I normally put my $$$$ where my mouth is before I dare recommend anyone else to buy, boss.......

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Added on January 20, 2010, 11:58 amlooks like u've been doing your homework......




This post has been edited by Pai: Jan 20 2010, 11:58 AM

its ok one la, u r property sifu, even if u recommend right or wrong, we may go in
no need put monies where mouth is

Exactly the reason why I cant disclose now, as the last thing I want is for ppl to follow blindly without knowing the risk involved. Im trying to be a responsible forumer.......

Too much buy3 nowadays.......

do they include HoHup in bukit jalil and OneSouth in sri kembangan? what u guys think about it?

I think everybody investment strategy is different, property is eye of beholder. Some go for capital appreciation and some go for rental yield. I think as long as the project do not stall or end up like bkt beruntung it shall be alright to invest for long term. Another risk is what happen to hong kong where the loan amt exceed the value of the property when market make adjustment after economic crisis. Property is still affordable by middle income now and I foreseen that middle income group will be force out of this game soon in the future. Look at the property price now and five year ago, what the different and what will be the price in another five year. Can our income able to follow this inflation. We only heard people take housing loan for 20 years last time and now everybody is going for 30 years. That show much people can't justify the loan they took for the property. I personally looking for another slump in economic for money making. Good time, bad time, money making is always there.

well, when middle group like us cannot afford to buy property, that is the time when property bubble will explode..

you can't rely on 5% of the rich people to push up the price..

It depends.

First, its a supply and demand argument. Demand? Definitely. I just heard that there are 550,000 babies born last year in Malaysia and 50,000 deaths last year. That makes it a gain in 500,000 Malaysians. Say 500,000 people make 250,000 couples(when they grow up) and say just 40% of couples opt to buy their own home to live in (the other 150,000 couples other rent or live with parents), you will still need to build 100,000 homes in Malaysia just to satisfy this. Do you think there is a supply of 100,000 new homes available per year in Malaysia?

And just think of Mont Kiara area. Assume there are 50 condos there (which there aren't), and average is 400 units in each condo. It makes a grand total of 20,000 units available....built over 15 years!


Second, if people cannot afford to buy, then their only option is to live with parents. Or rent. With people having to rent, then the demand is there thus there is no selling pressure, hence, bubble will not burst!

The rich will only get richer, bubble or no bubble. The economic divide can only get bigger.



minolta

With the current marketing gimmicks proposed by new developments to BBB, the definition of "affordability to buy" has shifted in the recent years:

a. BLR is at its "lower" range, yet few consider the impact of increased BLR in the coming year(s);
b. Of the people currently BBB - how many are panic buyers? ("The rate of my salary growth isn't increasing as fast as the growth of house pricing => suddenly, it makes sense to overstretch myself?)
c. Of the people currently BBB - are property investors, not first-time buyers? Where lure by the marketing gimmicks of new development, the trend is to FLIP! Especially since the "cost" is a mere 5% of price?

I wonder sometimes, of the first time buyers, if there are no 'HELP' from the older generation, would the numbers dive downwards?

a) Agree. BLR will definitely rise slowly to pace back where its fall from. I believe it happen in 3-4 year time.

b) look at other part of asia country like hong kong and singapore where there a lot people rent house instead of owning them. Scarce material like metal and wood are becoming more expensive nowaday. It is lucky that malaysia house are still built by indonesian where wages are at very minimum. Imagine a day when we have malaysian to do the job when we can't afford to pay indonesian to work or our govt forbid that. Moreover, land are getting scarce and scarce in develope area like pj and kl. I bought a terrace house in shah alam 3 year ago for 270k, now with 280k you can only buy terrace house in rawang and kajang. The value is there unless we have a war in m'sia.

c) There are investor and mostly are older generation at 40+ that can invest much property. Honest, with my age of almost 30, i can't see much of my friend buying property unless their dad is super rich.

i agree with your view. it's plain simple fact. cost of development have increased many fold. steel, cement, concrete, sand, finishing. all of it have contributed to land cost. not forgetting land cost have also increased. some developments are priced in that region not because they want to but they have to!
you guys might be truly surprised how low the margin are for some developers nowadays!
the main profiteer are the banks!

I don't HOW true and neither can I verify the cost of development in recent years.

What I can OBSERVE is ... the only bona fide argument is the cost of land. Why? If it is the cost material of development and labour cost, the rapid price increase will not only impact the KL/ KV property development but other regions will also suffer from similar increase. This argument is also true for other developing countries such as Vietnam, Cambodia, Indonesia etc. Fact is, the cost of new property development is STILL rather affordable in these places. So I can only logically rule out the cost material of development. (Plus I am sure most reputable property developer would have hedge against such cost material)

Land cost... is based on the subjective factor of LOCATION, LOCATION, LOCATION, yet M'sia is not as land scarce as Singapore and Hong Kong. If only public transportation is as friendly!

nopes... It is not because of land nor materials.

It is because of the policy:
1) BLR is set to as low as 5.55%. BLR-2.2, you get 3.35% loan interest.
2) EPF can be withdrawed to buy house
3) Property buble is forming as everyone knows that property price has raised every year and they take out their savings.

All above increase hot money in property, in multiple folds.

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Added on January 23, 2010, 2:23 pmBut i do believe everyone should have their own house.

But in this high inflation times, everyone will have to work hard, spend less to support house repayment. Good luck everyone in the boat...

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Added on January 23, 2010, 2:40 pmFor those who knows chinese, this is the news for China Bank restriction:
http://cn.wsj.com/gb/20100121/ecb084446.as...rce=mostpopular

Other people can read in money.cnn.com.

http://cq.focus.cn/msgview/40890/44638357.html

This post has been edited by epalbee3: Jan 23 2010, 03:54 PM

good read with the macro view of the property market in this topic.

personally, i think the property price will still grow steadily regardless depression or not especially in KL & PJ areas. the contributing factor will be: demand is still there for new families' own occupation; affordable entry price; and ever increasing construction material cost.

Hello all, need to ask some of you experienced sifu here. I plan to invest in a commercial shop lot. Can I ask what is a rental rate for a double story shoplot ? even better if you know the rate for location in malacca town.

I plan to buy a 1 condo unit at Subang Andaman located near CSR Sugar Plant, near Shah Alam, Komuter, and highway. It priced around RM264k...and is it good for investment since terrace house at shah alam is too expensive...

Yeah, I believe there will be a minor correction in some parts of Klang Valley. These past few years from 2006, the run up in prices of property in has been phenomenal.

No doubt the demand for property is there but the buy buy buy phenomenon is really driven by speculation to the point where average property prices to annual income ratio is difficult to justify.

The historically low interest package offered by banks last year further feed the speculators appetite, many whom are now way over-leveraged.

My concern has been:

a. The historical financial/ mortgage packages offered both by the property developer and banks;

b. The ratio between speculators and home-stayers;

c. The road towards economy recovery is still... LONG;

plus

IF we are all expecting some sort of correction to occur in the year of Tiger, 2010. What will happen in 2012/13 when there's a sudden influx of new fresh SUPPLY (residential and commercial)?

Many have taken advantage of stimulus in Malaysia via low interest rates. This on paper makes RE affordable to groups unable to buy previous.

When the market turns, and it will finally, it will not end well for RE anywhere!

Rates must rise, lending practises will become more strict, unemployment will rise in 2010-2015 and as a result listings will rise quickly.

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Ludwig von Mises

I am not trying to compare KL or Malaysia RE to the ROW as it is by far kept a very small bubble compared to other Asian destinations most notably in SING or HK.

I see only a correction of about 10-15% but enough for many to default on personal property with low down payments and rises in interest rates. I do see however the potential for further drops as the ROW is in trouble for the next decade and this has the usual knock on effect to MY.

What could happen though is the compounding of forces which WILL occurs in high bubble areas whereas you search for a bottom for years as unemployment, partial employment and salary cuts keep the gap for affordable housing ongoing for years until prices are low enough to bring new buyers to the table.

Issue is always, will buyers hold off looking for the bottom or just the fact there is far less buyers who qualify during these times.

Property investors will always leverage themselves differently and sell properties to cover current ones. I have associates in SING and HK who are now selling to grab the top and mitigate risk and they are the biggest property bulls I've met.

You will never time the top or bottom but those who move early always win.

Good Luck!

So let's be practical, given the "future probable" scenario:

a. People can't support the mortgage repayments...

Straight to auction houses?

b. People need LIQUID cash, but are stuck with value of the property < current loan?

c. People need LIQUID cash, but still under construction

What happens? Need info now to gear up ;D

hhmmm...
let's consider this. majority of people who bought houses over the last decade are paying a relative modest loan interest. again, assuming majority of these group of people are living on edge (maximising loan), thus increase of BLR is going to significantly hit them hard. before jumping to the conclusion of bad debts and loan defaultment, let's analysis these group of people (going to basics).
let's say these group of people are mainly consisting of the working class with nominal or medium income. and suffice to say with our population distribution according to races, let's assume the same as well? am not going to dwell into political state of things from what i'm implying here but you guys should know the drift of its implications. let's just say "big brother" would wanna help out whoever that falls under these income gorup, eh?
now, when BLR increase (which it will, just a matter of sooner or later), all these people are gonna be affected. Those who can afford the revise rates, no problemo. for those who can't, you may derive from your previous assumptions on loan defaultment and similiar cases. but let's not forget another simple solution to all these worries. prolonging the tenure of loan!
given the scenario of dropping property prices versus maintaining the prices, am sure most people will vote for the latter. owners of property would do their best endeavour to increase or the very least maintain their pricing. only when there's no other way would someone consider selling at a loss. and if given the opportunity to delay selling it at a loss, wouldn't one prolong their loan and wait out till the buyer market returns?
this isn't really something new. look at car prices. we have hondas and toyotas in the sub RM100k years back. now the entry level honda is almost rm100k. for those who can't afford the loan, what did the banks do? from 3 to 5 to 7 and now 9 years loan! heck even property loans have been extended from max 55 years old to 65 years old!
now there are countries who have loan upto 60 years (not 60 years old!). these loans are service by 2 generations!
of course these kind of action are usually kinda last resort by the banks too. so am anticipating some form of drop in property pricing before these schemes kicks in and we are going to be back at square one!
just my 0.000002 cents and take it with a big bag of salt please!

~given a choice, would you want cheap property in our country like in the 80's OR property pricing to be somewhat similiar to hk/singapore pricing~

This post has been edited by kochin: Jan 28 2010, 09:41 AM