Been thinking: people say that the population keeps increasing, therefore the demand will always be there.

But, the demand is actually not based on heads, but on how many can actually afford it.

If a single guy whose been saving and holding out can't afford a new home in the future. Do you think the new generation would do any better?

This post has been edited by TheDoer: Feb 10 2011, 07:37 PM

Yes, well, something seriously wrong with this right?

They either come from well to do families, or the banks are going on a lending spree.

Well, if they come from well to do families, then you can't compare them to those who work hard, and yet when they thought of buying, they found that they have entered the market late. Guys who come from well to do families, are a minority, they won't make up the demand.

If the bank is on a lending spree, then we all should be worried.

I have to agree, it makes more sense now. But there are some points to consider.

The problem now is that even the outskirts are getting expensive. The property rush has spilled over. This is further worsen by Developers concentrating on medium-high developments. As the investors tend to go for those for some reason. So it's like Air Asia flying less to Macau, but instead make more direct flights to HK.

Which means that some people will not be able to fly at all, until and adjustment is made. And unlike flying, which is a luxury. Housing is a necessity. Yes, we can even live on the streets if we are desperate. But it isn't right.

Yes, and just like air asia, we simply can't afford it now.
Soon more and more people will be effected too.

If one expects these people to aim lower, well, probably it will happen eventually, you'd find what should be the middle class living in low cost homes in the middle of no where. Then who is the target market for your medium cost homes?

Ah... that's just the problem. In this case, it's not about not buying during a crisis and avoid the crisis. In this case, whether you like it or not, if you've bought a house, these will multiply your problems. You'll be stuck with debts.

---

Added on February 10, 2011, 9:44 pm

I respect that, it was a good explanation. give me some time, I was replying

This post has been edited by TheDoer: Feb 10 2011, 09:44 PM

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?

---

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

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.

---

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

@Pai & @Property101,

Yes. There's always an option. As mentioned, we could always swim ashore am I right? The problem is taking this type of advice, from the guys aboard the empty life boats. They do not know what the rest of us are going through.

We are not refering to the minimum wage worker, who is not willing to live in a low cost home, but an average income graduate. Meanwhile, there are plenty of vacant medium cost homes which have overgrown weeds. They are not willing to release those homes at a lower price, because they believe they are worth more in their mind.

Think again, people are not just complaining because they withheld and didn't buy 2-3 years back. Imagine if this is a fresh grad we are talking about, how do you explain this to him? "Son, you have to either work twice as hard as the rest of us, or come from a well to do family."

It's true, this is a dog eat dog world, I do not deny that, sometimes we have to suck it up and take it. But then again if everybody thought of the next person a little more. The world will be a better place.

If we were on the titanic, and the ship was sinking, Yes, the guy who was the most aggressive and pushed his way through the crowd will find a lifeboat first, and the timid one only has himself to blame. However, if we had all walked in an orderly fashion, perhaps all of us could have survived.

---

Added on February 15, 2011, 1:22 amIt's one thing, if you have extra cash and you are making profit from undervalued properties. The people whom I have a bone to pick are those who buy new properties, to sell them off to genuine buyers whom were not years late, but hours and days late.

These guys do not take long to ponder on the property like people who genuinely want to own a home. They are not planning to live there anyway.

As soon as they can, they sell it back to the genuine guys, for a profit of 10K to 20K. Without needing much cash to begin with.

Basically, this is the same as, you buying some stuff from tesco... and as you are approaching the counter, another guy snatches the cart from you, pays it for you and demands you pay him a tip by %.

This post has been edited by TheDoer: Feb 15 2011, 01:22 AM

Valid points.

Interesting you mentioned Taiwan. was not able to get the stats for the same year, but check this out:

Sure, there can be many graduates. but if the salary of those graduates do not improve, then the price of the properties will have to drop to suit them.

IMO, Correct me if I'm wrong:

Some say, if you can't buy, then rent. The rental definately won't be more than the loan, otherwise those graduates won't face that problem to begin with. They might band together to rent a property. Resulting in several homes which were made for them, to be vacant. This will cause these landlords to lower their rent, so these graduates will start to live in them. A reduce in rental, will effect the interest of people to buy, thus the price of property will be in check.

When the price of property is high, it results in runaway development, because developers are trying to rake in as much as they can, therefore, there will not be a problem of housing shortage. The reason for the high property prices, are optimistic speculation. So, even if there is a surplus in property, the price remains high, because speculators keep their money dump in them, in the hopes of return. But when they realise that money isn't coming in from this surplus then the above will happen.

so, it's not really a matter of number of graduates. As mentioned before, if an average graduate who has been saving is not expected to be able to afford a property in future. Then how do we expect the new wave of fresh grads to afford them?

The real spoke in the wheel here is whether the current prices are caused by speculation or demand by real potential home owners? This I leave it to you guys.

This post has been edited by TheDoer: Feb 15 2011, 04:03 PM

I know of this tenant who defaulted on 2 months rent. And overnight he moved out. He left behind unpaid water and electricity bills costing hundreds.

It's a nice thought to be a landlord doing nothing but collecting money. But there are risks, and you need to really know how to manage your property well.

Sorry for jumping into the discussion like this.

Well the price is not determined by an individuals needs or wants. But it is determined by the needs and wants of the potential home owner.

If it is a high-end property and none of those targeting this type of property wants the MRT nearby. Then the price theoretically should drop, until it hits those who do want/need the MRT.

Yes, exactly, that's what I've been saying. This is a speculator driven market.

Us medium-low income group, just has to play along. And the response from them is... get 2 jobs, and sell newspaper early morning if you have too.

Note: I'm not refering to KL/selangor prop market.

I agree, that speculators target new development. Recently there was a new development, and all the houses were snatched. Meanwhile the taman next door has a string of vacant houses to be sold.

erm... hint hint.. if I were an investor, I'd buy these. It is opposite a NEW industrial park. Good for rental.


Talking about rental... I scouted an out-of-town bungalow taman , which was from the same developer whose new projects were always snatched up. The Taman was quite empty. only 30% signs of life. There were several houses for sale. And some even went up for rent. Isn't this the worst place to target rental??

1)The target group are those who can afford to buy a house

2)Who wants to rent a second home/holiday home in the middle of no where?

3)There are no business or factories nearby. You'd be better off, with my above mentioned prop.

Yes, well.. we all have burdens to bear. But when the burden is unrealistic, and is caused by people playing around. Now that's a different story.

If we all did become over optimistic, then the situation will be even worst. Everybody will be owning 2 or 3 props, and nobody to sell them to but other speculators.

Someone compared us with taiwan, and heck, we really don't want to have the same high suicidal rate as them.

Years back, I did pick up a book on property investment, after reading the first few chapters, I came to the conclusion, that it was like gambling. And it still is, it's just that people are presently winning, and this is due to the fact that there are plenty of optimistic people still gambling.

And in any gamble, there are always winners and losers, and nobody wins all the time.

Ahem... except for the house of course, because they always have deep pockets.

This post has been edited by TheDoer: Feb 21 2011, 12:04 PM

You've skipped the part with the suicide rate.

It helps with the number of zeroes we need to buy things, but does it really help our standard of living? Perhaps for a few elite.

Investment is without "greed" now, this is a tricky bit. Would investing in a basic necessity be considered without greed? What if clean source of water was up for grabs as well, and the owner can place any value upon drinkable water. Would you not say these guys are greedy? Well no right? because it's just business.

In terms of helping the economy, well first of all, it may help the economy but makes matters worst for standard of living. People become greater and greater in debt, and find themselves in deeper and deeper holes to dig themselves out off. People are talking about 2nd generation loan now. Is this really what we want? A better economy but worse standardard of living?

In such a case, a better economy is nothing but the number of zeros behind your ringgit.

If one owns a share in a company, and him owning it, allows this company to produce goods/services which people can buy and benefit from. And it provides jobs for people. This is of course good.

Now, on the other hand, when we are talking about property speculation ("investment"), it is about owning a piece of land, that sits abandon, hoping that a genuine buyer (or another speculator) will take it off their hands. Who exactly are they helping? They're simply acting as a middle man and taxing the genuine buyer. How are they helping the economy? By causing inflation basically.

There is an exception of course as I mentioned. The real property investors, are those who take an abandon home, holds on to it, renovates it, and makes it livable again. Not those who try to out bid in at high demand prop, that they hope to sell the very next minute.

---

Added on February 21, 2011, 2:10 pmWe can be as positive to continue with our lives, but it shouldn't stop us from pointing out what's not right.

Just like with matters of politics.

This post has been edited by TheDoer: Feb 21 2011, 02:10 PM

Why I consider this as gambling, is because these guys are buying simply because these props are hot. And not because this props are under valued, under appreciated.

Another group of speculators, are just finding some place to dump their cash, because they are told that all props will go up, and there's no such thing as a bubble (obviously there is).

All in all, these speculators, do not understand the term "over valued props" they do not care whether the actual home owners can still afford this props. All they know is that if more speculators will take it off their hands, they are safe.

This is why I call it gambling.

If you ask me, if people really want to dump their cash. They should dump it in gold or something that will not suddenly deteriorate, the price won't suddenly drop simply because a rubbish dump was built across the road.

Edit: This post was writen, before reading the previous reply.

---

Added on February 21, 2011, 2:30 pmActually you're right, I'm getting off topic. Just wanna get through to the same set of audience for both cases.

But the below statement is really a shocker.

Either way in my opinion, the bubble is about to burst.

This post has been edited by TheDoer: Feb 21 2011, 02:30 PM

I disagree, when market crash, the investors will be stuck with their current props, how they gonna invest? if they can, they already would have invested now. By then given that interest rates and lending will be tight, do you still think they can invest?

The real investors that buy low, are those without commitments when high, waiting for the right time to pounce.

You mentioned about your friend who waited till it's too late. Bare in mind that we are just the same as you who believes in strong research before investment. We may be wrong, but proper research will tell us when and how to invest.

Not exactly. For myself, I will buy when I can buy.

if I can't buy, then I can't buy. I'm not just waiting for the sake of waiting.

And yes I agree with sampool. though in history prop market and economy tend to fall together. Property bubble bursting, IMO, doesn't mean that our economy has collapsed. It's just the property market which burst. Which means those who are involved are effected, not the rest. Just like when the dot com bubble burst, yeah many people lost their jobs, but mostly by those directly involved in the dot com.

Let's say, a bunch of speculators, grab a string of props and lending through their nose in hopes of selling them higher. Alas they are actually the last guys willing to pay this price for it. They don't lose their jobs. It's just that they realize that they cannot sustain this little side "investment".

Eventually the props are sold at a lower rate. And soon people start realising that more and more props are on the market and nobody is silly enough to pay the same rate as they used to. Soon other speculators realize that it is useless to hold on to the props, and start dumping them. (unless they plan to invest for the long haul and even so, it doesn't guarantee when prices will return to the purchased price).

This will have a snow ball effect. Nobody has to lose their job. The developers can continue developing as usual, alas with less profit. Erm, and yeah maybe some foreign workers get sent back. That's all.

Living is a need, but when props get thrown all over the market, and props price become cheap. More people will opt to purchase than rent. Also, more prop owners will resort to renting instead of selling. This should bring down the price of rental, which will further cause more prop owners to dump their investment.

yes. and this will be a problem for those who are currently in the BBB mode.

---

Added on February 21, 2011, 4:37 pmExactly, I'm referring to the BBB investors/speculators. Are these people hoping for the big guys to bail them out? Or do you think the big boys are gonna use them as scapegoats?

What is the purpose of owning this property really? It is so that genuine home owners will want to live in them and buy them. If they can't afford it, then the props won't sell. Do you think the big boys are gonna buy back props like these for charity sake?

The bottom line is, the price of the home should be what the average genuine buyer can afford and this is what the correction will do.

I care not that it's on going, the higher it goes, the greater the fall.

Do you think the price of something can be sustained only by investors and not the actual buyers? If so, the price of it can reach unlimited heights, and that's simply illogical.


Scarce resource is just an excuse. Back then they were talking about dot coms, as being "canggih", so it should raise. Then they mentioned about rubber or palm oil being a sure commodity but prices still fall.

The fact is, right now it isn't scarce. There are many vacant props everywhere I look. Maybe a few generations more it will become scarce, but by then we will all be long dead. And it was never the intention of the speculator to hold it that long.

---

Added on February 21, 2011, 4:43 pmYeah, completely agree with you. I've heard of this case of a speculator, who looked quite wealthy... own a big car and several props. But he was optimistic to the very end. After retiring couldn't afford to maintain his props and found himself struggling with debt. When his ex-colleagues saw him he had grown thin and sickly.

This is what is holding up the market right now... nothing but optimism.

This post has been edited by TheDoer: Feb 21 2011, 04:43 PM

Maybe we are all barking up the wrong tree. Should ask the gov to encourage prop development. Churn out more houses, since people need more than 1.

Price drop so what, important, everyone can own a home.

Dito!

Maybe you can sell newspapers, or be creative (illegal business) to buy it. People say, we must be positive and take advantage of any bad situation.

Good luck to us.

---

Added on February 21, 2011, 5:37 pmAh just had a brilliant idea. Do you know of any vacant homes where the investor never visits? We can turn those to birds nest homes.

This post has been edited by TheDoer: Feb 21 2011, 05:37 PM