I am not trying to run down your "banker" source. For BLR to reach 8%, OPR need to go up at least another 125bps (residual increase effect from SRR increase). From my limited knowledge and understanding on how BNM works, I can conservatively say that Dr. Zeti is unlikely to increase OPR by more than 50 bps for the rest of 2011 (i.e. the likely maximum BLR will hit in 2011 is around 7.1-7.2%). There are three more MPC meetings in 2011 (in July, Sep and Nov) http://www.bnm.gov.my/microsites/monetary/03_schedule.htm

So, don't worry too much...Be prepared is good but BLR going to 8% in 2011 is Highly unlikely.

This post has been edited by chabalang: May 23 2011, 08:49 PM

While I agree with much of what you have written, I am not sure on the last line.

From my personal observation, resale property asking prices in prime areas have stagnated in the past few months, partly because of "crazy" asking prices (for example, a number of sellers are asking for 60+% more than the selling price in second half of 2009 - I know because I bought one unit in that area). Even my bullish colleagues are commenting asking prices are fast going "bonkers", they are seasoned property investors who own a number of properties with years of investing experience.

All I can say is that property prices (in June 2011) in some parts of KL have gone up too much and too fast...due to convergence of low interest rates, ample liquidity and inflationary pressure (such as higher building materials cost). The question is: IF you jump in now, are you going near the top of this cycle? No one knows...my two cents is that upside is limited for this cycle from now. We should get a clearer picture by first half of 2012. (P.s. I am not buying now but I am already vested in some properties with minimal gearing)

This post has been edited by chabalang: Jun 2 2011, 09:51 PM

@sunzi69 - it's good to let your frustration out once in a while but overdoing it will not help much either.
You can either (1) continue to complain, curse the Govt, etc. (NB: I also agree with you that M'sia can do much better) or (2) face the reality and do something about it. I do whine once in a while but life still goes on...

Let's go through your Long posting...

1) RM2,300 is quite low but remember it is a Management associate position. If you do well, after 2 years - you pay will jump (depending on your coy). If your coy is reputable MNC, your pay will go up more than 100% after 4-5 years (>5,000) is well within reach. So, don't be gloomy on life...your work life is just beginning - do look on the bright side. Yes, there are a lot of people who earns more but how about people who cannot even get a job?

2) Yes, property prices in Klang Valley is getting unaffordable for fresh graduates. But do you really need to buy a house after you graduate and with your first job? Staying with parents or renting may be a better option - for job mobility purpose.

3) As for your "aunty example". Yes, every property speculator is a Hero when the market is up and UP but when the market turns, they become what? They take the risks and bear the brunt if the market turns against them. Most people only boast how much they make but when the market declines, those who get burnt - will keep quiet.

4) Your GDP/debt analysis. Agreed. Malaysia is caught in the "middle-income" trap and the RM3,000 high-income threshold is a JOKE (even Mustapa tried to dissociate from it subsequently). The key culprit is the education system (+political & socio-factors). Personally, I am not too optimistic either. Frankly, since you are young and educated - I will advise you to keep your mind open - do explore opportunities outside Malaysia when you are more experienced (keep an exit route ready).

5) The starting pay in M'sia has relatively stagnated (pay has increased slightly but is significantly lower in real terms). As for the Bangsar landed property price at 30k twenty years ago (1991) is highly unlikely. The 30k price for a double-storey terrace in Bangsar was during 1970-72 (before 1973 oil shock) at Bangsar Park/Lucky Garden (no Bangsar Baru yet). Even during early to mid-80s, double-storey terrace in Bangsar was around 150,000. I don't have the price at 1991 - I suspect it was around 200,000+. Now, the asking price in Bangsar Baru is 1.3+ mln for a basic double-storey terrace house - up 6.5 times. If you use use annual compounding, it's around 9.8% p.a. for the last twenty years. I am not sure whether your lecturer bought LAND instead of a building (then it may be possible). I don't know where you get the amount of RM13.2 mln (at RM380 psf) - it is for a 35,000 sq feet property which is a gigantic bungalow (those at Bangsar Hills).


I can see you are analytical (+ bother to dig up facts/numbers to back your posting) and can write well. If you feel really frustrated, you can explore regional/global opportunities after a few years (I am not asking you to leave the country but keep your options open). In meantime, work hard and gain experience + network. Cheers.

This post has been edited by chabalang: Jun 5 2011, 06:13 PM

HDB flat is NOT similar to low cost flat in M'sia but yes, HDB flat is relatively affordable (despite some complaints from fresh graduates that the new HDB flats are getting unaffordable). It is not low cost but a PUBLIC housing. Some HDB flats in good location can easily fetch more than SGD500,000...an extreme example (offer price of SGD900,000 - still low cost???) http://www.asiaone.com/Business/My+Money/P...331-207846.html

In S'pore, HDB was set up to provide public housing for the masses (around 80% of population). The other main category are called Private housing - apartments/condos or landed properties. In between Public/Private, there is a category called Executive Condo (the term is a misnomer (i.e. nothing executive about it) there are certain restrictions on this type of housing and only fully converted into a private condo after 10 years). In the past, there used to be another category called HUDC (most of them are now converted to private estates).

The key difference between M'sia and S'pore public housing is the upkeep or maintenance. In M'sia, our public housing flats (mainly low cost) are like slums (what those I have visited). In S'pore, the HDB maintenance is comparable to our condo (or even better than some of our condos).

[/quote]
any??pls share??

& any1 who interested "how vulnerable" it is for our Economy..
would like to invite u to c this
"http://dapmalaysia.org/newenglish/DAP_Budget_2010_en.pdf"

i'm nothing to do with politics, just coincidentally they have the economy report, hehe..save my research time n cost"
Enjoy.. n be prepared...

i'll be seeing Prime Minister this coming week in a Youth Corporate Malaysia event..any1 interested to go ar?
wish i have the guts to raise this in the Q&A sessions later...

[/quote]

@sunzi69
It's always interesting to read your post (assuming you are 25 yrs - if I remember correctly?) - really well-read for your age and I am impressed. I can sense your frustration and irritation in your posting but life goes on...

The hot property market has been a source of anxiety and frustration for many people and govt in the world, particularly in Asia and Australia in recent years. With regard to your suggestion of 2-tiered property markets - like what is in S'pore. I have worked/studied in a number of countries, I have to admit the housing programme (HDB) in S'pore is among the best, in my opinion. The positives of the HDB scheme are well-documented but there are some problems with it as well. With a 2-tiered market, there tend to be a more distinctive society stratification...HDB (lower-class) and private (upper-class). People can deny it, S'pore govt can deny it (but they know it) - the reality on the ground is that there is a social DIVIDE. There are some millionaires living in HDB flats but many more of those living in private ones are millionaires. The sad thing is that the society or a lot of people tend to associate material wealth with social status (probably because morality and other virtues cannot be physically seen and be compared). A number of countries are learning from S'pore on the HDB but the implementation part is DIFFICULT.

As for your comment on the Bubble...you see thread is already in V2 and after hundreds of pages...people are still shouting Bubble...yes, eventually they will be right. I think I have posted a couple of posts at beginning of this year and a few weeks ago on direction of property prices. You see property cycles are part and parcel of business/economic cycles (just like financial markets and etc.). Let me give you my two cents' worth perspective of the current M'sian property (I am trying my best here since I am not a property expert - I am more a finance person but own some properties as part of my portfolio allocation).

I am wondering from which year should I start from (too long ago - lack relevancy, too recent - lack reliability)...Ok - I will start from after the Asian currency crisis. From 1998/99 to around 2005/06, the property market was limping along...during that period, properties market was subdued even though economy was cruising along (bear in mind that the property price increase during that period was lower than GDP growth). The property market got its first structural break in March 2007 with RGPT removal announcement (market was already moving up in second half of 2006 with better equity markets + economy + rumour of RGPT removal). So, the market went up in 2007 and 1H2008 until Lehman crisis...everything cooled off...you see the UPTREND was not completed in 2007/08 but rather disrupted by the 2008/09 financial crisis. Subsequently, in the second half 2009 - the market began to come ALIVE again...this time with more FUEL than the previous uptrend in 2007, driven by Cheap mortgage rate, pent-up demand and higher construction costs (more in 2H2010). So from 2H2009 to now, the market has been up and UP away.

Personally, I feel the recent asking prices (especially for new launches) have gone "bonkers" but there were takers in some "highly-priced" projects. When I checked with the real estate "experts", their feel is that the prices will "level off" (but unlikely a big drop) for the time being. You see the property price increases have been most significant in Klang Valley and Penang...youngsters in these two areas are feeling the PINCH. It boils down to managing expectations...sorry to say that a graduate won't be able to afford a double-storey link house in PJ within five years of working (unlike their parents) but the reality is that land is really getting scarce in prime locations and young graduates have to settle for high-rise or landed in further away location.

You may wish to read the following article by Mr Khaw (ex-Penangite who is now S'pore MND Minister - in charge of housing matters in S'pore) talking on the housing situation in S'pore. I admire him for his sharpness and boldness to take the bull by the horns in Singapore housing problem... http://mndsingapore.wordpress.com/2011/06/09/my-worries/

As for your invitation, I definitely cannot qualify as a youth but I did meet the PM last Monday at the ETP update 6. We in the audience just shook (gently) our heads (and sigh inside) after hearing his update speech (nothing new at all). If you get a chance to ask him a question, just ask your MOST BURNING question but please be POLITE.

This post has been edited by chabalang: Jun 18 2011, 09:31 PM