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!

This post has been edited by Onemorething: May 10 2010, 05:32 PM

I find it strange that you hardly engage in any discusssion pertaining any of your posts n all your posts seems to be copied from elsewhere

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?

thats bcoz global markets have got very little to do with MY..................especially when it comes to property market. u should know better. When you r busy doing your "analysis" about the global doom n gloom, all investor I happen to know are minting serious cash from properties.

Action..........often speaks louder than words.......

This may be true to a certain point but as we look to local & foreign investors to take MY to another level moving forward you cant make such a bold statement. Some would observe you as a RE pumper only out to feed the herd mentality....and that is where some on this forum may need to know better hense their questions.

Last I looked, at least 50% of GDP in MY was driven by exports and if demand changes its hurts business for all of us and the sediment around RE. For most RE is an emotional buy, to be used as a home by the avg. Malaysian. GDP slows, jobs reduced and ability to service debt a problem.

As a RE investor, it makes no sense to post negative views on this blog for obvious reasons. For RE Developers, Agents and Brokers the same.

Overall I agree that MY is different but to what extent, for how much longer and to what risk to the average buyer.

Friend of mine bought one property at ss2 last yr ~$800k, aft 5 mths people offered him $1.3M. Who says old properties no value.

Global crisis? Yes, but life still goes on.

Unless the whole nation goes into doom mode whereby everyone hiding in own cocoon, unemployment at >20%, may be then doom will happen. But with population growth, your assets/saving/investment growing, would properties free fall in the coming 1-2 yrs?

Emm, may 2012 will be dooms day, according some prophets of doom. That’s doesn't really matter anyway, whether you earn hefty on shares, properties all will be doomed anyway, so go enjoy while you can .

15 years ago when I started working, property price has risen to a level where I can't afford to buy. So, I waited for the property price to crash.
Years by years I waited , but the property price rose even higher & higher.......will property price going to drop in future ?....please take into consideration that your age is also going older & older.....

what kind of prop is that? landed or shoplot? any reno done?

Chief, my statement might appear to be bold to you but I simply speak based on facts, well based on past performance of property market anyways. I might be an RE optimist simply bcoz I made bulk of my wealth from RE, and I've seen ppl who wayyyyyyyyyyyyyyyyyyyyyyyyyy smarter than me lose out on many fantastic opportunities in RE here simply bcoz of this generic statement ............"global economy isnt looking too good, , so Im gonna hold back this year"

Bottom line, the global economy factor is outside on one's circle of influence. Why overthink on things we can never control anyway? We however, can choose to buy properties with strong fundamentals to ensure the asset is good enough to weather trying times. That is within our circle of influence, and that's what I felt we should strongly focus on.

Again I reiterate that action speaks louder than words, especially when it comes to wealth creation.

that's exactly we're talking about.
that's why i said waiting for price drop just a dream.

1) Don't be influenced by surroundings. No need to compare your portfolios with others.
2) Buy RE when you can afford and don't try to flip with big profits or levergare too much.
3) Buy RE with normal heart. Treat it as a preservation to your monies, think long-term.
4)Work hard but live comfortably, dream a bit but if you are not destined to be rich in your life, invest (educate) in your kids so that they will thrive.

If can find shoplot with this price is ss2, may be 1998 when market crash to rock bottom, even tat dont think can find. If not mistaken ~900k.

Cant disclose much, since first I also dont know the actual location. 2nd people might say I stir market. But but I also miss the boat leh.

Anyway, to confirm ur own, do check yesterday Star, OPR might rise 25pt due to too much speculation. Check it out. It is not LY sentiment, it is not some forumers sentiment, it is market sentiment.



One thing abt characteristic of my old friend, very humble and down to earth type. Driving old local made car, makan at kopitiam, stay in single storey old house. No glamour flashing big car rolex etc. Hmmm, seem like a lot of multi millionaires oso like tat one. My kampung millionaires many riding bike or motobike only, what BM or MB for show? Who say need to look rich to be rich . Young generation way to learn. Am not too old though.


This post has been edited by Bobby C: May 12 2010, 02:07 PM

Touche, btw how did you know I was a Chief!

I believe that Pai subscribes to what Warren Buffett has famously advised, "You only have to do a very few things right in your life so long as you don't do too many things wrong."

This is where you and I may agree! My 10,000 hours is in another field.

However, this is not the case for the avg. RE buyer. To buy at top of market right now, with pending interest rates rising and a 50/50 on double dip (REAL DROP) vs. previous papered over drop, you are setting people up for failure.

Just watch the China Commercial RE market get slammed, it will also reach our Malaysian shores next and they get in line with bad RE news globally for years to come, try 5-7!

RE Pumping by all those vested in RE is natural.

GOLD Pumping the same.

Pai, no worries, this is a blog, we can always agree to disagree!

So many hot free money floating around the globe, everyone afford to hold 2 ~ 3 properties even no tenant or rental income cause just need to pay small amount of monthly loan repayment. Not sure when will FED raise the interest rate in the near future.

Is there any source of good data on Malaysian real estate like you have for the US? Things like average rental rates to property price ratios, occupancy rates, average leverage of a property (percentage of debt as value of property) etc.

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Added on May 13, 2010, 5:13 pmBut this only seems to apply to new launches. Even if you bought a property 15 years ago, it would be old now. Why don't you buy a property that is 15 years old now?

This post has been edited by wankongyew: May 13 2010, 05:13 PM

Chief, wasnt born with silver spoon, so I cant afford to make ANY mistakes. WB once said "No 1 rule of investment is never lose money". I have to get it right................. EVERY time, and thank God I've been very lucky so far.....

"Always buy below the intrinsic value" does not only apply to stocks, it can apply to property as well.

And the beauty about Real Estate market is that its even less efficient than the stock market.

The way to make money from Real Estate is not be the "average RE buyer". Even if we are at the top of the market now, the right property at the right price is still a good buy.

Jus looking at the Macro picture and not the Micro picture, means you only see half the picture.

Regards,

I agree, all my RE has been ear to the ground, some desperation sales, never purchase the most expensive house on the street, know the owner buy direct type buys.

These came pre momentum due to demographics/business expansions or knowing what the city was building long term ie. communities/roads/infrastructure.

Here's a challenge though, buying in an established area such as Damansara Heights? While this is for family living, the same buying principals apply!

Any suggetions?

stock market is over efficient..

As far as i remember, Malaysia RE market has never been so speculative before. Prices gone up gradually becoz of inflation and some mild speculation rather than by fold. Only property in area like mt kiara, klcc are subjected to intense speculation. Things seems to be very different now, you ll notice all the new developments are being bought up like hot cake, some developer even claimed that its being sold out even before the launch, which I think its not true. Its quite common for graduate to own 1-2 houses nowaday. The question is, is there a real demand for all this. In any speculative market (eg stock) its subjected to up and down cycle, the same will apply for properties. Price will drop when the time comes. The market will correct itself.

This post has been edited by Singh_Kalan: May 16 2010, 01:23 PM