KUALA LUMPUR - The ban on Developer Interest Bearing Scheme (DIBS) and the hike in real property gains tax (RPGT) rates next year is likely to result in more property auctions in 2014, said National House Buyers Association (HBA) secretary-general Chang Kim Loong.
"I will not be surprised if there will be a lot of properties for auction next year. I won't be surprised because a lot of people who bought into properties for investment, they are now caught out with RPGT and DIBS," he told SunBiz in an interview.
"So it now depends on your holding power. How long can you hold on to the property with the bank interest when the developer won't be paying installments for you anymore? By next year there should be a lot of foreclosure cases," he added.
Chang said if there is a slow down in the property market, if buyers who bought properties with DIBS are not able to service their loans and end up in foreclosure, they would not even be able to repay their debts after the property is auctioned off and banks would not be able to recover the full loan amount.
"Assuming there is a slow down in the market, do you think the bank will finance 100% of DIBS at RM600,000 for a unit that is actually priced at RM500,000 without DIBS? The banks will also not be able to recover the RM600,000 (after the property is auctioned off) because they hiked it up in such a way for interest purpose," he said.
"If the property's real price is at RM500,000 but was purchased at RM600,000, even after it is auctioned off, the buyer would not be able to clear his debt. He won't have enough to pay off the debt because the actual price is RM500,000. The valuations are off already," he added
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as predicted some time ago... 2014 is a better time to buy property than few years back and with inflation shooting up, those people that has been saving their money, 2014 prove to be the time to grab some good deals
of course we will also see many people getting into trouble as well
that's for not thinking properly and for getting into the BBB mode..
i have mention this to my peers, if you do not have insight or knowing what you are doing.. you are definitely heading the wrong direction.. i mean following the crowd is not a good thing, taking time and do your research is much better
Another direction that i see many people doing wrong is the forex / share investment.. the time investing into studying forex / share does not justify the return. without adequate knowledge you are just going all out crashing to the wall.. which many people include myself have tried before..
^^
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