Why do you say so? Actually I just wanna buy a house. Not for investment but for marriage.
Plan to buy this year cz worry it will increase next year.

Any advice?

I made a thread specifically for this issue. Read here:

http://forum.lowyat.net/index.php?showtopic=2023039&hl=

If u plan to buy in Klang Valley, i advise you, now is the wrong time.

if u have the need, if u have a good plan, y not?
u buy the house for own stay, price will not much affected, as you not planning for sell in short times.
price will going up and down regarding the cycle and inflation.
just have to make sure u got enough cash on hand for emergency, stable income and income is affordable to pay the installment and daily use.

i just brought my house past 3 months. just get the key. currently doing reno and plan to move in b4 Nov.

Since you need a house for marriage THIS year... what advice you need??

Can you hold??? No right? Then... just buy lor.

agreed, sometimes $ cant buy time

the earlier u start ur loan repayment, d earlier u can settle it, perhaps the low BLR + bank attractive mortage rate is one of the points u may want to look at now.

This post has been edited by bearbearhong: Sep 6 2011, 04:47 PM

Read it. Thanks.

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Added on September 6, 2011, 4:55 pmThe door just hit straight to my face. Haha. Good one.

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Added on September 6, 2011, 4:58 pmYup. The house indeed quite pricey and all the house I'm looking for is freehold.


This post has been edited by BboyDora: Sep 6 2011, 04:58 PM

Hm... the big boys have been selling since last year! When all flippers rush out the property market en masse, who are they gonna sell it to? Could they sell it to each other and make a profit? Sigh, it won't be pretty.

Will Li Ka Shing step in and prop up the market? He will for sure, but not until after a bloodbath in the market.

Bolehsia government has officially said, they want the house prices to correct, they are worried about the household debt level. It would be unwise to against them and dive into the property market now.

bought early at 500k with 6.6% interest rate.

3 years later after the bubble burst, the price might be 300k with 8-9% interest rate.

Overall which one is a better value?

If you really want to buy a house now, my advice is go get a fixed interest home loan for the whole loan tenure, although the fixed rate is higher than the variable loan.

We are having a historical low interest rate, it won't stay here for long for sure, so take advantage now and lock up the rate.

Most importantly, you have to be mentally prepared for an underwater mortgage, say 20-30% underwater from the current price.

Also, if you got a job in other state or overseas, would you be prepared to sell your house at a loss?

Try to google underwater mortgages in the US, should be many articles on the internet. Good luck!

our gomen respond is always slower pace then reality, they shud have limited foreign purchasing long ago.

For those investor/flippers, they do need to be aware.

However, as for myself, my intention to get a 2nd property is more for long term saving for my child, it will be kept for at least 6-10 yrs, and limited new development within KL area prompted me to get 1 under construction within my preferred area.

Prices of property may be dropped or stagnant soon, i am confident it will not drop continuously but we are aging, time too is $, however, i am not a desperate investor who simply strech to buy

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Added on September 6, 2011, 5:19 pmBro, no one can guarantee that price anyway...in particular freehold landed terrace houses, the demand is higher then high rise and higher end Property

This post has been edited by bearbearhong: Sep 6 2011, 05:20 PM

it could happen... but.. our fuel price will be below RM1.50/l during that time... many thing will become cheap... the age of deleveraging.

Yeah, no one can guarantee that price, but it's possible.

That FACT has spoken. The fact that our household debt is currently highest in Asia. The fact that BNM is finding a way to reduce lending.

Why must we live in denial?

maybe someone can compare the deposit rate amongst the countries as well.

BNM proposal could hit property buyers, says RHB

YES, PLS DO IT FAST, IT'S LONG OVERDUED.

http://www.themalaysianinsider.com/malaysi...buyers-says-rhb

KUALA LUMPUR, Sept 5 — A change in the way mortgages are calculated might slash the amounts that the public can borrow for property purchases by as much as 37 per cent, said RHB Research Institute in a report today.

RHB said that the proposal to change the computation of property mortgages — to be based on net income rather than gross income — is currently on Bank Negara Malaysia’s table for consideration.

The change comes as the central bank attempts to reign in household debt that, as a percentage of gross domestic product, surged to a record high level in 2010 due to low interest rates and easy financing schemes.

As a percentage of GDP, Malaysia’s household debt increased from 66.7 per cent in 2004 to 76 per cent in 2009, which is uncomfortably close to the levels seen in the US prior to the 2008 financial crisis.

Household income is one of the key guidelines in credit evaluation for banks and mortgage instalments are now typically calculated at one-third of gross income.

A move to calculate mortgages based on net income could reduce the threshold for mortgage instalments and thus impact residential property prices.

RHB estimated that the proposed measure could lower affordability by 14-37 per cent and the impact would be most severe in the high-end segment.

“For example, assuming an individual’s gross monthly salary of RM5,000 and if mortgage is to be calculated on net pay basis, the house value that one can afford will be reduced to RM231,000 from RM300,000 (or RM277,000 from RM360,000), using the rule of thumb of 5x (or 6x) of gross salary per annum,” said RHB.

“If supply is to match with demand, it implies that prices will have to correct by a similar (or smaller) percentage for the supply to be absorbed, or developers will start to slow down their launches to limit the supply in the market.”

RHB added that apart from the calculation of household debt on net income basis, RPGT (real property gains tax) has also been speculated as one of the possible measures that the government may impose in the 2012 budget.

“We believe RPGT is a more meaningful measure to curb speculative purchases in the property market,” said RHB. “We expect, if it is to be imposed, the tax rate to revert to pre-April 1 2007 level or slightly lower.”

RPGT has been set at a five per cent flat rate for any properties disposed of within five years of purchase while prior to April 1 2007, it was 30 per cent for disposal within the first two years of purchase and progressively lower for disposal of properties in subsequent years.

RHB added that the recent sell down in equity markets is expected to increase economic fears and could also hit property buying sentiment.

It noted that in the 2008/2009 global economic slowdown, property sales stalled and fell 30-40 per cent year-on-year and prices dropped 10.6 per cent in Kuala Lumpur.

“As we only expect a slower economic growth, property sales and prices may experience some minor corrections of 5-10 per cent,” said RHB.

Putrajaya introduced a 70 per cent loan-to-value mortgage cap on third properties last year in response to complaints that property prices had spiralled out of control due to rampant speculation.

A housing affordability chart carried in the The Edge Financial Daily on August 15 showed that property prices had risen from 5.9 times income in 1989 to 10.9 times income in 2010.

The share of household loans to total bank loans in Malaysia, meanwhile, rose from 35.2 per cent in 2000 to 55.5 per cent in August 2010.

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Added on September 6, 2011, 6:51 pmI can tell you that most of the genuine buyers (especially those who are looking to buy for own stay these two years but failed by the ridiculous pricing) like myself will definitely BUY.


This post has been edited by godutch: Sep 6 2011, 06:51 PM

I just move in my new house @ 2 months, my opposite neighbours is selling abt RM100k higher of my purchase price..
All said, if u are buying for own stay, just go ahead and search for reasonablke selling price house and not overpriced.

Of course 300K at 8-9% are better, Is is How much you Owe the bank that matters the most. when one declares bankrupt, banks will go after the amount owe, if one buys the property at a low price, chances for the reasonably price property to be auctioned at close to reserve price is higher than the overpriced property.

Furthermore, it you are buying for own stay, interest rates fluctuates, can always refinance.



This post has been edited by godutch: Sep 6 2011, 07:15 PM

+1

interest fluctuates, but principal remain fixed.

in my opinion, in the era of high property prices, save more for deposit then only hunt for quality assets as time goes by.

rent is always cheaper options then buy in the era of high property prices. reason? rental mkt has abundant supply, not to mention, initially seller got the property at lower price, therefore, lower rental but good yield for them.

err.... not sure about fuel price coming down though... demand for mobility & energy consumption has never subside... prices will only goes up in the longer term...

ok you can slowly wait for that to happen. Learn from your history. from 1998 to 2007. Property price will not slash up to 40%. reason? few factors:
1) Land Value
2) Raw Material
3) Hot spot area

Whatever happens live will go on and everyone needs still needs a roof. Those area which soon to be hotspots, Sungai Buloh, setia alam, nilai, puchong, outskirt of ampang and yada yada... this few places the property market will slow down that's for sure. Hot spots like PJ, Mont Kiara, Bangsar.. nah you got no chance, those houses most likely ppl had paid them up fully for own stay. if the property market really bubble most likely houses which you bought 330k from developer would remain as 330k - 350k but for a property to drop from 500k > 330k? You can dream on. If a property shoot up from 330k > 500k it tells you that it's a hotspot. Everyone wants it, middle class salary earner is eyeing on it. Infact me myself would WANT them! If you can pay 50k down payment today for a home what makes you think in 3 years time you would not be able to fork out another 50k for another home? The debt crisis will hit us soon but how hard will it hit us? We can't gurantee. What if it would not even happen? Think again.

Your graph is nice to see. infact im hoping for it to burst, but i am not worrying, i'm planning to buy a condo soon and sell off 1 of my property to earn for some extra bucks. If i buy the Condo for 300k now and next year it bubble and it drop to 250k why do i need to worry? It will still go up for the years to come. You will only need to worry if you do not have the money to repay your debt to the bank. You only need to worry when your spending way beyond your earning capability.

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Added on September 6, 2011, 7:50 pmWell it's quite true.. if only you are LEAVING OUTSIDE OF KLANG VALLEY. Renting a condominium in klang valley is a pain in the arse. a studio apartment in subang will cost you RM2.6k which if you purchase them and do a 30 years installment... It would be even CHEAPER! Same goes to the few places. Renting a place is just like paying for others installment.

I have to agree on your point, it takes time for you to build up your reserve fund. It's always better to pay more initially to lower down your burden.

This post has been edited by kidmad: Sep 6 2011, 07:52 PM

Let's us learn from WORLD history if you will.

See how much house prices have fallen from the peak in the countries below,

Japan - plummeted over 70% since 1990
Dubai - plunged nearly 60% in 3 years and still falling
Ireland - crashed 40-50% in 4 years and still heading south
US - down over 30% since 2006 and still no bottom in sight
Spain - dropped 20-30% and still falling

Well, whatever happens life will go on and everyone still needs a roof? Scarcity of land? Hot spot areas? We could apply all these factors to the countries above, can't we?

Don't you think bolehsia is so different, think again. Don't you think our overbuilding frenzy, easy/flexible loan, historical low interest, zero interest loan scheme, developers rebate for down payment etc. are not a recipe causing a housing bubble waiting to burst? When the housing bubble bursts, many people tie to this sector will lose their jobs, whatever happens life will go on?

Our household debt has reached an alarming level, we simply cannot borrow more money to sustain the current house prices, this household deleveraging process will take 5-10 years to run its course, it won't go away in few quarters.

Anyway, I really have nothing to gain, just want to spread this message around, so some flippers won't lose their shirts and sleep under some bridges. Wake up Flippers! Wake up! Let's learn from history.

This post has been edited by debtismoney: Sep 6 2011, 10:14 PM