End of the day, it is all about financial prudence.

Think a lot of people missing the point.

If you cannot afford it, don't buy it simple as that.

Unaffordable meaning if you loss your job next day you will lose you home. Or 1/3 of salary as a guide.

It is a trend that young graduates load themselves with loans aft few yrs of work and work for the banks for the rest of their life in Spore, Msia is catching fast. Many been con by the banks with easy loans.

Spending half million for own stay which you can barely afford is different from spending less for own stay and invest the rest either in property, stocks or business. Many prefer the formal than latter.

Similarly heard stories like driving bm or merz but can't find money to pump at the petrol kiosks. Or another extreme millionaires on bikes/old junks in small towns.

Short term gratification/showing off is better than long term plan. That's why never judge a man/woman from the car he drive, house he stay or shirt he wears.

What for being a millionaire but loaded with millions of debts? Worst, cant even to donate few cents to schools/society/charity.

Ok, stop preaching go back to property.

I thought of younger generation were more aggresive than the older generation. But, I was wrong. The age of owning a house tend to be lower when compare with older genaration. The conclusion is that the majority of younger people aim to own a house for stay is in the 1st priority list. They will forgone their investment opportunity due to limited fund available...ended up with payment housing loan until retire...

is there a survey in malaysia similar to this one on the melbourne house affordability?

What do you think the next General Elections will have on real estate prices?
The thoughts of experienced property investors much appreciated....

Nowadays, the country seems to be more divisive and racial. BN (or should I say UMNO) seems desperate to cling on to power and is playing the racial card! There are rumours that if they lose the GE, they may even engineer racial riots like in 1969?

Could this be the bursting of bubble?

Neverthless, I tend to agree that if you buy for own stay, do buy...Doesnt seem to be speculative to me because interest rates are low...but do have holding power especially if interest rate goes up.

ed1torz,

When i say ME, i meant Middle east....i'm based out of dubai. I live at the Marina Bay area...at one of those high rises! To be honest...i dont see my rent in hand..it gets paid directly by the company as a company lease due to my contract being so...needless to say, if i took the option to localize then i get the cas in hand so i have the optiont o rent cheap and pocket the money..the only reasons i have not considered that is...in my current expatriation status...if i lost my job here...i have a guaranteed position back in KL + i get full health coverage for my family in KL ....so its a trade off.... its not always about money....

if money was my primary objective i would have resigned in KL and took up a local employment here, possibly get 50-100K more per annum and housing in cash to me....but then i have no security!

Its a cultural thing man....i have few malaysian friends who are contracting here at 10-15K USD per month + plus benefits but then they live ona montht o month ...they have 1 years savings in malaysia so they dont mind doing it!

If i took out the equation of wanting to buy a home with land...i would be in the same boat...but the fact is...is till wanna buy that house! The quetsion is when?

Goks

izzit posible for blr to shoot up continuosly when the re price crashes? blr is increasing and some owner might not have holding power thus foreclosure happens. just a thoughts

I've been flipping through the last few pages and there were quite a number of fairly informative points. So I guess if I'm looking to purchase a property to live in, I should wait for a few more years for a correction in prices? Obviously right now prices are just way too high... but then I can't tell for sure if prices won't keep spiralling upwards for, say, the next 10 years?

quite sure we wont be to far off VS Melbourne... but interestingly if one look at from 1965 till 2010 :

1. Salary grew 20-fold.

2. Property prices grew 50-fold.

3. Largest drop in prop prices is less than 10% YOY in 2008. And that was after price increased around 20% in 2007. And in 2009 prices jump another 30%.


Bet those who were listening to naysayers in MelB and waited to buy props............... must be damn pissed today.

This post has been edited by Pai: Aug 25 2010, 07:40 PM

but much of the increase of price come during 1999 when interest rate drop and GST reduced making price skyrocket. for 1965 till 1998 the salary grow 14 fold and property price grew 20 fold. the price still within affordable level. the aussie are complaining and the aussie gov even need to launch several official inquiry on the problem of unaffordability of house.

http://en.wikipedia.org/wiki/Australian_property_bubble

i am still waiting for our gov to act on cooling the property speculation activity.

if anything the price of property in malaysia is even more expensive for average malaysia compare with the aussie, most of malaysia property stock are terrace house, most of the aussie house are bungalow



the average price of house in KL already knocking on 400k last year, the average household may be earning 4k a month (sorry no data available for 2010, only see survey in 2007 that average household income is 3.6k)

This post has been edited by robertngo: Aug 25 2010, 09:27 PM

if you are buying a house for own stay, spend some time looking for the ideal place ie what you want from a house in terms of location, design,type,quality,feng shui,amenities and what have you. once you find that house and you have the means, buy it.
dont worry too much about timing...............
buying for investment is a different ball game altogether-
timing is obviously crucial here.

yes agreed. If u found you dream home just buy so long can afford.

IMO prices will go up for a while. How long and how much I cant tell. Since market only started upward trend last year, probably can and will go 2 or maybe 3 years.

for investors, I am so many theorist out there. Guess they know what they r doin only time will tell who is right and who is wrong.

if buy for own stay find a house you like and can afford the payment even if interest rate was to jump to double digit like 98, then can buy it.



This post has been edited by robertngo: Aug 26 2010, 03:27 PM

Depends on location & demand. Choose a unit you like as own stay purpose (investment for old days) Why new launches people intend to grab? coz many still haven't own a property yet.

Those invest into property have a better chance making it in life compare modify car & spending on those unwanted luxury stuff.

My friend bought a condo in 2001, I was laughing at him (i was low iQ)
He sold it after five years & bought 2 new condo one shot.
Both rented out, income pulak got a landed in Shah Alam.
(i envy him & at same time happy for him, come to office shake leg & always show me the 1mill smile)

People who wait for property to drop are those waiting gold falling from the sky.

This is not to convince you into buying, It's your choice.
if you prefer to waut by all means, it's your money.
Remember now days time fly real fast.
By the time you woke up, it's Kelang, Gombak, Rawang, Selayang etc.

Blasto, your fren is a great example of those who never pretended to be an expert and tried to time the market. And he's not the only one, many others made tonnes of $$$ from buying the RIGHT PROP.................. instead trying hard to buy properties at the RIGHT TIME.

Hi, is there anyone know which government institute record the population growth by states?

It is quite difficult to fullfill all the ideal conditions of your dream house at any time....most houses is either lacking of one or more satisfaction and also your budget constraint.

In the US as quoted,

"Nearly 1 in 4 of the population with a mortgage are “upside down” and as a result are now prisoners in their own home. We have over five million homeowners now either in the foreclosure process or seriously delinquent. The government’s HAMP program was supposed to bail out between 3 and 4 million distressed homeowners and instead we have only had a success rate of fewer than half a million.

Now back to the new home sales data. Every region in the U.S. was down, and down sharply. The homebuilders did not cut their inventory levels and as a result, the backlog of new homes surged to 9.1 months’ supply from 8.0 months in June, which means more discounting and margin squeeze is coming in the homebuilder space. As it stands, median new home prices were sliced 6% in July and this followed on the heels of a 4.7% drop in June. And, at $235,300, average new home prices are down to levels last seen in March 2003, down nearly 30% from the 2007 peak. If the truth be told, if we are talking about reversing all the bubble appreciation that began a decade ago, then we are talking about another 15% downside from here. The excess inventory data alone tell us that this has a realistic chance of occurring.

The high-end market, in particular, is under tremendous pressure. In fact, it is becoming non-existent. Guess how many homes prices above $750k managed to sell in July. Answer — zero, nada, rien; and for the second month in a row. Only 1,000 units priced above 500,000 moved last month. That’s it! Over 80% of the homes that the builders managed to sell were priced for under $300,000. Just another sign of how this remains a full-fledged buyers’ market — at least for the ones that can either afford to put down a downpayment or are creditworthy enough to secure a mortgage loan (keeping in mind that 25% of the household sector does have a sub-600 FICO score).

This is going to sound like a broken record but it took a decade of parabolic credit growth to get the U.S. economy into this deleveraging mess and there is clearly no painless “quick fix” towards bringing household debt into historical realignment with the level of assets and income to support the prevailing level of liabilities. We are talking about $6 trillion of excess debt that has to be extinguished, either by paying it down or by walking away from it (or having it socialized)."

The interesting thing here is the US property market for the most part before the crash and continued landslide still have affordable property at the 4x level in various major city suburbs and still the slide occurs. High end properties are always the first to suffer and I could not believe not one property in the US over $750K sold in the month of July!!!

I agree with the posters on this blog that location will help you manage your risk IF you purchased in the 2007 or earlier in Kuala Lumpur and you should be fine if a correction occurs however in the high end market RM3-7M I believe a 30% correction is in order similar to my looking to purchase at this reduction only 1.5 years ago. I believe the a similar correction could take place for speculative properites in the KL core and surrounding affluent developments.

Lastly I believe the secondary market of 500K-1M is in for a very interested ride where bungalow owners, just like the rest of world who speculate on rentals will dump them to make margin calls on other investments or just plain mitigate risk in thier portfolios.

To those still stuck with a local only view, this is a global event, this is the only time in history where expansive money, mass consumption, low interest and loose policy is mapped to the richest demographic in the world -- the baby boomers who have used thier RE like an ATM or tied up all retirement in it and have lost in the end game.

I cannot believe the unaffordable property in KL and surrounding development first off, this should be a big red flag that the bubble here is worse than perceived. If you are a smart investor, you take profits at the top so even if you purchased property prior to 2007, why not take the 30-40% profits and come back in and play later.

This will not end well...be ready, be protected, be smart for turn 3-5 years down the road. Without liquidity (which RE is not) you will not be able to take on the great opportunities after the correction NOR be in a position of affordability when your home is under water!

The government are proposing max 80% margin financing. I believe this is to slowdown the high inflation rate jacked up by investor. This is mere following China move to press down property price by implementing minimum 40% down-payment in China. Initially I believe they are slowing the property prices by increasing the OPR, thus BLR but this mean also bursting the bubble earlier as most people who bought under lower BLR will face a higher loan installment. However, this move will also penalise property purchaser for own stay as not all can get 80% due to OMV and may get slash by bank to 70%. That mean someone going take out 20 - 30% down - payment to purchase a house. Let look at a typical 400,000 property =

20% x 400,000 = 80,000
Estimate s&p fee + stamp = 14,000
loan agreement = 5000
valuation fee = 1000
________
100,000
________

Almost 25% if one get full 80% margin financing, what if can't get OMV due to high prices jacked up by investor?

Just sharing my view

Hi bro kelvin, do you mind sharing the link which stated this Government intention?

I agree 80% is a double edge sword, at the same time of curbing investor (well, the cash rich one is still unaffected), it will heavily impact own stay buyer, especially fresh graduates, how can they fork out that much of cash? So asking/borrowing from parents will be the only way...

Prices jacked up by investor? Would it make sense to assume that the high real estate prices are due not only to a limited supply of real estate, but also to speculative trading of properties? If so then as with all speculation, its highly likely that a bubble is growing. And will pop eventually.