DD vs SS, over supply will cause price to drop, rental will drop too, just imagine, for instance, if MK price drop 30% and rental increase 20%, do you think anyone would be blurr blurr paying high rental? very simple if installment lower than rental, sure buy

why property is more stable, it some how cater for basic needs, it won't happen like stock mkt drop 70%, I remember one of the worst Talam project in Tmn Puncak Jalil, 212K developer price in 2000, 2004 lowest hitting 175K, now back to 300K

demand over supply not necessary will drop. when demand over supply + people losing holding power (like a major economic crisis), then more likely will drop. the aunty uncle who rushed into BBB has a lot of holding power. people who buy within their mean also have holding power. not every buyer stretch themselves till too thin. especially asian who have good saving habit compare to US

price drop rental not necessary will drop. just like when property price increase rental not necessary increase.

even sometimes when installment is lower than rental, not everyone will buy. many people may not afford to pay the downpayment, many people may not able to get a loan

so puncak jalil burst oredi, 15% drop and then 50% hike
still people wanna chase the drop

Yes, but you said, he had owned property even before completing his uni. So don't tell me he bought it from selling newspapers and doing odd jobs?
Unless he was doing business. Now this is a matter of wits and luck. How many people can actually be like this person?

If it was a matter of hardwork, how many people (including those who already owns property) IS this person?

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Added on February 13, 2011, 3:49 amYes. And where's the money coming from? Bank lending rate of course. but there will be a limit. When the tap runs dry, then hell breaks loose. The only question is when and by how much. The higher and the faster it goes, then the quicker and bigger the pop.

Well now this is not something to be celebrated about. It's a problem of over population. When the planet has too many people, many people will die off, until it reaches a sustainable population. If the planet recovers that is.

Before that happens probably, there will be moves to control population growth.

There's nothing proud to be part of the kiasu club in general, their simply people who jump queue and help society as a whole reach it's critical point sooner.

This post has been edited by TheDoer: Feb 13 2011, 03:50 AM

retracement trend on PM's.

PM's have historically overshot, negative retracement is due!

That is all I'm willing to share! How you read PM's is up to you.

Bottom Line the return has been hugely greater, and ultimately easier due to liquidity than RE!

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Added on February 13, 2011, 9:13 amAlways, or move in with family and double triple up. What else do you think happened in the USA!

Listings Increase, Sales Decrease, Prices Erode....so do rentals!

Top prop's get hit first until some equalibrium occurs between affordability and ownership.

Maybe someone in their wisdom can explain why there are so many new listings in the highest priced areas are on the market right now?

I know, but do you?

This post has been edited by Onemorething: Feb 13 2011, 09:13 AM

Hi 1morething,

what is PM?

Thanks

think out of the box, dont limit the view on how the world should be solely base on your own knowledge and experience

Maybe ppl who experienced more hardship r forced to master the ability to multitask and get the job done ..... I’ll share a real story of a someone I know ……….

Like prop101's example, he started taking odd jobs since was in secondary school. Dont have the luxury of having parents paying good tuition, or go to good schools. Still managed to enter a local uni after SPM. Didnt use a single cent of his parents $$$ throughout 4-5 years in Uni, worked his butt off through-out uni to ensure he has enough money to eat, study and pay for his bike. He didnt get 1st class honors, but did enough to get a decent result and graduated.........perhaps could have gotten better result if he didnt have to work but honestly today I personally think that having the right attitude is far more important than getting a 1st class degree.....

Today still in his twenties, he works in an industry n role that is completely unrelated to his degree, earn a decent salary and doing a job that he loves. Like myself , he has always liked prop investing, self-studied the game n made his 1st million from prop investing (networth). Think today he also oversee 3 startup companies that he co-own n co-run.

Looking at him, he never focused on solely one thing at any time yet he isn’t doing that bad at all today. In fact his multitasking ability has become a valuable asset. People often ask him how did he achieved so much with little resources and time. He’ll always smile and then utter the following ………. “stop making excuses, and just start……………”

Good story and good point, this is a possibility in which the "others" may acquire their home... but, I still have to reiterate this....

I metioned. The rise of property prices by speculators, is like we are on a sinking ship, and there are enough life boats. The first thing the speculators do is, to snatch as many life boats as they can. When the rest of the sailors are about to leave, they are told to either pay up, or swim to shore.

"Stop complaining, look at that guy, he's already reached the shore, perhaps you should have improved you swimming, now just put your back into it, I'm sure you can make it."

Saying this aboard their empty lifeboats which they had tied together into a floating platform.

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Added on February 13, 2011, 1:04 pmSo it is as I mentioned earlier?

Unless you're hinting at illegal activities.

Well, the same conclusion:

Not everyone can be this guy.

And this guy is 1 in a million, what about the rest of them, do they not deserve a home? It's not like they laze around everyday.

This post has been edited by TheDoer: Feb 13 2011, 01:05 PM

Chief, the example makes sense when there arent any life-boats or cheap housing anymore. As previously mentioned, there r cheap housing available if one is not choosy. No one forces anyone to pay half a mil for a new DSL when a 10 years old DSL within the same vicinity is at least 40% cheaper. Our prop price arent anywhere near HK, SG, China etc...........yet still ppl complaint?

Sometimes I felt ppl complaint as they felt that they r entitled for cheap housing. They somehow think gov, dev, and all prop buyers must ensure that the market adhere's to their own requirements. So instead of adjusting to the world, they want the whole world to adjust to their needs and wants................. and these r the same bunch who could have afford to buy properties for own stay 2 years ago but simply hold back as they are BETTING against the market................. only to see market has gone complete opposite against their bet..............

a lot of people are still living in yesterday when the property price was cheaper. they expect the yesterday price, in today's reality.

imho, it's not that they do not know today's reality, they simply do not acknowledge and do not accept it, they rather complain because it is always easier to join the complaining mastermind group, than painfully accepting the reality.

for most people, it is hard to live in the new reality because their salary increment never beats the inflation (especially property), by accepting today's reality, it basically tell them that they have to downgrade their desired lifestyle such as the type of property they will be staying in. this group of people have no one to blame because they choose to stay in their comfort zone. even when there is an opportunity for them, they are always saying: "wait...lets see how it goes first..."

there is another group of people who is willing to walk the tough journey to increase the amount money they make. these people afford their properties, one after another.

Buy property with cash or take loan?

which is better?

This post has been edited by soul2soul: Feb 14 2011, 09:21 AM

Guys,

One more article in the Star today concerning property..

By Michael Tan | Feb 14, 2011
How do you make money when there’s a property bubble?

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There’s a definite price bubble growing in the real estate arena in Klang valley to say the least. With the reports from various financial dailies showing strong or overwhelming growth in the nation as well as new and bold land acquisitions by several large developers, things are definitely gearing up for 2011. Without doubt, more prime located properties will be launched, and the prices are definitely on the upside.

As a matter of fact, just the other day, I was at an auction for a residential property auctioned for RM500K. To my surprise, it looked more like a night market than a high court auction. Never have I seen so many people so anxious to plough their money into properties before. There were more than 30 people in the courtroom! What baffled me was that most of the properties in fairly good locations were bid up and bought at above market value prices! The property auction I attended went for RM800K. For the life of me, I cannot understand the rational behind their actions.

I also experienced and heard of similar cases in the secondary market. Just the other day, I stumbled across a good deal in the market. It was a small residential property in USJ that was going for a reasonably good price. When I showed up for the viewing, there were more than 15 prospective buyers and real estate agents cramped up in the living room of the unit! From my observation, property prices in several hot spot areas such as Taman Tun Dr Ismail, Damansara, Bangsar, Subang, Petaling Jaya, USJ and Kota Kemuning, have increase by an average of 40% to 60% in the past seven months (since May 2010).



It’s true, the market is hot and it will only get hotter. Bank Negara’s implementation of the 70% capping on the loan-to-value (LTV) was in reaction to the tremendous increase in real estate transactions in the past six months. However, the question is, will it be enough to slow down the current market momentum?

The question one should ask is “What can a person do, in a situation like this?”

My response to this current situation can be split into two answers. The first answer is for those who currently own one or more properties, primarily for investment purpose. My answer to you is SELL. Run a check for the value of your property, both from the banks as well as from the market (i.e. you can ask your friendly real estate agents). Should the value achieve 30% or more appreciation value within the last two years or less, it is a good indication for you to consider a sale. If the rental rates are great, you might want to consider refinancing, so long as the cash flow remains positive. These are the best time for you to cash out from all the years of investing. Monitor the market well, depending on what type of properties you own and also what type of development you are experiencing in your location, you may want to find the best time within the next couple of months to let go of your property. I figured, within the next couple of years, the market will continue on an uptrend and cashing out during these times will be generally profitable.

For my second answer, if you have already sold all your properties, or don’t have properties to sell yet, then buy with caution. Invest into fundamentals, never on speculations. There are still opportunities in the market. With your ears on the ground, keep your feet firmly planted while shopping for properties. Keep a firm eye on the prices. The best reference is always the rental market. If you are going to buy property for investment purposes, you will need to either rent it out or sell. Selling prices are closely related to the rental prices as well, therefore, you always need to ask yourself “Who is going to rent your property and at what price?” Find out what the rental rates are like. With the exception of houses, a good benchmark for all residential investment grade properties is about 6% (or more) rental returns. The following is the formula to determine rental returns:




If a property cannot achieve such returns, i.e. the selling price is too high as compared to prevailing rental rates; it is definitely not a good idea to buy.

Let’s go back to the fundamentals. Besides rental returns, look out for the take-up rate of the properties in the surrounding areas and ask yourself, “Does it take too long for the tenants to fill up the space? Is there more demand or more supply of space in that area?” Also, who is your target market? Is it a growing or the numbers dwindling?

Regardless of whether you are busy selling or busy buying, start getting busy. The worst thing you could do right now is to freeze. Many are either sitting it out or just plain afraid to get into the market. These are probably the same people whom do not invest in the worst of times too. My question is, if in the good times, you do not invest, and in the bad times, you do not invest, then when do you?

I challenge you to make the best of things, in the best of times and in the worst of times. Happy investing!

http://www.starproperty.my/PropertyGuide/Finance/10009/0/0

Take maximum loan for maximum loan duration for good location properties.

For me.. as long as we did our homework on the location and ROI numbers looks good. Even if the bad economy hits we will be able to ride through the storm... Need the power to hold the property...

if you have a lot of cash, says a few mil?
how about if you pay cash 10 prop (300k each) and reinvest all the collected rentals to UT/ETF (annual return 8%) until u can buy another property with cash again? (u can save on lawyer fees and bank interests by paying cash)
eg if rental income is 20k net/month (2k/mth x 10 prop) + profits from UTs, u can afford to buy a 300k prop again every 1 year.

p/s: in most cases, rental hardly cover the loan interest, based on current inflated properties prices. so it is not wise to have loan for rental income.

You have put in one unlikely scenario for me. I can dream that if I were to have a few mil cash, I will buy agricultural land ie with oil palm or rubber trees as the price is very high. Later on, when the township is needed I will convert into housing land.

However, to be realistic. I have little cash but can qualify for bank loan. I would go for freehold landed property with reputable developers. Banks are happy to offer me high MOF, long tenure and good -ve BLR.

He is contradicting himself. why sell now if you expect price to go up for another few years?

This post has been edited by groggy: Feb 14 2011, 04:03 PM

Best word "Downgrade"

Rent now as there are plenty of choice at numerous location and at the fraction of the monthly installment the owner has to service the bank.