JOHOR HIGH COURT – UNDERVALUED PROPERTIES FOR AUCTION.

For 10 Years since 2003 I have been watching The Sale Of Auction Properties In Johor. In the beginning, there were very few bidders at the Johor Property Auctions. And I wondered where were the Syndicates like those I met in Kuala Lumpur High Court. The atmosphere was so different from the ones I attended in K.L

Let me relate my experience at the 1st Auction I attended in KL High Court in Year 1992. It was a time when the Property Market started to move upward. At the mail box we received flyers promoting a new Condo Launch in Taman Desa – RM99,000 for a 3 room condo with about 1,000 sq. ft.

Then we saw an auction property going at the Reserved Price of RM90,000. It was a renovated Corner Single Storey House in Shanghai Garden, Old Klang Road, KL. It is a freehold property with over 3,000 sq. ft.

It was My  First Time At Property Auction. And I  really don’t know what to expect. But to participate I  have to get a 10%  banker cheque as deposit.  Since parking in the city is difficult to find I had to park a considerable distance away.

To my surprise I met a Mr. Wong, a building contractor,  who sold me his used car. And he was also joining the auction. The total number of bidders for this house were about 8 people.

I was told to wait  because there were other properties on auction ahead of ours. Meanwhile we waited. Then Mr. Wong came to me and said, “Do you want to pay money?”. I replied, “No, Why Should I Pay Any Money? Anyway, this is a High Court. There are Lawyers & Judges Around. Aren’t you afraid?” It drew a Blank look from him.

After awhile he came back again and proposed, “Do you want to take money?”. Again, I answered, “No,  Why Should I Take Money Since I Have Done Nothing To Deserve It.” He protested, “You refuse to give money or accept money. What do you want?” Well, this is my First Time & I am really curious to know what transpires in the Court Auction Room.

Finally, our turn came for the Action. The auctioneer started to   list out the rules.  No 1) Only those who brought a RM9,000 cheque as deposit are allowed to  participate in the auction.  no.2)   The successful bidder is given 120 days to make full payment.  3) The Reserved Price is RM90,000 and each bid is RM1,000 more.

So the auction begins.  Hands were raised with bids of RM91K,  followed by RM92K,  then RM93K  after that  RM94K and RM95K.   As the bidding progressed I was getting impatient. There were 2 reasons. First, with the long wait till auction time, my parking time is running out and I needed to put more coins in the meter to extend time. Or else I might get a summon.

Since there were no public toilets at the Old High Court  , and the call of nature is upon me. I needed to visit a  toilet urgently  to ease myself. So I raised my hand and offered  RM100K.

Then after pausing momentarily a couple raised their hand and offered RM101K. At this the Whole Court fell silent. I looked around to see the other bidders. They have a faraway blank look on their faces.

So I raised my hand and said, “RM105K”. Again after a short interval the same couple said, “RM106K”. Finally I gave my final shot,”RM110,000″. There  was quite a long pause before they  counter offer  again, “RM111,000”. And they won! I clapped my hands and congratulated the winner. And I found out that I was the only one who clapped hands. The rest were non-chalant.

This same property that was auctioned off at RM111,000 in 1992 is worth nearly RM1,000,000 today. While the 1,000 sq ft Condo in Taman Desa sold for RM99,000 is only worth about RM300,000 today. That’s why from long experience (20 years in this case) I am srongly convinced that Landed Property Is Superior For Long Term Capital Appreciation. In this example after 20 years a Condo Price up 3 times BUT A LANDED CORNER TERRACE UP TEN TIMES!

Coming back to Johor, the years of 2000 to 2008  were fearful years. Very Few Genuine Buyers; Fewer Investors & For Syndicates, They Were None At All! Because In These Times Of Falling Property Values Everything You Buy Will Become Cheaper And Cheaper And Even More Cheaper – As If There Is No Bottom At All. To Buy Now Is To Buy In Fear.

Let me tell you  What Were Available Then. 3 Bungalows were  available for auction in RINTING HEIGHTS, JOHOR. Each over 7,000 sq ft with a Freehold Title. Reserved  Price RM330,000 each unit. Out of the 3, only one was sold. Sold at reserved price. You see, only one bidder. So he got it.

The other 2 units were up for auction again at RM300,000. 10% Less if there is no bidder. Then the prices were further Reduced to RM270,000 (another 10% Off Reserved) Because There Is No Interested Bidder Again! .

You see the Brave guy who bought the one at RM330,000 must have Kicked Himself for Being Too Hasty! That was in 2005 – 2007. But if he held on to it, prices today have shot past RM1 Million & moving nearer to RM1,500,000.

In 2007 a Hilltop Bungalow with Big Land of 10,500 sq ft came out for Auction. The Place? Taman Bukit Dahlia in Pasir Gudang. Original Purchase Price: RM700,000. Auction Forced Sale Value: RM220,000.

It was True. Sound too good to be True? I advertised this piece of news in Singapore NST.   “10,500 sq ft  MANSION ON THE HILLTOP FOR SALE AT ROCK BOTTOM PRICE OF RM220,000”.  AND  I GOT ZERO RESPONSE! Nobody believed me? Actually No Body think of buying Johor property then.

THEN IN MARCH 2009 THE AUCTION SCENE STARTED TO HOT UP!!

A 5,000 sq ft CORNER  TWO  STOREY FREEHOLD   SHOPHOUSE were up for Auction sometime in 2008/09. The Place? Taman Rinting, Masai. Reserved Price? RM280,000. I saw that it was in good location as all the other shop houses nearby were tenanted out.

Armed with a RM28,000 Banker Cheque I went for the Auction. What A Crowd!  More than 40 people participated in the Fiercely Contested Auction! Before the bidding started, a number of seasoned expert Property Agents told me that the Value Should Be About RM320,000 – And At The Most Not More  Than RM350,000. That was what I thought, too. And how wrong was I.

The Court Room was packed. Since all the available seats were filled, I had to stand at the far end. And standing beside me was an Indian Gentleman. Reserved Price RM280,000. Each bid up RM20K.

Then the bidding starts. The First Bidder Confidently Shouted,  “ONE HUNDRED THOUSAND” At this the auctioner asked, “ONE HUNDRED THOUSAND WHAT?” “ONE HUNDRED THOUSAND ABOVE RESERVED PRICE RM280,000 – “THAT MEANS THREE HUNDRED EIGHTY  THOUSAND DOLLARS!” It drew Gasps  Of Surprise From Many Bidders & Agents Alike.

I got knocked out on the  First Round. I thought – that’s it – the Bidder has Overpaid for the Property. Then to my surprise the Indian Gentleman raised up his hand and said, “ONE HUNDRED THOUSAND!” AMAZING! ANOTHER RM100K UP – MAKING THE OFFER PRICE RM480,000.  Then the Bidding Went On To RM500K  – RM520K – RM540k. The Indian Guy raised his hand one more time at RM560k. But The Bidding Reached RM600,000.

Above RM600,000 there remained ONLY TWO GENUINE  BIDDERS – LIKE TWO HEAVY WEIGHTS CONTENDING IN  A WRESTLING MATCH! OH! HOW HEAVY IT WAS TO WATCH THEM LIFTING UP THE HIGH PRICES OF RM620,000, then RM640,000, then RM660,000.

We watched with abated breath AS THEY STRUGGLED UNDER THE HEAVY PRICE OF RM700,000. AND FINALLY THE BIDDING  ENDED AT THE UNBELIEVABLE PRICE OF RM720,000!  BEFORE THE OTHER PARTY FINALLY GAVE UP!! {Both Were Chinese Businessmen).

People from All Over The Room Clapped Their Hands. The Court Bailiff said, “This is A Court. Be Serious”. AT THIS THE ENTIRE COURT ROOM ROARED WITH LAUGHTER! HOW COULD WE CONTROL OUR FEELINGS. I TELL YOU – IT IS REALLY IMPOSSIBLE TO CONTROL OVER SUCH PENT UP EMOTION!!!