Housing affordability getting worst: 2014

Between 2009 and 2014, the housing affordability has worsened. From 3.4 times of annual gross household income in 2009, it has risen to 3.6 times in 2014. This is as per a survey by Rahim & Co Chartered Surveyors Sdn Bhd.  As usual, this is just an average and it is based on the price of a terrace house. If you work in KL and you would like to buy a terrace house, it has risen to 5.6 times of your annual household income. In Sabah it is 6.2 times while in Penang it is 5.9 times. Yes, this is HOUSEHOLD income. If you happen to be a single, it will be much harder. Do not worry, if you are okay with high-rise apartments or condos, it should still be lower than what the survey has indicated.

Now, the question is, what do you think of the housing affordability in Malaysia? Has it gotten worst enough for you, yet? Personally I think the affordability has gotten worst but beginning 2013, the prices has not moved a lot due to the many cooling measures implemented. Next question is, do you expect it to be better with the coming years? Well, if we look at all the usual and major property markets in the world today, the answer is no. It will only get worse. What about Malaysia? Perhaps we may be able to ‘force’ the affordability to be better? Well, some have said that PR1MA may be able to address some of this. Not so much on reduction of property prices but more on ensuring prices do not rise so much. This would meant that after a few years the affordability should be better because every year the income would be increasing.

Personally, I think when more people are in the market and the wants for a certain hotspot is spread over a much larger area, the pressure for property prices increase would lessened. Today, there is only one reason why property prices in certain areas are already RM1,000 psf but just less than few minutes away, it’s less than RM500 psf. When everyone only wanted to buy that few certain areas, how can it not continuously move up every time a unit changes hand? The housing affordability is not likely to get better unless the people / buyers become more objective instead of driving prices up all the time. Government actions can help, of course but until to date, no government actions in any of the major property markets in the world can be considered so successful that is worth following. Sorry, not even in places like Singapore where the majority of property new units can be said to be a controlled matter by the government. Happy waiting or deciding.

written on 2 Feb 2015

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Affordability, Availability, GST and More Money (new income tax rate)

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Housing bubble, housing cycle and affordable units ‘fight’ between the new and old

Is there a property bubble waiting to burst in the near future? According to MKH Bhd group managing director Tan Sri Eddy Chen Lok Loi, the answer is a No. His opinion based on property price movements from 1990 was published in an
article in Edgeprop.my Click here for the full article.

He gave us a glimpse of the three bubble periods from 1990 – 2017. He shared that Bubble 1 was from 1990 1991 where prices rose rapidly from 4.1% in 1990 to 25.5% in 1991, and then drops drastically to 4.9% in 1993 within a three-year period. This reflects the bubble characteristics where there is a sharp upsurge and rapid fall of house price within a short period of time. This movement in property price was repeated in Bubble 2 which was from 1995 – 1996. Bubble 3 started from 1.5% in 2009 and it reached a peak of 13.4% in 2012 and this moderately decreases to 6.5% in 2017.

What happened in Bubble 3 was that house prices moderated and this was mainly driven by the cooling measures introduced by the government to curb speculation in the property market. This includes the following:

(i) interest rate hikes

(ii) abolishment of Developer Interest Bearing Scheme (DIBS)

(iii) raised real property gains tax;

(iv) minimum property purchase price for foreign investors;

(v) maximum 70% loan-to-value for third residential mortgage loan onwards;

(vi) 10-year limit on cash out mortgage refinancing; and

(vii) increase in transparency of property sales price.

Due to these cooling measures, there is no threat of an impending bubble in the immediate future. Nevertheless, house prices are unlikely to decrease because of demand from the expanding adult population (Our Median Age is only 29), the increase in housing quality as well as construction costs and land prices. In the article, Chen also shared that affordable housing has been actively built for the past few years but these homes were not sold because the prices were above the affordable price tag as estimated by Bank Negara Malaysia (RM282,000), or located far away from the urban area that is lacking local amenities, infrastructure network, employment opportunities, educational facilities etc, causing inconveniences to the people. Due to this, the unsold units in the country have risen. He shared that due to the fast-growing pace of affordable housing production, it will potentially inflate the already crowded affordable housing market segment. This will then lead to market cannibalisation between new supplies and the existing stocks.
Here’s that article in edgeprop.my for reference.

Property prices will only rise as long as working Malaysians continue to be able to afford to pay for them. Whether there are more supply or lesser supply, if it gets too expensive, the buying stops. This is the reason why measures undertaken by our Bank Negara Malaysia with the government is not called ‘price reduction’ measures but it’s called cooling measures. Basically, they want prices to stop rising too fast and give time and space for income to start catching up. I think the unsold units which are still in the market will start to face more pressure when newer affordable units are launched. Price is an issue, this is why new launches are targeting the price sensitive potential buyers. Sometimes, the density may also be much higher to push the prices down too. Happy looking for a property you like.

written on 31 Aug 2018

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No, houses cannot suddenly lose a lot of their value

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Housing development sector will be allowed to resume operations under Phase 1 and 2 of NRP

It’s not an easy time for many of my real estate industry friends. Not working means not having money to sustain themselves. Some may have additional savings but without income coming in, the depleting savings in the bank really do look scary. It is now announced that the housing development sector will be allowed to resume operations under Phase 1 and 2 of the National Recovery Plan (NRP)

Click here to download the full file from Ministry of Housing and Local Government

Under Phase 1 of the National Recovery Plan (NRP), housing developers which are still active with a valid advertising permit and developer’s licence (APDL) under the Housing Development (Control and Licensing) Act 1996 (Act 118) are allowed to resume operation. Activities allowed to operate include housing developer’s management office, handing over of vacant possession notices and house keys.

Other activities which are also allowed include critical damage repairs during the defect liability period and construction works for Rumah Mesra Rakyat (RMR) under Syarikat Perumahan Negara Bhd (SPNB) for G1 to G4 contractors.

In the Phase 2 of NRP, sales and marketing at the developer’s office, sales agent, sales gallery, show unit and subsale property units are allowed to resume operation. Many of my agent friends are waiting for this to happen. They are not just restless at home, they are running out of money for food as well.

All these permissions for the housing development sector to operate is subject to compliance with the latest standard operating procedures (SOPs) which can be downloaded from KPKT’s website at
https://www.kpkt.gov.my
.  The construction SOPs issued by the Ministry of Works can be found at
www.cidb.gov.my
, while the general SOPs of the National Security Council (MKN) and the Ministry of Health (MoH) are available at
www.mkn.gov.my
 to contain the spread of Covid-19.

Click here to download the full file from Ministry of Housing and Local Government

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Housing investment grew 43 percent. Biggest driver of economic growth

It’s not Malaysia yeah. However, whenever we look at the world, we could see one very important sign / fact. When the sentiment is positive, property is one of those things people buy. The reason is simple. A home (shelter) is a need. Meanwhile when we look at history, property prices always go up when we stretch the time longer. Of course if we are looking at Malaysia from 2014 to 2020, then the price increase is much more subdued versus earlier years. However, quarter by quarter, we continue to see a small positive uptrend.

Before you want to tell me that property is not the only investment lah, I want to tell you I know… I am a Mutual Gold member for a very long time already. I also believe very much in the stock market too and continue to hold many counters too. However, property is one of the investments we must not miss or we will be missing out on a lot. Just my personal advice and I have no properties to sell you as I am not from developer, not a real estate agent and not from any financial institution.

Article in nst.com.my
  canada’s gross domestic product (GDP) expanded at a 5.6 per cent annualised rate in the three-month period according to a report from Statistics Canada. Housing investment grew at an annualised 43 per cent pace, easily the biggest driver of growth. Data is showing that housing is helping country’s economy power through restrictions meant to curb spread of Covid-19. The potential for a sharp rebound is already prompting the Bank of Canada to start paring back its stimulus and warning of higher interest rates. Please do read the full article here:
Article in nst.com.my

Would property investment also drive Malaysia’s GDP growth?

At the moment, we are all at home. So the answer is no. However, home Ownership Campaign (HOC) has been extended and if we look at the trend over a few years, it does seem that Q3 and Q4  would show higher property transaction numbers too. So, we do have this potential of the property market roaring back as soon as vaccinations start to show more positive signs. Some property speakers who said that 2022 is going to be a bullish year has pushed this back to 2023. I would not want to say they are wrong just yet. 😛

An overview of vaccines and vaccinations, okay?

Total vaccines coming in June and July would for the very first provide Malaysia with a problem of HOW FAST could we vaccinate versus previous problem which was much harder; how to get vaccines to arrive earlier. Total registered for vaccines is around 12 million. Total vaccinations number slightly above 3 million.
 Total vaccines coming just within June and July are estimated to be over 10 million just for Sinovac
. We would also have deliveries from AZ and Pfizer too. Plus that news about orders for Russia’s Sputnik too. In other words, it’s enough to give everyone one dose IF we could vaccinate fast enough. Or, we could already hit 6 million Malaysians fully vaccinated with two doses. For my fellow Malaysian’s sake, I hope all these would come true.

Stay home and hope your first dose vaccination will come soon enough.
I completed my 1st dose AZ on 22nd May. My experience here.

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Housing loan approval rates stable, Housing developers still building…

Some of us believe that it’s hard to get our loans approved these days. Perhaps it’s because the banks are no longer in the business of lending money. (Just kidding…) This assumption about the tough approval for a home loan is true even for a friend who’s a senior manager in a prominent developer. He took a half day leave and went to Bank Negara to check his CCRIS first before submitting his loan application. Anyway, his loan was approved and he has bought a landed property somewhere in Setia Alam. In fact, today, it’s possible to sign up for eCCRIS instead and we could now check our CCRIS status from anywhere at all. So, what’s really happening to the loan applications?

The Real Estate Housing Developer’s Association (REHDA) has their own assessment

on the loan applications approval but the below would be from Bank Negara Malaysia (BNM).
(Here’s a comparison of home loans from 15 different banks.)

BNM says that housing loan approval rates for houses costing below RM500,000 have remained stable over the past few years at above 70 percent. In fact, the approval rate for houses priced less than RM250,000 was higher at 72.7% compared with 67% in 2012. More information at
factwatch,my
. REHDA said earlier that end-financing remained the main challenge for house buyers to own affordable houses. Highest number of loans rejected were for applications to buy houses costing RM500,000 and below. BNM asked property developers to increase the supply of affordable houses for the people. (I believe the developers are also doing because they are in the business of building homes.) BNM then shared that “In 2016, house prices in Malaysia were categorised as ‘seriously unaffordable’ by international standards with a median multiple of five times of annual household income.” Properties with median house price above three times the annual median household income is considered unaffordable, according to Demographia International.
Full article in TheSundaily here.

Since banks have to lend money and developers have to build more homes and BNM has all the facts and figures, then who’s fault is it that the transactions numbers are lower than a few years ago and the

number of unsold units continue rising?

How about issues with the buyer themselves? How about the wrong perception that everyone must buy the most
expensive property they could afford now?

How about the fact that people are buying too many things and thus

have too little savings?

There’s also the fact that sales of a cup of RM15 lattes are still increasing even if everyone knows that a cup of latte a day without a slice of cheesecake is still going to be RM450 per month? Oh yeah, that’s RM5,400 per year or RM54,000 in 10 years which is enough for a 10 percent downpayment to a RM500,000 home. Looking at all those advanced countries, I think these last few reasons seem more probable. Happy hunting.

written on 8 April 2018

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4.4 times the median income, so it’s seriously unaffordable. Tomorrow?

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Housing Loan rejection, how to avoid it.

How many of you have had your loans rejected by the bank? Today, new applications for loans may have a rejection ratio of up to 50%, especially for new properties. Main culprit is because everyone is trying to buy a property which they like very much but the price is on the borderline of what they can afford. In fact some even drive a car which they could hardly afford and this made their housing loan application become even harder to approve. Of course, last but not least, the ever increasing credit card debts which is plaguing those below 35 years old here in Malaysia. Okay, for those sure fail cases, you really have to control your wants and manage your needs. However, for those borderline cases, what can you do about it? My friend, the mortgage guru here in Malaysia, Mr. Miichael Yeoh shared the following ways of getting your loan application REJECTED.

Overconfidence.
I was once approached by a couple after my seminar. They look very worried and pull me to one side for a private discussion. Guess what happen. They bought a RM3.5 million commercial property paid 10% and immediately sign Sales Purchase Agreement(SPA). Their biggest mistake is not securing the loan from the bank before paying RM350,000 down payment. After that, their nightmare started. They approached 5 banks 3 rejected 1 approved at 50% another at 60%. They need a margin of 85%.

Lesson to be learned: No matter how confidence you are, sometimes that are a lot of unforeseen circumstances that can affect your loan approval. Better make sure your loan is approved and you have sighted the Banks Letter of Offer before proceeding to sign SPA.

Giving Fake Documents.
As the name suggest, this should NOT have been done in the first place. I have seen borrowers who are worried cannot get their loan approves by the banks have resorted doing such thing. I also had seen syndicates who are expert in this field. They can even make the EPF statement looks so real. I am not suggesting you do this to get your loan approval. Banks have ways to verify your documents. Like for EPF contributions by a loan borrower the banks will be able to do a cross check with EPF department.

During my time working in the bank, I have seen many altered financial documents submitted by loan borrowers to me. Sometimes, it is not difficult to spot these. Even the loan is approved but when it reaches the disbursement stage if the banks finds out they have all the right to cancel the facility and report to the police. I have seen such cases happen before. My 2 cents advised to all loan borrowers. Do not resorts to such way in order to get your loan approve.

Panic.
Imagine yourself as a loan borrower. The bank rejects your loan. What will be your reaction? Most borrowers will PANIC. You will start to get worried especially time is not on your side. The next thing you will do is photocopy 10 sets of your financial documents, then submit to every bank you can find. RED ALERT. This might make your chances in loan approval lesser. Banks can tract your loan submission and rejection to any other banks via Central Credit Reference Information System. In short we call it CCRIS.

You go to Bank A and Bank A rejects, Bank B also rejects, Bank C rejects and Bank D actually you have a slim chance to get approval but the problem is they saw 3 previous banks reject your loan. Your guess is correct, they will also reject this loan.

From my experience, different banks have different approval criteria. One bank rejection does not mean you are in trouble. Maybe you do not fit into what the bank is looking for as a borrower. This brings us into the next discussion topic, No Knowledge on How the Banks Approves a loan.

No Knowledge on How the Banks Approves a loan.
Many borrowers are complacent when it comes to loan application. They taught loan approval could not be that difficult. This is one of the main reason loans gets rejected. Well, if you look at the past few years Bank Negara have introduce many measures to curb lending. It will not be easy anymore and it is not going to be easy in the future.

You need to be a savvy loan borrower. Knowledge is power. With proper knowledge how banks determine credit approval, your chances in getting loan approval will definitely increase. You don’t even have to trouble yourself and send your documents to many banks. Choose the banks which you have the most likelihood to get approval. Some banks approval are more relax than others.

My personal advised to every loan borrower out there.

Do your Research

Plan your Mortgage Submission

Know your Bankers

Attend talks to learn more.

Do visit
Miichael’s website
 for more information on mortgage.

Hope everyone has gained some additional knowledge about what to avoid so that your loan will be approved. The same advice remains, buy what you can afford. The first house that you buy is not likely to be the last house you buy. Upgrade is easier when you are higher up the corporate ladder and by then you would also be more knowledgeable about what you need. Thus, one sure way to make sure your loan is approved is to live below your means and buy within your financial capability.

.

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Housing prices expected to fall 10-15% due to COVID-19 and economic recession.

I know. The title will be very exciting for those who were waiting with lots of spare cash. Imagine that property you were waiting to buy for the past 12 months is now 10-15% cheaper? It will be very scary for someone who just bought a property last year and has just started paying for his mortgages for the past couple of months. What will happen to him?

Please do not be too alarmed, the property price cannot go down if the owner does not sell at a lower price. The owner will not sell at a lower price unless the person is in financial difficulties. So, if the property market crashes, I do worry about the state of the economy. As for the state of the economy, this was recently forecasted
too for 2021. Read on yeah.

Coming back to the title. Someone from a prominent firm in the property industry is now saying that with the COVID-19 and the effects from the economic recession, there’s a possibility that the housing price in Malaysia may fall 10 – 15%. This is more serious that during the 1998 Asian Financial Crisis.

Article in edgeprop.my
  NawawiTie Leung Property Consultants director and regional head of research and consulting Saleha Yusoff says that house buying interest will be low for the coming months. She said, “The situation is uncertain for property investors, even if you have money, why should you buy now if you are not under pressure to buy?” Saleha expects a decline in transaction volume similar to 1998’s downturn which was at -30%.

She said that the property market depends a lot on economic growth. Back in 1998, the Malaysian GDP fell 7.4% in 1998 due to the Asian Financial Crisis, while The Malaysia Housing Price Index (HPI) followed suit and dropped by 9.4%. In 1999, the HPI declined 2.3%. She also shared that the COVID-19 has many associated risk factors such as depressed oil prices, ongoing tensions between the US and China, and domestic political instability.

According to data from the National Property Information Centre, there were 31,092 overhang residential units worth RM18.77 billion as at 3Q2019 compared with 10,897 units worth RM4.92 billion in 2015.  Please do read the full article here:
Article in edgeprop.my

I think if we assume that we have lost 3 months this year due to the Movement Control Order (MCO), that’s 3 out of 12 months and it’s around 25%. This number is not too far away from Saleha’s forecast of negative 30%. Actually, the recovery will take some months. There will still be fewer visitors to the mall which is a good thing. There will still be fewer people going to the property sales galleries too simply because people are still going to be worried when they read about other countries’ COVID-19 numbers.

Perhaps we also need to see what happens once the U.S. starts to reopen their economies because this will also be setting the tone to the business confidence too. Most countries have decided that they will only reopen their economies once COVID-19 infections are negligible.
President Trump has announced that they will start reopening for states which has sown a decline in new infections for 14 days.
Happy understanding.

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Press Release: Hassle-Free Home With Glomac – Houzkey by Maybank Islamic

KUALA LUMPUR, 5 Nov 2020 – Glomac Berhad (hereby referred to as “Glomac” or the “Group”) has partnered with Maybank Islamic in the latter’s HouzKEY home financing solution to provide more benefits to homebuyers in acquiring their desired homes.

Among projects that are included in HouzKEY are Glomac’s prized projects in Petaling Jaya and Johor, namely the high-rises of 121 Residences, Plaza@Kelana Jaya and the landed development in Saujana Jaya, Kulai.

121 Residences is located in the heart of Petaling Jaya, just 400 metres from the upcoming LRT 3 Station Kayu Ara and boosted by excellent connectivity besides being surrounded by abundant amenities which include shopping mall, school, F&B outlet and with easy connectivity to LDP, Sprint and Federal Highway.

Meanwhile Plaza@Kelana Jaya is strategically located along the LDP and selling price starts from only RM383,000 which makes it the only and most affordable freehold property available in this prime location.

Saujana Jaya Kulai meanwhile, is located in a 174-acre Glomac township development comprising landed residences that is easily accessible to and from North-South highway and only about 20 minutes’ drive to Johor Bahru.

Touching on the collaboration, the Glomac’s Chief Operating Officer in Operations, Zulkifly Garib, quoted, “Glomac sees HouzKEY as an exciting chance for us to deliver to our prospects a property ownership solution and to cater to a larger population. Especially to first-time homeowners, we believe we can make their first experiences more meaningful through this partnership with Maybank Islamic”. Glomac believes the scheme encourages exciting homeownership journeys for its customers.

Maybank’s Managing Director of Real Estate Ventures, Sally Lye, said “We are delighted to be partnering with Glomac to introduce our home financing solution, HouzKEY to potential homebuyers. During these trying times, we remain committed to our mission of humanising financial services. Through HouzKEY, we hope more Malaysians can now own their dream home by providing 100% financing, no payment during construction period and lowest monthly payment”.

With Glomac & Maybank Islamic’s HouzKEY, homebuyers now gain much greater flexibility and cash flow efficiency in their homeownership journey. Amongst the Maybank Islamic’s HouzKEY benefits to the customers include:

1. 100% Financing; get full financing with no down payment required. Only 3 months of refundable deposit needed.

2. No payment during construction; Maybank Islamic helps to finance the cost during construction

3. Lowest monthly payment; enjoy the lowest monthly payments with the best rates.

For more information, visit
www.glomac.com.my

— End Of Press Release —

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How Colours Can Enhance Your Home

The colours in my current home was chosen by my wife and I. We kept more to the neutral tones because we were afraid that too much bright colours may just cause the house to be too ‘Hot’. Haha. Anyway, I am nowhere qualified to talk about colours you can use for your home. Let’s read from one of kopiandproperty.com’s article contributor, Tim Smith of Modernize.com

— Start of Article —

Bored by your home? We totally understand: day after day of looking at the same old, same old can be exhausting — especially if you’re surrounded by white or beige walls. No reason to fret, though. Adding a little color can seriously enhance your home. Read on to find out how to use color to give your house an amazing lift.

Create the atmosphere you can live with

It can be tempting to just pick colors that look nice in display rooms or on magazine pages, but a critical part of using color to enhance your home is to make sure you create the environment you will be comfortable in. Before making a choice, ask yourself what type of ambiance you want.

Pick a color scheme

Color schemes are the result of a conscious choice. Don’t choose colors at random or just because you like them — a room’s color scheme is ideally derived from a picture, a rug, or a dominant piece of artwork in the room. For example, if you have a painting of avocados split open on a kitchen table, this can lead you to a theme consisting of shades of green, yellow, purple, and brown.

Use color to create a well put-together look

Once you’ve picked your colors, distribute these so that more than 50 percent of the area you are working on will be covered in the dominant color you have chosen. Then, decide which color you will use as your secondary color and find ways to use this in about a third of the space. Lastly, use the remaining colors to either complement or contrast, making sure they cover about 15 percent of your working space.

For example, if you decide to use green, purple, and beige as the three main colors of the room, you might want to paint the walls green so that more than 50 percent of the room is green. Then, you could put brown slipcovers on your furniture and refinish your woodwork in a darker or brighter shade of brown. Finally, you can include accent pieces such as throw pillows or a small area rug in shades of purple.

By distributing your color scheme this way, you will have a well-coordinated room that can be as vibrant or as sedate as you want – depending on the colors you pick.

Use the color scheme through the entire visible space.

Make sure there is continuity in the colors of all visible areas. If your dining room and your living area are all in one open space, make sure your color scheme flows through both areas. You can do this subtly – by using a tablecloth or a table runner that echoes one of the colors in your scheme.

Use a touch of contrast for pizzazz

A splash of contrast here and there will prevent your home from being humdrum. You can supply this contrast with a throw pillow, a vase, or a table lamp. Remember, just a tad of contrast will do – unless you really want to create an atmosphere of constant motion.

Color is one of the quickest and most effective ways to change the way a home looks. If you are ready to undertake this project, start looking at magazines and showrooms to get a better idea of the colors you want to use.

Tim Smith writes for Modernize.com

— End of Article —

Hope you like this article. If you want to read more tips, you can always visit their website too.

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the KopiTalk has reached the #12. For this last in the first dozen, of course it has to be a topic I personally like a lot. Let’s talk about personalities. Did you know that some people just could not work with someone else NOT because that someone else was not working as hard but because how he does things is completely opposite of how others do things? Last minute works best? Try telling the one who starts right from the 1st minute a project is given to them!

“How do our personalities affect us? Time to take charge.” Understanding our personality will allow us to be aware of all the other different personalities. It will also create a much better understanding and acceptance because we now know why some people react the way they react. With a good understanding of one another’s personality, we are doing to live an awesome life and well, things get done way better too. Managing a team? We must start from understanding their personality.

I have invited someone who trained me a few years ago. He has helped me improve my management skills. I am honoured to have Daniel Lee Kwan Leong. He is a managing consultant, trainer, coach and author. Books he has written include, “Success, Money & Passion; Finding the Perfect Balance at Work” (based on an earlier title “The Joy of Work”) and  “8 Success Qualities of Outstanding People.”
Register here to attend the talk and ask Daniel a question. You will be in the running for a free property investment book, “Property Investment Wisdom.”

(Daniel) Lee Kwan Leong trains, coaches and consults in people development matters as well as being frequently invited to speak in conferences on these subjects. He is based in Malaysia and occasionally delivers his training and consultancy services in countries like Hong Kong, Singapore, Philippines, Indonesia, Vietnam and Thailand.

As a strategist, Kwan Leong has the privilege of learning from the inventor of Mind Map, Tony Buzan & CEO of ThinkBuzan, Chris Giffiths where he was certified as 1 of the 5 ThinkBuzan Licensed Instructors in Malaysia.

He is also certified as a trainer with PSMB, SEI 1-1 EQ Assessor (from Six Seconds) and Lumina Splash personality assessment.

All I can say is that we must not miss this KopiTalk #12 on 8th August (Saturday) at 9pm. Register for the session here for a chance to win a comprehensive property investment book
by Dr. Peter Yee entitled, “Property Investment Wisdom.”

Register here to attend the talk and ask Daniel a question. You will be in the running for a free property investment book, “Property Investment Wisdom.”

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When we do not change, we stay the same. Oops…

I love to have lunch and coffee with different people every now and then. I learn new things every time this happens and I do not mind to pay for the coffee and the meal especially to people whom I could learn from and share some of my perspectives too. In the real estate industry, I have met so many really capable and knowledgeable people and they remained ever down-to-earth and always willing to share and to all these people, I will forever be grateful.

Recent conversation with a few senior managers in the corporate world. A few were complaining that the current work environment is stressing them out. Furthermore, competition is getting tougher and the company may face grave danger in the future. They shared that there were so many things which were beyond their control that the best thing they could do is just to take everyday as it happens and just go with the flow.

I asked if they have something which they intend to do in their mind. A business? A second job? Something for the world? Most have some idea(s) which they would love to try out one of these days in the future. When asked when will that happen and why not now, they answered that everyday, when they arrive home, they were already very tired. They prefer to relax so as to be able to continue working hard the next day.

Dear everyone, let’s remember that when we were young, we had no money, no opportunity and no experience. When we started working, we have little money, some opportunities and little experience. After working for 10 years maybe we have a good monthly salary, many business networks and even sufficient expertise with something which we may have been doing for many years. Look again, so when should we start something new? It may just be now.

The issue is this. After many years of working, we got comfortable. Every month, we get our pay, we enjoy the little things we enjoy. We go for vacations occasionally and thus spend a lot of what we saved. We spend our time watching our favourite drama on television or on our smartphones and thus spent a lot of our extra time which could have been used for something with wealth creation potential maybe. So, what has changed? Practically nothing much anymore.

When nothing changes with what we do, nothing changes with what we will achieve (those things we dreamt / aspire about). When we are always tired every time we reach home and watch 2 hours of tv before we go to sleep, we would have spent nothing less than 730 hours every year. I have no idea what could we have done with an extra 730 hours but certainly we could use it for a lot more than just watching dramas. (or playing a never ending smartphone game).

This article serves as a reminder to me that I need to keep evolving. I need to keep reading more and writing my views so that I have a reference to go back to in the future. I should also for this one resource, everyone has the same amount; TIME. If it is to be, then it’s up to me. Well, unless of course that fresh graduate has a father who owns a listed company and could then arrange for a super fast-track route for his son / daughter to learn from all the experienced managers and to take over from him when he retires in the future. For the rest with a day job, remember that when we could not change for the better if we kept doing the same thing every day.

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How do you know? Let’s get to know.

How do you know if the property fair was poor but the organiser tries to cover up? Well, instead of telling you the overall number of visitors, they would tell you, ‘huge crowds were there’ or ‘many property buyers visited the show’. Instead of telling you the overall transaction which may number over RM50 million easily because RM50 million is just 100 units of RM500,000 properties. They would say, ‘developers said they have lots of interested buyers’, or ‘some booths were busy for the whole day’. Truth is, if there are 30 developers, each developer needs to sell just 3.3 units and it would hit 100 units. Furthermore these days, do you think properties exhibited are really Rm500,000 and below? For those, they do not really need to exhibit. They only need to do advertisements and it should sell well.

How do you know if a property is ‘not selling well?’ When you see lots of advertisements about it on Facebook by different agents. When you received SMSes which tells you, ‘Final call, few units left’ and that same SMS is sent to you again one week later. There was even a developer who said, their offer ends on Friday. For the next 3 weeks, every weekend, they were still advertising in the newspaper. I am not saying you should not buy these but sometimes there are reasons why it could not be sold for a very long time. Sometimes, it may be just the wrong marketing used. No one knows but if there are so many new launches, why go for the ‘long time no one buy’ kind of property then?

How do you know if the price is really overpriced? When they kept telling you about the MRT which is going to be right next door within the next few years, therefore there is certainly some premiums in the pricing. Some developers would also tell you that their concept is the only one of its kind in the market. Please note that MRT may help your home price to increase but there is really no need to pay for a premium for it today. For the only one of its kind concept in the market, if the concept is not liked by many, you are doomed if you buy it. If the concept is loved by the market, you think the next few projects would not be based on the same concept? If that happens, are you still the only one of its kind?

How do you know that the area is very far away? Most of the time, it would say things like, ‘with the highway, the journey to city centre would be a breeze as it would take just 30 minutes’.  Wait a minute. Highway speed limit is 110km, 30 minutes journey meant the property is 55km away!  Alternatively, they would tell you, ‘escape the hustle and bustle of the city and come back to nature. The development is surrounded by a secondary forest. First of all, if it’s a forest reserve, it is unlikely that developer would get to build there. Secondly, once developments arrive at your area, the secondary forest would become ‘once upon a time forest’.

I love reading many of these advertisements and I love visiting projects. However, sometimes, after I read about the project, I would just do an online search and conclude that I would be better off visiting malls instead. How do you know? Well, just read more and visit more and speak more to your friends who are active in the property market. These are good knowledge to have.

written on 24 Sept 2014

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How dominant is the US Dollar? Why is it needed for trade?

How dominant is the US Dollar?

When country A needs to buy goods from country B, it has to pay country B in country B’s currency. If it uses country A currency, then it’s not usable in country B. However, it may be hard to determine the value of country A’s currency versus country B. Both would want their currency to be higher valued, then the country with a higher valued currency can buy more goods from the country with a lower valued currency.

So, in order to ensure a seamless trade, both countries can choose to use a common currency. In the world today, that common currency is typically US$. Briefly, currency helps to encourage economic activity so that countries could trade with one another easily. Barter trade is likely to be hard because the two countries may not be needing goods from one another or may not be at the same time too.

This is why US$ is do dominant today.

Source: visualcapitalist.com

When countries hold US$ as part of their currency reserves?

If I hold US$300 in my pocket right now, I would HATE it for the value of this US$300 to drop… right? Now you know why even more countries may prefer to hold their reserves in US$? It’s because so many countries are holding it, thus they fee it should be a safe currency to hold as a reserve, for trade and well if it appreciates because of high demand, it will benefit the country holding US$ too.

Next is Euro and a distance away is Yuan

Remember yeah, it’s EURO. It’s not British Pound. I still think Brexit is a wrong decision yeah. Let’s hope UK will somehow be able to increase their trade with all other nations beyond just the European ones.

Japanese Yen is being held by more central banks in the world and with China soon becoming the largest economy in the world in a few years’ time, more countries would be holding more of it too.

Swap agreement is helpful to reduce the need for US$

When China and Malaysia trade with one another, there’s really no need to use US$. We can use Chinese Yuan and Ringgit instead. A currency swap agreement is needed though. For example, Malaysia and China have a currency swap agreement for more than 10 years already.
Hopefully this is renewed continuously. (earlier article here in BNM)

What happens with a currency swap is that both countries agree with a certain value assigned to both the currencies. This is a hedge against fluctuations and also takes away the need for a foreign currency to act as a trading currency. So yes, at the moment, US$ will remain extremely dominant and will be a trading currency of choice.

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How high can land price actually go?

Occasionally we hear of ‘crazy’ transactions for some small-sized but prime land plots nearby KLCC. Well, how high can land prices be, for these small pieces of land nearby KLCC, say within the next 20 years? I have no answer. However, I would like to share a piece of interesting news which can perhaps predict the future. One old 5-storey car park building has been sold for HK$23.3 Billion (RM12.94 Billion). Do read the full
news in nasdaq.com here.
The size of the land? 31,000 square feet. Yeah, less than 1 acre. By the way, even though we know Hong Kong land prices are expensive due to its size but this transaction has set record as the most expensive plot of land ever sold in Hong Kong. The winner is Henderson Land Development and it had to beat many mainland Chinese developers. The price per sq ft is HK$50,000. (RM27,700). Land prices nearby KLCC is definitely not going to reach this level within the next 20 years, I hope. 🙂

Actually, the two Hong Kong developers I know would be Cheung Kong Property Holdings and Sun Hung Kai Properties. Both of them lost in the bidding. This piece of land is in an office area and the vacancy rate is less than 2 percent. (YES, it means very few choices…) The actual site is in the middle of Cheung Kong Center and Hutchison House, two major flagship buildings owned by the city’s richest man Li Ka-shing. Henderson will be building a landmark office building with retail facilities and it is expected to be completed in 2022. The report said that this building would become the company headquarters for Henderson thanks to its location and gross floor area of more than 460,000 square feet. The availability of office space remains tight in the prestigious Central district and with more Chinese financial companies eager to set up offices there, prices would be pushed higher. Do read the full article in
Nasdaq.com which has many more facts here.

I personally believe that the bid is not something out of the ordinary. To buy one whole building as a headquarter within the same area would definitely be costly, not to mention all the additional renovation costs. The design may not even be acceptable to the new owner. Building cost is also something more manageable as Henderson is also a developer themselves. In other words, the usual profit margin that Henderson would have to pay for a new building is now ‘saved.’ The location itself, as stated in the article is the one which is out of the ordinary. The next available piece of land may be years away. The decision is thus quite straight forward. Bid so high that every other bidder’s bid would be pretty far away. This is not the time to try and bid slightly higher and hopefully be the highest. 🙂  Perhaps I should drop by and look at that piece of land in my next trip to Hong Kong in mid June. Haha. Happy following.

written on 19 May 2017

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How long can ‘good time’ lasts?

Is it a good time to buy Malaysian property today? Let’s discuss this funny term, ‘good time.’  I am not sure if anyone would like to refer to current volatile stock market and Ringgit as well as falling property markets in terms of transactions as a ‘good time.’ Seriously though, my friends who have a few properties are still buying or viewing properties to buy. As at 2015, I have not bought any but I have ‘poured’ some money into the stock market. Yes, ‘poured’ because I have never had so much money in stock market before. Just have to wait. Coming back to our topic, ‘good time.’ Every strategist or entrepreneur would tell you that it is when there are threats that there are opportunities. If there aren’t any threats, the companies on top would always be top and new companies would never emerge. Life would be so boring right?

Well, in English, there’s a saying that ‘one man’s meat is another’s poison.’ This is so true in everything we do, especially property investment. I just go to know another investor friend who does exactly opposite of what I have been doing. From his, I learnt that perhaps landed can be considered after all since there are still opportunities. From me, he understood why all my purchases has been high-rise and he is thinking of starting with the first high-rise soon. Both of us agreed that during times of slowdown, it is a ‘good time’ for those who are ready. Ready to take calculated risks. Remember, no one knows how long this slowdown could be. That’s why it has to be a calculated risk because we may be wrong!

I seldom believe those analysts who said after 10-12 years of good times, a crisis should happen for everything to clean itself and restart higher growth. I only believe that we should always buy undervalued, whether its property, stocks and even a new pair of leather shoes. (In the month of August, I am wearing a different pair to show my colleague that I really have enough for one month of 20 working days.) It is a good times during the 1998 crisis, especially for those who bought stocks when the index was lower than a water well. Well, everyone forgotten that it’s a well…… so, when the recovery started, those who bought during the ‘bad period’ had a ‘good time.’

Do not ask a developer if they will build cheaper homes. Do not ask an agent if the house you are viewing is worth buying. It’s even funnier to ask your stock broker if the market is low enough to enter. Truth is, none of them would be able to give you an answer you should just believe and do. Perhaps the best question is to ask ourselves, ‘is this a good time for me? since it is now considered a bad time for many.?’ Whatever answer you may have should guide your actions for the next few months or longer or even forever. Happy deciding how long a ‘good time’ would last.

written on 23 Aug 2015

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How long can your neighbour renovate his home?

If you are staying in Kuala Lumpur and your new neighbour just started his renovation, how long do you think you will have to endure the drilling and hacking and even the never ending dust layers inside your house daily? 1 month? 3 months? 6 months? Legally for now, there’s actually no limit. In other words, your neighbour could continue renovating everytime he has more money to spend and this can go on forever and ever.

Oh dear. This is bad, right? So, what is Dewan Bandaraya Kuala Lumpur (DBKL) doing about it? Nothing? Not really, they are trying to do something about it for the benefit of everyone here in Kuala Lumpur. Let’s read and understand.

Article in thestar.com.my
  Mayor Datuk Nor Hisham Ahmad Dahlan said the Uniform Building By-law 1984 has to be reviewed to ensure house owners in Kuala Lumpur complete renovating their homes by a given time.  The mayor said that there is currently no time limit on the person to complete renovation works in Kuala Lumpur or in other authorities. Actions if needed could be taken against offenders under the Local Government Act.

Planning law expert Derek Fernandez said that the mayor has powers under the provision of law to come up with new guidelines on time frame and validity period. He said, “The mayor has the sole power under the provisions of the law for DBKL to fix a validity key period for any building plan approval.” He said that those affected could sue the local authority to compel it to take action. Please read the comprehensive
Article in thestar.com.my

From this it does seem that the mayor has some powers to decide on the renovation period by using the building plan approval? Well, as Spiderman once said, ‘With great powers come great responsibility.” The mayor may be the key to all of us living harmoniously instead of suffering in silence from some inconsiderate neighbours. Fortunately for most of us, our neighbours are good people, right?

Oh yeah, even if we hate our neighbour, cutting a tree from their compound which has become a
nuisance to us may still be illegal yeah. Read here.
 In the mean time, if WE are the ones renovating, the least we could do is to ask the contractor for a completion deadline, tell our neighbour nicely and occasionally buy them some oranges. Building bridges will be necessary since once we moved in, our neighbours will become our ‘close’ friend too, literally.

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How low can property prices go?

How low can property prices go?

Actually, can also ask this instead. How long can home owners hold versus having to sell their properties during a slow period? Perhaps the home owner is desperate to sell? Perhaps the owner could hold for a very long time?

It can also be how long can potential home buyer wait and see while continuing to pay rental or whatever payment if the house they are eyeing is for own stay. Perhaps the buyer desperately needed to move out from his current place? Perhaps the buyer was just buying for the sake of buying?

Many different questions depending on which side of the fence you are and which side you like to support. So, which side would you like to support then? Well, in Sydney and Melbourne, it’s not so rosy at the moment when it comes to property prices. One reason often cited is the rise in rates meant that buyers are less enthusiastic to buy. By the way, most of the homes in Melbourne and Sydney are sold by way of auction yeah.

Article in smh.com.au
   Cooley Auctions managing director Damien Cooley said this about what is in buyer’s mind. “They’re nervous about, if they buy this property for $2 million, is it going to be worth $1.8 million in six months time?” “That doesn’t mean they don’t like the property – they think, ‘We’re going to sit on the fence for a bit, and wait for the bottom’.”

AuctionWorks chief auctioneer Jesse Davidson agreed some buyers are worried about the value of their new asset falling. He said, “That’s one of the concerns, and typically, buyers are always trying to pick the bottom and pick the top.”

“The truth is no one knows … it’s too hard, it’s too difficult to tell.”

In Melbourne, Marshall White director John Bongiorno said because buyers are mindful the price of their property will fall, they are saying they are in no hurry to purchase. He said, “It is one of the catchcries you hear in the marketplace – buyers aren’t in a hurry to buy unless they find the right property at the right price.”

Buyers’ advocate and Wakelin Property Advisory director Jarrod McCabe said, “The concerns that buyers have, and that they’re factoring in, are interest rate movements.”  Here’s that article in full yeah.
Article in smh.com.au

Ask these 3 questions instead?

Have you compared and see if the current price is already below similar areas elsewhere?

Have you viewed enough properties to know if the price actually has gone down by double digits and is really value for money?

Could you actually buy the unit and hold it in case there are some uncertainties?

If the answer is a Yes, then it is much safer to buy versus just asking whether the price will rise or whether the price will go lower. Whether higher or lower, there has to be a comparison. We cannot compare if we have no knowledge about what we are comparing. Think about it. The only way we ever know something is cheap is because there are expensive things and vice-versa.

I viewed over 20 properties before buying my first one. Some say 20 is too few for the first property. Haha. It took me 2 months to decide whether to buy my second property. Yea, I know, pretty crazy. Third one took a few days. Fourth one, I bought 2 days before the brochure arrived at my doorstep. Fifth one took me 45 minutes. If you do see me in some talks, you can ask me about the rest. Haha.

Yes, I love properties. Happy thinking about it.

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How many of us are ‘blue-chip’ level anyway?

Not many of us are wealthy enough to retire. Perhaps not yet anyway. A better question is, how many of us consider ourselves BLUE-CHIPs? Wow, this is a question many would be looking at me now. We are not stocks, why are we blue-chips then? Haha.
Warren Buffet always buy undervalued
 and fundamentally sound companies. Let’s look at just two items; undervalued and fundamentally sound.

Are we ‘undervalued’ then? Well, to those who think we deserve more than what we are earning today, the answer is probably. The company must be paying you a little too low. Next question, are we able to resign and find a new job almost immediately, paying us more money? If your answer is also yes, then friend, you may really be undervalued and it may be time that you leave. Third question, when you have found a new role, would you be doing more valued-added responsibilities than what you are doing today? If your answer is YES, then you are totally undervalued because you can actually do more than what you are doing today, you just did not have the opportunity! Last question, did you ever tell your current manager about this? If answer is Yes, you may be wrong or they may be wrong. Either way, decide and take actions.

Are
we fundamentally sound
? First question, are there MANY other staffs within the same company who can do what we do and perhaps some can do better? A Yes should make you wonder why you are not special. If answer is NO, then are in a position which is allowing us to continue improve what we are doing today? Do note that if you do the exact same thing year after year, please do not expect to be paid much more and more, right? Last question, are we also continuously remind ourselves that we must do better, must do more? If answer is yes, and we are still growing, that’s the best. If answer is no, it’s time we re-evaluate our position. Just like a listed company, if their product is exactly the same as everyone else in the market, think what would be their growth like? Maybe nothing, maybe decreasing even.

Are we considered a blue-chip? Haha. If we are positively blue-chip, congratulations! If we are not, well, perhaps we should start
focussing on investments
 because if our career just would never take us up to a senior management role, there’s really nothing to fight for. Oh yeah, even if we are today a senior manager, just be reminded that there are some young managers who earn more than us from their investments. Perhaps that ought to keep us on our toes and keep improving; ourselves and our investment portfolios. Gambate in becoming a ‘blue-chip.’

written on 23 Aug 2015

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How many of us could save RM336 / RM788 / RM1,386 per month for the next 30 years?

If we work for 30 years and we save money without fail every month for 30 years, how much do you think we could save? Well, if we could save RM336 per month for 30 years, we would have RM121,000 at the end of the 30 years. Perhaps by then, the value of RM121,000 is much lower than today. However, we still have RM121,000 on top of whatever we have in our EPF.

What happens if we bought a property instead? Say a RM350,000 property and instead of the typical property price increment, we lower this to just 1% per year for 30 years? Image below shows the calculation. We would have the same amount of RM121,000 in property price increase. We will reveal one surprise at the end of the article. For now, we know that we could either save RM336 per month or we would buy a property and rely on the 1% property price increase per year as well.

Source:
https://www.money-zine.com/calculators/investment-calculators/future-value-calculator/

Let’s just say we are more ambitious. We could save a lot more money every month. RM788 per month for the next 30 years. That would give us a total of RM283,000. This amount is around the number recommended by EPF for all its members when they retire. So, are we safe? Well, we are safer. RM283,000 plus all the EPF contribution means we are definitely comfortable. Take a look at the image below.

This savings of RM788 per month is also equivalent to a 2% increase in property price every year for the next 30 years. We are using the same property price.

Source:
https://www.money-zine.com/calculators/investment-calculators/future-value-calculator/

What if we are aggressive savers and we save RM1,386 per month then? If we do that for the next 30 years, then we will have around RM500,000 when we retire from working full time after 30 years. Whoa, not a bad number at all even if this RM500,000 at that time would be of lower value than today.

If we bought a property and use 3% as property price increase every year, then the property price will also be up by around RM500,000. Calculation as below.

Source:
https://www.money-zine.com/calculators/investment-calculators/future-value-calculator/

I know, some would like to say that all those savings into the bank, surely they will earn interest! Yeah, I agree. If we look at advanced economies, the interest rates are already lower than our current 2% for the Fixed Deposit. I hope everyone understands that low interest rate regime may be here to stay judging from what’s happening in the world today. We assume that some of us would insist on just staying focused on savings alone and nothing else, then yeah, on top of the savings, the interest rate may just be an extra 2% up every year.

Remember yeah, this 2% Fixed Deposit rate is based on what we saved. The property price increase is meanwhile based on the property price and not on how much we invested. Now we reveal the surprise. Yeah, besides that increase in property price, by the end of 30 years, that property is already ours. In other words, every amount above needs to add an extra RM350,000 to it. (original property price). THIS IS NOT AN ADVICE to take ANY ACTION. No one knows the future, you decide and take appropriate action yeah.

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How much interest do we pay for a RM500,000 home? Too much?

Ever wondered how much interest do we pay for a RM500,000 home at the end of the loan tenure? Remember many people shared that the interest we pay could even be more than the loan amount we took? Well, those were the days when the interest rates were much higher. Specifically, if it’s a RM500,000 home and the tenure is 30 years and the interest rate is 5.35%, then by the end of the tenure, the interest we paid is MORE than the amount we borrowed.

What’s the current rate?

These days, any new home loan may have a rate of around 3% or thereabouts depending on the loan amount and the borrower’s credit score.
Here’s one latest sample of typical rates for a RM500,000 home and 10% downpayment from loanstreet.com.my

Source: loanstreet.com.my

What’s the total interest?

Will the interest we pay be higher than the loan amount we took? Let’s look at some calculations by using
calculator.com.my
  We use the typical interest rate of 3% for the calculation yeah. We can see from the second image that the interest rate for the RM450,000 which we borrowed will come up to RM233,000 at the end of 30 years. So, the interest we paid is only around half of the amount we borrowed.  This is a huge reduction from the time when the home loan rate was 5.35% and which would have meant interest paid is higher than our loan amount.

Source: calculator.com.my

Source: calculator.com.my

Should we proceed to buy then?

If the decision is based on just how much interest do we pay, then of course it is a firm YES. Then again the decision to buy a home needs to also take into consideration many other reasons. 4Ps (Price, People, Policy and Preference) would be the more important considerations. Briefly, buy if the price meets our expectations and is not overpriced, buy if the demand for property in the area is established, buy if there are positive policies supporting the growth and lastly, the property is a preferred property by your targeted potential future buyer / tenants.  Here’s that earlier article:
Deciding to buy a property? Think of the 4Ps

Happy deciding and do note that for the question of how much interest do we pay, it’s no longer true that interest rate will be more than the loan amount at the end of loan tenure yeah.

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How much is a REN’s salary? Well…  :)

About 30 percent of the traffic to kopiandproperty.com comes from organic search. Occasionally, some search term amuses me and I write about them. Take a look at today’s result for search terms. Someone searched ‘real estate agent Malaysia salary’ and somehow got redirected to kopiandproperty.com Haha. Real Estate agent means Real Estate Negotiator (REN) Perhaps there are a number of pointers for them and thus google assume I could help them. So, what is the salary of a REN in Malaysia anyway? What if I tell you, they are paid nothing much but the REN career is a very rewarding one, financially. Well, for one, they are not usually paid basic salary or even if they have a basic salary, it is usually to cover some of their incidentals. They earn commissions when they close deals. They earn commissions when they sell a new property (from the developer) and they earn commissions when they sell a secondary property (from the seller). They also earn when they help homeowners rent out their home.

So, how much could these RENs earn? Perhaps some of the RENs who are reading should just tell what some of the better ones are earning. I DO NOT think the good ones are in this industry to earn a basic salary or even a fixed pay. When I was asked to give away some top performer prizes in an awesome real estate agency in Melaka a few months ago, I got to know that their top performers could afford to go for weeks of holidays. This was because of their strong network of buyers and sellers which they have built diligently over time. Week of holidays would be something which many of us could not do, including myself as I also earn a fixed pay. No work, no pay. Work harder, same pay. Haha. Yes, the good ones earn five figure monthly salary and the five figure does not start with 1.

Of course, the question of what the below average ones are earning would be very little
, barely enough actually.

Join a good agency if you intend to be a REN.

A good agency is one which the agency lead would provide continuous training, takes discipline seriously because a team can only work when everyone does their part and last but not least, the agency is always open to keep improving and not having the ‘been there done that’ attitude. Yes, I talk to RENs on a daily basis and the good ones usually stand out because they are on the phone nearly all the time. With their buyers, their sellers, their friends from the industry and basically every opportunity is pursued. I know of an engineer who decided that REN is his career. He resigned, worked very hard and just a few weeks ago, won a couple of REN related awards. He has even published his book and is today sharing his property thoughts to lots of people. To the one who searched for REN’s earning, hope I have provided to you the answer. Happy working hard and the rewards are huge.

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written on 18 Sept 2017

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Will buy very soon. Will buy when it’s low. 2 greatest reasons of all time. Agree?

I have a good friend who asked me what I thought about property investment when he was 24. After an hour of sharing, he told me he understood more about all the risks and potential returns. He purchased his first property after a few years’ of working and I do think he has a number of properties today.  I have an ex-colleague who bought her second property after listening to my property sharing. These people researched and decided that property investment is for them.

I also have good friend who told me that he is going to buy a property very soon. That ‘very soon’ was around 15 years ago. He is still staying in the same home thus far. At the same time, I also have a good friend who told me that her husband will buy one particular home they like very much when the price is lower. She does not know what price her husband is looking for. He does not know yet.  This brings us to the 2 greatest reasons of all time.

Buy very soon. Buy when it’s low. 2 greatest reasons of all time.

Feeling of comfort and safety is the same whether we rent the home we stay or still paying for the home we are staying in today. Please do not say that we will only feel comfortable and safe if we own the home we stay today. By the way, if we are still paying the home loan, it meant that the property belongs to the bank, not us.

A home sweet home keeps away the rain, the shine and it provides safety to our lovely family when we are away on business travel. In fact, it provides a space to watch our favourite show and we could even convert one of the rooms in the home into a mini cinema too. Since a home is such a good thing, everyone says that they want to buy one. However, decision to buy may not be so straightforward. Two reasons were often given. They are as follows:

I want to buy very soon.

Many friends have told me that they will be buying a property very soon. When asked how soon is that, they gave another good reply. As soon as I am ready. When asked when would you be ready? Another good answer follows. As soon as I have saved enough money. Then, when asked how much is enough, the answer would be I have no idea yet. Wait until I found a dream home I like. The conversation has no end, really. Days, weeks, months and even years later, the same answers above apply as well.

Anyway, how soon is soon?  Some say the property market is slow currently and that every developer is desperate and the unsold units are at record high. So, can wait. Some even say that many owners are willing to sell at a much lower price. So, can push. Some say many good auction deals. With all these backgrounds, is it a time to wait and is it a time to look for good deals? However, all these answers also still does not tell us the answer to how soon is soon.

I want to buy when the price is right

When price is right means when price is low enough. How low enough is low enough?  This is about property prices. We want to buy when the prices are low, lower or lowest? Well, no one in the world knows when will property prices hit rock-bottom. As for low and lower, this depends on our own assessment. If we found a place where the rental is now giving yields of 8 percent based on the property price, should we wait until the yield is 10 percent or higher before buying?

If we love a certain area and we know the usual prices and suddenly we saw a property for 10 percent lower than the usual, should we buy or should we wait longer? In the auction market, someone may have the opportunity to buy at 20 percent lower but he chooses to wait for the next auction where prices will go down another 10 percent lower from the previous auction price. In the next auction, there are now more than 5 potential bidders because the price is just too attractive. He may have lost the opportunity to buy that property at 20% below the market.

Perhaps a better question is how do we decide?

I think this is a better question to ask. We can decide what kind of property we prefer, decide on the areas we want to concentrate in and even by deciding the price that will be attractive enough to enter. We could also decide if we like landed more or high-rise units more? When we have all these focus areas in place, we are now ready to grab opportunities as soon as they come along and it’s not about waiting for the best time or even the best price anymore. Be ready to grab the opportunity.

As for how and what to decide, that’s up to everyone yeah. Keep reading, comparing and evaluating and soon, we will be knowledgeable about that certain area that we are looking at. Way better than any of the property speakers in some property shows even. Happy deciding yeah.

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Open for 2020. How to become a real estate agent (REA). Limited time left.

I have many friends who are real estate agents. So, how do one become a real estate agent? (REA)? It may take years but that journey actually starts below. Yes, you study for it and you pass all the exams and then you for an interview and many years later, you may have 30 real estate negotiators (REN) reporting to you. There are  easily over 200,000 property transactions every year here in Malaysia. Question is, do these transactions happen with you or without you. If it happened with you, then the monetary rewards would be extremely attractive.

There are many places where you could study and complete a pre-requisite academic qualification to become a real estate agent. One of those places would be INSPEN. This is where my close friend obtained her certificate and she is on her journey to become a real estate agent. The fees are reasonable yeah. This is an investment for the future. Please note that this is not a sure-pass certification programme yeah. I have friends who went a few times and every time, they fail the test. Need some seriousness to study, else, stop wasting money.

All the different certificates as well as some additional information is as below.  You only need to click on the respective image to go to the site in INSPEN where you could sign up to start the course. Deadline to submit your application to join would be 16th October 2020. If I remember correctly, there’s just one intake every year. Not everyone who applied will secure a place yeah. The first one is the certificate of real estate valuation. As the name implies, this is one basic step towards becoming a valuer.

Click image to register for the course

The below would a certificate in property management. This is also a specialisation in demand as the number of new developments would keep increasing.

Click image to register for this course

This is the certificate my close friend took. Yes, this is also that pre-requisite qualification for anyone wanting to become a real estate agent in the future.

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How to build a competitive edge strategy and stand out in a crowded world of the digital platform?

kopiandproperty.com has been around for 7 years. From an unknown site, these days I occasionally have people calling my name in some property events. Yes, it is because of kopiandproperty.com  Digital platforms are focused on social media these days. Let’s just say thus far, kopiandproperty.com continue to occupy an important role in the buying decisions. It is nothing to do with just building awareness yeah.

Please let me also share some of the strategies I used in order to stand out from the rest. What did I focus in?  Perhaps we could also understand digital platform a little deeper. Is it for awareness? Is it to create interest? Or perhaps build desire? Do digital platforms push through sales numbers? Understanding all these would help us to properly budget all the necessary instead of just focusing on building awareness alone.

Anyone not having any strategy to go digital seems to be losing out. Are all products suitable for online since now online is really the rage. Let’s talk about this yeah. See you on 11th June at 830pm yeah. It’s a Thursday and I am very sure Kian Aun will be giving Ernest and myself many interesting questions. Please do refer to the image below for the Hartamas Coffee Talk moderated by Tan Kian Aun, Associate Director of Hartamas Real Estate.

See you yeah.   Cheers.

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How to spot property bubble?

There are way too many articles about property bubbles. Your friends who has yet to buy a property has been talking about it for years. Your friend who buys many properties tells you that property bubble is impossible to happen in these few years. So, do you want to know how to spot a bubble? Actually, there are always some warning signs before any bubble. However, majority of the people are normally way too occupied with what they believe or hear to pay attention. Here are three signs.

1. Sharp and continuous house price increase

If prices are increasing or even doubling in say 3-4 years, this is considered extremely sharp. Imagine a RM300,000 property suddenly become RM600,000 in 4 years? There is just no way that your salary would be able to catch up. Last year, the property prices in Malaysia was ranked top 12 in the world in terms of price increase. Read here: ‘
12th Highest Growth in the world
‘ In terms of changes for the past 10 years, it clearly shows that the prices has indeed been rising but has not shown any sharp increases for the past few years, except for certain segments in certain locations. Overall basis, not yet.

2. Affordable choices availability

This is important. Imagine you are earning RM3,000 and ALL houses are priced RM500,000 or higher. Would you be able to buy any property at all? Fortunately this is not the case. I do not want to go into the low cost flats but if we go online to any property websites like PropertyGuru.com.my or Iproperty.com.my, we could see that even at the lower range of below RM200,000 there are still many choices. Thus, in terms of affordability availability, at this point in time, we are considered safe. We do not need to look very far, just compare to Singapore. Singapore government has undertaken many more cooling measures than Malaysia. Yet, the prices of HDB Flats of 1,000sf or higher, even at the fringes are hitting S$400,000 or higher. Please do not say Singaporean earns more. Number to number, their engineers earn the same as engineers in Malaysia. This can be verified easily online as well.

3. Bad Debts?

If the non performing loans in the banking sector starts to increase at a fast rate or has been increasing for the past many years, I think we ought to be worried that perhaps it is no longer safe buying ever higher priced homes. Perhaps a lot of people are now unemployed and thus not able to repay their mortgage, causing their debts to become non-performing loans. If we refer to the chart by Worldbank, for Malaysia, in particular, this is not yet happening. In fact, the total non-performing loans continue to decrease.

Do note that there are no guarantee that all these signs may not suddenly deteriorate if something unforeseen happens. For example, another huge collapse of the banking system in Europe or US? At this point in time, apart from a few problematic countries in the Europe, there are no signs of that happening. In fact, America reported such positive results that the QE 3 may be stopped much earlier than expected.

If you always monitor these three important signs, there is no need to listen. You know the answer. Happy Chinese New Year and Happy Holidays!

written on 29 Jan 2014

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How you see your house is different from everyone else. 5 views here.

This photo (image below) came up again recently. How you see your house is different from everyone else. I have seen it many years ago. Let’s write one article so that I know where I could find a copy when I need to explain why you may think ever so highly of your home but others do not. Also, why sometimes you want to tell the council that your house is actually worth lower and deserves a lower tax?

To us, our home is a perfect one.

You can see in the image that we often think of our home as a perfect home. At least at the point when we purchased it. Thus the image shows a very nice home. It has most of everything we like to have in a house.

To the buyer, it’s not worth the price

To the buyer, he does not believe our home is worth that much based on the price we want to sell. We can keep telling him all the memories we have but he will not feel anything. Anyway, he needs to act that way because it’s price negotiation stage…

To the bank, the value is lower

The bank would want to protect its profitability. Thus, it will value the property lower so that it could lend you lesser money. If there’s a need to sell that home later on when we fail to pay, the banks could then sell it at a higher price…

To the insurance evaluator

Everything seems to be wrong with the home. Haha. If nothing is wrong with the house, how could they charge you a high premium…  If everything looks perfect, then there are no risks, when there are no risks, what happens to the premium?

To the municipal council

The municipal council would want to get as much as possible from the house owner through rates assessment and taxes. According to them, this is necessary for them to provide a better service to everyone. Keeping roads without holes, making sure cleanliness and more.

This is why how you see your house will be very different from everyone else. Just need to note that one day, we may just become a buyer and we would also do our very best to negotiate a lower price than what the seller wanted. Under current situation (COVID-19 pandemic and CMCO), I think buyers have advantage when it comes to negotiation. As for the banks, they are also super conservative currently because if they decided to lend us too much, then they will be faced with a higher risk in the future if the buyer defaults. Let’s just hope the councils will do their best if they were to charge us higher assessment rates yeah.

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HSR Bangkok – KL – Singapore! Potentially, anyway.

As per reported in
The Nation
 (9 Sep 2016). High Speed Rail KL – Singapore may be joined by High Speed Rail KL – Bangkok! Okaylah, it’s just a preliminary study. However, remember all huge infrastructure projects MUST start with preliminary studies? Relevant agencies from both countries will be meeting to explore this. Since this is announced by both Prime Ministers, I think the committees should be serious enough. The main point would definitely be on the
potential economic benefits
 between Bangkok, KL and Singapore.

Imagine this. Breakfast in Singapore, lunch in Kuala Lumpur dinner in Bangkok and still be in time to catch a Muay Thai boxing match in Bangkok!  Haha. Note,
2026 is completion of HSR KL – SG
. Based on the usual speed, I do not think HSR KL – Bangkok will complete earlier.. Beyond just this HSR KL – Bangkok, Prime Minister Datuk Seri Najib Tun Razak and his Thai counterpart Gen Prayuth Chan-ocha has also agreed for a study on the possibility of rail connectivity between Hatyai – Padang Besar and Padang Besar – Ipoh. Exciting times ahead if this comes true. It meant a full connectivity from KL itself to Hatyai, potentially.

This was not all. Two bridges would also begin construction in 2017. This will link the border provinces of Narathiwat in Thailand and Kelantan in Malaysia. Specifically, it will Sugnaikolok to Rantau Panjang and Tak Bai to Pengkalan Kubor. I always like all these
integration between ASEAN
 countries. We are definitely not alone against all the regional economic groupings in the world and we should make the best use of all our neighbours! Okay, for now, let’s just hope the relevant ministries could EXPEDITE all discussions and hopefully both KL and Bangkok starts having joint quarterly meetings? Cheers.

written on 9 Sept 2016

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How HSR would benefit the cities along the line

A friend made a passing remark the other day about
High Speed Rail KL – Singapore.
 He said if this comes true, what it meant is that we should look at properties around all these stations, buy something affordable and wait. I told him that if that’s a strategy, please go ahead. However, I think every buyer must understand that buying a property for investment purpose may mean a great buy, a good buy or even a bad buy. In other words, understanding what we are buying is critical! It’s simply not enough that a train happened to stop by. Just look at every area with LRT stops today, surely we can see huge differences in price between different areas….? Perhaps we can start with these three considerations.

Current attraction. Does the current stop already has lots of attractions in the first place? Is it near enough to a major tourist destination today? If there are already lots of visitors today, chances are the number of visitors would quickly increase with another mode of accessibility. In this case, High Speed Rail will bring more visitors from Singapore as well as other cities within the line. One beneficiary in this case may be Ayer Keroh, IF it’s very well connected to the
city centre of Melaka
.

Working population
. Does it already have some industries? For example, factories and space for more factories? Universities? Private hospitals? Offices? My ex-Japanese GM told me that he travels via bullet train to work daily, around 400km to and fro. Perhaps not for most Malaysians but this represents possibilities. Do note that trains are also very comfortable, with spacious seats and walking aisles plus we can enjoy a cup of coffee or even watching a movie.

Second / Weekend home suitability. I say suitability because today if I am a retiree, I would hate to be in a city where I see people, jam, haze and high cost. However, some small towns are so small and so hard to reach that I do not find it attractive. Well, when we look at some of the stops, for example, Seremban, Ayer Keroh and even Batu Pahat, they are pretty okay for this purpose.
Enough activities and great accessibilily

as it is within the HSR line. Since many people would prefer a city which is much cheaper than Singapore, then both JB and KL would benefit. I do not know enough about Muar to comment. Appreciate if any readers can add.

Cost Savings Advantage.  Many Singaporean businesses, especially the smaller ones which want to continue to use Singapore as a HQ would welcome this HSR. It allows more departments to be
 located at a cheaper location and yet well connected
. In fact, it’s now really possible to supervise a factory which is a few hundred kilometres away easily. The CEO could start with a meeting in Singapore in the morning, arrive in the factory by noon and by end of the day back to beloved family members in Singapore. Think about the best of both worlds.

I do not think I need to talk too much about the potential for the Bandar Malaysia and Nusajaya. It is already a given that HSR will benefit both places tremendously. For
Singapore, it is a huge advantage
because now they can even have another CBD in Jurong. Think about two CBDs within a city instead of the usual one like many other cities. It may even help to improve cost efficiency versus currently which has given Singapore the title as one of the most expensive cities in Asia. Suffice to say, HSR will benefit both countries and I look forward to taking a ride in it once completed. hopefully by then, I no longer have a full-time job. Happy believing.

written on 21 July 2016

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I don’t wanna… talk about it… yet… again.

I think I am one of the very few who continue to follow and continue to get disappointed on the progress for the High Speed Rail KL – SG. (HSR). Delayed many years is not a great thing. However, that need to restart a more serious discussion on how to start, who to start, when to start the construction and many more things has yet to restart. Not sure if this continuous delay is a smart move because the world (ASEAN at least) is not stopping in its connectivity development.

Here are a few of such rail related news recently. In Thailand, we have this:
China – Thailand railway project to be signed in October 2020.
  In Indonesia, we have this:
Indonesia’s train plans is not just Jakarta to Surabaya but also Jakarta to Bandung too.
  In Australia, we have this (even if it’s being objected by many)
Australia wishes to link Melbourne, Sydney, Canberra and Brisbane
 via high speed rail. As for our HSR KL – SG, happy reading that latest update.

Article in thestar.com.my
   Senior Minister Datuk Seri Mohamed Azmin Ali said the HSR discussion will be extended to end of 2020. He said, “I have been asked by the Cabinet to lead the Malaysian team in the discussions with the Singapore government on this project. The Government of Malaysia and the Government of Singapore have agreed to resume discussions on the KL-Singapore High-Speed Rail infrastructure project in the near future.”

HSR is a postponed railway project to link Kuala Lumpur, Malaysia to Singapore via a high-speed rail line.  In Sept 2018, with the extension request from Malaysia until May 2020, Malaysia agreed to reimburse Singapore S$15 million (RM45.1 million) for the delay. There will be further costs to be reimbursed to Singapore if Malaysia continues to fail to fulfil what was agreed in the HSR agreement. New agreement says that the HSR service will start from Jan 1 2031 versus Dec 31 2026.  Please do refer to the article for more details:
Article in thestar.com.my

Tired to keep hoping that there’s progress. Yet, I guess as long as they do not say ‘we cancel HSR,” then it is still a go-ahead. Only the timeline will be an issue lah. Then again, I do agree that perhaps this is not the best time to be discussing about it. Perhaps when the COVID-19 is more under control as well as all the Parliament sessions are done with, then we can have a better visibility of what to expect. Right now,just have to stay safe and keep following. Yeah, that upcoming recovery plans which is on this coming 5th June 2020 as well. That would be something big I think.  Happy following.

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HSR: Joint Tender, Joint Development Partner

Another sharing on High Speed Rail KL – Singapore. On 22 August, a JOINT Tender will be called by Malaysia’s MyHSR Corporation Sdn Bhd (MyHSR) and Singapore’s Land Transport Authority (LTA). This will allow both sides to appoint a Joint Development Partner (JDP) for the HSR. This is something very similar to the current MRT construction where a Project Delivery Partner is appointed to ensure everything is on time and within budget. Else, the PDP will not gain anything or even suffer losses.

The JDP will
provide project management support, technical advice and procurement advice relating to the high speed railway systems and operations. It will also be
developing the technical and safety standards for adoption by HSR project. ”
“In addition, it will assist the Joint Project Team established between Singapore and Malaysia with the preparation of documents for the forthcoming tenders relating to the joint aspects of the project, such as the appointment of the AssetsCo and OpCo International.”

Interested firms? Visit here beginning 22 August 2016:
MyHSR’s website
 or
LTA’’s website
. The tender is open to firms
which have advised on large public private partnership infrastructure projects including HSR projects of similar size and complexity or firms with experience in providing project management, technical, commercial or legal advisory services relating to HSR and/or rail projects of over or equivalent to 200km of track. This joint JDP tender meant that the HSR is moving along smoothly. Anyway, 10 years is really not that far away. Hopefully by then, I could visit Singapore like few times per year. 🙂

written on 21 Aug 2016

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HSR KL – SG is changed? (not officially mentioned by any minister yet). What has happened?

News about HSR KL – SG

This was reported in an
Article in stratistimes.com
.  In the article which it has referred to an article in The Malaysian Insight (TMI), the following were some of the important latest updates. Malaysia is said to be continuing the High Speed Rail (HSR) without Singapore. Nevertheless, a Singapore Ministry of Transport has commented this, “As communicated in the Dec 2 joint statement by both prime ministers, we will announce further details on the HSR project through a joint statement in due course.”

TMI reported that Malaysia had asked to build a HSR station at the Kuala Lumpur International Airport, which Singapore had rejected, with the source claiming that the Republic perceived this as a threat to its aviation industry. The new targeted targeted completion date for the HSR is 2029, while the number of expected passengers has been revised downwards to 4.2 million from 8.4 million previously.  Please do read more details in the article here:
Article in stratistimes.com
.

If you like to read the article in TMI, it is here.
 Just need to make sure you are already a subscriber yeah.

Conclusion

We still have no formal announcements or in this case, supposed to be a joint statement by both countries and this is supposed to be announced before end of 2020. Thus, whatever is being reported needed to be treated as unconfirmed news. While that link to KLIA was mentioned as one of the show stopper, I think there are definitely more reasons too. As for now, just note that if this does not proceed, Malaysia would need to pay a compensation of S$104.67 (RM317 million) to Singapore for the all the work done thus far.

I just hope both countries can look at this as a long term project for the benefit of both countries even if analysts have said that one country stands to benefit more. While Singapore’s Changi airport is the busiest here in ASEAN, the HSR will be a game changer because China has continued to pursue the Belt and Road Initiative (BRI) and this is said to already cover the routes from China until Thailand. Just have to wait for the formal joint announcement?

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