Thursday, September 2, 2010

Banking And Housing Again

Further to my last post on this issue (see here), banks are apparently working with BNM to limit property speculation:

Banks to try and prevent speculation on property prices

PETALING JAYA: Bank Negara is engaging with banks on possible measures to curb excessive speculation on property prices while developers caution that it should not be imposed across the board to avoid dampening the property market.

Responding to queries on whether the central bank will be imposing a 80% loan-to-value ratio (LVR) for mortgages to avert the risk of a potential property bubble, the central bank said: “Bank Negara regularly engages with industry players as part of its surveillance and supervisory activity. The engagements cover a broad range of issues and areas that relate to developments on the ground, safety and soundness of the institutions and the overall system.”

…When contacted, banking industry players said it was likely that any measures to be introduced would be pre-emptive measures to target certain quarters of purchasers and would not be across the board.

The measures are believed to be targeted at the high-end and non-owner occupied house purchasers.

Property developers are predictably against the idea. I suspect however, that the consensus is right – if any guidelines on minimum downpayments is actually put in place, it’ll only affect properties at the high-end.

We’re into September, and NAPIC still hasn’t got the price numbers for the 1Q of this year, much less the 2Q. What they do have is a detailed breakdowns of launches and sales, and interesting reading it makes, too.

There were 17,900 residential units offered for sale by developers in the first half of 2010. Get this: nearly half of those units were priced at RM250k and above, and 9.5% were offered at RM500k and above. And in that short period of time, nearly half of the latter category found buyers, compared to 37.7% for all 1H2010 launches. The only price level that saw better sales was in the RM200k-RM250k segment but that was only about 10% of the units launched.

The numbers suggest that if the banks and BNM are serious about curbing property speculation, they should look more closely at properties costing over RM500k.

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