my area there in Penang the price is quite crazy.

my bro bought the house at RM 267/f, super condo type, 60% foreigners 40% local, now the price is around RM 400/f, which is quite fair because he bought it about 5years ago which the price not yet go up yet. now all fully occupied

now new developers E&0 came out with studio apartment, 1300sf, RM 1.3mil.
link : http://www.pulau-pangkor.com/straits-quay.html

the salesman told us is own 30% foreigners 70% local. 80% sold.
at RM 1000/sf, it's more expensive than landed house at prime areas.

70% locals can u imagine that, for a local to stay there ? it doesnt make any sense for locals at that price. why should i pay RM1000/sf when i can get other luxury condo at RM 400/sf ? the price is totally in twilight zone.


i feel that now the price of new house is very dangerous, especially for speculators, price will increase 15% to 30% after project is completed, but if you take in account that the new property price will keep on increase because developers does sell below the current market price, meaning new projects will be more expensive 30% from market price today, while older property will still be much less. So if you push it higher and higher after 5years, lets say 15% increase per year, you go do the math

lets see, original price = 300k

year 1 = 345k
year 2 = 400k
year 3 = 460k
year 4 = 530k
year 5 = 600k

with growth of 15%, by 5years the price is already doubled, u go ask yourself whether that is sustainable or not flippers just want first level profit, lets say about 15% to 30% profit, but you have to see they started at which year.

developers now are not selling below market price, they are selling somewhere near or higher market price, thats is where the danger sets in

This post has been edited by AllnGap: Oct 11 2010, 09:44 AM

Interest rate increase affect many many things.

You imagine, if the interest rate increase a bit, every home owner's pocket reduce a bit, but the reduce in cash means people will spend less and the economy will slower.

when everybody spend less you know the effects la......basics of economy is MONEY SUPPLY AND INTEREST RATE

High MS + Low IR = BOOM
LOW MS + High IR = BUST