My take is always, Malaysia is different from the rest of the world.

This is to the fact like iceman said, we hav a different economic theory cant compare wit US. If ever interest rate went close to 0% here, i believe property investor would rejoice. And we still hav huge KWSP to bailout anybody, as what we went through 1998. There will never be the lehman brothers incident here.

Real Estate Home Appreciation - Last 12 Months
Last Updated: 7/17/2013

Home prices continued to skyrocket all around the country in May. The Northeast saw its median price rise to $269,600, up from $245,100 and up 12.3 percent from the year before.

Home prices in the Midwest increased to a median of $159,800 in May, up from $148,700 in April. Compared with May 2012, the median there was up 8.2 percent.
In the South, the median home price rose to $183,300 from $167,800 in April and jumped 15.0 percent from the previous year.
The median home price in the West climbed to $276,400 in May from $265,400 the month before. It was up 19.9 percent from one year earlier.

The above article refers to housing price in the US.

Now i am doing car comparison. Bear with me here.

Let's say a house in US is 200k usd. A toyoto camry is around 20k usd. You need to exchange 10 toyota for 1 house.

Let's say malaysia. A house is 500k RM. A toyoto camry is 100k RM. You need to exchange 5 toyota for 1 house.

You guys see what i am getting here? People still buy cars even cars in malaysia are exorbitantly priced.

House prices at any point in time, like that of any other asset with a built in cycle, depends largely on irrational sentiment and emotion. Fundamentals only tell you what the price OUGHT TO BE, not what the price WILL BE at any given point in time. Fundamentals in the US were largely constant, but the price for certain houses fell as much as 70% during the crash, way below the cost price of the house, and way lower than the fundamentals would indicate. Sentiment is a fickle b*tch, both on the way up, and on the way down.

What we are seeing in Malaysia is a newfound positive public sentiment towards purchasing housing at the highest possible end of affordability, and this is encouraged by prolonged historically low interest rates and a sustained period of consistent outsized gains, which has led to, rightly or wrongly, a perception among many ordinary Malaysians of reduced/zero risk, guaranteed outsized returns and a fear of being priced out in the future. How many Malaysians who hold millions worth of property and mortgage debt are invested in other asset classes? So long as this sentiment lasts, many ordinary Malaysians will continue to bet their next 35 years of earnings on houses which they can barely afford, fundamentals be damned.

Again though, sentiment is fickle, and I think there is a relative lack of sophistication in the average Malaysian investor who tends to decide based on limited anecdotal experience instead of statistics and dispassionate macro analysis. Such investors are just as quickly inclined towards fear on the way down as they are to greed on the way up.

I have a theory that the mentality of those who disregard macro analysis is analagous to the mentality of those going to a casino, or those buying lottery tickets. Let me elaborate.

Statistical data and mathematical analysis necessarily lead to the conclusion that an average person who gambles at a casino is more likely to lose money than gain. Logically therefore, nobody in their right mind should go to a casino. However, there are necessarily people who have had personal experience winning money, and due to the logical fallacy called hasty generalisation, they will tell you that your theory is wrong based on their own limited experience. (i.e. I have won the last 5 times, and my friend has won the last 5 times, and his friend has won the last 5 times, and therefore I believe I will continue to win) There are those who read, understood and agree with your data will tell you that they are exceptionally skilled or lucky (i.e. I am different, I am special, your theory does not apply to me). Ultimately though, regardless of all the theorizing and discussion the casinos are still packed with very wealthy and educated people, and the casino owner laughs all the way to the bank.

Caveat: Macro analysis at the layman level at least will not help you predict the future, and any prediction made by experts with any degree of specificity is usually wrong. Asset markets are inherently unpredictable, and the rules of the game may change at any time with a simple announcement of a new government policy, whether here, China, the US or elsewhere. Nonetheless, my analysis leads me to the conclusion that based on current conditions, people, especially the overleveraged, should start diversifying away (not exiting completely of course) from the property market which is looking increasingly vulnerable.

Once QE confirm exiting the market, bond, share, property prices will see major correction

Last stage, after the draining of QE.....interest rate will hike......this is when Gold, Property, stocks market will be hitting hard.....bear market.

If US is draining the QE in early 2014 coupled with the oversupply of high rise.....i think property correction may come earlier than expected.

Now we fear the recovery of US......

at the same time that would also lead more foreigner purchasing our properties.. have you wonder why the government had not increase the cap where property above 1m or perhaps 1.2m would only be eligible for foreigners? perhaps our government is planning to keep those foreign investors in our country as well.

For share investment, the companies are control by big shareholders. They may fool you around. If the companies perform well, they tend to privatize and offer low buy price.
If the companies perform badly, they may perform some tricsk on it. Nevertheless, they are  a few companies that are very trustworthy, at least until now.

once upon a time, ppl used to Q for 3 days for new property launches. Now at least you get to ballot.

BUY BUY BUY ppl .... u can at least make 2 or 3x.  So far it has only gone up 2-3x,  i think it got room to grow another 2x.

All condos will be priced above RM1k psf from the current avg RM500psf.  So average 1000sf unit will sell for RM1 million ...

BUY now before it is too late ppl ...

i-city soho

taken by HYB

Just came from Amaya site, saw a list of 70++ people who still wants to rent or buy the apartments that was already sold out. And talked to the agents there and they said there were subsales already being done at 500k for the 719 sq ft.

Burn Baby Burn!

However, there are a group of people, whose income grows at least 70% per annum. I don't know how they achieved it, but these people are having a good time now...

Probably less than 100,000 people but they say what Malaysia properties are not enough to feed their needs.

Hence my auntie neighbour buys 3 properties in Australia.
*Country Garden is rumored to be mulling a similar Highrise City in Klang Valley. Beware of their number of units.

Well the one with high income will just keep on buying more then i guess if no one is buying. Really heard a rich dato' who just swept one whole floor of a particular building that he likes. Might be just a rumor but i then think it is true. But then in this case, everybody wants to buy it is just that the dato' bought more, pushing some people to be empty handed.

Got a few... but all under different name. Herself high income name only probably 1 property only and that is most probably landed.

And I tell u the situation will be worsen in the next 2-5 years, when supply > demand at certain places especially ulu area. So play safe. Remember thumb of rule--location,location location

Agree..

The current trend is everyone seems to be buying Vege or shares.

These auntie and uncle forgot, they need to service loan not like shares, you buy and keep also ok..
Crazee...

aiyo future buyer how to afford now?
no worry there's plenty of future buyer

Landed in KV now start from 700k, feels like 600k is last year's price.
Just a standard 20x70 DSL, nothing special..

Not the only venue, but it is one of the venue, and if you are at high income range, u probably bought at least one property.

And not just look at malaysians who have high income, there are millions of foreigners that have high income and foreigners are buying local properties too. Singaporeans buying, china buying..ok these people i agree to put more restrictions on them.

Nestle too expensive for me. So never analyze that part much. I focused on penny stocks but now my position is zero. See what other news that will affect. Nowadays, i look for political signals. Kind of sad that the election petitions were all strucked out. Then UMNO election is coming soon, if najib get ousted what will happen to cimb do you think? Well still survive but u never know price might affect slightly or maybe huge.

And then of course budget coming soon. Good luck on your stock purchase.

Ringgit value dipping now, will this encourage more and more foreigners snap up our properties? especially singapok ppl?