i dun know woh.. i just use my six sense to draw it...

The longer the bull, the sharper the drop. Also, the longer the bull run, the closer it will fall. Just hope thing doesn't go irrational for too long, otherwise, it is bound to plunge. ask yourself, how many people afford to pay more than RM2k instalment per month for long term? how much can one save with so much commitment? i pay 26% tax in malaysia but think it's tough to commit houses over RM700k. i foresee lot of "prime property" for auction in not too distant future.

Update to new one

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Added on June 28, 2011, 3:09 pmyour prediction will scare a lot of people..LOL


Worse than 1998

This post has been edited by kh8668: Jun 28 2011, 03:09 PM

Although it looks dramatic but it is equivalent about 30%++ dropping only.

RM600,000 link house drop to RM420,000, not do dramatic if we look at it this way, right?

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Added on June 28, 2011, 3:11 pmIf it comes, it's going to be worst than 1998.

Year 1998 was not a property crash. It's an economy slow down that affected the house price.

This post has been edited by GangHo: Jun 28 2011, 03:11 PM

600k drop to 420k is not dramatic?

What do you expect?
Drop to 300K? 250k, 200k?

1997 could be the biggest crisis in our life time if look back.
And economy situation now is far better off the 1997 condition.

Something once go up may not go back to origin state anymore, although it may drop due to correction, over-shooting previously.
eg.
Do you expect to pump petrol at Rm1.10 per litre again like old day?
Factory operators get Rm500-600 per month?
A bowl of mee cost you Rm2 like 90's time?

The realistic expectation to see properties price drop more than 30%, while inflation threat looming around, is not a realistic expectation.
Unless we are heading to deflation, may be yes, but we are facing inflation problem now, instead of deflation.

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Added on June 28, 2011, 3:19 pmIt was not a economy slowdown, but economy crisis!
We were talking of potential banks went under at that time.

Do you know PBB share price was only Rm0.88?
CIMB was Rm1.80?

It was severe, not economy slowdown.


This post has been edited by cherroy: Jun 28 2011, 03:19 PM

but our $$/salary not inflated..

You are right, it's economic crisis I stand corrected. The point is it is not triggered by property market.

You are also right to say that there is no reverse in inflation, this is evident in history. Lots of news reports in malaysia has some how reached the conclusion that material price increase in not the cause of property price increase.

Stagflation --> High inflation + Stagnation would definitely trigger the total collapse of the economy and then the depreciation in house price. With our national debts running high, it would suicidal to have high profile projects at the peak of inflation. When the oil price drops back, our revenue would be reduced, however material price stays, would we continue with our mega projects?

And the price drop, i didn't say it is not dramatic.... i said it is not so dramatic as it looks......

However, since property price has appreciated more than 30% in lots of area in KV. It is possible for the property price to drop 30% and this is evident in many parts of the world.

This post has been edited by GangHo: Jun 28 2011, 03:44 PM

wow so fast today already 2 pages...

it will be foolish to assume that if property price drop by 30% and economy is still secure.
i'll be damn worried about my job if that happens.

as the old saying goes, be careful what you wish for!

many thing is out of our control... at least we are prepared.

Dear Kochin,

It is my humble opinion that the current world economy is not strong as we reckon it to be. In fact it is rather fragile and a wrong move would subject the global economy to severe down turn.

While we all pray and hope that it would turn out to be good. Let's also embrace and be prepared for whatever that is coming.

This post has been edited by GangHo: Jun 28 2011, 03:33 PM

Dear GangHo,
I fully understand that and always practise prudent matters for my purchases. But I realised a lot of people are simply praying for property price drop without realising the implications of it. At the same time, it also astounds me the number of people who are really clueless to property purchases. There is a big bunch of people buying up properties without knowing anything at all the whole mechanism of it.
Some even claim that buying DIBS is risk free because if project abandon, no need to pay anything??!!! I am really both shock and amazed by the guts of these people signing up their lifes without knowing what they are really signing on for.
As I said before, on one hand, I hope there is property prices correction (not drop), and the other hand, I hope it escalate much further (since Malaysia is already a big laggard compared to the neighbours).
Cheers,
Kochin

I also hope and pray that the house price will go up as I do have interest in property as well.

However, I sincerely do not wish that all these appreciation is at the expense of the possible economy collapse and later lots of people are caught in between.

Still remember how my friend wishes to use my name to borrow money from the bank to solve his livelihood problem.

The next thing is the fact about global economy, American,Europe and Japan economy now all facing problems. We have to be careful.

everyone also wanted to add prop into their investment porfolia.... this is the consequenes loh... where got good investment got ppl buying like crazy similar at pasar malam one...

My brother bought his d/s hse in DJ in 1986 for 196k. Today it is worth about 700k to 750k. Annual appreciation is abt 6%.

In prime areas, much as we want prices to drop, I think it is only wishful thinking. Prices increased so much, due to inflation. Much as we lament abt very low income, there are alot of ppl who are paid very well. I recently interviewd few candidates for managers post, and mind you, people are are below 35 can be earning an annual package of 200k to 300k. Malaysian high savings rate, meam alot of aunty and uncle have stashed alot of $$$, and due to inflation, and rising prices, people are grabbing hses.

A superlink in wah, so far away from Klang valley, also recently launched for 600k to 700k. How can u expect prices for SS2 or Damansara Jaya to come down? Impossible!!!

Land is scarce. People taste have changed. People who have money, are not just looking for a roof over their head. They want good neigbourhood, good address, etc. Therefore, prime areas like Mutiara Damansara or Bandar utama, and the likes, will hold their prices well.

Landed properties, due to low rental yields, are less of a target for speculators. People buy for own stay, or keep for children. So, if supply is under control, prices cannot have freefall. In 2009, my niece wanted to buy a hse, but want to wait for cheap sale. Good thing she got smart and bought sthg.

In 1997, prices dropped badly, because of high interest rates. Today, at BLR- 2% (some even BLR-2.4%) and long tenures (in the 80s, tenure is only 10 years to 15 max) of up to 45 years, property bubble will not burst. A RM1 million loan, only need RM4,200 to service. Back in 2000, the same loan due to a lower tenur, will need more than 10k a month to service loan instalments.

If need a house, dont wait!!!

Less target for speculators?

take a look at SS24 aka Tmn Megah. Back in 2008, that 30+ year old house cost only RM 4XXk and now it has jumped 100%. One of my neighbour wanted to sell her house for RM720k and her agent managed to sell for RM840k

is it corner lot? wah then u also rich loh... ur neigbour mah...

This post has been edited by sampool: Jun 28 2011, 04:32 PM

http://www.youtube.com/watch?v=Q2qDW34Fr64

Beware!!!!!!!!!!!!!

Check out this news:

http://biz.thestar.com.my/news/story.asp?f...1&if_height=758

Due to high inflation, economists expect interest rate to be increased by about 25 basis points. Effectively, you will be paying slightly more every month for your housing loan repayment...

If interest rate keeps on going up, it may reach a level where people will not be able to afford repayment, and start defaulting. That's when people start force selling, increasing supply in the market. When supply increases, price is pushed down. This will happen if Bank Negara keeps increasing interest rate, but I am sure they are smart enough to increase to a "sustainable" level.

I think if you bought a property at a "strategic" and "scarce" location, such as PJ area, you will be safe, because supply is "scarce" anyway.

did i sense sarcasm?

This post has been edited by nairud: Jun 28 2011, 05:22 PM