I don't exactly know but just my opinion.
If sign up rate to loan is dropping = growth rate to collect interest rate drops which sole income to banks.
Don't you think banks will go back to BLR +0%? Or worst BLR + 0.x%.
Meaning no more minus rate from BLR.

You know la this banksters ... they need to report growth income very year ma ....

Repeat

This post has been edited by HuiChyr: Jul 12 2014, 03:01 PM

Not yet la ... don be too sam kap....
Wait till USA increase rate ...which gonna be long time from now.
Then Msia will increase to in tandem.
Now Msia GRADUALLY increase meaning they are expecting USA to increase soon...
GRADUAL increase no shock to the market ma. ....

Rate of above 10% happened before.
What I'm saying is banks to need to make money ma ...
So they move up their profit margin la... meaning BLR/BR/ KLIBOR + x% ..etc

Competing rate bcoz there many new signees for loan ma.
Now already dwindling, they focus on EXISTING customers with loan to squeeze money from them.

I belip this thread should rename as:
4 Critical Signs of a Bubble Market V8

Yup .. that should be the way investment is done.
The comfort zone is within the scope of your own financial capability.

Not too sure if you followed the forum "4 Critical Signs of Bubble Market .... V1 -7"
Bear2 is the leader for DDD camp. And ManutGiggs has been cajoling Bear2 to buy .... well, coz Bear2 & his GF been looking for a place of their own. It's a frenly banter between Bear2 and Manutgiggs.

So take it easy bro. ....

Sometimes it has to do with luck too. For example, my fren was looking for a house in Putra Heights. Average price was RM750K. But he found one old woman planning to sell and move in with son & family after the husband past away. She sold it for RM500K. So situation like this do happen. That property was around RM250K when launched.

So buying property for own-stay within your budeget is important. For investment, I would agree with you. TOO EXPENSIVE liao. ... best invest in other stuffs.

That's not to say those who already bought properties for investment will definitely burn. That too depends on their financial ability. If you invest too heavily with not much monthly income to sustain ... sure cia lat lor.

So you already ready your bullets to repo them is it .... Hahahaha...

OK ... lets put in persperctive about this thread .... The interest rate (IR)

Yes ... up by 25 basis point doesn't count for too much in monthly installment.
But this is where the speculation begins. Why? and What will happen?

Why?
It has to do with foreign exchange rate. If BNM maintain low IR, there will be a shock to the economic system when USA increase their IR. Hot money will leave our shores and price/inflation will increase. Ppl will suffer when food (& other stuff) prices go up. Property too.

Not too long, hot money left the emerging markets but BNM managed to fence of drastic exchange rate movement with our foreign reserve fund. BNM cannot afford to rely on that ALL the time. So interest rate must go up.

Many economists are expecting USA to increase their IR after tapering but still very speculative. Chances are very high.
That's why BNM increase it GRADUALLY ... 25 basis point at a time. That will depends how the economy is doing and adapting to the increase.

Imagine when USA increase interest rate and BNM suddenly increase 75 basis point the next day .... the shock will shake the market.

What will happen?
IF and only IF BNM keep increasing IR in 3 times at 25 point each time. It will slow down the market for sure but the expectation of increase prepare businesses and speculators to the event. NO shock to the market ... but how businesses or individuals with high debt ratio survive .... more will die. Others with strong income or cash holding will survive. So it depends on own financial ability.

So the significance to IR increase is the beginning of what's to come. It may not show any effect yet but it'll be show in time.
Question is 25 basis point x 3, is it enuf? How much will USA increase their IR? That is yet to know.