There is simply very little risk or even no risk for the developer to have any launching.

History tells us that developer only goes into trouble when they never manage their cash flow well especially when the money earned are used to buy even more land for further development. With the current ballooning property price, the developer would be able to cover their initial land cost and development cost easily even if their property are not fully sold. As far as balance sheet is concerned, it will always be positive for individual development. The way the developer could lose money is due to the drop in company share prices and if their fundamental is strong and prudent, they should be able to sustain. However, the biggest risk taker is actually the purchaser and when any problem strikes, the purchaser is the one that suffers the most. I do not think that the number of new launching and its prices could be taken as an indicator especially to show that the property market is healthy. And again the history tells us that all crashes are preceded by heavy purchases. It is my believe that our property market would be more affected by regional market performance and global condition rather than the local situation because our national GDP is simply too small for our country not to be affected when the globe coughs.

The buyer should not HOPE that the market crash, that would be too selfish.

Neither should seller pray for bullish market that the price is too high for the poor to afford. This is also too selfish.

INSTEAD we should all STUDY the market so that whether good thing or bad thing comes, we are all prepared. And that we could adjust accordingly and minimum damage to any party.

We should also equip ourselves with financial knowledge and be fully informed of the local and international happenings.

As it is said, success are for those who are prepared. Good or bad, we should face it together as a country.

This post has been edited by GangHo: Jul 31 2011, 07:52 PM

http://www.spectator.co.uk/business-and-in...-defaults.thtml

Not a single country would be spared. People will worry about tomorrow, not the property price.

It's a financial Tsunami, it will destroy anything that is on its way!

This post has been edited by GangHo: Jul 31 2011, 08:29 PM

It could be unprecedented. The global appetite has grown.

Billions and Trillions are uncommon century ago.

1998 is more of the Asian crisis while 2009 is local American sub-prime.

http://en.wikipedia.org/wiki/1997_Asian_financial_crisis

A global financial Tsunami would be much bigger than these two.

When the vehicle has become so BIG, it is very difficult for it to stop due to its momentum.

This post has been edited by GangHo: Jul 31 2011, 09:11 PM

---

Added on August 2, 2011, 4:05 pmThe Star Online > Business
Tuesday August 2, 2011

Property bubble burst unlikely in near future, says AmInvestment Bank

KUALA LUMPUR: A property bubble burst is unlikely to happen in the Asia Pacific, including Malaysia, as there are no signs to indicate such a trend in the next two years, says AmInvestment Bank Group.

Director for Retail Funds Ng Chze How said real estate investment trusts (REITS) would also not experience a burst including those acquired by the group. "I don't see a burst or a crash in the property market.

"You have high wages, ample liquidity, small percentage of non-performing loans and these plus steps taken by the government to prevent the economy from overheating, augur well for the property market.

"I don't see a property burst (happening) in the next six months, one year or two years down the line," he told reporters at the launch of Malaysia's first Asia Pacific REITs fund, AmAsia Pacific REITs, here today.

He said with these factors in place coupled with an economic recovery, there would be more upside in the market.

AmAsia Pacific REITs invests in a diversified portfolio of REITs listed in the Asia Pacific region.

Ng was optimistic the REITS selected by the group would see high occupancy rate and increasing rental.

"Selected Asian properties have yet to reach their previous peak, as such, there is room for potential growth," he said, adding that properties were seen as a good hedge during the current inflationary period. - Bernama
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© 1995-2011 Star Publications (Malaysia) Bhd (Co No 10894-D)

[/quote]

His strongest argument is highlighted in BOLD above.

First, high wages??? Hello??? High wages compared to which country??? I thought we are talking people already over-leveraging here?

Ample liquidity?? Bank or individual??? When there is a crash, don't tell me bank will still loan people money........ There will be credit crunch despite ample liquidity. How high liquidity in bank will help the property market anyway??

Small percentage of non-performing loan........people will start to default when the property price goes down too much or inflation is too serious. We have not really experiencing the downward price pressure yet. Ofcourse people will hold-on to their property no matter what.

Plus steps taken by government?? He needs to elaborate further........

Our Property is considered very affordable to overseas investors due to their high pay slips. The fact is we do not have many overseas investors. Malaysia property market is very much supported by locals reported by lots of survey.

As we do not have property affordability index, the 9 times affordability index calculated for Malaysia shows that we are over-leveraged to the point of bubble burst. This also shows that the price is not sustainable and in unstable condition. In fact we should be COMMONLY practising the few generation repayment scheme already to avoid default in future. Although it is uncommon in our financial system to have our next generation to pay for the loan does not mean that we are in a better off situation. The current over-leveraging is only showing that we are in a very fragile condition. And for the fact that we have little foreign investment, the property market will free fall when the local market loses its confidence. It is like the dams full of water waiting to break lose of the retaining structure.

When we compare price, we should compare it with our own salary. Jakarta price higher does not mean they are stable. Our political stability is better does not mean our property price should be higher. The essence is affordability.

Sorry, I do not really get you...... Are you trying to say that Malaysian salary is higher than India, Philippine and Indonesia? That's why they come into our country to work?

If anybody leaves their own country and family to work in another, the most probable reason is due to higher salary.

India, Philippine and Indonesia are all highly populated countries compared to Malaysia. A smaller country would usually need to import either blue and white collar workers especially when they are lack of experts in certain field and also when the locals become choosy in the blue collar fields.

Malaysian don't go to Jakarta/Manila to work because:-
1) Our country is small, the country is able to provide enough working opportunity(that's why our unemployment is not a concern usually)
2) Singapore provide working opportunity with higher salary earning and better environment(don't have to go so far to other country)
3) There are other more attractive country in work in like China, UAE, US, Australia, UK and etc.

Indians have been working in our country for very long time and due to their up rising economy and salary increase, some has chosen to go back their own country so that they can stay close to their own family. Filipinos and indons salary are generally lower than Malaysian, it's no surprise that they are hired in our country when the local Malaysian demand a higher income.

A Country property price has certain link with the salary and earning and it is not a direct one and it is not consistent comparing across the globe. Hong Kong for instance has one of the highest property price in the world but is their salary highest in the world? The answer is no. America has one of the highest salary in the world but is their property price highest in the world? The answer is no. This is why property price index comes into picture to measure the affordability of the locals to buy their own country property. When the index is too high, like Malaysia, 9.... it tells us that our salary are low compare to the property price.

Double Dip Recession may be happening, refer the link below:-

http://www.cnbc.com/id/44029985

Do take note of the global PMI data released recently. China is not spared as well.

I see lots of good properties on auction.

http://thinkproperty.com.my/realestate/Auc...ults&type1_my=3

Think property dot com has got 1364 properties on auction on all types of properties:-

Link House, Bungalow, condo/apartment, shop office, commercial land, industrial land, residential land, semi-D

in Kepong, Kajang, Old Kland road, Shah Alam, Kajang, Ampang, Puchong, Bukit Bintang, Subang Jaya, Sentul

and prestigious place like Beverly Hills-Ampang, Sierramas-Sungai Buloh, Country Height-Kajang, Bandar Sri Damansara, Mont Kiara

Auction date between August to December 2011.

This is just one homepage.

Find hard enough, you should be able to find one from these properties. good Luck.

In my own definition, there are more categories:-

1) Speculators who care only about own profit. Even if the sky around him falls and he profits, that's ok.

2) People who has extra money but could not find better investment than property market to park their money.

3) People who has enuf money to buy a decent roof over their heads.

4) People who don't have enuf money to buy a house.

5) People who don't care whether they have a house, the most imp thing is enjoy first and worry later.

Now, who to blame? Nobody. It's just that some have not seen what others have seen. Economy is linked, and selfishness would lead to destruction.

All these argument that we have should be viewed positively and not otherwise.

We should be becoming more knowledgeable after we have learned from each other the wonderful & brilliant views and opinions. Their knowledges serve to enrich and compliment what we lack. The forum should make us more unite to face any good times or bad times and not divide us.

There are lots of ppl spreading good news of property because they want others to gain from S&P of property. There are ppl giving warning because they think that bad times are coming and they don't want others to be affected.

Let's not wear the colored specs when we read...... we all have our good intentions.

Yes, you are right. There are simply too many statements that are not clear. It includes many of those published views in newspaper by developers, columnists, financial wits, bankers and etc, all empty talks and empty cheques. Especially the local one, they are merely making reports and not predictions. But they might have their own wicked agenda, as long as they make money they do not care whether the market loses. After all, nobody will really hold them responsible if they paint the wrong picture.

Everybody has failed, advanced economy, developing or bad-ward economies. That goes to show how vulnerable the global and local economies are. Who is the real experts?

When there is uncertainty, the practise of prudent financial management is the best thing to do.

Yes, I do believe that.

I also believe that some of the major Malaysia developer faces cash flow problem and goes bankrupt because all the money is used to buy lands.

I also believe that major property player like Fannie Mae and Freddie Mac can tumble because of their wrong move.

It does not mean that they are right when they are big.

However, bigger companies USUALLY have bigger risk appetite. If they are not careful, they will fall harder.

And some does not care, because those are share holder money.

When the share price goes up, they are first one to sell.

This post has been edited by GangHo: Aug 22 2011, 08:44 PM

It is simply too sensitive to mention it here and it is against the Cyber law.

However, I can give you some hint.

Go through those black listed developers and study their background.

If not, you can come to my house. I will tell you in closed door.

I sense a change in Malaysian lifestyle especially spending habit in this new era. This is especially true for those people around me and I would consider it's the majority.

The spending habit has changed and largely lack of financial knowledge - People are earning ten of thousands per month but still complaining that money is not enough and borrow from the bank to finance their lifestyle. They remain single and has no contingency plan for tomorrow. They do not know what to do with the extra money that they have, so they just spend it. There are also people that earn less. Despite earning less, extra money are spent as well. They might invest their money in one property as this is the most popular talk of the town. However, They still dunno about the future. When you tell them crisis coming, they basically don care.

On other hand, we have also witnessed that those who earn less work their way through and invest their money wisely. They have good cash flow and are always ready for the rainy days.

Every individual has to be responsible over their own financial status and sometime the people around them and should not blame any party at all when things turn sour.

Unfortunately, What I mention is the fact. When you borrow money from the bank to satisfy your posh lifestyle, that's not good financial management.

In the country I work in, it is published in the newspaper that Youth below 30 owing millions to the bank. When they are out of the country, they borrow hundred of thousands from the bank for their oversea trips, renting Ferrari and stay in 5 Stars hotels.

Although Malaysian are not as serious in this aspect. Having budget in all things we spend is always good measure to control the ins and outs.

"Seems like our holding power are good as property price are rising.."

Increase of property price would not be able to increase our holding power. There is no formula to link the two.

However, increase of property price would increase the DESIRE to hold the property. This is an emotional relationship.

The definition of holding power is the DURATION one is able withhold the sales of property in hand.

It defers from one type of investment to another and defer from one investor to another.

To some people, there is no contingency and therefore it eats into their daily cash flow when ins and outs run into problem. And to others, it is to severe the injured limbs and life goes on.

In considering the holding power, we should not consider OPM(other people's money) and appreciated price of the holding asset as part of our holding power. And remember that income is not forever and always subject to local and global environment.

I have had similar experience this year with the bank but it is about signing the discharge of property. Got too frustrated with the bank and I said to them,"have this resolved immediately or wait for my lawyer letter!" They took immediate action and the issue resolved after few days. The manager called me while I'm oversea several times to follow through.

On separate issue, anyone has further information about MK3, please PM me. Thanks!

This post has been edited by GangHo: Sep 28 2011, 02:23 PM

I do not see the reason why the bank should and would reject one's loan application if one full fill all requirements and having good cash flow. After all, loaning is bank core business. For the information to be more useful, we should study the reason why certain ppl got rejected and why certain ppl got approved. It is the stance of the bankers that are important, whether they are very strict or loose(Whether 50% or more of monthly salary as repayment?) in approval. When falling in love in certain property, lots of people will try all means to get the loan approval. They might get the approval but it is way too much leverage. And for certain ppl, they drag along others as well.

This post has been edited by GangHo: Sep 29 2011, 02:32 PM