5-10% borrowers over-leveraged on property purchases: MAS

[狮子王]

MAS said 5-10% of borrowers is overleveraged.

Posters said 5-10% of some investors is overleveraged.

So, who has the hidden agenda?

Cheers!

Of courser we regard MAS to be the true authority, right ?

If 5% of borrowers are overleveraged, then the situation is not so rosy. Since 5% would translate to around 5,000 units overleveraged in the market, am I correct to say that? That is quite a number, am I correct to say that?

If it is 5% investors, how to know the total number of investors in the market? Nobody has this figure what.

Hence I conclude posters are the ones WITH HIDDEN AGENDA.

[chestnut]

Lion king, lim peh today will do my best to unlock your 3rd ass(oops paiseh, type too fast... 3rd eye)...

Can I ask u a few question first to confirm my understanding before I give u my anal ysist..... Hahahahahaha

When did this couple buy the house????
What was the downpayment????
This family got help from parents or not?????
This family kana SSD or not????
How long this family has been holding on to this unit????
This family - did they buy a hdb or not????

Brudder, you will find your answer when u answer those questions.... Hahahahahahahahahahahahahaha

Today, lim peh good mood....

Refer to past CM to determine your answer..... Hahahahahaha

That's why u did not study your CMs well and understand what impact it left.... HAHAHAHAHAHAHAHA

My kan cheong...... Take a few deep breath.... Hahahahahaha

That is correct, good brother. For those with 1 or 2 properties, they should not worry too much if their income is at least 3 times their mortgage payments. However, cannot say the same for overleverager.
Here is my quick example for a TYPICAL OVERLEVERAGER WHO thought they can afford:

Current Scenario 1

Household income : $10,000 ( Typical Young Professional Couple)
Exisiting Housing Loan: $1,000,000
Value of Current Property: $1,800,000
Own Cash Saving already used to paid for the property : $800,000 ( Assuming all savings used to balance the 80% Loans typically disbursed to borrowers last time, it will be worse if they borrowed up to 90% and tenure of 35years or more. )
Monthly Payment current @ low interest rates 1.5% is around $3500 ( Assuming Tenure is 30 years for young couple)
Exisiting Monthly Car loan : $1200 ( Assuming Typical Toyota Camry)
Electricity Bill and other msc like property maintenance and car maintenance : $1200

Cash Left for Household Expenses: $4,100

( Still Looks good right ? )
================================================

NOT When this happens: Interest Rates increase to only 4.5%

Scenario 2: Rates Increase ( Slight Only )

Income:$10000
Home Loan will be $5100
Car Loan : $1200
Msc Billings: $1200
Saving: NIL ( MOst Overleveragers will not keep much cash )

Cash Left for Household Expenses: $1,500

================================================

You think $1,500 is enough for emergency or Household Expenses?

That is like a person with initially $4,100 Salary now living only on $1,500.

What will happen to all aspects of this family's life?

I predict they will start to take up personal loans or even underground loans to protect their main asset which is property if they missed only one payment.

The slight interest rates normalising to only a mere 4.5% is enough to erode the cash left for spending by more than 2.5 times.

Can you imagine, the higher their household income, because of HIGH PROPERTY VALUATION, the overlevergers will had definately had borrowed more in our current property market because of GREED.

You know, what if it is an interest rate spike of 25% when a BlackSwan event arrives? Not saying it will happen, but just think how easy is it to make this household leg weak.

Of course, if you are not the 5% overleveragers, nothing to worry about what. Since the 5% usually holds more than 3 properties: ( 1 own stay , 2 small investment properties like MMs ) BUT also can be the greedy ones that has only 1 own stay and one other OVERPAID investment property.

Good Luck, and DO THINK OVER ABOUT WHAT I SAID CAREFULLY.

Your Very Handsome Uncle,
Blackjack21Trader

a.k.a 狮子王，神龙股圣，The Illuminated， The Third Eye

[chestnut]

Me think US interest rate will be 3%. Can someone calculate for me interest of 3% on US$16.8 trillion ah??????

My calculator don't have capability to put in so many zeros....


Hahahahaha

[狮子王]

Lion king, lim peh today will do my best to unlock your 3rd ass(oops paiseh, type too fast... 3rd eye)...

Can I ask u a few question first to confirm my understanding before I give u my anal ysist..... Hahahahahaha

When did this couple buy the house????
What was the downpayment????
This family got help from parents or not?????
This family kana SSD or not????
How long this family has been holding on to this unit????
This family - did they buy a hdb or not????

Brudder, you will find your answer when u answer those questions.... Hahahahahahahahahahahahahaha

Today, lim peh good mood....

Refer to past CM to determine your answer..... Hahahahahaha

That's why u did not study your CMs well and understand what impact it left.... HAHAHAHAHAHAHAHA

My kan cheong...... Take a few deep breath.... Hahahahahaha

READ MY LIPS: I SAID O-V-E-R-L-E-V-E-R-A-G-E-R-S.

[狮子王]

Me think US interest rate will be 3%. Can someone calculate for me interest of 3% on US$16.8 trillion ah??????

My calculator don't have capability to put in so many zeros....


Hahahahaha

Nobody believe what the USA said they are going to do with interest rates.

One day they said A, second day they said B.

It is anybody's guess. No need to predict what interest rates, just try to imagine what impact will there be if an unexpected event happens.

[chestnut]

READ MY LIPS: I SAID O-V-E-R-L-E-V-E-R-A-G-E-R-S.

Hear my words.... I am referring to the over leverage in your assumption/ example???

[狮子王]

Hear my words.... I am referring to the over leverage in your assumption/ example???

READ MY LIPS: ASS-U-ME.

[chestnut]

Of courser we regard MAS to be the true authority, right ?

If 5% of borrowers are overleveraged, then the situation is not so rosy. Since 5% would translate to around 5,000 units overleveraged in the market, am I correct to say that? That is quite a number, am I correct to say that?

If it is 5% investors, how to know the total number of investors in the market? Nobody has this figure what.

Hence I conclude posters are the ones WITH HIDDEN AGENDA.

There will 100,000 millionaire who will come to the rescue lar...
http://www.channelnewsasia.com/news/...in/717054.html

[狮子王]

There will 100,000 millionaire who will come to the rescue lar...
http://www.channelnewsasia.com/news/...in/717054.html

or million asses.

[狮子王]

AIYA I DUNNO WHAT TO SAY...(STOMPING MY FEET ) NOT FUN ONE, I GO TAKE MY BREAKFAST LIAO LA

[chestnut]

READ MY LIPS: ASS-U-ME.

Hear my words... Situation must infer to CM.... Hahahaha

Since u so blur today... Let me give u an example...

11 jan 2011, the 40% downpayment was implement.... So from here onwards, this group over leverage or not?????


Those who bot before 11 jan 2011(brudder, date may be sala hor... U do your due diligence hor)....
1. Did price go up????
2. Did they have increment over past 2 years????
3. If interest rate increase 3 years down the road, do you expect them to have increment????
20% of the properties are private... This are the cream of the crop lar..... Of course there will be borderline cases lar....

Brudder, I will not engage u anymore lar... U seem so hostile... Not like the old bj???? HAHAHAHAHAHAHAHA

[chestnut]

Nobody believe what the USA said they are going to do with interest rates.

One day they said A, second day they said B.

It is anybody's guess. No need to predict what interest rates, just try to imagine what impact will there be if an unexpected event happens.

Brudder, u know who will be impacted most or not....

Those who are over leverage holding long term bonds hor.... HAHAHAHAHAHAHAHA

Even those short dated bonds paying 4% and maturing in 3 years time... What will happen when interest rate hit 4.5%.... HAHAHAHAHAHAHAHA

I think u better engage Vic in this topic.... I quite mountain tortoise leh.... All this too cheem for me leh... Economist, where are u???? Please tell me my theory sala or not.... Hahahahahaha

If I correct, I will boast... If I wrong, I will say I being sarcastic lar...

Hahahahahaha win-win for me lar....

U know why they impacted or not... Interest up, bond price drop... Top up call hor.... HAHAHAHAHAHAHAHA this group will die with u know what standing.... Hahahahahah

So u think this group interested to know when interest rate will go up or just know the impact.... Hahahahahaha

[chestnut]

READ MY LIPS: ASS-U-ME.

Brudder, can u don't use this word.... In OCS, my mentor always tell me... Cadet, don't ass-u-me ...... It makes an ass out of u and me....

Actually, should have signed on... My friend already BG leh.... Sigh....

Somemore, lim peh salary only 2k after I went legal on the ah long biz.... Sigh... On the bright side, at least got rental income... Hahahaha

[indomie]

MAS only dare to say that there are 5-10% over leveragers, because the latest CM has already solve the issue. They also very cautiously said that the value of loan collateral is safe (loan to value is below 50%). If there is a real systemic problem to the over leveragers, would MAS dare to say such a word? But from this example you will know the SG property is the most guarded market in the world. The country future and fortune is very much linked with the property market performance.

[Secretariat]

Of courser we regard MAS to be the true authority, right ?

If 5% of borrowers are overleveraged, then the situation is not so rosy. Since 5% would translate to around 5,000 units overleveraged in the market, am I correct to say that? That is quite a number, am I correct to say that?

If it is 5% investors, how to know the total number of investors in the market? Nobody has this figure what.

Hence I conclude posters are the ones WITH HIDDEN AGENDA.

The agencies 'lost faces' because some greedy jokers managed to circumvent the CMs to buy properties, using the children's names.

The agencies are now looking at the bank's loan approval at the HOUSEHOLD level, not individual borrower level. (If you wonder why the loan approval takes longer time these days).

Blame these jokers for TDSR if you want.

Cheers!

[chestnut]

The agencies 'lost faces' because some greedy jokers managed to circumvent the CMs to buy properties, using the children's names.

The agencies are now looking at the bank's loan approval at the HOUSEHOLD level, not individual borrower level. (If you wonder why the loan approval takes longer time these days).

Blame these jokers for TDSR if you want.

Cheers!

The proxy was eliminated by borrower need to be included in purchase lar... Hahaha

I actually think all this CMs damn solid. If not another similar type of 'sub-prime' will happen in Singapore. Hahahahaha

[chestnut]

My views are just my views- it may be right ultimately or it may be wrong in the future. It is just to point in the right direction for my own purpose.
U want to go AMk by CTE or minor road, u have to decide- pay erp? Jam at CTE? Minor road cheaper? Minor road faster? People can advise u but u will ultimately need to decide if u are driving, which path to take. Hahahaha

Please do your own due diligence. Hahahaha

U answer to yourself!!!!

[chestnut]

The govt can install traffic lights for road safety for pedestrians but there will always be people who will cross the road w/o using the traffic light. Hahahaha

[Secretariat]

The proxy was eliminated by borrower need to be included in purchase lar... Hahaha

I actually think all this CMs damn solid. If not another similar type of 'sub-prime' will happen in Singapore. Hahahahaha

Why are you not buying?

Why should you forfeit the Botainia rental incomes to buy Waterrview?

Cheers!

[chestnut]

Why are you not buying?

Why should you forfeit the Botainia rental incomes to buy Waterrview?

Cheers!

2 years ago, I felt that was the right strategy based on my analysis. Today, the results luckily was as expected(remember ah, u need luck also hor). 3 years time, I don't know... But I re-evaluate my portfolio very constantly and try to max it... Sometimes right/ sometimes wrong... How to get every time right? So long as total portfolio increase, me happy liao

[kane]

the big red font makes a comeback to this forum.

[mcmlxxvi]

Suddenly i realised all my LTV become 50% or lower after rise in capital valuation. ... maybe I should buy up a few more. LOL

[taggy]

Suddenly i realised all my LTV become 50% or lower after rise in capital valuation. ... maybe I should buy up a few more. LOL

that why they further clamp you by TDSR and the 30% haircut on rental income.... like that how to over-leverage

[Secretariat]

MAS only dare to say that there are 5-10% over leveragers, because the latest CM has already solve the issue. They also very cautiously said that the value of loan collateral is safe (loan to value is below 50%). If there is a real systemic problem to the over leveragers, would MAS dare to say such a word? But from this example you will know the SG property is the most guarded market in the world. The country future and fortune is very much linked with the property market performance.

I saw posters dared this dared that.

You think that the market is a place where a bunch of kids playing daring games? The market is a wolf pack; you know how wolves would corner the prey, circle it, tire it, before moving in to kill. Boom!

The most guarded property market in the world, is also where one of the lowest mortgage rates in the world,, if not the lowest. Sibor tracking the FED fund rate? Then explain why the mortgage rate in US is about 4.4%.

Cheers!

[狮子王]

that why they further clamp you by TDSR and the 30% haircut on rental income.... like that how to over-leverage

that only applies to the new entrants into the property market, meaning this group of buyers in the market will be missing now.

GET IT NOW ?

[mcmlxxvi]

right on. n00b entrants must always listen to the voices of govt n elders before u. purposely going against it is akin to suicide....

dont buy new launch. buy resale....lolll

[taggy]

that only applies to the new entrants into the property market, meaning this group of buyers in the market will be missing now.

GET IT NOW ?

yes sir, at least we know, from now on, any price increase(if any) or price support is not due to over leverage mah
i am not disputing that there are over leveragers already in the market, but there wont be new one.

[taggy]

right on. n00b entrants must always listen to the voices of govt n elders before u. purposely going against it is akin to suicide....

dont buy new launch. buy resale....lolll

sorry, do u mean, eg. a hdb upgrader, inspired to live in condo, who do not have other property, should only buy resale and not new launch

[Amber Woods]

With LTV at 40%, isn't it means that buyers will have to cough out more cash upfront and hence not much buffer to withstand any interest rate increases or lost of job if they used up all their cash? Such buyers may not be highly leveraged but they are still financially vulnerable.

[mermaid]

With LTV at 40%, isn't it means that buyers will have to cough out more cash upfront and hence not much buffer to withstand any interest rate increases or lost of job if they used up all their cash? Such buyers may not be highly leveraged but they are still financially vulnerable.

precisely ...

highly leveraged =/= highly vulnerable if they hv high cash buffer on hand.

lowly leveraged = highly vulnerable if they hv no cash reserves and hv high expenses.

hence I feel tat MAS definition of high risk investors .... tsk, tsk .... sounds superficial to me