does this gives you more confident?

http://www.thestar.com.my/Business/Busines...-interest-rate/

KUALA LUMPUR: Bank Negara says it has no immediate plan to introduce new lending curbs, even as the household debt level remains stubbornly high, but it is keeping its option to raise interest rates.

“The current measures are taking effect, we do not want to cause an over-adjustment.

“Our economy has reached growth on a very stable trajectory, and this is what we want to achieve,” Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz told reporters at the sidelines of the Asian Banker Summit 2014 yesterday.

The central bank has kept the OPR steady at 3% since May 2011, which had enabled Malaysia to sustain a steady growth of 4.7% in 2013, despite the challenges in the global economy. Zeti said policy makers would assess in July if there was a need to adjust the OPR rate.

“There are many other pro-growth measures in place and any adjustment will be to the degree of accommodation, and the monetary policy will remain accommodative, it would not be a policy of monetary tightening,” she said. The market is expecting Bank Negara to increase its OPR rate by 25 basis points to 3.25% at the July meeting based on the strong growth in the first quarter of 2014 at 6.2% and higher inflationary pressure, which rose 3.5% for consecutive months since February and 3.4% in April.

Bond and sukuk yields have increased on the expectation of the rate hike. There are also concerns that lending curbs that are already in place coupled with higher borrowing cost would hurt demand for properties.

In July last year, Bank Negara launched macro-prudential measures involving the shortening of mortgage and personal loan tenures to rein in escalating household debt.

“The measures taken are beginning to take effect, mostly personal loans, and some effect on household loan growth,” Zeti said.

The household debt growth moderated to 11.7% in 2013 from 13.5% in 2012.

However, the household debt level reached a record 86.8% of GDP at end-2013.

Zeti said Bank Negara was not trying to restrict borrowing especially by first-time homeowners and those who were credit worthy. “The impairment ratio of the household sector is about 1.8%, in other words the portfolio of the household debt is sound at this point of time,” she added.

On another note, Zeti said deeper economic and financial integration in Asia was important in paving the way towards a more dynamic and competitive region.

“Further benefits to Asia were evident in the more recent period, when banks within Asia stepped in to bridge the gap left by the retrenchment of lending activities by some of the European banks, thereby mitigating the impact of the financial crisis on the region,” she said during her keynote speech at The Asian Banker Summit 2014.

just wondering, has the effect took place then? the measures?

IMO, there is effect on loan growth. But it failed in bringing down overall property prices. Maybe it is not BNM's intention to bring down prices at the first place ? I think if there is no further measures, price will grow by a small %, like it used to be in the normal years.

Ok there are actually 3 way for house price to drop:-

a) external/internal economic crisis - I think this one everyone acknowledge
b) house are priced above the targeted market - so as long as there's targeted sui yi buying the house, the house price won't drop. But if the targeted sui yi salary cannot get loan to buy your house, you can't sell also. So you need to reduce your house price.
c) there's no more sui yi in the market - means hor, every sui yi already bought a house. All left over is those that can wait to upgrade their house.

She has no intention to make u-turn, is mainly for slow it down. Obviously the price acceleration has slow since then. The intention since the cooling measure never mean to hunt the prop market down, seem like u wrongly interpreted what the bank Negara want, and thought they are try to create the result u wan.

This post has been edited by kradun: May 22 2014, 07:46 PM

Sound like make sense bro. But this is bad news. Means my RM700k condo won't double in 2018?

Dont limit ur potential. It might go beyond that.

Fuiyoh bro. TQ. My condo got expat and in prime area.

WOW.. let see we have:

a) slow down in transaction
b) bank negara increasing OPR
c) Zeti mention measures taking effect

hmm what is next?

a) price increase and keep increasing
b) price remains stagnant
c) price drops in selected areas

which one is more probable?

I think all this is probable:-

a) price increase and keep increasing in prime area
b) price remains stagnant near to prime area
c) price drops outside prime area

actually, why is there a need to slow down? even OPR increase also such a small margin.. how can buyers and investors feels anything ? like ants bite only... like that slow di ? if economic collapse really we can see worse effect lor..

of course Zeti never meant so, but whether investors and speculators are of good capacity to withhold the slowdown and yet greedy at the same time to profit 200k and keep holding... hmm ..

message is clear.. investment will slow down, more properties will be in holding mode, now, lets see any drop out investors? hehehe...

I think so too. Sap sap sui increase nia. House increase price faster than OPR increase. No prob bro.

Zeti also got buy house. You think she'll let her own house price drop ar?

these 2 are enough for me.. option a was never even a consideration to begin with.. so as showtime747, probably in option b... old prime areas where got feeling one bought so cheap, just merely renting for 10 years all money already back.. now just see profit less or more.. new purchase lehh and OUTSKIRT sumore lehh...

zeti house= our money, drop no drop not an issue..

Actually these 2 already happening in subsale I think. No?

what u mean zeti house = our money?

Good Luck hope you can get.

wah dangerous statement.. must confirm with agents taikor first.. got such ting or not.. i observed green terraine lu dropped lu.. developers sales leh slow slow.. surely got other drops geh..

agents can be a good reference if they were willing..

zeti say only want to move to new house, everybody (developer/bank ) rushed there with free house di.. understand ah?

that small % may take few years before it commence it turtling up effect