China's credit bubble on borrowed time as inflation bites
The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.

http://www.telegraph.co.uk/finance/comment...tion-bites.html

"It is sobering that even a slight cooling of China’s credit growth led to economic contraction in Malaysia and Thailand in the third quarter, and sharp slowdowns across Asia. Japan’s economy will almost certainly contract this quarter.

Albert Edwards from Societe General said the OECD’s leading indicators are signalling a "downturn" for Asia’s big five (Japan, Korea, China, India, and Indonesia). The China indicator composed by Beijing’s National Bureau of Statistics has fallen almost as far as it did at the onset of the 2008 crash.

"I remain convinced we are witnessing a bubble of epic proportions which will burst – catching investors as unawares as the bursting of the Asian bubbles of the mid-1990s. Ignore these indicators at your peril," he said"

Just wonder what is the basis of price vs disposable income above? Are the figures derived from highest price vs average disposable income? Or average price vs avarage disposable income? Which class/category property was it referring to? High end, middle or low end properties?

Note in 1997 downturn, middle class property around established areas BU/PJ generally escape the storm. Also note 2008 when crisis hit US/Europe, KLCC/MK proerty bubble burst coz many foreign owners dumping. But others around KV didn't 'feel' even a breeze.

While many talking bubble going to burst soon, take a look at the statistic below, yup bit outdated Feb 2010, still relevant as a guide.

http://www.economicshelp.org/blog/economic...ebt-by-country/

Note public sector debt vs GDP for Malaysia    47.80 at No.50.

Just to say that if if crisis was to hit, generally Malaysians still can tahan without mad dumping ... resulting crashing, bursting into flame etc.

Worst case scenario just extend your load for couple more yrs with flexi plan available.

Correct or not? 

I also do not think BNM will raise 100 bps next year.
However, I do not think your figures of the BLR is right.
Attached the historical BLR.
By the way, my reference of interest rate refers to BLR, not deposit rates.


1. Banks release of loan versus income is indeed very alarming. As posted previously, I do know of banks lending based on monthly instalment of 60-80% of disposable monthly income.
A general guide should be indeed 30-40%. Anything more, is risky for the individual, and may affect the economy too.

2. The range of salary from 1-2.5K is not worrisome as they are not, or at least I assume, they are not part of those who purchase 500K property. The more related one would be those in the range of 5K-10K monthly income.
That said, I do not see much employment issues for those in this range.

3. Malaysia did raise interest rate in 2010. Korea as well. China I cannot remember if they did in 2010 though they are likely to do so in 2011. US as well. China's govt also show that they dare to cool down the economy while US always fear that they are not competitive. Assuming China does raise interest rate, US would likely to follow suit as their competitiveness in export may not be so affected.

Properties indeed is about location, passive investment tool. However, nowadays it became like another Genting. I do not see much difference in the way the flippers play the property market vs those gamblers in Genting. Of course, there are genuine investors around with high holding power and long term horizon (5-10 yrs minimum)

Now indeed it is slowed transactions - listing increases, duration of listing increased as well but price stagnant. Both buyer and seller refuses to budge. Lockdown, I d say.

Thanks for the info 

Guess nothing is unethical till shit hit the fan and those on the street feel the heat then only will they the majority complaining...typical Malaysia tidak apa attitude. Matter of fact, how many of us care even to register as voters or/and continue to vote for the corrupt to be in the office? Just look at recent minor hiccup on distorted history books advocate/force by Ministry of Education onto our Form5 students. How many in the country actually aware or even care to voice up?

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Added on January 3, 2011, 5:34 pm
That's not moderate drop, that's bubble burst! If that ever happened, wonder how about KLCI? 30-40% plunge?!

no idea on tat... but how come price of goods, nasi lemak, teh tarik, ron97 & etc increasing & not in tandem with the purchasing power (salary increase) of the average citizen? how come the govt kenot save us?? y dun they go ask china go back to farming??? coz my car luv ron97   

sumore some developers r throwing in freebies & lotsmore to entice us. the last time I recall eating their bait was in 1997/98 & just recently 2008. tat time govt give waiver stamp duty oso. the recent was no rpgt. nyum nyum... u should know la, after tat, wat happen. clue : price did not go down

but its a free world & the decision is yours! btw, y not use epf, get a house? the return on house sure beats epf & fd rate or izit not? 

BLR is going up some more guys, honeymoon time is over

http://www.btimes.com.my/Current_News/BTIM...icle/index_html

Pardon, for being ignorant here... a "super"noob question here,

What is RE and ATM?

Thank you.

sometimes when we think about the risks too much, we will miss the opportunities

maybe u read it wrong, i didnt say don't think about the risks
just dont think about it too much

The key problem with some people is they keep forecasting that mkt will burst, but when the mkt really burst, they also hv thousands of excuses not to invest, why? Try to think in wat circumstances mkt will burst? there is no way mkt sentiment is good and stock mkt crash...if one dun prepare to take the risk, then forget about investment

Price of property depends on usability of public utilities nearby?? First time i ever heard of such a hypothesis. Common la! If ppl dont use it then its for a good reason which would mean either a flawed access design or poor locality.

Your wants and needs are not gonna affect the property value

That is the issue which was discussed in the article. Its not about who wants to move where. Property prices are not dictated by needs and wants. If the property is located too close to the MRT and exposed to the noise and vibrations then the price will drop for sure. Its nothing to do with the neighbourhood being full of rich ppl or otherwise. Its everything to do with the location of the stations and the running lines.