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

i also wonder why ppl keep on saying that.
maybe their siblings or children or relatives are all qualify to loan and willing to borrow thier names for them to loan?
very curious...

Your persuasions about the whole argument would have been very different had u not rented the 2nd condo & had wanted to upgrade now. Why complain about 600k to 1 mil links in prime & strategic locations when there're still plenty of offerings below the 500k bracket in many locations? And about the cash rich down shifting their game to lower bracket investments due higher capitalized entry is a valid point & u'll see more saturation in this segment soon, hopefully there'll be enough supply to address the demand. In fact, due to the measure, I would expect prices to be shored up further in the below 700k bracket links as investors & buyers make a beeline for it as capitalized entry costs are still manageable. As for the rich investing they are motivated by very different reasons, not always for a quick turn around, many have just bought to keep & are not bothered if it lies vacant for years. Property is still seen as the backbone in many investment portfolios of the rich, quick returns or otherwise, and they'll keep investing. It is the poor & middle rung buyers & investors who are caught by this capping measure! Besides siblings there are other loopholes, none of which i can share openly! 

If the properties buyers have lot of cash, whether they invest/stay/flip or not, generally BNM won't care.

The fear is flipper/speculators use the properties for speculation purpose, he/she is not able to service the loan in the first place and rely on properties price appreciation afterwards to get rid of the properties, or solely rely on tenants to service the loan for short term. Or just hold for few month, the loan is temporary financing only.
The buyers don't need to fork out a single cent or as little as possible already can own several properties to play around.

If everyone doing it, then just a minor shock can lead to the system collapse, as there is little room for error, just like what had happened on US subprime crisis.

If one has lot of cash, at least those properties won't be fire-sale, foreclose as easily as one doesn't afford in the first place, if anything happened.

The measure doesn't prevent flipper or speculation, it just mean sending warning message to flippers whom are or want to over-commit themselves.
If BNM want to clamp down speculation or flippers, RPGT is the tool,

Duh, if you already paid full cash for the other 3 properties so banks no longer hold any risk, it doesn't matter.
The ruling is to get rid of those high risk flippers who does not have the financing power. Those are the people who are not able to pay the loan when they're not able to sell the house.

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Added on November 9, 2010, 10:23 am
They're able to do that but their money will be stuck in the house, their gains will be reduced and the risk is higher for them. It's just whether it's worth it or not.

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Added on November 9, 2010, 11:04 am
Can, the person that you put the name into must be qualified for the amount of loan. If say your son is not working, how is the bank going to approve the loan based on your son's name if he's not qualified at all to get the loan? Or if you plan to borrow 2 million and put your sons name, but your son is only earning 3k/month, he still won't qualify for the loan.

Dear all, finished reading first page and last few pages.

My personal opinions:-
1. 70% capped, < mid-segment home buyers to be badly affected! High capital required for million dollar house will switch investor/speculator focus to this segment.
2. RPGT is the tool to reduce speculation effectively, but they chose to cap LVR. Simply to deter over-committed bunch. BNM has some of the smartest people there, whether it will cool-down the speculation or affect property prices, it is not even a question/topic at all because there was no intention to do so. The recent budget indirectly telling us Gov want us to continue to buy, within your means.
3. Comparing to many countries with similar per capita income, Malaysia houses are still relatively easy to own.

It is a weekend, lazy to type more...