In a news report in a local daily (24 September 2014), according to Real Estate and Housing Developers’ Association (Penang) chairman, Datuk Jerry Chan, 50-70% of home buyers have their loan applications rejected. He also said that while transactions has dropped so far for 2014, it will improve from November onwards. The reason for the continuous slowdown was due to the government’s cooling measures which got the banks more stringent in their approvals. He said however that post GST, if the purchase is for own home, it will have to continue, as long as developers do not raise prices. As for Penang, for the island, units below RM1.2 million would do well while for mainland it would be RM400,000 and below.
No surprises on the transactions part, every agent friend I know tells me of how buyers are taking much longer time to decide and many are wasting their time. Bank approvals has dropped to just 50-70% is a new thing to me. I thought it was improving but I think I was wrong. People are STILL trying to buy properties they could not really afford based on their current pay. I hope everyone realises that this is also the main reason why prices continue to inch up. Truth is, its always demand and supply. If you still want to try to buy higher priced homes, developers would of course price their properties accordingly, perhaps giving you additional renovations or airconds but they will sell at prices that you think you can still afford!
GST is always an issue everyone loves to talk about despite the fact that if you have travelled, you would note that majority of the countries you travel to are already on GST. Seriously, if you seriously think you should stop buying or start buying properties because of GST and not your actual need or affordability, you are wrong. GST was not targeted at property and it should not be driving your decision. The worst case scenario I read so far was that property prices rise by 4% due to GST. As an example, for a RM500,000 loan, it will rise at max, RM100 per month. If your decision is based on this RM100, you are seriously not buying based on your affordability. So, yes, I understand why the loan rejection is so high.
Oh yeah, I received a Whats App message from my brother-in-law just 2 days ago. One property developer said that they are launching a referral programme for existing buyers to recommend their friends and families to buy and the commission / incentive can be up to RM100,000. The property that they are supposed to refer the buyers for? Not something newly launched and considered a premium product. Makes you wonder about the actual property price. 🙂
written on 25th Sept 2014
Next suggested article: Affordability Availability: Penang Properties (Island).
0 Responses
Hi Chialih,
As referring to GST part, is it also applicable to CAR buyer apart from the property you eleborate with regard to GST factor?