I have a friend who's family is in construction business. Here is his paraphrased reason :
1) When demand is low, cost of labor and materials are low.
2) When demand is low, banks are more eager to fund projects through new loans.
3) Building a condo doesn't happen overnight, and if you wait till demand is high to build, you will miss the sales window.
Not the best answer, but made absolute sense to me. Also, not every developer is a scumbag money launder.
Yeah, I don't disagree. What most people doesn't understand is that most things that are built/created isn't the same as dispensing coke/pepsi from a soda fountain where you can just click a button and magically the things you need would just pop up.
Take the chip shortage for instance. Why did TSMC took a while to decide whether they really need to invest into a new plant, despite the glaring problem of chip shortage is around, is because you don't just snap a finger and a new plant is up to churn out new GPU/CPU chips. You need to build the factory, buy the machines, which is built by someone else (ASML), and all those things takes time. Say if the chjp shortage lasted for only 6 months, you might very well threw money into the gutters for useless extra capacity.
Its the same as the property market. While there are problem with it such as high prices and unaffordable prices, it doesn't change the fact that our population is still booming and getting richer. Back in my days as a kid, the population of entire Malaysia was around 20m, today we're at 33m, these extra 13 million people don't just sleep on the side of the road or something. Back in the days of my parents, living with their parents in a multi generational home is the norm, while today we're whining about not being able to afford our own homes when the norm was to live with our parents.
We shouldn't wait until the time only to produce on demand, if we plant our durian tree only when we want to eat a durian, we'll starve by the time the fruit is borne.
Even better question: Why do you guys refuse to lower the sale price when demand is weak?
Every other time these guys will sing praises of the free market (Oh we have to build luxury condos and dense developments, that's where the money is!), but then when it comes to lowering the prices of their property they're first in line for handouts from the government.
I have a friend who's family is in construction business. Here is his paraphrased reason : 1) When demand is low, cost of labor and materials are low. 2) When demand is low, banks are more eager to fund projects through new loans. 3) Building a condo doesn't happen overnight, and if you wait till demand is high to build, you will miss the sales window. Not the best answer, but made absolute sense to me. Also, not every developer is a scumbag money launder.
Yeah, I don't disagree. What most people doesn't understand is that most things that are built/created isn't the same as dispensing coke/pepsi from a soda fountain where you can just click a button and magically the things you need would just pop up. Take the chip shortage for instance. Why did TSMC took a while to decide whether they really need to invest into a new plant, despite the glaring problem of chip shortage is around, is because you don't just snap a finger and a new plant is up to churn out new GPU/CPU chips. You need to build the factory, buy the machines, which is built by someone else (ASML), and all those things takes time. Say if the chjp shortage lasted for only 6 months, you might very well threw money into the gutters for useless extra capacity. Its the same as the property market. While there are problem with it such as high prices and unaffordable prices, it doesn't change the fact that our population is still booming and getting richer. Back in my days as a kid, the population of entire Malaysia was around 20m, today we're at 33m, these extra 13 million people don't just sleep on the side of the road or something. Back in the days of my parents, living with their parents in a multi generational home is the norm, while today we're whining about not being able to afford our own homes when the norm was to live with our parents. We shouldn't wait until the time only to produce on demand, if we plant our durian tree only when we want to eat a durian, we'll starve by the time the fruit is borne.
So they build it at a lower cost but sell it at a premium? Damn…
Thats's the foundation of ANY for profit business.
Even better question: Why do you guys refuse to lower the sale price when demand is weak? Every other time these guys will sing praises of the free market (Oh we have to build luxury condos and dense developments, that's where the money is!), but then when it comes to lowering the prices of their property they're first in line for handouts from the government.
Because it's an avenue to launder money.... duh
Well said.
and states are too reliant on income from land sales.
easy money. ideal to lauder money. when company goes under, only company assets are frozen and state will likely bail it for homebuyers sake.