since the price is slowing you can afford to wait...

look see look see first....

Hopefully price of landed will stagnant in 2014.
Better still, hopefully it will drop slightly to match bank's value.
Now 9/10 property's SPA price cannot match bank's value

why bank's valuation is always so much lower than market price?
i don't really understand this because those are confirmed purchase price which means there is market for that kind of price...

but then bank always quote lower....really give problem...

Because valuer dont want to speculatr house price. If valuer also speculate buble become so big si fast then pop all dead chicken

My view is, the valuation will be used as the loan amount and the bank needs a REAL asset of that worth should later they need to take over the asset if the loan customer cannot pay the loan any more.

My 2 cents.

Can't blame those amateur who donno that is no such thing as "market price"

Just because i found a dungu who is willing to pay 1 million for my property doesn't mean my neighbour can get 1, what if my neighbour buyer is damn kao keng negotiator or his/her buddy, end up selling 850K then which is market price ?

Remember property price can up as well as going down, if next year economy getting worst or interest go up, another one of my neighbour sell for 750K ? Then for sure that dungu who bought my house has high possibility become defaulter, then the bank take the 300K loses is it ?

If u wanna be a fool buying property at over inflated price, bank would not be stupid enough to take the risk to bear it, let the dungu come out with 300K cash to take the risk.

Only desperate agent & wannabe flipper don't understand such simple fact..sigh

different valuer with have different valuation.
So for those really need to get the max value, just seek SA' assistance.

But buyer also facing dilemma.
say the seller asking RM500K.
SA said normal valuation ard RM450-470K. But if buyer really serious, can help to push to RM500K.
So if you are buyer, you wanted to buy RM500K ? as you not the valuation is not realistic.
So end of the day, market value is still back to willing buyer willing seller.

Article by Tong Kooi Ong in EDGE 27 Dec 2013

_____________________________________





UNIVERSALLY, we accept that all humans have the basic need for food, clothing and shelter. Modern theorists have updated this to include sanitation, education and healthcare.

Indian economist and Nobel laureate Amartya Sen has gone one step further in articulating that it is the people’s capabilities to generate these basic needs, rather than their mere consumption, that determines their own individual significance and socio-economic well-being.

Having a roof over one’s family is not just a basic necessity but also a human right. Every citizen has the right to safety, freedom and human decency.

For the same reason we strive to ensure that everyone has access to basic food – either through price controls, subsidies or some form of distribution to those in need – so too should housing be made equally accessible.

Over the past ten years, since 2003, average home prices in Malaysia, as measured by the Malaysian House Price Index, have gone up by a total of 80%. Meanwhile, average income, as measured by nominal GDP per capita, has risen by 92% over the same period.

However, the bulk of the property gains have occurred in the past four years, when average home prices surged 48% from end of 2009 to 3Q2013. That suggests a compounded annual increase of 10%, outpacing income growth of around 7% per year.

The surge in home prices in the Klang Valley have been more marked with landed homes generally doubling in the same four-year period.

Rising home prices, combined with high rates of home ownership and low income levels have converged to create a high level of household debt in Malaysia. Our household debt to GDP ratio of over 83% is the second highest in Asia.

To be fair, property prices in Malaysia are not universally expensive or out of reach. According to government statistics, the average home price in Malaysia is RM269,324 as at 3Q2013. It will take 8.4 years for an average Malaysian to buy a home, based on nominal GDP per capita of RM32,144 per year.

By comparison, it takes about 5 to 6 years of average incomes to buy homes in Singapore (based on a HDB apartment), the United Kingdom and the US.

Thus, Malaysians are worse off, although the two-year difference is not too wide.

However, the urban-rural divide here is very large.

The national average home price of RM269,324 would be able to buy only about 200-300 sq ft in the city centre, or half a shoebox apartment.

Indeed, statistics show that the average price of homes in Kuala Lumpur are 130% above the national average, at RM620,758 while those in Selangor are 50% higher, at RM405,836.

In other words, using similar level of affordability, urbanites have to earn a lot more – about 2.3 times more -- than the average Malaysian. This means about RM6,200 per person per month, on average. The question is, how many people living in the Klang Valley earn this figure?

Apart from demand, supply and costs, another major variable affects property pricing: Speculation.

Take the example of the DIBS (Developer Interest Bearing Scheme) financing structures. Here, a buyer pays a minimum down payment, say 10% of the value, to secure the purchase of a home. In the case of a high-rise apartment, the buyer pays nothing more until completion three to four years later. The bank provides the mortgage and pays the developer base on percentage of completion. The developer pays the bank the interest servicing on the mortgages.

Thus, for 10% of the home value, the buyer gets the upside of any appreciation of this property value over a four years period. Even if it goes up by 20%, it is a 200% return on investment. In effect, it becomes a high gearing warrant, turning properties into speculative investment instrument.

A reasonable counter argument would be to leave free market forces to determine property prices. But this only happens in the absence of large externalities. Creating asset bubbles have large economic and social costs. Depriving genuine home buyers of their capabilities to own their own homes and the long lead time to bring supply to market are good reasons to justify limited macro market interventions.

Recognising the need for social inclusion, we saw the Federal Government and the State Governments of Johor and Penang introducing a number of measures to cool down property prices.

Some of the measures announced since Budget 2014 include revising upwards the Real Property Gains Tax (RPGT) rate for disposal of properties within first five years for foreign buyers, raising the minimum foreign purchase restriction from RM500,000 to RM1 million, imposing a 2% levy on foreign buyers and removing the DIBS scheme.

In Penang, more radical measures were announced recently to make housing more accessible to the people. This includes the imposition of levy on property transactions to curb speculative buying and the moratorium on sale of affordable and public housing for five and ten years respectively.

The point is that making home affordable is not an option. The real question is how. Home prices must reflect the real economic fundamentals. It will rise and fall base on demand and supply. And like all economic goods, the market must be efficient and competitive to ensure a fair price.

I believe the measures taken so far to cool down property prices are reasonable. These are mainly punitive in nature. What are also needed are measures to support genuine home ownership and investments.

The Singapore Government’s investment into HDB homes is a good tested model. Malaysia has similar schemes but lacks quantity, quality and locality.

Tax incentives like deduction for first time home mortgage will assist first time home ownership. This was done on a limited scale for homes purchased from March 2009 to Dec 2010, with a RM10,000 per year tax relief for three years. The scheme should be made into a permanent one.

Developers will also be encouraged to reduce profitability if the risk of their business can be further mitigated. These include timely approvals and transparency on land use and densification as well as better infrastructure planning.

Developers should also be allowed to withdraw a project launch and return deposits on bookings if the launch fails to achieve the pre-disclosed sales target. This eliminates further financial risks to developers, buyers and the banks.

On balance, the rise in overall home prices in Malaysia is consistent with income growth. It is only in urban areas where housing affordability becomes a major issue. I suspect this is in part contributed by speculation.

Access to affordable housing is a basic human need and a fundamental responsibility of every government. As such, the degree of speculation on homes must be contained in every society. While punitive measures are necessary, positive measures to encourage home ownership and investments must also be formulated as a comprehensive solution.


Tong Kooi Ong is executive chairman of The Edge Media Group. Feedback is welcomed at www.tongkooiong.com.

Interesting fact quoted is:

The national average home price of RM269,324 would be able to buy only about 200-300 sq ft in the city centre, or half a shoebox apartment.

Indeed, statistics show that the average price of homes in Kuala Lumpur are 130% above the national average, at RM620,758 while those in Selangor are 50% higher, at RM405,836.

At the end.. are you trying to say economic is good.. so trying to persuade ppl to buy buy buy? U are agent or flippers? How many house u have in hand and how much u plan to sell..

I read his article clear & precise he is talking about subprime which part you don't understand ??
I am afraid u r the one ignorant about subprime.
http://www.investopedia.com/terms/s/subprimeloan.asp

Please note he is talking about a special property loan to civil servant.

On a different note can a average urban earning 6200 affort a average KL property at 620000 ??

If you are earning 6200 p.a.(??), normally you dont expect yourself to go for 620000 prop. Simple, stay where you are and work harder. If 6200/mo then no prob. Sap sap sui.

lol

This post has been edited by tangibee: Dec 28 2013, 10:14 AM

If you are earning 6200 p.a.(??), normally you dont expect yourself to go for 620000 prop. Simple, stay where you are and work harder. If 6200/mo then no prob. Sap sap sui.

Offcoz per month lah ! if per year need to live under the bridge in kl already..lol
yes with 6200 gross probably one "may" get 620000 loan max 35 years, what I mean is can u afford to live a decent life after paying the monthly installment, don't forget there is car loan, personal & family expenses plus a bit or emergency saving fund.

Frankly I have no idea how bank allowed 70% income going into paying household debt unless living with paying 5% min credit card debt to stretch one financial capabilities beyond max point or hutang here & there. .sigh

70 % LTV is a conservative evaluation bro.. Bank will scrutinise everything and your credit flow in your credit card also in their pocket..

Saw news jobless rate have up.

No worries. We still have the rich folks to sapu everything.

For monthly rm6200/mon.

Quick est:

Epf n income tax - 600 + 500
Car loan - 800
500k loan - 2500

Remain - 1800 for everything else. Taugh life in big city!

If working for people, 6200 is for manager and above. Poor middle income.

50% of household should live in apt or condo:
http://www.theborneopost.com/2013/03/28/av...me-hits-rm5000/

This post has been edited by gspirit01: Dec 28 2013, 12:03 PM

Nowadays Manager also susah..lol

High income nation by 2018 mah ! So must increase price then u all will find way to increase income loh ! if not u all lazy bum become so free to gather & ask for price turun...