I hope that more people see this post and dont chase high in auctions and/or subsale and/or new projects.
Dont be misleaded by auction/property gurus to keep the bidding/chasing high. And dont naively believe in negative gearing.

Buy only when the units can give you a rental yield (after minus maintenance fee) higher than + loan interest rate + FD rate (lost of opportunity cost) + 2% minimum safety margin to account for OPR rise later

E.g. Property auction price 400k, after lawyer fee, stamp duty, MOT = 450k
Rent = 2000 per month *12
Maintenance fee = 500 per month *12
Loan interest 3%
FD rate 1.75%
Minimum Safety margin = 2%

(2000 - 500)*12/450k = 4% - 3% - 1.75% - 2% = -ve

To determine the maximum property price that is OK (still not a good deal because we have not include possible repair/rennovation/refurbish fee), but at least still OK to buy
(2000 - 500)*12/(Loan interest + FD rate + minimum safety margin) = 267k

This post has been edited by HereToLearn: Aug 9 2020, 08:31 PM

In summary just don’t buy auction lorr if u say like this, 267k to buy a prop that can rent out for 2k a month, where u gonna find such deals?

To me personally is not to buy any property if you cant find such a deal (which is almost impossible for now), just continue renting for now. Dont FOMO (If no one buys, the market will be able to enter the correction needed unless rental is raised with increased in minimum wages). Just look at the NAPIC data, supply is still much larger than demand.

In an article published this month, I remember it stated that some states' supply is 6x the demand. There is really no need to panic buy right now. Dont be so quick to catch the falling knife.

This post has been edited by HereToLearn: Aug 9 2020, 08:36 PM

Rm150k studio kl 500sqft got?

If you expect to get such deals, just wait until forever la. You go count loss of fd rate summore. Be realistic la, you can get a unit which the loan repayment + maintenance can be covered by the rental good enough already. You’re basically getting the prop just for the deposit and you still have ownership which you can sell the prop later on. This kinda mentality will just cause you to rent forever.

If dont have, just rent. Use your capital to invest in stocks with dividends (of course with strong fundamentals with growth if possible) and use the dividend to pay rent.
Wait the price drop and buy at just about the right price later. You get free stay for years with dividends and get to buy newer projects at the right price.

Else if you loan to buy at overvalued price (you get a lot of commitment) with negative gearing on your investment.

when price drop? now? 1 year later?

ayam still wait rm150k studio KL 500sqft

You are exactly right. My plan is to keep renting and monitor the supply to demand closely from time to time. I dont expect the property price to rise with the supply is few times larger than the demand.

Property prices will only rise if demand > supply or minimum wage is raised.

hahahhahaahahahahaha u must trust TS and expert here.

You can clearly see that the prices are dropping from the auction prices. It is getting lower and lower. But with auction gurus flocking the auction market. I am expecting it to stagnant or even spike up very very little for a while. But keep monitoring, if auction supplies somehow >> bidders, maybe the miracle of getting KL studio with positive gearing investment (higher than loan + maintenance + FD + safety margin) will happen =D.

I myself also have a quick glance of the prices and news every month to keep myself updated.

So when can get rm150k studio KL 500sqft?

When the housing index chart looks something like this

Like BBB/uuu, unrealistic expectations remain unrealistic.

can never get, when it drops to 160k for 500sf i will sapu all the stock in kl.

What happens when it looks like this?



What about the period preceding the 98 crash?

A more accurate representation back then would be the graph below.

Don’t use indexes, instead measure with percentage change to get a better representation of price change.

Don’t cherry pick and misrepresent data to make a point.

Present a more accurate historical graph (refer below)



Do we have house price growth levels similar with the period of expansion back then?

What were the interest rates?

Low interest rate environment what effects?

Moratorium changes the game, how?

Look at consumer spending.


This post has been edited by Zwean: Aug 10 2020, 02:13 AM

Thanks, I know 150k for 500 sqf is unrealistic.

But to some apparently it’ll happen.

total property transacted
Value:
2018: 140b
2019: 141b
Volume
2018: 313,710
2019: 328,647

Comparing Q1 2019 n 2020 (jan & feb, March n april is MCO)

Opps my bad. I was just showing the trend, that when the index goes negative, we will have the chance to buy at the just about the right price from auctions. I hereby update you with the percentage change graph, it shape looks identical to the housing index that I uploaded. As of 2019, the capital appreciation is so insignificant, and yet people still go for negative gearing. Good luck guys

This is a better representation of the facts of the matter.

However do keep in mind to not exclude the data leading up the the crash in 98, THAT is a bubble.

What we face today is not.

Rise from 2009 to 2012 was not a bubble?