Well...i sort of agree to this, and this is one way or another similar to the Monkey story with reference to Stock Market....

But, one thing we need to realize is that, A owns 2 coin is because he traded or he invested.....so, if you worried too much and not investing....you will remains owning 1 coin...well assuming that inflation doesnt take place, you are still just ok.....I prefer to be ended up like A or C as at least C has someting to trade again......after a few years....the story of A, B and C will happen again....people tend to be forgetful..

When we are discussing bubble, prices, etc, there are a few points we need to be awared of:

1. We cannot compare price 10-20 yrs ago with current price. We should look into NPV if really want to do so. We all know that 50k 20yrs ago is much bigger 100k today. Unless we dont have inflation at all .... Ask anyone who had bought their property at 50k, 30 years ago...now, their property (in KL) would be at least 500k, and some even 1mil or more. Ask them to sell off their property and find a similar one....if they do, most likely they need to move out of their current neighbourhood, and move farther by another 10km

2. 30 years ago, max loan period is 10-15 yrs and yes, we can get 90% loan. But are you guys aware that BLR was like double digit. So, you are actually paying 13-14% at one time for your mortgage. I agree that currently the loan period is extended and margin of finance also stretch to the max, so it might appears that we could afford such a property. But ultimately, you can get a 40 yrs loan, but it is better to plan your affrodability based on 10-15 years or even less than that. Example would you buy a house at 500k when you are earning 30k a year, assuming that you can get the loan approved. In fact, many people are advise to buy a property not more than 5 x of their annual household income. Same thing here, i have seen many fresh grats buying 100k car, with just 3k salary....so, you are spending full 3 yrs of your salary on car (without eating, drinking, etc)...we can blame the government of course, but when we have no choice, we just have to regulate and be discipline.

3. Bubble is forming on everything that involves speculation. Is the stock market on bubble? Dont forget that our money in EPF, unit trust or direct ownership of shares are directly related to this sort of speculation....we can claimed that we have carefully study and analyze this and that , so we are investing and not speculating....in the end.....doesnt it really matter....the impact would be similar if the economy is not going as per how we expect it to be.....

4. If we are buying on needs rather than wants and seriously to the best of our ability to minimize our commitment and respective risk (there is obvious risk, we cant run away, but, try not to max it out, unless you really have the appetide and ready for it), then negative impact will be lesser.

5. Not easy to stop bubble...because when economy is doing well, a lot of transactions and purchases are done (vice versa). so, obviously there will be certain capitalization and thus inflating the cost....if i operating a restaurant that has enormous demand, and people are queuing up everyday....do i have the motvie to reduce my price....guess not, well i will be most likely thinking how to capitalize on this.

Property price down doesnt mean more people will go bankcrupt..we need to look at the factor in which the price is moving on a down trend. It could be just technical adjustment on demand and supply...IF the economy situation is really bad, when people losing job, then your wish will come true...property price will go down, bank will start to tighten up the restriction on loan, ...

FYI....Extracted from TheEdge:

"According to another analyst who tracks the property sector, local steel bar prices dipped from a high of RM2,500 per tonne during the year to around RM2,120 in 4Q. They are now trading at around RM2,120 per tonne, he added."

Steel is one of the key component which contirbute to substantial material cost within a construction....So tell the developer if they want to increase price, just increase it, but dont give stupid excuse like material cost increasing.....

Our salary unfortunately doesnt guarantee that we will have enough to eat, travel, buy house, etc. In Japan, even the salary is much higher, buying a house even for degree holder is close to impossible in the city. Well, you may still be willing to buy, but you might need to compromise so many things that in the end might as well just enjoy life a bit.

Here in Malaysia, there are still plenty of options for house. Of course, please dont expect to stay next to KLCC if you are working in KLCC when you just graduated (unless you parent paid for that).

Degree/Master is really common nowadays. Really no big deal.

All of us suffer from inflation, so, apart from tightening our belly, we have to learn how to make more money.

So many youngster hoping for property market crashing down...but ultimately, if the property market is down that significationly, many people might be out of job. so, you might not even look at buying any house at all.

Well, i am not that naive to think that property market would never collapse or experience correction or crash....but it is the same with any kind of investment, everything has a perceived value. And at different time, on different occasion with difference crowd, you will see different perception on the value of the said items. To be honest, i even think that one day the gold price might also be correct heavily....Also crash and correct could be very much different as the root cause might be different. Correction is more of the typical economical cycle or behavior which involve factors like supply and demand. But crashing could be caused by indirect facotr such as collapse of stock market, etc.

In property, the fundamental has to be right, amid any natural disaster or other economy crisis or even the population size, property is where people need to stay, work, do business, etc. So, in other words, the demand for property will be there and could be very dynamic becuase situation changes. So this area could be very popular now, but the popularity might be swifted over time to another location dur to unforseen circumstances. Unlike gold or stock, property has a basic value (let's ignore about war at this point of time).

Location factor had been mentioned repeatedly, but today location doesnt really guarantee for long term gain. All of us are somehow greedy, wanting more and more, better and better, so this drives us to invest and to upgrade. If the gov is not controlling this well, it is not hard to expectation bad consequences, but overcontrolling it (too aggresive) too will also affect the economy of a country to a certain extend. It is not easy because there is no formula to do this....it is thus much easier to evaluate the effectiveness of such measure after a certain period of time.

Enough had been said on the price of property, but i think that for those intended to get a house for own stay, you have to understand the price that have to pay (on intererst, repair, etc) and thus chosing one that falls within you comfort zone (risk perspective) might be more appropriate if you seriously worry about house prices. Everyone can predict, but that remains as prediction. In other words, everytime is a good time to buy if it falls within your comfort zone. Dont worry too excessively about losing job or so, because like many people, let's ask ourselves sincerely, how many of us can really survive without any income for a long period of time?? i guess not many.....

Of course, if you are a risk taker, then feel free to go ahead as well. As long as you understand the risk and know how to mitigate them......and most importantly willing to face the consequences.

Keeping a dismay outlook for future is really demotivating.....what is the price crash, what if i am retrenched, what if i have an accident, what if I have critical decease .....always be positive (not excessively) and be open and prepare to accept anything that might not falls within our expectation or bad things ...

This post has been edited by spydermind: Feb 29 2012, 09:29 AM

Agree , but the fact the people (either you call them forgetful, ignorance, naive, persistence, etc)...is something which keep the economy moving....imagine if one country operating on a aextreme caustious manner, people never want to buy or invest, people keep saving money, people less likely to take risk, etc...it might not be good also...so moderation is still be better option (if compared with overly conservative and caustious)

Absolutely, price alone cannot justify that it is a bubble. If there are solid demand (demand more than supply) for that location, i dont see a problem. Of course, if the market crash, every where will be affect somehow, so we cant really say that market crash means bubble bursting....

Anyway, we are not here to discuss about terminology....when the price is down, who really cares whether this is a bubble burst or correction, etc. I understand the sentiment here that many feel that the current price of houses are non realistic or non -sustainable. I do feel the same, but if i need a house, I will still probably go ahead....of if i am convince about a property for investment, i might still go ahead (becoz i might think that my judgement is right, as usual, everyone thinks they are right). There are people making tons of money when the market is going up, there are people making money when the market is down as well.

At current rate of development, certain area would appreciate faster than another....if the demand really exceed too much and the desire to cash out becomes more urgent, then the price might also be reflected downwards. I remember one forumer mentioned it very well, if we are lucky to spot the right fundamental of a type of property at the right location, we might be making more money or experiencing less loss.

Unless a liquidity crisis or other disaster, i think certain residential area would be more resilient. But for those who only own one house and staying there, it really doesn t really matter in the price is increasing or down, you should be more worry about the continuous income to pay of the debt (which si still the same). Well, unless your house price increase much much faster than other location, then you might have the option to cash out by changing to another area or house which is cheaper, then you are able to reduce the debt...this is only if you are willing to do so. In the past, a lot of Singaporean used to be doing so, moving house every few years but furthermore can get positive cash flow from the move.

i guess you are right....after listening to many...at the end of the day, just listen to your heart.....

Yah, when DPC was launching...people already say crazy, price in kepong 30% more , etc. then Sunway SPK selling 2.5 S at 600k+, people already say crazy.....Cheras (Alam Damai), Puchong puteris, 350k+ 2S already consider expensive back in 2003-2004.....Relatively, even at that time, people already complain expensive.

So, put it this way, salary will never be able to catch up.......

Very interesting analysis...you have your point ...

to become alike to Japan, I would first of all, like to see the salary income reaching that level......

if most people cannot survive and losing job (income), the chain reaction will be triggered and affect people along the economy chain....

In this case, not only property, most investment will be tough to sustain....including gold.

So, if we are using a typical massive economy downturn as a extreme test case, well, you will end up not invest anything because, the value of most thing will be significantly reduced....

Focusing the discussion on the direct impact may be better...

really funny ...so many people earn 600k and 6 mil discussing in this forum....guys and gals, you all are so lucky man...

By the way...how do you earn 6mil? Mind to share...i bet that you dont buy gold but rather trade gold right???

I dont think so....how many investor are from US purhcasing houses in Malaysia?If I am an American and if i can get financing, i would prefer to purchase in US rather than here....Malaysia property market is less likely affected if foreigner pull out their property investment as we have the least ration of property purchase by foreigner compare to Thailand and Singapore.

What do you mean investment that is saturated?

This is not only KV ....so a more concentrated satistic would be good for KV (PJ, KL, Ampang, SJ, Puchong, SA, etc)