A few weeks ago, I argued here about a drop in property prices in Malaysia due primarily to a crash in the Chinese property market and its subsequent effects. I have reason to believe that this is no longer true. Mainly, I have read that:

1. The number of unoccupied properties in China is lower than expected. While it is still bad, occupation rates seem to be improving.
2. Wages are increasing faster in China than expected and the saving rate is going down, spurring domestic consumption.

Slowly but surely, China is moving from being an export-led juggernaut to an economy based on strong internal fundamentals. I guess they have it much better than us in Malaysia. Here we have rising property prices but stagnant wages. There they have rising property prices too but wages seem to be rising to match. Overall inflation (in non-property) in China is still a problem and something to pay attention to.

This means that I no longer expect a hard crash in China in the short term (within 5 years or so). Consequently, I do not believe that property prices in Malaysia will drop either. I expect prices to either increase at a more moderate pace or to stagnate at worst.

In the very long term, I am still bearish on China. Their demographics are totally wacko, due to their one-child policy. Their population is aging fast and the severe imbalance between the number of males and females will create tons of problems down the line. But that is something to worry about 15 to 20 years from now.

It is only natural for parents to support their children. I have read so many posts that give a negative connotation if youngsters purchase properties using FAMA support. it is like these kids are 100% spoilt. Come on, if one is born with rich parents, it is not the kids fault right. And if your parents are rich, what's wrong with helping your own kids? If you educate your kids correctly, they will not be spoilt.

have you came across your thought that these are the kids that goreng properties using parents hard earned money?

and brag about what a well done job they have done?

Scenario A) If I am rich, I hv 3 kids, I bought 4 properties, one for my own use, the rest for the kids
Scenario B) If I am rich, I hv 3 kids, I bought 1 property only, and I support my 3 kids to buy 3 properties

I dun see any different between the above case study.

I see many people like to use the word "goreng", I dun agree.
For me, investing property is like investing in stock mkt, gold, commodity, forex exchange, antique, it has risk.
For the last 2 decades, those who wrongly "goreng" those abandon projects (i.e Talam projects) are miserable now, do you receive their complaint? Vice versa, if they make profit in investing property, why would we making noise?
Investment involve risk...

Wow! A lot of bashing on youngsters purchasing properties with FAMA support. But why people are so sure that when youngsters purchase properties, they must have FAMA support? 10% on RM500k is only 50k. Even 1mil house require only 100k. Furthermore, if got rebate, then actual outlay is much lesser. No, not all require FAMA support. EVEN if they require FAMA support, what's wrong??? It is only natural for parents to support their children. I have read so many posts that give a negative connotation if youngsters purchase properties using FAMA support. it is like these kids are 100% spoilt. Come on, if one is born with rich parents, it is not the kids fault right. And if your parents are rich, what's wrong with helping your own kids? If you educate your kids correctly, they will not be spoilt.

Where did you read that "The number of unoccupied properties in China is lower than expected."?

Thanks.

A couple of links:

Financial Times article.

CNBC article.

The population in Kangbashi, one of the best known ghost towns that belongs to Inner Mongolia’s Ordos city, rose to 50,000 from 28,000 last year, after a number of manufacturers moved in with thousands of workers.

Roubini also underestimates wage growth. Minimum wages in Sichuan rose 44 percent last year, mirroring double-digit increases elsewhere.

youngster..
i share my own experient here, last time when i just a fresh grad, i rent a hse and rent out all rooms, a young couple (older than me) rent my master room wf about rm400 per month, but will calculate with me every cent( like water bill, which is abt few bucks different only ), but both of them drive an Audi and Vios, Branded outfit, trendy gadgets... Youngster like this, do u think they can afford to buy props? Until today, they still renting a room and complaing not enough money to buy house.

if u can save 50k, and the period already hit 1sf = 1000k, then just go for smaller unit.
if want to get married, then small unit is not enough for u, just go for old flat.
if still can't afford to buy 1, just rent a room lar.

otherwise just try hard to earn more, there is no other way.
complant is only mean for spoilt kid or my ex-housemates the master room couple.
Don't have such a big head, just don't wear such a big hat lor.

http://www.themalaysianinsider.com/malaysi...nd-high-prices/

He said, however, he sympathised with Rehda over “indirect taxation” which came in the form of developers having to build public utility infrastructure which added to the cost of residential property.

“We too have lobbied for such infrastructures to be carried by the respective public-listed utility companies because they are business ventures,” he said.
when msia govt short of $$ (due to corruptions, leaks etc), i think more and more developers need to bear the cost of infrastructures eg bridges, flyover, tunnels, new access roads, road widening (eg rawang by gamuda, guocoland etc ), drainages, lanscaping, subsidy the mrt/lrt land for schools, carpark, garden, masjid/surau etc. At the end the extra costs will pass to the new house buyers. So expect the home price go up more. it is just like the new home buyers subsidy the govt to build all the above infrastructures. (Msia boleh!)

The old home buyers will benefited the most as old days the developers do not need to build so many infrastructures (as the traffic is not busy/complicated etc) and they can now enjoyed the rocketed price rise. eg BU in 80s,90s--no brigde, tunnel, flyovers etc. Now the new house price from SHC, Berjaya, Mammoth, MK etc already include all the above facilities..(all developers need to share the costs). The more developments the more infrastructure needed to cater for the needs of resident (old and new). Unless they stop new launchs which is impossible. Expect to see more flyovers, infrastructure in Damansara (but the govt will not going to foot the bills, it is u..)

so do you expect ALL Malaysian need to pay for the utilities for new developing area ? you want to stay there but all people need to pay with you...government money is people money...

i think current practice is right, you chose that area because you want all the utilities and facilities, so you need to pay for it, let peoples money goes to better education, preventing crimes so our country will be more prosper in the future....

A couple of links:

Financial Times article.

CNBC article.

government is suppose to pay for it in the first place. that is why many many taxes are there in the first place.
if developer pays for all related infrastructure, why do we need to pay taxes?

fyi, when a developer apply for utilities eg telekom, water, electric, etc. they are also mandated to build their own PPU, PMU, SSU, waterline, etc.
sometimes, they are even required to surrendered some part of their land for these purposes. build all these at their own cost. upon completion, have to beg them for inspection and acceptance. once the utility company accepted it FOC, they start to charge customers for the usage. do you still think that's fair?

taxes money can goes to education , healthcare, defence, road and environment maintainance, garbage managment etc....

do you know how many of public servant working in education sector ?  614744 peoples out of 1.3 mil

do you know how many public servant working in helathcare ? 228822 peoples out of 1.3mil

total of that is 843,566 peoples out of 1.3 mil it is 65%

most of the tax will goes to their salary+emolument

source : http://www.jpa.gov.my/status/index3_1.html

In general, in those Asian developed countries, their 1st time hse buyer are getting older and older, but I can feel that Malaysia's 1st time house buyer (Chinese) is getting younger & younger.. not a healthy sign... Wages dun increase but these young group buyer still can afford, I can only relate this to the change in the Chinese family structure.

May have something to do with loan % and tenure.
I agree it's not a healthy trend.
Especially if they bought it simply to flip, they will drop it the moment they realise they can't afford it.

thanks for the links, can understand you.
reading those two articles quickly, perhaps there is good reason to say the situation in china is not a gloomy as roubini thought.
somewhere in those two articles:
if we see many factories coming online, popn migration (maybe helped by illegals) will quicken in the fringe areas and cos. give min 10% increment p.a., then all will be well, i suppose. or there is nothing of that sort?

Bro AV,
actually whats the thread trying to say ya??
not so understand
is it will affected malaysia property also??

BLR now 6.6%, it is going to increase in a vry short period,
really scared the BLR will make the speculator less holding power then burst.
Crisis is comming to Asia, once it happened, it will be vry tough might worst than 97/98...

so do you expect ALL Malaysian need to pay for the utilities for new developing area ? you want to stay there but all people need to pay with you...government money is people money...

i think current practice is right, you chose that area because you want all the utilities and facilities, so you need to pay for it, let peoples money goes to better education, preventing crimes so our country will be more prosper in the future....

the links are about china, basically saying the millions of empty units in china may not be as gloomy as previously thought,
due to rapid urbanization, lots of new factories and wages rising 10-44% p.a.
nothing to do with maresia, but you can contrast that if the same is happening here or not.

blr will continue to incr gradually in attempts to control debt and inflation.
more pressuring is the price of fuel which affects price of eveything.
if income not rising fast enough, the normal salaried worker is squeezed on all sides.
home prices may not drop, but selling it at inflated price will get harder and harder.
no need to wait too long, we should have a clearer pciture in the next 12m,
as the first wave of essential items price hikes are about to begin with diesel subsidy withdrawn on 1 june.
matter of weeks or months when they will raise price if ron95 and tnb rates.
tough days ahead for most...