I guess lar.. it may be counted as third house; if not, everyone will go find their mum/dad/son/daughter as co-borrower.

u c, it is easy to put another name, just my guess.

Stupid policy, it only affect low & medium income people... rich people care the 10% or 30%??? My property investors told me it is good chance for them. they are cash rich & borrow from bank at the same time. It is good for them because those low & medium income people cannot afford to buy more, but they can~!~!~! My low & medium income customers complain even they want to buy something below RM200k also hard now due to this new policy. What a good policy huh???

U've stumbled onto a truth. The fence is now up. Used to be if u were smart, u could take advantage & leapfrog your way across the divide. The rich will get richer, the poor will get poorer. The irony of it all!!

I think it is good to have this policy of 70% LTV.
And we have 100% of LTV for first time buyer < 220k houses.

I have already secured my house in KL and has no intention to buy the third one...

The LTV will stop the speculation activities for those highly speculated area.

One day I drove through some so-called high class condo > 500k, what surprises me is only 20% turns on the lights.
The move will help to save innocent investors from loan default later..

Actually I am happy with the policy.

But I think the flippers are now very anxious of their speculations..

The poor people are happy with cheap house and 100% loan..

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Added on November 5, 2010, 1:14 pmby limiting everyone only have 2 houses, then the left over few houses can be distributed to those who own nothing..

the richest people will have 1/3 capability now to push the property price high. In this case, the left-over 67% houses are now free from speculations.

So... now poor people with low capacity can buy cheap houses now.. it is indeed a good news..

The loan policy has sided the poor and press the rich ones.. don't u see it?

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Added on November 5, 2010, 1:18 pmThere are 3 groups of people now:

Poor: get 0 entry to the property market < 220k
Medium: get 10% entry to property market > 220k - 500k
Rich: get conned and have to pay 30% to enter the investor market..

The new policy sided the poor (70% of people are < RM3000).
Smile is for the poor..

This post has been edited by epalbee3: Nov 5 2010, 01:18 PM

I think the LTV capping is affecting more the mid to mid high market, making props above the 300 to 1 million mark less liquid. The poor or perhaps it's more appropriate to say, the 'lower icome group' already have their interests protected by the 100% loan for props below 220k. Don't think the 'poor' is interested in upgrading anytime soon. These 2 groups are very distinct in their consumption habits & shouldn't be confused together. IMV the 3rd prop capping will only prove an unnecessary hindrance to the progress of the property market & the whole gravy train.

actually the Developers kena kaw kaw this time, those build expensive condo will suffer more
now Developers need to think, build more affordable house/condo for 1st/2nd owners or luxury condo for cash rich investors

btw why got so many high income property investors but goven income still the same.
Next stop, gov will have their hand on those property investors undeclared income.
with RPGT & GST high on their list moving forward.

This post has been edited by Iceman74: Nov 5 2010, 01:50 PM

from this policy, i dun see it will help poor ppl in buying cheap house, housing price will still incresing but in slower maner.

the biggest impact form this policy is STOP the poor catogory from doing property investment and ONLY ALLOW rich ppl to invest.

end result: poor become much poorer, and rick become much richer.

What about exactly 220K, does it fall under poor or medium ?

Is it 220K and below or below 220 K ie. 219.99 ?

This is posted to no one in particular

1. If I owned a 400 sq ft studio in the middle of the sky somewhere, that is part of a 500 unit behemoth, i'd be very worried. I'd monitor my "investment" closely.

2. If I was an investor, I wonder.....how attractive would Damansar Avenue by TA Global be right now.....

3. If I were in a bank, there would be chaos everywhere. 500 to thousands of applications are pending. Transactions cannot go through, because "investors" are now asked to top up an additional 20% on top of their initial 10% downpayment. Customers had to forego their 10% downpayment upon signing of the S&P

4. If I were in a bank, I'd be more responsible. No more interest free loans, no more 5/95 deals, no more grand "bonanza campaigns". No more developers trying to get rid of their landbanks, to earn a quick buck.

5. If I were a bank like CIMB - i'd be VERY worried. They grew their balance sheet by 5 billion in the last 3 years due to property financing. I wonder how "toxic" thier portfolio is? I wonder how many "investors" own more than 3 properties each? I wonder how many % of CIMB's loan stock is for props under construction? I wonder how much faith CIMB put into our "respectable" valuation firms?

6. If I analysed the situation carefully, I'd realise that this LTV initiative wasn't done to "protect" investors or society per se. I'd venture a guess that Stress Testing has been done on all the banks, and BNM doesn't like what they see. The LTV Measure was put in place to protect our beautiful & credible banks, who practice "prudent lending guidelines".

Credit is the OXYGEN of our capital market.....The measure was put in place, so that the air we breathe won't turn toxic.

This post has been edited by Phoeni_142: Nov 5 2010, 04:21 PM

the cap of 70% could be counter productive to properties around the 350k

10% dp of 1mil house = 100k
30% dp of 1mil house = 300k
30% dp of 350k house = 105k

so if a person have around 100-110k cash in pocket and looking to buy a 3rd house, instead of not buying.. he/she will just buy a cheaper house. this move is just shifting the bubble. the high end market will definitely be affected. not everyone that buy 1 mil property may not be 1st or 2nd time house buyer and may not be cash rich, so a price correction might happen for high end property.

this move could potentially be counter productive and may defeat the original purpose. the solution is not as simple as introducing a LTV ratio of 70% cap. a realisticc price evaluation on a new development may be more realistic to equal the playing ground between new and subsale financing.

You can appeal if the bank value it lower. Most bank will increase the value if you have a good record.



Are you sure that even if you have purchased more than 2 properties but with only one loan remaining, you can get 90% or more loan?

prices will readjust i the short term... then find its footing and then start to rise again... life goes on... i don't think the impact will be big...

that's right ! the rich will become richer. just imagine this. the rich is used to afford to buy a property cost 1mil. they can fork out 100k downpayment. but because of LTV 70% for 3rd property, they will swift to medium cost house as they can now fork out 90k to buy a house cost 300k. if more rich investors buy medium cost houses, this will push up the price for properties in the category of 220k to 500k price range and make these properties very unaffordable and speculative. lower income group still cannot find a dream home !

you should think like this, previously the rich people is able to speculate on 3 properties of 350k, now they only able to speculate one.. so the house prices will be affordable. There are 1/3 number less speculators everywhere..

if 1 million property cannot be cooked, they will drop to original value of 600k then continue to push the lower level houses. SO it is still better for the poor.

Less speculative loans are released to the RE, so the real buyers can buy the house with real prices, not the speculated one.. That is what i think...

why is it hard? Or is it just hard on you as an real estate agent?

You expect people to "pity" low income people if they cannot get 90% loan for their THIRD house?
Die loh, the so called "low" income people cannot buy their THIRD house with 70% bank loan to speculate and flip.
Why care about first time house buyers, people who cannot buy THIRD house should be pitied more right ? LOL.

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Added on November 5, 2010, 11:43 pmWell why switch only now? They can buy TWO medium cost house instead of one high cost property as well even before the ruling starts. So?

Also if they were to pay 30% d/p the buyers are taking more risk, lower gains while banks are taking less risk.
Who cares if the speculators take more risk.

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Added on November 5, 2010, 11:51 pmErrr all our houses are open market , there's no state housing here.

If the govt leaves the prop market & banks internal credit evaluation to free float who is going to be accountable when a crisis occurs? the bank or the govt? Who is going to bail the banks out when it happens? What's stopping the bank to take maximum risk and when shit occurs just wait for the government to bail you out using tax payers money. Cause seriously bankers know that govt can't let the banks go down.





Who cares, it's just to stabilize the price, if they cannot buy then they would not be able to buy now as well.

This post has been edited by Drian: Nov 6 2010, 12:09 AM

it seems you refuse to accept the fact that the price for medium price range properties will be pushed up further. previously those had a bigger appetite for high end properties will still buy properties, but this time the focus will be lower price properties. this policy will only help to curb speculation in high end properties, but not mid range properties.





last time they had more options. but this time the target is mid range properties. this policy in fact can encourage speculation in mid price properties, especially those below 500k.

The thing is you automatically assume these people will focus on lower end properties.
If they want to speculate using 30% downpayment, well lets see who gets burn first the buyer or seller.
At 30% d/p their gains are lower and the number of houses they can speculate and flip dramatically reduces and the risk that they take increases. If they want to take such risk then let them go ahead.

Also why are you assuming that rich speculators only speculate high end properties? They could be speculating on multiple medium cost units even now before the ruling. I bet this is already happening because medium cost units are where the highest demand are.


This post has been edited by Drian: Nov 6 2010, 12:19 AM

Well if the market hit crisis levels & crisis occurs, so be it. Then the market will correct itself & the prop market will adjust itself accordingly. In Msia we don't practice non-recourse loans for properties & if the banks saw it fit to pander out loans willy nilly, so be it. Why should public policy pander to a big brother syndrome of regulating a free market. Get away from a spoon fed mentality & expect crutches in any form if we were to mature past a parochialistic society. Our prop market is nowhere near a bubble situation at any levels, putting on the clamps will only stifle its growth.

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Added on November 6, 2010, 12:24 amU have a point & have been able to see past surface superficialities masking much deeper repercussions on the market & its growth, so i'm inclined to agree with u. TQ.

This post has been edited by Daryl Teo: Nov 6 2010, 12:41 AM

Now speculators has only 1/3 x of their previous speculation powers for all levels.

that means for every level, there are three leaving to the bottom level while another one enter the current level.

See the following figure assumption,

speculator who want to stay

High range: 1000 ---> 10 1000 ---> 1000

Mid range: 5000 -----> 1000 5000 ---> 5000

Low range: 10000 -----> 5000 10000---> 20000

(Another 10k speculators lose their speculation powers)

With less speculators (who bought > 2), and more real buyers, the re market will be more healthy and the prices are determined by the genuine buyers. THe above is just example, from 1:1 ratio to 0.2:1.

SO in this case the speculators have little power to control market, the poor will win.

So I am happy with the policy.

Well it's a free market only when it doesn't affect the rest of the economy and government.
When a property crisis occurs and banks start to beg for bailouts and the government just have to bail them out to prevent them from affecting the economy, then it would seem at that time it's the bank that is the one that requires spoonfeeding. And when a bailout occurs where do you think the bailout money comes from. The taxpayers of course. So in an event of a property crisis, the taxpayers money is used to bail out the bank which is used to bail out bad debts from loans to property speculators. But if a property has 30% downpayment, the bank might be able to sell it for 70% of the original price and hence the bank has 0 bad debts. The risk is just transfered to the property investor.


You're correct putting on clamps will slow down the growth, I thought that's the whole point, to slow down the growth of price of property.