hmm... I haven't posted for a while

It seems like our banks are starting to issue 40 years home loan with nothing down (100% margin). Banks are even offering overdraft facility tied to mortgages, or use home mortgages as personal ATM when home prices go up to buy another house, a bigger car or plasma screen that can be seen from the moon (sounds familiar? home equity extraction or personal housing ATM happened in the US before their housing bubble burst).

Hmm... this will create an economy boom and keep inflating the property prices for sometime. until the oversupply due to heavy speculation comes home to roost. Everyone q overnight to buy property and wants to flip it out upon completion, if everyone thinks the same way, who will be the next sucker?

Sigh... easy and cheap credit will never end well. Mark my words.


http://www.pbebank.com/en/en_content/perso...oans/5home.html

http://www.maybank2u.com.my/mbb_info/m2u/p...sonal/LOA-Loans

http://www1.uob.com.my/personal/loans/prop...i_mortgage.html

This post has been edited by debtismoney: Feb 14 2012, 09:34 PM

Inflation pressure or more consumer price inflation doesn't mean property prices can keep going up.

Brent crude oil is trading around US$125 per barrel now, which means it costs more to fill up your car to get to work, higher food prices, power bill etc. and everyone will have less money in pockets, less money to buy a bigger house.

In extremely low or even zero interest rate environment doesn't mean property prices can keep going up. see Ireland, Spain, US etc

At the end of the day, property prices will have to match the income level of the businesses/individual. Remember everyone would have to service their loans, we can refinance, get introductory low interest loan in the first few years, interest only mortgages, DIBS etc. but how can people buy more expensive homes without matching income growth? We simply can't in the long run...

The turning point I can see is people are willing to take 2 generations mortgages, 40, 50 years home loans. The banks are issuing 40 years home loans these days. It seems like people are more than happy to accept it.

It was low interest rate or cheap/easy loan causing housing bubble in the first place, it gives incentive to people to speculate in property market in low interest rate environment and cause bubble.

Crude oil was trading around US$10 per barrel 10 years ago, despite huge inflation pressure but we have witnessed housing crash in the west, didn't we?

Maybe we think we are so different

It is happening now, property prices went up more than 100% in the last 3-4 years. Did average employee or business get 100% income growth in the last few years?

That's nothing wrong with 40 or more years home loan, if you don't mind to involve your children in paying your mortgages.

Cheap and easy loan gives incentive to people to speculate in property market, would you rather park your money in fixed deposit with 3% interest when CPI is 5%, or buy a property when everyone says home prices can only go up? Most people choose the latter, and this is causing bubble.

We need people to save money and form capital and invest (this is called capitalism). In low interest rate environment, everyone becomes speculator with borrowed money because of cheap loan (credit bubble).

As I said the turning point I can see to prevent a steep property price correction is 40 years mortgages or even lower interest rate, but it may be balanced up by the new loan criteria based on net rather than gross income.

This post has been edited by debtismoney: Feb 25 2012, 10:24 PM

400k home loan with BLR-2.2% = 4.4% interest rate and loan's term of 40 years, monthly repayment is 1772. This is 63% of monthly income of 2800, I presume this is gross income and the fresh graduate doesn't have a 9 years car loan and study loan to service? and you think this is payable?

Even as far as Setia Alam, South Puchong etc, they are selling terraces at nearly 700k or more these days.



This graph above is Australian house price index vs rents vs CPI. Can you see the problem? We can inflate house prices with more debt to a certain extend, when people can no longer service their mortgages or can't find buyer for their vacant investment property, home prices will come back down to match income growth/CPI eventually. This is happening in Australia.

Maybe somehow we can find unlimited buyers for the high end empty condos/SOHO/SOVO in the KV.

This post has been edited by debtismoney: Feb 26 2012, 09:29 AM

If total home loan size shrinks in the next 6 months, I assure you property prices will fall if not crash by end of the year.

Banks are tightening lending criteria for car and home buyers, Bank Negara and the banking community see the credit bubble. They want to stop inflating property prices before it is too late, it is happening now and you still can't see the writing on the wall?

We got a historical low interest rate, so people can afford to buy expensive houses without matching income growth.

As some pointed out crude oil is trading over USD100 now, this is inflationary. What if the west attacks Iran any time soon?

To curb inflation or CPI, Bank Negara will have to raise interest rate. How many property investors/flippers can survive a few percent interest rate hike?

You may want to ask your parents, what was the interest rate back in late 90's and early 80's. We had oil crisis back in 70's therefore interest rate was raised to about 20% in early 80's to curb inflation. We had Asian currency crisis in 97, and interest rate was over 10% to stop currency outflow. These events happened just decades ago, and do you think the 4%++ variable mortgage rate will stay here forever?

We may able to smooth things out with 40 or more years mortgages, property prices may go up but rental yield would not follow the pace (historically rent matches income growth/CPI), that's why many property investors can't raise rents even property prices sky rocketed. At that point in time, smart investors will chase yield and invest in other asset class.

Why do people need to work hard or become entrepreneurs? We can simply flip property upon completion and make 50-100% capital gain, not even Apple's products can achieve this percentage gain! Why work 9-5, quit your day job and join the property party!

Many Real Estate agencies sprung up in the last few short years. Many young adults want to make quick bucks and rush to housing sector, go iproperty and you can see many young faces.

This is causing capital and resource misallocation to the property sector, and economy relies heavily on property boom but not manufacturing base must hit the wall in the long run (see Dubai).

http://biz.sinchew-i.com/node/57597

庭貸款申請挫20.6，貸款批准跌高達27.7%

汽車與住宅產業貸款批准雙雙暴跌近21%

信用卡與個人貸款批准，各按年大跌約50與30%

消費者貸款萎縮高達16.4%，汽車與產業首當其衝，各挫15.5與6.3%


If this trend continues, where do you get the money supply to keep bidding up the property prices?

So what do you mean "when the loan is tighten, it will help to prevent bubble from bursting, but not leading bubble to burst"?

When households are burdened with huge debt load, even banks are willing to lend, but the households simply cannot take on more debt without income growth. This will be causing the credit bubble to burst.


If you want to buy an investment property now, look into the US market. USD200k or RM600k can buy you a brand new 5 bedroom bungalow in decent suburbs. What can you buy in KV with RM600k these days, not even a 30 years old single storey terrace in TTDI, DSL in Puchong, Shah Alam or Cyberjaya. Don't forget the income per capital in the US is few folds of what a Malaysian is earning, although there is high rate of unemployment in the US.

The US property market has been heading south over 5 years since the peak in 2005/06, it should be near bottom now. As I said before, we need 5-10 years for a property bubble burst to find a floor.

This post has been edited by debtismoney: Mar 2 2012, 05:56 PM

You are right, if the rich or qualified one can absorb all the new launches and prop up the whole property market.

"When households are burdened with huge debt load, even banks are willing to lend, but the households simply cannot take on more debt without income growth."

Say a household is spending 60% of their net income paying loan principle + interest every month, even banks are willing to lend to this household with loose criteria, this household simply cannot spend say 70% or more of their income to make loan repayment. They need to buy food, petrol, insurance etc right.

This is called debt saturation, I think Malaysia is near this situation now, we have one of the highest household debt to income level in the world.

Did I say USD200k can buy you a brand new 5 bedroom bungalow in the US? Maybe you can buy a brand new but empty 1000sf 3 bedroom apartment/condo with less than USD100k in California.

Nobody is stopping you to leverage yourself to buy property, go get a few credit cards to pay downpayment and don't forget to take advantage of 0% balance transfer. hope this helps, this is worth a lot of cents as I don't usually give free advice.

貸款申請成長更自去年12月的10.7%大跌到2.7%，為去年8月以來，5個月內首次按年下挫。其中，消費者貸款萎縮高達16.4%，汽車與產業首當其衝，各挫15.5與6.3%。

Consumer lending shrunk up to 16.4%, property loan size decreased 6.3%. We have more new property launches, but less money sloshing around, chasing and bidding up property prices.

This is a leading indicator I use to forecast when the property prices will turn downward, provided property lending continue to shrink for at least 2 quarters.


聯昌視國行緊縮貸款為避免家債惡化的審慎策略。家庭債務在2003至2011年，每年成長高達11.7%，截至2011年12月，仍佔國內生產總值多達6千647億令吉或78%。

Households have been using more debt to consume more in the past 8 years without matching income growth, it's about time for households to face reality and deleveraging.


根據大馬研究，企業領域是1月貸款申請與批准主力，各增28.9與78.1%

The loan growth was mainly due to business lending, I doubt that businesses will use the borrowed money to bid up residential property. But this business lending growth should lead to income growth for honest employees, so they can catch up with their debt load.

I said we might go back to a gold standard monetary system, not using gold coins to replace paper notes to buy stuff.

Ever wonder why do Chinese use these words 金融 & 银行.

Historically, fiat paper currency could only survive average 47 years. This fiat paper system has been around for about 42 years, this time will be different?

British built they empire with gold backed British pound and conquered the world for 200 years.

The US started they empire with gold standard US dollar and dominates the world for over 100 years. Ever wonder why do we call US dollar 美金? and now the US has debt to GDP over 100%, and USD can still be the world reserve currency for global trading?

China and Japan signed a largest trade agreement in history early this year, they will be using their own yen and yuan for trading instead of USD.

Iran recently announced is accepting gold for exchanging their crude oil, this is the beginning of the death of the petrodollar.


If you can see the writing on the wall, you may want to load up as much physical gold as possible while you still can.


500 - 600k for a 20x70? look at the new launch price, touching 1 mil for a terrace in areas 20km from the city, 500-600psf for a condo in areas far from the city?

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Added on March 3, 2012, 10:05 amYou seem surprise, yes I do mean that.

You bet the minority "rich" will use cash to snap up all the new launching?

This post has been edited by debtismoney: Mar 3 2012, 10:19 AM

Under the current US dollar system, USD used to backed by gold, and other countries use USD to back their own currencies. That's why central banks in the world hold US treasury bonds as reserve, they used to own gold as reserve.

The US severed the gold standard in 1971, therefore the whole world is running a fiat paper system first time in human history. 2012-1971 is less than 41 years, 42 years is a false statement I have to admit.

It's not about we do not have enough gold for global trading, it's about the gold price. You can print 10 trillion paper notes and back by 10 tons of gold, or print 10 million and back by 10 tons of gold.

We do not have to have inflation, ever wonder why a house cost 10k in 1971 and is worth 800k now?

We had 0% inflation from late 19 century to early 20 century, because there was a gold standard.

The thing is the current system is hitting the wall, we will have a new world monetary to replace the current petrodollar standard. It's very likely to tie back to gold, it is the only way to to gain public confidence.

Ever wonder why the US keep invading middle east and wanting to control the world oil supply? The US dollar is backed by petroleum, they force the world to buy oil in USD therefore there is always a demand for US dollar.

Ever wonder why Saddam Hussein and Gaddafi got killed? They wanted to trade oil in other currency rather than USD.


Well, I do not want to talk about gold in this thread anymore, it's not relevant. Stop digging out gold topic Mr. Kidmad please.

http://www.iproperty.com.sg/news/5009/Sent...hes-record-high

Wait until the housing bubble in Singapore itself pops, then you will see whether those Malaysian working in Singapore can prop up the KV housing market or not.


Sentosa Cove bungalow sold at S$39 million. S$39 mil x 2.407 = RM93,873,000!

You could buy a few private castles in Europe with that sum of money. This is what I call cheap! But heard most castles are haunted?

http://www.eurobrix.com/property/castles/


Let's guess which housing bubbles pop first - Canada, Australia, UK, Singapore, Hong Kong (is bursting now), China Coastal Cities (popping now, new home prices fall 20% since Nov 11?).

This post has been edited by debtismoney: Mar 8 2012, 06:24 PM

http://www.themalaysianinsider.com/malaysi...e-buyers-group/


"The scheme, launched by Datuk Seri Najib Razak a year ago, has come to a grinding halt as banks are unwilling to hand out 100 per cent financing for property worth up to RM400,000 to applicants earning less than RM3,000 a month.

The government had earlier said that a state-owned mortgage agency would put up the initial 10 per cent deposit required to purchase the houses."


This state-owned mortgage agency and EPF to a certain extent will become the next Freddie Mae and Freddie Mac if this scheme goes ahead. I reckon the current state-controlled EPF system is not transparent, BN can do whatever they want with the fund. And members don't even have a say in the investment options, just like this 100% first home loan scheme is partly funded by EPF?

Crude oil is getting more expensive, but the government doesn't dare to raise petrol price before general election. Where does the money come from to subsidise petrol price?

How EPF is held accountable and by whom?! Yes, every year EPF yields above inflation. But it seems like a Ponzi scheme to me, every year we have new members pouring new money into the fund. No fund members are allowed to withdraw money not until retirement age, which means this Ponzi/pyramid scheme can go on forever as long as all members don't withdraw fund at the same time!

http://anwaribrahimblog.com/2011/11/10/is-...f-being-looted/

We should have a retirement fund system similar to Superannuation fund in Australia. Privately held retirement fund and regulated by the government, every member can choose whatever investment options they like.


"Chang said that a 20-year loan of RM400,000 at the industry standard two per cent below base lending rate would require a monthly repayment of RM2,552, or 85 per cent of RM3,000.

He added that a 30-year agreement would still require monthly instalments of RM2,051 or 68 per cent of RM3,000."


Mr. PJguy mind to explain again how to use 70% of disposable income to make monthly repayment and still got saving each month? might have to save for few years to buy a bed

The government shouldn't raise the scheme limit to RM400,000. I believe Ajib was under huge pressure by his BN crony developers.

If the whole world is only selling Ferrari and small numbers of people can afford it, the free market will come up with Perodua/Potong products. If people can't afford to buy 400k home, the home prices will adjust to suit. It seems like Ajib is trying to prop up the prices and create a floor for the housing market.

大馬家庭的購買國內平均房產的可負擔比例（平均家庭收入／平均房屋貸款供款）已接近歷史高峰，主要是屋價升幅落後收入 >>> GREAT!

大馬房價走勢向來與收入成長一致，不過，此趨勢卻在1997/98年發生亞洲金融風暴之後扭轉，屋價大幅落後人均收入 >>> GREAT GREAT!

特別是目前國內的平均房產可負擔比例達到新高點，換句話說，人民購買房屋的能力已達到最高水平。>>> GREAT GREAT GREAT!

雖然國內一些主要地區包括吉隆坡城中城、滿家樂的高級公寓市場供應過剩，價格在過去數年急挫，但肯定不算泡沫。>>> Prices plunge doesn't mean bubble pops? or it didn't have a bubble to begin with.

過去數年來，住宅房產新供應成長大幅度縮減，不過，屋價卻沒有相應揚升。該行預估目前完整磚屋住宅短缺接近200萬間。>>> GREAT GREAT GREAT GREAT! Housing shortage myth!


This is what I call DECEPTION!

I love to read these stuff, it's very entertaining indeed!

Please ask your buddy reporter to write more and publish in main stream media, so we can have more laugh here

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Added on March 9, 2012, 6:27 pmI have no idea about the price movement in MK, this is what the article says anyway.


該行指出，過去數年來，住宅房產新供應成長大幅度縮減，不過，屋價卻沒有相應揚升。2001年的常年住宅，包括巴生河流域地區的供應成長介於12至13%，惟2010年卻萎縮至2至3%水平。該行預估目前完整磚屋住宅短缺接近200萬間

Also what is the population in KV, 6 million? I presume the 2 million "housing shortage" is refer to nationwide? It just doesn't make sense if only for KV, 2 million homes are sufficient to house 6 million people.

This post has been edited by debtismoney: Mar 9 2012, 06:34 PM

I found some short videos about petrodollar, you study it and you will understand what I was talking about.

The US controls the world oil supply with their military bases literally, and the whole world needs to trade oil with USD without exception therefore the US can print money whenever they want because there is always a demand for oil. This is the petrodollar system we are having now, the US is ripping off every other countries.

How on earth can an empire just print paper money at will, and force the whole world to work hard and accept it forever? The answer is it won't last forever, all empires crumble eventually due to excessive debt.

If Iran starts to trade oil in other currency, the US must and will attack Iran, just like Iraq and Libya.

If the west can't get out of the depression/high unemployment, they must and will lead you to another world war. Historically, this seems like the most effective way to restart the world economy. I feel sad to say this, but this is the world we are living in... let's pray


http://www.youtube.com/watch?v=wha9lTKN7Zg&feature=related

http://www.youtube.com/watch?v=oUHmxBEZeU0&feature=related

This post has been edited by debtismoney: Mar 9 2012, 07:45 PM

Hey kiddo, I never said I don't own property. Stop worrying about me

Went to Maybank to buy some physical gold coins, and I was told they are running out of stock. I suspect the elite have bought them all. Don't try to act smart if you don't study monetary history, history simply repeats itself.

When the herd do the same thing together i.e. panicking don't want to miss the boat and queuing overnight to buy property, historically 99% of the time they turn out to be wrong. Sadly you are one of the herd GREAT!

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Added on March 10, 2012, 6:11 amYou think the staff are buying for own stay? and not flipping the units upon completion and ripping off genuine buyers?

I thought you have LUBANG in there, still need to queue?

Great! You feel proud of yourself with your two 40 years mortgages. Why not passing down to your grandchildren?

This post has been edited by debtismoney: Mar 10 2012, 07:30 AM

Hey which developers you work for? Got lubang kah?

You sound a bit desperate to defend the status quo

This post has been edited by debtismoney: Mar 10 2012, 05:51 PM

Have a family guarantor that has some assets/savings, most likely banks will approve the loan application, wouldn't it?