Show me an example Shelter Over The Head: New guidelines on loan - Effect on buying new houses
Apa kesan pembukaan SKVE seksyen 2 pada prospek pembangunan Kuala Langat?

Monday 19 March 2012

New guidelines on loan - Effect on buying new houses




The new guidelines on loan have been tightened where approvals are now based on the net pay and not gross salary. Throw in the policy of having to consider if applicants have good credit history and can sustain the repayment in event of increase in interest rate, many people will be affected. Those in the middle to low income category will be affected in their loan application to buy new houses.

Latest statistics on Skim Rumah Pertamaku reported that 48% of the 1062 applicants were not qualified for the loan scheme with another 16% pending approval. How about those buyers of new single and double storey terraced house in Klang, Shah Alam and Kuala Langat who applied for 90% loan? What happened to their applications? Many were rejected. Many more will be rejected.

This is the situation on the ground: You need to earn more to afford the same house you saw last four months, qualified for the loan but did not yet buy; or you need look for smaller house or one further in order to get the loan approval.

Slower and lower loan approval means slower and lower sales of houses in the new housing development. This effect is across the board - from bungalow and semi-detached house in Kajang, Sungai Buloh to the single and double storey terraced houses in Kapar, Meru, Port Klang, Johan Setia, Jalan Kebun and Teluk Panglima Garang,

What will happen to the price of the houses below RM300,000? Will the price come down when the take-up rate is slow? Should you wait for it to come down and then buy? Take-up rate may slow down but that doesn't mean the demand decreases. The house that cannot be sold to one previously qualified for the loan will be sold to the one who qualified for higher priced house last year but now can still buy a lower priced house.

I believe that it is possible that you can buy apples cheaper next year and years after that but not the house below RM300,000 in Klang Valley. You can produce more apples but you cannot produce more land! The reasoning that if people don't buy, the price have to come down in the context of houses under RM300,000 in Klang Valley is flawed.

Those who are not lucky to have salary increment have to save more, don't spend unnecessarily. Buy the house that you have found to your liking if you still can be eligible for the loan. You have to spend only what you can afford. Afterall, if you cannot afford it and it's arranged for you to have it, you are going to lose it in a matter of time. You don't pay installment for the house, the bank is going to foreclose it. The debt you incur because you cannot afford it, is a dangerous thing - it will snowball; debts beget more debts.




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