So how can we avoid such event and help our economy to effectively monitor real estate credit exposures.....
First we have a goldmine of real estate information residing in NAPIC (National Property Information Center).....just imagine if we can collect ALL transactional information on Real Estate both on Primary and Secondary market in Malaysia, this can be done via consolidating all Sale and Purchase Agreement with a standard data submission format.....get the legal firms to become collection agents........historical data can be derived from tax department.........Next consolidate all advertisement information in Major Print and Real Estate portals...this will become the source of Secondary market data both for rental and sales activity
All of these data then can be visualised via Google earth, perhaps via a special program to be agreed between NAPIC and Google.......The key is single unique identification number of the House/Apartment/Building/lands/units etc either via the "regulatory" unique address... once the ID can be constructed and maintained by the operator .......the business begins....
This information can then be used by the Banking Institutions say by integrating their internal loan portfolio data with the information in NAPIC being visualized via Google Earth......imagine a credit portfolio manager being able to view a specific location with the primary and secondary market prices, borrower profiles and credit history......Index of Real estate prices by location and type can then be build for monitoring and pricing of new loans........
8 years ago ..i went to a local bank for an Islamic Mortgage.......they only had "Al-Bai Bitamin Ajil".........looked into the fine print......somehow something was not right.....they projected the future price on my house by simply applying the current financing rate or the price of money on the original value of my house to derive the "profit" which i need to pay back on top of my principal payment.......i said F*&K......how come u use the price of money or interest rate??.....tell me what's ISLAMIC about that......so i went around to shop for my mortgage....everybody was offering the same thing......now even BNM is worried .......
Underlying Problems.......
so i spoke to a few people about setting up an indepth house price index so that loans can be priced more accurately......well that was 2000....we did not have the technology nor the political will to do it.......Have a look and let me know if this is possible......if it works go do it........and make some proper/halal money out of it......and remember to pay your zakat and be charitable to the needy.........
1 Key assumptions.....
2 The Framework......
3 Potential Mathematical Formula........
4 Mortgage Structure 1........
5 Mortgage Structure 2......
6 How ensure all Malaysians can own a home......
7 How to fund the operations.......
Hi PS
ReplyDeleteMy first time at your. Your analysis is pretty gripping stuff. You're not only analysing and positing questions. This current post of yours offers a solid framework for collating available data. If only the buggers running the economy will consider the model that you have suggested. After that they really need good people to analyse the data and make the necessary inferences.
Right now I have a sinking feeling that these buggers are groping in the dark, spewing terminology without understanding them and, worst of all, they have zero APPLICATION.
I'm going to put you on my "must read" blog list. You've got some real curling ideas, bro.
Thank You Bro de minimis.....
ReplyDeleteEh..tat picture on ur blog is that in Malaysia?? or is it Kampung Naga in Indonesia??? looks so familiar
Regards
satD
haha bro
ReplyDeleteyou're still into a lot of ppt stuff. i will definitely vote you in to become the next Prime-Minister. so that you could teach the Finance Minister and clean up the corruption happening in our country.
sssssh dont tell ppl plse!!
ReplyDeleteThank you for your vote bro!!
If i'm ever one..
Work Starts at 10 am and ends at 3 pm for the whole country with common holidays on Sat n Sun
Excellent post-- I (think I) understood 90% of the gist of your framework (no mathematical basis here.) and I have zero background in economics.
ReplyDeleteAnd even if it's not an established framework, I think it's a great visual for people who are thinking about making investments in property and trying to figure out what the actual costs and returns are.