Thanks
I will go reits topic look look see see

“Too many loans are still made where the borrower has the skinniest of income buffers,” Lowe said in the text of a speech to a Reserve Bank of Australia board dinner in Melbourne Tuesday. “In some cases, lenders are assuming that people can live more frugally than in practice they can, leaving little buffer if things go wrong.”

https://www.bloomberg.com/news/articles/201...ky-home-lending

Believe this statement apply to the kangkong land too.

KUALA LUMPUR: Malaysia is not expected to see a property bubble in the next five years, said iProperty General Manager Data Services, P. Premendran.

He said Malaysia has prepped fallback measures from the 1997-1998 economic turmoil and from the US sub-prime mortgage crisis in 2008.
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“Malaysia would not be heading into a property bubble as the next five years look promising,” he told Bernama.

Although Bank Negara Malaysia has said it would take some time to stabilise house prices, Premendran said, the silver lining is to slow down economic growth.

He said the current economic landscape allows the market to re-adjust and respond to factors that correlate with the rising living costs, stagnant income growth and the increase of house prices.

“This is why we are seeing a stabilisation of prices,” he said, adding that Malaysia’s National House Price Index rose by 5.36 per cent in the third quarter 2016, slightly lower than the 7.35 per cent in the same period in previous corresponding year.

He said house prices rose more than the average Malaysian household income since 2009 till 2015, recording a double-digit growth between 2012 and 2013.

Premendran said the market was currently supported by the coming property projects initiated a year ago.

“These projects would be able to match the public’s expected pricing for houses,” he said.

House prices from 2010 surpassed the average Malaysian household income, ahead of the implementation of Goods and Services Tax.

Moving forward, Premendran said, affordable houses continue to be in high demand, similar to situations in the UK, Australia and the US.

“The government’s initiative to boost infrastructure was a positive move for the Malaysian property market.

“We should give the market ample time to fix itself and we will start seeing more reasonable pricing for houses,” he said.

Meanwhile, Premendran said, there are plenty of choices for millennials to own their properties if they could compromise on size and distance between home and workplace.

He said Australia’s benchmark for a good quality of life is 30 minutes, whereby if a person arrives at the workplace within half an hour, it is considered good.

Prememdran said the latest housing schemes, such as ‘My First Home Scheme’ and ‘Reside-and-Purchase’, enable first-time house owners to receive their keys sooner than the usual time frame as compared to the normal regulatory process of house purchases
http://www.nst.com.my/news/2017/04/227074/...80%93-iproperty

Kv property price has been on downtrend for 8 consecutive quarters. If current market sentiment persists, downtrend is likely to accelerate.

Until oversupply is fully digested and relax in bank lending, property bull run or bubble is unlikely.

The government and Bank Negara Malaysia (BNM) would continue to organise educational programmes, with the assistance of government and private agencies, on financial literacy and sound financial management as only six percent of Malaysians have sufficient savings to last six months, says Deputy Finance Minister Othman Aziz.

http://m.malaysiakini.com/news/378126

This number is consistent with wealth report and epf statistics.

Mostly kampung ppl....

Kampung people expenses is lower than urban dwellers.

6% likely mean those are bank priority/privilege customers.

This post has been edited by icemanfx: Apr 6 2017, 07:55 AM

The property market is expected to continue from where it left off last year — slow, challenging and uncertain.

Sales of properties — especially high-end condominiums, retail malls and office spaces — had been muted in the last two years, creating overhangs in certain parts of the country and leaving speculators in a quagmire over their investment.

Developers rode the boom of easy financing, allowance of the Developer Interest Bearing Scheme, rising profits and endless demands from 2010 to build more homes and offices. However, that euphoria is all but dead now.

UEM Sunrise Bhd MD and CEO Anwar Syahrin Abdul Ajib said 2017 is forecast to be another challenging year for the property sector, after two years of sluggish performance.

He remarked that weak consumer sentiment, rising cost of living, low income growth, high household debt and the relatively high loan rejection rate posed a challenge to the industry.

“Home price rise has eased to a single digit in recent times and prices may continue to trend slightly downwards before the market recovers — especially for high-rise homes where certain segments are facing an oversupply.

“And the first-half of 2017 (1H17) will continue to be a buyers’ market,” he told The Malaysian Reserve.

Based on data from Bank Negara Malaysia, 2016 saw the lowest percentage of loan approvals over the last decade.

Although total residential loans applied increased by 1% year-on- year (YoY) in 2016, the amount approved fell 15% YoY to RM87.7 billion from RM103.4 billion in 2015.

The average loan approval rate was at 42.3% in 2016, down by 7.9 percentage points from 2015. During the pre-global financial crisis, the yearly average loan approval rate was slightly above 60%.

Total residential loans applied for January and February this year were RM15.7 billion and RM16.2 billion, while the approved loans for residential property were RM6.6 billion (January) and RM6.5 billion (February).

Anwar Syahrin said the real estate industry was experiencing “a tighter lending environment” as loans approvals were based on net income instead of gross income, resulting in a low percentage of successful applications.

http://themalaysianreserve.com/new/story/p...%E2%80%99s-pace

For a developer to admit publicly property market is slowing down is exceptional.

With npl rising in residential sector, expect tighter lending to persists.

This post has been edited by icemanfx: Apr 10 2017, 04:26 PM

A lot of developers now are advertising on FB and IG 😂😂😂

Areas like Kajang, Bangi and even overbuilt Jalan Ampang got developer selling property at RM2XXk-RM3XXk range these days. But mostly relatively unknown developers or developers with "mixed" record or got high tensions cables or the project in the worst part of a decent location, so buyers will shoulder a fair amount of risk.

Threads like this make me think your wet dream of a property mart crash might soon become reality
https://forum.lowyat.net/topic/4264634
https://forum.lowyat.net/topic/4264540

But on the other hand, I've seen ppl with a million ringgit in their bank accounts, the money just lying there not utilized ... and the big malls like Sunway Pyramid and KLCC are full on weekends, so ....

My brave prediction is an economic crisis will hit sometime between 2017-2020. I wrote a short essay on why I think so, but deleted it because I want it to catch most ppl unaware. I want to watch the world burn

But in the meantime, I hope you are contend with your rented apartment. I'm curious which apartment u are renting, but I guess u are not telling

Economic recession is not the end of the world, about 90% of people will still have jobs; these people could afford regular lifestyle. visiting shopping malls is a favourite and cheap pass time for many, selected shopping malls are packed during weekends and holidays regardless beside we are not yet in economic recession.

kv property bubble was fueled by cheap and easy credit, a fallout of us qe. as income didn't rise in line or faster, the inflated property is not sustainable. long term equilibrium always prevailed. so either property price will drop or stagnant to wait for inflation to catch up.

most of those ride the bullrun will end up worst off than the beginning. more money to be made during economic recession.

believe many income didn't rise as expected, with more property vp, those highly geared will be financially stressed. any increase bank interest rate will almost tip them over.

our gomen re-base the statistics every few years, it is possible to find gdp contraction or larger than reported contraction a few quarters after, so don't be so hopeful the gomen will declare economic recession unless our neighbours have declared first.


This post has been edited by icemanfx: Apr 13 2017, 12:25 AM

Wow! Lots of auction unit.. some appear attractive to me!

I mean you hardly see Maytower auction unit!

http://auctions.com.my/pah/list-kl.asp

Jeng jeng jeng.. First the high end market gets affected, then once the mid range starts to get VP for their units, the domino effect comes in.


KUALA LUMPUR, April 17 — A growing glut in the luxury property segment here is pushing some owners to shave nearly a third off their asking prices in order to secure a sale or rental.

According to data from the National Property Information Centre (NAPIC) on residential homes here valued at over RM1 million, unsold units increased by over 9 per cent from the first quarter of 2014 to the same period a year later.

Cumulatively, this was equivalent to RM158 million worth of surplus units in the luxury home segment, based on figures from the first quarter comparison alone. Figures for subsequent quarters are not yet available.

Property agents speaking to Malay Mail Online also noted that the phenomenon was especially prevalent in the secondary market, saying owners in the Klang Valley, Penang, and Johor were now prepared to lower their asking prices.

“If you look at the property market in KLCC and KL Sentral, owners are willing to rent out office spaces and homes for RM3 and RM4 per square feet compared to RM7 and RM8 before 2013,” senior property consultant Jeremy Jr told Malay Mail Online when contacted.

“Owners lowering the price of their properties by 20 to 30 per cent is also becoming a norm these days,” the agent from Oriental Realty added.

The drop is also fuelling a vicious cycle. Lower rental yields are making it harder for owners to meet their mortgage payments, leading some to sell off their units at discounted prices, which in turn affects rental prices further.

With an excess of luxury property, Jeremy also said new launches were being affected.

Property firms are now aggressively promoting their new developments in the hopes of meeting sales targets, he said, albeit noting that they have so far resisted blatant price-cutting.

“Freebies like kitchen cabinets, plaster ceilings, 0 per cent down payment… these are among other (offers) developers give out these days to sell their new launches,” he said.

The zero down payment is effectively a 10 per cent discount on the list price.

The realtors who spoke to Malay Mail Online declined to speculate on reasons for the drop in demand for luxury property, but a study released in January by property investment firm JLL Malaysia attributed the decline to the slump in the financial services as well as the oil-and-gas sectors.

Depressed oil prices have hit the once-lucrative O&G industry hard, with even state oil firm Petronas resorting to layoffs. O&G expatriates were some of the main takers of high-end property, but are now a relative rarity.

“Sales and rentals for properties valued at more than RM1 million have been very slow in the past four years or so,” said property agent Michael Lim

“After almost six months, I just sold one condo in KL for RM1.2 million recently after the owner was willing to reduce the price by RM300,000,” he said.

More recent data from NAPIC also showed a general decline in transactions within the luxury home segment. From the second quarter to the third quarter of 2016, total transactions dropped from 2,014 to 1,826 — a 9.3 per cent decline.

The same was seen with high-end commercial properties that fell 10 per cent in the same period.

For Lim, however, the falling prices were not entirely negative. Buyers, for instance, could take advantage of the situation and get property in the area for up to a third less than the previous asking price.

But he conceded that the long-term effects would be detrimental to the overall development and area.

“If everyone is selling off their property for 20 to 30 less in a particular area, the value of the development will definitely start dropping,” he said.

When contacted, Malaysian Institute of Estate Agents (MIEA) past president Siva Shanker concurred with the property agents on the weak demand for high-end property.

Siva said that renting out expensive property would also be difficult as owners could only afford to go so low before it was no longer worthwhile.

“At some point, the asking price will be similar to the price at which they bought the property about three years ago, which makes no sense any more to sell because they are definitely going to lose money,” he said.

He predicted that the property market would grow in 2020.


http://www.themalaymailonline.com/malaysia...o-seal-the-deal

Provided oversupply is almost fully consumed by 2020.

http://napic.jpph.gov.my/portal/web/guest/...blishingId=4708

It seems incoming supply and planned supply is not slowing down. kv property price downtrend is unlikely to turn before 2020.

This post has been edited by icemanfx: Apr 17 2017, 01:56 PM

My self analysis will see a huge oversupply in the mid range market (450-800k) due to the current onslaught of properties launched since 2014 onwards.

1) House prices reduce by 5-8% average annually till 2022, since a lot of "investors" have overlooked the burden of forking out maintenance fee for their properties. With MF trending around 30-40sen/sqft currently, an increase to 40-50sen within the next 3-4 years (past trends of condo launched in 2011-2014 with mf fee of 22-28sen). a 1000sqft property will command 400-500 monthly in maintenance, eating out a sizable chunk of salary.

2) When management starts increasing mf due to poor collection from house owner, existing tenant can and will force management to initiate foreclosing against a property for outstanding mf as they would definitely not want to be burdened by unperforming flippers

3) Condos that are not family orientated, or for own stay purpose will attract subprime renters (maipren, habibis), reducing resale value of properties in prime locations. This is not to say that rental yield will be bad, its just tougher to off load the property to someone else who is looking for long term stay. Cost of repairing the house might go out due to irresponsible bad tenants.

4) Salary growth will be muted in the future as more jobs are being taken up by upcoming markets and also automation of most jobs that can be replaced by robots etc.

5) Low upside in O&G, Banking and other high income jobs will further put pressure on the high end market in the foreseeable future which will cascade down towards the mid range as existing condo-owners will not have much room for price appreciation as the high end markets are rather muted. with existing condos going for more than 450/sqft in the past 2-3 years, a 1000-1400sq ft house will cost 450k-630k before even calculating interest and maintenance cost that has been incurred for the next 5-10 years. Therefore even if the condo-owner is able to dispose it off at a 30-40% increase in property price, end of the day the discounted cash flow coming in 10 years later on will probably be even lower than just saving up the cash and investing in alternative investment such as REITs, mutual funds or businesses etc.

6) Just assuming every couple in Malaysia have a minimum combined income of 6k nett with no other commitments, they would still be hard pressed to afford any property above 600-700k.

Just my 5 cents on this. For property surplus to be fully consumed by 2020 is a rather optimistic presumption. Especially for those UUU hardliners.

Problem is the so called crash begins since 2014 till now.

Oversupply? Not sure bro...unless u tell me someone build twon towers in kedah.

One thing the market has failed to realised is how willingly local flippers are willing to gear themselves up in debt.
Added on to the very low savings most msian have, a new property will always be more attractive than a subsale due to the low downpayment, deferred loan payment for 3-4 years in hope that by that time their income would have increased enough to offset the new loan commitment as well as the ease of taking up personal loans etc.

A subsale property will have to be sold at a 10% loss compared to market price for a new buyer to purchase it without downpayment. Furthermore the buyer will have to fork up extra 6% GST on the sale price.

Simple calculation:

Property price : RM700,000

DP@10% : RM 70,000
GST @ 6% : RM 42,000
Stamp Duty : RM 12,000
SPA Legal Fees : RM 4,650

Upfront: RM128,650

* Loan stamp duty & Legal fees are ignored since it can easily be added into the loan.

How many people are able to afford even 100k upfront to buy a subsale property?
Hence the domino effect takes time to set it. Low interest rate, hot money flowing in due to QE from western market, China buyers looking for ways to diversify their undeclared money out from China etc have contributed a huge inflationary effect on the property market in Msia.

With the outflow restriction on China hot money, hiking interest rate in US and probably Europe in the near future will cause a massive outflow from emerging markets, causing a big wound for local investors to lick on their own.

A market crash in property prices is not going to reduce prices by 50-70% for all properties, outskirt places like Rawang, Kajang, Semenyih etc will be the places to suffer the most. Core KV area will have a downside pressure easily in the range of 30-50% for condo market and around 20-35% for landed units as the prices have appreciated tremendously with no major market correction happening since 1998.

guys, stop dreaming about property bubble.

sure, middle income group will suffer, but u need to know who holds the majority of properties in Malaysia.

it's the businessman & tycoons, also kronnies & gomen servants.

before they go down, they would have sucked as much money as possible from society and you would go down before them, for example making the economy crash.

sure by that time comes, many people will be forced to dump their properties, but you will also be unable to purchase them because local economy has slumped too much to buy a house.

for those businessman & kronnies, the money they sucked in by sacrificing the country's economy will allow them to hold on to their properties, and as property price collapse, they have more funds to sapu these properties.

when economy recover, we will see even bigger disparity between super rich vs commoners.

just look at 1997. the rich became richer. those that suffer, are middle class people & small time businessman. those on top will not get affected because they will use the country as a shield.

unless u have a way to stash ur ringgit in foreign banks, maybe by the time ringgit collapse u have more money to make purchase. if ur money is in Malaysia, forget about it.