Jul 2 2013, 06:48 PM
QUOTE(Anon_1986 @ Jul 2 2013, 06:20 PM)
As usual, this thread has degenerated into a mess of ad hominems. All in good fun of course, but not a very fruitful discussion.
Nevertheless, has anyone cared to comment on the impact of the tapering of QE in the regional economy? The ringgit has fallen considerably relative to the USD. Where is the money flowing out from? Government Bonds? Our KLCI hasn't fallen that much.
Anyway, why is QE relevant?
To my mind, the fundamental value of property on a *macro* basis hasn't changed at all in the past 5 years. By macro, I mean the attractiveness of property vis a vis other asset classes, and the attractiveness of Malaysian property vis a vis property in other countries. What has changed is the perception of the investing public as to the attractiveness of property as an investment class. Whether that perception shift is permanent, or whether it will reverse is still an open question, hence the present debate.
I note that the momentum of rising prices has already faded, and this sucks a lot of speculative euphoria out of the market. I'm therefore trending towards a reversal in the trend, but only if there is a systemic shock to the economy because prices will remain sticky in the context of our kiasu culture. One candidate which I have been monitoring as a factor for a systemic shock is the outflow of foreign funds following the end of QE. A reduction in liquidity, the fall in the MYR and a fall in the stock market will lead to an increase in interest rates, and a reduction in the wealth effect, thereby reducing the demand for luxury products like fancy houses.
Any thoughts?
I reckon the uptrend is still intact but just at a slower pace. New launches are still fast enough to call for a higher price in term of psf. remember last year, most of the launches were in the range of 500psf to 600psf in the suburbans, new launches are now hovering around 700psf to 800psf within the same localities.Nevertheless, has anyone cared to comment on the impact of the tapering of QE in the regional economy? The ringgit has fallen considerably relative to the USD. Where is the money flowing out from? Government Bonds? Our KLCI hasn't fallen that much.
Anyway, why is QE relevant?
To my mind, the fundamental value of property on a *macro* basis hasn't changed at all in the past 5 years. By macro, I mean the attractiveness of property vis a vis other asset classes, and the attractiveness of Malaysian property vis a vis property in other countries. What has changed is the perception of the investing public as to the attractiveness of property as an investment class. Whether that perception shift is permanent, or whether it will reverse is still an open question, hence the present debate.
I note that the momentum of rising prices has already faded, and this sucks a lot of speculative euphoria out of the market. I'm therefore trending towards a reversal in the trend, but only if there is a systemic shock to the economy because prices will remain sticky in the context of our kiasu culture. One candidate which I have been monitoring as a factor for a systemic shock is the outflow of foreign funds following the end of QE. A reduction in liquidity, the fall in the MYR and a fall in the stock market will lead to an increase in interest rates, and a reduction in the wealth effect, thereby reducing the demand for luxury products like fancy houses.
Any thoughts?
what will be the market outlook for the next 6 months? I do not have any idea at this moment. someone can share some insight views?
This post has been edited by kh8668: Jul 2 2013, 06:49 PM
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