Speculators have been blamed for property price increases. Property buyers’ clubs have also been blamed for property price increases. In fact, greedy developers have also been blamed. This is because they are seen to be earning high profits from every project they do. For not doing enough, both the federal government and the state governments have also been blamed. Well, according to Real Estate and Housing Developer’s Association (Rehda) Malaysia, one major reason for property prices increasing was because of Bank Negara Malaysia.
Reported in an English daily today, Rehda Malaysia President, Datuk Seri Fateh Iskandar Mohamed Mansor said that this was due to the tougher credit checks on potential home buyers and lending curbs. This has distorted the market and has caused many property developers to delay their property launches, especially the affordable ones. Due to this, it has caused the slowing supply of new affordable homes and this has put pressure on prices thus pushing prices up. Major reason was said to be he high rejection rate of housing loan applications. Thus, he urged Bank Negara to rethink this policy to help those who are buying their first home.
Personally for those who have been reading some of my comments, I favour a stricter control of the property market. The number of affordable homes must be encouraged but I seriously think the cooling measures implemented has actually helped the property market from bursting. Do you still remember what was the increase in prices from 2009 to 2012? The price increase was CRAZY! There was no way salaries could have kept up. Of course, before this sudden interest in the property market, Malaysia’s properties were way too undervalued even when compared to the region. Thus, there was this one time adjustment but if BNM did not clamp down on the speculators, I dare not think what would have been the consequences today.
Yes, help must be given to the first time home owners. However, first time home owners must also be very realistic about what they can afford. Unless one happen to be a top performer commanding higher pay than everyone else, one must just be realistic. Buy smaller, buy further, buy lesser convenient places or whatever. Focus on owning a roof over the head. Not on whether others would look down on you if you are not staying in a condo etc. I remember when I bought my first 700sf apartment in a secondary area called Relau, some of my friends asked, why buy in Relau? Why not Gelugor, Greenland or even Tanjung Bungah. Why not they give me their money so that I can buy what they asked me to buy?
Sorry REHDA, I do not agree with lowering of standards. At the same time, I think these buyers better be more objective. Or else, in the end the one who would lose most would be them. For developers, they would just delay or change their plans. Not many would face continuous losses. Just look at what the developers are building nowadays and you would get my meaning. If they (developers) can change their ways, why not you? Happy shouting at BNM or waiting and waiting.
written on 26 May 2015
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