24 June, 2007

Property Boom -Do Not Follow Blindly

Flip through the newspaper, most of the analyst are praising on the government policy to boost the property sector. Everyone is very excited to see the property sector start moving up. Property counters at the share market already be the indicators to show the potential growth in future earning.

Time is of paramount crucial factor to determine the success of the property development. The result will not be seen in short term. Most developers start launching new projects, including residential , commercial, etc. The side effect is the construction material cost increase in tremendous rate and the cost will be eventually borne by end purchaser. End users have to bite the bullet to take up the over price property.

On the other hand, to be competitive, developer may reduce the cost by cutting down its quality or award the project to the lowest tender, which may be the main cause of poor workmanship and shoddy work. Then, subsequent defect will eventually repair cost more than construction.

Come to the end, the development is not properly managed, its sale will not achieved the target and the project become abundant. Once project abundant, the one who suffer it is still the buyer.

Government shall put in more effort to monitor such possible outcome and being a smart buyer, a careful selection of property is important and do not follow blindly to the trend.