An industry player told The Malaysian Reserve (TMR) that small-time investors with a budget of below RM500,000 would be unlikely to make any profit from property flipping.
“There are no guarantees for a purchaser to be able to garner significant returns from a property that is purchased today. It would be difficult to see any buying and flipping activities over the next two to five years. Only those high-income earners in the luxury segment would be able to garner some returns on their purchases,” the unnamed source was quoted as saying.
According to a recent Bank Negara report entitled “Economic and Financial Developments in the Malaysian Economy in the Fourth Quarter of 2017 (4Q17)”, there were 146,497 unsold residential properties at 2Q17, compared with 130,690 units as at 1Q17.
TMR quoted consultancy firm Rahim & Co International Sdn Bhd executive chairman Abdul Rahim Abdul Rahman as saying current market sentiment was not in favour of any immediate asset relinquishing activities, unless at a significantly lower price.
“If you buy now, you cannot flip it and hope for a profit immediately, because the property sector is not like the stock market whereby you can buy some shares today and sell them tomorrow,” he told TMR.
“It is a long-term investment that requires a longer digestion period to see the reward. Therefore, first-time investors cannot expect success overnight.”
Abdul Rahim said this year was the right time for long term purchases, especially in the residential segment.
“I am almost certain that within the period of the next three to four years, buyers can expect a 10% to 20% appreciation from the units they buy today,” he was quoted as saying.
Abdul Rahim said properties below RM1 million located on the fringes of Kuala Lumpur, especially landed units. remained the most “vibrant”.
According to Rahim & Co’s recent data, prices for high-end property near KLCC, the most sought after residential address in Kuala Lumpur which had fetched as high as RM2,500 per sq ft, had fallen below RM1,800.