I was respond to statement China economy is heading to soft landing.

The reality, There is no landing at all! still flying non-stop.

yes, still flying. if u read any industrial magazines, there are so many investments annoucement made everyday.. if this mnc know the economy not doing well in near future, do u think they dare to build more plants or expand their production capacity here in china??? wat we hear today is shortage, shortage...
my products (raw materials) was sold 2 years ahead.

While we are happy and excited with what we see, hear and feel, let's have some data, statistic, reports to reinforce our belief.

Do not forget that before the year 1997 crash, everything in Malaysia is going full throttle. It is the same case with Dubai as well.

And before the dot com burst, people also is having such optimism that it will keeping on growing with stop. There're simply too many of such examples.

Like what the word "crash" implies, it comes when it is least expected.

Therefore let's see what is the fundamental behind first, before we conclude. Agree?

Let's start with Nouriel Roubini’s prediction

http://www.financeasia.com/News/261139,pre...17s-future.aspx

In China today, investment contributes roughly half the country’s economic growth, which Roubini says is unsustainable.

This post has been edited by GangHo: Jun 21 2011, 09:24 PM

banks are being conservative in giving out loans for sub-sales property. the owner could be asking for a sky high price, but eventually only limited number of people would proceed with the transaction due to banks refusal of giving out loan at such amount. the buyer who is buying the property must have put in large amount of cash. which shows they are genuine or (worst case) cash rich investor. majority speculator rarely would want to invest in large amount of cash for one deal. this strategy from bank would curb the property bubble effectively.

If I'm the banker, I would also be on the conservative side. Since the housing loan demand is good and not lack of customer. The fact is this move is especially dangerous to the uninformed buyers. They are overly possessed by the sure appreciation of the property that they stretch their limit beyond own capacity. In this case, they are overly exposed, leveraged and extremely vulnerable and sensitive to any economy downturn. While in the same time, the new launch is reaching unprecedented high pulling along the sub-sales property. Through time, all greedy buyers would be pulled beyond their baseline and when the market crashes, the bank is still able to recover since they are on the conservative side(this would be good for the 'buy-low' investors. The chinese says, the appetite of man is so big that even snake can swallow the elephant.

This post has been edited by GangHo: Jun 21 2011, 09:37 PM

thanks fyi... appreciate that.. but, dun tell me base on these daily activity to justify the tsunami behind loh.. in yrs 2008.. the debt crisis.. i still traveling and eating/sleeping as usually leh.. i think many (not majority) still need to continue their LIFE as usual.. wat to say from now to 2012-2013 still far., i mean in china, not my lah... as said it is around the corner..

This post has been edited by sampool: Jun 21 2011, 09:52 PM

my opinion is
crash only comes unexpectedly

i also work in MNC fortune 500 company
there are times we are expanding, hiring like cracy
then suddenly economics down
cut cost, freeze hiring any where..., voluntary resignation ...
not only my company
all the competitors experienced the same
meaning even big MNCs also cannot predict and sometimes over optimistic

well that is why we call crash...

Don't think all is well in China. You can read some stories about protests and the stock market has not been doing well for a few years already.

I do think loads of people are flocking to Shanghai. It's natural that people go to the economic center and there's a lot of people in China and only one real center. From what you describe it's a bit under capacity.

Yes, you are right. This is what we called Crisis. Anyway, enjoy yourself while there is sunshine but keep an eye for the dark cloud. No body can predict anything but be prepared for the worst. There is a chinese saying that good times do not last forever. Remember that!

agree with you. And the crash usually happens when everything seem so perfect


of course some ppl can smell something is not right, but majority just being ignorant. even super power countries cannot run away with sudden crash. not that they do not have talented analysts.

Talking about MNCs and investments, Qimonda, in Melaka, had moved to Senai, and took over a huge factory. They payed their employees a bomb to move down there.

The paint were still fresh when the economic crisis struck, and everything went away.

This post has been edited by TheDoer: Jun 22 2011, 10:25 AM

if you believe in conspiracy theories like that told in Inside Job, the really talented (and powerful) ones are the ones that made millions when prices go up and then make millions again to make sure it crash! well, someone will have to pay for those millions made...

This post has been edited by AVFAN: Jun 22 2011, 12:15 PM

An interesting article written in 2010 by Azizi Ali, the property investment expert, linked below:

http://findarticles.com/p/articles/mi_qn62...1/ai_n53096451/

He is saying the property is bursting... But it has not burst until today... It seems he is wrong so far, but he could be right too, as it may happen tomorrow... It is not often that you see someone who teaches people how to make money with real estate saying that the real estate is bursting.

But, this is the counter argument today, by TA Securities, citing scarcity of land and increasing cost...

http://www.theborneopost.com/2011/06/22/de...onary-pressure/

I have still not made up my mind...

seems like many hoping the economy/prop to crash...
price drop camp ->90%
price up camp -->1% (including me, haha)
uncertain/middle path -->9%

Frederick Hayek Predicted 2011 In The 1930s - June 22, 2011 - Forbes.com Small Business: "Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom... , all considerable means have been used to prevent that readjustmen ...

zoombusiness.com

This post has been edited by sampool: Jun 22 2011, 02:56 PM

In Malaysia & current context, I would say that the main cause for the property price appreciation is speculation.

Inflation & scarcity of land could make property price to appreciate but in the current context, it is not the main cause.

This is evident in Malaysia history especially before year 2008. When our oil price goes up, property price appreciates very little only.

We have been yelling scarcity of land in Klang Valley for years, why is it that now it would become the main cause of property price appreciation?

Scarcity of land causing appreciation will only happen when Demand greatly outnumbers Supply. Are we in such a scenario?

However, it is true to say that inflation would affect affordability. We would have less disposable income to buy property. Therefore, it could cause the property to

go down as well.

---

Added on June 22, 2011, 3:15 pmDear Lucerne,

Actually I'm also hoping that it will go up. However, I do not think that the current trend is sustainable. We trip when we run too fast.

This post has been edited by GangHo: Jun 22 2011, 03:15 PM

there is a big difference between "hoping to crash" and "expecting to crash". And there is wide range of interpretations for the word "crash".
perhaps a better word is price correction.
i suppose that is the premise for the few hundred pages of debate here.


that essentially will become the key issue. prices can't go up forever when few have money or ability to borrow.
there will be some price correction or adjustment, imo.

This post has been edited by AVFAN: Jun 22 2011, 03:30 PM

My dad said even if properties in Malaysia drop, it wouldn't drop much also.

Thats true. Those expecting some major drop will be disappointed for sure. Even then the most affected will be newly launched condo's in glut areas like KLCC and Mont Kiara.

I do hope that our government has got a risk mitigation plan should things go really bad.

Judging from current scenario, I would strongly believe that the contribution of property sector to our GDP has increased a lot over the years. How great the effect if things go really bad? Somebody can share their prediction?

In 1997, the investment portfolio of the public is more distributed in share market and property. The daily hot topic those days are which share to buy and it involves the bottom most hierarchy level all the way to the top executive. When there is a crash, the property price drops about 10% to 15% depending on the type of property(link house drops the least I believe). Salary drops, bonus cut and the market is dominated by gloomy atmosphere. For the rest of the years, it's mainly government projects playing the main actor.