Won't disagree if the argument is that the end justifies the means. My only concern that a lacklustre market impeded by the LTV cap will not be able to absorb the bad loans as the ruling is self fulfilling. If our only concern is simply that of suppressing the market & curb speculation than i'll have to admit that this measure has achieved its end. But if i were to be asked if it'll create spiral in the market due to illiquid assets due to lack of available liquidity in the market then i'll have to differ & say yes! How many of these so to speak 'poor buyers' will now step up to absorb these now illiquid assets, IMV, very few. Hopefully high savings households would bolster the prop market moving forward. We can agree to disagree, so let's bide our time & revisit this thread 6 months ahead & see if we feel the same. I, myself, am a value investor & have always been careful with my pickings to building real equity over the longer time horizon, so perhaps my view is skewed towards liquidity considerations. TQ.

i think it is a good move from BNM...it wont curb the speculation 100% but at least it will do something with the property market price

Well done BNM. Hope there will be more genuine property buyer rather than just merely property investor.
Definitely will be a hit to investor that use to give 10% downpayment but now 30% dp.

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Added on November 6, 2010, 11:50 am
Come across some house that newly launch at RM350k and after abt 2 years it boost up to Rm500k plus which the house is so unreasonable and the area is empty with any flies is staying.

This post has been edited by Gary1981: Nov 6 2010, 11:50 AM

There are still liquidities provided by genuine purchasers, those liquidities from speculators will reduce to 33%.

In term of liquidities, I think speculators are not that dumb, they usually focuses on the high density areas which has no liquidity problem; what speculators did previously in these areas is to instead resist the liquiditiy by holding a lot of units and create a sense of little supplies. The genuine buyers were not able to buy at the genuine price.

That's why I think the speculators HAS NEVER CREATE LIQUIDITIES, but they blocked the liquidities.

So I support the gomen this policy. Good move.

Doubt it was speculators or even investors who created liquidity in the first place but rather the system that supports liquidity through easy availability of credit & a free moving market with minimal interference. To some extent while it may be true that speculation will manipulate a market but by a large extent they are also the ones who has also buoyed sentiments & sustained the market. I still have not heard anything vaguely convincing about this group of so called 'genuine purchasers'; their actual makeup & numbers, and how a measure so wide in its impact on the market can be justified to support only the interests of this group alone. I have no idea if this 'group' even has the ability to sustain the property market or are even vaguely interested in taking advantage of the new measure. Thanks to the new measure, we now see the protonisation of the property market at the expense of free market forces.

This post has been edited by Daryl Teo: Nov 6 2010, 12:30 PM

If so greedy yet insufficient fund, then who is to be blaim?

somehow I think this cap wont last more than 24 months.......

understanding that it won't effect 1st and 2nd property, but what if i am having them as joint name (both loan and property), for the 3rd property i limited to 70% MOF?

it will last till after the next GE at least

Got money, got opportunity, then buy

> 50% of property speculators / flippers are property agents ... i guess this will hit them hard ... many leverage to the max ... with this LVT cap, i expected property prices to soften soon ... time to go shopping when prices drop

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PropWall

cos within 24 months the greater KL property needs to be supported?

would like to ask, if 1st is taking 90% loan, but for 2nd hse is sharing with my mom under S&P but the loan is under my mom names alone only, can i buy 3rd hse in 90% loan?

Yes, the loan system show you only borrowed one loan.

if you pay off cash, then considered can get another loan.

6 months is too long for me, any longer & it may do irreversible damage to the market. R.E used to be the most accessible way for the average man on the street to create long term wealth, not anymore.

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Added on November 7, 2010, 1:24 amSorry dude, u'll be caught by the 70% LTV capping. U're one of the first collateral casualties of this measure.

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Added on November 7, 2010, 1:25 amFinally someone who has the ability to think above pure superficialities.

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Added on November 7, 2010, 1:26 amLucky fler, i guess u're on your first prop moving onto your 2nd.

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Added on November 7, 2010, 1:29 amNo u're out too! LTV is loan to value, so they vet your loans not your registered interests. On the flip side, now u can rope in another sibling who's not caught by the 3rd LTV cap to qualify for a 90% & have your name in the SPA only.

This post has been edited by Daryl Teo: Nov 7 2010, 01:29 AM

Property market is an unefficient market, so it will take min 6 months for everyone to see any real impact of this measure.......... 6 months LTV implementation is just too short......12 months would be ideal as it will do enuff to curb growth but not kill the market.....but 6 months definitely not impossible and can only be driven by only one critical factor........ POLITICS.

and should this cap continues beyond mid 2012............ we'll see plenty blood on the streets........... when all these overpriced crap DIBS development in 2009-2010 goes for VP...........thats when the tide goes out n we'll see who has been swimming naked

On a personal level, I wish BNM n GOV will increase RPGT to 30% back and get BLR up by 1% next year.......... hopefully I'll have enuff moolah by then to realease these pretenders from their sufferings

Chief u've read the situation correctly! Somehow i had an inkling that there is more to the measure than meets the eye. Unless if u're a cash rich investor who doesn't mind a receding COCR & high caps, u'll probably not take the plunge in the next 6 months, to see which way the market turns. Who knows? Perhaps the measure is really out to encourage foreigners' participation in our local property scene as there are little by way of restrictions on the type of properties they can own. Many locals caught by the LTV cap would find it hardpressed to cough up the requisite 30% for props now, perhaps we'll see more iranians, koreans, chinese or even africans flushed with black slush, stepping up to put up white picket fences as neighbours in our nice little kosher neighborhoods now!

If the situation holds past 24 months, margin flippers who banked on dibs & 5/95s will definitely be begging u to put them out of their misery, especially taking stock that impending rate hikes just round the corner. Hopefully by which time too, i would not have taken flight from the property market locally, to capitalize on the situation. In the meantime i'm thinking of relocating to a life of a country gentleman in Kiwiland! On reverting back to the full rpgt regime i've my qualms too, cos by which time i've just warmed up to my new multinational neighbours, they would be at an askance again at this flip flop of policies & will take flight to investor friendlier real estate destinations! We have an inefficient but sentiment efficient market!

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Added on November 7, 2010, 3:18 am The prelude to the measure.

Sep 8, 2010
Chor: Cap may dampen property market

KUALA LUMPUR: Any move to cap housing loans at 80% instead of the current 90% can dampen the property market in the long run, said Housing and Local Government Minister Chor Chee Heung.

He added that he would leave the decision to Bank Negara.

“We will give input if asked,” he said during a briefing on the Zephyr Point project completed based on the build-then-sell concept yesterday.

Chor said a large percentage of purchasers were genuine buyers and Bank Negara should consider the suggestion that the 20/80 proposal be imposed only on houses costing more than RM500,000.

The Star on Monday reported that several groups, including the National House Buyers’ Association, cautioned that a proposal by banks to cap housing loans at 80% would turn out to be a burden to potential house buyers.

MCA president Datuk Seri Dr Chua Soi Lek on Tuesday suggested that the 80% proposal should only be imposed on houses worth more than RM500,000 – to allow more buyers the flexibility of choosing which loan amount best suited them.

http://www.starproperty.my/PropertyScene/P...yScene/6930/0/0

This post has been edited by Daryl Teo: Nov 7 2010, 03:31 AM

i think one cannot assume that if investors bought into development with 5/95 or DiBS scheme that they are somehow are shaky bunch and are unable to meet the full repayment schedule upon VP. The loans they obtained from banks are approved based on their credit standing. they are being enticed into buying things because of the 5/95 and DIBs, but that doesn't necessarily mean they can't meet their obligations when due! by the same token, it doesn't mean if you buy into a project with no DIbs and 5/95 that you suddenly become a rock solid investor!

in that case assume i have 60% and 70% loaning outstanding for my 1st and 2nd property respectively and no longer in the lock in period.

when i do refinance my 1st property, does it count as 3rd property and i can only get 70% MOF or it considers as 1st property as it is and i can still get 90% MOF?