For ordinary people out there, there is no way for them to do due diligence on the company financial health especially in time like this, some developers financial situation can change dramatically in the recession time.

Previous completed project or properties can be a good benchmark how responsible and work ethic, but this doesn't mean the developers still financial sound to carry out future development.

In a recession economy, the risk of UC become higher particular for those unknown and smaller developers.

Just my 2 cents.

Hi Mr. Cherroy,

I'm suprised that I share a similar view as you with rgds to UC prop's. I thought I was the odd one out most of the time!

Anyway, there are many divergent views - and as long as investors fully understand the risk-return relationship of their strategy - hopefully they can achieve their expected return.

How about you? I noticed that you are more engaged in the equities section of the forum? Do you invest in properties? If yes, what's your investment philosophy? If you don't mind sharing.....

I had this UC risk view because had seen various experience/examples in the previous recession hit time (not me, just see some friends stuck with abandoned UC properties while still need to pay housing loan every month, it is the worst nightmare for property buyers, worst that buying overvalued properties), that always alert me UC properties has fair share of risk involved. Existing law is not protectative enough for the property buyers.

I invest in properties via reit investment (still equities) haha.
I don't like the hassle of managing the property that why I choose reit.

Ahhh, this is what's interesting. For some developers (reputable ones too), they manage their own property for a couple years (usually 2-3 years) before handing over to the Joint Management Body by the residents. But usually the residents will re-enagage the developer to continue manage it for them. I may be biased, but so far my experience in this regards has been rather pleasant.

Also when the JMB is in effect (very careful here), usually they are more proactive in maintaining the condos. I have 2 JMBs which are just set up and I'm happy that they are very proactive and transparent in their work. But I'm the guilty party as far as participating in their meetings (work commitments..yaya the usual procrastination )

Did I say management is one of the most important factors to consider for highrise investment? If I did not, "management is one of the most important factors to consider for highrise"!!

This post has been edited by mardybum: Mar 19 2009, 03:00 PM

After reading 15 so pages here and you're asking for fresh opinion?!

What you should do now is to list down your doubts in order for others to help you.
The question you've asked had been discussed many times and everyone has their own opinion. You'll just have to do your own homework and make your own decision. That's how it works here.

we are?

That's news to me too.

ahh....he edited his post already I've seen sign of slowdowns..... but we have yet to reach 97/98 recession levels

anyway wodenus, in your opinion, when do u think we will bottom out?

D@mn.....look's like I missed the action.

What was his original post, and what's the source of controversy?

If I knew that I would be God lol

refer post 307 fren

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Added on March 22, 2009, 7:40 pmanticipating isnt really God-like

This post has been edited by Pai: Mar 22 2009, 07:40 PM

We know our prob is not like US', ie the subprime thingy is not that prominent here. So we see manufacturing, and finance maybe having some problems here and there. If I were to ask the question : So whay do you think we will be in deep shit? Then surely I'll get the same very intelligent answers, ie we are exporting country la, we don't have the critical mass to use domestic consumption to push up the economy la, China la, India la, Europe la, whatever la....

The let me ask you, who are the ones who get retrenched? Are they holding lot of properties in good locations? Will they eventually become motivated sellers to a point their holdings will look attractive? Menangguk di air keruh? Sadly that's life.

The again, if the mid class employed are kept employed, what will trigger the drop in prices? The biggest drop in Klang Valley is in KLCC, and that's around 20-30%, and mostly due to FOREIGN players exiting. Most still have the holding power. Want to check out TTDI, Bangsar Dheights and hope for a bargain? Not happening. You counter and say Not happening YET". So I'm curious, what will trigger a meltdown in prop prices?

i'd like to know that too.

people in general are talking about anticipating a drop in property prices, but have no apparent reasons to support that statement apart from 'the economy crisis'.

so far only factory workers...........even our Finacial firms have yet to do a massive layoff.........

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Added on March 23, 2009, 12:02 amactually, even during 97/98 crisis, was there a property prices meltdown? And how do we define "property meltdown"? Above 20% drop?


This post has been edited by Pai: Mar 23 2009, 12:02 AM

meejawa,

1) We had a 30% pay increase with civil servants last year.

2) We have a 50 to 60 billions stimulus bill.

3) We are lowering the interest rate.

So, RM will go down further. Then, the companies with large foreign currency debt will get hit. The QUESTION that you should ask is HOW LONG can we sustain this?? Palm Oil price is down. Oil price is holding at certain level. We are at DEFICIT spending level. Depending on how long you think that the US problem will last, do you THINK Malaysia can sustain this LONG enough to avoid a collapse??

The melt down will happen when GLC and Government start VSS.

Dreamer

Dreamer,

Fair enough. But I'm questioning why I keep reading that a property uncertainty/meltdown/crash is expected...

1) How many actually spend the increase on properties? Having RCECap in place already almost guarantee their existing monthly mortgage paid.

Yes, printing money should cause one's currency to devalue, although depending on how you look at it, the reverse holds true for USD. When companies with high foreign debt (presumely largely in USD), one of 2 things will happen:

1) USD/RM remain high, causing what you described, but then again, who will be the target group offered VSS/get retrenched, and how will this translate into property prices come crashing? I'm curious specifically for property market, not economy in general. We know how the latter will be impacted, I just want to know how does that translate into other sector, ie prop.

2. USD crashes, as it should have been long time ago. So in this case, forex will not be on top of the concerns list, alhough the rest of the factor (absolute debt, demand outlook etc) will still be in play.

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Added on March 23, 2009, 9:39 amsee? so where's the peleburbawahan?

if 20% drop is meltdown, then you win, we are already there in KLCC This as you know is subjective (just like wen a country's growth is -ve for 2Q it's recession..)

Maybe a good indicator will be a shard increase in NPL for prop, and in auction listings? Figuratively, also maybe 2Q of similar trends? I'm just shooting in the dark..to me as long as prices in good locations drop to maybe less than 20% increase of the developer's price, then it's good news to me.

This post has been edited by meejawa: Mar 23 2009, 09:39 AM

meejawa,

<<1) How many actually spend the increase on properties?>>

The pay increase is sustaining the domestic consumption for a while so that LOCAL economy is growing a bit to compensate for reduction in export.

<<Having RCECap in place already almost guarantee their existing monthly mortgage paid.>>

Which is guaranteed by the government.

<< who will be the target group offered VSS/get retrenched >>

Which I had told you. Now, EVERYTHING is sustained by government's expenditure and bail out. There will be a POINT when it is NO LONGER sustainable. At that point, GLC and Government will have VSS. Then, the property market will melt down in Klang Valley.

How long do you think this CAN continue??

Dreamer

That's an interesting theory u just pointed out. May I disagree on a few points?

1. I won't argue with you whether the govt will VSS the govt servants or not. I can tell you many reasons why this won't happen - but won't bother right now - let's just put it this way - I don't think the govt will retrench 1.4 million govt servants in this country....by the way, I'm not pro-govt......just stating the obvious. Don't nit pick pls. There are many ways the govt could toy around with to prevent the vss from happening - from tweaking monetary policy, to manipulating money supply......of course, there will be repercussions....However, this is not the issue here. I'm saying that the vss won't happen.

2. You don't understand the property market in KV very well, do you? I can tell you now - if vss starts among the govt sector - prime prop's in the KV won't be affected at all. I betcha you wanna know why.....I'll keep quiet for now as I want u to counter me with your points first

cheers bud.

This post has been edited by Phoeni_142: Mar 23 2009, 11:44 PM

I'm not a Malaysian investor, and I dont live in Malaysia now, but let's recall that the world is concerned of being "over populated."

Invest smart.