I've just booked a Penang island high rise for own stay, and I am now thinking of chicken out. Looking at the falling of world wide share index and Singapore's recession announcement, things really doesn't look good to buy any new property now. Worst thing is that Malaysia government is still confusing of our country's economy status now...

I believe the property price will fall by 10-20% by next year base on the below:
1. Oil price is falling
2. Steel price is dropping
3. Share market drop (people, especially foreign investor to start selling their property to cover losses)
4. Very high possibility of recession

BNM is expecting to drop interest rate by 0.5 next year. If that is true, that could help sustaining the property price a bit but I doubt it will help much when people are making huge losses in the share market and lost their job.

Unless you are very desperate, I will not advice anyone taking up loan while the property price have tendency to drop. If you're to sign up for any loan, please make sure you have at least 20-30% of cash of the loan amount you've just asked for. In case the property price drop, the finance institute may ask you to fill up the differences with cash. Do think twice, the long awaited property bubble burst may happening within next 6 months. Just my 2 cents...

Maybe should refer to 1987 economy crisis to be more appropriate? If I'm not mistaken the housing prices during that time fall below 200k from about 300k in KL prime area yet no one is buying. The similarity of both 1987 crisis and today's finance crisis is the collapse of Dow Jones index. Dow Jones index hits the greatest fall in 10 consecutive days since it created 131 years ago. That should tell us how serious it is.

Regarding the oil price, it's already fall below 78 per barrel, hitting 1 year lowest. Well, I can't say much if the gov not tuning down the price though I hope they will But I agree with you, it's controlled commodity where they can still cut the output. But whether cutting of output can help increasing the crude oil price in the situation like this... I do not know. Perhaps is more likely to sustain the price? Not all oil producer are happy to see the oil price hike, as that will stimulate the invention and the need of technology that do not or use lesser fuel.

This post has been edited by Interrupt: Oct 12 2008, 11:09 AM

IMHO, the most scary thing in Malaysia is the lack of recognition of this impact. So far I think Malaysia is the only country in this region thinks that we can withstand this. I think we will only start feeling the real impact 3 months later. I read from Malaysiakini that we're likely going into technical recession Q2 next year and go into recession around Q3; but I expect that to be happening earlier given the fact that the world stock market tumble like nobody business... Worst is that it has not reach the bottom yet...

Japan Nikki stock index dropped to 26 years low on last Friday, and now reading the sin chew link you've just posted about China economy may be at risk -- I doubt any South East Asia country can withstand this without huge amount of reserve.

Btw, Singapore private home prices fall 2.4%

This post has been edited by Interrupt: Oct 27 2008, 03:03 AM