Monday, February 18, 2013

Why Property Market could not last long?

Property market up easily build up the increasing of country's GDP. But property market in the circle of economic always can create a burble and then harmful the economic base. Why it can't last long like others consumer products? ( eg Smart Phone, Camera, computer or Television).

Politician need price up for property, it can create an imagination to population they have been rich with support by politician party.So, nobody will get blame in the election. Nevertheless the hazard finally reach strong and unavoidable. It hit all level of basic economic and bang the financial institution loss all the depositors saving.

 In my mind, if normal salary per worker need to spend more than 10 years to purchase a house.(3,000 per month * 120 months = 360,000). The property selling price above 360,000 in the market already unreasonable. Now days, in the coffee shop I can hear a lot of old man said they already is a millionaire but they can't sell the house because they can't get another one like now or maybe need to pay more than that to purchase a new one.

Every one growing up be a man or women need about 20 years. So, the circle of property demanding should be follow such trend to make it steady and reasonable. If every ten year or less than that, the property price shut up more than 5% per year, that become unreasonable.

Recently a lot of listed company proposed be a developer to enjoy such blooming of price. But that is dangerous because the year of development required about 2 years and the skill workers would not join the new development company because of unsure. So, the quality not meet the requirement may cause losses and the commitment of management become heavy.

Those developer proposed the project in oversea is another threat. That also loss it heavily on foreign exchange risk.  


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xignite said...

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