Next time you are contemplating a property investment then maybe it is best to have a look at the calendar because the one thing which is important in real estate, apart from the location, is timing.
iwali and Chinese New Year serve up images of lights, fireworks and celebrations. By no means do people envision commerce and in particular real estate. Indian and Chinese people, who have two of the world’s oldest cultures, have certain cultural similarities. One of these is to spend and splurge at the time of these two events.
This mindset and action has a direct effect on gold prices as this is the other investment model which has always been popular.In cities such as Hong Kong, Mumbai, New Delhi and Singapore the number of real estate viewings, reservation fees and sales listings all have sharp increases. Real estate as an investment has a built in delay.Therefore the effects of this sudden market demand is felt for a few months down the line. One of the reasons these two festivals have this effect is that it is common practice to buy gifts and splurge on your family during this time. Spending on family during this time is not considered an expense but rather an investment in the long term. It could be envisioned as a very basic form of family planning.
[quote align=”center” color=”#b64736″]One thing which is important in real estate, apart from the location, is timing.[/quote]
Over the years selective developers have implemented policies and practices to be able to better capitalise on this phenomenon. These policies are for example marketing promotions as flexible payment plans and reservation fees for off the plan properties. They also have specially timed launches and viewing events to target the consumer. As an investor you must recognise that these promotions and prices have been built in by the developer however this does not mean that you cannot find yourself a good deal out there Real estate is a long term asset as mentioned before, therefore it may take a few ‘Diwali’s and Chinese New Year’s’ before you see a return.
In years that the economies of China, India and Singapore are booming, this phenomenon has an even great lasting impact. I have mentioned Singapore because the city state has three major demographic groups being Chinese, Indians and Malaysians, with the Chinese population being the largest and best represented in the top socio-economic bracket.
Other cities in the region which have large wealthy Chinese and Indian populations also experience this market movement. Chinese New Year is a very popular time for real estate purchases in Jakarta and Kuala Lumpur. Next time you are contemplating a property investment then maybe it is best to have a look at the calendar because the one thing which is important in real estate, apart from the location, is timing.
By Sooruj Gupta
