That is the million dollar question ! 

The DDD camp can keep on saying it will crash 1 day. And historical trend showed this day will definitely come because everything that goes up, will come down. So, they are bound to be correct 1 day.

But when ? By believing "that day" will come, they have lost so much opportunities. They have missed the boat this round while many others make money. Of course, there is always risks to invest. High risk, high return. No risk, no return.

I have seen so many people become millionaires for the last 6-7 years, all because of property prices going up 2-3 folds. Buta-buta a man walking on the street who bought 2 DSL or 2 Condo in 2006 onwards is a millionaire now. Those who own land make even more money. Although many millionaires are still on paper, but at least they are millionaires in their own rights.

Sometimes, I really pity those who missed the boat. Opportunity of a life time is lost. Some DDD camp like tat3179 and tikaram realised their mistake and turn to BBB mode. So, it is still not too late. I think they are clever, because they 不跟钱过不去. Whereas some die hard DDD camp still in denial mode after so many years and never given up on their belief. The only good thing about holding to their belief is that they limit their risk   

As long as an investor has holding power, it is never too risky to invest. Even if the market crashed, but in long term property will shoot up again as proven in the 1980s and 1990s (2000s property market never really came down). So the key is holding power. If an investors have other sources like a job to service bank loans, even if it is not tenanted, the investors do not need to do fire sale. The real risk is the investor does not have holding power and over-leveraged.

Gold hits 2-1/2 year low as Fed flags end to easy money

http://finance.yahoo.com/news/gold-hits-2-1-2-122811119.html

Instead of property crashes, gold gone case 1st.

Scenario when interest rate go up.

lets say interest rate go up 1%. If you choose to remain the loan period then the instalment will be higher.
For loan amount 400k.30 years loan period. Instalment from 1950 become 2200.

At the same time, demand for rental will be higher as well. Because is harder to get a loan and more expensive to get a loan now.
You still need a place to stay. End up , you still need to rent a place.

if rental demand increase, 10-15% increment in rental is very likely to happen. Then u can rent your place out at 2200 easily to cover your instalment.

Pls share your point of view , if you dont agree with this scenario.
thanks

I also agree "build then sell" ! (now you write longer and I understand what you said  )

DIBS means the developer adsorb interest expense during construction phase. So, the price of properties is imputed in the selling price (ie. price increase)

If you want "build then sell", not only does the developer need to bear the interest expense, they have to find banks to lend them money during the construction phase. So, instead of now DIBS interest mostly BLR - 2.4% = 4.2%, business loan is around 8%+. So the cost of construction is increased, and guess what ? The cost will be passed on to the consumers --> another round of price increase.

How you expect the price of property to come down ?

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?

Many of u also share knowledge here and jus doing my small part 
I dislike going to deep into details as per the ddd campers have shown here. they tend to lose sight of the big picture and hope for their theory to bear fruit. they assume things happen in isolation and not the effect of many other factor seen and unseen, domestic and international 

I am more interested in share market rather than prop due to its liquidity and the ability to short if things goes south. its good to see u understand qe, interest rate as most others find it difficult too  Jesse Livermore says "The market is operating in future time. It has usually factored in current events". thus the dow at 15k is very telling 
interest rate low, almost everyone take advantage to borrow and deploy the funds to be invested. when int rate increase, its time to repay those loan. so must exit whereever the funds r deployed in a quick manner. do the fed increase or reduce int rate sesuka hati?  with the obama in power, we stil got 4 more years for dow jones to go higher and play this out. awaiting secound round of earnings season, if goodie, there goes gold 

this thread does not hav much academician to answer your queries. even if the academicaian teori r correct, they would all be billionaries and no longer academicain. they can debate the right and wrongs. but if money is not on the line. how la they wanna profit? ok la, to entertain u on effects of int rate, it needs to correlate with the effect of recesion that some forumers felt here 

http://finance.wharton.upenn.edu/~rlwctr/papers/8824.PDF
no one economic event on or about october 19, 1987 can explain the record collapse of equity prices that occured on that day..... however the cumulative effect of rising interest rate appeared to quickly shift sentiment of investors..... the proximate cause of the tock market decline was the  rise in market long term interet rate which reach their peak on the morning of october 19

http://www.stanford.edu/~mckinnon/papers/M...nge%20Rates.pdf
The Asian crisis of 1997-98 was worsened by an earlier carry trade with Japan. By 1995, Japan had fallen into a near zero interest rate liquidity trap with a weakening yen. Hot money poured out of Japan and into the Asian Crisis Five: Indonesia, Korea, Malaysia, Philippines, and Thailand. Although Japan was not the only source for over borrowing by the Crisis Five, they became badly over extended in their foreign-currency indebtedness. Thus when speculators attacked Thailand in June 1997, the contagion spread to the other four by the end of the year with capital flight, widespread financial bankruptcies, sharp exchange rate depreciations, and sharp downturns in output and employment.

http://www.aaii.com/journal/article/dont-f...k-market.mobile
Long Term: Don’t Fight the Fed..... However, the market rose 85% of the time in the 12 months after the first rate cut. I believe this statistic is the most compelling for why you don’t want to wait too long in responding to the Fed’s actions. Eventually the Fed will get it right.....

The S&P 500’s average six-month price rise after the start of each rate-hiking cycle was only 2.6%. This abnormally low price advance was likely the result of investors being their old, anticipatory selves. They expected stock prices to suffer from the oncoming rate increases. And 12 months after the first rate hike, the story wasn’t too much different. Stock prices rose an average 6.2%, 200 basis points below the longer-term average annual price change. In other words, rate increases, and the prospects of even higher interest rates, have traditionally kept a lid on stock market price advances.

Sales figure fr HK exports. Not sure if any1 need tis to argue for the price movement of props. 

1 thg to take note, thou price for gold plunged more than 20% and many HKees or cinamen grabbed tonnes of gold, but stil the retail side didnt show attractive figures. Remember, it gold which cost high value. Huge volumn with lower pricing ll nvr boost figures. Some bizmen ll und tis especially if u r in raw mat industries.

Of cos, comments and criticisms are welcomed. I'm no economists. So cant write panjang lebar to show any sense. Just ignore me if I'm wrong.

Paiseh paiseh.

For gold price over the yr: http://www.bullionvault.com/gold-price-chart.do

this was in reply to Anon_1986 specific on interest rate only, coz only banks and ah long can charge us for it
do u follow faber advise or not? http://goldnews.bullionvault.com/marc-faber-060420134
Marc Faber: My asset allocation consists of 25% in equities, 25% in gold, 25% in bonds and cash, and 25% in real estate. I am hoping for the best

I can agree with most of his points 

My sense is that we are in a market similar to the Nasdaq 100 between November 1999 and March 2000 when it rose past 100%, or the oil price between February 2008 and July 2008 when it shot up 70%. When there is upside acceleration, it's a bad time to buy. Is it a good time to short? Yes, if you have deep pockets, maybe it's a good time to short the equity markets. But who knows?

Marc Faber: Revenues are hardly growing with sales. Just look at McDonald's or Wal-Mart. The market is going up because central banks are printing money. The money that is being printed does not go into the economic system evenly. It went into Nasdaq between 1997 and 2000, then it went into the housing market until 2007, in 2008 it went into commodities and now it goes into the broad US stock market. One does not know when it will end, but it will end very badly.

Marc Faber: The performance of the global economy. It is obviously not performing well at the present time. And for that reason, interest rates may stay low. I want to make one thing very clear: Interest rates will one day be higher than they are now. The question is when? This year? In five years? But the sentiment around bonds remains negative, while bullish for stocks.

Marc Faber: Junior mining stocks got hit very hard, for sure. I am on the boards of several exploration companies, and I can tell you that gold mining is a very tough business and it requires a lot of capital. One problem is that exploration companies have no cash flow. Every month, they bleed more cash to keep on drilling and to maintain overhead. If gold and copper prices do not recover, then a lot of exploration companies will simply not have the money to continue operations.

I cant find his fund performance, can share or not? or he makes bulk of money from newsletter?
wat the vital part missing? u can share here too

u need to ask the agentdiary, coz he is big fan of doom and gloom 
I do not follow faber newsletter nor can I check his fund performance either

this was in reply to Anon_1986 specific on interest rate only, coz only banks and ah long can charge us for it
do u follow faber advise or not? http://goldnews.bullionvault.com/marc-faber-060420134
Marc Faber: My asset allocation consists of 25% in equities, 25% in gold, 25% in bonds and cash, and 25% in real estate. I am hoping for the best

I can agree with most of his points 

My sense is that we are in a market similar to the Nasdaq 100 between November 1999 and March 2000 when it rose past 100%, or the oil price between February 2008 and July 2008 when it shot up 70%. When there is upside acceleration, it's a bad time to buy. Is it a good time to short? Yes, if you have deep pockets, maybe it's a good time to short the equity markets. But who knows?

Marc Faber: Revenues are hardly growing with sales. Just look at McDonald's or Wal-Mart. The market is going up because central banks are printing money. The money that is being printed does not go into the economic system evenly. It went into Nasdaq between 1997 and 2000, then it went into the housing market until 2007, in 2008 it went into commodities and now it goes into the broad US stock market. One does not know when it will end, but it will end very badly.

Marc Faber: The performance of the global economy. It is obviously not performing well at the present time. And for that reason, interest rates may stay low. I want to make one thing very clear: Interest rates will one day be higher than they are now. The question is when? This year? In five years? But the sentiment around bonds remains negative, while bullish for stocks.

Marc Faber: Junior mining stocks got hit very hard, for sure. I am on the boards of several exploration companies, and I can tell you that gold mining is a very tough business and it requires a lot of capital. One problem is that exploration companies have no cash flow. Every month, they bleed more cash to keep on drilling and to maintain overhead. If gold and copper prices do not recover, then a lot of exploration companies will simply not have the money to continue operations.

I cant find his fund performance, can share or not? or he makes bulk of money from newsletter?
wat the vital part missing? u can share here too

If that's the fixed rate you're getting I'll go for fixed rate... cos BLR will most likely go up when QE is gradually withdrawn...Credit crunch!!! Yummy like cereal... 

Is the monthly payments stressful on your finances? If it is, go with fixed again, this way you have more certainty on your month end balances... do check out the other terms and conditions i.e. above monthly instalment payments, penalties, etc.... just in case... Good thing to find out from your banker is the difference in interest paid compared by the different tenures... Will give you an idea on whats your best option.

1) blr forecast to get increase soon
2) but fix. u lock in the rate entirely
3) even any rate hike like credit contorl or due to case like 1997 u still paying the same rate
4) not easy to get fix rate as the bank foresee to rise rate
5) u budgeted a fix amount to repay loan. the budget fix amount help u to do better control of your monthly decision.

seem like both type of got risk, if take fix loan, if BLR goes down  if take normal follow-blr loan, if BLR goes up   

Aisey... bro... how can you do this man? why you apologise and kow-tow? You're a millionaire man, earning RM2m in 3 years with million dollar property portfolio and driving German car... Many here look up to you and your advice on how you made it big... you must share your real life experience with all of us and lead the way by showing us the real examples of how you did it... ... ... sigh... ... ... I think you let a lot of Up campers down by running and hiding... How can people believe what you say in the future? Come on bro... show us all that you're the real deal and not a person who just creates stories... Look forward to your German Car, Watches and Property reviews... Don't forget to include those props you mentioned earlier, thanks.

You're right, mr agent
Btw, are u real estate agent?

Bank Negara clamps down on pre-approved housing loans, mortgages, personal loans

http://www.themalaysianinsider.com/malaysi...loans-mortgages


Given many of marginal flippers' DIBS units won't be handover soon, don't expect any property price reduction in the next 2 years. However, number of property transaction is expected to curtail and harder for flippers to subsell.

Hmmm... Too little too late? Or is this the spark that starts the fire (sales)? Impact of this news in the market will definitely stir some panic selling ... Look out for early bargains... For those with upcoming VPs I think they enjoyed the so called airconditioned coach too long until they missed their stop... Now it's going to be more difficult to find buyers (I.e sell)... I wonder why BNM is doing this... Isn't property prices going up good? Wealth of locals increasing no? What happened to the foreigners coming to buy? Another point to note is... BNM new policy covers PERSONAL loans as well... Hmmm ... Trouble brewing there as well? Seems like he credit crisis is in the horizon... Everyone got their popcorn and drink ready?

it is just tightening but not stop credit. many qualified ppl still buying even the bank give MOF just 60%. also some cash rich ppl deposited millions in FD just want the bank to give loan to them. they dun want to alert LHDN that they are buying in cash.