contribution, monthly RM500 withdrawal from EPF Account 2, cost of living assistance programme, and Bank Negara Malaysia’s (BNM) moratorium on financing.

Now, let’s dive into the main topic, so keep reading

Save Money for Rainy Days or Buy your Dream Home?

When it comes to buying a home for our own stay, most Malaysians would prioritise these few factors – Layout, Location, Size and Show Unit! However, many would neglect their EXIT STRATEGY. After staying for some years, it is common for people to want to move to a newer and nicer place. However, the question is – Can your property be sold off, given the demand and market value at that point of time? Or if you plan to rent it out, would it be easy to find a tenant?

If you have read our previous article “Is Now a Good Time to Invest in Properties amid COVID-19 Crisis?”, you should pretty much know the answer to this is YES! However, you have to ensure that you have the financial means to do so and that is why we hold this theory tight – “HOLD & SAVE UP more cash when the economy is booming and INVEST when the economy is down!”

When buying a home for your own stay, it is as important to consider ALL FACTORS as though you are also purchasing this home for investment purpose as well. This will ensure that you have your EXIT STRATEGY planned out. One of the most important factor is also TIMING. Whether it is for own stay or investment, most Malaysians would make the same mistake – Acquiring properties only when economy is booming as they are financially stable with a lot of cashflow.

In fact, economy downturn is the best time to buy even if it’s for own stay! Smart homebuyers will take advantage of the current situation where BNM’s OPR rate was reduced twice and now stands at only 2.5%! Developers are also offering attractive packages with LOW asking price. Therefore, homebuyers will be able to own their dream home at a much lower value and enter into an initial agreement with a much lower interest rate. And hence, lower monthly instalment.

Furthermore, analysts including BNM are positive that the property market is resilient enough and will bounce right back. Their prediction is supported by prices, market trends and past recessions. This is known as the “bottoming-out” phase, the same situation as the Sub Prime Crisis in 2008, where many investors and homebuyers acquire their property at a low price and the prices boom in less than 5 years!

Who says you can’t buy a home for both own stay and investment? But, the big question is – Would you want to buy now at a lower value? Or wait-and-see until the economy is better and when the value increase?  

This is a choice for you to decide, ultimately 🙂

Do read our article “Insider Secrets: 6 Laws of Property Investment” to know all the factors to be taken into consideration when buying a property!