Not the banks, but the valuers. The banks empanel the valuers which are different entities to the banks, to get a 3-rd party valuation of the properties, within reason. Usually they will use past transactions, but during hot times, the prices went up up and up (!!!) that the rencet transactions did not catch up fast enough..

so people were like "well last month someone bought it at RM500k, how come I can't get RM520k valuation for this property?!"

If the valuation doesnt match the selling price, that is fine, the house can still be sold/bought but the loan will be based on which ever is lower, either the MV or the selling price... so if the property was sold at RM520k, but the MV was only RM500k, loan would be given based on the RM500k.. there will be a shortfall and the buyer will have to fork out more cash...

This is the dangers of subprime cirisis. That is why I love it when Zeti made it difficult to borrow money, because the easy of credit will only make the house price go uncontrolably higher. I'm a good broker, I don't need speculation to drive sales because my services are tip-top. I would find it more difficult to run the business if the market crashes, than if the market is being tightened.

Since, you need to "beg", I'm guessing not many are willing to top up the differences even during hot times?
If not, you won't need to beg as buyers will just willingly buy above MV as they think there will be further appreciation.
Is my assumption correct?

Topping out is difficult, since not many have cash in hand, all they are doing is investing using other people's money. And when the credit is easy to get for everyone, you get an inflation. That's why sub-prime crisis leads to a bubble and everyone bought - except for TAN SRI ZETI the heroine.

Buyers would still need to pay the 10% of the price, so they actually believe that the price is "right" but they simply dont have the money to top up, and rely on the bank's money - and my begging the valuers to match the price.

When the market was hot and price is on uptrend, low risk for valuer to increase valuation.

its unprofessional for valuer to increase the price for sales. Indirectly, valuer also help to speculate the house price higher.

The valuer agency need to be monitored closely to avoid this thing from happening. Impose heavy fines to them

Yes, this is true, the many valuers face sanctions during my time... some were delisted by the banks for giving out outrageous valuation (if bank needs to lelong the property and the valuation did not match the previous valuation, the banks will kena lah)

Nowadays, such a thing isnt an issue, MV is usually higher than the selling price - but that bring about a different set of issues, some of which you smart gentlement ca probably figure out.

If valuation is higher than transacted price and in the event of default, valuer could be liable.

So bubble already or not?

You mean bubble burst already or not? If it has burst we would know.. right now everyone is saying either that we are in an bubble or there is no bubble...

but if it has burst, everyone would be in agreement.

Wow! Thats a drop!

Id say no burst yet..but its deflating.. so might not burst after all..

I fully agree, and this is because of BNM's and the ministry's having taken the steps to cool off the market in the past few years with the (re)introduction of the RPGT, the 70% MOF limit on the 3rd residential property loan, the minimum price for the foreigners to purchase their properties, the use of the net income to calculate eligibility vs gross as per previous etc.

When the lending is made more difficult, the market will cool down, and in a way this is good, because better to deflate than to burst.

Unlike stocks and commodities; property is illiquid, price takes years to bottom.

This line should be your siggy man, coz its definitely the most repeated point by you.

Problem is, properties are usually invested with a loan.. if the price deflates, even for a little, may cause issues for the investor. The bank may even do a margin call and ask for a payment, you don't need to wait for the price to bottom up like shares to face issues.

because there are still have some expect property price to drop like stocks or commodities.

That will depend on how strict auditors, bnm and banks in implementing mfrs9 and when they need to provide provision. expect those classified npl won't have an easy way out like previously especially those without individual title.

This post has been edited by icemanfx: May 15 2017, 03:22 PM

Id expect 800 sqft apartment to be priced around 250( currently around 300k) in major areas and should be cheaper in outskirt areas 1000sq ft around 300k(currently 400k) and landed to start around 500k depending on locations. This cud be the bottom price unless the economy deteriorate further. But then again prices might also stay at the current level before going up again..

Also logically a studio then would perhaps be just around 200k? (Currently they are from 300k to 400k)

I think prices of global oil would hv an impact too, what do you guys think?

1) what is the bottom price if prices weaken further?
2) is the economy looks like its going to weaken further or the worse is over?

price should follow rumah selangorku. thats afforable. Pr1ma is overpriced shit

I'ld say it has bottomed out, but it's a long long bottom. And becos it's a long long bottom thr r downside risks. I think, atm, house prices r waiting for d "real" economy (importantly, wages) to catch up.

http://www.theedgemarkets.com/article/chin...kandar-malaysia

How would china capital control affect property prices?