IS RE STILL A GOOD INVESTMENT?

I sometimes post about challenges in the real estate (RE) industry to caution buyers, yet I also share property ads. Is that contradictory?

The confusion often arises from viewing real estate primarily as a financial investment, tied to the notion that it can be a quick path to wealth. At its core, RE is meant for end-use—providing shelter, one of life’s basic needs. However, much like food commodities, RE is susceptible to speculation. Over the last decade, skyrocketing prices have pushed RE to be seen more as an investment vehicle rather than a necessity.

The truth is, real estate purchases can be either good or bad investments depending on your goals, investment horizon, and liquidity needs. These are the same questions financial advisors ask clients before suggesting investments, and I believe brokers should do the same. Understanding a buyer’s situation and objectives is key to determining whether real estate is suitable for them—and if so, which type of asset fits their needs.

1.⁠ ⁠Objective

Flipping: Be cautious. The easy-profit days of flipping are gone. Developers struggle to raise prices, and laws penalize flippers.

Wealth preservation: RE remains attractive. Despite low rental yields, buyers value its stability since RE prices don’t fluctuate daily like stocks.

2.⁠ ⁠Liquidity

If you need steady income or quick access to funds, RE may not be ideal. It's illiquid and takes time to sell. In contrast, government securities currently offer minimal risk, higher yields, and faster liquidity as they can be sold instantly.

3.⁠ ⁠Investment Horizon

If you can wait 10-15 years and have other income sources, RE remain to be a solid investment. Over time, even today’s prices (P300K-P400K/sqm) may seem reasonable, especially for end-use or legacy planning.

Ultimately, how you interpret my posts depends on your answers to these three questions. Each buyer’s situation is unique, and understanding your goals is critical to making the right decision about real estate purchases.