Please stop reading if you're in property price will not go down camp. Take own responsibility if you still persist to go on. Don't blame the author for making your day bad.

Fact is the real estate market has slowed and the signs of further slowing is growing every single day.

Forget about U.S and E.U, everyone is tired about the gloom and doom there.

Better shape countries like Taiwan (don't argue, is a sovereign country and maintaining its own military), China, Korea and Australia face difficulty to maintain economic growth. For example, Australia coal, iron ore and copper export has slumped. For the past 6 months, Australia total home sale has dropped and recorded the widest drop in July 2012. Price in some second tie markets for high end sector (>AUD1m) has dropped significantly as much as -40% or more.

China fresh grad unemployment rate reached double digit this year (check Al-Jazerra latest documentary on China graduate). ZhuShanJiao 珠三角, Guang Dong Province (the locomotive of manufacturing hub in southern China), area like Dong Guan registered NEGATIVE -11 GDP contraction due to large numbers factories closure.

Though China official GDP is 7.1% but the reliability is quite questionable. China financial market is not reflective the entire picture because shadow banking plays a large part for the medium/small enterprises. Last year reports of massive shadow banks run begin to surface from WenZhou, ZheJiang Province which has alerted Wen to intervene. Australia, Korea & Taiwan export to China begin to contract in 2012 and China electricity production did not grow from 2Q, 2012. It tells us the situation there is not good at all.

Those in Malaysia who believe the property price can be sustained and grow (maybe slower) despite the economy gloom and doom around the world is living in fantasy.

Property price can only be sustained if you and me, brother/sister, your friends and enemies, good or bad neighbor, untie and uncle.... ALL, is able to continue paying the installment and rent on time to bank/landlord regardless of how bad the economy will become. The market really don't need many people failing to do their commitment for destruction the working of the financial chain.

Fictitious case. Just for illustration. A 3 years old condo with 400 dwellings. All in one size 1000sf, bought all in one price RM350k (now market price is RM500k) and 80% of them bough with 90% bank loan. When recession hit, 2% of them losing job and 3% of them have pay cut. So, 5% of them have problem to repay installment. 1% of them have saving while 1% of them, family can help out. Then left the 3% under water and foreclosure is inevitable. 3% is equal to 12 units of houses, is now on lelong. Let's say the lelong price is RM500k and under such economic downturn and large number of lelong is available, finding taker posses its difficulty. So, auction price has to be reduced, say, -10 to RM450k. If a different owner, financially better shape, want to sell his property now in an open market, he is not likely to find buyer at RM500k. Like it or not, RM450k is the realistic price (if there is taker of the auction price at RM450k. If not, further reduction is expected). When only half of the auction houses are able to sell, the remaining 6 will be further reduced. What if after further reduction, still no taker? Well, banker has to shoulder the liability without cash flow. When the vicious circle spread, it will force the market to raise interests rate as bankers now is facing reduction of cash flow. When interests rate adjusted upward, we can imagine the the ugly picture followed

To believe the property price can be sustained or rise is equal to believe all the parties in the chain can do their part without failing. All of us know very well, it's not possible.

When the export drop which is happening now, the affected companies is going to bite the bullet and under such circumstances, the problem of laying off surplus labors and suppliers is inevitable in order to survive. Chain effect: our neighbor working in those companies and friend who is supplying the material to the companies and our government who collects tax from those companies. People spend less and .....

It is a tough time ahead, friends.

Obama is trying hard to reelect in Nov 2012 and he, as well as Mitt Romney will try their best to win voters than curing the economy (U.S has just reached 16 trillion deficit 2 days ago but who is talking it now? Still remember all the huhu-haha in Aug 2011 when deficit hit 15 trillion mark?). Angela Merkel will face the same as Germany election going to take place by latest of next year. China, just settled the recent largest political scandal involving the influential Bo Xilai, make no difference. China main focus now is the 18th National Congress of Commuinist China soon to be held. Who will take charge after Hu/Wen will be decided. Thus, it can be speculated that those politicians are buying time time for the moment.

i wish to feedback from the economy pov instead of prop$ pov. we have learned that it will b a down turn every x yr, where the x is an unknown. when the bear comes everyone & everything will be hit.
yes, the sign is there that a winter is coming, whether it a true or false sign is still remained to be seen although imho there is 80-90% chance that the stormy winter isn't far away.however i hv also stressed a few times that we need weather the storm to grow stronger as it is part of life. jz b prepared & u will b allrite.

This post has been edited by humble_tot: Aug 31 2012, 07:03 PM

I actually wanted to post the same topic...and i agreed 100% with what u said...i myself predicted that in a few months, most probably in 2013, the world economy will crashed and burnt many young new property investors out there..dont believe what the property developers said or what you read in the newspapers, its 99.9% bullshiit..trust me, im a mortgage banker...the is simply too much greed in the market today...you can buy a property with just 1.5% downpayment, developers claiming how much appreciation and rental income you can get, but how much a Rm500-Rm800k small condo appreciate, with hundreds of competitors at time of completion...imagine a 625 sf condo new at Rm180k, went to rm330k, Rm360k, Rm380k, than Rm450k and now Rm500k, in a space of just a year plus...there is simply too much greed in the market today...if prices continue to rise, nobody will be able to afford to buy

This post has been edited by brother love: Aug 31 2012, 07:09 PM

Fren, anyone who drove back to balik kampung during the holidays will see vast expanses of empty land, even in places nearby KV, look at Sungai Buloh, Klang etc, we are not Singapore or HK, pls spare us the classic developers excuse for rising property prices

Wah really aa? Then I should buy more. All taikors, go refinance your house. Jualan murah-murahan is coming.Huhu. A good investor can make money regardless of how the market is. That is my point of view. Although how I wish jualan murah is coming, I doubt it will happen. If it does, it will be a christmas gift to all. Being a property investor, you should know that you need good holding power. if no holding power, better play something else.

This post has been edited by AMINT: Aug 31 2012, 07:37 PM

The only properties that will crash and burn will be all the high end condo/penthouse that is more than 1mil and all the 400k SOHO/studio.
If you guys think that you can get any 2storey link/semi-d house in PJ and prime area in KL with price from 4years ago, please stop dreaming.

An economic crash as severe as 50% decrease in property price will affect everyone in Malaysia. Dont talk about flipper, even the normal people will have problem getting food on their table. There is a very simple way for them to curb the property price, increase the interest rate. The current problem is very simple, the interest rate is too low. Just compare the FD interest rate with the loan interest rate, obviously most people will park their money in property. Besides for new development, you don't even have to pay anything if you have DIBS, rebate and all those discount.

Let your money depreciate in the bank if you guys are scared. Just dont cry 3years later when you find out that all the properties in good location are sold out and are still as expensive as they are in 2012.

If you ( TS and those who agrees with the prediction) have the magic to make the price drop, please do so. I will be happy coz I can buy more. Gotta get ready more bullets. huhu

Property price correction is more likely not crash unless malaysia is experiencing 97/98 crisis again where interest rate sky rocket and our currency is worthless.

Those are pretty marco pictures but on a specific basis some segment will survive and some will be affected like to shoe box, pigeon hole, soho, sovo, isovo o watever u call it. I'm sure good landed property are still very much in demand.

When one expect crash to happen very likely is not going happen coz naturally some form of precautionary measure already kick in to balance the market. Crashes happen when no one can predict.

Techically market correction is good. At least it can help to ensure market balance and sustainable growth on the fundamental of demand and supply.

Also not to discount factor of inflation into equation and currency is very much driven by value of global commodity that we see today.

let's go kelantan and stay there, big land cheap house.

Temerloh oso not bad. Just went to fren bungalow with big land n very huge b/u. It cost onli 1.5mil inclusive land. FYI, land 15k b/u slightly more than 10k. Walao. Mana cari kat KV.

ehh... KL also quite often one geh... maybe stay in cameron highland la

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Added on August 31, 2012, 8:48 pmehh... Aussie such a big country also experience slump in prop market..

This post has been edited by twincharger07: Aug 31 2012, 08:48 PM

If i work in aussie, i will sure find for one. But monitoring from malaysia or anywhere else is troublesome

wow, such a wonder land. additional holidays provided?

how about construction cost rising, material rising and labour cost rising etc???

The key is Cash in hand.

What makes one think that ones' property (with outstanding loan) will withstand any crisis?

All standard excuses by developers...bro im not talking about vast expanse of empty land and spaces in Kelantan etc, im talking about right here, Sungai Buloh, Klang etc so many land avalaible, where is the so called scarcity ...dont forget those Rm600-rm800k condos, do u serouosly think the prices could go up to Rm 800-1million, many young investors will be burnt when the market crashes...and oh ya, forget those good sounding jargons su h as " price correction, cautiuosly positive" etc these r all propaganda, a crash is a crash

but they dont rise triple i guess.. unlike props in certain area raise from 200psft to 600psft in few years..

In Aussie, a totally diff. ball game.

- High interest rate .
- Your profit from property rental is taxable (bare in mind, higher tax in aus)
- council and water rate around aud2k/yr, if apartment, somemore got strata fee!
- is advisable to have 20% DP.
- if you are non resident, then you will need to pay higher tax.
- plenty of land in the suburb if you are willing to travel to office.

+negative gearing.
+ tax deduction on investment asset depreciation.

IMHO, Msia still a better place for property investment! Moreover, by paying RM, I have more holding power if the economy slump!

What I like about AUS!?? "LOW RISK" saving acc., a saving account - more flexible than fixed deposit but can generate interest of 5-6%/annum without commitment

Perfect theory and great prediction

The game went on too long and things started to mess up, very soon.

What can we do and how can we play our part well, when these big cooperation company are in a greed mind

The situation in developed country is different compare to Malaysia. Building are very well maintained. As such the property value are very much sustained if not increase over time. Some of the old building are very much in shape even after so many years, thanks to better build quality material, better workmanship and good maintainence.
Sometime in Malaysia the building or apartment value drop or did not appreciate much after a number of years as the building itself is so run down, paint color faded like levis jeans, poor quaility material used not to mentioned horrible workmanship...
I happen to ask one of my fren who is working in construction company in Singapor, they said most of their paint that used for exterior wall are painted with stain resistant paint. This expalin why less maintainence are required over a period of time and can be clean easily. Thus all building look fresh even after so many years though the initial cost is expensive.
Malaysian developer are using cheap paint which easily attract dirt and look pale after a while. Worse still with lack of maintainence mentality, the building itself so run down especially those flat and old building.