i somehow find that while OPR is a toll to curb liquidity in the banking system, it does not reflect much of inflation situation in one's real life.

In other words, while our "OFFICIAL" inflation rate is reported to be low, below 2% this year and to stay within 2-3% in 2011 according to BNM & the government, We, the rakyat who experience sharp increases in food prices (for example, the price chicken rice that i used to Ta Pao increased to RM6 recently from RM4.8 last month is a good indication) will definitely feel the pinch and NEED NOT the official figure to tell us whether the inflation is high or low.

And i believe that everyone now thinks that prices of neccesity are going to go higher and higher the future. Increase in sugar price although some said ONLY 20sen, it is going to trigger a multiple impact on prices of other goods. if prices continue to rise, people will find servicing mortgage loan becomes more difficult (even if the interest stay the same) expecially for those who stretched to their max to borrow to fund their property, because now their daily expenses increase already. Also, look at the increase in Petro price , which will definite be hike again next year, as the OECD countries now said they see that the crude oil price at USD100 as reasonble (now is around USD90), just imagine come next year, your budget for the kid's bus sekolah service increased from RM60 per person to RM80 per person and the list goes on.

Not only direct increase in BLR will hit property market, but the impact on once's daily expenses is more immediate.

This is because inflation will not only affect the interest rate (usually policy will lag behind the actuall inflation rate), but it affects everyone's daily life directly. So if inflation rises sharply, even the BLR rise slightly only next year, it will definitely affect the property market.

Nevertheless, i also agree that to expect to crash next year will be a bit too optimistics though i think an adjustement to the property price is possible

This post has been edited by dreamadream: Dec 26 2010, 05:58 PM

i don't agree with the "pressure for wages increment also up" bit. Just take a simple example, 10 years ago as a fresh graduate my starting salary was RM2000 a month, last year, when my youngest brother started working, his starting salary is RM1800.

Our average salary is well lagged behind the property value especially at today's price. True that sellers can put whatever price they wanna sell , to add in inflation cost or whatnot, but the issue here is : will there be enough local buyers ? Even if there are water fish who is willing to buy at high price, will they be able to get the funding needed with the average salary? The issue here is affordability and eventually the market will need to settle at what economists' call an equilibrium price and this will only be achieved (looking at the current trend) either 1) property prices to remain stagnant waiting for the salary to catch up or 2) property price to adjust slightly for the equilibrium level to achieve faster... or ..... 3) property prices to keep going up but Salary increments to grow at a evern faster pace (which i think is very unlikely).

This post has been edited by dreamadream: Dec 27 2010, 01:00 PM

I was thinking that surely foreign investors are those in the smarter group (same as the rich in the country), but will the foreign investors keep buying property at the high price knowing the fact that the average income of local is well lagged behind the property prices? They will find it difficult to sell to locals when they wanna make their profit and quit, do bear in mind that the foreign investors are in the same group (competitors) to the rich locals.

As i mentioned in my earlier post, i am not expecting a slump in property prices next year. But i do believe that the prices will stay stagnant or adjusted a bit. My view is, property prices are already near the peak considering the average income of Malaysian. No doubt there are people who are able to get 20% increment every year but these are not the average Malaysian.

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Added on December 27, 2010, 5:20 pmI think maybe your uncle is one of those extraordinary people. I know a person who 30 years ago started off as a despatch and now is a CEO of a sizable company. But i also know many many employees in my company after working for 30 years are still earning less than RM5K a month taking into consideration the annual increments.

i always wonders why the government's tax revenue coming from individuals are so low and yet we hv so many rich people around buying property like nobody's business

This post has been edited by dreamadream: Dec 27 2010, 05:20 PM

i forgot to mention something about the 2 generations loans. i didn't think much of it until i came across an article whereby some politicians actually opposed to the idea, then i started to realise how this is a bad idea for an average Malaysian.

Just imagine those days most parents are leaving behind assest (at worst: nothing) but with this 2 generations loans what the 2nd generation will inherit is liability that they may not even want in the first place.

I would think that those opt to this plan will be those in the low-middle income group and chances are they will end up using the so called 2 generation loans to buy low-medium cost apartment/condos, and i wonder a 40-year apartment/condo is livable when passes on to their kids. This proposal is really going to deteriorate the quality of life of this group of people (and their kids) who may not be that well-educated/ desparate to own a place to live. Although one can argue this is the particular group's choice, but surely the govt shud do more to help as house is a basic need of every human and step into the shoes of the RAKYAT before rushing to make any decisions. Let's pray hard that there will be more caring politians around

This post has been edited by dreamadream: Dec 27 2010, 05:49 PM

actually i think those who have been struggling to find a reasonably priced property (including myself) will agree with your points, but i think it is only natural that sellers/speculators will not agree

maybe the sellers will think that this is the "sour grape" attitude of potential buyers to mention about all this ethical issues, but i would say that speculating on property is totally different from speculation on stock prices. The first one is like taking advantage over a basic need of human being while stock prices speculation is more of business adventures (not all human needs to own businesses via shares) .. speculating on property is quite similar to stockpile rice/onions/flour etc to sell them at a higher and higher price, and when the average/below average income families can no longer afford, the speculators will just say: then change your lifestyle, i.e. instead of feeding rice to whole family, cut it down by half, add water and eat porridge instead . But what have the average families done wrong to deserve the deteriorated quality of life? they continue to work hard (if not harder) but end up with a worse off living standard due to excessive speculation, this is just not on.

when the gap between the rich and poor gets bigger, that's when we start to hv a lot of social problems. Crime rates in the country did not just shoot up overnight, it is a long process that has brought us to feel so unsecured today. Like what buddists believe, cause and consequence. if we take more than reasonable, we will hv to pay back later on. Just like the global warming problem.

GOOD LUCK to all of us who are still homeless

This post has been edited by dreamadream: Dec 30 2010, 02:35 PM

not too sure how significance is this, coz all my friends who work in singapore ALL don't wanna come back and bought properties in Singapore. of course i'm talking about genuine buyers of property.

noticed got a number of high end condos being auctioned recently

This post has been edited by dreamadream: Jan 25 2011, 02:09 AM

i personally don't want to hv a MRT station near my house although i am not in the Rich group due to security and noise polution issues.

And Malaysian are BAD at maintenance, just go look at the conditions of our LRT stations and compared to the older MRT of HK and S'pore , taiwan and nearer thailand

I don't mind to drive my small little perodua around.

btw, i am just wondering whether anyone here noticed as well that in iproperty recently there seems to have more property up for auctions?

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Added on February 19, 2011, 5:01 aminflation <3% ? my foot. I think maybe the govt needs to adjust the basket they used to calculate the CPI . My "chap fan" in foodcourt increased from 3.80 to 5.00 over the last 6 months, my assam boy drink increased from RM1.60 to RM2.2, this is >30% increase ok? The problem with these so call experts, an increase of RM1.2 and RM0.6 for them is no big deal so they don't feel the pain and continue to talk what they believe.

This is the problem of having the upper class group to talk about property prices and inflation. the thing is when the medium-high end property prices increased, the low-medium property prices will follow suits, so eventually it affects everyone but the low-middle income group feel the most. The prices of properties are not working in isolation but highly correlated

This post has been edited by dreamadream: Feb 19 2011, 05:06 AM