If you can time it accurately. Let's say you are sure your property will drop price in 1/2 year. Then sell now and 1/2 year later buy it back

Unfortunately, there are "buts" and "ifs".

What if the bubble didn't burst and price didn't drop ? Worse, what if the price actually increase ?

What if the price only drop in 2 years time ? Your rental incurred is it worthwhile to be covered by the drop in price ?

What if all the owners of the area have holding power and don't want to sell at lower price even bubble burst ?

What if when bubble burst, the economy is so bad the banks is very stringent in loaning money and you can't get loan to buy the house back ?

What if the price drop is only 5-10% ? Worth to take the risk now ?


Property for own stay don't need to worry about price up or down so much. Investment property maybe you can consider selling just before crash (if you are confident it will crash very soon)

I could not disagree as all points are valid

Notice you also have 4 "ifs" in your comment So a lot of uncertainties are involved in property investment. At the end of the day, it is personal judgement and 眼光

Just to offer the other side of the POV.....

Increase in Net Wealth is only possible if an investor takes the risk. If the investor is risk averse, then he has no chance of increasing Net Wealth in property. For the risk takers, although they have to live with higher risk, but they have the chance of increasing Net Wealth (or reducing).

Eg. Investor who are willing to take the risk in 2006/7 (like paikor), then the 5 properties have already giving returns of 2-3 fold. He is multi millionaire now. But investor who chose not to drown in debt in 2006/7, he is very safe and sleeps very well at night. But he didn't get the returns from the property boom.

So, all depends on individual's risk appetite. If you ask me how is the property market now, I would say 50-50 chance of either still going up, or it will go down. Risk takers will still go for it. And risk averse investors will wait and see

I guess you are not the risk taker type of investor. Safe, steady, unemotional and clear sight of your objective

I like risk. But not to the extend of blindly buy. Just last year, I was very bearish. But after Euro crisis became clearer, this year I have made some moves. Maybe I know how much backup I have, and I have experienced quite a few downturn before. I think the risk now is worth it for my situation.

Bro, finally u realize prices here are cheap

Buy buy buy !!!

There are all ranges of properties in KV. From RM100k up. Depends on whether you accept your affordability level or not. You can hope for the price to come down (or crash). The possibility is there. But nobody can promise you a date, or it would ever happen

It is just like buying a car. From RM5k secondhand kancil car right up to supercar like Ferrari and RR. Everybody wants a Ferrari, but only a handful can afford. So most people don't wait and get what is within reach at that moment. And hope they will progress up the corporate ladder and afford cars like BMW, Merc, or even a Farrari in the future

I think get real and accept your own financial situation is the first step. If you don't move your first step, how to reach where you want to be ? I also want to own a mansion in Dubai or a penthouse in Manhattan. They could cost tens of millions USD. And I can complain and complain the high price or I can wait for it to crash or I will just buy those that I can afford now and move on. Hopefully 1 day I can afford the mansion in Dubai or a penthouse in Manhattan, who knows ?

Bro, I beg to differ. The thread has gone to 11th version, coming to V12. Those UUU camp seems to be right all this while. So the answer is quite clear (up to today)

Downturn will sure to arrive 1 day. Therefore those DDD camp will be right 1 day and say "I told you so". But when that day comes, it doesn't mean that the UUU camp is wrong for the last few years. For those who bought in 2009 for say, RM500k and the value is RM1m today (100% gain), even if the downturn cause the property price to go down 30% (RM700k), they still are making gain

There are many 1st home owners like debbie throughout the 11 version. Let's say debbie did ask in the 1st few version in 2009 whether she should buy or wait, and she takes the advice of DDD camp. She would have missed the opportunity on hindsight. Likewise, if she takes the advice of UUU camp, she could have made 100% gain and posting comments like the UUU camp here

So, let's just wipe out what happened for the past few years, and start all over again now. I would say the chance of the market going down is 50-50 only. Should debbie wait or buy ? She will be facing the same situation in 2009 when we have V1 - nobody knows the future. So, if I am first home buyer, I would buy whatever I could afford now and don't bother what will happen to the market (because up or down, I am not going to sell it anyway). It is a calculated risk I will take and the risk is just like the outcome of flipping a coin - 50% chance I will be right

This post has been edited by EddyLB: Jul 13 2013, 11:25 PM

That is a very objective and close to reality observation. Those flippers who jumped in 2011, 2012 and 2013 may face bigger risk.

I always think the risk of the property market downturn is in the world economy. If world economy faces downturn, then Malaysia's economy is affected. Hence wage earners will face losing jobs. That is where the risk of bubble burst comes in. But I think world economy looks better than 2011/12 after the Euro crisis and USA is on recovery path now.

My flow of thoughts for the property market not going into a downturn is like this :

1. Banks in malaysia lends to only qualified borrowers (not like subprime loan) --> only a certain % of wages can be used to service loan installment. It is not like if a person wants to buy 10 properties, the bank will lend to him. It all depends on his affordability
2. So, if property owners' job is secured --> they can service the loan even if rental market is not good
3. If malaysia economy is on positive region --> their job is secured --> No forced sale
4. Malaysia economy depends a lot on world economy. If world economy is ok --> malaysia will be ok
5. Currently world economy seems to be better than 1-2 years ago --> euro crisis improve + USA improve. (although now China's turn to be of concern)
6. It is true if interest rates goes up by 2% or more --> installment increase --> property owners will be affected --> forced sale. But judging from the world low interest rate environment, I think the interest level will remain the same. But the risk of interest going up is there
7. BNM and banks has since late 2012 became more stringent. We can see now usually the bank valuation is lower than market, LTV is lower and many rejected application compare to pre-2013. I think after the limit of loan tenure to max 35 years, this coming budget we will have some more mild curbing measures of property market. If the market can be cooled down slowly, we will have a healthier property market which increase more normally

So I think property downturn is depending a lot on world economy. And it is only 50-50 we will see a downturn. Just my tiny opinion

Ya you remind me of GST. If it is implemented in budget 2014, the housing price will go crazy.

Seems that the Euro crisis and US economy is not of people's concern nowadays, but china's risk is getting bigger. The china credit crunch just weeks back suddenly brings up the interest rates concern. And it went up to 10%+ for overnights. If it were to happen to malaysia again (it did happen when overnight rate went up to 40% in 1998 and BLR went up to 10%+), it could trigger the downturn not only in property market but across the board. Just imagine we are paying 4%+ now, and suddenly our interest goes up to 10%+, many unprepared borrower will be forced to sell their properties

Just to put things in perspective, a RM500k loan with BLR-2.4% and 30 year tenure, the monthly installment is about RM2400.

If BLR goes up to 10% - 0%, then monthly installment is RM4400. An increase of RM2000 pm ! If investors have no reserves for this situation, then the only option is to cut loss and forced sell

How likely is that going to happen ? Anybody's guess My guess is the chance of this repeating is low because no countries wishes to see china goes into that situation. Or china itself will just follow USA's footstep to print even more RMB than US$

In either situation, the most important thing is we the borrowers must be prepared for the worst and don't over-borrow

Customs proposes standard rated supplies for commercial properties and exempt supplies for residential properties. What it means is :

1. For commercial properties, we have to pay GST of 4% (or 7% as suggested by the stupid new minister) on sales price. So,if we buy shophouse or SOHO under commercial title, the price will be 4% (or 7%) extra

2. For residential properties, consumer should not pay any any GST. The government expect the developer to absorb the tax on input supplies. Ie, all building material, sub-con for labour will still charge the developer 4% (or 7%) but the developer cannot pass the 4% extra to property buyers

Ideally that is what is hoped by the government. But looking at the sugar price increase vs teh tarik price increase ? In malaysia, will businesses not take advantage of the price increase and make an excuse to increase their profit ?

I personally am not optimistic that the businesses will stick to what the government suggest. On the contrary, the businesses will just see this as a chance in their lifetime to profit from it. I would think the increase could be in the 5%-10% region. We might need to fork out additional RM50 psf for a current RM500 psf unit. All in the name of "expanding our national tax base" that actually goes to RM500 BR1M, laptops that cost RM30k and RM700 screw driver

Yea free market is determined by supply and demand. With GST 3 things could happen

1. Price goes up, nobody buy --> supply > demand --> price reduce
2. Developer don't want to absord cost, hence scale down on their projects --> supply < demand --> price increase
3. A new equilibrium will achieve and the price is stagnant at current high level

It is still uncertain now. But 1 thing I am sure, first home younger buyers will even complaining more it is so unaffordable !

I like your style !

Where ? Where ? Where got ? I don't see it !!

IMO, 2008 there were china and euro economy which cushion the effect. Our commodity petroleum and palm oil were enjoying historical high prices. And China was still riding high on the expansionary effect on beijing olympics while Euro's economy was red hot. If you are working with US companies during 2008, like Citibank, then you could have felt the effect. Otherwise, we were fortunate that other parts of the world economy saved us

This time if ever china faces crisis, hopefully USA economic recovery will save us

Yes. China is still growing at 8%+ then. Even that, countries around us mostly experiencing recession in 2011/12. On the other hand, Malaysia still grow by 5% because Ah Jib Kor is spending indiscriminately. Internally supporting our economy. Ah Jib Kor is doing a good job in this instance and we should be thankful to Ah Jib Kor

Apa Cina Mau Lagi ?

Now they are doing the right thing !

As the chinese saying goes "cautious allows you to sail your boat for 10,000 years"

The DDD camp will say all economic signs points us to economic slowdown. They are right because all numbers from countries all over the world say so

But the UUU camp will say the bad economic signs are not new. 2007/08 we got USA sub-prime crisis. 2010-2012 we got Euro crisis. Look what happen to Malaysia property crisis during this period ? Still goes up 2-3 fold

Depends on who is gungho enough to ride the boat that will sail for 10,000 years

You are referring to flippers. They just want to turnover and make money. Buy sell buy sell buy sell. Not denying there are such people in the market.

But not all are like them. There are other types of people call investors. They buy and hold. Sell only when the price is really attractive. These type of investors are more prudent. They buy only when they can afford the installment. And in terms of quantum of money, buy and hold for long term like 20 years makes the most money.

To all those so-called economists

I have said it before. Economic downturn is a phenomenon. It is a cycle. It is not like something we have not seen before. What is so strange, or why are you afraid of it ?

I am sure most of you here have experience the 2008/09 downturn right ? Did you survived ?

I am sure many of you here experienced the 1997/98 downturn right ? Did you survived ?

Fewer but I am sure there are some here have experienced the 1987 or earlier downturn. But we survived

It is not the end of the world for economic downturn. If you prepared well, you will ride through it. In 1987, the company I worked for almost went under. But we persevered, we managed the situation and the company emerged stronger

In 1997 my companies faced the downturn, it was not a pleasant experience. We cut loss, we re-organised, negotiated with banks, and we re-emerged stronger today. 2008 was not as bad and we were fortunate it was over before we realised it was a downturn

During downturn, we manage the situation. We adjust to the needs. We cut cost. We spend less. Personally, we also adapt lah. Previously we eat out in good restaurant 2-3 times a week. During bad times, just eat at home. Breakfast eat gardenia bread lah. You won't die. Previously we change car during good times. If no money, just repair it. And you won't die if you don't wear designer cloths. 穷则变，变则通 (if you are poor, you change. After you change, it will turn for the better)

You will face it when it comes. Just need to prepare for it. Those flippers who are too aggressive will learn the lesson. If they can't make it, they will bankrupt. They deserve it because high risk high return. But they won't die. Seldom we hear people bankrupt and jump down from the 14th floor in malaysia

Don't sound like you have never experienced economic downturn before, please.....