Being a Malaysian who currently resides overseas..i have seen the speculative scene tak its toll here in Dubai.

When i arrived in 2007, it was booming, ppl were flipping on a daily bassis off-plan due to poor regulation. By mid 2008, it was insane, ppl were getting greedy,,queing up and buying whole floors at 5% down and flipping it 2 hours later at a hefty profit!

The came the crash, all these guys absconded, the market crashed and till today never really recovered much. The condo i live in now used to cost 6M MYR, now its 3 and yet no takers!

I agree that prices will appreciate in klang valley...but the way the RE agents have been hiking prices up in the last 10 months is disguting...equally disgusting to see are the people who pay such absorbidant prices, thanks to the freely avail loans.

I had my fair share of experiance....i had sold a semi-d at a low 5% profits as my wife decided we wont stay there and i still keep a condo at MK which is rented out at high yields (am lucky) though i was half minded to sell everything and buy a house for my wife back home.

I was looking at taman desa...where i saw an absorbidant orginal end lot with 10 ft land, asking for 840K a few months back...i thought i can ask my wife to go negiotiate with the owner to see if he is willing to come down to about 750-800K. As insane as it sounds..an agent who pry's taman desa went up to the owner, asked him to ask the other agents to remove the ad from i-property and now, placed the ad at 1.4M.

I told my wife to walk away. I may be saving allot, sacrificing time away from my wife and baby...but i cant imagine my hard earned money to be dumped on speculative market. SAme case again last month when i went back for vacation/.....saw a house at BK 9 corner, ad placed at 940, original at about 680+- according to my survey and when i went to see it, the agent claims the owner wants 1.1M ?

I am interested to know, who are the real culprits..are they the RE agents who try level best to make a big killing or are they genuine speculators with holding power. Ultimately, me and my wife decide against investing. My wife still lives in a rented condo in Taman desa and if i dont sell my MK and if in a few yrs the tenant leaves..i may end up living there!

The dilemma:
Do i sell my MK, which if sold at about 550K will not make much money in capital but gave me very good rentals and the potential buyer will reap a 3.7K company tenancy or should i keep and keep getting the rental, given that company has asked to extend the tenancy for another 1+1 years?


Keep my cash or dump on a property..whatever i buy next is for long term stay when i am back to malaysia for good..in a year or 2 from now. But i certainly want a corner house with atleast 3K land...i grew up in Jalan tun razak government quarters where i had 1/2 hectar of land. Dont want to deprive my son of that as even at 9 months, he's an ardent football fan!

This post has been edited by goks: Aug 20 2010, 04:45 PM

Well thats how speculative market works right...it was the same here in Dubai..i almost got in at the peak! Well i know friends who made 10-20M in 2 years purely speculative in Dubai. One of them was lucky to leave early and had a net saved value of 18M AED. The other lost big but still had about 5M at the end....he was cribbing he lost 10M. He started with 200K.

So the question is always, where are we now in the bubble. I dont think malaysian RE market will have the same dubai effect but 30% correction is possible but thats quiet a big impact on most average malaysian, working locally or abroad..most of which started up from nothing!

How many today will pay 1M for a corner at BK9? Seems quiet a few corners in older releases at 6-700K.

As for me, my wife wants Taman desa, price wise, i'm not able to convince myself on a 800K investment on an intermediate, let alone 1.4M on a corner and thereafter another 200K to do up the house to our taste!

I will see. If i will make a 1M purchase, i would probably need to sacrifice my MK condo, in case of worst case scenario on my financials. Dont want to take the risk of holding 2 properties though the MK seems like it will be a cash cw for me for the next 24 months.

Any idea whats the going rate for a casa Kiara 1 corner unit, high floor, FF with designer furnishing and sold LSB with company tenancy of 3.7?

Thanks,
Gokula

Malefic,

I do work overseas but yet, i cant seem to afford something i want. Working oversaes especially in ME is temporary...3-5 yrs and given the way RM has appreciated against the USD or USD depreciation.... the actual income is dropping on a monthly bassis...worsts till if you are in my shoes where u get Euro's..then u're taking pay cuts if ure sending back home...secondly cost of living oversaes is prtty high...i pay 150K RM for rent a year for a 3 bedroom ...so do the numbers!

Nevertheless, the nett take home (tax free thank god) is still better but you become more prudent on how spend after seing the bubble burst in ME.... here you go to jail if you miss you loan payments.... then deported....

the worry of any overseas malaysian...if they are taking a 800K loan...thats about 4+K a month over 25-30 yrs. Can you sustain the payments if you need to come back? There is less job security overseas then in Malaysia..the labour laws in many countries doesnt really protect work permit holders very much..so its high rick, high stress, high cost of living..sometimes when u do the math...u just stop thinking!

I think i have reached that point..the business case of taking up an offer from my KL base was on a Euro to MYR of 4.88 and today its 3.98 arggggg!

Good luck guys!

ed1torz,

When i say ME, i meant Middle east....i'm based out of dubai. I live at the Marina Bay area...at one of those high rises! To be honest...i dont see my rent in hand..it gets paid directly by the company as a company lease due to my contract being so...needless to say, if i took the option to localize then i get the cas in hand so i have the optiont o rent cheap and pocket the money..the only reasons i have not considered that is...in my current expatriation status...if i lost my job here...i have a guaranteed position back in KL + i get full health coverage for my family in KL ....so its a trade off.... its not always about money....

if money was my primary objective i would have resigned in KL and took up a local employment here, possibly get 50-100K more per annum and housing in cash to me....but then i have no security!

Its a cultural thing man....i have few malaysian friends who are contracting here at 10-15K USD per month + plus benefits but then they live ona montht o month ...they have 1 years savings in malaysia so they dont mind doing it!

If i took out the equation of wanting to buy a home with land...i would be in the same boat...but the fact is...is till wanna buy that house! The quetsion is when?

Goks

I think it needs to be a several pronged effort and based on the following:

- Margin of financing of 80% is healthy for base line, most RE burst countries are looking at 70% as baseline
- Margin of financing can be reduced with the number of properties, i.e each individual is allowed 1 landed and 1 non-landed @ 80%, regarded of share on the property. Any company purchase will be max of 70% financing regardless of number as most investors buy under Sdn Bhd for limited liability. Anything more, each new property, margin drops by 10%, maybe reaching a baseline of 60% for individual, 50% of companies.
- Alternative, the margin drop with property prices. I dont think a fresh grad should aim for a 400K property, so it can be tiered.under 300K 90%, 300-500K 85%, 500-1M 80%, 1-2M - 75%, 2M and above 70%.
- Above 90% must be abolished
- I'm not too keen on a high BLR, that only means you hard earned money goes to the financial institution and government.

The question is, when such strict measures come by, will investors invest? Maybe yes and maybe no.

What i have seen in Dubai is, there were little genuine investors who are willing to wait, ppl were flipping properties on a daily bassis. There was absolutely no local market to absorb this. This is critical for million dollar projects in KL. Every new development , be it condo or house are reaching or exceeding the 1M mark. If a big portion are foreigners, then they have a problem as if they want to exit, there must be local demand to sell too. From what i can see, the 1M and above mark is mostly able to be met by only 10% of less of the population.

I believe there is huge demand for the sub500K properties but anything above, you are hitting a non genuine market or a slimmer market with higher risks.

Just my 2 cents.

This post has been edited by goks: Sep 2 2010, 01:39 AM

Did anyone visit the Mapex fair in Mid valley last weekend?

I strolled around the fair and saw only a few nice projects was turned off by the prices...2 semi d projects...one in USJ 1 area and another i cant remember..both at 1.5-1.8M m for small Semi-D's and leasehold!

I just dropped the pamplets when i saw those. I'm would not be that shocked if it were freehold...but to see that many idiots queing up to buy 1.8M semi-d's which are leashold when you can get the same free hold semi-d's in USJ 5 or other places on freehold is just mind boggling?

Is there really such idiots who pay that much in those locations for leasehold residential?

I saw strolls of ppl buying leaseholds at taman desa a few months for >2.5M RM but i guess ppl are iwlling to pay any price for location...silly but perhaps acceptable. Ironically, i called in on a semi-d in Taman d 6 months ago asking price was 1.5M Neg and today called in again 1.8M and yet not sold! I wonder if the owners are the real idiots or if the real culprits are the real estate agents trying to make fools of owners!