Haha, I have invested in properties since 1980s/90s. Property prices have to fall by 90% to endanger my little bet 

Don't treat property investment as a 1 time battle. It is actually a lifetime war. Those who have the perseverance and ammunition will prevail. Unlike stock market, do look for a longer period in property investment. Broaden your time horizon and you will see property investment differently

I know you are targeting those flippers. Both you and me have no mercy on them. They spoilt the market and when there is a correction, they should pay the price. And we can cash in on them. But you have to be more patient. The time is near 

I think ppl use the term 'burst bubble' too much. I think the property market in Malaysia is already in a bubble but this bubble is not going to burst. The Government wont allow it to happen. What we will get however is a property slump where you might see prices dropping about 10-15% in glut areas and stagnation in prime areas.

Im not worried about a slump as I have the holding power to withstand this (as long as the BLR doesn't go beyond 8.0%). My real concern is for those investing into property this year especially property which is clearly being priced well above the subsale market price of the area with little or no sustainable factors to support these prices in the future.

Property cycles and the event of slumps do not bring prices back to its original levels. It just eats into the profit margins of investors as long as these investors have a few years of 'buffer' in between cycles to absorb this effect. But new purchasers will not have this buffer leaving them exposed to a slump if they do not have the holding power.

The issue is that everybody is looking at new launches and the number of ppl lining up to buy. But how many ppl are observing the secondary market? Are sales as good? Everybody assumes that they will be able to sell after VP as easily as they bought it during the launch. That's the main problem. Not many of the ppl who go around investing in new launches with the herd mentality have any idea what-so-ever- of the situation in the secondary market. They don't understand that the factors which helped them invest in new launches (DIBS, free SPA, free loan fees, no valuation, etc) are not gonna be present during subsale. Plus you will be competing against a few hundred other owners with the same intention. That's how it becomes a buyer's market.

This is what I said in the Fennel thread today.

why bank's valuation is always so much lower than market price?
i don't really understand this because those are confirmed purchase price which means there is market for that kind of price...

but then bank always quote lower....really give problem...

Ready but still vacant. Read on:
http://www.starproperty.my/index.php/articles/investment/completed-and-lived-in/
"One property which has dropped its prices is that of a beautiful condo development located behind my own. It sits on a hilltop within a quiet and low-density part of Sri Hartamas, within striking distance of Bangsar, Damansara Heights and Mont’Kiara. For many, you can’t get a more desirable address than that.

The property itself is gorgeous with all mod-cons: exclusive lift lobbies where unique access cards open only to your apartment, video intercom, fibre optic backbone, etc. Even though the development was completed about three years ago, however, more than 60% of this tower is empty.

“This tower was originally bought en-bloc by a tycoon who intended to re-sell for profit but it has taken some time because they are all big units like over 2,000, 3,000 and 4,000 sq ft,” says a source close to the development. “Now the bank is also involved in the sale, and although the developer’s last price was over RM800 per sq ft, the price has recently been reduced to RM720 per sq ft.”

Another condominium in a central Damansara Heights spot has been quite empty since being handed over in 2011. 92 out of 318 units are occupied, which works out to under 30%, says a source close to the development. In fact, there are still developer units available for sale."

More properties ready in 2014. And with a drop in general population buying power, we'll soon have Malaysian version of ghost towns / buildings. Flipping/ Buying enbloc days are over.

That a good analysis on Spain. It's like a Proton income earner take a loan to drive a Merz.
But wait .... this scenario does exist in Msia. Msians with average income committed to property worth RM1 mill using wife, parants, uncles etc name to get loans approved. Not forgetting sharing amongst frens to venture into properties. Their "business" was high rental to cover the installment. Is this the scenario now? Do you know rental in Mont Kiara area drop by 50%?

So the above is private debt. How abt public debt (govern) ? Currently, Msia's sovereign bond is 50%++ of GDP. Do we wait until 100% and above to GDP like USA, Japan and UK to take measures and realize we are in trouble? Msia cannot afford to bcoz we are not superpower of the world. 50% of GDP is bad enuf.

USA, Japan and UK are economically & politically stronger so they can bend some rules. Spain was lucky bcoz they are tied to Euro .... if they weren't, Euro countries won't be bothered to support the PIGS. Iceland defaulted because they use their own currency, Krona.

It is NOT the matter of Msia (gov or private) able to borrow to the level of Spain. WE ARE ALREADY THERE!
http://www.consumer.org.my/index.php/perso...-it-sustainable

So when Msia private loans turn to NPL (Non-performing loans), our banks will be affected. That will definitely affect the businesses that survive under loans. Public listed company with bonds too. Credit crunch may occur or interest rate bankrupt the businesses. Ppl will lose their jobs.

So what happen to Msia financial market? Investors will flee our market on stocks, bond and direct investments. Our currency weaker causing inflation on daily goods. Food, petrol etc . Hard times will be upon us question is can each household weather the storm and survive?

Sovereign bond (gov debt) will experience high interest rate. Can our government pay the interest + principal to survive? At 50% debt to GDP, it gonna be a tough ride.

Why do you think BN gov suddenly increase price like hell. Petrol, Toll, sugar etc ..... They are using this tactic to increase revenue and pay off debt. They increase price first before the price increase due to factors mentioned earlier. They KNOW it is coming anyway so best to do it NOW than having economics forces dictates the terms.

Oppositions know this as well. But their policy is different. Get the GLCs and Petronas to pay for the debt instead of the rakyat. BN wants the rakyat to pay while maintaining profit to the GLCs.

It's ALL interlink. Politics & economy, property, industries, businesses, private, government ...... and it ALL comes down to DEBT. How to keep the right balance.

I attended an RE course many years ago. One advice which has stayed in my mind is, when buying apartment, go for the medium class apartments. Why? Not that it is cheaper than the high end but during:
* good time, even the lower income people will up grade themselves and go for the medium class apartment
* bad time, the high income people may downgrade and go for medium class apartment.

So the demand is better than the other 2 classes.

Is there truth in that from real experience?

Thanks.