Should doesn't mean will. I still remember previous crisis, when the gov keep saying bullish even before impending disaster.

If the ship is sinking, do tell the rest everything is under control, so you can safely climb to the life boat.

Just broke the neutral balance.

This is why it's called speculating. Nobody really knows what's gonna happen. Just make guesses and place your bet.

If banks and speculators don't back up, in theory the party will never stop.

I'm no expert, but I would say, when share markets around the world drops. Companies will have less money to invest. Some may even close shop.

When this happens people will lose their jobs.

When companies close, and people lose their jobs. Other companies and people that support them, also lose business opportunities.

It's a chain effect, that will effect companies in Malaysia. This is what's called an economic crisis.

And when that happens in Malaysia, people who take out big loans, may default on their loan.

Causing a drop in demand and surplus of available props in the market.

2ndly, the scare factor, or the potential for a drop, will scare people into a selling frenzy. To get their props off their hands before they get into trouble.

The difference between the stock market and prop market is the rate of speculation. 1 goes up and down faster than the other.

But they are all the same, over optimism may increase the price beyond it's real value. People with holding power may hold on to their props, hoping that their prop location doesn't turn into a ghost town.

Correct me if I'm wrong.

Actually it's not just the agent. It's the prop speculators first. They buy to make a profit, this is why they'll never sell you market rate.

They also represent the people whom will buy those props and crazy prices, because they think they can sell it back again.

I really can't say. But if your company deals with mostly foreign companies, then surely you're company will be effected.

before the last economic crisis, a branded MNC company my friend worked in, invested quite alot in building a new site, acquiring facilites, and getting their employees to shift to the new plant.

2 years later it went bust.

This post has been edited by TheDoer: Aug 5 2011, 02:51 PM

I noted that the chinaman company I worked for did better than the MNC company, because they foresaw the crisis, and started cost cutting measures 2 years before.

Yes, they could but they wouldn't. In their mind now is the owner wants to make a profit. He definately will not sell it at a lost. And if the owners is cash rich, and is just looking for someplace to dump his cash then again he wouldn't be bothered whether people buy his house or not. For the agent, the more houses he sells the more money he makes, so he wouldn't increase the price beyond what he can sell.

The reason why an agent dares to raise prices is because there is a demand. And the demand here comes from Speculators who are thinking of raising the price further later .

I know of a case, whereby an agent doesn't want to sell a house because the owner had markup his price above market rate.

But yes, I do find it ridiculous what the agents are making. For a 300K prop in kv, the agent was asking for RM10K in comission.

Why are we so dumb, playing investor, when we should be agents instead?

1. Never. Already bought a family home despite the rate. Will only buy if I need another home.

2. Don't know. I just know it will drop. But anyway, while economy crisis was looming, I was thinking of the housing bubble bursting, irrespective to it.

3. Yes, worried. And Yes, I'm happy, because I looked like an idiot when everybody said I was wrong. If it was coming, it would come irregardless of what I said, so it is better that I had said the right thing.

Being right, also grants people the ability to prepare and act.

However nothing was done on my side. I was just too depressed by people's attitude towards the market, so I just got fama's help and we're moving to a house in the outskirts. Who cares whatever happens to the rest of the market. Even if we stay in a ghost taman, we will make the most of it.

I however cheer for those who had stood their ground. Assuming prop price will indeed drop significantly.

P.S. Another of my concerns why I bought early was, even if houses were cheap, I might not necessarily get the house I want then.

This post has been edited by TheDoer: Aug 8 2011, 01:49 PM

bursa red at midday.

I wonder whether this is just a temporary thing or will it continue. What we do know is the gov's of the world, are trying to reassure people that things will become better.

Exactly what soongkm had said.

I had no control over the market. Infact I had preached that we live in moderation, so that we do not have burdens during crisis like this.

The inevitable had occur. What more can I say?

I too may be effected by this.

@soongkm, Thanks for understanding.

Just to clarify on my statement:
I meant had bought a house without having to worry whether prices will continue to rise or fall. Worst case scenario being that market will fall, and my taman in the outskirts may turn into a ghost town. But that had been part of my consideration which I will accept and live with.

I am at the mercy of speculators, either way I lose.

This post has been edited by TheDoer: Aug 9 2011, 11:15 AM

That's the expected worst case scenario.

But I consider that the best case scenario.

The best case scenario is those existing speculators are indeed cash rich, or there are cash rich speculators waiting to pounce on the market.

The worst case is, many speculators rely solely on loan, and when they lose their jobs, or they didn't foresee not being able to flip the houses in time. They end up defaulting and market gets saturated with these props.

This post has been edited by TheDoer: Aug 9 2011, 04:02 PM

Optimism is good because it motivates us to achieve a certain goal. Getting through a rough spot, making things come true.

However, optimism in the market, is simply rewarding each other with more optimism only. Nothing is gained.

Example given, When I am optimistic that I can score an A in my exam, I will be motivated to study hard, and succeed.

When we are optimistic that the price of something will increase, we are later paid by people whom are optimistic that the price will go up even higher.

The real product of our optimism here is simply more optimism. It isn't real. It's just alot of hot air. And something with the foundation of nothing will eventually collapse.

haha. yeah, maybe we should withdraw all our money and enjoy it before it's too late.

Help the economy in the process.

simple. If our economy is effected then it will.

If "somehow" Malaysia's economy is unaffected by the US. Then should be no problem, because RE speculators aren't so easily scared.

Easier said then done. Out of a 100 people. How many will know what's the correct time/location, despite all the homework?


It's being realistic. Optimism can't sustain us forever.

Infact it was optimism that got us here in the first place.

Borrow borrow borrow, buy buy buy....

Now that shit has happen, the speculators are pointing the fingers at those who foresaw where we were headed, as though we had any control over it.

aiyah... this one all tipu.

Who knows whether it's a discount or not? They can put any price they want. As long as there are enough optimistic people to buy them.

And this optimism, has nothing to do with what people can actually afford.

In away yes, I have a choice. But do I really?

Supposedly, everybody in the same boat, should know how to behave for their own good. but when everybody starts rocking, my choice of not rocking doesn't really make a difference. And of course, me rocking, wouldn't be helping either.

I wished there were.

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Added on August 23, 2011, 4:47 pmI wished I could.

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And whatever it is. Doing it, while not rocking the boat in the process. Else, I'd be no better.

This post has been edited by TheDoer: Aug 23 2011, 04:47 PM

From my layman's POV. I will sell my thing, at a minimum of what I paid for it. And no higher than the market value if I want to get it off my hands fast.

I believe that the reserve price reflects this.

And this could be that the bank loaned a big amount to the defaulting borrower. Forcing the bank to set such a high reserve price or face losts.

Only after several no bid auctions, will the price of this units drop.

my personal non professional POV.

That's why I said "and no higher than the market value".

We must not look at banks as reality players. They do not buy and sell property for a profit. They take risk on people, not directly on what ever investments these people are making.

When a loan defaults, their first objective is to liquidize assets seized as soon as possible, with minimum lost.

If the starting bid is already above market price. Then it runs a risk of nobody buying it, and they have to hold on the prop a little longer. Note that the previous loan amount (market value) may not be the current market value.

And what will happen if they start accumulating assets that they can't sell? They'll no longer be a bank but a realtor/car dealer. And they take on the risks of a property speculator.

If they start the bidding lower, at market price for example (even at a lost), they can hope that a bidding frenzy will bring the prices back up.

So reasonably, if it was me, the highest I'd go at my first attempt will be the market value, even if it was at a lost.

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Added on August 24, 2011, 1:48 pmIf the banks were indeed interested in prop investment, why do they, offer you a loan, while they could be the ones who purchase those "sure win" investments?

It's because they do not want to get involved in it.

In a gold rush, the surest profit is the tools used for mining.

What the bank does is they take a risk on the borrower, by considering his ability to pay back. If he can pay back, then even if his investment drops in value, he will still need to pay it back, or declare bankruptcy. Which the bank is sure, nobody wants.

In the worst case scenario, that bankruptcy is declared, the bank tries to cut back on losses by liquidizing the collateral asset.

This I believe is the strategy used. If I was the bank.

This post has been edited by TheDoer: Aug 24 2011, 01:51 PM