RATIONAL AND IRRATIONAL BEHAVIOR IN ISKANDAR PROPERTY INVESTMENTS.

Iskandar-prices-rising-2013

“ISKANDAR PROPERTY PRICES SPIKE!
ISKANDAR PROPERTY PRICES SKYROCKETING!”

THESE ARE THE HEADLINES NEWS TODAY FOR ISKANDAR, MALAYSIA.

What Are The Rational Or Irrational Responses  From The Malaysians, Johoreans & Singaporeans. How Do The Owners Of Properties, Speculators, Investors, Property Flippers & Those Watching At The Sidelines, React To This New Phenomena? All these  could be classified into  10  groups. See which one describes you?

No. 1. THE HAPPY OWNERS.

By now almost every property owner in Iskandar knows that his/her property has risen in price. Since this is their One and Only House, nothing much can be done as they need to live in it. They bought it for consumption – With Steadily Rising Prices It Turns Out To Be A Wonderful Investment!

No. 2. THOSE WHO CASH OUT IN THE HOPE OF BUYING BACK LATER AT A LOWER PRICE.

Don’t Make This Fatal Mistake!! Let me give you an example:- In Year 1983, a close relative of mine bought her Single Storey House 24 x 80 feet in Taman Bukit Maluri, Kepong, Kuala Lumpur for RM55,000. As Prices Of Property Touched RM180,000, she sold it off since price has almost tripled.

So she moved to live in a cheap flat. Hoping & waiting for KL Property Prices To Crash so as to buy it back at a lower price. Instead of crashing her house that she sold at RM180,000 is now worth almost RM600,000!

No. 3. STALE BULL CUTTING LOSSES.

In Share Market Term “STALE BULL” means those who bought share during bullish time, only to see their share prices going downhill for long period. They might hold these under performing shares for months or even many years in mental agony of holding to these money losing investments.

At the first sign of movements in their share prices,  after long period of doldrums, they quickly sell off the shares, either getting a very small profit or cutting their losses. For example: I met a guy in the Share Market recently. I asked him whether he own any Pan Malaysia Corporation Shares (KLSE Stock Quote 4081)? He answered that he owned it for many years at 30 cents.

30 Cents? That was the price he bought more than 5 years ago. And  just sold it for 15 cents recently – taking a 50% loss. He said that at one time PM Corp share prices Crashed as low as 7,5 cents a share. Since 15 cents is double of 7.5 cents he is will to cut loss and get out. If only he could wait a little longer. Management has confirmed that There Will Be A Capital Reduction Followed By Capital Repayment In 2 Weeks’ Time From Now. (Note: August 24th, 2013 – According to Mr. Ho Chun Fuat, Sing Long’s Payment already in Singapore NFI Bank A/c. Still working on Capital Reduction & Cash Distribution.)

Coming back to Property. Those who hold multiple properties bought at High Prices during the Go-Go Boom Years of 1990 – 1997 Are Now Deciding To Take A Small Profit Or Cut Their Losses By Selling Off Properties Now. This is what we term “STALE BULL CUTTING LOSSES!”

No. 4. BUYING ANOTHER ONE OR TWO MORE  AS AN INSURANCE.

Those who already own one house are looking to buy one or two more because they are worried for the future of their children. If they only have one house and have 3 sons, they aim to buy one or two more in case prices shoot up beyond the affordability in the future. These are concerned parents who buy as an insurance against runaway property prices

No, 5. BUY AS AN ALTERNATE FORM OF INVESTMENT

Or it could mean that Property has turned out to be an alternate investment, too. So why not invest in one or two more. This Could Turn Out For The Best Investment For Retirement. It Might Outperform  EPF Or CPF by a far bigger margin. Property Prices Might Double Ot Triple In Iskandar compared To Malaysia EPF Or Spore CPF which give a 3% to 6% divident – which can hardly protect you from the ravages of inflation.

No. 6. THOSE CAUGHT UP IN THE PROPERTY CRAZE!

This Group  Is On Fire. Having Made Good Profit From Earlier Investment they are looking to buy more and more properties. Some even buy up to 100 units!  But 5 to 10 units are the norm.  They watch with glee – The Ever Rising Property Prices & The Steadily Climbing Rental They Collect From Their Tenants. This Is The House Owners & Landlord’s  Market Now, you know?

No.7. THE BUSY PROPERTY FLIPPERS.

This Group Is Out Hunting For Bargain Properties – whether from Court Auction Or From Owners Who Mispriced Their Property For Sale Below Market Rate. They keep on buying and selling; buying and selling!

Let me give you an example: I met a Mr. Chai at Johor High Court 3 years ago. He told me he had purchased over 20 properties from Court Auction And After Having Done Repair & Renovation to the foreclosed properties he sold them off for a profit of RM20,000 to RM50,000.

He bought a Single Storey House In Panglin Area, Taman Perling for RM120,000. Spent about RM15,000 to do up the property. then sold it for RM165,000. After deducting all costs and taxes he made a clean profit of around RM25,000.

Then he bought another similar auctioned  unit again in Panglin Area, Taman Perling. This time for RM162,000. After repairing he sold the 2nd house for slightly over RM200,000 this time last year in 2012.

Today, he is trying to bid for Panglin Area again. But no success so far. You see – Panglin Area, Taman Perling House Prices Have Escalated Past RM300,00! And Most Probably Going To The Half A Million Ringgit Mark In The Far Future,

He told me he is buying Single Storey Houses Now At Auction for around RM100,000. Location? Taman Sri Panti, Ulu Tiram & Jalan Nenas In Taman Kota Masai. He should not sell those Prime, Prime Properties In Exchange For These Faraway Ones. Anyway, who am I to give advise to the Expert?

No. 8.  SPECTATORS ON THE SIDELINES.

This Is The Group Who Know What Is Going On But Own No Property Yet In Iskandar. They Are Working Here As Transitory  Migrant Workers. Intent to return back to their home town in Pahang, Perak, Sabah ete etc.

Those who are  just starting work and have car installment and rental to pay. Those  who only want to rent all their lives and enjoy traveling round the world. Other superior priorities capture their consuming habits.

Those depending on parents. Those waiting for prices to crash before buying. One thousand excuses for not buying. We are either bees or butterflies. The busy bees gather nectar all summer in preparation of the coming winter. The butterfly dance from flower to flower all summer. At the first froze of winter, all butterflies died. The bees survived in their warm hive with their store of honey (energy) because they prepared for winter.

No. 9. THE DIE HARD UNBELIEVERS.

Of all people  I find this group to be the most unfortunate.  Why? They have a Mental Blockage In Their Mind. Their Mind Is Either Set In Ignorance  & Total Aversion From Unpleasant Past Experiences.

I had spoken to doctors, lawyers, bank clerks, businessmen and ordinary people from both sides of the Causeway – Spore & M’sia. Their views are: “I don’t know much about Iskandar. I seldom go there.

It Is such an unsafe place, you know? Carjacking, robberies, muggings so on and so forth. I really dread going there. Johor is definitely not for me. Anywhere else please, but not Iskandar!

One lawyer said, “You know there are more  than 100 condo developments being built in Iskandar, When they are ready who is going to live there?” Another sneered, “I think Iskandar will crash back like it did during the Asian Financial Crisis. No hope, lah!

Yet another said, “The developer abandoned the project I bought. I suffered immense losses. I will never buy again in Johor.”  And some will never ever set foot here again forever on Johor’s soil.

Let me illustrate: Years back I met a Financial Consultant In Penang. He is extremely intelligent but he said this, “I Will Never Buy Or Use A Japanese Car!” I asked, “Why?”. “Because of the atrocities they committed against the Chinese during the 2nd world war.  I said, “But they suffered the consequences of 2 atomic bombs – Hiroshima & Nagasaki?” That’s not enough, he protested. “I will never buy a Japanese  car.”

Then, after the Japanese Surrendered there were still Japanese hiding in remote islands, not knowing the War Is Finally over. For more than a decade these soldiers lived everyday in the Mental Frame of Past Baggage IN TOTAL IGNORANCE. These Dumb Japanese Don’t Know.

But Many Singaporeans Have Heard Of Iskandar – through Newspapers & TV Adverts. Yet There Is A Serious Mental Blockage From Bitter Experience Years Past Or From Negative Input That Solidifies After Long Years.

The Story Of The Circus Elephant.

It was said by trainers that when the elephant was still young, they tie the elephant legs with ropes attached to poles. Then when the elephant is fully grown up they still think that the same ropes keep them in check – even though they now have the strength to uproot the Biggest Pole of the Circus Tent.

Sometimes the ropes attached to the elephant’s legs are not even tied to the pole, yet the elephant think that they are bound! Like these mentally bound elephants, some Singaporeans will not dare to venture out into Iskandar.

The Story Of Creatures Living In Dark Caves.

There are bats, snakes, fishes, insects living in Caves that have lost the power of sight. You see, Living In Darkness for thousands of years have caused these creatures the permanent lost of vision. Unfortunately, these hard core Singaporeans have Been Mentally Impaired In Their Minds – They Still See Nothing Good To Invest In Iskandar. Or Have They Lost The Ability To See?

Alternately, the Singapore Govt  has to build more Vertical Kampungs like the current one in Woodland. Small sized sudio units upstairs for Senior Citizens with A Big Enclosed Hall For Multi Type Activities For Social Gatherings  At Ground Level. On first and second floors are food court & 24 hour small sized hospital on stand by.

As land becomes more scare, Pulau Ubin & even Palau Tekong might also be an option. Necessity Is The Mother Of All Inventions,  Innovations  & Improvisations

NOTE: Latest Update: 19th August, 2013. In the National Day Speech. PM Lee Hsein Loong  announced the shifting of Paya Lebar Air Base to Changi – Thus freeing up Land the size of Hougang for A Mammoth Development. Also All The Shipyards From Keppel to Pasir Panjang will be entirely shifted to Tuas – Freeing land for Waterfront Development twice the size of Marina Bay area.

In this strategic move,  all Air planes will move Eastward  & all Ships will move Westward. Thus freeing highly valuable stretch of Sea Front Land – stretching from Keppel to Pasir Panjang. This Will Greatly Add Value To High End Property Development. And with the removal of Paya Lebar airbase, the surrounding old flats with prescribed  height limit will be torn down and remake into taller  skyscraper for low & middle income housing.  This is another step forward in Value Creation for Singapore’s Future!

 

 

No. 10. FINAL DESTINATION FOR RETIREES FROM SINGAPORE, JAPAN, KOREA, CHINA AND ALL OVER THE WORLD.

Retirees In Singapore Are Fighting An Uphill Task Against  Sky High Cost Of Living. Iskandar looks More & More  Promising  as A Retirement Option As The Years Go By. Many will move here in future. With the ease of MRT for connectivity between Singapore & Iskandar Expect An Ever Increasing Influx Into Iskandar.

Retirees From Japan think so, too. The Doors of Japan Are Slam Shut To Foreign Low cost Domestic Maids. Countries Like Hong Kong, Singapore & Malaysia welcome them. Maids cannot come to Japan. So go to places where Maids Are!

And For Competitive Cost (Unlike Prohibitive Cost like Hong Kong & Singapore) Iskandar Is The Better Option. Or Is It The Only Option left? The Condominium Highrises In Taman Molek  Are Almost Ready –  Soon More Japanese Retirees Are On Their Way.

These  will be followed by Koreans, Chinese from Mainland China. And those from Hong Kong? Why not? With the polluting smog of the Pearl River  Delta Region retiring in Iskandar is ideal.

What  about European expat?  Many have sunk their roots in Ledang Heights, East Ledang & Mulpha Leisure Farm. Their children are in Schools & University from UK. Lego land, Pinewood Studio, Premium Shopping Outlet sound familiar  like those back home, And all year  Summer without cold bleak London winter, makes Iskandar An Ideal Playground like Florida, USA  (Of Course without any fear of rampaging  tornadoes!)

And  So The Story Goes…..On and On..