From CG, a viewer who wrote in by email
CG bought a 1,100 sq ft condo for RM620,000 four years ago, at 28, to live in, partly out of fear of missing out. Due for handover soon, it is low-density and far from public transport; 270 of its 770 units are still unsold, though the developer has raised the price twice. The instalment is about RM2,900, while smaller partly furnished units next door rent for RM2,500 to RM2,700. CG now wants to rent it out or sell.
Will the developer cut prices to clear unsold units, what does selling cost, and should CG rent below the instalment or sell at a loss?
“entry price is everything”
Don't sell at a loss. Fully furnish it at handover, rent it out to cover most of the instalment, and hold until the market recovers enough to sell without a loss. Developers rarely cut prices openly, but they do sell leftover units privately through bulk purchasers, which is the competition CG faces.
Why
Price rises are not profit
Developers often raise prices to fund bigger discounts, because the marketing budget is a share of the price. A higher list price only means gains if units actually sell at it.
Leftovers are sold quietly
Cutting prices in public would anger existing buyers, so developers short of cash sell blocks of units under NDA to bulk purchasers. Those buyers get lower instalments and can rent for less than earlier owners.
Selling below the loan costs cash
Selling for less than you owe means paying the bank the difference, perhaps RM40,000 to RM50,000. Renting at a shortfall of about RM200 a month would take many years to cost as much.
A furnished unit stands out
Discouraged owners in a slow project tend not to furnish, so a well-furnished unit can win the tenants who like the area but cannot afford to buy, at a rent close to the instalment.
What to do
- Fully furnish the unit at handover and rent it out.
- Compare your break-even rent, instalment plus maintenance, with what furnished units achieve.
- Hold for two to three years and sell once a price covers your loan and costs.
- Avoid paying down the loan with savings just to cut the interest, unless you have no better use for the cash.
- For future purchases, compare the price with the area's median price per sq ft.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
ASKING SEAN #273 | PROPERTY STOCK CLEARANCE
Sources & Verification Data
Summarised from Sean's full English captions for Asking Sean #273. The quoted line is verbatim; everything else is paraphrased. Figures are as stated in February 2025. Sean is a member of FAR Capital, a bulk-purchase club, not its owner, and says three of his last four purchases were stock-clearance deals of the kind described.
