Expatriate Forums in Malaysia

I think that the Malaysian government found a way to maintain this bubble for the next few years.

http://jitcoproperty.blogspot.com/2011/ ... house.html

If your family income is less less then 3000k, which is not very difficult when you are a fresh grad, you can buy a house without a down payment. Like in Europe and the US, well, we know how that ended...............

There was an article about my previous post and the posts from the others regarding this matter.

The are going to raise the 300k to 500k for people with an maximum income of 3000 a month. With other words, their whole salary can be used for the mortgage.

So actually whats happening in Malaysia right now is exactly the same as what happened in the USA and Europe, although the loan system in the USA was worse then in Europe.

It's just waiting for the bubble to explode............

similar? seriously? what do you guys think of this allowance from the government, do you think it'll help much?

Im reading all the posts and everyone is right.

Malaysia is following USA and Euro bubble theories and its going to take them right off the cliff as well. I wouldnt touch property right now, despite that some gains are still to be had.

This returns us to the USA problem because this foretells the local future. Who was wrong, the USA banks who offered 125% loan-to-value financing, or consumers who took the loans? Who should have said no?

Traditionally, even with increased fractional reserve lending through the years, banks not only limited payments to 25% of your income but also looked at other aspects of your life to assess risk. For example, were you going to live in the house and therefore take care of it better? They didnt want the property back. Malaysia followed USA precisely, throwing out loan ratios and passing out easy money to anyone who asked. Same with cars. If Malaysia followed prudent lending practices from the start, there would be a stable, orderly, non-chaotic market even though most people could therefore not qualify for a loan.

But look now, foreclosures and bankruptcies are at historical highs in Malaysia and nobody wants to talk about it. What, bankruptcies are also "sensitive issues?" The goverment writes it off to increases in population and therefore higher bankruptcies but if you look at the proportions its way off balance these days. So if things are so good why is everyone broke (except for what can be lent to them?)

The goverment is so keen to keep people from noticing them too much, so keen to present a gleaming facade to the world that its willing to sacrifice its future. Someone, sometime, is going to be stuck paying for all this and the choatic over-building, just like musical chairs, just like USA--which i can say will never recover without drastic steps like new currency, erasure of debt, massive corporate and bank failures, in other words a national reset.

Like USA, when Malaysians have a shiny car and an address with their name on it, coupled with lovely beaches and trees they think they are doing better than they really are, which is the feeling the goverment wants them to have. Not only that, the country hasnt really suffered a major property collapse before so they think it cant happen to them. Thats all USA and Euro stuff, right? Think again. Like USA, Malaysians have for some time now been in the belief that they no longer have to work for a living, let the increase in property prices give them income.

My god, doesnt anyone follow history, let alone news?

Hi I predict prices will go up, or down or sideways. Nobel prize for economics await me lol

In 1997 everyone said UK market peaked. It then doubled in prices! Even 2008 hasn't had that much of an effect except for apartments sold in south London (and a few other toilet areas like Manchester) which were sold fraudulently by dodgy estate agents with dodgy solicitors who were in on the dodges.

RCP I noticed years ago that malaysians won't lower prices but I think it actually is an advantage. In western markets prices are lowered and psychology hits in and people panic sell forcing prices irrationally lower. I suspect the eastern way on balance is better as no forced selling in negative equity etc.

Prices in KL do seem high compared to incomes but I turn this on it's head. Actual incomes are prob far higher than reported for tax purposes. A business contact in 2002 warned me 95% of business expenses were under the table and also obviously not taxable. Most malaysians are not going to report bribe income!

Salary 60,000 per annum
Bribes 1,000,000 per annum

That happens as staff on 5k at banks I noticed sometimes had 20 investment properties and a fleet of mercs at 1 million a piece. You do the maths!


So maybe house prices reflect how rich malaysians (majority Chinese
Malaysians) are in fact and prices are reasonable.

The prices are too high,they should come down to reasonable levels

I think the government has been trying to cool down the property market with lots of measures implemented.
So maybe we can anticipate the price to decrease soon?

I'm just a beginner looking for houses. Yes, I also agree with the fact that by looking at the current economy status and the profits of investment in real estate, one can easily see that it would not be the right choice to invest in real estate.

Many of us have been deliberating on the growing bubbles in Malaysia but 6 months down the road, nothing major happened. At least for me the launching prices spiraled out of control and I am waiting at the sidelines. The unholy union between greedy developers, bankers and valuers conniving to contribute to the escalation of properties.

Anyway something to share to everyone.

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Cheerios.

There are many excellent posts in this thread. Couple of comments:

1. The runup inflated prices in KL cannot be sustained but it's hard to know when it's peaked.
2. If you are patient, you may have an excellent buying opportunity when the marked corrects. I watched the U.S. market overinflate and then when prices shot down, bought 3 houses at about 1/3rd of their price of 4 years earlier. Now renting them at a very nice return. When they return to their natural price point, I'll sell them.