What will possibly happen to the development of new single and double storey terrace houses in Klang Valley / Selangor when we have an economic slowdown?
1. There won't be a decrease in the real demand. In this category of houses, we are not experiencing a situation of supply more than the demand.
2. People are not buying, more because the price is beyond what they can afford than other reasons.
3. In the market at this point of time, there is no oversupply or glut i.e houses ready and built but not taken up or occupied. This is not happening to the market for this category of houses.
4. Price in this category MUST come down if there is a high inventory / "delivered" supply in the form of new houses having been built in the market. Price will come down if developers are willing to accept a lower margin because they need the cash flow. But is this the situation in this category of market / houses? If the developers are not facing with this situation, can house buyers expect to enjoy good price decrease for " rumah baru teres satu dan dua tingkat di sekitaran Klang Valley / Selangor "?
5. In free market economy, price do not have to come down when the cost come down just like price will decrease even though the cost never decrease when there is decreased demand and increased supply in the form inventory.
6. Development of new housing project under single and double storey terrace house for middle income and lower income group is kind of safe from the economic downturn due to above-mentioned factors. The developers will be safe if they build to meet demand and not to create demand.
