But, before we set our new goals, have we analyzed our past mistakes, miss opportunities and reluctance to take action. Are our weaknesses just due to lack of capital or is it because our refusal to learn from those who already succeed to achieve their dreams. Do we really think we have sufficient knowledge to achieve our goals? If so, why our dream is still beyond our reach? Are we shrewd enough to be innovative in making our investment? Or are we just regular guys who invest based on the current investment flow?
Based on current perception, Malaysia and all around the world are going to face recession. Some analyst predict the economy meltdown will be worst than 2008. Here are what we can easily see: as long as the new pre-cold war persist between USA, Europe and Russia, their economy will not getting better. Oil prices will keep dropping which will drag down a lot of financial and related oil and gas companies. This also means Malaysia has less demand for her products.
After 2008 financial crisis, Malaysia stimulate her economy by lowering the BLR. BNM learned this important strategy after 1998 financial crisis. As a result, a lot of people buy properties especially new ones. Developers were eager to launch new development. The secondary economy benefited a lot from the new property development as new home owners need to buy new furniture, renovation, cooking equipment, security etc. The economy multiplying effect is more than ten times the amount of property being sold. Hence, the GDP growth was maintained at respectable rates.
However, this time around it is not easy to repeat the same strategy because total household debt to GDP is already too high which is more than 80% (86.8% as of November 2014). Malaysia has one of the highest household debt to GDP in South East Asia countries. This is one of the reasons many economy analysts suggest there will be great down turn in property investment activities due to potential recession Malaysia may faced. One thing for sure, BNM will not let 1998 history to repeat again. So, BNM will not simply throw away the current strategy. Instead, BNM is in the process to modify the current strategy. And this is where Base Rate (BR) came in to replace Base Lending Rate (BLR).
So, have you reevaluate your investment strategy? Economy down turn does not mean there is no economy activity at all. It does not make sense which make me surprised when an economist professor said so. He might be intelligent but he definitely not a practical man. People still need to eat, buy foods, clothes, car, houses etc. This also means there still a lot of property investment opportunities out there if you believe they exists. So, you should adjust your strategy, learn new tricks and make you investment. For me, this year, I should buy at least a property to increase my investment portfolio.
GO HUNT FOR YOUR PROPERTY INVESTMENT!
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