Well, if these speculations that a great economic crisis is on the way coupled with people unable to meet their loan payments are true then some people may want to simply wait for lelong from banks.

However, as mentioned above, it will not be the high-middle to high end properties that will be lelong'd. The individuals who purchase those have holding power and are not in a rush to sell out thus the prices for those are unlikely to fluctuate too much, especially landed properties.

As for waiting to cash in on ones property and enjoying the fruits of one's labour, I believe property is an investment that should only be long term (10-25 years) although for those who are impatient - mid term investment at least (5-15 years). If the property is good, some may simply collect passive income from rental or if the price is very good, sell it for $$$, invest $$$ and spend the interest collected from FD or dividends.

*shrugs* Different people have different goals and attitudes thus how they deal with their investements will be different.

I must point out, cruel though it may seem, that those who bought properties without considering how they would manage in times of economic downturn and crisis deserve it. I truly mean those who were ignorant or had rose-tinted glasses on. Those who had personal crisis (death of a relative, illness which caused a large unexpected expense(s), etc) are excused.

It is a historical fact that every economy will face problems and if they did not prepare themselves by having extra cash flow, savings, investments then there is no one to blame but themselves. Interest rates never promised to stay in place (unless you have a fixed interest rate) and banks are not your friends. It saddens me to know so many people stretch themselves to the limit that if one thing was to fall out of place, they will sink and drown.

Honestly, if properties are an investment you cannot see yourself handling for longterm, or at least mid term, then just rent. There are plenty of fair landlords whom rent out their properties and not cause trouble so long as you care for the place properly and pay rent on time.

Well, if they are well prepared for recession then they will still most likely hold onto the properties if they are able. If they had enough income or savings stashed to weather 1-2 years of economic instability then may not be too many durian runtuhs.

It is all very uncertain now how bad those holding high end properties may be hit. We can only be certain those who aren't prepared will be badly hit as they stretched themselves too far with no nest egg to see them through bad times.

Wait and see is probably what alot of people are going to do for now.

However, if you can buy an undervalued property in a good location then it may not be advisable to wait... I think money is better protected in property than in the bank right now as inflation hits.

Your dollars and cents be worth less and less compared with properties that is more likely to protect ones $$$ value. Unless of course FD goes all the way up to 10% then naturally FD will be very tempting XD

But of course billytong is right, basic economics cant be ignored - if more supply than demand, price decreases. If supply is less than demand then naturally price increase. Note that that is why many investors try to snap up properties close if not within the city as land and development there will eventually exhaust itself and more people come to live and work there. I doubt that it will be in the next 5 years though... Thats why property must be seen as a long term investment to truly reap the rewards.

Hahaha I think this topic has proven that speculation of the property market defer quite a bit depending on ones knowledge and inclination.

Personally, I am not able to ascertain with any certainty (not enough facts, experience and knowledge) whether our country will hit rock bottom in the next couple of years but would not be surprised if we did. Maybe even worse than the last recession fiasco. As for how the property market will be affected should recession hit, I forsee price decline in general though the further away from KL the more it will drop (with exceptions like Penang where it seems property is in high demand but in short supply-I may be wrong about this, please feel free to correct me if I am).

However, there will be those, like my father who optimistically tell me that regardless of how the economy is, property (especially those within and close to the city) has never and in his opinion will never decline in value. It is simply a matter of whether it rises or remains stagnant.

I cannot ascertain the truth of such a statement but there you are.

*shrugs* It is difficult to comprehend all the information. Previously I was told that the US was going to face something close if not exactly like the Great Depression which would undoubtedly affect us.

As far as I am concerned, I have a home to live in which is mine, steady income regardless of economic decline, a simple lifestyle that need not change so long as I am content. I am not sure how many can say the same. The saying "Don't put your eggs all in one basket comes to mind."

Sadly, I believe that until the education system incorporates financial planning and comprehension into the highschool and university syllabus then many will continue becoming adults whom live on debt and fall into financial ruin (if the kids are old enough to fancy themselves adults then they ought to be prepared to be adults. I know I would have benefited greatly if I had learnt about simple economics, investments, compounded interest, etc in my teens. I learnt about such things from).

Did you know I read somewhere that in the last few years, thousands of more young adults and adults (20's-30's) have been forced to bankruptcy due to credit card debt which in the hundreds of millions? Sigh... it does not bode well for the economy in general when people are spending money they do not have and cannot repay.

But I digress, all in all, it boils down to individuals really. How many have prepared for the eventuality of recession? How many can continue to make payments should BLR rise? How many have savings to see them through at least 2 years of less or no income? How many can sustain their current lifestyle(If no one spends, economy stagnates no?)? How many can handle possible illnesses or large unexpected expenses during time with little or no income? How many have investments which will maintain the value of their RM? etc. Many variables apply to different individuals and each individual will contribute to the whole picture. If there are only a small percentage of Malaysians can answer yes to the questions above then on the whole, it seems that should our economy worsen many properties may be on the lelong block.

Then again, who knows for sure? LoL. (Don't you just hate the uncertainty?)

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Added on August 2, 2008, 3:34 amexcuse me. I didnt finish my sentence. I learnt what I know from my family and what they personally went through and from my observations in general (I am an avid reader regarding most subjects so I guess that helped). If they hadn't thought it important that I understood how to handle my finances, I doubt I would be as financially stable as I am at the moment.

This post has been edited by shadowz: Aug 2 2008, 03:34 AM

Recession is difficult to predict. Unfortunately, I believe our current political environment makes things more uncertain than previous years (I am not saying political situation was way better before-pros and cons in all situations-but certainly less volatile and uncertain.) thus creating a sense of general insecurity which is never good.

Like I said before, I don't know if we will be facing a recession but if we did, I won't be surprised and I have ensured that I am prepared for the worst. If other people, investors and non-investors alike, can say the same then we will not face a huge meltdown as USA seems to face with the subprime. However, who knows? Too many invariables to consider and like many investors have been warned-previous performance does not guarantee future performance. We can only speculate based on previous events and current events which are numerous.

However, as Pai said here, it is doubtful property prices will drop drastically (In KL anyway) as cost of construction materials rise and demand remains at the very least steady (Shelter is one of the basic human needs after all...). If I had to give an estimate I say that properties won't drop more than 5%-10% and even then I am stretching the price decline estimation. This is again speculation as I am not certain if we will face a SubPrime crisis like the USA, if we did then the entire scenario changes but lets leave this SubPrime possibility out of the picture as no one can say for certain.

Furthermore, let us face facts that once prices on goods such as construction materials rise, they are not likely to decline again. I for one doubt it will decline 50%. Those who can pay by cash during times when people are forced to sell out will certainly feel grand but how long does one want to wait for capital appreciation, which is not guaranteed, and there is no guarantee that one can maintain constant tenancy in their property. Also, even with capital appreciation-it is only realised once property is sold and cash is in the bank or a person takes out loan with home as collateral.

I dare not make claims that there will be no recession or that property will continue to gain capital appreciation or be able to rent properties (even strategically located properties) with no trouble. Properties are an investment which may or may not prove profitable depending on individual situations but let us not get ahead of ourselves and declare that strategically-located undervalued properties are going to fall from the sky.

I must admit that I do hope FD rates increase though as I would love to reap profits from that.

no la~ but it would beat the current lousy 3.xx% p.a that is offered now. I haven't learnt enough to invest money in stocks so FD it is for now. Sad to see that I am getting so little for it though so hoping interest rates climb up... At least then my money working bit more harder no? Hehe.

If really kaya then I would buy several nice (& rentable!) properties with cash and enjoy passive income lor while still having cash in FD too. ;

Sigh... Orang biasa - got to work hard for so little k. U all are the ones who seem to be kaya with your properties and masterplans I cannot conceive of! Hahahaha.

True. Wasn't there a statistic showing that there were less than 10% of Malaysians with a household income of more than RM10,000/month? I cannot recall where I saw that now though...

There are very few Malaysians who can afford to rent luxury properties and quite frankly, if they are that wealthy - they can purchase their own properties rather than rent right?

I wonder when the luxury condo trend will stop. There are only so many deep pockets that developers can go and dig after... Unless of course Malaysia is prepared to let foreign investors own the most expensive condo's in KL. *shrugs*

I was considering trying the NZD FD myself. Any reason why you were warned off it? If not NZD then alternatively, AUD is the other currency I will stash in...

As for gold, it is a relatively stable investment option right? I mean for medium-long term investment of course. The only sad thing is no interest or dividends lol. If no need money then I guess it is the way to go but like you I haven't read up enough to know risks so not an option for me right now. Must read more...

That is 95K increase... Thats roughly 40% increase. Less than one year too I would say "VERY cool~" LoL!