condo location?

Regardless of how you guys envision sudden crash or totally free fall of property price, i just wanna say, materials price have gone up again, things will eventually getting more and more expensive and we are no longer can construct same unit for same price like we used to back to 5-10years ago. So, keep waiting, and we will see how DDD for the entire market, time will tell.

By the way labor cost have gone up quite substantial, thanks to unflavorable exchange rate. That eats up quite lots for project cost too.

Regardless of how you guys envision sudden crash or totally free fall of property price, i just wanna say, materials price have gone up again, things will eventually getting more and more expensive and we are no longer can construct same unit for same price like we used to back to 5-10years ago. So, keep waiting, and we will see how DDD for the entire market, time will tell.

By the way labor cost have gone up quite substantial, thanks to unflavorable exchange rate. That eats up quite lots for project cost too.

Source: http://www.freemalaysiatoday.com/category/...ays-think-tank/

PETALING JAYA: The property bubble in Malaysia is set to burst, but the government must resist the temptation to intervene and allow market forces to coordinate supply and demand, says a think tank.

In an interview with FMT, the Institute for Democracy and Economic Affairs’ (IDEAS) senior fellow, Carmelo Ferlito explained the two “economic dynamics” which have resulted in the current property situation in the country, where the prices of homes are beyond the reach of most and the oversupply of such homes, has led to many being left unsold.

Figures from the National Property Information Centre (Napic) have indicated that as of the first quarter of 2017, some RM10.08 billion worth of residential units are unsold in Malaysia. This figure does not include serviced apartments, which have since 2015, been classified as commercial properties.

For some time now, the discourse over unsold properties in the market has focused on two key contributing factors – the prices of homes that are too high and the difficulty buyers have in obtaining bank loans.

What hasn’t really been explained, says Ferlito, was why the prices of property in the country are as high as they are.

“Malaysia is undoubtedly experiencing a housing bubble and the unsold properties are a natural consequence of this bubble.

“This bubble is due to two specific economic dynamics. The first is the natural business cycle, and the second is the intervention by the authorities,” Ferlito said.

Expanding on what he meant by the natural business cycle, Ferlito said it began when the property market was expected to boom after the end of the 2008 global financial crisis.

“When an industry is expected to boom it attracts investors, such as developers and usually, it is the first wave of investors who really benefit from the boom.

“This in turn attracts new investors, which in this case, are the speculators who are looking to make a quick profit. They further contribute to the property market boom.”

He added that the property market boom had a positive impact on related industries, such as the construction sector and businesses involved in the supply of raw materials.

“A direct result of this demand has seen property prices rising, and the ensuing growth in the need for more resources has seen prices on the production side of the equation, such as labour and materials, also increasing.”

He said this inflationary expansion was reflected in the selling prices, and that the second wave of investments only made the situation “hotter”.

“So when there is a boom, there is this very positive feeling in the market and it moves consumers towards ‘desiring’ new properties which furthers the inflation.”

A case of intervention amplifying inflation

On the intervention by authorities, Ferlito said that while the natural business cycle was unavoidable, the resulting inflation was made worse by external intervention, particularly the low interest rates set by Bank Negara Malaysia (BNM).

“Essentially, all central banks fix base lending rates (BLR) on the assumption of knowing what the appropriate level is.

“However, when central banks set the interest rates, it is sending ‘wrong signals’ to the market.

“If banks were free to set the interest rates based on what free market proponents are pushing for, you would see interest rates that better reflect the relationship between supply and demand.”

Ferlito said problems arise when the BLR is lower than an interest rate that would have been derived from the relationship between supply and demand.

“This means that the BLR may be artificially lower than what it should be. This makes it easier to borrow money and so people may invest in properties because it is ‘cheaper’ rather than because they want to purchase a property”.

Ferlito explained that this could lead to higher inflation and wouldn’t be sustainable simply because there is a mismatch between supply and demand.

“So the prices keep going up even though they aren’t reflective of the relationship between supply and demand. At a certain point, to stop the inflation, central banks will raise the BLR.”

Avoid intervention when market crashes

When the banks raise the BLR, the property bubble is bound to burst and this will affect developers, who are in the midst of developing new properties, and speculators.

“If the BLR increases, then developers who took loans to build new projects may not be able to repay those loans and their projects could be abandoned.

“As for the speculators, with the increase in interest rates and a lack of demand to meet their supply, they will have little choice but to either slash their rent or selling prices for their units.”

Ferlito said the number of unsold properties was a sign that the property bubble may have reached its final stage and that the property market was close to crashing.

“But the property market crashing can be seen positively if we’re looking at the goal of reducing housing prices.

“In a situation where there is over-supply and high prices, we should let supply and demand do its job and let the market affect prices to the levels they should be.”

Ferlito said it would be crucial for Bank Negara to refrain from supporting the property industry by then lowering interests rates or the government bailing out developers.

“Intervention will only result in a longer and more painful crisis with prices kept artificially high by the central bank when the market is demanding for lower prices.”

Last year, economist Hoo Ke Ping predicted that Malaysia would be hit by a recession in 2018, resulting in among others, the prices of medium and high-end properties dropping.

Previously, property expert Ernest Cheong, warned that the glut of unsold luxury properties could result in a financial crisis.

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Just wondering, any truth to this? I am looking to buy a property (first for investment, then eventually for own stay) but have always told myself to wait for mid 2018 to see if the property sector deteriorates even further.

What's your take on it?

Materials price and labour inflation will impact on new launch price but not subsale in the short term. at current market sentiment, subsale price is largely depending on vendor capacity to hold.

with more dibs properties vp in this 2 years and many were bought to flip, subsale price is expected to soften further.

I never buy cash from auction so far...plus my limit for the unit is 600k, so just gonna bring 60k bank draft. Even if I wanted to I don't have 600k cash.

120 days is more than enough time to secure all the approvals and loan disbursement to get the prop la. Especially since this is a freehold prop.

You just need to take leave and get your ass moving to chase for the relevant approvals and documents. Most of the time within 90 days settle. Unless you're the type who just throw to lawyer and expect them do everything for you without you chasing then gg la. But I guess my lawyer so far been good, she kena harass by me kao kao before d so now when I buy prop from auction, she will work on it on high priority to avoid me bugging her. Lol.

Give ayam location contact number and type of building
Ayam want to sapu 2 bijik property now
Please don't chicken out and tell Ayam there is no such deal existed

Give ayam location contact number and type of building
Ayam want to sapu 2 bijik property now
Please don't chicken out and tell Ayam there is no such deal existed

chichichi, you can choose many landed unit from auction market with brand new unit because the unit mostly just completed and bmv 20~30%.

cocbum4 time to walk your talk.

Developer playing discount game.

I have been watching one property (by major big name developer) for two years.
Price move up up up (slowly) but discount also more more more.
Finally early this year, when I tot they won't discount any more, I bought n  pay 16% less compare to the amount I will hv to pay if buy at launch 18 months ago.
Then last month got promotion for remaining units, another 2.5%  off. Dang.

I notice this is common now, esp for condos.

So watch carefully, n dun be rushed into buying.

yes you are right! the discount keep getting bigger. nowsaday 16% diskaun is not so uncommon!

in fact i am not so optimistic on msia property these days. But if you choose the better location ones, should still be quite safe. I hope!

To say property price up and fall is too general.

This general rule cannot be applied to the property market as a whole, and it is also very misleading.

In prime location = the property will never back down, due to the :
1. consistent increasing in the value of the land.
2. increasing the materials cost of the construction.

In sub-location = i believe the valuation will be affected by the numerous factors (i believe this is where the ppl saying property price drop etc). The numerous factors that affecting the valuation not just the macro economy alone, it might be caused by the sudden change in the infra-structure that linking this sub-location to the prime location, population swift, future development hold etc etc.

BB area, bukit bintang

Chulan?

Yea, but I kinda changed my mind last minute. Found out from a friend who lives there that the condo lately got water leaking issues and management is crap lately. Heck, dodged a bullet there.