Property prices in Malaysia

Simple fact is that prices of apartments are still falling. I think rentals have steadied out in the more sought after areas but if you're price sensitive look a little further out.  Big warning..if you want to be near Bukit Bintang be aware that with hundreds of unsold properties developers have become hoteliers but with no professional experience. Therefore it's absolutely common in places like Suasana to have your life ruined every Saturday and Sunday by open hose parties where young dj's and/or druggies rent a suite for the weekend and party at club level straight through night and day!"

The pattern ive seen is that prices plateau but never actually fall. Sellers hold the price until better days, no matter what the cost.

I have to digress for a second and say that Asia is so different than US. In US, the seller will start high and keep dropping the price until there is a buyer, and they dont take too long to do that. In Asia. they hike the price to over-market and wait until conditions allow a sale, even if it takes years. Complete opposite approach. In Thailand, I watched an apartment building that was worth RM400,000. Seller asked for RM800,000, knowing very well it couldnt sell at that price today. He said he would wait.

Back to Malaysia. What I see is both over-value AND over-supply. In economics this cant work and so the market is either stalled or very slow to take up the pieces. In Penang, Guan Eng has severely loosened the barriers to development and companies are going hog wild to build. There is vast over-supply happening and who knows what will become of prices. In housing, developers force the market by initially offering a house for RM500,000 and then advertise that they are raising the prices RM30,000 per month to force panic buying even among those who do not actually desire a house. Its either a ponzi scheme or musical chairs, you tell me. But such games only contribute to a disorderly, and even fake, market. But asians, forever suffering from grave cases of kiasu, always take the bait. Does this mean a person should walk away or join the lemming flow? Hard to say. Ask me again when the banks have had enough and decide to turn off the spigot.

Meantime, Id like to hear from anyone about specific areas anywhere in Malaysia considered affordable. I dont know a one.

So many lelong sales of bank reclaimed property. A friend of mine in Australia was upset that he couldn't get over to an auction of a property he was renting last year, value on paper last year 1.5m,  lelong advertised price, 1.19m .  At auction it didn't sell. The agent said that they could accept 10% less but I have no interest in buying at the moment as we are waiting on a looooooong negotiated house purchase!
However as a fully trained estate agent who went from a bank manager to estate agency, in the UK and Australia I am just stunned at the Mickey Mouse agents here, 99% are a disgrace.
Not as bad as the banks though, you can't believe a word they say. And I've walked away with scrappy bits of paper hand-drawn from bank managers here "explaining" a structured investment that was actually just nothing like reality.  In the UK they'd be in jail!  They ring you at all hours to ask when you're coming back to sign and when you say, "No way, I've looked on the internet and this product is a total scam, only an idiot would buy into this", they laugh and say, well we've sold 1.9 billion Ringitts into it so far!!! This from a major International bank. Outrageous. I discussed it with a branch manager of the same bank in the UK and he couldn't believe it.
I just wonder where the hell these idiots get their money from in the first place and what will happen if any mis-selling laws are introduced like in America and Europe.

Good points all!

Im also licensed in USA, almost 40 years, so its easy for me to agree with you. The disgrace among agents, sellers, banks, properties, etc has been talked about plenty. They are legend! I recently wrote on this quite a bit with Hansson, if you have seen those posts.

Personally, your post is the main reason I havent been in the market. To me its scary, as if PROPER dealings and properties werent enough of a risk and headache. But the reason others ignore your post is because Malaysia operates on momentum, not laws, rules or professionalism. In US, any of the banks would lose their charters, and the agents their licences, STRAIGHT AWAY. Though Hansson has written abundantly on the topic of protecting oneself, I think generally everyone relies heavily on the momentum system in which there will always be someone else to take a property without looking TOO closely at details. Some would call this the "greater fool theory" although I certainly dont mean to call anyone a fool.

But to me, and I can see, you too, it represents opportunity. If possible, id love to start both title insurance and escrow services in Malaysia and end the bulk of the nightmares. Are you game to join? It would be a gigantic project for which I dont even have all the resources but yes it could be done. Aside from that, the government must adopt a licencing system modeled similarly on the US-NAR protocols and end the reign of the "wild west" agents. If the country truly wants to be "2020" it has to step up beyond building more airports, tunnels and shiny structures.

I've been approached before, not least by an Australian national real estate name but that was before this slump. I said no then because I travel 7 month's a year and if I was to do anything in property it would probably be in Europe.  I think here I'd rather do rentals than sales. Offering a decent honest service here would be a breath of fresh air and make friends as well as money!

I am staying in a place called Segamat in the state of Johor. Its a disst HQ with very lil development. So property prices are not much. I am staying in a rented house with three bed rooms, two halls and portico style place all around the house at a rental of RM 1500/-.

I dont much knowledge about real estate as I just completed one year.

Im shocked at the high price in Johor, in an area with little development. Is it a kampung you stay or in a city?

Its not city actually.. u can say its town. But its fully furnished house

I would agree, that seems a little high for Segamat. I'm assuming that this a single family bungalow and not a condo, semi-D or terrace house. However I remember paying RM1000 in Kluang (another smaller town in Johor far away from JB 20 years ago, but that was for a 5 room Semi-D, on a hill great views from two balconies off the master and one of the guest bedrooms upstairs. Well worth the price at the time. But this place is overpriced if it's nothing special.

Yes it depends on the house too.

I rent in mainland part of Penang, in the city, terrace house, 2-story, 3 rooms, complete kitchen, partially furnished, hot water, aircon, built-in cabinetry, electric gate, good condition, park across the street so its quiet, near shopping, schools, RM700.

The owner purchased it for, I think RM180,000 and today its worth about RM460,000, most of the rise in price coming only recently. The area was very stable and quiet, suddenly mass development came last year. New houses opposite this tract are, I think, RM1 million, plus many shoplots, etc. Area becoming too jammed with traffic, need to move!! I wonder where all these people suddenly come from?

I live in Setia Alam which encompasses Setia Eco Park, all the Damais and Indahs. The bungalows and semi d's are not really selling now. However, the prices have not dropped, just stagnant as sellers wait it out.
Surprisingly, Eco World are building a huge development called Eco -Ardence costing R8 + billion. Ful,ly developed in 8-10 years. I have no idea who is going to buy all the houses and commercial lots planned. I guess the economy will have picked up again by then.

There are still many houses empty in Eco Park and the Semi Ds in Damai 14, 15 and 16. Though in Malaysia, landed (freehold in particular) are still a viable investment for the medium to long term. The high end condo market is very soft with few buyers.
Yet building continues?

Speculation drives many of the markets here the major ones being housing and stock markets.

The bubble will burst!

Bubbles never burst in Asia, thats the problem. Asia IS a bubble waiting to burst for 2000 years and still nothing. Its that earthquake you keep reading about that will wipe out humanity--if it ever happens. But it wont. Tomorrow never comes.

Eco World....is that the bridge that collapsed?

I wont buy but i would build if I could find a freehold lot with a separate and distinct title, and not part of a development.

I forgot something about prices and bubbles and thats the debt of people. I dont know anyone with cash in their pockets, everything seems to be bought on credit and that heavily contributes to bursting bubbles. The government refuses to raise interest rates which would halt the increases, yet foreclosures and bankruptcies continue to rise. This should alarm the government but instead of taking actions to slow things down, they open up even more lending. If people were forced to pay cash for their lives youd quickly see how bad things are. Its lurking underneath and there has to be a day of reckoning at some point.

In most countries you can plainly see where the wealth is coming from, its in the productivity of the people. But this government sees little value in production of goods, it wants to follow US steps into a service economy. No offense against doctors, lawyers, dentists, accountants but they dont produce hard goods, especially those that can be exported. The government wrongly believes that sinces doctors earn big, they can pay big taxes, but who and how will the doctors be paid, with borrowed money? The hard goods in the country are mainly imported goods that are re-shaped and re-sold for profit. So, wealth created from exportable items is curtailed at a time of rising population and needs. Does the government truly believe one can borrow his way to happiness and success?

These are among the things scary to property purchases. Whats holding it all up? Where is the solid and growing foundation on which one can rely? Banks have everyone at their mercy and yes its scary. The solution is to produce, produce, produce, and become more self-reliant in the process. Get away from the madness which cant end well.