Don't think their margin really BIG. If so we won't have so many abandoned projects in our nation previously, make more than 10k++ ppls suffering right now...

u getting Fixed Rate package right? if BLR fluctuation happened, bank dont have authority to advise the fixed rate interest that agreed in the loan agreement earlier...

their margin is really that big, other wise they won't be that rich.

houses in malaysia are way overpriced, most of the houses are sold twice the price of the cost to build one.

fixed package only got one PBB 5 year fixed at 5.4, other banks are flexi package.

same with me taking the same packages from PBB...
hopefully inflation or recession happen within this 5 years...
later economy may stable and BNM giving better BLR rate after 5 years and advice for lower BLR from PBB...

This post has been edited by gkl83: Jul 1 2008, 07:16 PM

All,

It does not matter whether the developer has thin or thick margin.

A) If the house is not selling, it MIGHT be more profitable for developer to abandon the project and leave sold house half completed.

B) If the project is completed, they may sell at any price just to stop the bleeding. Or, they will build mor ehouses.

<< Why build more house when there is less demand??>>

C) In USA, there are developer that is doing this now. They have to in order to get NEW LOAN and MORE MONEY to service the loan of the OLD project that cannot sell. They have to keep on building to stop going bankrupt.

D) This is similar to people applying and getting new credit card to pay the minimum balance of the OLD credit card debt.

Dreamer

wanto ask , is it possible for a project tht is 75-80% sold n is their maiden project in their big piece of land to go abandoned ? chances are?

yah loh, praying hard for economy to recover within five year. not brave enough to let my largest commitment every month be subjected to changing interest rate during this trouble time. better safe than sorry.

This post has been edited by robertngo: Jul 1 2008, 09:20 PM

I got my fixed interest rate from AIA...less worried...

Lets put it this way, whether or not to buy a house now really depends on your needs. If you are an investor, of course you have the luxury of waiting for the right price to come along. if you plan to get married of whatever reason that requires you to get a house in the near future, you got no choice, you cant really wait for the price to go down. Should there be a big time end of the world recession like some of you guys predicted, buying house will be the last thing in your mind.

@tzeyin,
Yes it is possible.

if the project is 80% sold also does not mean the company have all the money needed to completed the project, the worst thing is the developer develop until like 70% completed and run away, all the buyer need to pay loan on their 70% completed property

I guess time will tell which way the prices will go in the midst of this coming recession. I'm still pretty certain prices will be driven downwards instead of up

Congrats Coincidence or not, after the announcement, a banker called me to say the offer letter is ready. Read the letter today - very competative rates

Today's Sunday Star has some related articles -

http://www.thestar.com.my/news/story.asp?f...3487&sec=nation
Builders cautious about starting new projects

http://www.thestar.com.my/news/story.asp?f...3232&sec=nation
Desperate times force contractors to turn down government jobs

http://www.thestar.com.my/news/story.asp?f...3489&sec=nation
Ministry may cut tax to help developers cope

http://www.thestar.com.my/news/story.asp?f...3491&sec=nation
Contractors return jobs for government projects due to rising costs

http://www.thestar.com.my/news/story.asp?f...3113&sec=nation
Housebuyers hope there won’t be delays

This post has been edited by joe_mamak: Jul 6 2008, 06:01 PM

demand and supply will determine the price of houses, not cost. some developers have to build, because that is their source of income. if they dont build, they dont have money to pay their staff, to settle their borrowings etc. as such, they must keep to their plan.

some developers abandon their projects because or bad budgeting. some abandon their projects because of sudden surges in the cost of materials.
some abandon their projects because they have siphoned all the money out of the company, and they cant pay their contractors.

also, don't get too excited about the blr being maintained. i think it is just a matter of time before they are forced to increase it. spending is still high.

i got a friend who's a small time developer....he told me the margin around 40%....


so you are right, it's sold almost twice the cost to build one.... but according to my friend...high risk, high gain la... they are risking all their money to build the houses...so it's proper for them to reap high rewards as well...

johnsonm, care to elaborate ur thought's on this?

kevyeoh,

<< they are risking all their money to build the houses...so it's proper for them to reap high rewards as well...>>

Come on. Please do not be so naive.

1) They get payment upfront from the buyer.

2) They borrowed money from the bank to build the house.

So, they are NOT risking their money. And, if things go bad, they can siphon the money out and abandon the project. And, you CAN'T do anything against them. All the risk is bear by the bank and the buyers.

Dreamer

worth buying house now, but must make sure that the location of the house is good (no.1 priority)

and of course your income is stable to pay the instalment