hhmmmm let me give this a try.

there's kopi from mamak.
there's coffee from kopitiam.
there's the special brew from secret recipe and the likes.
there's branded gourmet coffee like starbucks.
and there's the premium coffee from god knows what.

let's equate these to properties in a way.
and let's assume everybody is a drinker (for those who claim they don't drink, let's assume they are renting )
those who likes to drink but got limited $$ for expenses might get their cuppa from mamak stores. (or curi curi drink from company's pantry; these are the ones still living with their parents maybe? )
and there's the bred that enjoy a cuppa and who are the average joes. they prefer kopitiam.
and the rat race pack leaders might enjoy their brew from establish restaurants.
and for the elites, only branded and premium coffees will satisfy them.

when starbucks open for business, i thought it's absurd to pay rm10 for a cup of coffee! and overtime, starbucks have manage to open up outlets after outlets. it's really amazing how a mind can play tricks on you through repeated advertising. from absurd to oklah, it's branded and good quality stuff mah, to value for $ status?

properties in a way might be evoluting to a similiar degree. although greatly exaggerated, but come to think of it, previously, only klcc and MK can command premium pricing. but nowadays, anything at rm300psf is consider a bargain?

and i do think it's true that when a downturn strikes, am sure some starbucks branches will go under. no doubt about it. same goes to secret recipes and kopitiam and even some mamak. and isn't it funny that the most that would be shutting down are the middle group. the premium would most likely last it out.

in times of uncertainty, let's just chill and not make strong accusations which we might regret later.

chill guys.

PS: am still optimistic but cautiously optimistic.

Property players give mixed views on effects of economic crisis
Aug 15, 2011

Several property players have cited mixed opinions on the impact of the economic crisis in the US and Europe on the Malaysian real estate market.

“Property prices in Penang cannot continue on an upward trend forever. The weakened condition of the equity market will influence the capacity of investors to inject funds into the property market,” said Mark Saw, Managing Director at PPC International Sdn Bhd.

Chandra Mohan Krishnan, Managing Director of Azmi & Co (Penang) Sdn Bhd, believes there will be some minor corrections in local real estate prices due to the crisis in the US and its effect on the local equity market.

”But I believe that the impact would be short-term. The longer-term impact on local property prices would be political events such as the next general election,” he said.

Tan Hun Beng, General Manager of Sunway City, noted that should the crisis in the US and Europe continue for over six months, an impact will be felt by the local real estate market.

“If the crisis is resolved within six months, then the impact will be minimal,” he quipped.

On the other hand, Lim Chien Aun of C.A. Lim & Co believes that the decline of the equity market may motivate buyers to engage in property investment to dodge inflation.

“The conditions are ripe for another round of investment to move into properties. But whether the investments actually come into the local property market will depend on the political stability of the country,” Lim added.

You got your point.

I agreed that Rich people will become richer while poor people will become poorer in the future.

The house price is extremely high now and it will keep going up wont stop.

This is the game from the rich people + gorvernemt.

The Rich raise the price, the gorverment lower the loan and the duration of payment, at the behind they share the benefit.

Try ask the average young/aldult what they want, the answer will be simply as a normal house which can be stayed with their family. But they all end up paying house loan till they dead. whole their life is a profit for the rich and gorvement.


Lets see how it will become in the future when most of people cant afford the price of house.

How the poor gonna survive? which will you choose?

a) move to deep deep undeveloped village where got the cheapest land, and build your own house, work as farmer, fisherman and else to support your living.


b) rent the house, ( when all most people stop buying house, and go to rent,. 100% rental of house will be sky rocketing up) you will end up finished your salary by just paying rental.

c) All the poor raising up and Rebelling hoping to have some change. ( like what happening in country like thailand, indon and else)

d) Struggle hard, earn more money, until you are the one of the rich. ( not all people is lucky and smart enough to do that)

e) saving the cash, buying lottery, sharehold hope to win xD

f) sharing with your friend to buy a house.( it will lead to many arguement in the future,)

Whatever you choose, try imagine what will happen next.

Only 1 answer, inflation.

Good luck guys, for surviving before the inflation.

i guess condo's in puchong area now is facing some slow downs... bcoz in may and june month a lot of agents keep on bugging me to sell my 1400sqf condo in puchong jaya as that time i just want to rent out, and now i might consider selling my unit with the tenant if rm1.5k permonth, but seems like no enquiries at all for condo's in puchong that is above 400k from end of june till now middle of Ogos... and some agents also told me tht they have a few listing in sri petaling / OUG also no enquiries at all... so maybe puchong and old klang road area the properties dont know is it facing some saturate...



just my 2cents opinion yo...



This post has been edited by forumnet: Aug 15 2011, 08:51 PM

Property price pullback after strong show in 2010: More to come?

By theedgeproperty.com
Monday, 15 August 2011 11:52

There is no question that Malaysia’s residential property market had a great run between 2001 and 2011. But property stocks have had a chequered performance record.
A capitalisation-weighted sector index, the Bursa Malaysia Properties Index suggests property stocks exhibit a pattern of returning to the approximate base levels (starting points) after the index completes its rally.

Each successive rally also took the index higher than the previous occasion, that is, assuming the current rally will accomplish the same. This suggests that, in general, property stocks on Bursa Malaysia are purely cyclical and exhibit increasingly volatile retracements with every new upswing cycle.

The upswing portion of each rally cycle appears to last either about 11 months or, if of an extended duration, about 20 months. Given that property stocks began rallying in April 2009, the post-recession rally reached its 21st-month duration in January 2011 and may already be past its approximate end if the January 2011 high is to be taken as a peak.
Given the cyclical nature of property stocks, they are unsuitable for a buy-and-hold approach to investing. Timing considerations then take on an important role in investments in property stocks.

An integral part of investing in property stocks is therefore to also read market trends for signals identifying a peak in the cycle e.g. relying on technical analysis for signals, but we will suggest that there are other ways to achieve this.

Success in direct property investments depends ultimately on the choice of location, but sentiment trends may be discerned from Malaysia’s House Price Index. After staging an excellent run in 2010, particularly in Kuala Lumpur and Selangor, this index dipped quarter-on-quarter in 1Q11.

Anecdotal evidence suggests that speculative activities did play a major role in the initial run-up in prices in 2009 right after interest rates fell with the onset of the 2008 global downturn. In turn, the sharp price appreciation drew in new speculators and resulted in newly formed families bringing forward house purchase decisions.

In the past 10 years, property prices rose steadily, resulting in a proliferation of hitherto rare million-ringgit homes. Based on the national House Price Index, a “representative” residential property costing RM100,000 in 1988 would have risen in value from RM220,694 in 2000 to RM308,066 in 2010, up 40% on the back of a rise in per capita nominal income of 20%.

Property investment became a viable asset class in Malaysia, where it had stayed in a class of alternative investments outside mainstream asset classes in the preceding decades.

What has changed in the past 10 years that has allowed house price appreciation to outstrip income growth without affecting demand? We suggest six main factors:

Malaysia’s aggressively young demographic profile has and will continue to fuel rising demand for housing. There’s an age pyramid showing a jump in the population in the 20 to 29 years age bracket compared with the 30 to 39 bracket.This means that household formation is set to pick up pace sharply and that sets the stage for a boom in housing demand in the medium term. Our estimates suggest that on a nationwide basis, the rate of household formation implies that the incoming supply can be mostly absorbed. But demographic dynamics do not permit demand to circumvent affordability issues.
Interest rates fell steadily from 1998 highs. From a mean lending rate of 12.1% in 1998, interest rates fell to 5% in 2010. This lowered the monthly interest-only cost of, for example, a RM200,000 loan by 34.5% from RM1,278 to RM837 while nominal incomes rose 20%. Lately, many developers even absorb the holding cost by offering interest-free periods until completion. This enables property speculators to gamble on potential price appreciation by buying, then simply “flipping” a property to the next purchaser before the need to pay any money at all arises.
Loan to value (LTV) or the margin of finance that banks permitted borrowers to take on rose from typical ceilings of about 70% in the early 1990s to as high as 95% to 100% recently. The implication is that house buyers need not spend as many years accumulating cash resources needed as deposit for a purchase. Consequently, it became possible to buy a residential property very early in one’s career. Purchase decisions brought forward easily in this manner fuelled demand for houses.

Loan repayment periods were in the past constrained by the length of one’s working career (up to 55 years of age), effectively limiting anyone who began working immediately after graduation from university to no more than a 32-year loan. But no more. Banks resorted to two-generation loans of 40+ years’ duration at the peak of Malaysia’s 1980s property boom. Malaysian banks have now come full circle to again offer 40-year loans or for periods until the borrowers reach 70 years of age (effectively launching into two-generation loans again). The average life expectancy for Malaysian males is 73 years, meaning that this measure (lengthening repayment periods) has no further room for play.


Multiple home mortgages spread across several financial institutions each still declared as owner-occupied units generate strong demand that is higher than can be inferred from income or demographics. They reduce each bank’s exposure to a given borrower, but mask elevated systemic risks. Generally, owner-occupied residential mortgages find favour with banks because they are thought to spread out risks, and individuals will arguably be loathe to lose the roof over their heads.
Owner-occupied home mortgages also tax the capital base of banks less. They carry 50% risk weight, allowing banks to extend twice the sum in credit on a given capital base.


The rise of property as an international investment asset class. The pooling of investor resources via vehicles like local and regional REITs (real estate investment trusts) has telegraphed the up-until-then limited ability of individual investors to invest in large-scale commercial properties. Some property consultants also attribute the purchase of properties by foreigners as an important demand driver, but other than residential properties in a limited number of enclaves, this may not be a major source of property demand. Applications to take up residence here under the Malaysia My Second Home programme number about 1,500 a year. Some consultants also allude to the repatriation of money by returning expatriate Malaysians. The extent of this inflow and the number of individuals involved is unknown.
It is clear that easier and cheaper credit availability for both residential as well as commercial properties were major factors fuelling a decade-long upswing in property prices. Between 2000 and 2010, nominal GDP rose annually at 4.6% a year Banking system housing loans in comparison, grew far faster annually, averaging 16.8% a year.

This translated into increasing levels of household debts relative to income. During all periods when GDP growth stalled in the past decade, loans growth merely slowed briefly, only to see, on recovery, an acceleration to a pace faster than prior to the slowdown.

The resultant relentless rise in household debts became possible mainly via a loosening of lending standards in the manner described above.

Is further leverage even possible?

The precise upper limit of sustainable household debts is a matter, of some conjecture, but Bank Negara Malaysia (BNM) has begun to turn its attention to the matter given the role played by unsustainable household debt levels in inflating a housing market bubble in the US between 2002 and 2006 and given an alarming number of cases of individuals (140,000) seeking assistance from AKPK (the Credit Mediation Bureau).

How far away are Malaysian households from the famously high debt levels of US households at this point?

The chart sets out the household debt-to-GDP ratio for the US from 1952 to 2011. Note that the 2010 household debt-to-GDP ratio for Malaysia stood at 76%, approximating US household debt-to-GDP levels in mid-2002, when the housing bubble in the US began unfolding.

It would therefore be prudent that BNM quickly install measures to head off an involuntary deleveraging process that would accompany any subsequent bursting of an asset bubble (e.g. requiring banks to test repayment means using net, not gross, income as is usually done).

That the current US household debt-to-GDP ratio of 88.6% is still an unsustainable level is best indicated by the still ongoing nature of the US household debt deleveraging process.

In our opinion, the comfortable aggregate household debt to financial assets ratio at 238% for Malaysia is an unreliable buffer because currently high asset prices (e.g. unit trust prices) may also rapidly deflate in a deflationary environment that typically accompanies the onset of any deleveraging process.

Also, such aggregate data masks the true extent of the pervasiveness of over-extended households where income disparity is very wide (a small number of extremely wealthy households with no leverage in combination with a large number of over-extended households will result in a comfortable aggregate ratio still).

Anecdotal evidence hints that this may be increasingly the case. In a systemic crisis, it will be the number of households in the weakest financial position at the margin which determines the incidence of inability to meet financial obligations.

While the precise timing of peak conditions in the property market is as always unclear, we see clear implications from the tailing-off of the credit impetus to the housing market.
The large-scale township development model is clearly behind us. The lack of large plots of undeveloped land in the proximity of mature urban areas means developers must realistically focus on smaller developments, thus robbing property developers of some economies of scale.
The strategic response has been to move upmarket, into “niche product”, higher-margin developments.

In order to justify higher prices, product innovations such as gated communities, “landed strata” communities, SOHO (and variant) residential developments with commercial possibilities, and inner-city high-rise developments have been explored.

First-mover advantage can be quickly lost, so innovations such as these have been followed up by rapid-fire launches across a number of locations. To maintain the earnings momentum, the gross development values (GDVs) at property developers have had to be quickly built up. To ease the process, these developers have also increasingly turned to commercial developments that involve higher GDVs, but which are more vulnerable to soft patches in the economy.
This is of particular concern as our view is that in a “new normal” world economic order, business cycles will be of a shorter duration.

A clear consequence is the spring/summer soft patch in the US and developed economies that has already weighed on property prices in export-dependent Penang.
Valuing property companies will become measurably more difficult in 2012 as new accounting standards in accordance with IC Interpretation 15 of FRS118 are to be observed in respect of income recognition beginning from 2012.

The present method of first estimating the total development profits and then progressively matching the estimated profits with the percentage of completion is thought to be unreliable, as the risk of failure to carry construction to completion will go unrecognised and project cost overruns may not be reckoned with until the completion, skewing reported quarterly earnings away from reality.

As a strategy, we have deliberately focused our attention on property companies with a small current base of ongoing projects measured by their GDV but which have a strong pipeline of relatively affordable properties, particularly in the Klang Valley.

Considering the following:

The interest rate cycle has clearly bottomed and is on the upswing in the face of inflationary pressures;
Beating means test constraints through lengthening repayment periods has reached a practical limit with the latest 40-year loans;
Demand from investors is being choked off by restricted access to high LTV loans for second and subsequent home purchases;
The price dynamics have turned less friendly and may turn unfriendly in several major states; and
The ratio of the price of a representative house to the nominal per capita income has reached 1996 (eve of Asian crisis) levels and Malaysian consumer debt levels are unsustainable.
Our preferred approach to stock-picking in the property sector is to focus on companies with projects involving ongoing GDV of less than RM1 billion. These tend to be lower capitalisation stocks but those which we eye as candidates for promotion into the big league.

The drawback is, with a smaller even if growing pipeline of projects, these companies will report a more volatile stream of earnings when income recognition becomes restricted to the completion stage beginning 2012.

We have also become more wary of property developers with a high exposure to the shop unit, shopping complex and purpose-built office properties segment in Putrajaya, Kuala Lumpur, Selangor and Johor.

There is anecdotal evidence that the surge in launches in this property segment was to an extent made possible by the loosening of bank credit standards. In the past, drawdowns of bridging loans were, as a rule of thumb, subject to projects exceeding the 60% sold mark.
This has apparently been lowered to 40% in many instances, raising risk levels for banks and also for developers.




Attached thumbnail(s)

I sold a condo in OUG for a record price

[quote=dlyw1103,Aug 15 2011, 08:52 PM]
Property price pullback after strong show in 2010: More to come?

By theedgeproperty.com
Monday, 15 August 2011 11:52


In the past 10 years, property prices rose steadily, resulting in a proliferation of hitherto rare million-ringgit homes. Based on the national House Price Index, a “representative” residential property costing RM100,000 in 1988 would have risen in value from RM220,694 in 2000 to RM308,066 in 2010, up 40% on the back of a rise in per capita nominal income of 20%

Property investment became a viable asset class in Malaysia, where it had stayed in a class of alternative investments outside mainstream asset classes in the preceding decades.

What has changed in the past 10 years that has allowed house price appreciation to outstrip income growth without affecting demand? We suggest six main factors:

Malaysia’s aggressively young demographic profile has and will continue to fuel rising demand for housing. There’s an age pyramid showing a jump in the population in the 20 to 29 years age bracket compared with the 30 to 39 bracket.This means that household formation is set to pick up pace sharply and that sets the stage for a boom in housing demand in the medium term. Our estimates suggest that on a nationwide basis, the rate of household formation implies that the incoming supply can be mostly absorbed. But demographic dynamics do not permit demand to circumvent affordability issues.

-------> Goverment and the Rich: walao~! Rakyat can afford. I try earn more from them.. hehe... But how?


Interest rates fell steadily from 1998 highs. From a mean lending rate of 12.1% in 1998, interest rates fell to 5% in 2010. This lowered the monthly interest-only cost of, for example, a RM200,000 loan by 34.5% from RM1,278 to RM837 while nominal incomes rose 20%. Lately, many developers even absorb the holding cost by offering interest-free periods until completion. This enables property speculators to gamble on potential price appreciation by buying, then simply “flipping” a property to the next purchaser before the need to pay any money at all arises.
Loan to value (LTV) or the margin of finance that banks permitted borrowers to take on rose from typical ceilings of about 70% in the early 1990s to as high as 95% to 100% recently. The implication is that house buyers need not spend as many years accumulating cash resources needed as deposit for a purchase. Consequently, it became possible to buy a residential property very early in one’s career. Purchase decisions brought forward easily in this manner fuelled demand for houses.


----------> Goverment and the Rich: Let's try cheat them by Raising the house price but lowering the loan, so all of them will struggle even hard giving us their money.

Is further leverage even possible?

The precise upper limit of sustainable household debts is a matter, of some conjecture, but Bank Negara Malaysia (BNM) has begun to turn its attention to the matter given the role played by unsustainable household debt levels in inflating a housing market bubble in the US between 2002 and 2006 and given an alarming number of cases of individuals (140,000) seeking assistance from AKPK (the Credit Mediation Bureau).

----------> Goverment and the Rich: We have enough? Noy yet, Rakyat still can survive, lets planning how to earn even more from them.

The drawback is, with a smaller even if growing pipeline of projects, these companies will report a more volatile stream of earnings when income recognition becomes restricted to the completion stage beginning 2012.
We have also become more wary of property developers with a high exposure to the shop unit, shopping complex and purpose-built office properties segment in Putrajaya, Kuala Lumpur, Selangor and Johor.

----------> Goverment and the Rich: Oi , Rakyat, is that all you can give to me? i need even more.

Wowww...so fast.....wat record price.....can give some tip or not.....i may using it as reference...

I think is is more on JB side. Many Singaporean bought it but many ppl prefer new house in JB so most of the houses hard to find buyer. My friend bought a condo below the selling price, seller is from Sg.
My friend said, those who VP recently kept asking the sales any buyer or not. Property bought at 1m at mount kiara, monthly 5k installment, now rushing to find buyer after VP.

share
http://www.theedgeproperty.com/news-a-view...nal-market.html

[
I'm just trying to share my information, and you make your own decision. I have friend in Australia who has few investment properties that couldn't be flipped out in a falling market, he is no longer able to service his underwater mortgages, he is going to file bankruptcy and lose everything he got!

[/quote]

this is the ( fact) people here wish the property price will go up and up every year does not want to see and read it,thier just try to hide under the pillow pretend nothing will happenning after all those year price go up and up and up again,as i pointing you on prevous post:


SECRETLY BROKE IN AUSTRALIA

The housing boom in Australia is now an escalating bust. Many Australian homeowners put every cent they had into their homes and they needed double incomes to just scrape by. Unfortunately, those jobs are disappearing in a construction and commercial real estate bust.

http://globaleconomicanalysis.blogspot.com...-australia.html

It is the fact,which is you cannot change it or alter it,fact is the fact,there isnot any demand for property market,after sold out and VP in the first launch from the developer,every one try to flood in to market ,tell me the logic it is? ask you self how many aprtment/con/house be flood in to market without anyone buy it sitting there empty for buyer ,best of one year worse is two year could be never sell it again when the crisis hit..........when the cisris hit bank will stop lending ,business will suffer,then govt will cut the budget ,the whole of economy and GDP will fall.....
read more about why the lehman brother will trigger entire western world start in US,then UK then EU..why thier GDP stil low while china have 9% and deficit still a mess..let youself to understand when the crisis hit after match economy down turn will effect all of you....even you donot buy the property it still could lose the job of ordinaly people like manufactory worker,lawyer,retailer,business ect....

bubble bust just around the corner,donot denial it.....it happening in down under now AUSTRALIA.....soon will be heading to your way perhap China first then across ASIA

thanks for article, summarises much of what some have been saying here. below are the major pointers to me. one can ignore it or take it in.

This post has been edited by AVFAN: Aug 15 2011, 10:46 PM

hey, I am sure you could sense the sarcasm in my post? am merely chanting what has been preached by the speculators.
the most risky group of people are the over leveraged ones who bought into premium pricing outskirt area, new developer.

abandoned project means game over for good.

just check some own beh tahan liao... 2% - 5 % below their asking price since last week... target min 20%

source of checking: iproperty...

Wonder why the real estates forums are so quiet these days? We are towards the end of stage 5 now. Entering stage 6 very soon.

1) displacement ( birth of a boom )
2) expansion ( growth of the boom )
3) easy credit ( fuels asset price inflation )
4) euphoria ( over optimism and over confidence )
5) insider profit taking ( liquidation of position by lead investors )
6) panic ( chaos as investors try to sell but are hindered by liquidity and leverage )
7) revulsion ( investors stop participating in the market )



http://7economy.com/archives/2822

Haha. No worries bro, none taken.

If the property sector toast, I suspect many banks will go under, maybe is time to get out of the banking stocks.

Found it interesting, your figure shows No.6 panic with $USD, does it mean buy USD or get out of dollar?

Guys, I got something important to share here.

The USD will collapse! I don't say this lightly. It is mathematically impossible for them to pay off their debt, they could either default their treasury bill or print money and inflate away their debt.

They will choose to print and cause runaway inflation if not hyperinflation (Zimbabwe in 2008, ring your bell?), and the worst part is, the whole world fiat currencies are backed by the reserve USD.

If the USD falls, our ringgit will not spare, unless our Bank Negara has tons of GOLD to peg our ringgit if hyperinflation really does happen.

For retirees, their paper savings will be worthless, for younger folks, they can start over again... I believe we are very near the tipping point.

I know this has nothing to do with property

the table just shows USD is currently in Panic stage. (article was written in May, which is still valid given today's scenario)
US simply cannot go default, implication will be a worldwide collapse.

Gold value experienced a runaway hike to stratosphere mainly due the rounds of quantitative easing, which also see the value of dollar getting smaller and smaller.

this is interesting times, we get to live it and tell our great grand children someday.
...if the world does not end on 21st Dec 2012.

All follow azizi alis lead..