The rationale given by property consultants is that in the late 1990s crisis, interest rates went up from less than 10% to 15%. Now interest rates are around 7% and getting lower for residential properties.
The second rationale is that banks were withholding credit in the late 1990s. The third rationale is that property buffs (which include buyers, sellers and observers) have learned from that crisis and are not so highly leveraged.
And then, excerpts from the "bear" point of view,
The world is going through what could be the worst financial crisis since WWII and there is no such thing as decoupling from the US market because every country is affected. The question is to what degree will we be affected, and how developers and property buffs will weather the crisis.
Glomac Bhd group managing director F.D. Iskandar Mohamed Mansor puts it,
“To those who say Malaysia will be insulated, let me say that when our trading partners – the US, Europe, Japan, India and China – are affected, we will be affected. We have to face that,” he says.
Savills Rahim & Co managing drector Robert Ang says,
“The condo market has been weak for the last couple of years. The office market will have a lot of supply. The landed houses will be much more resilient,” he says.
At the end of the article, it mentioned that a source from a foreign bank, who monitors the property scene says, “I would hold cash. Realistically, Malaysia has not yet felt the whole effect of the global meltdown. The next six months will provide more clarity.”
For the next 6 to 12 months, we will surely see more stuffs/news coming out from our BolehLand. We have already started to feel the heat from the current crisis with news of retrenchment, no bonus or "not so great increment", pay cut, etc...
How will all these affect our property market in the near future? Those who bought property(ies) and is still servicing their loans, I bet the word "retrenchment" is the last word they would want to hear.
I wouldn't dare to imagine how bad it will be when the time comes.
2 comments:
Wrong Wrong WRONG.
The way our property market works is:
a LOT of people whose incomes cannot allow them to stay in such an expensive house, INCLUDED YEARLY INCREMENTS IN SALARY in their decisions.
In fact, I hear that majority of people who were not confirmed at their job, bought landed property, AS IF their confirmation was guaranteed.
Well, in boom times... it was a fair enough assumption.
But now, those unconfirmed people get "let go"... and they simply cannot manage to sell.
what is the worst case scenario?
Possibly, all gains made in the last 5 years in the stocks market and the property market might be wiped out.
So... in fact, that would mean that condos would do ok, but landed houses would be the ones to suffer.
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