When ever I see people rushing to buy 500sf service apartments with 400K price tag in non business district, I just shake my head & wish them good luck.

Does this people ever calculate rental yield & secondary market demand for such property in non business district ? ...sigh

But as usual all u need is some obasan gossip & social media, plus ask your staff to become actors/actresses to line up long dragon...lol

Yeah,dun sweep but use water to wash. It seems the droppings can cause blood cancer. So dun even open your door and windows if the live overhead.

Hope you are right. Then nobody will compete for the dead chicken How do you calculate the extra interest when the rate return to pre QE level ? What was the interest before QE level in malaysia ?

Any cheap deal?

BNM rate is closely correlated to the Fed and historical interest rate is over 3% higher than current rate.

It could take a year or 2 for BNM to increase rate by 3%, doubt many flippers could sustain 3% interest rate rise for over a year.


This post has been edited by icemanfx: Dec 22 2013, 11:36 AM

Most if not all are only looking at low entry cost and leave the rest to the bull market.

Lol

Most strong holders are ok in the sense of paying more interest to bank is not disaster, at least got asset to hold on to. Can rent from us if cant get a loan to buy your own since interest high right if happens. Either way if flippers force selling, new buyers are u ready? Better qualify yourself to get loan at that point of time, else no good if burst also you cant buy. Talk is cheap if no action when opportunity arises.

I do really hope lyn provide a LIKE button. Sad tat I'm not able to press LIKE for ur comment.

1% increase is RM200 pm increase ? or RM1000 pm increase ? How you calculate ? You must have a figure to conclude the flipper will suffer right ? How you calculate one ?

In my opinion, there are people buying 500sf service for own staying, say in Cheras, it make sense as near to town and close the amenity.
They have no choice as they wanted modern design, security, and with limited capital and and capacity, that is the choice need to make.

But the same 500-600sf in those outskirt area like Selayang, Kajang, is kind of tough if they price it more than RM500psf.

Anyway, blame our government to allow the developer on such planning which end of the day, many units could be empty upon VP...
Smaller unit shall only be built within certain radius from town city...

I think a lot of people dun realise that flipping game is already over. Unless flipper is buying with 100% cash, flipper is paying majorities interest for the 1st few years. If u take 100k loan, after a few yrs of monthly payments, u still owe the bank majorities of the original 100k loan as u are paying majorities interest only. So prop investment is a long term process.

Rental yield is easy to calculate, principal/interest cals is more difficult.

For every 1% increment, every 1m loan cost extra 10k p.a.

How much loan does a typical flipper borrowed? 1m or more?

NewlY completed Msuites Ampang, ori price Rm620k now subsel from Rm680k, 500sf, buy time staff said can rent Rm3k

Lol renting out at RM3k.... Saying is one thing, action leh?

Home loan is not straight line. You should put the increase in 1% in homeloan calculator. Assuming 40 year loan (last time flipper always loan to the max before BNM limit to 35 years) and assume RM1m loan.

BNM rate is not coorelated to Fed fund rate.
From 1998 to 2013, basically BNM rate was always in the range of 3.x% (apart from a year or 2 during 2008 crisis, that we saw OPR at 2%), while Fed fund rate was roller coaster from 1% to 4% then to now 0.25%.
Even many time Fed has reiterated Fed fund rate is going to stay low for extended period, despite QE tapering.

So, it is very unlikely for OPR to increase 3% to 6%, even in many years time.

Since 1997 crisis, Malaysia OPR never more than 3.x%.
Already 16 years at 3.x% level.

There is no reason for BNM to increase OPR to 6%, unless the economy is growing red hot at more than 8~9% rate just like what economy did before 1997 crisis.

If inflation is seriously hit or RM under pressure that forcing BNM to increase OPR to 6%, it just means property cannot be sold at dirt cheap price as well. Temporarily fire-sale due to those unable to service the home loan could surpress the property price for sometimes, but inflation will bring up the cost of property, aka property price in the longer future.
Just like a bowl of mee cannot be sold at RM2-3 nowadays like in old day.
Yes, property market could dampen due to correction, in fact, showing sign of slowing, but BNM is unlikely to hike so significantly to 6%.

It may kill the economy at 6%, which is not the interest of BNM to do so.
BNM want the property market to cool down, but not the economy, this can be seen by moves made by BNM of LTV ratio, tighter lending practice on home loan, but reluctantly to use interest rate as a tool to cool it down.

So the chance of increase 3% is remote for time being condition.
In fact with GST is on the pipeline 2015, that could dampen the economy growth, it is not the interest for BNM to hike rate so significantly.

Tot since many yrs ago many oledi claimed tat opr or blr ll go up??? The blr at 6.6 today is even lower than 5 yrs back which was at 6.75. No prob to go up a lil further as many hav taken tis 5 yrs opportunity, eventhou its short, to earn some extras or settle some loans.

Does it really so hurtful to go back to the oevel 5 yrs ago??? Dun think so. Many smart investors hav kinda expecting it. The previous 5 yrs or even longer if opr stays, was and is gonna b bonus. Analysis is all tis while telling us wat to do n wat not to be done. Howeva, when u look carefully, its most of the time bs or just a report after sthg happened.

Soli har. I'm no gd in analysing so I dislike analysts. Just my pov. No obligation. And hav u been asking urself, wat hav u capitalised for the last 5 yrs and wats ur plan in the next 5??? If u din earn more during the last 5 yrs with all the hot money around, and plans do not look rosy for the next 5 yrs, I might say sthg is not right.

Malaysia is one of the few country that retail loan is available at BLR minus, like many official data is a mockery. Unless the gomen imposed capital control, effective interest rate is linked to Fed.

Foreign funds buy gomen bond because its rate is higher than the U.S. To keep these fund holders, gomen will revise rate inline with Fed.

Gomen expenditures is a higher priority than people, negative economic impact to people is a acceptable collateral damage e.g GST.

Current historicaly low Fed interest rate is a desperate measure in desperate time. After U.S economy returned to normal, idea interest rate is just over 3% so that resources can be allocated to productive sectors.

Prior to 1997, bank lending rate was 8% to 10% and the economy still managed to have a bubble. Hence, higher interest rate won't kill the economy but weed out unproductive investments.

This post has been edited by icemanfx: Dec 22 2013, 08:58 PM

Lolx XD, then mcdonald/Kfc not going to worry no enough chicken supply, btw government just drop the house assesment tax well u know

There r other ways for govt to claw back e lost tax. Other subsidy cuts will be deeper that's all