you are talking about prime area aren't you.

Cheras Mahkota, 22x75 double storey = 300k

Urbanization process is like that, when the city developing, prime area will go up to make space for middle to upper class.

new comer? stay in condo, or real estate further away...
That's reality

still got cheap terrace in prime area.... get single storey, or 18x65 double storey...

Yes & No.

Holding right stock like Pbbank, earn good money over long term
Holding wrong stock, abc, now even no exist in the market, kaput already.

Holding right properties can lead you earn good money over long term
Holding wrong properties, it is only a liabilities (you need to pay expenses related to the property like assessment, quit rent, loan interest) without any return.
Some even with loss, even after 10-15 years after taking in account of the expenses part of story.

Buying properties doesn't mean must make money.
Only buying right properties at right location, will earn you good money.

I would agree with this poster however one thing Malaysian's are not used too is a RE market that has gone down. This is typical of a developing nation and basic urban development and suburban development 101.

You have to be purchasing the right properties at the right time. The more suburban properties tend to be less expensive upfront and deemed affordable but you have to calculate the cost vs. time of commute, unknown future development around you or lack there of and therefore risk of stagnation or worse if the area does not get developed properly via right mix of residential and commercial and community linked to ideal infrastructure and road system.

If we look at HK or SING we can see clear evidence of ups and downs and how they occur. Malaysia is in a much better place right now with development over the last 10 years, especially the last 3-5 which has escalated RE prices but at a level of unaffordability greater than developed nations which is a red flag for me.

I believe the top has been put in for the developed areas in KL and surrounding which has driven up suburban areas. Remember RE for 90% of the population is an emotional purchase. When the emotion shifts as we have seen in the developed nations, there is not stopping the downside. Without strong unemployment there is no stong RE market and without a strong RE market there is limited consumer spending.

For me it is simple, I'm watching listings, the amount of them vs. previous months, asking prices, selling prices and how long a property takes to sell. This trend is starting to show. Anyone looking to buy and rent clearly see it's not worth it today. If purchased 3 years ago still okay but when the correction comes, it will take them out potentially as when prices goes down so do rentals and this is enough to drive your motivation to sell.

The developed nations are spiralling right now and low interest rates dont matter. Spriralling could occur in HK or SING but unlikely in Malaysia which is a good thing but a long drawn out 20%+ avg drop is not out of the question.

Spiralling nations will face 50%!

For Malaysia, 20% down predictions I'm coined Dr. Doom.

For the developed nations they call these corrections!

Example, just after the crash I watched a property in Damansara Heights start at RM6.5M, then dropped each consecutive month by RM500K per (for 3 months only) to a final asking price of RM5M. I offered RM4.2M, the property sold for RM4.5M. At this low from ask to sell, that's 30%! Listing in this area are now triple what they were a few months ago, the market is repeating it's cycle now all the global stimulus is running out so I'm liquid and ready! 2-3 years will the time to buy! Right now and for the next few months is the window to sell.

That's right. But one thing I discover by researching properties is that, nowadays standard size single storey (22x70 above) cost more than double storey 18x65....
not sure why...maybe 18x65 really look sempit?

And also single storey in prime area isn't cheap either, Taman Tun 500k for intermediate, Bangsar 700-800k for intermeddiate....
I guess nowadays ppl tend to compare single storey to new condo development, when the condo price is high, single storey follows....
of cz I meant those FREEHOLD magic word one

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Added on August 13, 2010, 11:12 pmwell said buddy, but in your opinion, is this correction going to affect matured area landed property as well? not taman tun and bangsar those sky high price, I am talking about places like Taman Desa, OUG which the price escalate quite steadily...

This post has been edited by surf-it: Aug 13 2010, 11:12 PM

Another I want to add is that, renting is not necessary no good.

Renting benefit
1. Improve cashflow, due to less commitment
2. You get rid of the housing liabilities part of story.
3. Can move on easily.

Cashflow is very important to individual especially for middle to low group people whereby financially generally tight.
If renting can significantly improve one's cashflow and lead to more financial flexibility and more room for others like investment, business, renting is not as bad as many have taught.
We have seen not few case that people over commit themselves into housing loan, until cannot breath much every month.

Buy a house and rent out, sometimes is not as lucrative return as many have taught. The net return after deducting all the expenses incurred (as well as being taxed), the return could be on par with FD rate or some even worst than FD rate.
Gross yield of residental properties for rental market generally quite low (except for certain strategic, golden location), and their gross yield can be in range of 5% only. After deducting the expenses incurred, and tax issue, it could be as low as 3-4%.
It is not quite rewarding, as you still need to face tenant's risk/troublesome issue as well.

wow, cash rich waiting for properties megasale.. good for you!

Agreed. Add in for wear and tear of the building (house)

All you need to be concerned about in a correction are RE prices which escalated quickly over the last 3-5 year. You know which areas these are and how silly the price increases became. I'm sorry but you cannot expect RE to double quickly and have it sustain itself without consequences down the road. These properties could correct back to where they were in 2005-2007 as there were both increases naturally and speculative increases artifically inserted.

Most developed nations will show a curve of all major cities charting growth in RE over a timeline. It is in fact easier to calculate the correction using a baseline year like 2007 or 2005 to see how far down your percentage will go. The avg. will be based on these major cities or you could take a more micro view on KL and surrounding neighborhoods.

Ie. you may find a 20% in Taman Desa and 35% in Bangsar!

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Added on August 14, 2010, 9:02 amThis is exactly what has happened all around the world, dont believe Malaysia is any different! Renting is now the new trend in America where for over 30 years it was deemed "my right" by consumers to own. The rich even have paid the price for ownership. Consider these signs and do the math as "keeping your powder dry" or being "cashed up & liqud" doesnt mean that you are ready, but living within your means where in the case of US UK and Eurozone those families are sometimes the last ones standing.

3-4% after taxes and expenses, property management and dealing with contractors and whining tenants is bad enough but if there is a correction, if you dont have over 30%+ into the property it could be under water on prinicipal, and with correcting rentals and competition for best rent you may not be able to keep it anyhow.

This poster has touched the surface of what can and has occured already in other parts of the world and could quickly turn here.

Unless you are of the mindset that "This is Malaysia, we're different!"

This post has been edited by Onemorething: Aug 14 2010, 10:00 AM

Most of the rental of landed properties already cannot cover the mortgage, is that normal?

just came in http://www.starproperty.my/PropertyScene/T...ghtBox/6476/0/0

Large percentage of property loans may be a problem if recession hits

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THE surge in property prices has created a fresh avenue for investors wanting to make big bucks, but it is also creating a huge future problem that if left unchecked, can spell trouble for households, banks and the overall economy.

The robust property market has seen the percentage of property loans to total loans in the banking system rising well beyond the levels seen during the 1997/98 Asian financial crisis.

The growth in house purchases is said to be among the largest contributors to the tremendous build-up in household debt over the past 10 years.

Those concerns, for now, are being overlooked as the sector has not yet showed signs of strain.

Actually onemorething has a lot of valid points in his arguments, i like how he see things from a macro point of view.

These past few months, a lot of new developments have been snapped up even faster than they can be launched. All these new "integrated developments" with mall, service apartments, soho, office is well and good.. but i don't really see the demand for them. Esp those service apartments which are launching at more than 500-600 psf, i mean who is going to live there?



This post has been edited by bkfeng89: Aug 14 2010, 05:49 PM

I agree. Some are selling service apartment studio units as "big" as 400++ sq ft at RM 200K ++... Who are really going to stay in those units? They cannot fit more than 2 people at the same time... Anyone can enlighten us on this?

i liked this idea.
And i really belief too that every1 speak with "vested" interest.
well...we are all humans afterall...but if some1 can provide evidence/analysis in their arguments, then that's really something different to me. It can be taken in as information. Other than that, all are speaking with "VESTED INTEREST"

shooottt.. just bought a studio typed at Neo Damansara. A hotel room alike costs 300k.

lolz. u best pray no down swing of the economy before or right after completion. otherwise, pray hard you can find fools that wants to rent such a unit

300k for a studio.... wow.... are there any commercial blocks around Neo Damansara? Perhaps your renting target can come from people who work there...

The rental should be 300K x 6% = 18k pa = RM 1500 per month + maintenance for one studio.

in spite of reservations expressed by some quarters of a possible downturn, i attended a soft launch of some semi -d last week and they sold out on same day!!!

I guess if you feel in your gut its a good buy, go for it!

BBB sentiment is still strong, especially when people hear stories of huge returns flipping properties.
this is a purely speculation market.