SGD Strong, Ringgit Weak

[johnny333]

do u know malaysia housing interest rate is about 4-5%

and the rental yield is not high and high risk of the tenants not paying their rental on times.

No I didn't know that. How does that impact the rental market if I want to rent a place

 

[lifeafter41]

do u know malaysia housing interest rate is about 4-5%

and the rental yield is not high and high risk of the tenants not paying their rental on times.

While I am not so sure about the rental yield in Malaysia, at this point of time buying a property in Malaysia, specifically in Iskandar, faces triple whammy of 1. Possible housing glut with many incoming supply. 2 high interest rate, and possibly higher rate as Malaysia fiscal deficit worsen. 3 depreciating ringgit vis a bid to the Sing dollar.

 

[xebay11]

While I am not so sure about the rental yield in Malaysia, at this point of time buying a property in Malaysia, specifically in Iskandar, faces triple whammy of 1. Possible housing glut with many incoming supply. 2 high interest rate, and possibly higher rate as Malaysia fiscal deficit worsen. 3 depreciating ringgit vis a bid to the Sing dollar.

Isn't depreciating ringgit positive?

 

[eErotica69]

Isn't depreciating ringgit positive?

Not when you own assets like properties in matland.

Positive for jiu hu kia Tonychat cos he earns here and spend at home in KL.

 

[NanoSpeed]

Not when yoh own assets like properties in matland.

Positive for jiu hu kia Tonychat cos he earns here and spend at home in KL.

Isn't it better ? Those who properties are still under mortgage pay less SGD for the same amount of MYR monthly installments. No ?

In any case, I just don't see how foreigners who bought properties in Johor can sell for a profit. Foreigners can only sell to foreigners because locals and bumiputra will not pay MYR 1 million for second hand properties when they have so many less than MYR 500K to choose from.

 

[eErotica69]

Isn't it better ? Those who properties are still under mortgage pay less SGD for the same amount of MYR monthly installments. No ?

In any case, I just don't see how foreigners who bought properties in Johor can sell for a profit. Foreigners can only sell to foreigners because locals and bumiputra will not pay MYR 1 million for second hand properties when they have so many less than MYR 500K to choose from.

You are correct if RM (MYR) appreciates against the SGD. However, we are talking about depreciation of the RM.

Example you buy a Iskandar Condo at RM1.35 mil. Now at exchange rate S$1 : RM 2.7, you pay S$ 500,000 (RM 1.35 mil/2.7).

Then you take a bank loan with CIMB Singapore of $300,000. Transfer of property done and loan disbursed. So you have a S$500,000 property and S$300,000 loan.



Now assuming if after say some time, RM falls to S$1 : RM 3. Your RM 1.35 mil property is now worth S$$450,000 (RM 1.35 mil/3). So without the property price falling, you already lose $50,000 on paper.

Let's not forget that your loan taken in S$ is still $290K plus plus (lower with instalment payment).

As such, with RM depreciating, you property value in S$ terms falls, but your loan does not change.

The above make sense to you?

 

[JohnTan]

You are correct if RM (MYR) appreciates against the SGD. However, we are talking about depreciation of the RM.

Example you buy a Iskandar Condo at RM1.35 mil. Now at exchange rate S$1 : RM 2.7, you pay S$ 500,000 (RM 1.35 mil/2.7).

Then you take a bank loan with CIMB Singapore of $300,000. Transfer of property done and loan disbursed. So you have a S$500,000 property and S$300,000 loan.



Now assuming if after say some time, RM falls to S$1 : RM 3. Your RM 1.35 mil property is now worth S$$450,000 (RM 1.35 mil/3). So without the property price falling, you already lose $50,000 on paper.

Let's not forget that your loan taken in S$ is still $290K plus plus (lower with instalment payment).

As such, with RM depreciating, you property value in S$ terms falls, but your loan does not change.

The above make sense to you?

What doesn't make sense to me is sinkies investing tons of money in Malaysia, be it in property or stock market or any business venture. Malaysia's ringgit will continue to slide because Malaysia is not ruled by PAP, nor do their leaders share PAP's vision of meritocracy. Their political system is based on racial and religious apartheid system. In most countries, having just one king or sultan is bad enough. In Malaysia, they have several parasitic sultans, over and above their already corrupted system.

Malaysia's ringgit is set to devalue further in the near future. I won't be surprised by end of next year, we could be seeing $1 SGD to $4 Ringgit.

Be grateful you live and work in Singapore, and earn your salary in sing dollar. You would be weeping buckets if you were earning in ringgits.

 

[eErotica69]

What doesn't make sense to me is sinkies investing tons of money in Malaysia, be it in property or stock market or any business venture. Malaysia's ringgit will continue to slide because Malaysia is not ruled by PAP, nor do their leaders share PAP's vision of meritocracy. Their political system is based on racial and religious apartheid system. In most countries, having just one king or sultan is bad enough. In Malaysia, they have several parasitic sultans, over and above their already corrupted system.

Malaysia's ringgit is set to devalue further in the near future. I won't be surprised by end of next year, we could be seeing $1 SGD to $4 Ringgit.

Be grateful you live and work in Singapore, and earn your salary in sing dollar. You would be weeping buckets if you were earning in ringgits.

You are correct, after the separation, indeed RM has weaken from S$1 : RM 1 to RM 2.7 today.

But of course there are also many opportunities in Malaysia. FX is only one consideration.

Example for those who bought condos in Iskander say in 2008 or 2009, their property may now have appreciated by 60% or more? So a fall of 10% in the ringgit, net net they still make 50%.

Investors invest take everything into consideration. So to assume that FX is the only factor, is incorrect.

 

[JohnTan]

You are correct, after the separation, indeed RM has weaken from S$1 : RM 1 to RM 2.7 today.

But of course there are also many opportunities in Malaysia. FX is only one consideration.

Example for those who bought condos in Iskander say in 2008 or 2009, their property may now have appreciated by 60% or more? So a fall of 10% in the ringgit, net net they still make 50%.

Investors invest take everything into consideration. So to assume that FX is the only factor, is incorrect.

The value of a currency reflects the state of a country's economy and political system.

When currency gets cheaper, it seems logical that more people should want to invest in it because things are cheaper. But a currency depreciates because of overall loss in confidence in a country's future due to its poor economic policies, fiscal spending and political instability.

For now, Malaysia seems pretty stable. But if its currency continues to slide, do expect its sociopolitical problems to become increasingly glaring, and with it, an overall drop in property prices.

While Singapore's currency and overall cost of living is higher, it is also reflective of the confidence people have in our currency, which again represents the country's sociopolitical climate.

 

[Runifyouhaveto]

You don't say. Really meant your Viagra? More bang for your buck? :p

Aiyah so paiseh, like that u also can tell

 

[Runifyouhaveto]

Why is everyone talking about buying properties in Malaysia but no one is considering renting

Assuming you bought at a fair price, Prime KL properties are good for rental incomes.
But nobody really think about buying Iskandar for renting, to begin with. The yields are too poor and trust me your condo will be ruined after renting for 2-3 years.
Singaporeans tend to buy Iskandar more for staycation or retirement.

Besides, several Iskandar condos are not under residential titles, which means you pay a significantly higher property tax and your tenant/you pay more for water/electricity etc.

If you die die die die die want to buy Iskandar Property for rental, I think you can consider those condos near industrial parks in Johor. Maybe Malaysians from other states will rent from you or convert your condo into a hostel for white-collar workers. Again, this is too messy and too much work. I am aware that this is still profitable for Malaysian who purchase <RM300,000 condos. However, Singaporeans can only invest in condos of at least RM500K-RM1mio will have extremely poor yields, even if you don't need any housing loans.

 

[Runifyouhaveto]

3 depreciating ringgit vs a Sing dollar.

For that to happen, we need Malaysia to expend as much resources as possible to bail out 1MDB.
1MDB is like Greece, the shit will get bigger each day if they don't admit defeat.

Deutsche-led group in talks over US$975m 1MDB debt
http://www.businesstimes.com.sg/government-economy/deutsche-led-group-in-talks-over-us975m-1mdb-debt
If lenders seek repayment leading to default, it will trigger cross default on rest of RM42b borrowings



So, this is where GST comes into the picture.

 

[NanoSpeed]

You are correct if RM (MYR) appreciates against the SGD. However, we are talking about depreciation of the RM.

Example you buy a Iskandar Condo at RM1.35 mil. Now at exchange rate S$1 : RM 2.7, you pay S$ 500,000 (RM 1.35 mil/2.7).

Then you take a bank loan with CIMB Singapore of $300,000. Transfer of property done and loan disbursed. So you have a S$500,000 property and S$300,000 loan.



Now assuming if after say some time, RM falls to S$1 : RM 3. Your RM 1.35 mil property is now worth S$$450,000 (RM 1.35 mil/3). So without the property price falling, you already lose $50,000 on paper.

Let's not forget that your loan taken in S$ is still $290K plus plus (lower with instalment payment).

As such, with RM depreciating, you property value in S$ terms falls, but your loan does not change.

The above make sense to you?

Yes, it makes sense.

However, as a foreign investor, the loss in paper value of the property in RM does not impact me immediately until the proceeds of sale goes through a FX conversion and being remitted to Singapore.

If I manage to sell the property at the same price of RM 1.35 mil (assuming that property market remains the same), putting aside taxes and duties, I will still get back RM 1.35 mil regardless of RM depreciating against SGD.

As for the mortgage, I'm not sure if loan has to be taken in SGD. I was assuming that it would be RM, so if the monthly instalment was RM 2,000 I would be paying less SGD because of the depreciation of RM.

 

[lifeafter41]

Yes, it makes sense.

However, as a foreign investor, the loss in paper value of the property in RM does not impact me immediately until the proceeds of sale goes through a FX conversion and being remitted to Singapore.

If I manage to sell the property at the same price of RM 1.35 mil (assuming that property market remains the same), putting aside taxes and duties, I will still get back RM 1.35 mil regardless of RM depreciating against SGD.

As for the mortgage, I'm not sure if loan has to be taken in SGD. I was assuming that it would be RM, so if the monthly instalment was RM 2,000 I would be paying less SGD because of the depreciation of RM.

Problem is the RM has been on a downtrend against the Sing dollar at least the last 5 years.
5 years ago, it was 2.3, now it's 2.7 a loss of 17%. Yes the argument of 1.35kk if do not convert back to sing dollar, there is no loss, I am pretty sure, the 1.35kk rm, will buy you much lesser stuff, in Malaysia, compared to 5 years ago.

 

[Runifyouhaveto]

Malaysia's 1MDB Trades Like Junk (bond) as Investors Weigh Wind-Down
http://www.bloomberg.com/news/artic...unk-as-investors-weigh-wind-down-asean-credit
1MDB’s borrowings climbed to 41.9 billion ringgit in the year ended March 2014 from 36.2 billion ringgit a year earlier


The debts alone is also equivalent to the market cap of MayBank

 

[eErotica69]

Malaysia's 1MDB Trades Like Junk (bond) as Investors Weigh Wind-Down
http://www.bloomberg.com/news/artic...unk-as-investors-weigh-wind-down-asean-credit
1MDB’s borrowings climbed to 41.9 billion ringgit in the year ended March 2014 from 36.2 billion ringgit a year earlier


The debts alone is also equivalent to the market cap of MayBank

Exactly. Ball-less Tonychat and his arse fucked parents still dare not utter a single word in front of UMNO.

 

[Cestbon]

My prediction Ringgit will fall to SG$1 = RM2.8 in 24 month or RM3 in 5 year.
Ringgit keep falling like blackhole no ending......

 

[bigboss]

Wah!!! If S$/RM hits 1 to 3 after 1.5 years.
Property investment in Malaysia now would have depreciated 15% just on exchange rate loss alone.
Even put at FD at 3.15/year not enough.

Better stay in P Hole then.

Staying in sinkie land is certainly better than in mudland. Even though the pappies' policies are idiotic, they would never allow a drama like 1MDB to occur in the island. This kind of drama frightens the foreign investors and contributes to drive down the value of RM.

Stability of a country counts in propping up the confidence in its currency.

 

[bigboss]

....1MDB’s borrowings climbed to 41.9 billion ringgit in the year ended March 2014 from 36.2 billion ringgit a year earlier

The debts alone is also equivalent to the market cap of MayBank

The world, especially the pappies, are watching to see how mudland clears up this mess. As long as it remains unresolved, and the lenders are not satisfied, RM is on the way down, not up in the foreseeable future.

 

[bigboss]

..1MDB is like Greece, the shit will get bigger each day if they don't admit defeat.

If lenders seek repayment leading to default, it will trigger cross default on rest of RM42b borrowings

So, this is where GST comes into the picture.

Applying GST to recoup losses of 1MDB is like applying antiseptic to cure cancer. The lenders are waiting to see how this cancer will be treated. Default of 1MDB is synonymous to the sovereign default of mudland.