have we seen in history where fixed interest rate is lower than BLR?
does it happen before?

probably way back in '97?
i guess those who took AIA/ING fixed loan might have experience of paying 10% in BLR back in those days...

so anyone can confirm back then, do we have fixed 6% interest?

Kev, think 4 months ago you could get a 5.99% fixed for 30 years. But not now

uob has fixed interest. but it hsa limited quota left.

you might want to check with uob. last i inquired was 2 months ago.

i almost fell for their pitch a few years ago, but then again if i were to take it, re-finance lor ....

so N73me, why didnt u took a fixed loan back then?

back then the non-fix offer was more tempting, in fact quite a reasonable offer at that point in time. So decided to take a risk againt the blr ...

House of prices would stay stagnant for a few years and it will boom up again.

Raw material increase would force developers to abandon projects or sell with lower margin (price might be higher or same as now but cost has increased to lower down margins)

Steel, cement and etc have risen on average of 30%-40% a house you use to buy for RM 280k might now cost 380k. Developors should be able to sell between this region.

Consumers might not have buying power, so rental would be a good business. (ps: ppl still have to stay somewhere if they didn't buy a more expensive house) Rich ppl would still be able to afford those price and rents would be higher. So the rich get richer.

However price of current houses would stay stagnant, ppl won't buy and won't sell too low. there are about 5% would not be able to sustain would give some lucky buggers a cheap price. For bank to reposses a house it would take 3 years which anytime if the owner wants to restart payment could do so.

simple yet very valid thoughts

How about land? I guess land investment would be the better choice now.

I have doubt whether properties drop? The rumours spread by so call economist, analyst & etc is never can be trust. A year before the rumuors commented BLR will drop due to investor & competitiveness in banking, but now what is the BLR rating? During 1997 recession, ppl are struggling & claim malaysian will be in deep shit under soros deployment, but yet what malaysian still sustain till 2008? Our CI managed to boom up to 1500 points. Also rumuors claim recently US slowdown will dramatically affect malaysia market & will not able to climb up but i would like to see the outcome in years coming.

Im not a economist, but just found doubt of the accuracy of ecomonist spread out the rumuous!!!!

The 1997 financial crisis had a lot of impact on the country.

It isn't so much with Malaysia sustaining or not, but more like life goes on.

Besides that, it is a cycle. There will be tough times and then there will be good times. It can't be tough times all the time.

PS
Speaking of the 1997 financial crisis, 11 years later, how is Malaysia doing?

We are not achieving the high growth rates prior to 1997.

Our currency in 1997 was at US$1 ~ RM2.6. The government stepped in to impose a fixed exchange rate of US$1 ~ RM3.8 at the height of the crisis. Only now we are at US$1 ~ RM3.3. Meaning the ringgit is still far from pre 1997 rates.

Despite all this, life goes on....

Competition in banking sector won't prompt a lower BLR, bare in mind, BLR which affected by overnight rate set by BNM is not controllable by banks themselves, only BNM can do it. Interest rate is controlled by respectively country central banks not commercial banks.
You need to look at real interest rate whether it is positive or negative before BNM or most central banks can make a move. Last year, real interest rate already almost zero already (now even worst, -4%), so BNM should raise interest rate, but with economy is slowing fast, that prompt BNM reluctant to raise it. But with current interest rate, every deposit you make in FD is actually having negative interest rate now because of high inflation.

Properties price won't drop too much because of inflation in raw material price. Unless raw material and others basic materials price drop significantly while economy is in deep recession, then yes, properties price can drop. In fact more likely scenerio for current situation is properties price stays roughly stagnant. Again it much depends on location wise.

Malaysia economy does not recover back to the old glory day before 1997. By looking ay KLCI, yes, it set a new high compared to 1300 level back old day. But do remember, 1500 point of KLCI is much contributed by plantation stocks like IOI, KLK, PPB and others good strong fundamental stocks like Genting, Pbbank, MISC etc which most make historical high 2x 3x or 5x compared before 1997. But if you look at other component stocks like TNB, TM, Plus, MAS etc they are not still far off their previous high.

Yes, most economist and analysts always tend to over optimistic and over pessimistic most of the time. But life always goes on, those good and strong one surely emerge as next new round of winner but do remember also, they are plenty of company went broke during 1997 and money down to the drain. Now, you only see the winner of 1997 crisis, but forget that are plenty of company struggling severely and closed shop. Country as a whole won't die, but individual company can.
Even in US financial credit crisis, we had already one big casualty (Bear Sterns), (rumours said might have another one) while several smaller regional banks have failed already but for sure financial system in US won't fail. This US financial credit crisis will eventually fade away over the time (take times not overnight or next week) because of self-correcting mechanism in a free economy.

Economy is cyclical in nature, you can't say one will boom forever, nor one will in deep recession forever, as economy itself is a self-correcting mechanism.
Too many people build houses, too much supply, house price goes down. House price goes down, not profitable, nobody wants to build, then supply decrease. Supply decrease, demand high, prices goes up. Then with high house price which is profitable for developers to build houses then more houses being built. Cycle goes on and on.

cherroy,

One MAJOR difference between the coming recession and previous 2. We do not have the OIL MONEY to bail out. In previous 2 recessions, instead of reforming GLC, we used OIL MONEY to bail them out. So, in the next recession, GLC will be hit badly and the economy will go down with it.

A) How can you teach people that has NEVER work for 20 to 30 years to work in a real world??

B) How can you get people that learn close to nothing in local public university to do REAL work??

I had seen some of (A) from GLC's VSS. It is close to impossible.

So, I do not believe that Malaysia can recover from (A) and (B). We will fallen down to an even lower level.

Dreamer

I don't reckon Malaysia recover well or fully from 1997 crisis either. Ask businessmen out there, (except those related to commodities, steel industry, because of commodities boom), I am sure majority of them will tell you profit margin never recover back to old day prior before 1997. Even GDP is growing at 5-6% for last few year, the dynamic of the economy never like prior 1997 situation.

Also for individual front,
prior 1997, fresh graduate is getting around 2k plus for engineering field, general operator being given roughly below 1k. Now 2008, the situation remains roughly still the same.

But before 1997, a roti canai cost 50 to 60 cents, now cost 80 cents and above while a bowl of mee cost 2.++ back then now 3.++.
General public never get any real benefit from the official figure of economy growth, instead most public's life become under more pressure because of inflation running wild. Income doesn't grow much but inflation already jump several fold, this kind of economy growth is not bring real net benefit to general public. So whether recover or not recover officially is never bothered by most public, they knew themselves whether the economy is in good shape or not in term of their income in general.

Anyway OT too much from property already.

You tend to have negative chi towards the country.......
Although, I mean come on, oversea grads aint that good anyway.......

Trust me, if you've compared and hiring/interviewing oversea grads and local grads long enough; you'll come to Dreamer's generalisation.
Anyway, it's OT.

Here we go again, another one of those famous ‘oil money‘ prophecy of doom.

Have to throw my hats at ya',dreamer. You have a believe and u act upon it, and that is why u'll do better than most malaysians who only talks. But whether your believe n actions is a smart OR not-so-smart one, it remains highly debatable.

Pai,

<<But whether your believe n actions is a smart OR not-so-smart one, it remains highly debatable.>>

1) Who cares about any debate?? The best way to predict future is to make it happen.

2) I have my source of data. I know how much money is wasted every year by some of those GLCs. And, I know it is NOT sustainable much longer even with good economy.

3) I know people that work in those GLCs. I supply stuff to those GLCs for a few years. I know how much "work" those people do every day.

4) Ditto, I know people that got VSSed from those GLCs a few years ago. I know how much capability that they have.

You make your gamble. I wish you best of luck and you have enough buffer to carry you through bad times when it happen.

The situation in USA is getting worse by days. And, it will last for at least one or two more years. Now, is it wise to believe that Malaysia will not be affected in any major ways??

Dreamer

haha...
the airasia nuts dont like people talk about the recession.. he is confident that the economic growth will be same as our inflation rate 8.5% (July CPI)

This saying makes big sense. property market is just that simple. theoretically, it answer the question in this thread.