Wah lau ...Eve of CNY also got ppl comment.
Not bad ah this thread ....

anyway .... Gong Xi Fa Cai to ALL DDD or UUU campers.

Well, Zeti just announced their OPR ... no changes... 3% ( I believe)
So the UUU campers missed the bullet.
Interest rate will be the needle that prick the bubble ... or in your case .. the invisible bubble.
You can keep on cheering UP UP UP for now.

That right. And the portion of the chicken is smaller too .... bloody hell.

RM drop bcoz of foreign investors dumping Msian stock, bonds and currency (RM). 'Hot money' as they are known.
Especially on the bond side, interest rate should rise. Hence OPR, BLR, KLIBOR should rise in tandem. Theoretically, this give burden to borrowers with higher monthly installment and squeeze them to dump their property.... price drop.

However, Pn Zeti maintain OPR. Meaning they have the foreign reserves to buy back the bonds to maintain the rates. Hence BLR will maintain and property will be fine. BNM probably focus more on bond buying that RM because it's link to lending rate thus business, properties etc that are on loan will not be badly affected. That's why RM decreases in value. However, in currency war the objective is to have weaker currency to improve export. On the bad side, inflation will affect the Rakyat.

Other emerging markets are feeling the pressure on hot money leaving their countries, Argentina, South Africa, India, Indonesia etc... had increase rate.

Pros & Cons .... hmmmm ?
It really depends on your CURRENT economic situation and the central banks objectives. The noble objective is to have economic stability so business can run as usual.

Using foreign reserves:
The main purpose of foreign reserve is to support own currency. Msia and other emerging countries learnt their lesson during the Asian Eco Crisis. Thus, BNM using it now for that purpose is correct... imo.

As for the other countries.... maybe their foreign reserves are not strong OR there is no perceived bubble in their economy.... I'm just guessing. This deeply depends on their export capability. If your export is good, your foreign currencies holding is more. So weaker currency improves export which translate to improve foreign reserves. BNM may let RM be low for awhile in order to replenish the foreign reserves required to purchase their bonds.

Using Interest Rate:
Increase interest rates helps to bring back hot money into their economy hence raise their currencies. It's like Bank A give 5% in FD while Bank B give 3%.... ppl will deposit their money in Bank A. So in this sense, we are looking at countries. However, this have side effects.

Raising interest rate will also slows down economy. Businesses may hire less or opt for VSS if the financial obligation is too high. Since 2008 subprime crisis, interest rate has become impotent tool to balance the economy. Quantitative Easing (QE) by USA also make it really difficult. Printing money (QE) flood the world with cheap money (low interest rate), inflating bubbles in every sector of investment vehicle. Top 3 economies in the world are doing that .... USA, CHIna & Japan. China is different that they peg Reminbi lower to USD.

Central banks need to play a balance game with a correct interest rate. But with boom and bust in economy, this is getting harder to dampen the swings. However, I believe BNM is prudent. They kept BLR at 6.x% for sometime. However, banks were lending out BLR - 2.x% giving an effective rate of 4.x%. This is due to QE earlier mentioned. Competition with cheap money. BNM is coming out with new framework for housing loans. Base Lending RAte (BLR) means BASE or the lowest rate. Banks broke that rule.....

That's why economist with Austrian and Minsky background cry foul when Fed Reserve (USA) started QE. They expected FED to increase interest rate instead.

U are right. If currency drop any further, it would be detrimental to the Rakyat due to inflation. But instead of raising interest rate, BNM can PEG RM to USD at a FIXED rate which they did for the Asian Eco Crisis. But that was Mahathir's time. He got the ballz to do it .... Ah Jib kor on the other hand got his ballz kept by Rosmah....

You can go to this thead for discussion like these
https://forum.lowyat.net/topic/3117448

Thanks bro ....
I'm still learning too. Hopefully, others can add in some comment to further my knowledge..

I'm still believer in fundamentals and political scenarios. These are the 2 aspects govern the market or IS the market.
BNM is influence by political power too and not necessary a bad thing. It depends on vested interest of these politicians. So the late raising of interest rate has it purpose.

IMO .... BNM allow banks to lower interest rate below BLR is for the PRIVATE sector to provide housing to the ppl in a capitalist nation. Since housing is a basic necessity and the most expensive compare to food, clothing etc. The runaway factor is speculators that push the price up too high. So is it too late? We will have to see .... as being discuss here in this thread .... bubble or no bubble. ...

You can go to this thread for such discussion:
https://forum.lowyat.net/topic/3117448

IMO ... the push factor can be cured by raising interest rate.
Property rising is really due to cheap/easy money. Banks set interest rate below BLR allow ppl to buy and speculators to flip left and right. And that was at the start abt 10 years ago. However as time progresses and property prices keep going up, ppl began to forget the runaway prices. They believe property will keep going up.

Raising interest rate will only pop the bubble. That's what BNM is trying to avoid. As another bro here mentioned, BNM increase the rate too late..... to a point with eminent detrimental consequences.

Agree 100%.
I have a fren who bought a condo recently for own stay. He was worried his condo will drop in price.
1. The condo will hv less value.
2. He could have bought it cheaper if property crash.

I told him these 2 factors does not make sense. Paper value may drop in value but the REAL value is, he has a roof over his head. So this advantage is priceless. More so he had been moving a few times bcoz landlord selling the place he was renting.

On 2nd factor, buying it cheaper at the downward trend; how would you know when that will be? Also, the rental he's paying every month is best used to pay up his own condo. Imagine signing a 1 yr rental: RM1000 x 12 = Rm12,000. Not forgetting his moving cost from one place to another. That money is good for paying of the condo.

Property buyer for own stay usually have the right mind set; affordability & common sense . That itself minus off all the overpriced property. So when you mentioned a RM800k prop, is it a landed or condo? Buyer will probably nego a bit for landed but absolute NO for condo. Unless the buyer recently becomes a millionaire.

More over, for own stay, the buyer will be there for long term (so during that period,price may go up and down)... unlike the flippers.

This post has been edited by HuiChyr: Feb 5 2014, 03:20 AM

Ok seriously. I know I didn't asked those accounting questions but it's good to learn new stuffs right?
So please if u ARE an accountant. Pls contribute the real info.
Just begin you comment with 'I'M AN ACCOUNTANT' .... then the facts. Thank you.

As for those who contributed the infos, just post 'I'M AN ACCOUNTANT' if u r one so at least I can take your previous comments seriously.

If you are still staying with parents or just renting a room, that strategy is good to go.
But if you are renting the whole house... no lor.
Imagine renting for 3 yrs already while waiting for DDD? Assuming you are paying rent Rm1000/month x 36 (3 years) = Rm36,000. Better to use that money and commit to a property for own stay right?

DDD or UUU is just across the board view but if u are earnestly hunting for the gem in certain area. You bound to find it. I called that mini bubble burst. One individual willing to let go at much lower price than normal.
That's what happened to a fren. Found a Singaporean seller for Impian Meridian Condo, 990sft for Rm420,000 after renting for 3 years.

Actually for own stay buyers; the factors to consider is well within yourself and all are known parameters.
1. Your salary & savings => affordability & downpayment
2. Area your prefer. MRT/LRT, shopping mall, schools ..etc around your new home. How important is it for you?
e.g. U & yr wife have a car each so LRT is not important ...
3. How long you plan to stay before upgrading to bigger or better place?
IF you stay in a prop for 10 -12 years, chance are your prop value has gone up. Sell that for a better prop.
4. With common sense, you already filter out the overpriced properties.
5. You ONLY need ONE property.
6. Don't forget, during DDD period bank loans are harder to get approved.

Unlike speculators, they have to consider factors for the general public/market. First factor is LOCATION. Hence, LRT, shopping mall, schools, etc....so the pricing is usually HIGH. So affordability comes 2nd. Flippers with strong savings to put in bigger downpayment for positive cash flow from rental or strong holding power then it's good to go.
No point buying somewhere outskirt and hoping the area would boom .... like bukit Beruntung.
But if for own stay, Bukit Beruntung is ok ... my parents been staying there for the past 16 years. Nice place to stay but not nice for flippers.

This post has been edited by HuiChyr: Feb 5 2014, 02:25 PM

You see ... that's the main point I am trying to make. We are guessing the statistics. Everybody here is also guessing it's gonna be a DDD or UUU. It may or may not come to pass.
My advise is if you have the heart to buy a property for own stay.
1. Rely on SOLID facts which is within oneself which were presented earlier.
2. Go and hunt for the best deal possible 'coz u only need ONE property.
3. Search for "mini bubbles" just burst. Willing seller at lower than market price.
4. Everything else is for flippers/speculators to consider. e.g the Bukit Beruntung case posted earlier.
For own stay: Bukit Beruntung is good.
For flippers: Bukit Beruntung is bad.

Filter out ALL the noise out there and go for it bcoz in the LONG run, property goes up.

Yes ... best judgement is looking for gem. I am a DDD believer but how long hv to wait for it to happen?
Look at BNM decision to maintain OPR ... that will prolong the property bubble for a bit longer. I was expecting BNM to raise it.
Look at USA, who would hv expected Uncle Ben to print money like hell..... maintain low interest rate. And he did it for 6 years.
These are the decisions out of yours or my power. That's why I said make decision within oneself for own stay buyers.

DDD will only happen in drastic manner when BNM increase rate. That ... to me ... the decisive indicator.

If you think long run argument is not valid then don't rely on it. The are many other factors I gave which is applicable to own stay buyers.

As for your statement in BOLD highlight; nothing is ALL left or right. I use my wisdom to make investment decisions. So far it had served me well.

Hahaha ... don la like that bearbear ...
I actually like ppl reply my comment ... against or for my opinions.
Bcoz I learn also .... I hunting for "gem" in knowledge too.
Also what ppl are thinking ....

This post has been edited by HuiChyr: Feb 5 2014, 05:43 PM

Wah lau .... u no scare of bearbear meh?
He repoman ma ... later he repo u with no mercy how?
Hahaha ... just kidding la ..don take all the comment so seriously.
We are all here to learn.

Ya lor. So many agents and flippers trying to keep the mood Up up up....
Trust me ... my business deals with pump repairs. Many building managers told me collection for maintenance is getting low.
Cannot repair 2 pump then repair only one lor. Some more hv to give 60days terms. Aiyah.... looks like siao liao...

Many owners trying to hold by paying installment first. Deal with maintenance fee later. Kena 10% late charges also nevermind bcoz JMB cannot repo the property mah. Actually inside info, Majlis also malas want to 'sita' the property. I was a committee in my own JMB. I should know. Cut water bill or bar from carpark also no use. THese properties a vacant.

So my information also comes from real market scenario and it doesn't look good. For own-stay-buyers (OSB), pls make sure the property is at least 70% occupied. Check out at night around 9 -10pm to count the lights.... hahaha...
At least you know ppl staying in hence maintenance fees are collected.

Don't want to stay in an apt/condo where lift doesn't work la, water shortage la .... bla bla bla....
Heart breaking for own stay purpose la.

It's not the investment decision I need from the accountants. It's the accounting format.
So we can read the financials correctly and make our own investment decisions.
If we don't understand the accounting format, how can we make sound decision right?