Jun 20 2011, 01:00 AM
If it happens the other way a downward spiral will be initiated. but nobody want a downward spiral to start except for those who are cash rich and those in real need for properties.
Major developers and valuers help in raising prices of proerties. Higher property prices paradoxically increases demand and gives rise to speculation.
Real price increases are caused by increases in building material, labour and land costs. This is also the main reason for recent price increases.
Whether there are real demand or speculation is best determined by rentals. Poor rentals with respect to their values indicates an oversupply situation.
Location of the property also play a major role in wild fluctuations of prices.
When the bubble burst, and we are on this trend now, those highly speculative areas will suffer the biggest drop in prices.
An area that is highly speculative can be indicated by the number of units for resale when the units have just been completed.
Added on June 20, 2011, 1:09 am
QUOTE(cherroy @ Jun 19 2011, 09:10 PM)
Personally I don't quite agree on this.
"Everyone also want to buy few properties" statemet.
I lived in rented house for >20 years, none of family member complaint not owning a house, as long as live with financial ok condition.
No point stressing one financially to max until cannnot breath, just to "own" a house.
Need a place for shelter, and a place called home.
And a place call home doesn't mean must own the house, it is intangible.
I see rent has its own advantage.
With current properties condition, price sky-rocketing while rental rate is not.
There are reasons for choosing to rent.
Somemore, you don't scare to buy the wrong properties, ended up with half abandoned project, don't like the house afterwards etc risk.
Can simply just move out.
Has chance to live in several condition/area around if wish.
I have a friend who doesn't like to buy properties and would rather rent. This is ok if he has got other investments that gives a better return than properties. One property that cost rm300k 7 years ago now costs rm900k. So if you can invest in a business that gives you better returns then rent. Also don't forget if you had paid rent for 7 years you would have paid rm126k!! You could have invested in a house already!!"Everyone also want to buy few properties" statemet.
I lived in rented house for >20 years, none of family member complaint not owning a house, as long as live with financial ok condition.
No point stressing one financially to max until cannnot breath, just to "own" a house.
Need a place for shelter, and a place called home.
And a place call home doesn't mean must own the house, it is intangible.
I see rent has its own advantage.
With current properties condition, price sky-rocketing while rental rate is not.
There are reasons for choosing to rent.
Somemore, you don't scare to buy the wrong properties, ended up with half abandoned project, don't like the house afterwards etc risk.
Can simply just move out.
Has chance to live in several condition/area around if wish.
This post has been edited by chisel55: Jun 20 2011, 01:09 AM
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