i think developers would just reduce the unit size and charge RM 999,999.99

most flippers don't buy >1mil property to flip anyway

but i do think it's a good move to encourage developers to offer more units at the price of less than 1 mil but the limit is still too high to make any significant impact

the last major house price crash in Malaysia was 97-98. there was a massive reduction in house price during that time. unfortunately the majority of the population did not benefit from the reduction of house prices because:

1. Economy was in recession. People are worried if they still have jobs.
2. Banks freezed almost all loans.
3. Even if loan was possible, the loan to value ratio was very low
4. BLR peaked at 12.27% in 1998

Only people that really profited from the house price crash was cash rich buyers who can get really good deals due to desperate owners

The problem with house price dropping by 20-30% in a short time is that banks will be more prudent. If a 1mil house drop value of 20% to 800k within 2 years, chances of getting 90% loan for the 800k is very low because the bank is worried they might not be able to recover the loan if the property goes up for auction.

So the bank might do more risk assessment and decides it might drop by another 30% to 500k instead and offers the buyer 70% of 800k instead, which is 560k. This will mean the buyer have to fork out 240k cash just for the downpayment alone.

Best thing for the market is to let the market decide. I think a price correction is happening now, but it's not something drastic, which means it is pretty stable.