Making sense of swelling house prices

ONE MAN'S MEAT
By PHILIP GOLINGAI

Where previously it took about two to three months for a house to be sold, now it is more like a week. And prices have shot through the roof.

LATELY, my favourite pastime is driving around USJ Subang Jaya to look for houses for sale. I’ve no intention of buying a house. I just like to know the market value of the property in my township, which is about 20km from Kuala Lumpur.

A week ago I saw a “For Sale” sign and I punched in the real estate agent’s number.

And I was pleasantly shocked to discover that a link house a few metres from mine was sold for RM390,000.

Yeah, I thought, I’m 39% a millionaire.

Well, maybe 33%, as my link house is at a T-Junction and faces west.

I was also shocked, because I assumed 20 x 60 link houses in USJ 13 were priced around RM250,000 to RM300,000 (depending on whether the owner had extended the unit).

My assumption was based on my immediate neighbour’s link house having been sold for RM218,000 last year.

I was told it went for a song as the market price was around RM250,000.

Yes, I regret not buying that house.

For the rest of my life I will be living next to a symbol of my lack of foresight.

Is my other neighbour’s house really worth RM390,000? Curious, I drove around USJ 13 looking for “For Sale” signs.

And my calls to real estate agents confirmed the RM390,000 price tag was not a fluke, or a “fake” like the RM14.5bil golden yacht.

Each time I call a real estate agent I get a “wow!” moment.

The prices are unbelievable in this award-winning township USJ (UEP Subang Jaya).

For example, an abandoned, dilapidated 3,000 sq ft corner house in USJ 3 went for RM715,000.

A basic one-and-a-half storey house in USJ 11 was sold for RM450,000.

I’ve been making so many calls to real estate agents that I’ve become an adept real estate agent of sorts. I can now size up a unit and correctly guess the asking price.

Now my favourite question is not “how much?” but “why is the price unbelievable?”

One real estate agent told me “the prices don’t make sense”. To make sense of the property market in USJ, I had a chat with M.L. Ho, Property Watch head of operations.

“How’s the market for USJ houses?” I asked the real estate agent with 15 years’ experience in the business.

“Very vibrant – in the sense that there are more buyers than sellers (10 genuine buyers to one seller). In terms of pick-up rate, there has been a sudden surge since the beginning of this year,” Ho said.

“So has the jump in prices. We have not seen this for a long, long time.

“In fact a price jump – some of them 60% – is very unprecedented in the property market.”

Usually, a house is sold around a week after the “For Sale” sign is put up.

Previously, it took about two to three months for a house to be sold.

The jump in prices was “so fantastic” that it caught many buyers as well as the experienced real estate agent himself by surprise.

His 29-year-old software engineer son was looking for a RM400,000 house early this year.

“We were stunned when we found out that the prices (for the size they were looking for) had shot up to 500K,” related Ho, who lives in USJ.

“Unfortunately for my son, the price of houses just keeps going up. There is a rush to buy property in USJ. Buyers are sort of panicking because there is a lack in supply.

“We thought the prices have gone haywire.But, the thing is, if you don’t buy, there are always people who are willing to buy.”

Until now, his son is still searching for a house.

“My advice to him is to slow down and wait for the scenario to change as I think the property price has reached a very, very dangerous level,” he said. However, some may disagree with me on this.”

The surge in house prices, according to Ho, is due to the fact that there is no more land around USJ for development.

It is also because developers are building expensive houses in USJ (a newly-launched link house in USJ Height costs about RM800,000).

The “fantastic” house prices in USJ are reflective of the property market in the Klang Valley.

“There is a surge in prices, especially for landed property,” Ho said.

The property market is so hot that I constantly receive flyers from real estate agents asking if I want to sell my house.

When I read the “invitation to sell” letters, I wonder whether I live in a bubble.