None of us will be able to time the the deflation of the bubble so you must take profits now.  When it pops, everyone will be trying to sell and it will be too late.  Those on the sidelines with liquidity will reap the benefits as always.

Take the HK market now, the government stepped in again to limit loans to 40% down instead of 30% down from the bubble heights pre crisis where you could actually put 5% down.  This was to hold off the bubble growing in HK but has failed as RE investors have moved to the secondary market and picked up more RE. 

The herd mentality is alive and well in RE and this is the only sign you need.

1/RE prices are only high due to cheap money
2/A small increase in rates will be enough to stop the growth in RE and begin the downward cycle
3/Sellers will start dropping prices to take profits starting the spriral affect
4/Banks will start tightening lending practices
5/Rates will rise a quarter to half percent each quarter and RE prices will dive

I believe that single family homes in prime locations in KL are over priced by upto 30% on asking.  I expect that in the next 12-18 months this 30% will not only come off but another 15%+ given the above changes.

 
We are actually lucky in KL as the bubble is only a small one unlike SING and HK, or VANCOUVER/TORONTO which can correct by 50%+ down the road.  Also expect a very long flat recovery 5-7 years and the power exchanges hands from the west finally to the east.

On the flipside, KL is a unique place to be right now, given the US is still trying to bankrupt the rest of the world.  Japan stuck in QE for another decade along with UK and EUROZONE.  CHINA is the wildcard right now as they have their own issues!  Canada is in the biggest RE bubble on record ready to pop before or after the Winter Olympics and AUS/NZ should be also taking a double dip when the US does.

I refer to this whole period of time as the GREAT GLOBAL RESET!

If I were you, I would be sitting on the sidelines ready to pick up great opportunities of a lifetime!

May I ask wat's the' take on the RPGT policy being changed to 'after 5 yr from purchase' as announced yesterday??

Did the initial ruling cause any dip in prices as investors try to sell b4 jan 2010, to beat the deadline??

Dont mistake pessimism with being a contrarian!

As for listening to RE Agents, Banks, Brokers, Financial Advisors, Economists and most importantly the US FED Chairman, who do you think created the bubbles.

There are only a very few I follow.

Malaysia like most will lag behind the these predictions so yes the bubble will continue here and herd mentality in tact.  I would expect you have some more time before you need to sell.

How much time is the key, buying needs to be put off!

Timing is everything, isnt it!  The long term strategy still applies to RE but not right now.  To try and time any market comes from pure speculation and greed and one will never be successful at doing it.

I simply saw the original bubble coming around 2005 and took my RE profits and since the crisis have not seen any good opportunities in it.

yeah.. but low BLR is an issue now.

The house price is high,  yet interest is low. We might afford now.

But what if BLR is raised to stop cooking property?

1-2% raise will be a great hit to people who borrow.

I have no idea how people can raise BLR without being hurt..

i wonder where to find 10% yield, even if there is, would the owner want to let go in a price that allow u to get 10% yield?
IMHO, 6% is fair, 7% is good, 8% consider lucky....of course this is upon getting a unit, not after holding it for few years

one of them is i think TS.
not sure about ED, maybe can get good yield as well.
Zest? maybe, i'm not familiar with the area.

come on now, pai, don't be a tease. just say it. 

lolx...how soon? after u bought some?

i forgot about Palazzio.. 

even if u recommend right or wrong, we may go in 

CASH IS KING!  Liquidity is key!

BNM will have to hike the interest rate following others countries like australia. No doubt the RE price will be affected by the whole economy and US economy. This had been proven in the last recession last year and there no argument on this. Us economy had been rising on the stock market and economy growth. However, the 10% unemployment that will affect the retail sales and productivity is a major concern. The intervention by FED seem to create artificial economic upturn and no doubt this will be very fragile. In coming month, we will see Dow Jones coming up and down vigorously as a effect of the artificial rebound and FED intervention. I forecast there will be a slow growth in ecomomy for all countries.
Looking at this, with BLR on the rise and PGT, this will push the property price up as cost have been more. However, due to the higher selling prices and unencouraging higher BLR and PGT, buyer will turn away soon. It will take some time for buyer to feels that the price are stablise before starting to rushing into a deal again.

Conclusion : Prices of property will stay providing US economy stay. I forecast this year end will be another double dip for whole economy and this time it goin hit hard. So guys, don't be too highly gear.

Pai, liquidity is good, cash is king, but both is less inflationary hedging. So guys, balance out the wealth management and always get ready for another round of opportunity when the economy collapse. Those who done so in the last recession is laughing his way to the bank now!!!

fully in support of what constant quoted. a hike in the rates would not deter property growth. at least not yet. usually a substantial hike only would deter it enough. if small hike eg. 0.5%, it's still manageable. usually when that happens, sales will drop but rest assure property price will not drop...yet. sometimes you might actually see an increase in value whereby people are aware the financing cost to own a property is increasing as well!
when i bought my 1st property, i was paying BLR+2.25% working to approximately 7.8% or something like that. my latest property purchase was BLR-2.25%.
also not forgetting the flexible rates offer by banks. if BLR goes up, they are able to provide higher (-ve rates). if BLR goes down, they provide less flexible rates.
eg. BLR 6.5%, BLR - 1.5% = effective 5%; BUT if BLR goes to say 8%, package by bank may be BLR - 3% = effective 5%.
let's put it this way, whatever loan you are in, you are bound by it for only approximately 5 years. if the differential between new package and existing package is too huge, pay the lock-in penalty, no big deal. ultimately, you will still benefit from current BLR pricing versus future BLR pricing.
all this talk about cash is king is semi true. true only if you really have a LOT of cash. and definition of a LOT is really a LOT!
anything less than a million bucks, is nothing to really shout about.
anybody wish to support my hypothesis?!
cheers!

my friend work as civil servant there got several units in beverly hill luyang and all let out and never have problem to find tenants 

well...i'm quite konpius also now....property price in penang here is rushing up like crazy...easily go up like RM100k within a year! it's really insane! now any new condo...u close eye also RM400k already.... those selling for RM200k like 2-3 yrs back...now become RM400k!!!

and really...i was thinking...those new fellas coming out to work... how to afford buy such a property? really kesian them.... thank god i work earlier a bit and manage to grab one property for myself...or else...now also headache.... dunno where the money comes from... malaysian so rich eh?

it's really insane..... i don't know how my kids going to buy their own property in future....

This isn't necessarily true.
Both HK and SG have social housing - and if you are on the lower income (not middle), you can still dream of a home!
UK, beyond London, is still very much affordable.
The edge between these 3 countries versus MYS:
a) higher income - if not, its currencies can stretch further beyond its shores, NOT RM;
b) creative mortgage plans - e.g. buy to let schemes, first home plans, 120% mortgage etc.

This isn't necessarily true.
Both HK and SG have social housing - and if you are on the lower income (not middle), you can still dream of a home!
UK, beyond London, is still very much affordable.
The edge between these 3 countries versus MYS:
a) higher income - if not, its currencies can stretch further beyond its shores, NOT RM;
b) creative mortgage plans - e.g. buy to let schemes, first home plans, 120% mortgage etc.

Pelangi Utama 360/sqft!!! My oh my, compare to Riana Green only around 280/sqft. What's happening? Looks like speculators are stirring the market. Recession / inflation / deflation / depression what else, more like halocination ...

People who wish prop price to drop = People who don't own a property
People who wish prop price to rise = People who have a property

I been to both and still dont understand why?

Mind to elaborate a bit. Thks.

Yes the herd is cautious right now, western world investors in bubbled destinations are taking profits now.  Remember, when affordability due to stricter lending practices and higher interest rates come our way, there is only one way for RE to go.  Supply and Demand.  It doesnt matter if there are no condo developments on offer, it's the resale market that will be flooded with sellers as they purchased 2-5-7 years ago for 30% less looking to either take profits or service debt if overleveraged.

Leverage has been the magic word for the last 20 years, it will be removed from the RE vocabulary.  Big money down and your rating on service debt will be all that matters.  I will take it one further and expect lenders to look at those assets you do have as either volatile and/or liquid.

Cash, Stocks, Precious Metals are liquid....RE, Term Bonds, Vehicles are not!

Malaysia is funny place...I agree with one of the posters above on the mentality towards RE.  It has to do with being part of Asia but also the access to other investments which are not available.  That is either good or bad moving forward but if we double dip which is what I'm expecting, it's not going to make a difference, RE will move down and for an extended period.

If the Malaysian banks offered fixed term rates for 10-15-20 years then I support the long term view, but with rates to rise and running variable, you have to wait or you'll be under water at some point for a renewal.

As for inflation hedge, RE is not at the top of the list as an inflation hedge as RE only depreciates during inflationary times however if we do get into a currency crisis the only hedge I know is Gold and Silver and commodities which again need to be purchased early while fiat currencies devalue against them.

I have a prediction, the US is out to bankrupt the rest of the world, flight to USD is upon us once again.  At some point all currencies will be devalued to write off sovereign debt nation by nation.  Once the EURO - USD cross is 1:1, that is when you will see the USD start to falter.

The challenge will be where to store your USD when this time approaches, Gold, Silver?

The local challenge will be how will Asia fair, and I'd say better than the western world.  I will predict the DOW to fall to 8000 by 2012 and to 5500 by 2016-2018 just like in 1813, 1842, 1857, 1920, 1932, 1942, 1948, 1982.  But then again the 200 year cycle of the US is complete in the next 5-7 years so Asia is poised to lead the way.

Good Luck to you all!

I find it strange that a very few on this blog look for direction based on global markets and are only KL centric.  What is your point?