Yup ... my 51 yrs old fren just sold ALL his properties in Msia and moving to Sydney. He's a Site Manager for a developer. His employer has problem selling the units ... his information is first hand as it gets. Frm the horse's mouth as we say it.

He's not even bothered to finish 4 more years to retire. And with his PR and 2 houses in Australia, he built himself a good retirement.

So if the crew of a ship is bailing out, you better be quick on your heels for the exit too .... hahaha....

This post has been edited by HuiChyr: Apr 10 2014, 03:37 AM

Ah... back to normal liao ... hehehe...

Yup agreed ... I shld know bcoz I worked for a German company designing cars before.
Posted to Germany to work on projects on monthly basis and the truth is this ....
3 -4 years exp engineers can earn more than the managers in Msia. No conversion. Number on number basis.
I'm not surprise German technology and quality is so high is bcoz of this factor. Engineers stay in their jobs with good pay and improve their skills and knowledge.

Here in Msia when engineers are paid peanuts and need to concern abt surviving will not focus or stay in their jobs. Most of my colleagues left to other countries after 4 -5 yrs gaining experience. I left and do my own business.

Msia shld had moved from manufacturing to techology innovative long time ago. Look at S.Korea. They are progressing. Current gomeon policies do not encourage that bcz they exploit capital resources for own or cronies advantage. New ideas for products need capital for R&D and manufacturing. Here they demand 80% of the share and u do all the work. Ppl with ideas move to overseas to angel investors.

Renting out in current scenario is to mitigate cost for new props.. Not to profit. THat's why we keep hearing "holding power". If you are cash rich then holding power is possible. The negative cash flow either bleed u to death or make u poorer by the month.

Such specific prediction need to go to a soothsayer or tilik nasib to help u out .... hahaha...

Yes bubble happens all the while ... but he specifically as when it 'POPS' ... that one hard to say lor.

Which MNC? I know Konica Minolta in Melaka got shutdown. They move out bcoz their 5 years tax free was up.
But the land belongs to them. That's what the manager told at least.

Wow such sacrifice ... bring tears to my eyes.

I already have a prop for own stay. Since 2006.

Hahaha ... diego garcia ... tht cracks me up ....
No worries abt the "no house" issue. Just want the UUU campers to know that not all DDD campers hv no house thus wishing for bubble to burst. Some are really concern abt the property scene.

I know u asked bear2 this question but don't mind me taking a jab at it.

Currently, gomen is trying to hold the bubble steady ... not to POP it. They know the consequences is dire. That's why they keep the current interest rate. This is the only advantage the UUU campers have on their side. If rate goes up, the effect is more wide spread especially those whom are heavily invested (with debt) with little cash as holding power.

Your question: how to expect property price to go down without a downturn in the economy?
I can also ask in this manner; how to expect a downturn in the economy without property price going down (bubble pops) ? It's a chicken and egg question now. Which one comes first? Property market is just a subset of the whole economy but also a big part of the economy. THe truth is if property is in bubble, the economy is in a bubble.

It was the property market that was doing great which caused the economy to be great. Money comes from bank as debt. Money that was stuck in the bank as saving is now pour out to the economy via debt. Money that was created when a loan is approved. This caused inflation as more money is circulating BCOZ banks made it easy to get loan.

So during good times, developers and flippers make money. And their profit trickles down to the rest of the ppl ... via buying new cars, better restaurants, etc .... So they "stimulate" the economy. Hence, economy is great.

And the theory of "Velocity of Money". This applies to developers and flippers. THe money they made prioir is used to build and buy new properties. Meaning the profit margin is recycled into the economy 'as if" the money supply is doubled. This too stimulate the economy.

So now look at the measures take by BNM. Stringent loans approval. Supply of money is halted from the economy. Flippers and developers who made the initial rounds may still use their available cash but at limited time. They too bcome prudent with their cash. Economy in a downturn bcoz all activities stated earlier stop.

All the measures taken is left with only ONE devastating blow ... rise of interest rate. We came close to that when 'hot money' left our shores. Thank God, BNM has high foreign reserves to fight crashing RM. That too will run out and BNM will hv no choice but to increase the rate.

Property market shot up in 5 -8 years? Hopefully, it can take 5 - 8 years to cool the economy down. That's they call it 'soft landing' of the economy. But no history has achieve that due to 'irrational exuberance'.

This post has been edited by HuiChyr: Apr 11 2014, 11:20 PM

Bro, pls read my post carefully. I didn't say the economy is DEPENDENT on property alone. I say property market is a SUBSET of the economy.

I blame it on easy credit. Any SUBSET (agriculture, mining, manufacturing etc) of an economy that has easy credit (which leads to credit bubble) will tilt the economy imbalance. And when the bubble burst, the economy will shift back in balance violently, affecting the rest of the economy. Every sector of the economy is dependent on each other. One sector/subset increases help to boost the other sector, directly or indirectly.

Sorry to say this but you are looking at the statistic data wrongly. 3.4% is only for NEW development for Construction sector of the GDP. U shld be looking at 'Real Estate & Business Services' PLUS 'Construction' which adds up to more than mere 3.4%. And we don't stop here. Property is unlike other products in the market. It doesn't extinguish out of "existence" like your smartphones, tablets, shoes toothpaste etc. They appreciate in value while the others depreciate in value. In economic sense, the house that was built today can be sold 2X after 5 year is as though "another" house comes into "exixtence" while a car lost it value in 5 year losing 90%. So the car "extinguish" from ECONOMIC existence by 90%. Moreso for service sector, a haircut from a barber extinguishs after you pay the barber. You cannot sell your haircut to another person for any value.

Because of this nature on property, the data on property every year is accumulative. That's why I rather look at Household Debt to GDP ratio = 86.8%.

With household debt ratio so high, they will try to PAY DOWN their debts. House, car and credit cards. When paying down debt occurs, it's a NONE productive move to the economy bcoz DISPOSABLE income is taken away from PRODUCTIVE side. For example, using my DISPOSABLE income to pay off credit cards and increase loan pre-payment compare to buying new clothes or dining out. This affects the economy. This is the affect of using FUTURE money (debt) at PRESENT time.

And pls DON't say, I have RENTAL income. If RENTAL is not enuf to cover monthly installment + other costs, it's NEGATIVE cashflow. Either you increase rent which takes away the DISPOSABLE income of the tenant or pay down your debt which takes away the DISPOSABLE income of the landlord. Either way, it's taking money from the PRODUCTIVE side of the economy.

NEGATIVE cashflow of any investment means the principal value of the investment is TOO HIGH. Property price is too HIGH. IT will affect the economy.... especially when it's with debt.

This post has been edited by HuiChyr: Apr 13 2014, 01:44 PM

I owe Showtime a reply to his comment but it's gonna be a long reply.
So I tackle the easy one first .... COOL PRofile Pic Bro .....

Good graph there my fren.
To me as long as QE exist, the effective lending rate will be lower than BLR or LIBOR.
Bcoz QE is just printing of money, without any backing of real asset or value. It's diluting the value of the currency.
Whether it's QE @ 80bill a month or taper to 30billion a month is still supply of money to the economy.
Interest rate will back to its normal nature (effective > BLR or LIBOR) when QE is stop completely.

Yes bro. U are not wrong. But u r looking at ONE-WAY or unilaterally. Now use point (A) and connect to point (Z), (BOLD PROCESS ABOVE), u have a circle right? That's wat I'm trying to explain; property market is part of the economy.

As you mentioned is point 2. Ah jib's measure AND bank stringent loan approval ---> Price drop ---> economy down --> unemployment problem --> people cannot pay installment --> force sale --> property price come down FURTHER.
Don't think this wil lead to the bubble burst?

And economy down , doesn't mean Msia will get blasted to stone age. Ppl will still trade and the economy will still be there.

The POINT DDD campers are trying to highlight is that the speculative nature in property market has gone out of hand.
And what is the symptom to that; negative cash flow to long term investers (rental income). UNless u hv holding power, then good for u.

This post has been edited by HuiChyr: Apr 13 2014, 10:01 PM

Don't you think with PR1MA, cheaper supply of housing gonna reduce the rental of investors since their tenants now can buy their own house? So we go back to those who have tight margin between installment + cost and rental gonna feel the burn?

This concept is also true among investors. When supply of house/apt/condo increases, investors competing each other to secure a tenant. Rental price will drop.


I'm don't have the data to support the assumption that MOST flippers/speculators don't have holding power. Do you have this data?
MY only measure is negative cash flow from rental income is bad enuf investment. Unless u r cash rich and dump in more deposit than the required amount. But I believe many speculators are pushing to the limit with minimum deposit requirement and secure as many units as possible depending on the cash they have as deposits. I, on the other hand, can be wrong.

But this notion came from the property investor "guru" that advise their students to reap the profit fast and furious.

Bro Showtime,

Here is a good read:
Completed but Empty

This is wat I'm talking abt. En-bloc buyers only want to flip for profit. Big time investors not willing to rent .. YET.
Either they dump price or change their mind and rent out ... desperation hasn't set in yet.

This extra supply of condos/apt plus PR1MA housing will give sudden flood of housing supply.

This post has been edited by HuiChyr: Apr 13 2014, 10:56 PM

Ooo... looks like I touched a nerve....
I'm not trying to be God. I'm not even timing the market.
Just like you, I'm a businessman. And as a businessman, there's alway avenue for investment. Property is NOT the only investment.

You are a businessman and we know wat can be done with property
So for your case I'm sure you are in solid financial state. Other speculators however, whom rely on the salary as employed worker doesn't have the same advantage.

I don touch stock markets either. I roll my cash in my business.

A salaried banker still feels the torn in his eye balls with my 1/3 theory. Hahaha ....
What pathetic fool. (This message is not for you Showtime )

OH yeah ... allow me reiterate then.
1) Property Pricies you see on iprop, propwall are PLUCK from the air by Real Estate Agent.
(They create market exuberance for the sellers and desperation on price increase for the buyers)
2) They DO NOT have any real property to sell ... YET
3) When there's a "water fish" nibbling at the bait ...Real estate agent frantically call the owners from their list.. ... trying to convince the owner to sell.

So the real estate agents are the puppet masters. If you think you property price has gone up, wait 'till property transaction slows down or stagnant, these "puppet masters" will "dump" the price in their fake advertisements. No transactions, no commissions ma.

This 1/3 theory expose the truth by a real estate agent himself. Don't believe me? Look at the ads in property website. The same photos and some of them even use the wrong photos to show "their properties".

This post has been edited by HuiChyr: Apr 14 2014, 12:39 AM