Chinese characteristic, those who drive BMW and Merz could be middle manager / CEO at the age of 35 - 45, salary 200K-500K a year. Some of those real Cash Cows are those wear short pant, drive 4W, Honda / Camry, live in SD only.
My neighbor's friend who stay at BK5 intermediate hse 20'x70' for years, age 50++, trading goods fr China for 15 yrs already, own 21 units of properties in KV mostly are factories & shops, drive old Rexton. Just bought a corner house for own stay 900K.
I told my Malay best friend :-
When you see a Chinese guy drives Proton, he could afford a Honda Civic
When you see a Chinese guy drive Honda Civic, he could afford a Camry
When you see a Chinese guy drive Camry, he could afford BMW 5 series
and finally....
When you see an Chinese uncle riding Honda 70cc cup zai, he could afford a Bentley...

Ya, they are the one who always complaining their salary are too low and cannot afford for a decent property.

Nowdays bank are so lenient to give credit cards and personal loan. Once they have outstanding for more than 20k and with 4k nett salary, I don't think they have any chance for getting a property, unless their family support them. Even with family support, they will not manage well on their financial if keep on swipe CC and end up their parents suffer for paying the installment.

Many my friends whack their cards to the max for levi's penang, burger king, seikos.. & continue life as usual..

Btw I drive a kancil....

The reason I buy a property for backup/investment ... & as an example to my kids they must at least buy 1unit without any sponcer..

You are special compare to them, you know how to think for your next generation

I think the property market is experiencing soft landing at this moment. Talked to a few bankers, loan application has dropped quite significantly. Besides that, you can also see that a lot of new launches nowadays got many units still available even though already launched for more than 1 month.

Ya... like my 2 uncles, they riding kapcai but have about 4 props each in KV.
Sometimes I think we really overestimate ourselves and underestimate others

cash rich uncle also help pushing the country's economy..
good thing for us.. maybe when the props is too expensive for most Malaysia citizen, then our salary will increase
if not sure riot here and there..

because now the trend is everyone including (even aunty, uncle, plus some of my friends and a colleague (fresh grad)) started giving advice about property price is overpriced, dont buy first and wait for it to come down

This post has been edited by property101: Apr 23 2011, 04:03 AM

Loan application slow down, mean more ppl waiting it to come down.
i foreseen the price will maintain now, but will not drop.

Since inflation and BLR rate still low confirm no bubble in 1-2 years

For government, property increase is good for them. means ppl need to work 2x or 3x harder to pay the loan.
They get more tax and GDP will continue growing.

This post has been edited by ckc00: Apr 23 2011, 04:57 AM

Bubble only to properties where price shot up becoz of perception and certain area where oversupply due to perception. Eg. Mont Kiara....Developer and Agent make money, buyer lose money.
Why coz developer&agent created the market and move on when no more market but buyer cannot move on holding hot potatoes.

Bungalow & Semi D not to worry mostly owned stay.(less speculator)

With material, labour & land cost rising don't think the price will go down.

Another thing is in Malaysia normally price go up never come down.

my philosophy in prop investment is simple. i always assume rental gain are people helping me with the installment. so therotically if property prices drop, it actually doesn't affect me. the only thing that does affect me is the rentability of the area.
and speaking about rent, during bad times, of course need to correct to market condition. and even if rental is less than installment, no big deal, at the most then i would top up the difference. let's say the unit installment is rm2k/mth. even if i lease it at rm1.2k/mth, i need to top up rm800/mth. not a big deal bcos the tenant already HELP to pay rm1.2k/mth. and eventually over a long period of time, the unit is mine. but of course, we obviously do not wish this to happen. of course the biggest concern is not getting any installment at all from rental income but this is unlikely as if you have selected a unit in a fairly decent location and when you start to leasing it cheaper than market value, am sure you will definitely manage to secure tenant. remember, beggars can't be choosers when bad time comes.
and back to property up versus down topic. for those who bought approximately 3 years ago or earlier, they are virtually safe by the amount of appreciation that has occurred. so in terms of both rental and market value, these property are virtually save from any depreciation even if there's a drop of say 30% from current pricing. so it should not affect them at all again. and again, if someone who can come up with a statistic on property already fully paid off, am sure the numbers would be staggering. so we are talking about millions of property which are debt free to a whole lot of people.
when you strike off all those in the above list, how many property do you think is vulnerable to a property correction?
even MK for example, with the average gain of more than 10% per annum previously, do you think the owner who have previously enjoyed such handsome gains are worrying about the current dip there or the decrease in rental? the only person trap will be those entering at a much higher price recently. and when the property does depreciate, no prizes for guessing who will be buying off from them at discounted prices, it's gonna be the previous owners.
anyway, that's just my views.
and lastly, i always reserve 1 full year of full installment in my account for all my properties. and i usually use interest rates @ 8% as calculation for monthly installment. so give or take, i still have a cushion of blr to move until 10.5% before i gets 'stuck'..... theorectically.
be safe man!

No wonder you buy covillea la. I bought covillea for the same reason too

its called fully "booked" not fully sold.. any tom dxck and harry can book without commitment.. the real picture comes when buyers are asked to sign SNP, lets c how many are real buyer and how many drop outs..

---

Added on April 23, 2011, 10:21 amtrue.. was amazed by an uncle share his experience with me, he lost 4 millions in share market and business, but gain back few million after that because of his investment in properties.. what do he drive? a 10 yr old camry... his advise to me.. dont buy expensive cars and dun suka suka change car.. use your credit profile to maximize your borrowing in property..

While I am surpriced with another fren who just bought a beemer (fresh car new car, not recon) and he mentioned his loan barely qualify.. I assuming this is overstreched and for the sake of status, but actually having networth not even close to a million..

brand conscious youngsters... wish them luck..

This post has been edited by eugene jk: Apr 23 2011, 10:21 AM

I believe that most of the people here are talking from the perspective of investors as opposed to buying a house for staying in yourself. Even though I'm one of the leading bears in this forum, I still believe that if you manage to find a property that you like, is conveniently located for you and is affordable to you, you should by all means buy it regardless of the state of the overall market. My only advice is that people buying to stay should consider sub-sale properties in addition to new launches. I don't understand why so many people buying to stay only insist on new launches. New or old, you're likely to spend a fair bit to renovate the unit to your personal liking anyway.

The current situation: Buying a new property from developer is more affordable to sub-sale property.

Although new launch property is priced higher but it allows the purchasers sign SPA with low entry costs/minimal costs as compared to sub-sales property.

I noticed that actually a lot of people can afford to make monthly repayments to bank however they do not have much initial downpayment to purchase property. Thus, two years ago 5/95 scheme firstly introduced by SP Setia has provided a good opportunity to a lot of youngsters to purchase their first home. Also, thanks to the low borrowing costs from banks.

This post has been edited by kh8668: Apr 23 2011, 11:00 AM

always prepare cash reserve to withstand 2 yrs of installment IMHO... you can get it rented out to minimize cash bleeding..

IMHO, minor cash bleeding is still tolerable as long as you are confident the prop you are holding will give good returns in the long run..
I was suffering -ve cash flow when I bought my 1st prop 5 years ago bcos the place was untested, and interest rate was high.. not long after 1 year, when the valuation was pretty clear for that place, the rental was increase and thats where I started to gain some +cash flow, and 5 year down the road, the price had appreciated close to 100%..

Most ppl looking at immediate ROI as the key for potential.. however, IMHO, if a prop has its true nature of potential, the potential will always be there regardless what the immediate ROI is. When the true potential previal, it can be bigger than you tought.. ROI and Potential should be viewed from different angle.. The key is how confident are you with your property and long you can hold.. however, smaller players might avoid this kind of investment who cant effort to suffer any cash bleed at any point of time..

Having said the above, I would like to stress that it is not a generalize term but rather a case by case basis.. If your prop incur more losses in the long run, better get rid of it before shit get shitter..

my 2 humble rupiah..

---

Added on April 23, 2011, 11:14 amDifferent ppl has different preference and IMHO, should not be generalized everyone should act the same...

-sometime subsale might incur more $$ for fixing old pipes and renovation.. some renovated house might not suit your taste anyway..

-the current attractive thing about new launch is the minimal upfront fee.. its not the installment that they cant afford, but rather the initial capital that they do not have.. Its easier to afford installment than initial capital nowadays.. Notice not many malaysian have enough cash and saving by looking at the ever increasing household debts and lifestyle..

-new launches nowadays mostly offer securtity concept as opposed those most of the subsale unit which do not hav G&G..

This post has been edited by eugene jk: Apr 23 2011, 11:14 AM

curious, what was your deciding factor that made you go into an untested area?
in 5 years gained 100% appreciation and even enjoying +ve cash flow sounds pretty good
mind sharing which project / location?

This post has been edited by property101: Apr 23 2011, 11:27 AM

Drive Sang Kancil??
I believe you hv found the success formula...
Tomolo sure you will drive Harimau ya!!

Villa Pavilion bukit serdang.. Potential was it is just behind TPM where all the IT companys are and APIIT..
It was untested due to it was the onli apartment around the area.. den came villa park n sanderson

This post has been edited by eugene jk: Apr 23 2011, 11:29 AM

I am also interested in this question, but so far no one has volunteered any answers. I would even like to go further. Many of the posters in this thread seem to talk about only the property market, as if it were isolated from the rest of the economy. But what happens if there is a recession, serious enough to possibly cause you to lose your day jobs? Or are all of you so secure in your jobs and so confident in the employment market that you have no such fear? I do not know if such a recession is likely in the near future, but it does seem at least possible to me.

Such a worst case scenario would be caused by:

1) As mentioned earlier, a general property market crash in China, causing economic growth to slow drastically and rippling out across the whole region. Even the Chinese government acknowledges that there is a bubble, asking their banks this week to conduct a stress test to see what would happen to them if property prices fell by up to 50%. Overall however, I think the property market in China should still be okay for at least the next couple of years.

Link: http://blogs.forbes.com/kenrapoza/2011/04/...e-is-different/

2) The US economy remains sclerotic at best, and dips back into recession at worst if the Republicans and Democrats still can't get together to agree on how to fix their budget. S&P recently issued a warning on the worsening outlook on US debt, the first time this has happened for more than 60 years.

Link: http://www.washingtonpost.com/business/eco...601D_story.html

3) The EU debt crisis seriously blowing up. More than a year after Greece first received bailout funds from the EU, it looks increasingly likely that Greece will default anyway. Some people have called the country ungovernable as its citizens are violently resisting the austerity measures, recently shooting a bus conductor trying to catch people riding the bus for free. Portugal has also recently asked for EU bailout funds after months of denying that it needed help. This increases the risk of Spain being caught up in the debt crisis.

Link: http://www.guardian.co.uk/world/2011/apr/1...default-bailout

In such a perfect storm of bad events, I think there is a serious chance of companies going under and people actually losing their jobs in Malaysia. How long can people afford their installments if they lose their salaries? Personally, I have enough liquidity to last me a year or more even if I were unemployed. But do other people have similar holding power?