20180405 (Thu)
Why property in Sarawak is so expensive despite Sarawak being biggest land area?
There was a gentleman who asked me this question while queuing at the auto-payment parking machine. I was taken aback! Indeed, if you were to ask me when I was younger, I would have answered, “I don’t know!”
Most would not have an answer. Why? Because it is just too many variables to compare. You are comparing an apple to an orange. Kuching is different from KL. So, I asked: Sir, are you buying for own use or for investment? He said: I come to Kuching very often for business, so I am kind of thinking why not I buy one here?
Exactly, I said. If you are buying for own use, it is just your choice. There isn’t much to compare. But, then he said: Well, if it is too costly, then I would not want to take this risk!
So, I put forward an idea that it is the same as comparing a landed property to a strata title property. They are not the same. But, it is cold hard cash you are putting in them. Landed property would give you more capital gain than strata title – so certainly there is some risk involved. It is about demand and supply I said. However, there is no data to show how much is the demand as it is hard to measure demand. May be there is supply data – from developers and historical market trend.
Landed would have limited supply, whereas strata would have more supply. Inevitably, there is no accurate measurement of demand – you cannot really measure sentiment in market place. Despite, I proposed that certain indices be established to make this comparison simple. For instance, landed double storey house is given Index 1. The rest would be compared to this to arrive at a set of indicators for their predictive value.
Amidst, I said the task to collect this data is daunting!