Thanks for sharing! It's valuable information and it addresses some of our discussion earlier.
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No property bubble emerging

Recent increase in property prices has raised concerns of a potential property bubble
emerging. A property bubble is usually associated with rapid rise in property prices, driven
by excessive speculation. Property bubble will have a detrimental and long-lasting impact
on the sector—for both developers and home owners—due to the resulting sharp fall in
prices and negative sentiment for the sector.

However, we believe that the current rise in property prices is due to fundamental
reasons—strong demand and limited supply, especially for landed properties in Klang
Valley. Other than specific locations in the Klang Valley, we do not see evidence that there
is a widespread property bubble in Malaysia.

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My conviction on the above statement is only 40%. The first q in mind would be whether the developers are providing the right mix according to the right demand. A lot of launching I notice is for the investment appetite of the buyer and not the actual need of buying house to stay(and therefore speculation).

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Rising material prices

A spike in material prices, such as the one seen in 2008, will negatively impact
construction margins and lead to lower development profits. Developers are usually able
to pass-through part of the increase in material prices, if the movement is more gradual.

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Agree on the above.

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Political risks

Land related issues in Malaysia are under the jurisdiction of various state governments.
The last general election saw the ruling coalition, Barisan Nasional, losing control of a
number of states for the first time since independence.
Any changes in state administration will be a challenge for property developers and could
potentially delay some of their future launches. The next general election is due only in
2013 but there are political analysts expressing strong views on their possibly being held
as early as late 2011 or 2012.

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Need to pay attention

Agree on the near term robust outlook. However, if we were to buy new property now, it will most probably be completed after June 2013. By that time, lots of property currently launched would have been completed as well. The good thing is it might just drop the current purchase price(in that case, you lose on initial sunk in cost) and more if things turn out to be worst(you lose big time).

When the market is overheated, there will be lots of symptoms that we could see and accordingly we could make prediction.

For those interested in this topic, please read:-

Crisis Economics by Nouriel Roubini and Stephen Mihm

Based on the current scenario,

1) if the property price in Asia starts to fall, do you think Malaysia can be spared? And why?

2) if the property price in South East Asia starts to fall, do you think Malaysia can be spared? And why?