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High Property Price Affecting Rental Market

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High Property Price Affecting Rental Market
High property price affecting rental market
BY AIN AQILAH

The upcoming MRT developments will change the value of properties

How people make decision?
In our daily life, we face problem and question that require our decision making. Decision making based on economic concept which related with economic activities is very important in our life.
The rapid rise in the price of property has caused growing concern among prospective property buyers, especially the young professionals who are just starting to make their mark in the world. The price of property has been steadily increasing, to the point where it's almost impossible for the middle income group to own their first property. For the time being, the luckier ones have the option of staying with their family. Others have to resort to renting a room. The co-relation between property price and rental is indisputable when one browses through room rental websites such as iBilik. On the website, it shows that medium-sized rooms in the city have an average rental price of RM400 per month. The fresh graduates, who on average earn RM2300, are usually the target market. The amount is approximately 17% of their monthly salary. In daily life, people can use the law of demand in their decision making. I assume that the price of the local properties is drop, then the demand of buying a properties will be raised. In the law of demand, the lower the price of a product the higher the quantity demanded. Besides, expectation about the future price can also be a factor to make decision. The higher the expected future price of a product, the higher the current demand for that product and vice versa. For example, if the price of a property will continue to rise in the next few years, the demand of the properties will surely increase as the people expect that the properties can be sell with higher price in future, undoubtedly it is a wise investment. In the other hand, people also can make their decision based on the



References: 1. http://www.freemalaysiatoday.com/category/nation/2013/09/30/no-economy-crisis-msians-are-ungrateful/ 2. http://www.businessdictionary.com/definition/economic-activity.html 3. Principle of Economics, Second Edition, Oxford, Deviga Vengedasalam, Karunagaran Madhavan

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