Do you guys feel property price surged too high in sudden for last half a year? Whereas salaries wise din c much increase.

Too many punters? Inflation?

its not feel. it is confirmed. for last 1 year surge.
too little land left in prime areas

agree... this happens even to Shah Alam, specifically Kota Kemuning, which considered as not so hot property in the past.

My friend bought a double storey link in Kota Kemuning and moved in last year. Bought at 310k, now nearby agent is selling at 500k!!

Another friend bought a house at Kuchai Avenue for 200k two years ago. Now agent offering him 350k to sell... 150k gain in two years!!

Suspect it's property bubble in the making

Kuchai Avenue not so kua cheong la.. i've got friends having units there, on-going rate is about 280k bradder...

All this began 2h of 2009................ and u r absolutely right. Prob is a lot ppl just dont realise that economically speaking it hasnt improve as drastic as the new housing prices......

In facts, what kind of people is buying the property at such a high price?

or is the Agent putting a ridiculous tempting price to the owner to begin selling?
Once the owner decide to sell, then the agent start to find buyers...
Meaning the purpose is to temp the owner to start selling first, then find buyer to complete the transaction at a agreeable demand-supply price to earn commision...

All the money coming out the FD's due to low interest rate all ended up speculating in the property market. If you notice that, most of the new properties are barely tenanted even after 6 months to 1 year. Finding tenant is so-so places are also difficult now as there is a massive oversupply of units to rent. But surprisingly no one wanted to sell, as many are holding on to their units even though they are not making money. The sudden surge in prices has caused the rental yield to dive down from 7%-8% to currently now at about 4+%.

Seeing good demand and sold out situation, the developers are all raising prices and getting super profit. I have seen one developer rising prices 3 times during a launch, almost once every couple of weeks. When I ask them why? They say very good demand, even raise price still got people to buy, so why not keep raising, so end of year bonus becomes very nice.

Also there are a lot of people that got burned in the stock market crisis of 2008, they don't dare to put money in stocks, FD is yielding too little with no inflation protection, naturally all of them will gravitate to properties and gold to 'protect' their assets. There is no other suitable investment for those who have less risk tolerance and also seek inflation protection.

But as every asset out there there, it can form a overbought position, I would not call it a bubble as the prices are not extremely ridiculous yet. In an overbought position, the prices will tend to consolidate for some time to release the pressure, properties will not fall, but will be stagnant for some time until the macroeconomics situation (salary) manage to catch up with them.

I have some properties as well, which have seen a huge surge of 70%-80% for the past 3 years, but I am not content, anyway I am observing the current prices and I feel, it is not worth to invest in properties at this period as the yield are way too low. And I seriously hope that BLR continue to rise to further consolidate this 'hot' market, so that us decent long term investors get better yields.

This post has been edited by gark: Jun 19 2010, 09:10 AM

Such a property price increase with not supported by income growth, first timer buyer and new investor with less experience and backup shall be careful.

Whether is bubble or not, time will tell. Anyway, agent, lawyer, and developer is sure win parties!


As of oversupply of units on renting market, as long as they managed to secure the tenant and generate positive cash flow, i believe owner still will hold and hope for property appreciation.
Once it no longer owner realize they had suffer the negative flow, it might kick start a panic market and sell.

Europe crisis is kinda quiet for sometime and not really resolve yet, silent is dangers.



This post has been edited by return78: Jun 19 2010, 10:21 AM

Yeah, all kinds of agents keep on sms and call me if I wanted to sell my unit, say got ready investors to buy. I wonder where the heck they got my phone number...?

From developer.

if will probably tamper off moving forward as the interest rate hikes have provided a cooling effect

Not yet, there was a Rm 600 psf condo opening for sale soon in Damansara and looks like it's going to be fully snapped up, in fact you have to buy with balloting speaks of the demand. Too much hot money going around

This post has been edited by gark: Jun 19 2010, 03:57 PM

It partly due to "Kiasu" mentality. Everyone expects the recession to be over and don't want to lose out. So, properties is the best investment as it will definitely go up over the long run. The problem is that when properties started to go up, everyone thought that it's the right time to buy or they may miss the boat. So, they buy and this started a chain reaction where everyone moved in. So, properties prices keep going higher and higher.