how sustainable is the current property market? most of the houseowners are currently servicing their mortgage, with the recent hike in prices on almost everything, how long do you think can houseowners continue to service these loans when their disposable income is shrinking wef this month. Things is going to get worse if interest rates rises. The current NPL of our existing bankd is heading upwards and as far as i know, a lot banks has already called back on unused facilities. people think that since new houses is going to cost 30% more, it doesn't mean that the house they are currently staying is going to appreciate by the same quantum. Therefore, in general demand is going to drop, people will hold back on buying property, those who cant service their loans will sell out and maybe purchase a smaller house. People may also want to nearer to their workplace. Our country economy is now in a mess. Goverment policy is flip flopping and and this is bad for the business environment. We are already seeing a acute slowdown in spending since the fuel hike, people can't even sustain their current lifestyle. Some of the property in good location areas like ttdi, damansara, subang jaya, hartamas, pj area is way overpriced for what it is worth. I would think that property prices will decline despite what property owners might want to believe otherwise. Market forces will correct itself if demand and supply is not balanced out. And please remember that there is a lot of short term investor in the property market and they will bailout sooner or later.

my company have a substantial amount of overdraft facilities from the bank..normally we will utilised only a portion of this so called facities granted by the Bank and they remain there as long as we have a need for it. recently, Bank Negara has given directive to all Banks to call back any unused facilities which are floating in the market. e.g I have RM10 million facilities and only use RM2 million of it in the form of overdraft. The remainder RM8 million will be called back. If you need more int he near future, you have to put in a fresh application, you can't ride on your prvious facilities anymore. Bank Negara is tightening on credit facilities for reasons best known to them only. With the current rise of NPL's and i believe this will increase further i can't see how the value of the property market can be sustained anymore.

It is not a matter of hoping house prices will fall for those who can't afford, house prices will fall if real income detiorates and demand wilts. In London, during the 90's house prices in the city centre fell by almost 30% and stayed that way for almost 5 years. Why? that was during the crash of the yuppies era. Short term gains was wiped out overnight, interest rates rosed beyong sustainable level, banks went under due to NPL's. Oil prices went up, remember the Gulf war. World economy slump. Like i said, property owners of course wished that their property will continue to appreciate but then if there's no buyer, and when you are struggling to service loans, all that it is worth is on paper only..if you have holding power thats fine. but what if you don't. Can you still hold on?

All is not lost as the chinese proverbs says, for every crisis an opportunity looms..thats why there will be people who lose during bad times but there will also be people who gain during a crisis..everything in life has its own way of self correcting itself..