The significance of this move is that it effectively gave a ceiling to the prices. Subject to market forces, it the price cannot go up, then naturally it ll come down

Very good points you have there for RPGT.
Now to elaborate a little on the ceiling - using your classification
1) High end condos
For this purpose of discussion, we shall simply define it as property above 350K.
Ceiling is set via LTV - should we agree on this then the issue much simpler.
Assume also LTV remains in force into perpetuity - though in real life may not be, just for discussion's sake.

Now imagine the force, ie momentum to go up is blocked by the ceiling.
Either it breaches the ceiling - but in this case, we assume it cannot be breached.
So it can consolidate for a while assuming there is still "force" to hold it there.
Then again, assuming the "force" dries up... then it ll come down.
The force here is money or to be exact, cheap and easy supply of credit.
With the impending BLR increase, soon it will not be cheap anymore.
Furthermore the gomen is bent on reducing subsidies - general prices for basic necessities will go up.
It puzzles me when my banker tells me that people who earns 6k per month are buying property worth 800K with minimum downpayment. This was before the introduction of the 40 yr loan.
Assume 30 yr loan, with interest rate of 4%, a loan of 800K (due to the 90+10 package), the monthly instalment will come to RM3820. I cannot see how it can be done with an income of 6k actually.

2) Low/medium end property
Ceiling is the 50% stamp duty waiver for property below 350K
However this is only in force for 2 yrs beginning 2011.
So yes, agree that low/medium end property may not fall much. Likely to consolidate here. Enough incentive including the 40 yr loan to sustain the market.

Another assumption into the points above is that the mentality of those who purchase high end property vs the low/medium end property - ie, one group dislike 40 yr loan, while the other will take advantage of it.

Well, its difficult to segregate high end - say
500K = high end?
800K?
1m?
2m?
So just for the heck of it, since the gomen did something about 350K, so I just use it as a basis.

Yeap, some banks offered up to 80% of salary - question is how to survive nia.

I dont see the gomen as having tough times... only us... the non ultra rich...

Speaking of the ultra-rich, there are many ways to generate income, I do not think they d be interested in the property which you and I are interested in.

Rates for the general public looked like will stay stagnant though ppl in the finance line knows this will happen - at least 25 bps.


EDIT: "Money" in my previous refers to the money which you and I have, not the money supply as oftenly used in the statistics - those money supply got nothing much to do with you and me

This post has been edited by maxforce: Dec 12 2010, 10:57 PM

Well said!

For stock market and currency, I do agree on the syndicates/speculators but property?
Then again, guessed it is possible, though really not much sign of them in the subsale. Now if, you re talking about the new launches, then yeah... know they re there though they re not labelled as syndicates (as of now)