Speculation is like buying up all the tickets to a concert then selling it at twice the price. There's nothing smart about it. We could all do the same, we don't because it isn't the right thing to do.

If everybody does starts speculating, what you'll get is overpriced tickets, that nobody wants to buy.

If we want to know how bad things are, just look at the occupancy rate of existing property. eg. Melaka Raya Shop lots. Tons available, run down and probably still overpriced. And yet, they are still trying to reclaim more land to build on.

I hate speculators!!

So true.

I think not many people realise what speculation of property actually means.
It's just like a pyramid scheme, money is made not from providing a product or service, but from other members of the scheme. And like a pyramid scheme, it will reach a saturation point when everybody who can purchase it has purchased it. The last person to own the property is the one who has made all the others up the tree rich.

The only difference is, as already mentioned here, is that people may decide whether to get involved in shares and get rich quick schemes, but homes are a necessity! It is unethical to play with someone's livelihood.

This is no different than, people hording sugar, rice, fuel, or water source, in the hopes that prices will hike in the future.

Does buying property make money? Yes, and you will also LOSE if you are the last owner, just like any Pyramid/ponzi/get rich quick scheme.

The only reason why people are making money at present, is because, not everybody is buying, and when late comers come in, they take over the burden. But just imagine... if every Dic, Tom and Harry were to dive into properties*, irrespective to the risk, do people realise what will happen?

*developers creating smaller/cheaper properties for poorer investors to widen their market enabling almost anyone to invest in property.

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Added on December 21, 2010, 9:43 amThe tragic part is that, now everybody is being made desperate to get a piece of the action, making matters worst.

And some of these people know nothing about property investments, other than the next guy "appears" to be making money.

They assume, that just by buying a property, it is an instant cash cow. This is with the assumption that projects will be completed without issue and they can always borrow more money from the bank to buy their own home.

They optimistically believe that renters will move in quickly, they will behave themselves, they will pay you enough to cover your monthly loan repayment, and the house never needs any maintainance.

unfortunately it doesn't work that way

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Added on December 21, 2010, 9:48 amI say let the prices go up! and up! and up!

Then we'll have a nice fall.

This post has been edited by TheDoer: Dec 21 2010, 09:48 AM

Yeah me too... and found out I can't move out, without first selling my parents house, and dragging them along with me to a slightly bigger house, in the middle of no where.

Meanwhile, there are lots of houses in my Taman, that are overgrown with weeds.

Ah yes, I agree.

There should be a minimum holding period, so that people don't just buy and dump houses.

The holding period should be longer for foreign investors. If this is going to be their second home, they won't mind holding on to it. If they are here to make a profit from desperate malaysian, how exactly are they helping the common malaysian again?

I have to admit they have more buying power then us. If all of them bought houses here... Malaysians would soon find themselves forced to pay rent. Money syphoning out of the country for no reason. (it's not that we can't afford a house, it's just that we are trying to race our proton with their Ferrari).

Ideally, I would take a step further. A second or third home needs to be justified with the authorities.

Until everyworking adult, can own a home his future family can grow into in line with his salary.

thanks max. The chart says it all.

I have to agree with you. Myself, and the guys around me, have previously talked about owning a home. and guess what? After much independant search, none of us has settled for anything. We are all still in the waiting game. Because those expensive prop in the middle of no where, are simply not realistic.

The guys that do buy those property are those who blindly buy in the hopes of making a quick buck. These are the people who will face financial difficulties and cause the market to spiral down.

Yes, those measures are to STOP, greedy people from taking insane risk to invest. They should be doing it right now even. It's more like using an umbrella after you've gotten wet.

But heck, do you think I care about 20% downpayment and/or increase interests when houses are cheap?

While you guys own 2, 3 houses. I have not spent a dime. So, you can guess where the money is coming from.

Cherroy, from an ethical perspective. What's your take, on the similarities of property speculation and how Pyramid Schemes work (based on the association I made in my post).

You have made some strong points for property investment. I wish to reply, but currently occupied with other post.

This post has been edited by TheDoer: Dec 28 2010, 12:02 PM

In terms of property prices. Instead of micromanaging it, and trying to predict how it will work, lets zoom back and see it for what it is.

Assuming we are a close system, not affected by foreign investment. (Infact we are a close system, because we live on the same planet, with simply various subsystems present and ultimately they effect each other too)

For someone to make money off property prices. It will mean that either:

1.By chance, the state capital has moved to your backdoor.
2.It was strategic planning, it wan't luck. I knew they were going to move it here, before anyone else.
3.Increase in demand, because the population is increasing.
4.Inflation. Which means you are getting your same house worth, just in a different denomination.
5.Own improvement of the property, which means renovation, furnishing it,etc.

(Am I missing anything?)
Now what these means.

1. If it were a matter of chance, then you are basically gambling. You may see the surrounding develop into a hot area. Or it could be a dead fish, maybe a new rubbish dump is open in the area.

2. It was strategic planning. Sure, but you must still consider that it is a risk, since you can never know what turn of events may effect your property.

Furthermore, so called development are sometimes, nothing more than optimistic risk taking. The developer of the facility, assumes that since there are ample housing, that there will be ample patrons. Not realising that some are simply 2nd or 3rd homes.

I have seen a case where a new cinema was open in my area and it was closed down the next years. They get a maximum of 5 people per sitting, in a hall that can fit hundreds.

You maybe basically betting on someone elses optimism.

3. a.)Exactly how much are we growing, population and wealth wise? If there are lots of people with low income, then prices can't go higher than what they can afford. If we had rich people but low population(over supply), it will soon be apparent that people don't need that much room to begin with, and their asset becomes a liability.

Is the rate in which we are growing, proportionate to the increase of property prices? Or is it only a minor factor?

b.)Furthermore. If we really needed this amount of room, for our given population growth, is it not a concern that we have to live in such poor conditions because of it? In otherwards, we are trying to fit more and more people into a packed car, and soon everyone starts to feel uncomfortable.

Or perhaps it is not that we have too many people, but rather, each person is trying to hog more of what's available, like 3 person in the backseat of the car, and everyone is trying to lie down at the same time.

c.) Then we must realise how does the population increase. It is us who creates this increase, it is our children. Basically what this means is we are increasing the price of property for our children.

4. Inflation happens when people are asking more money for the same thing presented. When the roti seller says he want to increase 10 sens because of oil hikes, his customer the office worker wants a raise too. It becomes a chain reaction. Nobody really benefits. This is what we are trying to avoid. Now when the price of property goes up unrealistically, then it is one of the source of inflation. You are devaluing everybody's money in the hopes that you can get an advantage over them. Alas, when everybody does this, you probably end up with the same amount, only with a few more zeros at the back. You may have sold this house for a bundle and feel happy about it, but you still can't buy that house of your dreams because the price of it has increased too, through your doing.

5. For improving the property, well, not many people bothers to do that. And not everyone appreciates you to spend their renovation money for them. It will probably be the same whether you renovate it for them, or they renovate it themselves. Unless you were to do the renovation yourself. In which you could save $$$. This basically means, that you are working part time as a painter, plumber,etc. You don't have to own a house to do so.

There is an exception to this, that is if you plan to rent the house out, then some tenants appreciate that they can simply move in. Another is if you are already running this business of say plumbing, painting, or owns a second hand furniture business. In which case this becomes an outlet for you to sell your services. The house will be furnished with your furniture and not a competitors.

But then again, how many people actually improve their property this way?

So what I am trying to say is: Whether one makes money from property speculation, being a different story; from the perspective of human beings as a whole. The act of speculation, doesn't really make us rich, it just makes everybody's life more difficult. It means that you make a profit, from the fact that nobody else got in before you. Just like the guy who buys all the cure for a contagious disease, from the shop, and starts to charge twice the amount to everyone else. He is making a profit, not from providing a product or service, but merely leaching on the less fortunate.

And in this case, when people know that such things are permited, and people do become rich from such activities, everyone wants to get a piece of the action. Without consider the ethical aspect of it, and how it effects us as a whole.

In fact, if everybody were just as kiasu/kiasi, and everybody buys up all the medicine. We will end up with everyone having extra medicine but nobody to sell too. Nobody makes a profit (except the manufacturer, then again their effort could have better spent developing other cures/products).

This post has been edited by TheDoer: Dec 30 2010, 02:07 PM

You wouldn't call Bernie Madoff a criminal until you lose money.

Just because everyone is doing it, it must be right? So is burning witches?

Look at the points objectively.

Though I'm not calling them criminals (because they are not breaking any laws) an orange is an orange.

Your statement is like puting insult to injury. First you say we don't need to own home, then you're telling us you own 1 at a good location. lol

In away you are right, we all don't need to "own" it. Why do you own yours?

But think about it, when we don't own a home, we are at the mercy of the landlords. Assuming all properties have gone beyond our reach, then those who have a stake in them, gets a say in how much rent they want to collect.

Though "owning" a home is not compulsary perse. A roof over our heads is definately a must. And a home is not a home, if we are at the mercy of others.

For example, I have known some people who had to move, because their landlord wants to sell their property while the market is hot.

When you are willing to hire a taxi to work everyday, even though you can afford a car. Then you are entitled to say: "why not rent?".

For you to say, hard luck you won't die, is like someone stealing all the boats, and expecting the rest to swim.

The real question is, are we buying a smaller, and less attractive house, because there isn't enough? Or because people are hogging them hoping they can sell them back to us at a much inflated price?

This post has been edited by TheDoer: Dec 30 2010, 04:45 PM

That's the option that the landlord chooses, when he purchased the property. Any risk or hasle is of his own choosing, and he reaps the $$$ that comes with it; Whereas, for the renter, it isn't much of an option but a necessity, either that or live on the streets. It's no wonder why people are willing to pay a few K rental. If it's so good, perhaps the landlord should decide on renting too...?

Public transport, and what nots. If you drive in with your merc, you are the last person to tell people to take public transport. (Remember that politician, who hasn't been in a public transport for over 10 years and says our public transport is good?)


Yes, so you concede, that it's unethical? That's all I'm asking atm.

The world may be unfair, but the real question is, what role do we play in making it worst? Certainly there must be some level of civility.

People die from terminal illnesses everyday, but that doesn't mean people can start murdering.

I won't really fault anybody for buying or investing in property before this (assuming they aren't aware of the ethical aspect), just hope that people realise what is happening, and discuss next phase of action.

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Added on January 3, 2011, 8:53 amthumbs up! thumbs up!

Property speculating is worst as it involves a necessity and it's not regulated like other necessities.

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Added on January 3, 2011, 9:03 amHas not happen does not mean, it will not happen.

It will be pretty naive to think that just because things are going up, it will remain up. If anything, it is an indicator, that we are nearing the end.

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Added on January 3, 2011, 9:05 amWhy do you guys worry that we are waiting?

Unable to sell your house?

This post has been edited by TheDoer: Jan 3 2011, 09:05 AM

That statement is just plain wrong.

You think the rest of us here, are waiting for someone to give us a free house?

What will happen to the world if everyone thought the same?

Can you imagine one day, your house is on fire, and you ask your neighbour for a fire extinguisher, and he wants to charge you $$$? He then says these famous line:
You are right, work smart not hard. You must look at the bigger picture, know what exactly is happening, and not just that you are making $$$.

1st of all, nobody really knows when any market will go up or down (big time speculators like soros aside). Based on signs (trend), half the sooth sayers will say go up, another half will say go down. In the end, when it goes either up or down, then they will say... "ooo predict since long time already.....". This is pure gambling.

What you didn't realise is, that the money you make is from each other. So in order for 1 person to make money, another person needs to loose. In some cases the looser is the one who buys late, and sells early. It's a zero sum game.

That's plain silly.

1. I've asked this before, and will ask again, what will happen, if everybody became kiasu and bought as many property as they can?

The answer is, developers will catch up, and everybody will own expensive properties with nobody to sell them to.

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Added on January 3, 2011, 9:55 amMadoff was a con man.

Exactly my point. People will buy in to anything, as long as they see the numbers in books. But they don't really know what's happening.

For speculators, you might as well, start bidding for a piece of paper with my signature on it. I can guarantee that it will continue going up and up! as long as there are more speculators around.

This post has been edited by TheDoer: Jan 3 2011, 10:13 AM

Just wondering...

How does one, sell their property at a profit, then buy another house which is under valued?

In essence, wouldn't it be the same to just stick to that same property?

Yes, actually, it really doesn't make sense. If houses were really affordable... and everybody buys home slightly further away. Then whose going to rent from these $.$ landlords?

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Added on January 3, 2011, 2:29 pmAlright, though out of topic, I must say that philophy and ethics is very important in our day to day lives.

We are so different today, more civilized if you will, because of philosophers from history. Back then even in ancient times, there were people who couldn't care less.

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Added on January 3, 2011, 2:31 pmIs it because a certain area price will fluctuate faster then the current area?

This post has been edited by TheDoer: Jan 3 2011, 02:31 PM

Thank you.

In effect you have maintained the property, and saw it through when nobody else wanted it.

This is how investments should be. Many fly by night so called "investors" simply goreng. Spoiling the market and for what? for their own gambling pleasure.

ah... more speculation

When we say "below market price" sometimes it's a little bit tricky...

Does the market price, refer to the inflated property market price? or the actual market price?

Does the market price, refer to what you can afford vs what other people who are not as financially sound is able to afford?

There's a reason why Low Cost houses, are controlled. Because otherwise, people will simply buy them to "Invest" like it's nobody's, business.

The poor people, will then be paying you the inflated rent of which should have been their original loan to the bank for owning that property.

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Added on January 5, 2011, 11:51 amBut seriously, how many investors out there, actually buy a home, and upgrade it, so that, people will actually come and live there, when they originally would not.

Or to hold the house, so that where once the house would have been abandoned, it hold on, until the place developed?

Or, did we just scrapped some forest, just to stake a claim, so that in a few years time, somebody will pay me, for destroying the forest alittle earlier on his behalf?

This post has been edited by TheDoer: Jan 5 2011, 11:53 AM

It's the same thing with mamak stalls. Sugar increase by 10 sens, and they increase the price of teh tarik, even though that one bag of sugar can make many cups of teh tarik.

The cost of material, is just an excuse.

Nasi lemak, etc, price increase we complain, Our salary is fixed, but we are still able to afford this. The demand will not drop.

Now if the price of a home, requires us to take a loan 50% to 100% of our income. Do you think that is ever going to happen?

There will be a point when all the rich smart elect speculators out there will be stuck with all their luxury homes, but no one to sell to.

Because the rest of us, will be forced to stay in small flats as you said.

So naturally, an adjustment will happen.

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Added on January 7, 2011, 10:52 amPerhaps the term use maybe different. but the geist is there.

There is an actual value of a commodity, and the percieved or inflated value of a commodity.

There is no denying that.

If people start speculating on a piece of paper sign by a kid (with condition there won't be new ones). Then of course the price of that piece of paper may go up, to the point of infinity. People will celebrate and party like there's no tomorrow. But nonetheless, it's still just a useless piece of paper, and that's the actual value of it.

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Added on January 7, 2011, 11:02 amI had mentioned the similarities between pyramid/ponzi schemes and property speculation, and have yet to get feedback on it.

I would like to propose that those $.$ people out there might want to consider it also, because it's basically the same thing.

There is a "guaranteed" return on investment, as long as you have a bottom line aka someone willing to buy the house off you, with the hopes of making money just like you.

similarly, There will be a saturation point, when nobody can afford, or there are no more gullible people around anymore.

If you are the upline (person who bought early), then confirm, you have made some money, if you are the downline (last person who is holding on to the property)... too bad loh.

This post has been edited by TheDoer: Jan 7 2011, 11:03 AM

This is out of topic but. what you said sounds just so wrong.

It's no secret that stocks crash. and when they crash, who do you think lose money? Anybody but yourself? It's always a risk.

You probably will try to call in to sell, but can't get through.