Our banking system is screwing up the property market. But it is trying to tell developers not to build too many.
For me, still manageable. Sign the S&P already so now have to borrow from Ah Longs...
Ah Long is your MDM Finance Manager izzit?
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Economic News
- Thread starter FHBH12
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Ah Long is your MDM Finance Manager izzit?
Banks make money by lending out money just like Ah Longs only that they do it officially and openly and in a more glamourous way.
The last thing a bank wanted are bad loans and the last subprime crisis is still fresh on these people's mind.
With the downturn in the Oil & Gas industries, banks like Maybank with high exposure in this sector are getting jittery and are quietly making provisions.
Maybank has about RM5.1bil loan exposure to the O&G sector and recently, Swiber Holdings, an oilfield service firm, which is now under judicial management, is of concern.
Last year saw many company in MY downsizing and retrenching staff, notably those in the O&G sector, banking sector and MAS, which actually sacked 6,000 staff.
Among them, many probably have some kind of outstanding home or car loan and they may be the defaulting group soon if they can't find new job.
So, banks now are very cautious in approving loans plus the sluggish property market is not helping so that's why banks are all lowering their loan target for the coming year.
True... but I thought the banks should be less strict towards foreign buyers, if they want to see property sales go up. Cos seriously, many of those newer Iskandar properties are targeted at foreigners, such as Singaporeans and mainland Chinese. Don't think the usual salaried worker in Johor can afford or want to buy such highly priced properties.
Local or foreigners is not so much the issue, bank only recognise your credit worthiness, your ability to service the loan in years to come.
Developers deciding to build expensive home that only attract foreigners is their problem, not the banks'.
What if banks start giving out loans to foreigners and one fine day these investors decided that they got a bad deal wanted to quit and stop servicing the loan.........and if many foreigners started doing it?
The banks and seize and auction but what if can't even get base price?
That happened during the subprime crisis, more auctions and foreclosures than the market can take!
Then how?
Who ended up holding the baby and who will be having a bigger liability?
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Banks are more strict with foreigners as they have no track record of earnings in the country. In UK, they absolutely do not lend to anyone who does not have sources of income in UK. In Australia, they are very strict lately. In fact, some of the banks exited lending to foreigners. Banks lend to collect money plus intrests. They are not real estate brokers. So they are not interested to sieze and auction.
As many can see, the prices of property recently in JB are over priced.
The big worry now for banks will be when valuation of these properties against the loan.
If valuation starts to fall, the bank may need to request top-ups from the customer or they may reschedule your loan repayment terms.
In SG during the last financial crisis, many home owners were forced to reschedule their loan with higher monthly repayments and over a longer period for those who can't top-up.
The big worry now for banks will be when valuation of these properties against the loan.
If valuation starts to fall, the bank may need to request top-ups from the customer or they may reschedule your loan repayment terms.
In SG during the last financial crisis, many home owners were forced to reschedule their loan with higher monthly repayments and over a longer period for those who can't top-up.
Bank loans in Malaysia are covered by personal guarantee beside the said property. Many borrowers think all they could lose is just the property would have to rethink.
It's not a good sign when the banks are not lending, it shows that the banks have no confidence in the economy and thus doubt that the borrower can repay the loan. Johor in general is not ready for too many condos above 700k , and the greedy developer build too many and the market not able to digest. If there are no country garden danga bay and forest city, the property market will be so much better.
Good observation. Actually, even without CG and Forest City, I think the oversupply still remains.
Hungry Singaporean "investors" were shut out by the SG government when they delivered the last knockout punch on the Cooling Measures back in 2013. So these foreign buyers chiong into Iskandar to dump their money there instead. Holding onto cash seemed so wrong. Must let it go somewhere.
Developers saw the greed, up their prices like nobody's business. The Iskandar authorities and IRDA people's mouths also dripping with saliva, sell sell sell and approved more land for residential developments.
The China developers came down and wanted to build their kingdoms. They also brought in their own people like ants that run to sugar. Let's dump our RMB currency onto Malaysian soil!
Condo launches were packed. Greedy agents also pre-booked several units in the hope of trying to "scam" goondoo buyers to pay more for the units. Some projects were fully sold in a short time. Banks also greedy and joined in the Buy-and-Buy frenzy by dishing out loans like nobody's business.
Nobody seems to know what in the world was happening! But they thought there was money to be made out there.
Until big brother Maybank come out in early 2015 to raise the alarm: "Maybank sounds warning on Iskandar, urges caution"
http://www.todayonline.com/business/maybank-sounds-warning-iskandar-urges-caution
Only then everyone came to their senses. The Iskandar authorities suddenly realised Hey, we can't be eating pork indiscriminately. It's a sin! Developers suddenly were faced with units that no one would buy. Bank managers started to wet their pants and realized Jialat.... if bubble comes, can owners pay their loans? Investors who thought they could flip and get easy rental or sell their condos suddenly realized Nabeh...I may be stuck with my properties! Agents who once rubbed their mouths with honey when talking have now all disappeared far away. Ask them about Iskandar, they will not reply you any more. No more money, no talk.
Hence, the situation now.
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In all seriousness, having looked back at the explosive growth in the jam at both entry points signals also bad times for Singapore, never in history has jams been so bad during weekends, this means that Singaporeans are finding Singapore too expensive and are rushing to Johor to spend money.
So what do you think of the next five years? I feel that if costs keep rising and wages remain stagnant, the next wave would be Singaporeans moving over to stay in Johor. If one has the finances, I feel one should commit to buying a property in Johor, for self stay, because in the next five years when more Singaporeans start to move over, more restrictions would be enacted.
Safest bet is go landed. Condos are still a no no, anyway I discussed this with my father on this, he said that VEP is the biggest game changer to the whole equation of living in Johor. This we will have to wait and see.
So what do you think of the next five years? I feel that if costs keep rising and wages remain stagnant, the next wave would be Singaporeans moving over to stay in Johor. If one has the finances, I feel one should commit to buying a property in Johor, for self stay, because in the next five years when more Singaporeans start to move over, more restrictions would be enacted.
Safest bet is go landed. Condos are still a no no, anyway I discussed this with my father on this, he said that VEP is the biggest game changer to the whole equation of living in Johor. This we will have to wait and see.
Purely from own stay perspective, if you are a small family like only husband and wife, and in retirement age, my opinion is to go for condo. Main reasons are it's a lot more easier to maintain, and with your old age and low immune system, better to reduce the exposure to mosquitoes. Now got dengue and zika, dunno in a few years what else will be there. Do you want to end up switching on air con for the whole day to avoid mosquitoes? This is not a joke, a few of my landed friends are doing this in sg, sgd 600 per month for electricity.
Quite true. Then rental in JB is the answer. But I do not quite agree on the cleaning part, a small condo with tight space is harder to clean than big house with lots of space.
Singapore has reach a point where it cannot reduce cost anymore from a Malaysian perspective point of view. Seriously I couldn't convince myself to buy Singapore properties. I did a lot of research last year from visiting various new projects to URA latest price transactions and even talking to renovators on some freehold very old condos. Even Yishun Northpoint also I visited. The only way cost can come down in Singapore is prolonged recession and I do not think the Government is going to allow it.
My take on JB properties if you guys are interested. No worries, no vested interests here.
If you buy landed in JB City, make sure it is the proper guarded ones with physical perimeter wall types. Not those wire fencing or with oil drums and gantry. JB is ready for these type of higher end housing. If you buy condo in JB City, go buy those high end ones within or nearby established housing estate, especially those about 30 years old ones. But please buy exclusiveness and higher end ones. Happy investing.
Wahh... How come you have changed your opinion? Thought you've always supported renting a property in Johor?
My opinions are below. But seems like I must clarify every time that these are strictly how I feel. Agree or not is not my problem to argue with anyone. Learn to respect. If anyone is angry, just walk away. Don't be an idiot by pushing your personal opinions on me.
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For the jams at the causeway, we don't know the real reason unless we stand there and ask everyone why they are entering Johor. Otherwise, it's too easy to make assumptions SG is getting expensive so people are going there.
Seriously, total up the amount you can save by going over to Johor to shop and eat vis-a-viz your salary. How much do you save? Consider that you spend say 30 mins driving from your home to the causeway, 3-4 hours jam both ways, then maybe another 40 mins or so driving within JB, pay tolls, and face fatique from driving.
If you save S$100 (RM300 sounds good huh?) in this one trip, is it worth it? For me, it's not because I can earn more for the time and sweat I have to sacrifice on a weekend. But Singaporeans are known to spend their time uselessly waiting in queues to get some ridiculous Hello Kitty dolls, watching K dramas, sms-ing rubbish on the phones, playing Pokemon Go, or eat their favourite foods.
So those cars on the road could be just recreational families who don't mind waiting hours just to eat their favorite food, rather than desperate people trying to save money. In fact, I would think if the cost of living in SG is too much for them, why do they still own a car? That should be something they would be thinking of dumping.
Slowly and surely, Singaporeans will move over to Johor. But I think the number will remain insignificant compared to the resident population in SG. 5 years is too short a time for that to happen. Maybe 20-30 years later? But then again, that's too long a time frame and no one is right or wrong to predict anything.
If you look at prices of HDB flats back in the '80s, buyers could easily buy them from about S$30k to S$80k. If you could travel back in time, and tell people back then that in a few decades' time, smaller flats would typically cost $500k to a million$, they would say you are crazy and that no one can survive at that kind of prices. But look at today. Yes, people complain and complain, but isn't everyone still buying and owning their flats at those prices?
SG is still very much sustainable in the next 5 to 10 years. I don't know beyond that. I believe it should be. It's just that people have to manage their expectations. The perks of staying in a safe, strong, convenient country are too attractive to sacrifice moving to a foreign place like Johor. Now, this opinion is not just from me but from the many people I have been talking to since 2014 -- my friends, relatives, colleagues, retirees, strangers I meet at talks, Singaporeans, Chinese/Indian nationals, Malaysians, PRs, etc. So far, believe or not, ALL told me the same thing.
The only people I have met telling me Singaporeans will soon go over to Iskandar to live because cost of living is too high are Malaysian property agents selling their stuffs, managers working for Iskandar property developers, and those Iskandar sales property talks. Any surprise?
Sure, there are reports of people already moving over for whatever reasons. They hate the SG government, they take pride that they can save S$2 per meal eating in JB, they want to feel like a king. Those are personal choices. There are people moving from Malaysia to SG to start their families also. It works both ways.
Complaining is easy and if one thinks through enough, spending precious time with our families, doing things we enjoy, those are the most important and what I value. For me, I am fortunate enough to stay in 5 star hotels as part of my work, those facing the ocean (not just a sea!), I've been up on the mountain alps, I've lived on a farm/forest house with unimaginably beautiful scenery... Nothing fazes me so easily. So when I see pictures of owners who show their "sea" view taken from Puteri Harbour and Danga Bay and talk like it trashes living in SG, I'm like whatever.....
Here's Michael Phelps' home that he bought for US$2.5 million only. More than 6,000 sq ft. How does it compare to a semi-D in SG or Iskandar?
https://www.yahoo.com/news/michael-phelps-retirement-home-enormous-025630000.html
Bottom line is, no point comparing. There will always be more beautiful homes than yours. There will always be many a lot richer than us. Wealth and properties are things we can't take when we leave this world. Important thing is to be happy.
I also don't see how VEP will be a big game-changer. I see a contradiction in that statement actually. Now that you see many Singapore cars are going to JB and causing a jam at the causeway, you conclude this is due to the high cost of living. Then when VEP is implemented, and fewer cars go in to JB, does it mean the cost of living in SG has dropped? No it hasn't. So what do we conclude?
Move over to Johor if it's for personal reasons. Will many general Singaporeans go over because cost of living is rising in SG? I don't think so. Not in the next 5-10 years. The Singapore "spirit" of calling this country "home" is still very strong among not just Singaporeans but PRs and even foreigners!
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Agree with Mahattan.
Don't be a house slave. It is ok when you are still able. But when you hit 60plus, go for condo.
My landed monthly electricity bill is RM800. And that too does not allow me to switch on the aircon for whole house. Only bedrooms.
Wahh... How come you have changed your opinion? Thought you've always supported renting a property in Johor?
My opinions are below. But seems like I must clarify every time that these are strictly how I feel. Agree or not is not my problem to argue with anyone. Learn to respect. If anyone is angry, just walk away. Don't be an idiot by pushing your personal opinions on me.
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For the jams at the causeway, we don't know the real reason unless we stand there and ask everyone why they are entering Johor. Otherwise, it's too easy to make assumptions SG is getting expensive so people are going there.
Seriously, total up the amount you can save by going over to Johor to shop and eat vis-a-viz your salary. How much do you save? Consider that you spend say 30 mins driving from your home to the causeway, 3-4 hours jam both ways, then maybe another 40 mins or so driving within JB, pay tolls, and face fatique from driving.
If you save S$100 (RM300 sounds good huh?) in this one trip, is it worth it? For me, it's not because I can earn more for the time and sweat I have to sacrifice on a weekend. But Singaporeans are known to spend their time uselessly waiting in queues to get some ridiculous Hello Kitty dolls, watching K dramas, sms-ing rubbish on the phones, playing Pokemon Go, or eat their favourite foods.
So those cars on the road could be just recreational families who don't mind waiting hours just to eat their favorite food, rather than desperate people trying to save money. In fact, I would think if the cost of living in SG is too much for them, why do they still own a car? That should be something they would be thinking of dumping.
Slowly and surely, Singaporeans will move over to Johor. But I think the number will remain insignificant compared to the resident population in SG. 5 years is too short a time for that to happen. Maybe 20-30 years later? But then again, that's too long a time frame and no one is right or wrong to predict anything.
If you look at prices of HDB flats back in the '80s, buyers could easily buy them from about S$30k to S$80k. If you could travel back in time, and tell people back then that in a few decades' time, smaller flats would typically cost $500k to a million$, they would say you are crazy and that no one can survive at that kind of prices. But look at today. Yes, people complain and complain, but isn't everyone still buying and owning their flats at those prices?
SG is still very much sustainable in the next 5 to 10 years. I don't know beyond that. I believe it should be. It's just that people have to manage their expectations. The perks of staying in a safe, strong, convenient country are too attractive to sacrifice moving to a foreign place like Johor. Now, this opinion is not just from me but from the many people I have been talking to since 2014 -- my friends, relatives, colleagues, retirees, strangers I meet at talks, Singaporeans, Chinese/Indian nationals, Malaysians, PRs, etc. So far, believe or not, ALL told me the same thing.
The only people I have met telling me Singaporeans will soon go over to Iskandar to live because cost of living is too high are Malaysian property agents selling their stuffs, managers working for Iskandar property developers, and those Iskandar sales property talks. Any surprise?
Sure, there are reports of people already moving over for whatever reasons. They hate the SG government, they take pride that they can save S$2 per meal eating in JB, they want to feel like a king. Those are personal choices. There are people moving from Malaysia to SG to start their families also. It works both ways.
Complaining is easy and if one thinks through enough, spending precious time with our families, doing things we enjoy, those are the most important and what I value. For me, I am fortunate enough to stay in 5 star hotels as part of my work, those facing the ocean (not just a sea!), I've been up on the mountain alps, I've lived on a farm/forest house with unimaginably beautiful scenery... Nothing fazes me so easily. So when I see pictures of owners who show their "sea" view taken from Puteri Harbour and Danga Bay and talk like it trashes living in SG, I'm like whatever.....
Here's Michael Phelps' home that he bought for US$2.5 million only. More than 6,000 sq ft. How does it compare to a semi-D in SG or Iskandar?
https://www.yahoo.com/news/michael-phelps-retirement-home-enormous-025630000.html
Bottom line is, no point comparing. There will always be more beautiful homes than yours. There will always be many a lot richer than us. Wealth and properties are things we can't take when we leave this world. Important thing is to be happy.
I also don't see how VEP will be a big game-changer. I see a contradiction in that statement actually. Now that you see many Singapore cars are going to JB and causing a jam at the causeway, you conclude this is due to the high cost of living. Then when VEP is implemented, and fewer cars go in to JB, does it mean the cost of living in SG has dropped? No it hasn't. So what do we conclude?
Move over to Johor if it's for personal reasons. Will many general Singaporeans go over because cost of living is rising in SG? I don't think so. Not in the next 5-10 years. The Singapore "spirit" of calling this country "home" is still very strong among not just Singaporeans but PRs and even foreigners!
Why are Singaporeans still going to JB despite the jams? In my view it is simply "Because it's so near and so cheap!" And for those with own cars, crossing the Causeway opens up a "whole new world" of exploratory adventure all the way up to Penang, and even forays into Thailand for the braver souls. Anyway, in my view, Johor itself is already a big playground.
Whether Singapore is getting more and more expensive or not, the fact remains that JB is relatively cheaper on most things. And it is also the "feel" of JB, or as Brother Tekkun says, the charm of JB that has its allures.As for people moving over to JB to stay, I agree with you that this would always be insignificant when you use the whole residential population of Singapore as denominator. Many people are contented to remain living in Singapore, even if there is discomfort or complaints about higher costs of living. But when connectivity improves, I am sure more Singaporeans will move over. Not most, but more. Do they hate Singapore? Hate is such a strong word to use, and I don't think it is warranted. People who hate Singapore will probably give up their citizenship, why still hold on to the pink IC, right? Rather, it would be people who prefer the cheaper things in life, or opt for a more lower cost of living. it's a lifestyle choice, not a hate decision.
Yes, people are still buying HDB flats today, just as our parents did in the 80s. But they do it by taking up full loans at maximum tenure. My father paid up our 3 rm HDB flat many years ago, and he regretted not buying a 4 rm flat because he was afraid he could not service the loan. And we are talking about around $20K then? Now we talking even bigger numbers!
Your job gives you the good things in life to enjoy, good for you. You should enjoy it as much as you can for as long as you can.
People will willingly sacrifice for love, just like how parents make sacrifices for their children. If a country loves her people, the people will love and make sacrifices for the country. That's how nations become great with capable leaders who love their countries enough to serve for the good of the nation/people.
Actually those local johorean that work in real estate industry already knew what would going to happen back in 2012, back then CG, forest city, greenland all china party haven't come...because the way authority approve condo building already doesnt sound right, with so much empty land, iskandar do not warranted high density development.
What you havent realised is the bigger picture that happened globally, not just iskandar, other cities that foreigners favour such as london, few Vietnamese city, sydney and especially melbourne also going to face the same problem. Ever wonder why UEM, greenland, capitaland, setia etc all going to those cities to entice their home country buyers to buy overseas ppty? Why local cannot attract local buyers and need foreign developers like those to help them develop?? Loose monetary policy period by the US, create the bull run that will end when FED hike rate. When time come, recession looming, all foreign buyers will kena.
Take australia for example, what foreigners do not understand is understanding the mentality of the local. Is CBD condo something the local want? Because this is the market you will be approaching to, since they do not allow foreigners to buy 2nd hand ppty. So for those who are thinking they are smarter because they buy 'overseas' ppty, better be careful, time will come and you will kena too. Iskandar already happening, next is UK and australia buyers.
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