As a young people, I had seen the price of property steadily increase overtime.

I am interested in how much is the cost of buying a house at the developer price and sell it later when the house is complete.

For example, let take a not so prime area: tanamera

The house for developer price is 400k in year 2003.

But in year 2009, the price of the house is Rm 480k. (let assume)

However, as far as I concern, When the buyer purchase the house in year 2003 till 2009 this timeline, they will still need to pay intrest every year am I correct?

So let say 400k at rate of 7% per annual.( just paid interest)

400kx7%= 28k per year

Then 28k x 6 years= 168000.

So at 2009, a 400k house will now cost 400k + 168k= 568k.

So at 480k asking price, the owner will still making a loss of 88k because of interest.

I not too sure is this a correct calculation? I think my rate is too high even in year 2003 not sure need advise.


My theory is that the reason why house price have been steadily increase in area with high occupancy rate is because the interest rate is an added cost to the purchase of the house, this in turn induce the owner to price the house at high price to cover the interest cost and also to cover the risk the 1st hand buyer bare?

What do you guys think?

This post has been edited by mikro: Apr 27 2009, 11:30 AM

So how much the interest suppose to be?


How much will the cost of stamp duty?

Cause I was thinking even if the owner selling the house at 495k which i saw in the newspaper, It unthinkable if they are making a lost on interest rate.

Mind to clarify me on this, cause I am quite new.

This post has been edited by mikro: Apr 27 2009, 06:39 PM

er, By using common loan since I doubt speculator have enough cash.

Let say a 400k house, in year 2003 and complete (getting cf) and selling 3 years later which is 2006.

How much the speculator need to paid to breakeven it cost?

kind to clarify what the opportunity cost?

Anyway, I just want to know when buying a house, does the person who buy from subsales market will be eventually the loser.

The 1st buyer= winner.

So for the 2nd hand( subsales buyer) what are the opportunity cost another than the obvious (financial cost) ?

Sorry if I sound a bit tense.

Hi dreamer,

I am not a owner or anything, but sometime i think people do indeed get lucky.

In my case where there is abandon apartment in usj. They had been abadon about few year but the block before abandon is more than half complete, so i think some developer take it and complete it.

I know about abandon project cause my parent is one of the victim. But if we buy from reputable top 5 property developer( not sub company), the chance of abandon project is at it lowest.

Anyway, if the property happen to be quite hot like those lot where sell fast and people waiting overnight just to buy the developer unit.

I think these unit pretty much price won't fluctuate very much and therefore buyer will not able to live the day to see these property price drop ( in 6 years time) and needed to paid higher than developer price to buy from subsales market.

With the worldwide financial system getting mature and controlling monetary policy improved and the credit market going international. I don't think the we will have a economy crash exactly like 97 and 98 where the property price drop drastically even for those price location. It just ain't possible even with what is happening right now.

It a paradox, we want to buy a prime property lower than what it used to be, but it just happen only when the market is not good. And when market is not good, we risk losing jobs and the credit market freeze up, so we end up unable to buy because we have no credit.

So I am confuse. Should we buy from developer ( assume that the risk of abandon is not present i.e.: sime darby, sunway) and paid for developer price which is lower.

Or,

we could buy from subsales market and paid +- more than 100k compare to the original developer price developer price.

Is this base on buyer preference ( do you think it worth it) ?

I new to this and didn't own any property before.

So what you guys think?

Er, do you have any example? Old 1 will do even if the house i sold.

I think can learn something.

This post has been edited by mikro: Apr 30 2009, 03:28 PM

Guess there is no free lunch in this world.