moderator is being moderate here, recently has been ending the message with "no offence " quiet frequently

100% agree.

I don't think malaysia properties sector is going to burst anytime soon, as malaysia property price is still consider cheap if compare with other country and its always good to purchase your 1st property as soon as you have enough saving

I understand that gov doesn't want to overdo until killing the properties sector, as we know construction and property sector are quite important for every country economy.
Once overdo it, it could takes years and decade to recover.

But I would say property sector need some regulation, especially the bolded part, which become a rip off for genuine property buyer out there.
When there is 100 unit to be sold, please list/open out 100 unit, often, even first day of launching, we saw the tag sold being put around and left a few unit. Eventually people want to jack up price when seeing great demand. Is it true the 100 unit really being sold off on that day of first day launching?

It’s getting way too costly to own a home

AS I will be getting married next year, I have been looking forward to owning my first home. However, it is really painful to witness the ever-increasing prices of houses which is outpacing my income growth.

Recently, I walked into the sales office of a new condominium project and the sales person told me the developer is giving a special eight per cent discount for units on the lower floors. The person told me that I only had to put down two per cent to secure a mortgage, as they will report to the banks the full price of the condominium, and give me the eight per cent discount without the bank’s knowledge.

Coupled with ever higher loan-to-value ratio, it sure is a sign that the market is now beyond the reach of most genuine home buyers. Otherwise, why resort to such tactics to entice buyers to sign on the dotted line?

This reminds me of the hey-day before the 2008 crash in Britain. Just before the crash, British banks were lending up to 110% of the value of a property. Any form of affordability test was circumvented by mortgage advisors who encouraged buyers to “self-certify” their income levels to declare an inflated income.

The whole of the UK was in a euphoria, and everyone was piling into the “sure-win” property market. Mortgage repossession in Britain has increased drastically in the past couple of years, probably causing ruin to the lives of those caught out.

After looking at the property market in the Klang Valley, I am now more inclined to rent my first home.

I can rent a nice house in a good area for RM2,000, whereas I would have to pay RM4,000 or more to the banks if I were to buy a similar property in the same area. Many people say renting is a waste of money. I don’t see how paying double the rent amount to a bank to service the interest is not a waste of money.

http://thestar.com.my/news/story.asp?file=...40931&sec=focus

err... capital appreciation?

I see the developers are now commenting

how about corrections?

Hi there, very nice article. Cheers.

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Added on October 1, 2010, 2:42 pm"I can rent a nice house in a good area for RM2,000, whereas I would have to pay RM4,000 or more to the banks if I were to buy a similar property in the same area. Many people say renting is a waste of money. I don’t see how paying double the rent amount to a bank to service the interest is not a waste of money."

I want to make two comments:
1) I think with monthly RM2,000 there are still many nice condos around. Just people are choosing, expect bigger, better, and lagi cheaper. That's the nature of most human being.
2) Important is you got to make sure you have enough saving to support your house purchase. That's shall be fine anyway. Still got people remember their uncle bought house @ RM150k in P.J. and 15 years later become RM500k? The time is telling property is appreciating over time.
3) Malaysian inflation is up definitely, because government remove oil subsidy, sugar subsidy here and there. If the cost of building is increasing, new house, i don't see any reason the house should not appreciate. That's the rule of thumb.

This post has been edited by ThinkerMachine: Oct 1 2010, 02:42 PM

Actually their internal people has already bought it before it being launched. I know cause I bought a place which was owned by the vice president of the developer itself.
Also if you're talking about demand, the demand from genuine house buyers(those that buy for stay) is actually not that high, it's those speculators that creates the demand. It's quite obvious when you see apartments /expensive condo a year after OC only 20-30% occuppied .

nope... i'm just a plain old investor... just like you guys... i have a full-time day job... not even in the real estate business...

possible... but i was giving a reason why people invest even though sometimes the monthly installments are more than the rental returns...

Notice some of the characteristic of the group that are complaining property are too high:- i. property must be new ii. property must be landed iii. property must be freehold. Guess if you are not so choosy, you can still find some reasonable one.

Developers and bankers are making an ass out of new buyers. Just see now many new launches sold out in the first day, good units reserved mainly by their own people. They will sell you the 2nd phase with inflated price. If not give you 8% discount so total load up to 98%. End of the day aft sold, developers wash their hands, bankers laughing you will work for them for the rest of your life.

Guess we forumers here just commoners. Not really understand how the system works.

Say you are a developer, built a condo or a landed property with 300 units in Ph1, 300 in Ph2 and so on. Out of 300 units in Ph 1, 50% reserved by your own people. The rest sold to open market. After completion, you have 150 units in hand. You just need to stir the market by selling and buying back say 5 units in your hand by 150% of the initial launch price and then spread the news to property agents. Market will follow. Believe that happened in KLCC and some PJ properties few yrs back. Not surprise similar tactic going to happen in the coming future.

Another disgusting method, listed property company, using shareholders money, building shops next to some mega stores within your land. But not a single unit sold to open market, no need to launch, all taken by your internal people, be it CEO, MD, executives. Sell them in 2ndary market and pocket the profit into your own account so lesser profit to shareholders.

End of the day, home buyers, shareholders, investors etc being made ass by the developers and bankers.

Think abt it, if that make sense. Hope there will be some regulation to curb these unscrupulous practice by the developers.

Last thing I will do is to buy their shares in KLSE.

This post has been edited by Bobby C: Oct 2 2010, 12:11 PM

Bobby C,

What you outline is standard practice by many property developers. To them, it's just business tactics, even if not exactly scrupulous. They are businessmen, first and last, out to make money. They are not compelling anyone to buy their products at their price. If you fall for their tricks and buy in the mistaken belief demand for their properties is high and supply is running out, it's your own doing. As for the financing banks, same thing applies. No compulsion. If most consumers hold off buying, the laws of supply and demand has to come into play. There's only so much developers and property speculators can hang on to ; even at low interest rates. They also borrow from banks and need to service their loans. Don't expect regulators to save consumers from themselves, or from sharp developers and speculators. You are much better off learning to look after yourself.

In stock market, if you are company insider knew the company financial info, or any confidential info that could lead to significant price movement, and use info, to trade stock, it is against law as insider traders, which is an offence.

When a grocery shop sells sugar or whatever product, when they knew the product price might go up in near future, they stock up and refuse to sell or just sell a little, it is also an offence.

But in properties, company staff can buy their company built unit, and some may even reserve unit for their own, which is totally considered a normal practice?

I fully understand from business or even investment pov. But clearly not everything can let thing run freely on its own.
Ain't we just seen how unregulated financial market can lead to the global financial crisis?
Some regulation must in place, so that situation won't go way too worst until making into another crisis.

Locally, properties buyers actually have little protection.

Buy a not yet built house, developer abandon mid-way, all money gone, and still need to pay interest to the bank. Buyer can do nothing.
Buy a condo, developers don't do the strata title for years. Buyers can do nothing.
Buy a condo, developers gone missing after or close shop afterwards and strata title not yet completed, buyers stuck in the middle. The properties cannot be sold with out a strate title.

You can moan all you like about lack of house buyer protection in Malaysia but nothing much is going to change without a strong house buyer lobby, adequately funded, politically active and well organized. Who will go about organizing such a lobby? Given Malaysian consumers' general apathy, versus strong political clout on the part of developers, nothing much was achieved for house buyer protection the last 30 years. The Housing Ministry has been an MCA portfolio for most if not all of that 30 years. Much reforms were suggested but little progress was achieved. Is it surprising?

This guy is an idiot

Maybe our friend need your guiding light in teaching him RE, mortgage, rental, etc ...

teaching anyone who is ignorant but thinks they r dem smart is a tall order.

Anyhow, I'll be VERY, VERY happy if there are more idiots like this exists. Can quickly retire lioa...........

kekeke... you are much more direct than me... at least when i replied to him, i was polite...

The best part is, it make it in thestar paper....
i wonder what the editor doing.