@philipsenderos,
I don't believe we'll ever be in the same crisis the USA was/is in. Also, as much as I personally feel prices of properties are skyrocketing too fast, I really don't think it'll be slowing down soon; maybe in the next 3-5 years but even then people today seem to be more conscious and may have sufficient $ to hold on to their properties should there be a dip in the market.

I think we can refer this topic to this discussion.. http://forum.lowyat.net/topic/741185/+680

Seems there more pros are explaining there pretty well

@eugene jk,
Act, U have a point - maybe we should just merge this thread with that...

TS,
What'd U think?

it's total unfair to compare here with US. We're asian, we are conservative and not innovative. In US, u can only pay interest without paying principal. Or only pay partial interest and let's interest snowball.

U got the point, properties are getting more expensive, especially the new launches. But think about easy financing (main reason for price increase now), from 20y to now 35y or even more. So a 5k earner used to only able to buy RM250k, now can buy RM400k. My message is, also buy bank stocks, if u believe in property stories and people in malaysia has no choice but to extend their loan duration. Same goes to car. Most people only lease their car, cos most of them change car before they really pay off their bank loans. All in all, i'm bullish about asian consumption story, especially with Gen Y coming to workplace.

yeah..unless people start to lose their jobs..

or if interest rate raises much.. like what happened in US in 2005.

Interest rate is not the main culprit for the US properties bursting, it is the loan giving out to those already not affort to pay in the first place which is the source of the problem.

Those bought the properties just on the basic of hoping the properties price appreciate enough to cover the loan back.

it is the last grass that fall on the back of the camel..

but it seems that many people nowsaday also do the same here, hoping the price to appreciate so that they can cover the loan back.

Sigh...somehow i feel that most of u all trying to console urself...maybe u guys are the ones who bought alot out there, and definitely wiser thing to do to prevent the fear or hide it instead...i'm quite certain most of the people who bought alot doens't have the ability to repay the loan, if and only if, all tenants are taken away...it's happening around me, people that i know, they are too clouded by "rich dad" book...anyway, it's jz disheartening to see poorer ppl needs to move out from urban area....Malaysia equal balance and affordability is slowly fading away...

I nv mentioned on comparing to oversea, coz i know u can't do that. Msia is still immensely far behind to those big cities....population wise is totaly not compatible...economic wise is extremely tiny what more to say on currency and spending power? speculation is undoubtedly small in msia if you are trying to analyse across regions but u jz can't comment on that as the macro environment is totaly different. I doubt people reli have the holding power, seriously.

Bold assumption that makes people
But I do hope you are not entirely right.

I am not sure others are trying to console themselves .. well.. You can wait the price to drop.. default loan is still low, auction is still low.. thats the picture i see so far

This post has been edited by eugene jk: Jul 7 2010, 10:33 AM

I no doubt there is some bubble on properties especially in mid to high end market.

But it is not until it can lead to full blown properties crisis. As long as banks are cautious on lending practice which majority banks here are more conservative, the chance of full blown crisis is very minimal.
Some softening impact, yes, it could, and largely depended on how well the economy situation.

Yes, I don't deny there is a lot of speculation around, just the impact will be more on those individual front and properties price softening effect, but not as severe impact the banking financial health overall, which is the primary factor that lead to 2008 global crisis.

The richer are getting richer, which resulted there is high demand from rich and wealthy people which lead to those mid to high end properties price surge a lot lately few years.
As land is always a scarcity factor that lead to properties price appreciaton. Land suplly in urban is fixed, while richer and wealthy people become more. So you will have a situaion of demand may increase but not on supply side.

Also not to forget the inflation factor.
When more and more subsidies being removed, it only lead to higher price across goods, from steel, to labour force around. Even foreign workers wages on construction front also increasing along these few years, not to mention timber materials etc.

I am not trying to console or whatever, just as long as banks lending practice is conservate, the chance of full blown crisis is low.

Even above is my comment, I still advise recently my family member not to buy a recent launched mid-end properties (apartment), due to fact, I analyse for them, after deduct the net expenses that may incur, you left with minimal return rate, which is comparable to FD rate only, even taking in consideration of properties price may surge afterwards and tenants issue.

The net return rate of properties may not as good as people thinks if really calculated all the expenses incurred. Some, yes, while some not.

i hope he is 100% rite

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Added on July 7, 2010, 7:01 pmi hope he is 100% rite

This post has been edited by Pai: Jul 7 2010, 07:01 PM

having read a few back pages., i do think.. the current price that's been launch near my place (seri kembangan/equine) is close to absurd level.. yet i can't fathom why still a flock of people grabbing all the launch unit during any new development launch.

price is like? 500k? 600k? and this people are buying like a cheap sawi in the market.! just handing over their cheque and grab any available unit.

Is it really the buying power have increase over this year? or it's just a speculative play?

are we going to go down like our neighbor singaporean ? 1 condo cost 1million? are we approaching that level?

if down-south there.. at least i can understand a bit as they are earning quite high..! they are really enjoying their high-income nation status. !

but us? we are just above average income laa! most of the youngster are bringing home a salary of around 5k.. to 10k max.. mostly i can say 3-5k..

but buying a house that might cost them what - 2k - 2.5k permonth for house installment?

is that normal? is that healthy financial planning?

I personally think - those who are yet to bought a house - you should scout around for a unit that are really within your budget.. not the unit that going to squeeze all your other purchase and living further down the road..

serious.. what's the point of having a grand big house, but living inside like an immigrant just to be on the same level play with all your other colleagues ?

I've seen this happening more and more.., my office colleagues who are not wanting to be left behind - go and buy a great big house , near our areas.

At 1st - waaaah!! I salute you man! really..! have a gut and manage to buy this type of property! really big house.., I think it's a terrace house costing 500k. with 5 room. But deep in my heart , I wonder - how can he afford this ? he's just a tele-call assistant earning nearly 3k salary..

After not more than 1 year of serving the loan.. I can see the strain in his finance - car broke down.. (didn't service - until all the belting snaps during balik kampung trip), car stranded at workshop.., he goes to office using EX5.. ) and.. more thing.. until he stop going out for lunch, with the excuse - had a heavy breakfast..

end -of the year - he ask me if I want to buy his house! cannot take it anymore.. ! sell at loss..

see? i've seen this with my own eyes.. few of my colleagues go down.. trying to follow the trend and didn't really reflect on their financial ability to own a house according to the level of affordability.

in the end.. if you purchase anything beyond your capabilities.. you are going to suffer..

Property market have it's cycle..! study the market.. read.., ask around.. wait if you must..! what ever come up.. can also come down..! there's no such thing as - property never go down!

I bought myself a unit at seri kembangan, after waiting patiently for 3 years until it finally offered at a discounted price.. (i'm buying a sub-sale .. )

so my friend.. don't simply listen to your friend.. and follow the 'herd'.. sometimes, you might get lucky, but most of the time - you will end-up in a slaughter house.. like a herd of lamb..

This post has been edited by morpheuzneo: Jul 8 2010, 12:20 PM

This is a clear case of very poor financila planning. He's a moron for trying to live a dream he clearly cant afford. Anyhow has he sold the houses since? I might be able to put him out of his misery ............

what to do Pai...! look around us., there a bound to have moron like this right?

yeah .. my friend have since sold his house.., wife also become ex already.. and he's now single.. working from ground again.. (et another company.. )

that's why there's a saying in malay - Ukur baju di badan sendiri..! .. don't just simply follow others..

There's a saying, "where's there's one cockroach, there are hundred nearby"! There's also a saying about "Once a few rats jump ship, all the other will follow"!

This unfortunate fellow is an emotional buyer however someone had to furnish the loan and this is exactly the case for the western 'loose lending' mentality fueled by cheap money via a massive credit expansion.

It is usually the low-mid market properties that suffer then those who are able to leverage even more ridiculously to the higher end.

Right now, the whole western world is watching carefully the reports of how many homes being listed for sale vs. sales and time on market.

For most areas, even the beat down US is still suffering from an inventory that will take many years to unload.

Do we in Malaysia have any reports which show such data?

Property market recovering, but oversupply of condo and office units


But high-rise condo and office market still in oversupply

PETALING JAYA: The residential property market, especially landed residences, is on a recovery mode and prices of houses in some parts of Kuala Lumpur and Petaling Jaya have rebounded by 15% to 25% in the past one year, property realtors and consultants said.

However, the high-rise condominium and office market is still facing an oversupply situation and will weigh down on the market at least over the next couple of months.

CB Richard Ellis Sdn Bhd executive director Paul Khong said Malaysians still had money to invest and residential was the hot favourite at the moment.

“Landed properties have rebounded in all segments across the board while in the strata segment, the high-end ones in KLCC and Mont’Kiara have moved relatively slower due to the current supply situation and the small tenancy market,” Khong added.

Khong said that although the Klang Valley landed housing market was hot, “it is not a property boom.”

According to Knight Frank Ooi & Zaharin Sdn Bhd managing director Eric Ooi, the landed residential property market has fared well as it is considered a good time to buy now.

“The market has certainly picked up due mainly to limited supply, the high liquidity in the system, and growing interest in property as a reliable investment instrument,” Ooi said.

The affordable entry cost and an all-time low bank interest rates have also contributed to the improved sentiment and rising house prices.

Ooi said landed residential property prices in some parts of Kuala Lumpur, such as Desa Parkcity, had breached new high and house prices in well-sought-after locations would continue to strengthen.

“I believe even the commercial sector has seen the worse and although the market is still soft, it is stabilising. If the economy continues to grow steadily, the commercial sector will be next to rebound,” Ooi added.

Ooi said that besides the good location, the unique concepts and exclusive features of some of the projects were the reasons for the strong demand and prices.

DTZ Nawawi Tie Leung Sdn Bhd executive director Brian Koh concurred that supply of landed housing property had not caught up with demand as there was a lag in new supply coming onstream after developers held back their project launches in the past two years.

“The performance is still very location centric and concept driven. Buyers prefer well-established neighbourhoods and those with good concepts. Security has become a top priority and that’s why gated and guarded projects are doing very well,” Koh said.

He said even some KLCC condominiums were attracting interest again.

“This time around most of the buyers are well heeled Malaysians who appreciate the exclusivity of the residences in the KLCC area. Having came off from their previous high, there is potential for some price upside. Moreover, prices of residences here are still lower than those in cities in other parts of the region.”

Koh said there was a need to monitor the impact of potential rise in interest rates on property demand especially in the medium to lower price range.

“The higher entry cost may affect demand going forward but it could have contributed to buyers locking in at the current low entry cost,” he added.

Perdana Parkcity Sdn Bhd director of marketing and sales Susan Tan said a combination of factors including a pent up in demand and limited supply were the main causes of the current price rebound in the residential market.

“There has been no new supply of landed housing in Kuala Lumpur in the past year. A fear that prices will climb further due to an expected rise in the cost of construction is also fuelling demand now.

“Buyers are willing to pay for the right address, a good overall concept and well landscaped and maintained environment. That’s why some highly sought after projects can fetch quite high price premiums,” Tan said.

Perdana ParkCity is the developer of the 473-acre Desa ParkCity in Kuala Lumpur which has fetched one of the highest premiums in terms of landed property prices in the capital city.

my recent plan to upgrade to a bigger house prompt me to check out this section...

i doubt prices of Property may drop, in particular for landed residential property, it will only be stagnant/slow down. I have been scouting for a landed property at this particular housing area for 2 yrs, from the price of RM380k+ in end 2008, the price in market now has risen to RM480k-Rm500k+

I was little regret of not grabbing one in yr ago, and been cursing that the owner/agent is manupulating the prices...but the scary fact is that there are willing buyer and transacted price in market proven the hikes!

i have given up "wait and see" attitude, dont really bother if the price of the property will drop or whatsoever, I think the longer i wait, the lesser chance for me to own such a property. I have planned to keep my existing landed property too, for i believe, it will be a white elephant when my baby reach her 20s...

the low FD rate, current bank offered loan rate has help property investment grow, and flat 5% property gain tax too the culprit... bbut that have victimised those who genuinely looking for a residential property for own stay...

my humble point of view...

another bubble 'theory' supporter.

http://malaysiafinance.blogspot.com/2010/0...cross-asia.html

quoting one of the reply there