Losing deposit money of RM18.85 million, anyone?

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Usually, we will pay deposit when we intend to buy a particular property. This is so that no one else could buy that property and gives time for us to get our loan approved. It may not be 10% of the property price, sometimes just a couple of thousand ringgit. I do not think there are that many Malaysians who would pay a deposit and then walk away without buying and thus losing the deposit, right? Well, there’s one buyer who paid a deposit of HK$36.09 Million (RM18.85 million) and then decided that he did not want the house anymore and thus, he forfeited his deposit of RM18.85 million! Article in South China Morning Post

The house was a luxury home on The Peak and the price of the unit was HK$721.88 million (RM377 million). Speaking about the deal, JLL executive director Joseph Tsang said, “It is definitely not good news for the market.” This is the particulars about the particular house. It has a private garden, rooftop and swimming pool in Asia’s most expensive address and was sold at a unit price of HK$90,484 per square foot in December 2018. This is already more than 7 per cent cheaper than the adjoining house which was sold in April 2018. The project, Mount Nicholson became the priciest address in Hong Kong with the top three most expensive units in Asia in 2017. In November 2017, a single buyer paid HK$1.16 billion (US$149 million) for two units on the same day. Hong Kong’s property market is cooling rapidly due to a slowing economy,rising mortgage rates as well as uncertainties over the US-China trade war. Tsang said that there are now a rising number of homes being repossessed by banks but it is still too early to say whether it would trigger a wave of defaults. Do refer to the much longer Article in South China Morning Post

Personally, I have not heard of any such news here in Malaysia. However, a good friend who’s an auctioneer for over 10 years said that there are now more cases where properties which he thought was attractively priced were not sold. There were enquiries but when it came to the day, no bidder came with the required bank draft to register. I think the issue is not because of getting bank loans. I think the issue is sentiment driven and for this, we need confidence boosters and not more ‘roadblocks’ or obstacles yeah. In the 4Ps (POLICY) is by the government. Let’s see what happens next.

written on 12th Jan 2019

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