More to come la...
http://www.blr.my/

100% Home Loan For First Time House Buyers

Those with income below RM3000 need not make down payment on house. First time house buyers with a family income less than RM3000 per month need not pay the 10% down payment under the My First House Scheme (SKIM Rumah Pertamaku) home loan.

The 10% down payment will be guaranteed by Cagamas Bhd for houses priced between RM100,000 and RM220,000. This will allow the first time buyers to obtain 100% home loan with will enable them to buy houses costing between RM100,000 and RM220,000 with a repayment period of up to 30 years. The scheme does not cover refinancing of a home.

To qualify for the scheme, which is for both houses under construction and completed properties, house buyers must be those working in the private sector and are confirmed employees with a minimum of six months in the job. The self-employed do not qualify for the scheme while joint applications are allowed, provided that both are in the private sector and are family members, such as siblings or spouses.

The monthly financing repayment sum must also be not more than one-third of the applicants’ monthly gross income. However, this sum can go up to 50% of their income if additional credit is permitted under the banks’ underwriting policy.

They will also be given stamp duty exemption of 50% on instruments of transfer on a house not exceeding RM350,000. The government also proposed a stamp duty exemption of 50% for loan agreement instruments to finance first-time purchasers.

The scheme sees the participation of 25 conventional and Islamic financial institutions including major banks like AmBank, CIMB, Hong Leong, Maybank, Public Bank, RHB and Standard Chartered.

For government servants, the goodies include an increase in the maximum loan eligibility from RM360,000 to RM450,000 effective 1 Jan 2011.

http://biz.thestar.com.my/news/story.asp?f...03&sec=business

a good sign?

yup.. but the figure reported does not reflect the overall market sentiment in addition the property price are still not coming down to more sensible figure..

This post has been edited by jib3000: Apr 6 2011, 11:15 AM

Approved rate still got 50%






Wednesday April 6, 2011 (The Star Online)
Downtrend in property loans

Higher deposit to curb market speculation seems effective

PETALING JAYA: Bank Negara's move to require house buyers to pay a higher deposit seems to be weeding out speculation in the property market, some analysts said.

Its monthly statistical bulletin last week showed that for fourth consecutive months since November, the number of loan applications to buy residential property has reduced.

On Nov 2 last year, the central bank announced a 70% loan-to-value (LTV) cap on a borrower's third and subsequent house-financing facility, meaning that these buyers would have to fork out 30% of the purchase price.

The move was prompted by fears of a retail credit bubble fuelling speculation on the prices of residential properties. Certain areas reported price spikes that are indicative of speculation and multiple-unit purchases by individuals.

However, analysts cautioned that the data was not conclusive.

Some analysts said the decline in the first couple of months might be seasonal and believed data from March would accurately show the effects of the LTV rule.

RAM Rating Services Bhd's head of financial institutions ratings Promod Dass said: “Household financing facilities now account for approximately 55% (or RM489bil) of the local banking system's loans, with loans for the purchase of residential property comprising about half (RM238bil) of total household loans.

“Although the full impact of this move has yet to filter through given the short time since its implementation, loan applications for residential property purchases have started slowing down in the last two months of 2010 and January.

“The heftier down payment because of the more stringent 70% LTV cap is aimed at discouraging excessive over-leveraging in the property market. While the early signs are that this move has weeded out a degree of speculation in the residential property market, it will take at least six more months to gain a conclusive feel on whether such speculation has been curbed,” Promod said in an e-mail.

Malaysian Rating Corp vice-president and head of financial institutions ratings Anandakumar Jegarasasingam said the LTV ruling was insufficient to control the level of household sector debt in the economy or an unhealthy property price appreciation.

“Any individual who is purchasing a third residential property is either likely to be affluent or a reasonably savvy property speculator. If property speculation is to be curbed, the authorities should perhaps explore more direct measures involving taxes and prudential restrictions,” he said.

Another issue was whether the current trend of lower applications for housing loans could eventually lead to a softening of the property market.

ECM Libra said in its banking report yesterday that “residential property and non-residential loans approved have shrunk and are set to continue their downtrend.”

ECM Libra's analyst Bernard Ching said “loans growth are expected to taper off due to our expectation that property sales growth may slow down later this year as a result of the imposition of loan-to-value cap.”

Another analyst said the drop in housing loan applications, and the reduction in the number of loans approved, would eventually lead to a softening of the property market. “Increasingly, developers will find it more difficult to push sales and this will lead to a softening,” he said.

For Bank Negara statements click here



This post has been edited by kh8668: Apr 6 2011, 11:20 AM

I think if BN maintain it's good result, which means BN has to do landslide win in Sarawak compared to 2006 result, (which i think is impossible), i think those investors and those big boys developers will have more confident and continue their "ponzi scheme" of property. Yes, i think price will go up, if BN wins big in Sarawak.

My view:

China, Australia and Asian country will increase the interest rates in this month or next quarter in order to curb the ever increase pressure of inflation. The increase in the interest rates will directly increase the cost of borrowings. Buyer who do not have the capability to serve the ever increase housing installment will forced to sell off their unit at discount. Hopefully by the end of the year, we will be able to see the bubble softened (but not break completely).

Hints :
1. CIMB increase interest rates but subsequently reversed. (In other words: interest rates will increase in this or next quarter, it won't be prolonged)

2. Companies that have high gearing actively proposing right issues. (Prevent the increasing borrowing cost impact the company's financial position and cash flows)

Feel free to comment!

Serdang property also can goreng from 180k to rm350k
Have to work harder to find hidden gems

This post has been edited by airline: Apr 6 2011, 11:42 AM

six months after the 308 in 2008, property prices start falling what. It fell from August 2008 for the next 12 months. Of course, you can say is GFC la. but still local businesses lost confident, investors starts to lose confident, all go overseas to invest, alot of people emigrating after 308 all contributes to the fall of property prices 6 months after 308.

Haha, broker and loan agent find most money in these two years

I've seen many of them changing cars and so on.

Have you save any money for rainy days?

I see government is under pressure to increase interest rates and curb the high household debts to prevent the party from game over.

Mind to share your view?

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Added on April 6, 2011, 11:50 amIt doesn't happen over night. It takes at least 6 month to a year in order to come down. Most people still have the holding power. But not until they lost their capacity to serve the installment.

It will come down end of this year. But bear in mind, my view is on general property market.

There still maybe some speculations on the property around the proposed MRT areas. Prices around these areas maybe still stubborn by the end of this year.

This post has been edited by keith_hjinhoh: Apr 6 2011, 11:50 AM

i hv been monitoring prices of properties that i desire to buy for own stay for months. noticed only a few were lowering prices by around 5%. But i think prices will be adjusted by end of this year due to inflation pressure.

living cost is trending higher and higher. E.g the grilled ikan pari (small portion) at a hawker center near my house increased to RM13 from RM10, this is 30% increase.

And i know many of my colleagues and friends, friends' friends have started to use RON95 instead of RON97 after the latter's price increased to RM2.7 per litre. This means the government's subsidy on petrol is increasing as more people using RON95 now. This is in addition to the government's initial plan to subsidize only RM0.30 per litre of RON95. But with Crude Oil price at USD108, the government is surely subsidizing more than the RM0.30 per litre now (maybe GE is around the corner???)

The question is now: how long can the Govt Tahan not to increase RON95 price ???

for genuine buyers who are buying for own stay (like myself) , this is a group that will take into consideration affordability. As inflation kicks in, we may need to redo our family budget so most propably will put on hold any plans to buy for a while (of course i am refering to those who can afford to wait) .

With more buyers putting on hold, when interest rates started to increase to curb inflation, i believe there will be sellers who are willing to profit less (asking price for properties in certain areas was > 50% with some close to 100% of the so called investors' original purchase price) and lower their asking price (they don't rugi anyway).

+1 i'm in the group who's waiting..

me too

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Added on April 6, 2011, 2:56 pmCIMB increase rate due to SRR effective 1april that was imposed by BNM... but they are being told not to increase the rates because of the SRR that is why there reverse it...

most analyst believe that OPR will go up by 100 basis point in 2HY... as BNM as indicated that they want that OPR to be back in good old days figure.. BNM defined it as " normalisation of the interest rate "

This post has been edited by jib3000: Apr 6 2011, 02:56 PM

Refinance my loans 2-3 yrs ago. Tat time BLR+0.x%. Only the first 2 yrs they give BLR-0.x%, 3rd yr onwards back to BLR+0.x%.

For the last 10 yrs, never heard BLR-Y before. Only the last 2 yrs such low interest loan offer by the banks.

Believe some powerful hand behind to allow this to happen, easy credit to stir the market, so looks good on surface before GE. Aft GE, wonder whether can still find BLR-Y type of offer and that for the entire tenure (not first 2 yrs). Imagine if you can save 2% loan for 20 yrs tenure how much are you talking about?

One of the only reason to buy property now is very low interest. Believe things will turn right aft GE. Ya, you might get discount of 5-10% on property price, but loan offer goes back to BLR+x, additional 2% for whole tenure so total sum paid still more.

So how to time when to drop? Price drop, interest up, in the end same same. May be you should ask God how to calculate.

In short, better to have local knowledge on specific properties rather that general knowledge trying to time the market. You are not buying stocks you know.

Looks like the move is effective.

agreed with you to certain extend, but interest rates hike is just one factor affecting property prices. with global economic recovery remains uncertain now, BNM may do it slowly. There are better ways to ensure the property prices are adjusted to a more reasonable level. if the govt signal possibility of implementing property gain tax like what the taiwanese govt is doing now, property prices will sure go down. Like what i mentioned before, the so called investors are asking 50% or more capital gains for properties in certain areas, if the govt implement property gain tax, these investors may willing to sell with 30% profit instead of 50% profit

This post has been edited by godutch: Apr 6 2011, 07:48 PM

Do not see the point here.


if earning 50% from purchasing price
property
bought 500k
Sold 750k
fees involve say: RM50k
net earning before tax = RM200k
RPGT 5% = RM10k
Net earning after RPGT = RM190K

if earning 30% from purchasing price
property
bought 500k
Sold 650k
fees involve say: RM50k
net earning before tax = RM100k
RPGT 5% = RM5k
Net earning after RPGT = RM95K

so why selling and earn 30% if you can sell and earn 50% margin from purchased price?

When we going to have "luxury tax"?

http://www.straitstimes.com/BreakingNews/A...ory_653676.html

Because the next buyer/speculator has lesser incentive to buy the property.

If you know if you make 100k from properties but 50K needs to go for RPGT, your net gain is 50K, the return is lower, so lesser incentive and justification for high risk taking.
Speculate a 500K and end result is only gain 50k, only 10% gain, vs 100K which is 20% gain. The difference is huge.
Risk and reward ratio dramatically change with RPGT.

Just like when jackpot is 23 million time, lot of people want to try their luck.
When jackpot is only 3 million, the number of people try the luck become lesser.

Sold price is because of next buyer willingness to buy/speculate/flip.
Sold price is not determined by you or me, or existing owner.

bro/sis...rpgt if going back to original 30%....if your net earning before tax = 100K, after tax still got 70k la..

check out the RPGT calculation, then you will know more.

and investors should know what they are buying and with their own objectives...not to worry whether they buy or not buy, how much they make or not make, got incentive or less incentive..lol

This post has been edited by kh8668: Apr 6 2011, 10:18 PM

You are correct in terms of tax computation, but with each subsequent buyer you'll be running up against the law of diminishing return, because the next buyer has to keep in mind 2 things (a) lower LTV (thus his ROI is lower), and (b) a 30% RPGT on his earnings, so it affects whether it's still worth it to buy.

The population of buyers out there is a bell curve, and by having RPGT and lower LTV, it shifts the breakeven line higher, thus reducing demand.