How the recent hike in petrol/diesel can affect the properties (residential) value/price? If the petrol/diesel price continue to increase again, what about properties?

Increase for sure....because all building materials price will increase as well.
However there is a limit to the increase, as when ppl start not to able to afford the properties price anymore, the demand will subside, and that is when property price will come down so that supply and demand will sync again.

So we wait till it drops?

@bleeper,
If U can wait, Y not?! It's not a good time to be spending unnecessary now; keep ur $ Or well, I think the G will want U to start spending the $ to further inflate the economy

property prices will drop over the long run as cost of living increases and the demand for property drops.

For me, middle price properties in Malaysia is not going to drop anytime soon, we still have surplus of demands, look at the frens around you, aren't all of them planning to buy a house? We also will not face US kind of property credit crisis because our banks here are relatively much more stricter in approving house loan, so properties in Malaysia is still going on very strong for me, regardless what happens.

Ok ok
Will wait cos now im squatting at my brother's place.
Just thought better if i get my own place ma.

@bleeper,
If U like a place and if U can afford it, go ahead and get it But if U haven't found a place U wanna call home, U might as well hang on and look around a bit.

After some research, U'll know if its worth paying RMX for that property

I see condos now also almost 300k and most of them leasehold. Unless certain areas which have bad traffic like puchong.

well sooner or later it will worth cheaper.I think it is time for the property to slow down; or else bigger bubble will burst..
300k is consider reasonable..but look at the long run can you sustain without income?

Malaysia properties are not in a bubble at all. Only the extra high end areas (e.g. around KLCC), those might be bubbles. But for 300-400K houses, they are not bubbles. The price is there to stand for me....at least for next 3-5 years.

MY gut feel is that there'll be a glut for high rise condos so if that's what Ur looking for, I'll suggest for U to hold on a little longer.

around KLCC is bubble.isnt it a chain reaction.
how do you consider not a bubble, putrajaya? nusajaya under iskandar project?
well all this is speculated..
why not bubble?
300 to 400k ..in west malaysia is alright..but for a place out of nowhere 300 to 400k; it must be sitting on a gold mine.
how about SJ, PJ, Klang?

@KVReninem,
Like I said, it depends on the location. Prices in the town centre's always been high but i find it ridiculous to pay >RM1m to live in a pigeon hole *grins*

As to those in the other regions as U've mentioned... well, I don't know how much it cost but if it's going to be the same price as it is here in KL, I certainly wouldn't go for it, at least not in this period of time where a lot of things are uncertain.

ahhaa...pigeon hole in sky? ok.
now i`m speculating how the FDI get out malaysia in no time ..so will make malaysia suffer abit..due to retard govt system

@KVReninem,
Look on the bright side. At least we do have a Government, not a dictator like in some other countries

I do have the same feeling that property price will drop. If everything increase and people become poorer and the demand to buy house or car will drop. So, the property price should drop as well.

@kb2005,
Sub sale property prices might drop but in the long run, I doubt it'll drop by a lot because raw materials have increased [then again, it depends on how much profit these developers want to make]

This post has been edited by tinkerbel: Jun 6 2008, 01:41 PM

Ya, agree. New project price will go up but the demand will be lower. As for sub-sale, the price will probably drop.

@kb2005,
Having said that, I doubt they can increase it by much; cause it's still v much depending on the amount of $ buyers are willing to pay for a house. The other option I can think of is to use cheaper raw materials but that might pose to be a problem in the long run cause that might reduce construction quality.

Ah well.. as to sub-sale houses.. well, if a person really needs the $ and liquidate, I guess that's when U can get the property at a v good price Just need to find someone who's desperate enough

It is always good to have cash at times like this.

After this price hike, the property material like cement, steel etc will increase. Definitely for sure property price will increase.

@knwong,
Such raw materials haf oredi started increasing - ah well, like we said, property prices might increase but it might not increase v much more from the current price. If people aren't going to be buying the houses, wouldn't developers lower the prices just so they can dispose them and make some $?

In the long run, it will cost developers more to keep those unsold houses, unsold.

lets have a look at short term, compare last year and say end of this month, do you think there is any changes in terms of prices for the house ?

@nnpjj,
I don't think I'm in position to answer this question cause I haven't checked out the house prices in totality. I do however think if U do compare house prices from last year and this year in the same locations, U probably will find an increase.

Property, unlike stock is not a liquid investment. Meaning even the market price for certain property had drop to certain level (based on transaction record), doesn't mean u can get it at that price. Unless there r lots of house owner a.k.a speculator in serious financial problem, they may choose not to sell. In the end, there may be just a few transactions going on at the lower price. Eventually you ll still have to pay a higher price in order to close the deal.

@Singh_Kalan,
It still doesn't answer the question of whether it's a good time to invest in properties now?

I am waiting for good bargain during auction instead

All,

1) Per capita GDP of Malaysians is RM1,800 per month. Even assuming dual-income family, how MANY people can afford 300K to 400K house/condo?? Isn't this a property bubble??

2) Yes, material price is going up. But, how much is the costs of the house tied to the building material to begin with?? I would say not much. It is the LOCATION aka price of the land that determine the house price. Why am I saying this?? You can go a bit further away from Klang valley and the house of the similar size will drop by 100K to 200K. So, the house price is NOT that much determine by building material.

3) BLR. With inflation, it looks like may be the interest will be going up eventually. Or else, RM will be devalue. If interest rate goes up, how many people can afford to but those 300K to 400K houses??

4) Unemployment. How many of your friend / colleagues can survive without income for 6 months? If we have a sustained recession, how many will have to sell their house??

Given (1) to (4), I believe house price will go down in most places. Most Malaysians are over-stretched financially.

Dreamer

Building materials prices went up about 15-20% today. This would translate to about an extra 15k - 25k increase per house for building costs (depending on type of house).

I'd say the property market will soften further in the near term.

jchong,

Okay. That is 15K to 25K out of 300K to 400K house.

Dreamer

Or could be 500-600k house (depending on location). It's just to give some perspective and to support your point about how much/little the selling price of a house is tied to building materials (and the price increase).

This post has been edited by jchong: Jun 6 2008, 06:19 PM

of course, the property market surely slow down. i am a property owner, and of course i do not want this dilemma to happen, but based on this higher inflation condition, property slowdown is inevitable.

But, i dont think the slowdown will be serious, perhaps a minor effect. Since this higher inflation ( oil hike ) just begin, i guess it is still too early to predict as we dont know the BLR story still. To add some positive view, since there is a discount of stamp duty of up to 50% and the abolish of property tax, i believe these are the 2 points will give a positive impact onto it.

Building materials, is definitely soar in price as well. This will make a heavy impact of new development price. Forget the steels, bricks, wood, cements, just a PILING WORK work cost the developer a huge sum of money.

Strongly agreed...

I must have been on mars. Property tax may be abolished???

Anyway, gotta say that if Malaysia is heading the way it seems to be economically, then its highly likely homeowners with large debt may opt to sell out but it does depend on each persons individual situation.

I agree with dreamer on the fact that many malaysian stretch themselves monetary wise. Financial management and economics really ought to be taught as a subject in school...

Just keep an ear and eye on the news to monitor how the G is handling everything (read between the lines people!), watch general public reaction, business trends and all.

I know MAS offered pilots a raise on conditions which would affect the seniority system that is in place (meaning a pilot working 20 years wont really be better than a pilot working 5 years) and they rejected it >< If some companies offer raises to help their employees stay above economic decline then maybe the entire situation wont be so dire thus properties wont be discarded quite so fast and desperately.

At this point, speculating is all we can do... We should get a much clearer picture in a few months if not sooner.

yes, i do refer to property tax, indeed which is also known as RPGT. i believe it is also being announced in newspaper quite some time ago.

Thanks

Ohhh the Property Gain tax... Yeah that has been abolished since april last year. That I knew and the plus point I saw for that was people who wanted to 'flip' houses profited more.

All I can say in light of possible economic decline linked to RPGT is that homeowners who cant keep up with payments will be able to sell their homes at a greater profit if they aren't able to continue loan payments.

*shrugs* if people opt to sell their homes then long term investors profit. I cannot say for certain how property sales will go cuz I don't remember how the market was after 1997... I assume it will be close to the same if the economy does slowdown like that time...

Looking on the other side of the coin, I reckon properties near to public transport hubs will go up in price due to more higher demand in rental. Young adults like me dont want really want to drive around anymore so we'd be looking at properties with good access to public transportation.

Syd G,

That is assuming that you have a job.

Dreamer

Ah yes

Nowdays I only consider companies that're near public transport. I'm very stingy about spending money on transportation so only allocate 5% only. 25% is already allocated for saving. I'd rather walk than sacrifice my nest egg

@Syd G,
I assume Ur job doesn't require U to travel ?

Chained to desk

Wanna ask some experts opinion here, will you buy a double storey semi-D which is 90% completed now or you will buy a double storey only later on due to increasing in property value or material cost? (Assume double storey price later on will same with double storey semi D now)

What about property near college?
Do u think it will be affected?
Regardless how the Economic goes, there education will go on...

@hotlink,
U should ask urself if U need the house now?! If the price is going to remain the same and U don't need the house now, Y get it now and lock ur cash in?

why don't we choose 10 properties today.. ranging from RM150k to RM450k. Let's see what they are worth 6 months and 12 months from now...

let's have a mix basket of houses/condos/apt...

I mean the price now

2 storey semi D : 297k (90% completed)
2 storey : 260k (New launch maybe will become 280k or 290k when 90% completed)

If i buy now, i can get 2 storey semi D with 297k
if i buy later, with 297k in future, i only can buy 2 storey

Actually is my parents wanna stay with me so that i no need to travel back hometown twice a month.
Besides that , I just feel that I will never ever to own a semi D if i buy later on as everything keep increasing.

@hotlink,
Apologies but I don't quite understand what U mean. What's the difference between this 2-storey and 2-storey semi d? 1 is a semi-d whilst the other isn't?

Well, my friend,.... if you have always wanted to stay in a Semi-D, then you must buy it now. Things are so uncertain nowadays, you never know what will happen to the prices later on.

he mean a Semi-D (2storey type) vs a Double Storey linked (intermediate or corner?)

@yewkhuay,
Yeah I think so but in his original post he did say the properties are the same price mah, so how'd I know there's such a difference.

Anyhow, a semi-d <RM300k?! Er.. just where would it be located?

Lemme ask about the semi-d. From what you mentioned I assume the semi-d is still sold by the developer? Are there many units left in the project?

If there are still quite a few unsold semi-d units it's unlikely the developer will increase the price after completion. So you can afford to wait.

But otherwise yes the normal trend is for house prices to increase upon completion (unless demand is low).

Another question: where is the location of the semi-d vs the location of the terrace house?

i read newspaper yesterday regarding the raw materials (cement, steel bar, etc)...
due to petrol, electric, water hike caused the the citizens having low and middle salary range may no afford to buy houses... government may decide to provide rebate for the developers of the raw material to reduce to house pricing, so citizen afford to buy house later... is it possible for government to do so?

@gkl83,
Yes the Govt can do that; in fact, they can just do whatever they want despite troubling their People [ie: increase of fuel]

just afraid the Govt give "empty" promise again... they say will reduce the cost of raw material...
later petrol hike again and they said forced to increase raw materials pricing...
felt dilemma now, now i targeted another house at Berjaya Park which beside Bukit Rimau since everything cost living increased... but that Berjaya Park house and Kemuning Utama house no yet launch, price still unknown... i afraid will regret if bought the Berjaya Park house which launched earlier than Kemuning Utama, but Kemuning Utama still within my budget...

@gkl83,
I don't suppose U need to worry now since prices aren't released. U should ask urself which one U prefer. The prices shouldn't differ much unless there's some kinda wow concept the developer's put in otherwise it's just another area.

In your evaluation, look at things from the macro perspective. If the building's oredi up, chances are raw materials been bought so there's no way the developer's going to be offsetting their cost - or at least that's the excuse U'll hear them give u -- people just wanna make as much $ as they can so if they can sell it to u at a higher price they will!

I really doubt this government can do it. RAW MATERIALS FOR BUILDING CONSTRUCTION is a big business. They cant even control the electricity tariff properly ( which TNB IS A GLC ), AND RIGHT NOW THEY ARE TALKING ABOUT building raw materials. CHILDISH GOVERNMENT.

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Added on June 9, 2008, 12:32 pmi do confuse about what Hotlink mention as well. and the question seems like too subjective. since the semi d is that cheap compare with double storey link house, why you still puzzles of buying it ?

secondly, i would also like to know where can i get a semi d below 300k in Klang Valley.

This post has been edited by a6meister: Jun 9 2008, 12:32 PM

To me this is a case of robbing Peter to to pay Paul...

Makes little difference in the end...

Altho right now I've planned some minor renovations I've to quickly confirm and lockdown the prices before it increases again

@aaronpang,
Yeah U better get the renovation works completed soon before raw material price increases again

does these really works?? i've gone through an agent to acquire 2 properties from auctions but the seller always bail out last minute ... is it really the case or internal workings??

i'll reckon that existing property (not new ones) in town, price ain't going to go down any time soon from the discussion (soon as in 1 or 2 years time). what do you all think of a RM180k landed single storey in Pandan Jaya. there's existing tenant at RM700/month. good buy?

Plenty available in Rawang, Sepang etc

but the location are the boundary of klang valley...
same like klang's bukit tinggi, still have available units even completed build...
if for shah alam house, the construction done 10-20% only and 90% of under construction houses sold off...

In my honest opinion, If you're looking for positive cashflow from rental or property appreciation, it's not a good buy. That area is matured, jam everyday and the neighborhood is too dodgy for my liking... but that's just my opinion.

I'd add a couple of Ks and buy a condo near Setiawangsa LRT. Rent 1k++ and it's a good neighbourhood too

KLCC bubbles? Come into the banking & property line. They're bound to increase a lot more (according to those umm economist?) and they have extremely high demand compare to medium and lower cost properties. I don't believe it til I managed to get my hands on the loan there.

one of the reason i was considering the area was that in fact it is a landed property... and if one fine day i really get married then can live there

thanks for the info... will keep a look out at condos near Setiawangsa LRT... but the few that i viewed are like 300k and it's above what i can afford

I used to think like that too but you gotta differentiate between investments and property for own usage. I personally dont like staying in the unit that I bought for investment - thus no sentimental value or plan to stay there in the future, just purely business decision

biggest problem is cash flow... i would love to have a unit i bought just to stay in and then others for investment only... but prob is i would only have money to buy 1 for now ... i don't need a place just yet, but want to start early... don't want to be still paying for housing loan when i'm 60

the price of house is much more related to the land, if remember last time read about a property developer said that if you can get a piece of land in klang valley with a reasonable price you are almost sure of making profit from the project.

Anyway Bank Negara have said it will not raise the rate at this moment, but ask we have seen in the past this government can change it mind anything. with the inflation rate rising, Bank Negara may well be force to raise the BLR soon.

Maybe you could get a smaller house and invest the remaining to gain profit?

I started with a low cost unit (85k subsale, original price was 49k). Rent was puny but the property had appreciated nicely

Start small. Start early.

Good luck!

With the current petrol hike until market price soon in August. A 1KM nearer to the place you work and hang out will make a difference in your pocket for the long run. Development that further away from KLCC vicinity will be cheaper and price might even drop soon which is a good buy. BUT it is clear that your travel expenses will double/tripple seeing oil will rise until USD 200 a barrel in next year. Will Toll and misc indirect expenses, you will feel burden soon.

Actually the trend has started that a lot of young people actually preferred to buy apartments or condo nearer to KLCC eventhough it has smaller build up instead of getting landed at same price but far away land. Factor in the further traffic, fuel cost, travel expenses, child education, convenience; undeniably that nearer to KLCC is still a clear choice. I already heard that those development in North and South corrider starting to go bear with recent fuel hike. Places like Rawang, SG Long, Kajang, Seremban 2, Klang. A good reference is KL Draft 2020 and see DBKL has focus on KLCC as a center. I know this plan is still no concrete yet but at least you can see a general direction of where development can be.

My friend bought a Maytower unit (300-400 sqf, I'm not so sure) for 200k. That's like... a shoebox?

Unit like that small is normally for single living, or for rental investment. If location is good then it has potential long term value.

@Syd G,
It's slightly bigger than a shoe box; probably can fit hundred pairs of shoes if lined properly *grins* I call it pigeon hole

the place actually quite good within the golden triangle and close to LRT. i am hoping we can get more development like these single bedroom studio apartment right next to LRT and within the city center, you can walk to LRT and directly to office with fuel price going up to USD 200 i think this is good solution for single working adult or couple with no children. If the fuel price later rise to RM 6 per liter, a lot of ppl will looking for job closer to home, or home close to job. right now i see a lot of ppl living in one place and work at the other side of town. which include me staying in cheras but work in cyberjaya need to plan know where to buy my house and where in want to work.

This post has been edited by robertngo: Jun 10 2008, 01:55 PM

Maytower is close to LRT? Which LRT? The nearest I reckon is Masjid Jamek. Still need to walk for 10-15 mins

It's neighbouring Little India. God forbid it ends up like CityOne where the developer went dead, the place has no maintenance and property owners renting out to contract workers who will then use the swimming pool to brush their teeth.......

i sucks at investing my $$

low cost unit such as flats that can be rented out??

bandaraya and dang wangi lrt and monorail station is also nearby not sure which one is the nearest. haha Cityone is really a disaster, price of unit actually depreciated. who is those idiot that rent out their unit to contract workers? the apartment design actually quite nice, better that maytower.

This post has been edited by robertngo: Jun 10 2008, 03:39 PM

Can. In Bukit Beruntung even hv 25k/unit. But remember the rules - Location, location, location

Dang Wangi is still far leh from Maytower. I'm not a big fan of the neighbourhood but I really like the concept of studio apts in the city.

They rent out to contract workers cause get higher return ma. They stay 10 people in a house - dont care also if the house looks like they gonna fall apart. This is the same case as Cyberia Condo. Rent out to students so that area become like second hostel

developers dont seen to be very interested in developing studio apartment currently, only seen a few example like Marc, 10 semantan and maytower. but maybe later there will be a trend of people moving into the city center instead of moving futher out into the suburb because the cost of transportation is too high

This post has been edited by robertngo: Jun 10 2008, 06:08 PM

That's the size of the master room of my new house KL really is "golden"

@jeff_ckf,
Not ALL houses in KL fetch that kinda value `k? It's all about location location location!

I was actually suprised by the size of the studio unit rather than the price....400 sq ft??

You'll be even more suprised when you know how much rental these shoe-box unit can fetch

Guess that's why I can't live in KL too poor

The location is in Bukit mertajam, penang. The price increase 2k again. The good location now mostly booked by other people already.

Waiting for fire sale about two years from now ...

Interesting statement !

May I ask how do you know there would be a fire-sale in two years from now ?

Because if the said fire-sale does not come along, then you would have incurred opportunity cost. Your money would have earned more elsewhere.

I have learnt my lessons from previous fire sale, a.k.a 1997 financial crisis. Below is my 'forecast'
1. People lose jobs.
2. People try to hold on everything because they do not want to admit they cannot afford all these.
3. More people lose jobs.
4. People start to sell anything besides the primary residential properties
5. More and more people lose jobs.
6. Because of losses in other areas, some even lose primary residential properties


I hope my 'forecast' is wrong because it is not pretty

Actually I am not the only one who 'predict' this. Read this thread

I too anticipate that there will be a downturn in the economy in the next 1-2 years. And when there's a downturn, property will drop in price from current levels. Whether it will reach 'fire sale' levels is hard to say but it will soften.

But the real question is: when the downturn comes, is property the best thing to pick up?

I belived the 'softening' can be seen now. If you look in the streets, there are less cars and less traffic jams now.

What do the others here observe ?

I think this is a very noticeable occurence.

After reading this whole thread, so, what can we take advantage out from here? Save more and more now, wait for the moment when firesale, recession, people lose job selling properties then we go buy.

Of course. That's if you manage to save

Let's assume Jan 2009 recession, June 2009 10% of people lose jobs, 2010 more and more people lose job. So if people lose job selling property, I guess is around 2011. So you have to wait for 3 more years before you can get a house. But not everyone can wait for 3 more years, if they need a house around 1 or 2 years.

How old are you now vaio_me?

Almost reaching 30 when the recession time, do yo u think is a golden time? Saving now and keep on looking for opportunity.

Hotlink, seems like you are able to count the effects and able to predict the recession, if it comes. But have you been through a recession before ?

I mean have a personal experience in a recession ? If you have, then I would think you are able to foretell then.

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Added on June 13, 2008, 3:58 pmI'm afraid I have to agree with Syd here. If you are only starting to save now to accumulate bullets for the recession, then, it will be difficult because now that all things have gone up in price, your expenses will be high.

Previously, when things around us were cheaper, that would have been the time to save. .....

This post has been edited by Lawyer1: Jun 13 2008, 03:58 PM

it may sound straight forward, but how much money will you have by the time? it will be very hard to get bank loan, you have to pay cash if you were to buy in auction, worse comes to worse, you might lose job yourself, then you need the money to sustain you and your family...hahaha...money goes away easily..

I personally feel that during the actual recession, u really need balls made of steel to actually buy a property. Reason :


1. Banks r too afraid to lend you money even if you could afford to pay the sky-rocketting interest.

2. Everybody around u will be telling u to keep your cash, cash is king, properties is expensive etc, times r bad.....negative feel that will drag u down.

3. U dunno if you will still be employed next month, hence should you really take the risk DURING A RECESSION?

4. You then realized that good property's value doesnt drop that much, UNLESS we're talking about massive supply VS average demand.