Why property prices keep going up

[CS Chua]

Thanks.

Ok..let's just focus on the buying side.. i.e buy property or blue chip stock when the Ringgit is depreciated by Bank Negara to yboost export...

I reckon when this happens, the domestic economy is bad and supply exceeds demand in many sectors..

Holding a handy amount of cash even though RM has been weakened is still a good choice to pickup undervalued items in local market..

If I have sufficient money, I will buy both. If I wish to take risk, I will buy blue chips first because the market moves 6 months ahead of the real economy. In less than 6 months, the blue chips can be disposed off for a handsome gain because blue chips always lead the bull, followed by the 2nd liners. When a person re-invests his money into the market, he exposes himself as the risk has gone higher. So, better take the profit and go buy a property. That will be my strategy.

[SiangMalam]

Why not some of you rich forumers with spare money get together and pool you money and come into coalmining, iron ore mining, gold mining or copper mining with me in Kalimantan or Sulawesi?

Almost risk free but definitely very high returns, your money guaranteed returned many times over in less than 2 yeafs?

You can take back lots of USD in a matter of 6 months after you put your money down... too good to be true? It is a scam? Ask some of the forumers who have been to the mines with me...

[kwchang]

... I will buy blue chips first because the market moves 6 months ahead of the real economy. In less than 6 months, the blue chips can be disposed off for a handsome gain...

Reminds me of a rich friend I know... he once kept aside enough to buy himself a Merc 280 but decided to try his luck on the stock market with the money saved, thinking he could "earn" something extra before he pay for the car. Then the market crashed and end up with no cash and no dream car.

[SiangMalam]

Reminds me of a rich friend I know... he once kept aside enough to buy himself a Merc 280 buy decided to try his luck on the stock market with the money saved, thinking he could "earn" something extra before he pay for the car. Then the market crashed and end up with no cash and no dream car.

We often hear of people making a killing at the bursa, frankly more bite the dust that we don't hear about, they just fade away...

I know of one maverick broker in UOB Kayhian in Singapore who starts at 5am everyday for the past 10 years when the trading bell rings at the Nikkei, he just paid off his terrace house in University Walk, off Dunearn Road Sinapore... if a maverick rakes home only about 15- 30% of his trading, how could an amateur make more? There is only one Peter Lim....

[kwchang]

Banks are now giving loans up to 70 years old so it is not too late for some of us here...

You forgot that the buyer need to buy a life insurance to cover the cost of repayment of the loan in case of an unfortunate early demise of the buyer. The older the buyer is, the higher the premium for a life insurance to cover the cost of repayment of the housing loan. If you are looking at a KlangValley or Penang property, that insurance could be very heavy on your budget.

[CS Chua]

You forgot that the buyer need to buy a life insurance to cover the cost of repayment of the loan in case of an unfortunate early demise of the buyer. The older the buyer is, the higher the premium for a life insurance to cover the cost of repayment of the housing loan. If you are looking at a KlangValley or Penang property, that insurance could be very heavy on your budget.

MRTA is not compulsory. In fact, I avoid banks that insist on MRTA. Many years ago, this bank insisted on MRTA. I negotiated and we agreed that I buy a basic term insurance and make that bank the beneficiary. It was only a fraction of the cost of a MRTA. After selling that property, I kept that basic term insurance until today because at age 60, I will get all my money back.

[Rhiga]

Reminds me of a rich friend I know... he once kept aside enough to buy himself a Merc 280 but decided to try his luck on the stock market with the money saved,thinking he could "earn" something extra before he pay for the car. Then the market crashed and end up with no cash and no dream car.

wow, this is nay-saying of highest level...

Your friend was doing the right thing at the WRONG time..!

Enter at the time when the market crashes, not before the crash.

Unfortunately, one may have to wait a lifetime to meet this moment when he is ready for this moment..!

[Henry T]

1) Capital + 2) guts + 3) timing = success.

We don't have to go so far back. From 2008 up to mid-2009 was a good time due to the USA subprime crisis. So many cheap blue chip stocks and houses to buy.

Many people just lack either one of item 1 or 2 above. I managed to get a house upgrade on the cheap just before the prices shot up like a rocket.

[zinglicious]

You forgot that the buyer need to buy a life insurance to cover the cost of repayment of the loan in case of an unfortunate early demise of the buyer. The older the buyer is, the higher the premium for a life insurance to cover the cost of repayment of the housing loan. If you are looking at a KlangValley or Penang property, that insurance could be very heavy on your budget.

Term insurance is among the cheapest insurance you can pay for financial protection. And the MRTA - Mortgage Reducing Term Assurance is the one which financial experts would recommend either from young to old. Forget about the high premium of cash value. in whole life or endowment. Term insurance commision is lower for agents - go figure. Moreover. MRTA may not required for medical examination.

[coogee]

For those who are keen on Aussie properties I think this may give you some idea of current market situation especially for Melbourne: http://www.smh.com.au/money/hitting-...814-245bp.html

[zinglicious]

Stamp duty: 1%
S&P lawyer: 1%
Loan Agreement lawyer: 1% of loan
Real Estate Agent: 2% (but never need to study or take exam like lawyer)
Disbursements: Lots

After that, on receiving property, crazy Malaysians breakdown half the house and spent more than RM100K to rebuild it or renovate it, as they say. Only in Malaysia. Never see this in other countries. In US, the houses even come with the lamps, sofas, showers, heater, carpet, etc. Ours come with wires dangling from the wall.

Local real estate agents have to take Exams and served as apprenticeship. In USA, the listing is exculsive whereas standard agency fees is at 6%

[CS Chua]

Local real estate agents have to take Exams and served as apprenticeship. In USA, the listing is exculsive whereas standard agency fees is at 6%

Only the person who wants to be registered officially need to take the exams. Any Tom, Dick, and Harry can sell a property under that person's name and get a commission. From the 2%, they get from 70% to 100%. For the 100% commission, they have to pay table space to the agency, so that agency does not earn from commission but table space money. Imagine 50 agents paying RM200 each per month. So, if you are officially certified, you can open a company and have any number of people working for you on a commission basis. That is Malaysia. Go and find out what a Singaporean real estate agent has to do to earn their commission. They literally have to work the whole year for their client when there is a problem. They are obligated by law. But in Malaysia, they do nothing except selling you the property. If you have problems, too bad and so sad.

[Henry T]

Most local "real estate agent" are actually negotiators who park their business with a bona fide real estate firm. This arrangement gives these "agents" legitimacy. The fees are split between agent and firm. Win win situation for both sides.

[zinglicious]

Whatever happens in Singapura, happens here in Malaysia. Agency are liable should there be any legal disputes or irregular documentations not just limiting to a year once they cashied in the cheques from thier clients. The scope of resonsibility do not differs from Phua Chu Kang or Adflin Shauki. Neither is the acts of sales to secure prospective buyers and sellers.

To maintain their estate agent license, all licensed real estate agent in Malaysia must take additional continuing education courses yearly above and beyond that which is already required. This is one of the reasons why licensed real estate agents are expected to maintain not only a higher level of work ethic, but also a strict code to maintain a level of honesty between all of the parties involved in the transaction, but they also possess also a greater wealth of knowledge and expertise of the real estate business.

A real estate agent may then employ up to 20 real estate negotiators ( not 50 or any number ) to assist them in their day to day work. Estate agents are also required to monitor their negotiators to ensure that the negotiators are also adhered to the a strict code of ethics and standard of business dealing set by the Board of Valuers, Appraisers and Estate Agents of Malaysia.

[SiangMalam]

And who takes the mark-up?

E.g. during the period 2010 when Novotel along Yap Kwan Seng was put in the market by Pulai Springs Resort for RM180 million and some agents were quoting Singaporean and Aussie and Hong Kong investors RM220-230 million.... who take the mark-up?

And every agent / broker seems to say they have the exclusive mandate from Pulai Springs Resort.... how is the investor going to check?