Are you really purchasing a property that is affordable?

Dear Fellow Johorean,

it has been 2 month of worrying month for those property owner and investor in johor in view of the europe financial crisis. Well i am working in the property line for the past 7 years.
For the past 2 year Johor property is now experiencing a price rise that hasn't been experienced before since 1997. In my opinion, Property pricing escalated is due to a few reason.

1. Increase of the construction cost since 2008. since the cost of building is increased it will definitely directly have its effect on the selling price in order to cover the rising cost from the developers. 
2. Feel good factor in view of the investment from the IDR (Iskandar Development Region) project such as Financial hub in Taman Molek, EduCity in Sri Alam, Legoland and Educity in East Ledang. 
3. Completion of infrastructure such as Bakar Batu - Pasir Gudang Highway, Ulu Tiram - Desaru Highway, Ulu tiram - Kulai Highway, and the Latest one is Danga Bay-Perling bridge. 

Of Course there are many more factor for the increasing favor in the JB property. 

Is also has started to create a property grabbing frenzy here, it has been the talk of the town how property price increases for the past few years and how many investor are benefiting from its. I think it is always good when there are some speculation of property in JB so that the market is active and it can attract some other region player to this region. 

One thing that i am worried is some middle low income earner are starting to get worried. Worried that they will not be able to own their dream house in future if they dont buy now. they strongly believe that the property price will keep on escalating till the end of the world. 

I am worried because these has already blinded by the property speculation pricing. They went overboard by purchasing a property that they hardly can afford to. Developers are luring these un-sensitive buyer with all sort of bait such as

• Free Legal Cost & Stamp Duty
• RM 1000 downpayment (such as 10% discount for early bird)
• Developers Interest Bearing Scheme
• Rental Guarantee Return Scheme
• 100% loan 

All sort of these package could indirectly create a false sense that they could afford to service this property when they actually cant! (I strictly meant only those people without finance knowledge) 

Economy in Johor is highly dependent on singapore, Most of the people living here is working in Singapore. so this is one fact that we know as a johorean. when Singapore economy dropped so does Johor (but not other states in Malaysia). where in the recent years it has been a roller-coaster on singapore economy.

Simple novice advise, Before you wanted to buy a property you must understand a few thing.

• purpose of your purchase. Investment or Own Occupation? 
• What is your budget for installment before choosing property (not the otherwise, normally people will ask what is the Installment after choosing the property they like) - by doing this you will most likely not to over your budget. pls ensure that your budget also taken in consideration such as 
• Renovation 
• monthly maintenance fees of your property such as electricity, quit rent assessment etc
• repair fees 
• Look into surrounding area, is there a better deal around? there might be a cheaper house around such as second hand, or nearby Taman etc. pricing difference sometimes can be up to 30% difference! 
• Where to look for better deal? look for websites such as iProperties.com, call an real estate Agent. Auction listing from newspaper or Real Estate Agent. ETC. 

Pls take good precaution before you buy a house, it is not easy to maintain a house as you had planned. do your budget of installment at only 1/3 of your income. not more than that because you will have a lots more other spending to worry about. House is always the last thing that we wanted to lose in the event of cashflow problem. 

Good luck and happy buying!