If u look at the demographics and pyschographics of the people staying in landed prime prop's - they are in league on their own. History and time has proven that areas like TTDI and BU will not fall by quantums like 25% or more. Frankly, I do not even forsee a drop of 10% or more in those areas - at a worst case scenario.

In fact - the prices there will only be stagnant or slightly increasing. Why? The residents there have high bargaining power. They are free from any encumbrances. They mostly buy for their own stay. There are hardly, if not no motivated sellers. TTDI probably has the highest retiree composition in the country.

sub sale cases have been reducing in Banks since July last year. My point is this - subsales volume could trickle in prime landed residential areas - and the prices would still hold.

Give u one example - One DSLH which I am eying in Athinahapan 5 in TTDI is still holding at 780K. He has put the house in the market for close to 8 months now. And he has refused to budget even RM 1 on the price, despite getting serious offers from buyers. Secondly, and this is the best part - he has not bothered to rent it out. It's still very empty inside.

Agreed. those owners have the holding power, as u mentioned they are in league on their own and property may be free from encumbrances and highly not their 1 and only property.

I believe not every genuine seller will hv the patient to wait for his ideal price to close deal unless property is tenanted/occupied. I respect the seller you met and wondering if the house is vacant and how patient he has been to maintain it... can he really hold on for another few months to make it 1 yr unoccupied vacant house...

If the BNM lower the interest, also the blr will drop.

Which also means---------> affordable installments ---> lesser desperate sellers == stagnant house price

Agree with Phoeni..

Prime location (especially landed prop) is holding very well, especially BU.. Last year till date, asking price still remain at least half mil.

The 1st to be affected are usually investment property (usually high rise) rather than own stay property.. KLCC and Mont Kiara are badly affected right now as purchasers are mostly investors..

Property is about seller and buyer. Who is more desperate will dictate the price is heading north or south.

Another point many fail to see is that, there is no incentive to sell your property (those fully paid) and converted to cash and put in FD because FD yield little return now (not more than 2.5% and expected to go down another 0.5%), except those needing the cash or unable to sustain the housing loan due to reduced income or whatever reason.
Especially with inflation is expecting to revive after economy recover in the longer term, holding too much cash has more risk (eaten by inflation) than having hard asset.
Provided those asset can get some tenants, people with amper of reserved cash prefer to hang on their property.

Property price definitely will soften, but it is not up to a degree of crash like stock market did.

Its very low %tage, speculator have zero loan for their units. Yes, the BLR has come down and allowing a lower repayment, but if their main income is lowering beyond the blr reduction gain, they will let go eventually. Those that zero loan, may not be speculator. COuld be old money or inherited properties in no rush to sell. If one is willing to keep the house empty unrented and unsold for a full year despite a lowered selling price offered, must be either a complete ignorant fool or super rich, got nothing better to do than keeping existing properties and let it sit idle. If the offer price is not too low (breaching his/her oppty cost), they should sell it off and pour the money into other investment instrument. Although FD is the worst investment tool there is for comparison. Even selling it off cash at RM780K for that properties in TTDI, even at lousy 2.5%, that is RM19.5K a year. Assuming that they are not capital gain tax or any other cost involved further on the selling. Beside an empty house can be subjected to some cost that will seriously devalue the property especially unkempt or poorly maintained. And in 5 years, that is 100K gain! Houses in TTDI may have great holding value, but they do not gain rapidly either. Same goes for established neigborhood, they just gain slowly but steadily. As long as the gain exceed other oppty cost that the owner contend with, its unlikely to be sold.

Prime and established area may have less drops but keep your eye open, you will see some good oppty. Of course, the near completed project especially those speculated one, the developer are throwing in goodies like waived S&P, stamping, extra parking lot, etc etc. That can be a good chunk off your acquisition cost.

Got friend on property and development business, the impression and outlook from them is not pretty. They are facing a very tight credit from bank and new phases unable to be launched due all the down factors.

They seems to be expected a worsening nos from Q3 onward.

This post has been edited by gamenoob: Mar 5 2009, 08:29 AM

Hi, Mr. Gamenoob.

I appreciate the diversity of your comments. I do disagree with some of your points, but I think you made good points as well.

1. I am very, very, very particular when it comes to landed. I view prop's as a "centric" core concept. The core holds the country's most mass affluent crowd. In general, areas that go further from this centric core tend to command a lower premium. If you're talking about residential prime landed properties in Selangor - the centric core to me is the Damansara area. That would include BU, DJ, DU, AD, TTDI, Mutiara D'sara, Kota D, Bukit D'sara. TTDI is not classified as D'sara per se - but is just fronting DU, so i hv put it in. Don't nit pick pls - there are areas like DPC which are doing phenomenally well. I'm talking about things in general, all things being equal.

2. IMHO - this is where the majority of the mass affluent of the country reside at. (Mass affluent individuals have avg household incomes of at least RM 10K p. mth). Don't nit pick....I didn't say super rich....I said mass affluent. They are middle to upper middle class residents, have stable and good backgrounds, good mix of white collar and entrepreneurs. They also have their fair share millionaires and retirees. Many middle class families with young children aspire to move here. These areas have zero tolerance for speculators. They do not have fancy state of the art "guarded compounds" with nice landscaping - but they are proud of their homes. They have strong resident societies. They hire their own private guards to patrol the area. They construct their own boom gates.

3. It is home to 400,000 mass affluent individuals. The core of the mass affluent is here. The most integrated commercial centers, shopping malls and businesses is here. You cannot replicate an area like this overnight - despite any fancy landscaping, freebies thrown in, or financing schemes from newer areas.

4. My friend, the power of leverage helps people like me get a phenomenal return in the areas described above - despite the "slow gain" in price. Don't want to quote the math here - too much to write.

5. Don't bang me guys. Just my own personal opinion and philosophy. As I mentioned, I'm very particular when it comes to landed. I stay away from Under Con prop's - despite freebies thrown in etc.....I will only stick to my opinion of the mass affluent core areas. I may lose out in other UC areas....but so be it. From a risk-return perspective - i'd rather be an expert in the areas above, plus it suits my investment philosophy.

cheers.

This post has been edited by Phoeni_142: Mar 5 2009, 02:11 PM

Hi all,

was wondering whether it is a good time to buy property now? Considering that the future economic status looks bleak, should we, or shouldn't we buy at this point in time? I've spoken to different 'experts' and it's pretty much a 50-50 decision. Some say that the economy will experience a downturn soon, but some also say that the end is in sight.

Hope to hear your thoughts on this matter.

depends on your financial status.

during recession, u can get property cheaper, and maybe better rates from banks.

and once the recession is over, the property price will increase again and u can profit from reselling.

you didn't mention whether it's for investment or residing. but generally if your job/business is recession-proof (as in employed by govt), this is a good time to buy property since the rates are lower and developers will offer incentives to get the property off their hands.

There are already a handful threads available on this issue. You may refer to them for more insights.

Anyway, I'm also in the same dilemma; whether or not to buy NOW for own stay.

Considering job security factor, I'm halting it for a few months - with some hopes that the property price to drop even lower.

Well, it's for my own stay... will areas around TTDI (condos) be really affected? I have a feeling that the selling price may not drop much due to the seller(s) not being in dire need of cash. Would it be safe to say that the general population of TTDI are more of a want to sell, but not needing to sell kind of crowd?

same thoughts altho occasionally you could fine some rare lelong deals.

every area has their share of good bargains and deals.

In general, TTDI wouldn't have many motivated sellers. The bargain deal comes once in a blue moon.

Personally, I feel that the condo's in TTDI are pricey, but they have withstood the test of time, for the past 20 years. Their gains are not very exciting, but it's stable and reliable.

I'd recommend you to look at either Kiara Green or Kiara Park if you'd prefer something low density and family orientated. The Residences is a little bit too "happening" for uncle like me.

cheers.

As far as "safe investments" are concerned, think about it. Which investments can assure you that your capital won't get burnt? There is none. But look at how the equity markets are doing, you can be rich one day and before you know it not so much anymore. Same for commodities, even gold and forex.

Now look at property investments, if you speak to 10 ppl who have invested in prime areas (keyword is prime), you can see that not only the capital is preserved, you get cashflow if you rent it out, and inflation is usually factored in the market price. This is not a surefire guarantee that this is the best investment, but it sure gives me better sleep at night.

Couldnt agree more

meejawa, are you a "capital-gain" or "rental cashflow" property investor?

Both, but more towards cashflow. It's refreshing to see that to Phoeni, the capital gain for condo is a plus/bonus, and not an expectation.

I look for new properties at good locations, which USUALLY appreciate upon completion. Location is really key, and there must be some confidence in the potential tenancy. So a factor of no-rent are put in, so when the wheel starts turning (tenancy is in), I get to enjoy both.

I view both types as a cow; capital gain is like the cow growing, but if you slaughter it you get the meat, but it's a one-off gain. My philosophy in property investment should be always for cashflow, unless there is a good opportunity to flip. So as you may have guessed it, cash flow is like milking the cow, and this is what I need in my retirement later.

Tell you another thing, this is just my plan, sometime in the faraway future . I'm planning to get one house for one child I plan to have (I'm not married, so can only plan now). I'm getting good COCR, leave it on more or less autorun, and look for another, so in the future one kid can get one property for their needs (education and healthcare mainly). This will help me, the family, and them in the long run. It's very much easier said than done, but when you have a goal, and the passion to pursue it, I think it's a blessing anyway. In short, one "cow" per child.

We r more similar than what I initially thought.

Im planning to get approx 8 bijik properties with good cashflow to allow me to be financially capable to retire early (hopefully by 35), and kawtim my future kid's education.

Btw, speaking of location, mind sharing with us any particular location that u r currently vested/eyeing now?

Well, I think it's refreshing to meet a person which shares the same philosophy......I suppose this school of thought is getting extinct nowadays.....

Just a couple of questions.

1. Great to know that you're into COCR and for +ve cash flow in your properties. However, also noted that u don't mind considering UC condo's. Do u think it's worth the risk? It's hard to evaluate potential COCR and tenancy rates before the buidling is complete, isn't it? Unless you're willing to take the quoted rental yields from the developer? Perhaps you could share your views here.

2. I'm just playing devil's advocate here, to determine your thought process. Don't u think it's safer to view completed properties>? After all, it's easier to get certain deals and bargain prices - u get instant equity.

3. What landed areas do you think are worth looking at, and why?

cheers bud....again, I look forward to your views.