are you trying to compare our economy with usa economy ? i would say, it is inappropriate. or, are you saying we, malaysian are now in recession which related to the property goes downtrend ? again, inappropriate, which are based on my personal view. and please, dont tell me you have tonnes of relatives living in all those usa, uk, australia or all over the world , thus you have first hand informations. too add more, i personally live, study, and work in uk and germany for 10 years.

or, are you trying to convince everyone not to buy property rather than rent ? to me, i am more sort of as a typical chinese man, which buying a property is a cycle in life. come on, dont always based everything on figure such as percentage. the more calculative you are, the more miserable life you will be.

buying a property is basically based on one person's ability and thinking.
will the property goes up in value? more or less, yes, i would say, but, it will be slower compare with previous years.

Very simple, historically M'sia has never experienced such drop or even increase. And if u look properly, u'll see that NOT ALL location experience massive drop, and SF actually went up by 20+%.

Its all about picking the right properties. 
Recession? We are far from it, at least for now.

I think you r wrong here. Look for the definition of a recession, then u know why I said we were far from it.

---

Added on August 1, 2008, 7:24 pm

If there's no recesion, then there's no need for such bail out nor oil money(apart from taxes), rite? Ur assumption that we will get into a recession was based on nothing concrete.

---

Added on August 1, 2008, 7:27 pm
Hi Playbook, mind sharing with us the recent take up rate for KLCC area? 

Bro, was saying that we are still far from one, think it was Dreamer who thought we'll face one soon.

---

Added on August 2, 2008, 12:47 am
Just bcoz KLCI didnt go to 2500 or 2-storey terrace shoots up to 1 mil doesnt meant we are in recession.  FYI, we do have a DS in KL selling for RM1Mil.

And why do you think that Im optimistic? Im not optimistic, but if you or anyone else for that matter think we are heading for a recession, back it up with logic stats and data.

I have paid more than $30000 renting room since 2003. 

Hope the property prices is going to drop come 2009. Might get a studio / 2-room apartment unit for own stay.

let's not put things to the margin of financing. 33% is still considerable high. Some banks would take into account the borrower's debt burden of other financing facility from other banks while some don't. try taking it as 20% of a person income while the rest could be placed for other charges for the house in case repair is needed, emergency funds for the house, house insurance, quit rent, etc. Not to mention also maintenance charges. Most houses now are gated community or with security which also have maintenance charges. Tho the amount may seem small but most owners fail to pay them.

Lookin at the title ".. for 1st time hse buyer" i think hse price drop or not, its not as serious an issue compared to investors.

After all, if ur buying for own use, u might need the house already, unless if u can hold on to see how the market reacts, which might disappoint u, cos everyone is screaming 'cost increase 30% !'.

A developer put its sales on hold, yup, dun wan to sell, cos they are recalculating their sales price.

I know that house prices for future phases are coming up, not just cos of material prices, but it has been the practice always - developers never sell new properties priced below their previous phases.

Why ? Cos it will scare off future buyers who think the project is in trouble & depreciating.

Competition in banking sector won't prompt a lower BLR, bare in mind, BLR which affected by overnight rate set by BNM is not controllable by banks themselves, only BNM can do it. Interest rate is controlled by respectively country central banks not commercial banks.
You need to look at real interest rate whether it is positive or negative before BNM or most central banks can make a move. Last year, real interest rate already almost zero already (now even worst, -4%), so BNM should raise interest rate, but with economy is slowing fast, that prompt BNM reluctant to raise it. But with current interest rate, every deposit you make in FD is actually having negative interest rate now because of high inflation.

Properties price won't drop too much because of inflation in raw material price. Unless raw material and others basic materials price drop significantly while economy is in deep recession, then yes, properties price can drop. In fact more likely scenerio for current situation is properties price stays roughly stagnant. Again it much depends on location wise.

Malaysia economy does not recover back to the old glory day before 1997. By looking ay KLCI, yes, it set a new high compared to 1300 level back old day. But do remember, 1500 point of KLCI is much contributed by plantation stocks like IOI, KLK, PPB and others good strong fundamental stocks like Genting, Pbbank, MISC etc which most make historical high 2x 3x or 5x compared before 1997. But if you look at other component stocks like TNB, TM, Plus, MAS etc they are not still far off their previous high.

Yes, most economist and analysts always tend to over optimistic and over pessimistic most of the time. But life always goes on, those good and strong one surely emerge as next new round of winner but do remember also, they are plenty of company went broke during 1997 and money down to the drain. Now, you only see the winner of 1997 crisis, but forget that are plenty of company struggling severely and closed shop. Country as a whole won't die, but individual company can.
Even in US financial credit crisis, we had already one big casualty (Bear Sterns), (rumours said might have another one) while several smaller regional banks have failed already but for sure financial system in US won't fail. This US financial credit crisis will eventually fade away over the time (take times not overnight or next week) because of self-correcting mechanism in a free economy.

Economy is cyclical in nature, you can't say one will boom forever, nor one will in deep recession forever, as economy itself is a self-correcting mechanism.
Too many people build houses, too much supply, house price goes down. House price goes down, not profitable, nobody wants to build, then supply decrease. Supply decrease, demand high, prices goes up. Then with high house price which is profitable for developers to build houses then more houses being built. Cycle goes on and on.

Here we go again, another one of those famous ‘oil money‘ prophecy of doom.

Have to throw my hats at ya',dreamer. You have a believe and u act upon it, and that is why u'll do better than most malaysians who only talks. But whether your believe n actions is a smart OR not-so-smart one, it remains highly debatable.

Sounds like we are heading to recession??

Bailout bill defeat could cause painful recession

http://news.yahoo.com/s/ap/20080930/ap_on_bi_ge/no_deal_economy

By JEANNINE AVERSA, AP

Sept 30, 2008

WASHINGTON - The fallout from the vote against a bailout package for the U.S. financial system may well be lasting pain for the economy.

The House's stunning defeat of a $700 billion package urgently championed by President Bush, sent shock waves through Capitol Hill, the trading floors on Wall Street and the Oval Office on Monday.

righto..in some sense but wrong in the whole..

the bailout is to stablize the current sitution..

yet a lot of ppl are still blaming wall street for creating futures/options contracts on a lot of this sub-prime linked instruments. structure products.. etc..
but ultimately.. it goes back to the basic product.. the assets which backs them up.

if this bill does not pass.. its going to hit mainstreet hard... on the 4th quater earnings.
already banks linked to HSBC are not fully disclosing their write offs and the total amount of toxic loan exposure.
the worst is yet to come.

the 700billion will also create a opportunity for tax payers money to actually profit from the current situation.

all i can say..
guess what folks if u dont back them up..
the more a lot of ppl are going to be make from short selling all the futures contracts indeces in the world.
and since short selling in the us is not so regulated..
the ppl in the US.. with most off their money is banking on longing on the market.. is the one thats going to pay us
and we will us that money to buy all their undervalued assets in the US..
talk about double profits.. its  a win win situation...

last post..
ciao

You counter and say Not happening YET". So I'm curious, what will trigger a meltdown in prop prices?

Dreamer,

Fair enough. But I'm questioning why I keep reading that a property uncertainty/meltdown/crash is expected...

1) How many actually spend the increase on properties? Having RCECap in place already almost guarantee their existing monthly mortgage paid.

Yes, printing money should cause one's currency to devalue, although depending on how you look at it, the reverse holds true for USD. When companies with high foreign debt (presumely largely in USD), one of 2 things will happen:

1) USD/RM remain high, causing what you described, but then again, who will be the target group offered VSS/get retrenched, and how will this translate into property prices come crashing? I'm curious specifically for property market, not economy in general. We know how the latter will be impacted, I just want to know how does that translate into other sector, ie prop.

2. USD crashes, as it should have been long time ago. So in this case, forex will not be on top of the concerns list, alhough the rest of the factor (absolute debt, demand outlook etc) will still be in play.

That's an interesting theory u just pointed out.  May I disagree on a few points?

1.  I won't argue with you whether the govt will VSS the govt servants or not.  I can tell you many reasons why this won't happen - but won't bother right now - let's just put it this way - I don't think the govt will retrench 1.4 million govt servants in this country....by the way, I'm not pro-govt......just stating the obvious.  Don't nit pick pls.  There are many ways the govt could toy around with to prevent the vss from happening - from tweaking monetary policy, to manipulating money supply......of course, there will be repercussions....However, this is not the issue here.  I'm saying that the vss won't happen.

2.  You don't understand the property market in KV very well, do you? I can tell you now - if vss starts among the govt sector - prime prop's in the KV won't be affected at all.  I betcha you wanna know why.....I'll keep quiet for now as I want u to counter me with your points first

cheers bud.

---

Added on March 24, 2009, 1:05 am
Speaking of bailout, US is defo leading the way via trillion dollar bailout. Its not sustainable yet they keep on bailing out failing FIs and institutions. And guess what, now US property market apparently seeing signs of recovery now.....

Sounds cliche no?

This I know, but you honestly think that this con job can last forever? 

Its these thoughts that will lead to the USD downfall (no offence boss). Keep on thinking/hoping like that and you'll be caught holding the baby when the music finally stops 

I beg to differ as USD downfall will impact anyone who's earning in USD, have reserves in USD and investing in USD denominated invesments 

Now what determine the property price? Supply and demand, just as i any other investment.

Well, boss - if that's the case - I'm not very smart then.

I view diversification as "di-worse-sification".  I don't put my egges in many baskets.  Safer, but the return isn't too smart either.

I put all my eggs in ONE BASKET - and watch them like a HAWK.  Maybe, I'm not very smart - but IMHO - that's the way to do it - if u r serious about building some material wealth.....

If not, di-worse-sify away then.

Sorry - there are many other details to this, but that's the basic principle.

chief, your diversification sample above have lost over 45% of its value since inception in just 2 years I thought this fund is mainly for capital preservation? 

Anyway, thanks for providing us with a fantastic example on how diversifying rarely works in either growth or capital preservation mode

Chief, I'm pretty sure that 20 years from now - i'll still be having ONE BASKET. 

By the way - this principle applies all the way to the grave.  Don't nit pick pls.  I am aware that u should have some cash buffers etc etc.  I don't want to debate fancy arse asset allocation and efficient frontier garbage with you.

Let me put it this way.  If I have 8 properties now, I will have 88 properties when I reach 50.  Still ONE BASKET.  Personally, I think that di-worse-sification is way too over-rated and passe.   

Don't be too presumptious on how much u think I have.  Well, I only have RM 2,000 as my net worth.  How pathetic, huh?