those say not burst, y not sell u dsl to 1mil if now worth rm600k see got ppl buy or not...if got ppl buy, then congratz...

why gov need to take prevention, sure got analyzed before.

how do you know value of the DSL? If people are still buying at 1million then it is worth 1million instead of RM600k.

My advise and Im sure some might disagree :

"Its better to be a great investor in one asset class than to be the average investor in few asset class".

Bottomline, if one really knows what EXACTLY they are doing, whats the point of wide diversification? Unless the aim is to protect one's vast wealth, and not growing wealth ....... Honestly if one has to invest in more than 3 asset class to get a meagre 5%-7% returns (not guaranteed somemore)............ then there are some serious, honest questions one has to ask themselves as an investor...........

back to the question. how many people are very convince that the bubble will burst soon?

I don't think there's a bubble, but there is a growing number of developers putting up high prices at poor locations to take advantage of current property boom.

If anyone bought a multimillion ringgit property for investment, and think that it's going to be rented out easy, it's not going to happen regardless of the state of the property market.

Local property prices, especially the "high end" properties, may stagnate or "take a breather" at places when supply > demand. But it's merely a price correction, not a property market collapse.

As this is a hotly debated topic for years, I reckon there are still a lot of people waiting for prices to drop with/without cash in hand.

Like any other investment, do your research and take your calculated risk.

correct....correction....10-30% dependant on new or established & location.

Well i hope this thread is still surviving 4-5 years from now, then we'll know who is right here and who is wrong here.

To me I think it will stagnant until time and inflation catches up with the price.

2012-2014 will be a challenging period for investors who bought in 2010 onwards.....

The double dip in the US housing market is about to begin.

Canada finally showing inevitable signs of bubble bursting.

Australia is next!


Side Note : the US threw good money after bad for the last two years to shore up what they felt would have taken down the world economies. For RE, this meant keeping rates lowest in history, offering huge incentives and buyers programs, keeping all the foreclosed homes off the books to keep housing supply seem not as bad as it was.

Home owners with mortgages in the US are non-recourse meaning you could simply walk away, many did and still the market suffers. Based on keeping shadow inventory numbers lower, owners stopped paying mortgages for over 12-18 months while still living in their homes. These are all reasons to be concerned as all is coming to a head.

This is an example of how loose regulation and monetary expansion parties come to an end. This also shows you how those who follow the responsible path such as paying down mortgages, reducing debt will not be rewarded as all this sovereign debt must come from the healthy taxpayer.

The mortgage owner with zero down walks away, the one with 30%-50% ownership looses it all in asset deflation.

RE is and was for the US an Emotional thing pumped by every Ponzi on the planet. It's reaches spilled into other parts of the Western World in real time and for Asia for at least a decade. The unaffordability you see in Malaysia is evident now and steps are being taken to control it.

One thing can be said, it is usually too late when this type of news comes out.

I agree with Pai on 2012-2014 and 2010 forward purchases however, I would also include the time previous to the 2008 crash forward. Those here will recall when all the steep run-up began. Bench mark this date at 2006-2007 prices to return in some locations. This would be deemed a price correction as it could be 10-30% only. Just be happy you are owning in Malaysia and not China, HK or SING right now!

As for the US, right now housing has come back to almost 2001 levels with another downturn to go. Could it potentially hit 1997 prices adjusted for inflation to return as some are predicting? Now that is scary!

there is just too many condo waiting for vp in 2012 and 2014. there will be some sort of over supply, unless the property is in good location. else. price will most prob stagnant.

burst? i doubt so. unless there is some issue with the developer or very poor location

This post has been edited by 106127: Sep 17 2010, 12:39 PM

There will be good money to be made even in the worst of times. Oversupply also means opportunity.

Guys, don't forget 13th GE coming to town, probably 2011 or 2012? Do you think the gomen will allow bubble to bust and hence affect the entire market sentiment. Die die they will pump up the stock market and allow easy cash for property purchasing/extended loan period so that the entire nation will look 'good'. After next GE, things might make a u-turn and back to reality again. So, keep waiting for the bubble

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Added on September 17, 2010, 5:34 pmRE is not liquid is an old belief.

In the old days when you need cash, you sell your property and it takes months for the whole transaction to clear before you see cash.

Nowadays with flexi banking facilities, bank overdraft allows you to withdraw easily 50-60% of cash from your property within 2-3 days. When opportunities arise, you can always withdraw from your property account and invest in stocks/currencies etc. No hurry to sell so long as you have balance cash value in your property account.

This post has been edited by Bobby C: Sep 17 2010, 05:41 PM

Its a belief for those who doesnt understand the game well enough......

come on guys, get with the meaning, you need to sell the property first, find a buyer! This is not liquid when it's a buyers market only when it's a sellers! Ask California residents who are now taking a 60% hit on million dollar mcmansions as there are NO buyers and actually as I stated two weeks ago, in the month of July, there was not ONE transaction in the USA of greater than 500K.

Stocks, PM's even Currencies - Equities - Bonds can all be sold quickly if needed. Your house, car, boat and antique Ming Vase, NOT!

Chief, you need to understand that you DONT need a buyer n sell your props to liquidate your gains from props.........and I believe thats the message that Bobby here trying to convey.................

buy when the price is going down. sell when it is going up.

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Added on September 18, 2010, 12:43 amfainted!

just talk abt malaysia k... every country is different

This post has been edited by 106127: Sep 18 2010, 12:43 AM

Guess you are a pro in the US RE market
Definately not in Asia Market.
People like you are not helping our RE market not even the most conservative ones
Malaysia is not The States.... not even near. No point comparing KL to NY or probably Seremban to Carlifornia.
RE in Malaysia is Healthy. There was a Hick Up this yr, moving above the trend of 7-10% appreciation over the past 30 yrs to ....a crazy 20-30 this yr.
You sure want us down with some SARS or H1N1.
fortunately we survived most of it...
I have invested in many properties over the years.
The advice i was given when i started work....

" i was young like you when i started working.... wandering why all the houses are overpriced (back in 80s)
now (10s) i am still asking myself the same question. nothing changed... except the price tag"

Good luck to all the buyers. Soon we will see ourselves like Japan or Hong Kong..... paying 3 generations for home loans.
Except.... we were quoted 50yrs lag behind Japan.
I hope i live to witness this statement....

This post has been edited by preego88: Sep 18 2010, 01:33 AM

Yes Pai, agreed but what avg. malay is going to know how to do it! There loss becomes someone else's gain. They will never know the liquidity we are talking about here.

You keep coming at this from your highly knowledgeable position but one liners arent helping your fellow man invest in RE with options.

There are extreme pitfalls for the novice RE investor in a good market.

What is the purpose of this blog if not to assist the group with strong explanations rather than subtle soundbites!

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Added on September 18, 2010, 8:18 amfor the record I am no pro, none of us would be here commenting if we were. I follow global markets and trends. You my friend have your own agenda and so do I ultimately so dont judge the individual, state your view a be done with it.

My only point here which is not in line with your micro agenda is moving forward the macro view showing Asia extremely vulnerable to global challenges especially when it comes to lessons learned in RE.

Funny you bring up Japan, I recall a correction in RE there to epic proportions. The country has lost two decades but I see it as the neccessary correction one country needed to get real. Same will happen in China, HK, SING and to some extent in Malaysia. You bubble, you correct, the pieces on the global board change, you adjust your view accordingly!

It's just when!

This post has been edited by Onemorething: Sep 18 2010, 08:18 AM

THE issue of whether an asset bubble is forming has become a hot topic in a number of countries in Asia these days.

Hong Kong, China and Singapore have sounded the alarm on skyrocketing property prices and are worried that a bubble could be building up and will lead to a market collapse if the north-bound prices are left unchecked.

When an asset bubble happens, prices for a broad spectrum of properties would have escalated beyond the affordability of many common folks. The price increases are not due to fundamental demand but are being artificially pushed up by speculators.

This is what is happening in the “hot” property markets in the region today, and their governments are scrambling to cool the market down with tightening measures such as stricter mortgage loan policies and higher deposits for purchasers.

While some parts of the world, notably the western countries, are still facing the likelihood of a double dip in their economies, Asia has made a notable recovery in the past one year.

The low interest rate environment, high liquidity and an under performing equity market are fuelling a growing appetite for property investment among Asians who are renowned for their high savings.

The danger is that when interest rates start to rise and affordability is affected, demand may start to shrink. The bubble will then burst and result in falling asset prices and a market collapse.

The same issue has been raised about the state of the local property market. Will the run-up in the prices of houses in some parts of the Klang Valley, Penang, and Johor, be a prelude for prices to jump in the other broader property sectors and other parts of the country?

Although the current price spike is still quite contained within the higher end landed residential sector in sought after areas, some concerned parties have voiced concerns that it may spell trouble for the local market if the situation persist and a contagion effect takes place.

Those who are pressing the panic button are pointing their fingers at the speculators for the huge price increases through “property flipping” activities. By buying and selling within a short time, the main aim of these speculators is to push prices up and pocket the profits.

They worry that the bubble will burst when it becomes too big and unsustainable.

The bursting of the bubble will send prices tumbling and property values will be washed down the drains, causing much unnecessary losses.

Those who say there is no immediate danger believes the price increases of housing in the country are not across the board but are contained in only the “hot” areas.

To them, some degree of speculation is actually quite healthy and will not harm the market.

Although there is no confirmed figure on the exact percentage of speculative buying in the local market, the prevailing low interest rates and easy financing schemes are indirectly churning out more speculators in the market.

Unlike genuine investors who usually keep their properties to be leased out for long-term rental income, speculators are those who flip (buy and sell) their properties within a short time for quick profits.

It is common knowledge that there is a growing number of people (with extra cash for investment) who are pooling their resources to buy up multiple housing units (both apartments and landed) for profit-making purposes. They are hoping that their “investment ventures” will yield substantial profits for them in the current market run up.

Excessive speculation is unhealthy as it will unnecessarily burden genuine property buyers who find themselves being priced out of the market.

It will be a good time for the respective state housing authorities to churn out more public housing projects to meet the needs of the lower income population.

National House Buyers Association honorary secretary-general Chang Kim Loong laments that with the steep prices, only the rich, especially foreigners, can afford to buy. He urged the Government to introduce some kind of a price-control mechanism for houses – a threshold to help curb speculation.

He also suggests a lower mortgage loan limit (below 90%) for subsequent purchasers.

It is undeniable that some first time house buyers may still need the financing assistance to make it affordable for them to own a property.

To ensure the new measures do not unnecessarily burden genuine buyers, especially first timers, some flexibility like allowing a loan limit of up to 95% should be extended to these buyers who meet the banks’ credit assessment criteria.

Buyers who already own at least one property should have to dig into their own pockets for a higher downpayment for their subsequent purchase.

The easy financing schemes offered by developers and their panel of bankers should be phased out for upper medium to high-end houses.

Those who are taking advantage of the facility to speculate in multiple properties should not be granted “the free hand” to manipulate the market for their own gains.

http://www.starproperty.my/PropertyScene/P...yScene/7095/0/0

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Added on September 18, 2010, 1:35 pmWHILE much of the Western world today continues to suffer the effects of the global financial crisis of 2008/09, Asia has moved on. It is probably in this process of moving on that there is much concern about the property prices today, as seen in several readers writing in calling for curbs to speculation.

RAM Holdings Bhd group chief economist Dr Yeah Kim Leng says prices began to rise during the second half of last year but surge the first half of this year, particularly for landed units.

Although the 1998 Asian Financial Crisis took its toll on the Malaysian property sector, the sector was not affected by the 2008/09 global crisis.

“Our main concern today is the escalation in property prices. We do not see an economy-wide bubble. It is location specific. If the situation persists, it will have a spillover effect on the broader market segment. The effect is more noticeable in Penang, although certain locations in Kuala Lumpur are also affected. The double-digit growth may be sustainable for a year or two, but if it continues, there is the high likelihood that we will experience a bubble,” says Yeah.

Yeah’s views are echoed by property consultancy Khong & Jaafar Sdn Bhd managing director Elvin Fernandez.

“For a number of years after the Asian Financial Crisis, house prices hovered at about four times our annual household income. In some countries, it is three times. When prices increase six to seven times the household income, that is known as a bubble. In the last six months or so, there are a few locations where prices have started to run up. It is still not alarming as it has not yet affected the entire market.”

Both Yeah and Fernandez also concur that there are two key factors which are supporting this sharp run-up on prices – low interest and easy credit financing.

Prior to this sharp run-up on prices, the middle income group could afford a certain type of housing, in a certain location. Of late, the group discovers that this has gone beyond their reach.

At the same time, the number of people in the high-income bracket has also increased and their strong purchasing power has enabled them to snap up properties as an investment asset.

“Both these factors were present last year because of the counter measures taken by the Government to stimulate domestic demand.

“This has resulted in a boost in demand and the rush to buy in anticipation that prices will go up.

“Fundamentally, one may think it is not affordable but the expectation of higher prices stays with speculators. And the market becomes frothy,” says Yeah.

When prices go beyond fundamentals – an overshot in prices – rental yield is affected. If this situation is confided to selected schemes, the negative impact is limited. It is the high income bracket that will be affected.

A reasonable rental return is 3% to 5% nett depending on the type of house. But with various new areas coming up, yield has gone to 2% or below.

“These are dangerous levels from the household income perspective and also from the rental perspective,” says Fernandez.

Added to that is speculation, with some people buying five to 10 houses in one go, says Fernandez. The 5/95 schemes and other variants of it, where you pay RM2,000 to RM3,000 and need not pay anything until the property is completed, is an invitation to speculate.

Speculation, says Yeah, is another of RAM’s other concern as this is likely to affect non-performing loans (NPLs).

“At this point in time, the latest figures show that NPLs have not increased. That is one of the arguments that there is no bubble. What banks need to do is to ensure that lending is not generating speculation,” says Yeah.

http://www.starproperty.my/PropertyScene/P...yScene/7094/0/0

This post has been edited by xSean: Sep 18 2010, 01:35 PM

Mate, here's my take and I've got some questions for you :

1. The uninformed investor should never invest until they've invested in educating themselves with the right knowledge.

2. The informed investor will ALWAY make money at the uninformed ones expense.

3. If you wanna compare MY VS US, then do a proper comparison for everyone's sake. Right now it seems like you are saying that just because it rains in the US, it will rain here as well. Compare unemployment rates, savings rate, property price growth in 2000-2007, how many banks oliberated etc.... THEN compare regionally. Then tell us if you still think our props prices will drop by 60%............ like in California. If not then perhaps you shaould use a more relatable comparisons instead of California.

4. There are extreme pitfalls for ANY novice investors, not just RE. In your last few post you recommended silver, swiss currency, USD, Yen, Gold etc. What are the chances a novice investor here can master all these "investments" in the next 30-90 days VS learning picking good cashflow property?

5. Like everything else, property market follows a cycle. Eventually, a crash will happen and you'll be proven right. When it does, majority of the properties will drop in prices. This we all know. But there will be some properties resilent enough, and resist the drop. So since this is a property investors forum and not a "bad news" forum and since your goodself is also an investor..............care to share which properties you think will be worth holding through out the drop?

Anyone can point out problems..........but only few can come out with a solution to a problem.......

6. IMHO, anyone who is trying to time the market is a speculator. You keep on saying prices will drop. Eventually, you'll be proven right. (again its a cycle). But can you ABSOLUTELY 100% SURE that when the drop eventually happens............. will the property prices then will be cheaper than property prices today?



This post has been edited by Pai: Sep 19 2010, 04:51 AM