Amazing data in that article.

With BLR at 6.3, using BLR -2.1 for 30 years, 700k property with 70k downpayment, monthly payment is 3,081.
Monthly income is 4,500.
3,081/ 4,500 = 68% of income is used to pay of housing loan.

Last year calculation, assuming income was lower by 3%:
With BLR at 5.8, using BLR -2.1 for 30 years, 523k property with 52.3k downpayment, monthly payment is 2,167.
Monthly income is 4,365.
2,167/ 4,365 = 50% of income is used to pay of housing loan.

Or thinking more simply, income increase can never keep up with property increasing by 35% or even 19% in 1 year.

There must be a lot of people still out there thinking about this question, definitely more then when the thread was started in 2008.
In general of course some property prices have already dropped, some will drop and some won't. It depends on too many factors.

Anyway, I'd like to offer some advice for people buying for own stay. When you are buying for own stay, please take a long time comparing new and older properties in your target location. An older property in the same neighborhood might be a lot cheaper.
You are going to pay for it and live there for a long period of time. Make sure you actually love what you are buying. Don't just buy because there is some cheap financing option. It might be better to save up some money and buy a cheaper place somewhere else a bit later. My advise, if you have time, would be to rent around your target location first if you don't know it so well.

If you are an investor you must know more then me so I can't give you any advice but can wish you good luck.

Nice to see some sound advice.

I always wonder if anybody actually buys at or near these asking prices. Is there any data on transacted prices for any development anywhere?

I thought about going, but didn't.
I also thought about investing in a property that hadn't appreciated that much yet, but after much thinking decided not to.
Reason was that even though it hadn't appreciated that much, ie about 20%, I still think it's too much, and the risk is not worth it. I'll wait and see if it drops back to a level I'm comfortable with. If it doesn't I'll wait for another opportunity.

If I had an investment property now I would try to sell it of asap at cheaper price then usual asking price. Anyway, I'm a risk averse person.

If your estimation of market value is correct: the answer is yes.

The question you should ask yourself is why would somebody pay you 20% more then market value?

Found some data on this site: JPPH

And calculated the following from here: Malaysian House Price Index

Average yearly increase in terrace price from 1988-2009 is 4.7%.
Average yearly increase in high rise price from 1988-2009 is 2.3%.

I guess one reason why they would pay 20% more is that the buyer is in ultra-BBB mode yes.

Yeap, I'm aware it's an average.

Bank Negara likely to announce property curbs next week

KUALA LUMPUR: Bank Negara is expected to announce next week measures to curb property speculation and a programme to create financial awareness for the youth, said sources.

The introduction of a loan to value requirement for people buying their third house or more has been talked about, but central bank governor Tan Sri Dr Zeti Akhtar Aziz said any new rules regarding property loans would not be a blanket clamp.

“We want to promote house ownership but we want it to be done in an orderly manner and we don’t want speculative activity,’’ she said after a media engagement programme at the Global Islamic Finance Forum.

“So, for first time house owners and perhaps even the second one, any new rules will not apply.’’

Zeti acknowledged there were pockets of property bubbles in the country, but on the whole, steep property rises were not seen throughout the country.

“If we consider there is any imminent risk of a property bubble, of course we will take pre-emptive action. We are not going to wait for the bubble to happen before taking action,’’ she said.

Debate over the implementation of a loan to value ratio has been ongoing and the understanding is that people buying their third house or more would be required to pay a larger downpayment than the current standard minimum of 10% of the value of a home.

On Wednesday, Deputy Finance Minister Datuk Donald Lim Siang Chai told parliament Bank Negara was studying possible policy changes for those taking up loans to buy a third house or more.

He also said prices of properties in several locations in large cities in the country had shot up due to speculation and if the situation was not controlled at an early stage, home prices would go up beyond the consumer’s financial means and may affect socio-economic growth.

Lim said people would also face difficulty in buying houses, which might lead to an increase in debts.

“The loan-to-value ratio will be specific in nature and its implications on the country’s economic growth will be taken into account,” he added.

Zeti said the banking system through its own risk management and governance process was addressing rising property prices and Bank Negara had other pre-emptive areas it might take up.

One example she gave was on financial literacy and management especially for the younger population below the age of 30.

“We want them to be better positioned to manage their finances when they acquire a car and a house in the beginning of the career,’’ she said, adding that the central bank would introduce programmes for those purposes and was ready to deal with any excesses through a wide range of instruments.

In my opinion current pricing for almost all new launches is very high and there seem to be very many launches as well.

I'm surprised so many people are willing to buy at these prices, but I guess this is what happens when everybody "made" money on property in the last year. People buying from developers are talking about their paper gains and everybody also wants to jump in to get a piece of the action. I'm almost tempted to sell my own house and rent somewhere.

I guess this will continue until there is some action from Bank Negara. Any action from them will probably be the end of this BBB-period as people will start to be afraid that the party is over. Once action is taken I expect prices to stabilize or drop within a year.

Good move, I expect properties to stabilize or drop before November 2011.

Not sure how it will affect each and every sector, but psychological factor applies everywhere.

Also, installment below 500k can be high, it all depends on your salary.

Property market doesn't react so fast.

Yeah, if you are looking to buy it's good to monitor the prices in your target area now and compare to the price development over the past few years.

I just happened to see one new listing drop from the established pricing over the last few months.

It's in one of the area I monitor.

Launch already? Do you have details and price?

This post has been edited by prody: Nov 18 2010, 02:17 PM

Then we don't know yet if it will be affordable.

I think another cause might be oversupply.

Yes, not all projects selling out within a day anymore.