Dreamer, think some lenders now allow up to 50%-60%.....

33% actually.

I can attest to that. Last time i got one case, client income RM5000, loan repayment around 2k also approved.

i think some banks allow even more, i know for a fact stan chart allows up to 80%. ocbc even more

actually, i asked some loan officers before... the general rule ranges between 33% to 40% some banks allow up to 40%.

however, if you are one of the high earners (e.g. 20-30k a month), the banks will relax the limit for you... but this one got no fixed guidelines... go case by case...

*the above is only what i hear from the bank officers - i cannot confirm true or not*

yes is true. you can loan up to 70% or even higher provided you have others supporting asset documents like FD cert.

the bank not afraid loan you, just afraid you dare not to take up the loans

This post has been edited by Iceman74: Sep 27 2010, 03:33 PM

hakon,

If that is TRUE, the most likely REAL ESTATE BUBBLE in Malaysia will be in the high end....

Dreamer

that's what most people will think... but let me ask you.... what percentage of working population earn less than rm20k a month and what percentage earns more than rm20k a month?

so where do you think the bubble is?

no really high end. it deepens on location. not the price

what is the definition of high end?

1.5million for a semi D considered high end?
500k for a studio?
or 5 million for a condo in KLCC area?

RISING house prices are a double-edged sword.

Those who already own them will welcome the higher prices simply because that means more profit when they sell the properties, especially those who have invested in them in the hope of making a gain.

But for those who are aspiring to buy their first house, an unrelenting and prolonged rise in property prices will result in decent abodes being priced out of their grasp and with it a concomitant decline in one key factor in the quality of life.

The needs of the larger population are better served by the availability of popular housing at reasonable prices.

That means a stable supply of good houses matching demand without excessive speculation to push up prices.

In terms of policy, it is therefore important to ensure that land is made available for housing and there is a good mix of development to ensure that a spectrum of demand is catered for.

It is important to realise that if supply is skewed to the higher end and the demand is made to increase by encouraging foreign buyers for instance, this reduces the available resources for local demand and therefore raises the prices of all housing.

That is an undesirable consequence which is further exacerbated by financing schemes which encourage speculation.

There are currently many housing schemes, both for landed properties and condominiums where all the buyer has to do is pay 5% or 10%.

He does not have to pay anything else for between two and five years, the cost of that being built into the price of the house.

Effectively that enables a qualified buyer to place a leveraged bet that the property will appreciate.

If it does, by say 10% over two years, that amounts to a return of 100% on the deposit of 10% over the period, before transaction costs. It is therefore easy to see how such arrangements encourage speculation on the housing market.

The authorities, especially Bank Negara Malaysia, are considering moves to cut the speculation by raising the initial deposit for buyers who already have a house. That is a move that should be welcomed because it helps check undue speculation without burdening the first-time house buyer.

There are signs that a property bubble may slowly be inflating.

The best way to stop it from bursting is to ensure it does not become too big, and if necessary, deflating it.

That will save a lot of future anguish.

If speculation pushes prices so high that there are no genuine buyers who want to buy for staying and no takers for rental, the inevitable result is that there will be a collapse in prices.

The ensuing fear, panic and loss of confidence will result in the entire property market being downgraded.

It is far better that steps are taken now to moderate the increase in property prices, especially since indications are that speculation is part of the reason why the prices are going up in the first place.

agree, i definitely welcome a correction before the market gone too crazy. by then, it would be too painful to take the correction.

This post has been edited by property101: Sep 29 2010, 09:50 AM

Most middle class and working class people won't able to obtain such a high loan ratio, only for high income earners, self-proprietors, businessmen.
So it may affect the high end properties market, but medium to low section, impact won't be too great, even if there is bubble bursting.

Recently, the steep price appreciation or so called bubbles are more obvious/worry in mid to high end properties.

Still locally banks lending practice is still conservative in general as compared what had been happened prior before US subprime crisis, although recently banks are more relax on the loan issue due to too much liquidity.

Recent steep rise has a lot to do with too much cheap money around, and which lead to excessive speculation around.

This post has been edited by cherroy: Sep 30 2010, 10:06 AM

As mentioned Malaysia is going to correct in RE. It is not a matter of IF but WHEN and it will have nothing to do with local analysis I'm affraid.

Sure 30% correction in KL high end and speculative props might occur and that number will be reduced as you move out of KL to KV however look for global issues such as currency devaluation, global trade wars and further QE to add to the decade of correction that is happening now.

I repeat, the MSM is feeding you this bubble information now as they know it will occur. What they are uncertain as to all of us is the global aspect and what it can do to further the collaspe of RE globally. The US - CHINA trade war / currency war is just about to hit before elections.

Stock markets will get hammered again.

The US now is likely to follow Japan but will lash out in every direction on the way. Volatility - Liquidity!

my question is when the correction will come?
could we still buy now and sell 1 year later with profit?

if your buying in IPOH a property for personal use which has appreciated by 5% over the last 4 years I would say YES!

You must also keep your job and the ability to repay the loan when the cost of daily living goes up with rates!

It is very dangerous to have this kind of mindset, aka try to time the market.

This is not called investment, it is purely a speculation mindset to start with.

No offence.

I dont think any offence should be taken here moderator, this is just common sense and the lack of it when the average person get's caught up in the RE bubble, same was true in High Tech Bubble or any other bubble spurred on by loose monetary policy and unregulated investements.

I still renting a room at my age.... i feel very propertyless

Yes. Currency reset -> devaluation of USD -> Lower US consumption/demand + US govt increase interest to stop devaluation-> interest reset for Alt-A and Option ARM. And finally followed by a Peak Oil hit...

Coming back to the topic, aren't properties easy to regulate given that there are countries which are doing very well at controlling to learn from?
- limit foreign ownerships [according to segments]
- Tighter lending requirements
- govt to build more decent low-cost and mid-cost properties with facilities
- impose build-then-sell policy
- Limit the max Margin of Finance [ I prefer a max of maybe 50% starting from 2nd house in the same state, what's the excuse of wanting 2 houses in the same state for ppl who can't afford to pay at least 50%?]
- Ban of developers selling pre-launch [friends or relatives or business clients or employees just have to queue up too]
- Clear sales literature and fair pricing structure (no more sell 1 block-and-increase-price-sell 1 block-and-increase-price)
- Capital gain tax [ a declining tax of starting at maybe 90% for the first 2-3 years. why are ppl so afraid of high capital gain tax in properties? I'm in the opinion that properties are the single largest transaction for most ppl in their lives. So I really think ppl who profit from flipping properties in the short term = robbing livelihood from others.]

Pretty much a bookwork question. The question is, does 'the Gahment' really want to curb the bubble or just want to talk?


Bubble burst or gradual correction. They both need trigger(s), the difference lies only in the intensities of the shock(s)/changes in economic parameters, which all simply boils down to employment and paychecks. In the coming years, keeping your jobs is probably the best thing you can do for yourselves.

Good luck guys.

This post has been edited by Warn3r: Sep 30 2010, 03:47 PM