Yet another person is now telling a different version of the great economic boom story. This time it is real estate veteran Ernest Cheong who said that Malaysians do not have the financial capacity to own homes with some failing to even pay their monthly instalments.
“This could lead to a market crash,” said Lee to Free Malaysia Today.
When the property crash comes early next year, Cheong expects the prices of houses to fall from RM500,000 to RM300,000.
WFTV pointed out on many occasions that the property prices were exorbitant and that most buyers were in dire straights, having no financial capacity to afford such high priced properties in Malaysia.
The story about Malaysians having no money is now becoming common, with the Mydin superstore managing director this week exposing the fact that Malaysians have stopped buying groceries like before.
The Mydin boss, Datuk Ameer Ali Mydin said on BFM on Feb 7 that Malaysians do not have enough money to spend on groceries, despite the numerous reports that the economy is doing good.
This time, it is the property market that is of concern, with the Deputy Finance Minister Lee Chee Leong saying the property builders and sellers were offering generous payment schemes, allowing buyers to pay as little as 1% to acquire a property.
“Previously, house buyers needed to pay 10% as deposit. Today, the situation is different. Developers are in a desperate situation,” said Lee.
Cheong said this “generous payment mode” exists because developers are finding it hard to sell off their new properties.
He said they are in danger of losing their bridging finance from banks if they fail to sell at least 40% of the total units. The bridging finance is used by developers to support their construction.
“This is where the danger starts. I predict if this continues, markets will crash within 24 to 30 months because consumers do not have the financial capacity to buy properties any more.
“Furthermore, developers who started building two years ago are expected to flood the market further with their units.”