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Investment 4 Critical Signs of a Bubble Market, Property Investment

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forever1979
post Dec 22 2013, 09:38 AM

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It really happens that some seller wanted to rush to sign SnP within this year for the RPGT issue, a difference of 10%, especially those condo type.
However, buyers cannot really expect a fire sale, probably merely 3%-5% less than normal price.
forever1979
post Dec 22 2013, 09:58 AM

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QUOTE(klbull @ Dec 21 2013, 06:44 PM)
The thing about a bubble is that you don't even know you are floating in one, so soothing and gentle is the sensation that you don't want it to end, ever. But it will, someday, and that someday is not that far away given economic events in Malaysia that will adversely impact future consumer spending. For highly geared property speculators, good luck for a not too hard landing in 2015/6.
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Property investment is all talk about timing and risk.
I myself also is a risk taker, and at one time highly geared as I bought 1 house in 2009 & another 1 in 2010.
But i strategy is to choose the landed property, thus the capital appreciation is not as great as those highrise one.

So i think one need to always diverse its portfolio, maybe buy some sub-sales, or medium range apartment etc.

If always focus those low entry 'service apartment' in total new/unproven area, it will badly impacted as you may not able to rent immediately while there could be many flippers within the same development.

If you ask me, the new launched prices is too risky to swallow for a investor like me. (no positive cash flow and high gear)


forever1979
post Dec 22 2013, 01:23 PM

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QUOTE(jolokia @ Dec 22 2013, 10:19 AM)
When ever I see people rushing to buy 500sf service apartments with 400K price tag in non business district,  I just shake my head & wish them good luck.

Does this people ever calculate rental yield & secondary market demand for such property in non business district ? ...sigh

But as usual all u need is some obasan gossip & social media, plus ask your staff to become actors/actresses to line up long dragon...lol
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In my opinion, there are people buying 500sf service for own staying, say in Cheras, it make sense as near to town and close the amenity.
They have no choice as they wanted modern design, security, and with limited capital and and capacity, that is the choice need to make.

But the same 500-600sf in those outskirt area like Selayang, Kajang, is kind of tough if they price it more than RM500psf.

Anyway, blame our government to allow the developer on such planning which end of the day, many units could be empty upon VP...
Smaller unit shall only be built within certain radius from town city...
forever1979
post Dec 23 2013, 10:03 PM

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QUOTE(dreamer101 @ Dec 23 2013, 09:40 PM)
Hi,

If interest rate goes up and the monthly installment increases, this could cause problem for some people.  But, isn't there housing loan out there where even if the interest rate went up, the monthly installment stay the same.  The only changes are the tenure increases??  Please enlighten me.

Thanks.

Dreamer
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Correct, normally banks will automatic prolong the tenure and inform the borrower by writing.
However, this make thing worst as borrowers are paying more interest end of the day.

What borrower actually should do is to maintain the tenure, so that don;t pay extra interest.
Of course, provided your cash flow is allowed.

that is why when BLR increase, bank stock counter also shot up, more profits earns.
forever1979
post Dec 24 2013, 06:22 AM

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yes, the occupancy rate is very annoying.
My fren who stays in a landed in Kota Kemuning, I think he bought the house 4 yrs ago about RM400k plus, move in 1 year ago, i just when there recently, looks like < 50% occupy. and I believe many places is like that.
But the price has just shoot up to RM700K.

It shows that either the seller cannot sell due to higher asking price or some really means for own stay.
but surprisingly there is no auction for all these houses or condo and it show those property owners are really cash flow strong.


forever1979
post Dec 25 2013, 07:53 AM

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QUOTE(SaProp @ Dec 24 2013, 10:04 AM)
Not true for today kota kemuning is <50% occupancy, I stay here about 10 years, initial stage which is more than 5 years ago yes, but today, i would say more than 95% occupacy, and majority are owner stay, majority of those who invest already sold off due to recent hike.
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I am not referencing to the whole Kota Kemuning.
only a new neighborhood, i think is call Damai Residence.

It also happens one of my property in Ken Rimba, Shah Alam, after 1 year VP, occupancy is only 20%-30%, i think, but many will move in beginning of next year because many units sold via subsale so far.
but I believe still another big portion has no intention to sell/ rent, but doing nothing so far..
forever1979
post Dec 25 2013, 08:11 AM

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QUOTE(bearbearwong @ Dec 24 2013, 06:01 PM)
1 million property.. if high rise u are aiming mont kiara.. puchong high end klcc areas di.. and many more not listed..
come on 100k downpayment.. plus the others colum which I tink is the s&p ,loan, stamp duty for both loan and s&p.. rm 130k..

to invest.. these are rich ppl but at then end they are targeting the midfle class of which household income not more than 10k .. open your eyes big how many ppl reach the 10k bracket and above.. even they have.. childten.. car.. insurance.. good.. phone and other necessities.. how to secure ur loan..

these investors cant be targetting ppl with earning more than them or same.. this does not make any sense..

Like our friend highlighted the low occupancy reli cause lot of problems.. unpaid management fees which will affect the other house owners who wish to stay.. friend of mine bought condo 550k just after phonix toll suffering now with limited lifts in operational.. flimsy touch card system limited guard.. bangla reduced bangla without working permits and etc.. this apply everywhere

another classic case also friend of mine bank officer can get loan without interest bought service apartment in iskandar johor for 380k 580 swuare feet locatefhighly nearby students area.. depending on salaries around 2.5 k plus commission around 3k .. bought together with his gf.. planning to flip it and sell it of vourse to singaporean for 500k and above... sadly..now 1 million.. have to sell to locals.. joheareans wont buy it at 500k .. now in deep trouble.. then cash advance and paid of the loan.. month by month meet statement and etc.. haizzz u see

I have photos of bukit beruntung abanfoned shops which cost rm 130k 4 floot.. who say rawang coming up..

my 2 cents
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With all those small apartment/ SOVO/ SOVO flourishing into the market, it is really interesting to see 2-3 year later, how market can absorb on such huge supply.

But for other type of property is different. i.e landed and proper condo (with decent size) being subsale or completed new.
I have seen many buyers are mean for own stay and some also got support from family to come out with the down payment. Thus this group of people will hardly facing auction issue as they wanted to be their house.

Even for those mean for investment (long term) or flippers, as least you can see the supply has been diminishing these few year, so in event of fire sale, impact will be lesser as there will be a taker and price correction may not be as great as those SOHO/ small apartment type..


forever1979
post Dec 25 2013, 08:42 PM

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QUOTE(BTimes @ Dec 25 2013, 09:01 AM)
The weakness in such shop-offices is the design that require customers to climb up and down the staircase.  The developer should design for a few common lifts at the spacious lobby and common corridors at each floor leading to individual units.  This ease access for customers and tenancy rate in the building.  The other very odd design is lack of rubbish chute for high-rise.
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Your idea is good, but by having common lift, it will incur extra service /maintenance charge to the owner.
I have come across many such shoplots, when it come to auction, many interested bidders turn off because of the huge outstanding service charge due to the JMB.

Those retail lot is actually charging > RM1.0psf for the service charges for maintenance lift and common area. If the shoplot do not have the huge crowd, it will not be viable.
forever1979
post Dec 26 2013, 06:29 AM

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QUOTE(kurtkob78 @ Dec 25 2013, 11:32 PM)
i heard that the process to before auctioning a prop is a long one. some say more than 1 year. so in the year 2014 when gov impose cooling measure on prop price, the effect of will only show in 2015. ??
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It is depending on the title.
If still under master title, then can be by deed of assignment, can be very fast, within 3-4 mth can set the auction.
If title issued either strata or individual, must go to high court or land office for auction, fastest is 8 mth to > 1 year to set the 1st auction.

forever1979
post Dec 27 2013, 10:02 PM

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different valuer with have different valuation.
So for those really need to get the max value, just seek SA' assistance.

But buyer also facing dilemma.
say the seller asking RM500K.
SA said normal valuation ard RM450-470K. But if buyer really serious, can help to push to RM500K.
So if you are buyer, you wanted to buy RM500K ? as you not the valuation is not realistic.
So end of the day, market value is still back to willing buyer willing seller.

forever1979
post Dec 28 2013, 02:14 PM

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QUOTE(HeartRock_Cafe @ Dec 28 2013, 08:31 AM)
keyword - national

how can use rural income to compare urban house price? want compare, take KV average income.
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Income is one thing, city life and cost of living also different.
At rural area, you earn RM3K, maybe better off those earning RM4K in city.
so many of the speculator for city properties are originated from 'kampung' which we called hidden dragon.

forever1979
post Dec 29 2013, 12:18 PM

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QUOTE(bearbearwong @ Dec 29 2013, 01:13 AM)
That is the main sign.. businesses especially.. in malls.. dat is the main.. businness getting bad.. take a peek at occupancy level in new projects.. 80 percent in agents hands and flippers wannabe.. and mostly 70 percent chinese..  ask the agents how their commissions... sure know one

the bank must be strict.. once 3 months default.. proceed auction.. dun give much room negotiate..  charge thrm everyting under the sun..oncein auction list then it for the genuine buyers.. auction price will be the corrected price.. I say at least 30 percent..
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No body would like to default their loan and I worked in auction division of a bank before and there are many sad stories.
30 % interest of default ? you must be kidding...
Someone that you know of may fall into this and he is not the flipper but the actual property owner that just need a place to call it home.

'Prevention' is important and what our government do on the RPGT and LTV is the correct way to curb the speculation.
Further law should impose on developer on better planning and avoid those SOVO/ SOHO thing already as getting to much in the market, and even extended to non prime area.
forever1979
post Jan 3 2014, 09:22 AM

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Some of you are comparing stock with properties, which I think is not accurate.
Stock is much more liquid, and in any event, either good time and bad time, the movement is very lumpy.
Say in a downturn, stock value can depreciate by 50% or more, but property will take longer time and (fluctuation ) maybe -30%-40% at worst.
Same go to good time, stock is more advance and fast in getting the return, > 50% return within a year is normal, but if property can do like that, we should be more worry ...

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