True, but doesn't really reflect on their income as stated earlier.

To be exact it is located at Damansara Damai. A low cost area. Located deep inside. Only got 1 road in and 1 road out.
Still at 40% off + vacant unit, it is a good price currently.

This is Damansara by name only. Not the same standard like Damansara Heights/Utama/Jaya. Even JB got a Taman named Damansara Alif.

This post has been edited by MGM: Apr 9 2019, 08:11 AM

Hello boss, are you familiar with a condo/apt under construction near to Jalan Semarak/Dewan Perdana Felda?

Anyway, been following your posts and your insights are always appreciated.

Semarak Residence. Got show room/gallery at the site.

Thank you. What's your take on buying under-construction projects like this one? Upon a quick googling, this particular project is marketed as being sold 'under market price' due to its location. Sorry if the question is too general.

Not sure the pricing to be label as 'under market price".
But if given the choice, I will go for subsale Setia Sky Residence or The Orion located nearby. Over there got an underground MRT2 station.
Or even Legasi Kg Baru, a for bumi only under con project also seems to be better coz got LRT Kg Baru station at doorstep.

Semarak Residence got nothing except for jam. Yeah road expansion/upgrade been done but still peak hour very heavy traffic.

In the first place, cyberjaya unit at 710 sqft do not command the price of $500K, at best only worth $300K at launch price.

Now, the whole place like ghost town, it's not surprising that the lelong unit dropped to $200K because no one pays maintenance, and the whole condo will deteriorate very quickly

I feel sorry for Cyberjaya buyers. This place is not "like" a ghost town. It is one!

There is almost nothing of significance here.

so much bubbles that it's like spongebob is palying in bikini bottom

From what I can tell, property market is very soft at the moment.
There seems to still be demand for properties priced RM500k and below, however, not many are eligible for loans. For property above RM1mio, prices are falling. I believe one way the government is trying to solve the overhang problem is by 1)stopping the development of residential properties priced at RM1mio and above, 2) HOC, 3) BNM announced they may decrease OPR in the next meeting if growth continues to slowdown... not too sure if it'll be wise as there may be more capital outflow...

Seems like you've lived through the Asian Economic Recession in 1997... so I'd like to ask- as I am a newbie and took up a loan to get one of those affordable housing during this HOC period-

1) Will I be screwed if property bubble burst say... this year or next? Will the property prices still be affected if it's those under the affordable housing scheme (i.e. RM300k, maxed RM400k...) Do you think there'll be tonnes of default even on affordable housing? Why would banks and the government allow that, did we not learn from history?

2) Recession- as I know there are many many many citizens in this country who has a home loan and other debts, should interest rates go crazily high like in the 1997... are you saying that's when we will all "see blood"? As I heard from my folks, they were "okay" and their debt commitments were just slightly higher... hmm...

3) How should we cushion for market difficulties? FD? Cash in CA/SA? Holding onto a stable job?

Yup at least before it used to be a goldmine for pretty Kazakh uni girls who study at LKW but nowadays getting lesser and lesser edi the numbers and the quality also not like the girls before. Hahaha

Back in 97, our bubble wasn't of property, but assets like stock, even though I am young at the time we don't have trouble of negative equity at the time, but what happens is that there are tonnes of abandoned projects, some still stand in ruins today, personally known a family that have disposable cash and bought and refurbished what is now called "Fawina Court" in Ampang after it stand vacant for years and made a tonne of cash from it, and they aren't even experience property developer.
But it happens in Hong Kong, Kenny Bee is a classic example, his wife Teresa Cheung secured multiple property loan, thinking that it can only goes up and they have the income to finance the loans.

1. If your property value fells less than the remaining balance of your loan, say there is 1 million remaining on your loan and the property is now only worth 800k on the market, the property is "underwater" as they say.
They will ask you to refinance the loan say in our example, 200k - in cash, if not they will repossess your property if you couldn't renegotiate the term of loans with them and you will lost your house and go bankrupt.
This is what happens to the multi-millionaire Kenny Bee, it was the new buzz word of the late 90's and back then we didn't think this is possible even if one pay their loans on time.
I think the auction now can tell you if there is a lot of affordable housing in default.
As to why banks and government allows that, there are some banks that are involved with the developer themselves, some like Hong Leong are even developer themselves.
MBF did the same thing in the 90's, they have the most branch out of all banks, and went down under as the market collapse.
Some government linked companies, investment and cronies in each and their own ways involved in real estate business, and it stands about 4.2% of our GDP.
We don't have a honorable figure like Paul Volcker of Federal Reserve or as qualified and as good, and all have to say good things for the government. (ie. Zeti for Najib, and previous directors of BNM in Mahathir era)

2. Household debt wasn't high in the 90's, buying car with cash instead of loan with help of family is not uncommon, and downpayment of 30-40% for property is even common, and people aren't highly leveraged, our stock market on the other hand is a different story when many players overleveraged on their margins, most of all the bubble wasn't on real estate.

3. Cash is always important, but when I got out of college around the great recession 07-08 we played gold. Bought some gold bars at around $650 price level, it shoot up till $1800, and I sold around $1600 as I need money to buy stock, it is a good decision, but got cut kaw kaw as it was easy to buy gold in Malaysia, but impossible to sell, all shops will cut you kaw kaw and the market is monopolized by goldsmith, finally there is a goldbar dealer who could take my gold at Kuchai.
If I could do it today I will put some money on gold investment account like Maybank instead of holding real gold as a hedge against currency drop and inflation, I think I might buy some if it is at 1200-1250 level these days.

This post has been edited by Angelic Layer: Apr 15 2019, 01:41 PM

Bnm is unlikely to allow bank to insist borrower to top up underwater loan if loan is current. However, if the borrower has multiple loan and one of his loan is defaulted, it could cause a cross default and bank to demand a top up.

This post has been edited by icemanfx: Apr 15 2019, 10:45 AM

It just haven't happen in Malaysia before, but it doesn't mean it will never happen, especially in a crisis.
After all, our KLSE have denied and limit foreign investors from selling off Malaysian stocks of their holding back in '97, and given the political and economic climate these years I would say it is actually likely, I wouldn't put too much faith on our system.
Back in those days, property for regular folks rarely reach the figure of a million, now even a condo can cost a few millions.
And you have read the post earlier, many properties didn't get any bid after a few round of lelong even, this is unheard of in the past; the viral video about the 2 million condo if value drop under a million, the bank will of course panic will ask for top up as it lost more than half of its value, and we are starting to see some property lost more than half of it's value in lelong market already, so it's a reality.

Don't get me wrong, I love my country, but I have to protect my money and it's always a good thing to be wise and careful.
If you read first page of this topic, how many people say such things are impossible, now it had been a reality/

This post has been edited by Angelic Layer: Apr 15 2019, 01:49 PM

Local banks are governed by mfrs9; banks need to provide provision if loan is likely to impair. Otherwise, they wouldn't take any action. When bank demand to top up mean they are ready to exit the relationship.

If the loan had been issued as a part of tranche on the market?
It happens in the last recession. the infamous CDO.

Local financial institutions don't have appetite for cdo and bnm don't allow banks to parcel out housing loan.