Confidence with views from someone prominent.  Quite usual.

Many companies become prominent because of its founder. In fact confidence from someone important in a company may make people buy the company shares and treat it as a blue-chip counter. Think Air Asia… Think Public Bank… Think Top Glove and from the property developers, we can think of Eco World. Of course the results are also important else the stock price cannot keep itself up. One particular stock saw its price going up by double digits after its chairman mentioned that 2019 may just be its best year yet. The company is Eco World. the chairman is none other than Tan Sri Liew Kee Sin.

Article in edgemarkets.com
   Eco World Development Group Bhd (EcoWorld)’s shares leaped as much 12.4% or eight sen to 72.5 sen in afternoon trade after its chairman Tan Sri Liew Kee Sin said he expects the group to close its current financial year ended Oct 31, 2019 (FY19) on a record high note.

Yesterday,
The Edge Financial Dail
y quoted Liew as saying: “Despite the so-called downturn [in the property market], this year is the best year for EcoWorld and EWI.”  EcoWorld will release its results on 12th December 2019.  As of July 31 2019, EcoWorld’s net profit for first 9 months was RM121.97 million and this was up from RM80.69 million in the corresponding period. Revenue grew by 2.1% to RM1.56 billion versus RM1.52 billion previously. Please refer to full
Article in edgemarkets.com

Image source:
https://ecoworld.my/collections/

Please refer to the image above. If we look at it’s current price of RM0.74 sen, this gives it a market capitalisation of RM2.19 Billion. The P/E ratio if 11.52 and I think the current price is fair for current market or considered low when the market is more bullish. Very briefly, what this ratio tell you is that if you buy the stock at current price, its profits will be enough to cover the price of the stock after 11.52 years.

As a comparison, if you put your money into the bank for Fixed Deposit at 4 percent per annum, your money will double in 18 years. So, Eco World stock at current price is considered a better investment than the FD.  Therefore, if we bought into the stock at current price and we assume they will return similar profit numbers every year, it meant that the profits will be giving us a return of 6.25% per annum. (simple calculation)

Note, historical results are not a good measurement for future results yeah. I do not own a single unit of Eco World stock and has no plans to buy any at the moment. Happy following.

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Connections to PPR units? Do not trust them, please.

When a deal is too good to be true, it is usually not real. The
best deals would only be given to those people
 who are nearest to the deal. So, if the deal came from your best friend, it may be true. Else, you either lose your best friend or the deal is not true. Think about it yeah. It saddens me tremendously whenever people lose their life savings simply because they were cheated of it. Think of the years lost and think of the years ahead where these victims would have to suffer because they no longer have the money they have saved ‘forever’ for.  Another cheating case was reported and I think I should share with as many people as possible. It’s for affordable homes.

“Hey, do you want a People’s Housing Programme (PPR) unit? Here’s the LIMITED application form. You only pay me RM2,000.”
 Sadly, this is NOT TRUE and scammers have tricked more than 40 people to part with their money for an opportunity that does not exist.
Reported in TheStar,
 over 40 people have been cheated by scammers who went around these potential PPR applicants and telling them that they (scammers) have very good connections with the authorities and can help to ensure PPR approval success. Once they are convinced, then these victims would have to fork out between RM2,000 and Rm10,000 each for an application form which is actually available for free in the first place.

According to The Urban Well-being, Housing and Local Government Minister, the ministry was informed of this by a few groups of victims. What happened was that these applications were either not submitted or were rejected. Noh added that the application forms for all Government housing schemes such as PPR, MyHome, MyDeposit and PR1MA were free of charge. He urge all victims to lodge police reports. He added that his ministry would look into each case and assist victims to obtain PPR housing through proper channels. Read the
full article in theStar here.
 Let’s all be savvy to the fact that working hard should be the reason why we earn money and investing money should be the sole reason why our hard earned money would earn us more money with time. Cheers.

written on 7 Jan 2018

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Connectivity is always important. The more the merrier.

Do you visit Melaka at least once per year?  If you are working within Greater Kuala Lumpur chances are you may visit Melaka more than once per year because it’s just too near and too hard to resist the many attractions there, especially food as well. We see many Singaporean cars in Melaka too every weekend. In the future, it may not just be Singaporeans with cars, it may just be Singaporeans who travelled there via bullet train. The more visitors to Melaka, the more spillover effects would be for products and services and this in turn drives economic growth too.

There is now news about Melaka’s station within the High Speed Rail (HSR) line between Kuala Lumpur and Singapore.
Article in edgemarkets.com here.
The Melaka state government said that it has identified a new site fo the HSR station. Public Works, Transport, Public Amenities and Infrastructure Committee chairman Datuk Roslan Ahmad, it will be located near the Green City, and between Mukim Durian Tunggal (an Alor Gajah subdistrict) and Mukim Ayer Panas (a Jasin subdistrict).

He shared that the alignment will avoid high-density places and thus reducing the high cost of land reclamation which will add into the cost of the project. He said, “The HSR2.0 project in Melaka involves a 60km track, and we are given to understand that Malaysia and Singapore have agreed to extend the discussion period to Dec 31.”  Full article here:
Article in edgemarkets.com here.

According to googlemap, it takes around 1 hour and 47 minutes to drive from Kuala Lumpur to Melaka. Image as below. In other words, if the HSR is in operation, then Singaporeans going to Melaka may also be taking almost the same time BUT in a much more comfortable condition because they could walk around, drink coffee and well watch their handphones. Of course, there’s that option for KLites to travel to Melaka via HSR too but I think KLites will drive because it gives them more flexibility in terms of the time to go back since KL and Melaka is not that far apart anyway.

Let’s hope that the conclusion for the HSR at the end of this year will reveal that the timeline for HSR to be completed has been pulled forward and no longer 2030? Anyway, that’s my hope and yes perhaps one day we shall arrange a day trip to Singapore for a bunch of humorous kopiandproperty.com readers yeah. Teh Tarik in KL, arrive in SG by 11am, find a nice food court for lunch and then do some free stuffs in Singapore before returning by 4pm and arriving in  KL by 6pm. We have a seafood dinner somewhere and then say good night. Sounds like a plan? This article will serve as a reminder. Haha.

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Spending more money with connectivity

I love connectivity. With the PLUS highway, a trip to Penang from Sungai Buloh exit (330km trip) takes just 3 hours and 30 minutes or less. Seriouslah, at 110km per hour. (yes, yes, I have done much faster with a close friend) Last Friday I picked up my kids at 2pm, faced some jams when I was nearing Penang and could still arrive well in time for dinner in Penang. I spoke the next day in
Penang Property Convention 2018
 and I left Penang at 1030am on Sunday so that I could be in time for my talk in
KL for StarProperty.
 on a Sunday. If I did not travel with my family and just flew in, I would have spent much lesser as it’s just me and I do not even need accommodation. Fly in and Fly back. With PLUS, I spent more money since I could travel with my family. So, I am all for the High Speed Rail KL – SG.
Read my views here.

Image source:
https://qz.com/1396701/everything-you-need-to-know-about-taking-hong-kongs-new-high-speed-rail-to-china/

Since ours (HSR) is delayed to many years later, perhaps we look at some potential effects from China and Hong Kong’s latest High Speed Rail connectivity.
Article in Bangkokpost.com here.
 It says that during the China’s National Day holiday on Monday, more than 60,000 are expected to get to the city (Hong Kong) from China. It says that shopping is not a priority since Yuan depreciated this year by 8.8 percent. One Chinese university student Trumy Guo, said that the ride was “super comfortable”, but the ticket price could have been cheaper. A second-class seat from Guangzhou South to Hong Kong cost HK$247 (RM130) for the journey of an hour.  She was going to Hong Kong with friends and they will ‘eat and play.’  Her friend meanwhile says that she will buy cosmetic and skin care products, as well as clothes, in the city. Another passenger said that she will only spend around 2,000 yuan in Hong Kong for the two days she’s staying. Gilly Zhong Shao-ling, a Shenzhen resident plans to spend HK$2,000 to HK$3,000 in the city on goods such as clothes and baby milk formula. Within the first 8 months of 2018, 33 million Chinese visitors visited
Hong Kong. This is up 13.8% from the same period last year.
That article in full for reference here.

60,000 per day HK$2000 is HK$120 million. That’s per day by the way. It’s only starting and many may not yet experience this convenience yet. As for ticket prices, well 60,000 per day x HK247 is HK$14.8 million. On a yearly basis, this is HK5.4 billion. Total cost to build is US$11 billion. Nowhere does it mention when will the margin from the ticket prices will ever cover the cost of construction. Assuming only 10,000 people travel into KL on average per day and spends just RM500 per trip for accommodation, food etc, that’s RM5 million per day. With a multiplier effect of 4, that’s RM20 million into the pockets of people and businesses per day. (Haha… Yes, I am talking about the people who keep saying that ticket prices from our HSR will never be able to cover the cost of construction of the HSR) High Speed Rail gives benefit to the economy. It’s not for the government to earn profits from its operations. Happy understanding yeah.

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written on 6 Oct 2018

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Conezion Residences received overwhelming response

A colleague bought her first home a few months ago. It was Conezion Residences at IOI Resort City. She asked for my opinion. I told her, it’s a safe buy. Whether it will give her huge capital appreciation or not would depend on the overall success of IOI Resort City as well as the general property market sentiment. At this moment, the negative is definitely more negative than positive. Well, I think she is happy to note that many people do agree with her choice. On 2nd October 2016, the final blocks of Conezion received overwhelming response. The below is their press release to the media. Read on.

Senior General Manager, Marketing & Property Development, Lee Yoke Har said, “We believe that such good response is a result of customer confidence in our brand, the quality of our product and our customer service that exceeds expectations. Besides, the attractive price of RM465,000* onwards for these freehold residences is a contributing factor too”, she added.

Conezion is an integrated-development located in the world-class destination of IOI Resort City in Putrajaya which consists of residential, retail and offices. Conezion Residence offers three different unit types and sizes, each comprising 2 or 3 bedrooms, with built-ups from 780 to 1,278 sq ft. These units feature captivating views of the Palm Garden golf course, Putrajaya and IOI City Mall. Every unit is equipped with digital locksets and comes with 2 parking bays. Among the facilities available include a swimming pool with aqua bed, children’s art studio, learning lab, a mini theatrette and more. This development is expected to be completed by first quarter of 2018.

Commenting on the successful launch, IOI Properties Group Bhd (“IOIPG”) Chief Operating Officer, Teh Chin Guan said, “We are very pleased with the response of the final launch of Conezion Blocks A & D. The purchasers have made a right decision in purchasing Conezion due to its ideal location within a resort city with close proximity to a range of world class award- winning amenities which include IOI City Mall, world-class five star hotels Le Meridien Putrajaya and Putrajaya Marriott Hotel as well as the 18-hole Palm Garden Golf Club.”

Customers present at the launch gave positive feedback about Conezion which included their satisfaction with the high ceilings which greatly enhanced the sense of spaciousness as well as large windows to usher in natural light and enable enjoyment of the scenic surroundings and magnificent landmarks of IOI Resort City.

Some cited the expected high return for Conezion Residences in view of the potential growth of IOI Resort City as a well- planned resort city with world class amenities. The fact that the retail and office components within Conezion will be kept by the developer for leasing in order to ensure a good tenant mix and to preserve the original concept of Conezion as a lifestyle hub lends further confidence to investors and owner occupiers alike. IOIPG is highly experienced in property management having been managing 3 malls, 4 hotels and a few office towers thus far. Another feedback received was Conezion is close to established amenities within the resort, especially IOI City Mall which is merely 700 meters away from their new home. When phase 2 of the mall is completed, their homes would be even closer to the shopping haven. The unobstructed view of the lush 18-hole championship golf course from Block A is yet another plus point.

Conezion in IOI Resort City is well-connected and well- served by one the best highway networks in the country making it conveniently accessible via LDP, Maju Expressway, SILK Highway, North-South Highway and Besraya Highway. These highways provide residents easy access to various nearby amenities, including KLIA (37 km), KL city centre (25 km), 8 international and private schools and colleges, medical centres and more.

Meanwhile, in line with the efforts made towards creating sustainable and healthy lifestyles in its developments, construction of a cycle cum walk path is underway. Conezion residents will be able to enjoy the scenic lush greenery within IOI Resort City as they walk or cycle along the dedicated bipath to maintain their healthy and active lifestyle.

Additionally, Conezion comes with an attractive furniture package* and the Buy Now Pay Later deferred payment scheme*, where purchasers can defer their payment on differential sum for up to 24 months. However, this scheme is for a limited period only and ends 8 November, 2016.

For those who missed out on the launch party and wish to find out more can contact 03-8947 8899 or visit
http://www.ioiproperties.com.my/ioipropertiesshowcase
 or visit the show unit at IOI Galleria in IOI Resort City.

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Health is wealth. Go conquer Mount Kinabalu.

I think some readers of kopiandproperty.com may have noticed that postings were not daily for past few days. Haha. I went on a 5,000 calories hiking. Did not bring my trusted Macbook along. Before we can enjoy our wealth, we need to have our health. True, yeah? In November 2016, I was 83kg, going towards 84kg. By June 2017, I have reduced it to 74kg. All these because I realised my kids were too little (young..) while I am getting old. Must make sure I stay healthy. So, what can we do which pushes us to our limits? Yet not too expensive like an Europe trip. With views so amazing that made us realise Malaysia is truly blessed? How about climbing Mount Kinabalu. For those avid climbers, they may even say this is a piece of cake! Not me lah. I still think this is tough.

Since I am writing this, it meant that I have succeeded, for the second time. It was tougher this time I felt. My first time was 7 years ago. Look at some awesome photos to motivate you to go for it just like me.

familiar? 😛

clouds beside us

lonely platform above clouds

breaking dawn

proof lah…

For those of us who are like me, it is really time to be healthier. As for the tips on the climb, do follow this link here. Mostly are applicable. Oh yeah, my personal tip is that we need not be extremely fit but mental strength is much needed for the second part. Keep energizing yourself with concentrated fruit juices or energy bars. Take it slow, keep motivating yourself or climb with someone. It helps. This time, I had 8 awesome people with me and the success rate was 100%. As they say, never say never but for now, I do not think the 3rd climb up Mount Kinabalu would happen. Cheers.

written on 29th June 2017

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6 considerations when buying a property (to be safer…)

What are some of the considerations when buying a property?

A reader asked me if he should consider an old neighbourhood but closer to his parents or a newer and modern landscaped neighbourhood around 10km away. The prices are not too different because one is a mature neighbourhood while another is newer and in a ‘far-away’ place. I gave him this answer. ‘If you love your parents, buy the closer one.’ Seriously, between property and family, there’s no need for any debate.

Staying closer means great home cooked food too. However, assuming family is not within the equation, then what could be some of the things we look at before we decide? Here are 8 potential considerations to think about. Only based on my personal opinion yeah. Any differences in opinions, feel free to comment yeah.

Photo by Maksim Goncharenok on
Pexels.com

#1 –
Convenience.
By convenience, I meant a location which has the most of all that you need within 15 minutes. 15 minutes is because after a while, you will not feel it much. Some of the things you want to be near to? Restaurants, lots of them. (not cafes…ok,keep costs lower). School (for your kids). Mall (the bigger the better, provides more choices). Supermarkets (I prefer Hero over Econsave). Your office (Yes, this is towards the last consideration because you may NOT stay in your same job forever…..)

#2 –
Connectivity.
 No expressway(S) within 5km, better don’t buy, regardless of MRT / LRT / KTM / Monorail / BRT. One expressway is NOT enough lah. Two or more, within 5km from your home would be best. Waze will help you decide which one to take. After expressways, then yes, within 5km away from MRT / LRT / KTM / Monorail / BRT as long as these connect to your office. Else, change your job. (Haha). Buying next to the public transport station is perfectly fine, as long as you are okay to pay a premium of anything from 20-30% extra, if not more. (So, instead of RM500 per sq ft, it would be easily RM600 per sq ft or higher.)

#3 –
Neighbourhood. (landed)
 If you feel unsafe even when you drive around the area, skip it. If you see some playground, take a look at the facilities, are they in good shape? In many good neighbourhoods, the playground is well maintained. It does not need to be an expensive neighbourhood! The landscaping around the neighbourhood, is it well trimmed? What about the trees, the grass and the leaves on the road? The good ones would usually remain good because the council is doing its work. The drains (preferably monsoon size), are they clogged?  (This is not a joke. Clogged drains usually mean LOTS of mosquitoes…)

#4 –
Condition of the unit / compound (high-rise)
. Here’s a full article on how to evaluate one.
12 tips on inspecting condos

#5 –
Property price.

 It’s usual for people to buy homes with emotion. Tamper this with some objectivity. Understand what are the prices around the area. Please do not be the buyer who bought at the highest price. It’s not hard to check it out these days. Here’s one:
brickz.my
Alternatively, there are so many property sites that we can refer too as well.

#6 –
Developments nearby.
If there are vacant pieces of land, do we know who are the owners? Do we know what would be built there? Ask the real estate negotiator. They better know….. If it’s owned by a very branded developer, I think it’s fine. If the new development does well, it helps to bring up the price of your property too. Are there planned expressways just outside your home? Do note that it may take years and during those time, you may have to face jams and put up with noise and dust. (However, once completed, these new infrastructure tend to help your property price increase too. It’s a choice…)

I am very sure there are some other considerations but I think these should be within our considerations when we are buying our new home sweet home. Make it a sweet one. If we fail to buy a good one when we buy the first one, it will take us a long time to buy the second one while we suffer with the first one. Happy buying and staying.

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written on 1 June 2017

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Consolidation, Old Plants, Fairchild in Penang ends

My friend forwarded me a piece of sad news. One of the earliest pioneers of Penang’s Bayan Lepas Industrial park, Fairchild will be shutting down it’s Penang plant. This would be one out of many including facilities in West Jordan, Utah and Bucheon, South Korea. Major reasons stated was the need for consolidation as well as the need to close down older plants and build more advanced plants to keep up with the industry. By the way if you think they are closing only plants here, it’s not true. They are closing their own plant in Utah too. This gives us a question, so is the semiconductor industry going through a downtrend? If you go to google now, key in semiconductor industry, you may see that majority of the news are positive. So, at least this is not industry based.

How would this affect the property market? It really depends on whether the retrenched engineers and managers are absorbed fast or slow. The number is not that huge, 1,892 workers. For engineers and managers who are not overpaid, I think their next job is going to be easy. For those over paid but has never improved their skills for many years, I think they need a reality check now. Unless a few more factories suddenly announce their closure, I think this will be just a small red dot, not yet a dangerous red. As we know, there were a few MNCs setting up in Penang such as Sandisk and Haemonetics. This is joined by Seagate which will also be building another facility. No mention of the number of workers needed but 3 new facilities should be a good balance. Get more please.

I shared with my friends about Penang’s changing workforce. In the 1990s up till even the 2000s, majority of the Penang MNCs were still very low end. Many operators were needed. However, soon, more of the Design work was done in Penang. Many factories suddenly need more engineers and no longer just the operators. In fact some factories like my wife’s former company, Vitrox, the number of engineers exceed those of the lower end workers! More importantly, they are doing well and recently announced a huge jump in business due to the recovering market as well as penetration into more end customers. Seriously, the affordable properties needed for Penang are definitely shifting more towards the apartment types and no longer the low cost flats. For now, my personal conclusion is, this closure is manageable. Just make sure more are coming with higher end plants.

written on 26 Aug 2014

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Construction accident in Taman Desa. Two rescued.

At the time of writing, as reported in
Article in thestar.com.my
  two workers in the construction accident in Taman Desa has been rescued.  The second victim was successfully rescued after rescuers spent hours at the site. First victim was a Bangladeshi and he is currently seeing treatment in the Kuala Lumpur hospital. The 6th floor of an apartment which was being built at the site collapsed in the afternoon and this trapped the two workers. The building’s developer Maxim Holdings said that the incident will be investigated. Photos as follows.
All images from thestar.com.my

Earlier article in thestar.com.my

Video from Astro Awani as below:

My wish remains the same. That we will not have more of these accidents because some times, it may not be this lucky for the workers who were trapped due to the collapse of one level which was currently being built. Happy reading.

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Construction delays because of COVID-19 lockdowns. How do we resolve them?

Updated. Happy watching the full video here.  Lots to learn!

Many things happened after COVID-19 arrived. During the Movement Control Order (MCO) businesses were closed, even F&B outlets. Malls were closed, even drive-throughs. Sales galleries were closed, even lawyers’ office. There’s one huge industry which will be hit with a lot of issues; construction. With months of zero activities, there will be delays. When delay happen, there will be disputes about the delays and there will be claims.

How will the construction industry emerge from this? Will the buyers be compensated fairly? Let’s hear from the experts in the Malaysian Property Talkshow on 4th July (Saturday) at 11am. More information in the image below. Moderating the two experts would be Malaysiakini CEO, Mr. Premesh Chandran. The two experts are Mr. Leong Hong Kit from MAC Consultant and Mr. Lam Wai Loon, Partner, Harold & Lam Partnership.
Register for free now. Reminders will be sent.

Moderator and Speakers credentials as below:

Mr. Premesh Chandran, CEO Malaysiakini

Mr. Leong Hong Kit, MAC Consultant

Mr. Lam Wai Loon, Partner Harold & Lam Partnership

Beyond this show, there are 5 more.
For updates, please follows here.

See you on 4th July 2020.  Stay safe and take care.

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When the construction is already RM5.1 billion – petroleum refinery

Oil price has been going up. Note that I do not say recovery because based on the usual cost of production, the price of oil should not reach the levels of yesterday. Perhaps the price should just normalise at current level. However, investments into oil and gas sector is continuing. After all, total sales for electric cars still way too little compared to the whole car industry. Coming back to oil and gas industry investments. Regardless of the industry, whenever we invest a certain amount of money, we expect to achieve a certain amount of profit which is usually derived from a certain amount of revenue. It’s called the potential return on investment. It is also with a long-term view or strategy that we invest our money in the first place. So, if we are investing RM5.1 billion, what do you think the investor has in mind? Yeah, probably revenues which are many times that on a yearly basis and profitable enough so that the invested amount is worthwhile.

The investment that we are talking about is not in Iskandar or Kuala Lumpur but it is in the east coast. In this case, it will bring economic growth to Kuantan, Pahang. The company is NewOcean Energy Holdings Limited from Hong Kong. It announced that it planned to build a RM5.1 billion petroleum refinery complex on Malaysia’s east coast with two partners. The partners are Malaysia’s Kuantan Port Consortium Sdn Bhd and Malaysia’s east coast development body. The news article is in
 livetradingnews.com
 It was also mentioned in the article that NewOcean is a Hong Kong-listed company primarily engaged in the sales and marketing of liquefied petroleum gas and natural gas, oil and electronic products. Meanwhile Kuantan Port Consortium is jointly owned by IJM Corporation and Hong Kong’s Beibu Gulf Holding (Hong Kong) on a 60:40 equity holdings basis. The Malaysian government has a special rights share in the consortium.

Seriously, I think I must follow my colleague to her hometown in Kuantan to see for myself what’s the extent of the investments there. It’s the same like when some friends tell me that there is NOTHING happening in Iskandar but when I was there to meet customers, I could see real activities and construction is happening feverishly. One developer I met in Iskandar has only the showroom when I visited her many years ago. Recently, when I drove past the development, it was already fully developed. No idea if it’s fully occupied but as usual the first 12 months of completion usually meant that there are not that many people staying yet.  As for Kuantan, a search in iproperty.com.my and propertyguru.com.my has not yielded enough residential listings yet. Two reasons. Both sites are not well known there yet OR there is really too few residential developments there and all the existing ones are fully occupied. Good news actually. Kuantan people, ready to read a bit more and start investing? Happy following.

written on 9 Aug 2017

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Construction material cost pushes up property price?

There was this article which appeared a few times in my FB page and also in some Whatsapp groups.
Article in nst.com.my
 Title: Property prices will rise next year as construction materials become more expensive.  Knight Frank Malaysia deputy managing director Keith Ooi said, “Any increase in material or construction costs will eventually affect the selling price. The developer will pass on the cost to the respective consumers or buyers in some way.” The article is a long one. Do read the full article here yeah.
Article in nst.com.my

Would construction material price become more expensive?

With the world economy coming back after a very slow first half of 2021 due to Covid-19, it will inevitably push up demand suddenly. Due to this, prices are pressured to move upwards because supply cannot suddenly increase. Just need to look at some advanced property markets for some clues yeah. Property developers did not or delayed their launches.

Suddenly, potential buyers are back to galleries and they are also starting to view properties again because their decision were delayed due to the lockdowns. Suddenly, all the property developers are ordering construction materials. This is why at least within a short period of time, construction material price will become more expensive.

What happens when the construction material price goes up?

Simple answer to this question. Property price would have to be adjusted upwards or the developer may choose to take a lower margin. It may be both as well. So, it does seem that property price may just be moving up especially for future launches if the developer chooses to absorb the current rise in material cost for existing project. However this applies only to the new developments right. The secondary property market is already completed, surely the construction material has nothing to do with the secondary property market price?

When price of new property moves up will this then mean everyone will buy a secondary property instead?

Secondary property market comprise around 80% of the total market transactions. The new properties only 20%. Assuming the gap was 20% between the secondary and the new property market, this gap may widen when new properties are priced higher. Now, when the new properties are priced higher… the people may be tempted to buy a secondary property instead.

This means demand for secondary market properties move up (especially in similar area and similar type) and usually this meant that prices of these secondary property will also move upwards. Thus, the price gap between the secondary property and the new property narrowed again but it’s because both the new property price as well as the secondary property price has since adjusted upwards in-tandem.

Conclusion

Material construction cost going up does not mean property prices immediately move upwards. It is more likely that the current construction materials have been purchased earlier. However, in the near future, with a higher cost, it does mean that the property developer will need to adjust their prices. We just need to remember that they would not want to lose customers in a slow market, thus any adjustment will take this into account.

This is also why property prices do move upwards due to reasons beyond just premium location, new catalysts and even other emotional reasons.

Happy understanding.

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Construction starts, Confidence up and Buying Booms

Long time ago, when developers were not that established and risks of them running away with your money is high, typically the buyers would only buy once the construction starts. That’s when they have confidence that the developer really can start the project. Ok, does starting the project meant they would complete it? I do not want to answer but my friend’s apartment in Penang was already 12 storeys tall when the developer ran away. The theory was, if they start construction, people would come and buy confidently. Today, every few days, if you are subscribed to Facebook pages of say, Property Talk and Lifestyle Malaysia, you see new projects being launched. Yes, that’s every few days.

Today, if your project is ‘pre-launched’ or ‘soft-launched’, it will already be covered by many online medias, unless you sue every site which publishes information about your project. What that means is that the engagement must start right from the beginning, especially if your project is said to be one of the largest of its kind and involves a long term integrated development approach. It is considered very ignorant, not to mention arrogant if you say, ‘no need to advertise, buyers will buy when construction starts’. This is exactly what a senior management of a developer company said. For his company’s sake, I hope that he is right because the project that this developer is building is huge and the competition for them is also tough.

If you said your project is high end, luxury residential project, please do not scrimp on the marketing materials that you do. If you must do newspaper, it should be a full page, full colour on a Saturday. It must never ever be a half-page black and white. Hope you remember you have allocated the budget for this and the higher GDV, the higher the budget? If you are targeting foreigners and when you go out of Malaysia, you print better materials, then shame on you. Better not let the ‘foolish’ locals know about this too.

Okay, I am not a developer. However, I am a buyer and if you do not give me a good feeling about the project that I am going to buy, I will not buy. If your project has been selling for over 9 months and you are STILL selling it, try others. I also would not buy it. Stop being arrogant and just do a good job. When you do a good job, people will buy and they will follow you.

To developers who are still having the mindset from yesterday, I can only wish you the best.

written on 19 June 2014

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Only 28th most confident consumers out of 63 countries….

Malaysians are feeling under the weather in recent months.
 Perhaps too many negative news or never ending bad news?
 Yes, this is the case for property buyers too. Need more decision time. Banks more stringent. Ever more discounts and rebates are all the usual happenings in the property market. Well, Malaysia was ranked 28th MOST CONFIDENT globally by Nielsen which conducted a poll on consumer confidence in 63 countries. Looking at it objectively however, it’s improving. It climbed 8 spots from previous quarter and even the points shot up from 78-80 to 87 in Q2 2016. This is already very near to the 89 point which was scored a year ago. Let’s not talk about the few years from 2010 – 2013 where it was above 100 points.

Nielsen Malaysia country manager Richard Hall said, “Malaysia has weathered the currency devaluation and moved past the first year of the implementation of the goods and services tax (GST) without the economy going into any significant downturn.Thus the nation’s consumer confidence outlook is returning, with most Malaysians
believing that the economy was more resilient than a year ago.
” Seriously, I am not sure how many colleagues of mine would agree with his assessment. Personally, I agree with him and has been singing a similar tune for some time but it’s really a negative world out there. Except for the few property investor friends of mine who were still buying as at one week ago. Haha.

In South-East Asia, there are many nations with far higher scores than Malaysia. I love this too because this meant that the economies of these countries are also holding up well. 4 countries with higher than 100 points include Philippines at 132 points, Indonesia at 119 points, Vietnam at 107 points and Thailand at 101 points. In fact the first three was along the world’s top 10 most confident countries! As usual, where’s Singapore? It’s right in front of Malaysia, at 88 points and taking 25th place overall. The Nielsen Global Survey of Consumer Confidence and Spending Intentions — conducted online — measures
consumer confidence, perceptions of local job prospects, major concerns and spending intentions

among more than 30,000 respondents with Internet access in 63 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

So, are we ready to be even more positive in the next survey? Well, I hope Nielsen sends me the survey too.
In terms of using our own observations,
 just look at the food and beverage outlets in the usual bigger malls. Most of the time, they are full and this includes those with expensive menus as well. In other words, people still feel secure with their jobs or is this is a false alarm since many are overspending what they have? Well, you decide yeah. Happy believing.

written on 2 Aug 2016

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Consumer sentiment in 2018 is positive says PropertyGuru

It’s a little tiring to keep explaining that the Malaysian property market is not going to suddenly crash. Anyway, investments are always a risk yeah, so there’s no guarantee that some unforeseen circumstances will not change the current situation. Perhaps I let a survey from PropertyGuru do the explaining as to some reasons
why the property market is not going to suddenly crash

within a few months’ time.

Press Release:
PROPERTYGURU: POSITIVE CONSUMER SENTIMENT IN 2018 IN LIGHT OF IMPROVING ECONOMY

75 percent believe market is facing oversupply issues, hence presenting good opportunities to buy

57 percent intending to buy in the next six months, up from 52 percent

KUALA LUMPUR, 29
th
 JANUARY 2018
– Measuring the pulse of the property market, PropertyGuru Malaysia’s latest consumer sentiment survey indicates that despite the headwinds battering the property market, consumer satisfaction has improved with a greater number of buyers looking to transact in the next six months.

While the increase in consumer satisfaction is marginal, it is likely that the improving sentiment may persist going into 2018, as consumers react positively to issues of oversupply in the market, improved assistance from the government for affordable home ownership and macro-economic factors. These macro-economic factors include the strengthening of the ringgit, rising crude oil prices and better than expected GDP growth among others.

“Our analysis in 2017 shows that the market has been moderating with prices generally declining. However, with the better than expected economic performance, consumers are gaining confidence again. Coupled with the oversupply issue which may see prices drop further in 2018 for certain property types, consumers now are expressing improved satisfaction. This sentiment may hold throughout 2018 barring any unforeseen circumstances,” shared PropertyGuru Malaysia Country Manager, Sheldon Fernandez.

“While some buyers may adopt a wait and see approach prior to the upcoming general elections, it is likely that 2018 will see more transactions as buyers try to capitalise on the oversupply of certain property types, particularly high-rise strata units. This is a welcomed development but it is really too early to say that the market has recovered,” added Fernandez.

¾ Malaysian Believe Market is Oversupplied, 57 Percent to Transact in the Next Six Months

The PropertyGuru Consumer Sentiment Survey showed that three out of four Malaysians believe the market is oversupplied – a significant jump from the previous six month’s 64 percent. In addition, desire to purchase in the next six months has jumped 5 percentage points in the last six months to 57 percent with consumers looking at both primary and secondary properties to optimise their choices.

About 1/3 are looking for properties priced between RM300,000-RM500,000. Those looking for properties priced RM300,000 and below have increased by 5 percent to reach 31 percent from the previous six-month’s 26 percent.

“A significant number of buyers have modified their budgets and with that, are more prepared to transact. With smaller budgets, they perhaps are better able to buy a property, which may have contributed to improving sentiment,” added Fernandez.

Consumers’ criteria when purchasing a home remain unchanged with location, security and safety and unit size being the top three factors for consideration when making a purchase decision.

Long-Term Consumer Sentiment – Capital Appreciation of 10 Percent and More Expected

While consumers are looking to capitalise on declining prices, most believe that the long-term wealth preservation capability of real estate as an asset class remains intact. PropertyGuru’s data showed that a majority of Malaysians believe that property prices will appreciate over a 5-year period across all property types.

In PropertyGuru’s Consumer Sentiment Survey, 44 percent of respondents polled were 1
st
 time home buyers or those intending to purchase a home in the near future. Investors and upgraders formed the next highest consumer segments at 30 percent and 20 percent respectively.

About PropertyGuru’s Consumer Sentiment Survey

Conducted half-yearly since 2009, PropertyGuru’s
Consumer Sentiment Survey
 measures property sentiments and expectations around the property market to enrich decisions by helping consumers, property agents and developers gain a better perspective of the local property market. The H2 2017 survey saw 817 respondents in Malaysia and more than 1,900 respondents across Southeast Asia.

ENDS

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Continuous expansions in connectivity and advance tech vital

No, I do not believe the U.S. will retreat into its cocoon and stop economic interactions with the world. If they do, where are they going to export to? Only produce within the country for own consumption? Haha. Let’s stop joking. There are still lots of actions from President Trump, that’s for sure. So, let’s keep watching. One advanced country in this part of the world called Singapore will be doing something opposite. It will be looking to become even more connected with the world as it continues to invest in technological advancements. Reported in many medias were the recommendations of Singapore’s Committee on the Future Economy (CFE). One such
report is here
.

As a key Singapore advisory panel, it recommended to the Singapore government to investing in new international connections such as the planned Kuala Lumpur-Singapore high speed rail, Changi Airport’s Terminal 5 and the high-tech seaport in Tuas. It issued a 10-year strategy which basically aimed at GDP growth of between 2-3 percent and to achieve this, it mainly focused on trade partnerships, deepening the workforce’s tech skills and digitalising the economy. It also recommended a review of Singapore’s tax system so that it remains pro-growth and competitive, while also “broad-based, progressive and fair” to adjust to an ageing society. (YES, even Singapore is moving towards becoming an ageing nation)  The Singaporean Prime Minister Lee Hsien Loong said that the proposals were all accepted and the government will pursue them. The CFE panel recommended the government NOT TO resort to protectionism or trade barriers.

Seriously, I think CFE’s recommendations, especially on the opening up instead of closing up should be forwarded to Mr.Trump  Moving away is a huge thing. If it’s shown over time that ASEAN can still be successful without TPPA or even other bilateral trade agreements with the biggest economy in the world, it will be bad for the one who was left out. Coming back would then require much more effort in the future. Engagements are vital, not disengagements or mere rhetorics. Of course, ASEAN can certainly do much much more than today. How about starting with even more usage of our own currencies for trade? ASEAN has 625 million population. All the best.

written on 13 Feb 2017

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Let’s control the property price.

Let’s control the property price.

Why can’t the government just control the property price?

It has been a few occasions when people commented that Malaysia should control the property price better. If the one commenting is my good friend, I will explain. In fact after I have given them 5 or 6 examples from all the countries they know and show them some news articles in google, they realised they needed to read a little more to know the it’s easy to say but it’s very hard to do when it comes to controlling property prices.

If they are not my good friends, I just smile because I do think they have no idea at all about what’s happening all around the world. Let’s start with a few very famous countries whose news we read nearly every day. I mean I read about their property news everyday. I had to as I have to write in kopiandproperty.com

Controlling property price all around the world

Controlling property price has NOT happened in the most advanced economy in the world (Starts with an A) or the upcoming largest economy in the world (starts with a C) and definitely not that country whose lady Prime Minister is loved by many (Starts with N), not in that country which Malaysians love to migrate to and stay in suburbs which are 50km away from the city centre (starts with an A too) and last but not least, the property price could not be controlled even in a country where over 80% of all homes built were actually controlled by the government. Today, we have the news about this country, Singapore.

Article in theedgemarkets.com
   Private property values climbed 5% from the previous quarter, according to Urban Redevelopment Authority flash estimates released on Monday (Jan 3). That’s the highest quarterly growth since the second quarter of 2010 when prices jumped 5.3%. For 2021, prices increased by 10.6%, also the highest since 2010.

Singapore’s central bank last month warned that household debt was higher than pre-Covid-19 pandemic levels, driven by property loans.

Christine Sun, the senior vice-president of research and analytics at OrangeTee & Tie said, “Prices may stabilise and rise at a much slower pace in the next few quarters. But values are not likely to fall because developers have bought the land parcels at quite high prices.” Please do refer to the full article here:
Article in theedgemarkets.com

Property price rises because of emotion, that’s why…

If we love a particular popular and mature neighbourhood and wanted to buy into that area and has been waiting for a few years, if there is an available unit but it’s RM50,000 above the market price and therefore the asking price is RM1.05 million instead of market price RM1 million, do we buy or do we wait further? Chances are, we will buy. When this transaction happes, the property price has just risen by 5%…

Why did we buy if it’s RM50,000 higher than the last transacted? Well, we are worried someone else would buy it first. Well, in financial terms, based on a loan, the actual monthly mortgage repayment for this extra RM50,000 is only roughly RM200. For someone who could actually afford that RM1 million home, the person would just pay this extra RM200 without much of an issue. This is why the decision was taken.

All these are just emotional decision which is then supported by logical reasoning. It’s just an extra RM50,000. I will stay here for a long time anyway. So, this RM50,000 divided into 20 years is only just RM2,500 per year. Monthly repayment is just RM200 per month anyway. If some of us still believe we are fully rational people, do read this book to understand better yeah.
Predictably Irrational by Dan Ariely. (Fantastic and easy to read)

At best… government can control the starting price

Yeap, that’s the only thing which can be controlled. It’s being done currently. Property developers need to apply for approval in terms of the pricing for their project. Once this new unit is sold, the new owner can sell at any price they like as long as the seller is willing to pay. In other words, the control stops once the unit is no longer new and is now categorised as under secondary property market.

Happy understanding and start aiming versus just waiting for price control to happen. I would not say never but it has yet to happen in all the usual countries.

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Malaysian’s affordable home mission by the government. Views.

I think by now people who read property related news would have heard that Pakatan Harapan intends to build 1 million affordable homes within 2 terms. Roughly, that’s within 10 years. Some would say that this is a lofty goal because this comes up to 100,000 homes every year, all within the affordable segment.
Here’s that earlier article about this 1 million affordable homes.
Personally, I think it’s a good goal to have because everyone should own at least the home which they live in. A home will always be a good hedge against inflation too which at the very least would keep the not so wealthy become poor in the future. RM300,000 even if growing at just 3 percent per year would still be close to RM750,000 when one retires after working for 30 years. I fully agree that by then, the RM750,000’s value is only like RM300,000 or even lower but that’s the reason why property is a good hedge. May not make everyone rich but will keep the owner from suddenly becoming poor when he retires and income stops. Okay, what do others think about this 1 million affordable home goal?

Institute for Democracy and Economic Affairs (Ideas) senior fellow Dr Carmelo Ferlito says that the building of so many affordable housing and the property market at large may hurt the industry. He says, “I believe the right question to be answered is if Pakatan’s proposals for the property market are not simply realistic and feasible, but if they are beneficial or harmful. The general perception I have regarding Pakatan’s manifesto on the property market is the one of a desire for an exponential growth of government control and regulation.”  He also does not like the idea of a central planning agency because the central planner does not necessarily know the needs of the market better than the people themselves. He dislikes the time limit to develop a land because he said that this prevention against landbank hoarding is an open violation of property rights.
Here are his views in full in edgeprop.my. He gave explanation to all his points too.

The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) president Foo Gee Jen likes the idea of a central planning agency for affordable homes. He says, “The [idea of] forming a National Affordable Housing Council is in line with the Real Estate and Housing Developers’ Association’s (Rehda) proposal of setting up a central agency to oversee affordable housing matters, which is the right way moving forward.” He shared that affordable homes focus should not just be in the quantity but also building where the demand is greatest. He shared,
“Selangor, Kuala Lumpur and Penang are the critical states which have seen housing prices far beyond people’s affordability. Thus, the government should consider building more affordable homes in strategic locations with easy access to public transportation and amenities to meet their needs.”
Here are his views in edgeprop.my and with full explanation too.

There is also a very comprehensive article from the National House Buyers Association in edgeprop.my
 In brief, HBA honorary secretary-general Chang Kim Loong said, “The proposals from Pakatan are well thought out and if implemented right, can go far towards increasing the supply of affordable housing and reduce the threat of a homeless generation.” First up is for the government to DEFINE what it meant by affordable home because currently, the interpretation by home developers and the Bank Negara Malaysia is not the same.
An earlier article here.
 Besides that, Chang also said, “HBA hopes that the new housing minister will always put the interest of the rakyat and country first before the interest of housing developers and does not become a ‘Minister for Housing Developers’.” Happy reading the full article here with all
HBA’s views. Very comprehensive really.

What are your views about the affordable homes then? Do you believe that 1 million affordable homes would distort the market since it is government led? Do you think having a single agency is not a good thing because it’s best to let the market forces decide instead? Frankly, I believe the government would be engaging the developers to do the job by providing lots of incentives. I also think that it is necessary for developers to continue moving forward in terms of reducing construction costs. We already know that there are cheaper ways to build today. HBA as usual is very protective of home buyers but this does not mean that it understands what the market wants in the future. Frankly, some surveys could be done with regards to what is actually needed. It may not be the typical 800 plus sq ft apartments that everyone is building feverishly today yeah. I wish every Malaysian would own a home sweet home.

written on 17 May 2018

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Analysts on Budget 2017: Cooling measures unlikely to be lifted

The Singaporean government is still
keeping its cooling measures
 despite some fall in property prices. This was also reiterated in July 25 2016 by
Monetary Authority of Singapore (MAS)
. The developers there (Singapore) have also been putting forth their arguments for some relaxations. As of now, nothing has happened. What about Malaysia? Our property market is also pretty cold today when compared to the warmer and hotter days just a few years ago. Will Budget 2017 be the start of relaxation of some of these cooling measures? Below would be some brief comments from some analysts on Budget 2017 and cooling measures. Reported in
theedgemarkets.

AllianceDBS Research analyst Quah He Wei gave two strong statements on why it is unlikely for the government to relax the cooling measures. “In the unlikely event of the broad-based relaxation, household debt is expected to spike up. Ultimately, it depends on the banks to access the eligibility of applicants, and banks may be less willing to extend credit for high-risk borrowers. We believe the upcoming Budget 2017 will continue its focus on increasing the supply of affordable public housing priced below RM400,000 to boost home ownership.”

Credit Suisse Securities (M) Sdn Bhd analyst Joanna Cheah also have the similar opinion; there will not be a broad-based relaxation of cooling measures for the property market. Not especially for these three:  reintroduction of the developer interest bearing scheme (DIBS), lowering or removal of real property gains tax (RPGT) or allowing for a higher debt service ratio for homebuyers. She said, “All the aforementioned could fuel speculative purchases once again, which we believe is against Bank Negara Malaysia’s (BNM) priority to keep household debt, which is currently at 89% of gross domestic product (GDP), controlled.”

MIDF Research analyst Alan Lim also does not think there’s going to be any relaxations such as raising the financing for first-time homebuyers to 95% and extension of loan tenures. He shared what BNM said earlier. “BNM has dismissed the suggestion that access to financing is the main problem confronting potential homebuyers, and said that it will be standing firm on its lending policy. Therefore, I think the element of financing flexibility is unlikely.”

I have three wishes. First one is for all affordable homes to be speeded up further. Everyone should own a
roof over their head, period
. Second is for a stricter monitoring and punishing all those who lied to get access to affordable housing which would have otherwise been given to the more needy. Third is for buyers to really read more, view more and then decide more rationally.
Think duration, not distance.

Think WHY, not where.

Buy affordable, not glamour.
 It does not have to the BEST ever for the first home. We can
always upgrade later on.
 Cheers to Budget 2017. Hope it helps to lift some of the negative sentiments currently.

written on 12 Oct 2016

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Cooling measures must include more affordable units

For those who have been reading kopiandproperty.com for some time, you would know that I do not believe cooling measures would cause prices to drop a lot. Maybe for the way too highly priced ones. Those units which are not interesting for the super-rich but not really affordable for even a household with two managers. Cooling measure as the name imply is meant the cool the market. In other words, property prices should stop climbing so fast and start to become normal again. In brief, still growing but not to push prices down. Yes, I firmly think Malaysia still face shortage in appropriate properties; affordable and good ones.

I read some interesting views from Datuk Alan Tong’s article in The Star. He reiterated some of the cooling measures taken which include the 70% loan policy for third property purchases, housing loan limits calculation based on net income instead of gross, and loan tenures reduced from 45 years to 35 years, the removal of Developer Interest Bearing Scheme (DIBS) as well as the revision of Real Property Gain Tax (RPGT) rates. He said these measures did manage to reduce the number of transactions in 2013 but by end of 2014, the transaction has grown again, even if just slightly. 246,225 units in 2013 and 247,251 units in 2014. He then quoted statistics from Savills Malaysia and Raine & Horner International Zaki + Partners which showed that in the Klang Valley, the price of terraced houses and high-rise residences recorded 8.6% to 18.5% growth year-on-year in the first quarter of 2015. During the same period, similar properties in Penang gained 12% to 17% in price. This meant that prices are still growing even if transactions have barely moved upwards when compared on a year by year basis.

He then quoted the statistics from National Property Information Centre (NAPIC) which showed that the number of transactions in the secondary market has risen from 78 percent to 87 percent between the years of 2010 to 2014. He said something which he said before, that the housing industry which are producing less than 100,000 units per year for the past 2 years meant that there are just not enough units being built and he said that these cooling measures have actually discourage the increase in supply. He suggested that the government should fill up this gap in affordable homes with their land resources, conversion of agriculture land for residential use and faster approval process. Cooling measures have yet to solve the root cause and this has to be quickly supplemented by the building of more affordable homes.

I think it is quite true that the number of units being built is insufficient. for the past 2 years. However, to rely on just the private developers is never the best solution. To be fair to these private developers their main aim is profitability and not charity. However, I would love to see some of them thinking along the lines of maintaining overall profit in absolute numbers but reducing their margins. Actually, this is still possible and can be seen from some of the happenings today. Just look at some of the advertisements in Facebook or in SMSes or in online property portals. Some developers are offering very attractive rebates. Truth is, no developer would offer big rebates if they could sell the units easily. A big rebate also could only be offered if the developers do not suffer losses by selling such prices. If they suffer losses, they would just stop building.

As for the affordable homes, I think the government just have to step up their game and ensure more are built but ensure that only those who qualify gets to buy them. I would be sad if those who do not qualify buys them and rent out to those who should be the ones in need of such housing. I always feel that we should judge them (federal and state governments) by their promise and the actual units built every year. I think this would ensure they deliver what’s promised and not only keep talking but not acting on it. Everyone should continue pushing for more affordable homes. All the best in owning your first property as this is definitely a necessity for our future.

written on 4 Oct 2015

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Cooling measures in SG? One more year at least says Capitaland Ltd

There are no signs whatsoever that the cooling measures in Malaysia is about to be lifted. I would personally be looking at Singapore instead. Once they decided that it’s time to lift their cooling measures, perhaps the property prices has really dropped enough. The reason? The home prices, except for those who managed to get a HDB flat allocation is pretty high. Do look at the most unaffordable city in the world for home prices. (Image)  The full article was published in Bloomberg just a week ago. Read here:
House price to income ratios

Singapore is nowhere near the top 5 though. It’s only 7th. Kuala Lumpur? Already high, actually. As per
Numbeo, it’s 8.74 times Price to Income Ratio.
Fortunately the choices are aplenty unless everyone must stay within the few popular areas or even the city centre also known as CBD. Do note though that transportation and toll would add into the affordability too.

In one latest article in
The Business Times
, the president and CEO of CapitaLand Ltd was speaking in a Bloomberg Television interview and he said, “We see volume picking up and the price declines have slowed. We see this trend continuing for 2017. There is no compelling reason for the government at this point to make major changes.” Capitaland reported net income up by 74 per cent to S$430.5 million (RM1.35 billion) in the three months ended Dec. 31. Revenue rose 7 per cent to S$1.9 billion. For the year, net profit rose 12 per cent to S$1.2 billion. The developer has more than 8,000 homes ready to be sold in China and expects to hand over 6,000 this year, the company said.  Currently, the government of Singapore capped the debt repayments at 60 percent of a borrower’s income as well as higher stamp duties. This is expected to continue to help cooling the market.

Want to know what’s a typical home price like in Singapore today? Well, a typical 1,000 -1,200 sq ft apartment with facilities in Singapore today is S$1 million (RM3.14 million) or higher. Please refer to the image from Singapore’s main property site, propertyguru.com.sg  The median income of a finance manager in Singapore? It’s S$82,786 as per
payscale.
 In brief, these apartments are considered unaffordable. The situation is similar here in KL, especially within the city centre. Seriously, most junior managers are earning incomes which are far away from the home prices. This is the reason why governments are still keeping the cooling measures. Would it reduce the prices so much that it becomes affordable? I personally do not believe so. The reason is because the demand for these sought after properties would be there and as soon as there are some correction of prices, it would be snapped up. Except of course when there’s a financial crisis. Else, based on usual employment numbers and continuous GDP growth, rest assured that demand remains strong. Do look up some of these condos within KL city centre to get an idea. Happy viewing and investing.

written on 20 Feb 2017

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Cooling? Warming? Heating? What’s up?

Singapore’s HDB flat’s resale prices are on a downtrend even if not a lot. According to their Urban Redevelopment Authority and even some reports in the media, prices have gone down 6.8% since the 3rd quarter of last year. In Singapore, there’s no fun trying to guess because the home prices are as updated as last month! Thus, the cooling measures in Singapore is working, or is it? I don’t think we want to look at the luxury condos side which has dropped by double digits because the prices then were so high that it contributed to Singapore city being ranked the most expensive city in the world, ahead of even Tokyo, London etc.

China has meanwhile relaxed much of the cooling measures implemented earlier. Today, they are trying to warm up the market instead of letting it cool too much. Many new measures have been introduced. I just wrote about this two days ago.
China’s Property Market Rescue Package Deployed
. The reason for this was because the property market is threatening to slow down the whole economy of the second largest economy in the world. Average home prices fell across 100 major cities in China, as tracked by the China Index Academy. Note, these measures are likely to stop the cooling and perhaps some warming but it will be far from its crazy growth previously. In other words, perhaps the bubble may not burst this time.

In major Australian cities and London, the property market continues to heat up and bubble predictions are becoming much more common. The governments for both have denied that bubbles exist and said instead that the demand was the main reason fueling the price increase. Both countries continue to show double digit price growth compared to one year ago. Both Sydney and Melbourne grew 15% within the past one year and London grew by 20% within the same period. I am very sure the working population’s salary do not grow by such numbers.

One is cooling, another is trying to warm it up while a few more are heating up. All three situations are causing anxieties to the market in general and every analysts have their own predictions. The more important question is, which one do YOU believe more likely to happen in the near future in Malaysia, with the slowing down transactions and the pre-GST and the post-GST happening from now till Q3 of 2015. Personally, I believe volume will continue to be subdued but secondary transactions should inch upwards already, especially for those who wants a new home and is currently renting and yet still waiting by the sidelines for the prices to dip.

written on 6 Oct 2014

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With GST, demand may slow down next year. True?

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6 more weeks and coronavirus will affect the Malaysian economy hard.

This was one recent article about how the coronavirus will affect the world economy. The writer shared many points to show that the virus will not significantly affect the world economy unless of course the coronavirus is prolonged. Here’s that article:
The coronavirus worry. How will it affect the world economy
 Needless to say I do agree with his assessment though I will have to say that if the peak for this coronavirus does not arrive within February 2020, then many things will change.

Article in malaysia-chronicle.com
   Economist Soon Hoh Sing told The Malaysian Insight that Japan, South Korea, Taiwan, Hong Kong, the Philippines, Singapore, Malaysia and Thailand are expected to be affected if the outbreak lasts more than three months. The reasons include demand from China will slow down when China experiences a slowdown due to the virus.

We have to note that the consumer spending accounts for 76.2% of its gross domestic product growth in 2018. Soon also shared that most of our tourists are from China and not the US. With regards to locals, he said, “People might not frequent shopping malls, cinemas and crowded places. I believe everyone will go out less, so this will have an impact on the retail industry.” Please refer to a very comprehensive
Article in malaysia-chronicle.com

It’s now already the 6th week since coronavirus officially started from Wuhan in China. If we agree that 3 months should be the benchmark, then we have just 6 more weeks left for the peak or even the vaccine to be found. Till then, there’s so much uncertainty. Just look at the panic buying in Singapore will tell us that things could go south very quickly as soon as people feel that the situation is unsafe.

Most important though is to stay objective and stop forwarding those unverified news. Seriously, we do not need even more of these fake news as we could not even keep up with all the real ones. Yes, I personally reprimanded so many friends who forwarded articles without any source. It includes these kind of articles, ‘My wife’s best friend who works in a hospital in Wuhan…” or even “According to nurses working in Wuhan…”  Happy understanding and continue praying. Take care and stop buying the whole row of sanitizers in the mall because you are not drinking them.

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‘Wuhan’ coronavirus is a worry. How will it impact the world economy?

There has been numerous reports on how the Wuhan coronavirus is affecting the world economy. Many has pointed out that many industries will be affected. Especially tourism for example because people are now more inclined to stay at home or they may be disallowed from flying as there are now many flight restrictions already. My personal thinking is that it should affect the economy but this is not going to effect us like a genuine financial crisis; both depth and width.

I do have many of my personal reasons for thinking so, but I think I will let
Shang-Jin Wei, a former chief economist at the Asian Development Bank, is professor of finance and economics at Columbia Business School and Columbia University’s School of International and Public Affair
 to explain it in more detail via an article in
marketwatch.com (click to read full article here)

Shang explains that he thinks the infections and deaths from the coronavirus to happen by second or third week of February 2020 and by early April, both the Chinese authorities and the World Health Organisation (WHO) will declare the epidemic to be under control. Thus, the effects of the virus on China’s economic growth for the whole of 2020 is likely to be small, maybe within 0.1 percentage of gross domestic product.

He says that effects on the first quarter growth will be big but will be substantially offset by above-trend growth for the rest of the year. Effects on the world GDP growth is even smaller. The reason he says so is through the experience of the 2003 SARS crisis where a big decline in China’s GDP in second quarter was offset by higher growth in the next 2 quarters. Many investment banks’ economists over-predicted the negative impact on growth.

He also shared that the worry about people spending lesser because they are staying indoors no longer holds true because online shopping is now a common scenario. As for holidays, those who have planned for a trip would have set aside some budget for it and could do it in the near future.  Anyway, short term is a negative for restaurants, hotels and airlines. As for the closures of factories, government offices and schools, these are extensions of the usual closures for festive season.

He cautioned that these assumptions are also based on the current coronavirus crisis and does not take into account if it gets even more serious or lasts even more longer. He also said that beyond the small slowing of growth, Chinese policy makers still have room for both monetary and fiscal policies too. Example, the banking-sector reserve ration is still relatively high and the share of public-sector debt to GDP is still manageable compared to China’s international peers. In brief, there is no need to push the panic button yet where economic growth is concerned. It’s a very comprehensive article. Read it here: article in
marketwatch.com (click to read full article here)

Please feel free to disagree with the above views and have the thought that coronavirus will cause the next economic crisis yeah. Just remember that whatever we believe, we need to take the appropriate actions for it. If we believe the next crisis is on the way, then it’s time to save every cent we could from now till then because there will definitely be lots of opportunities to pick up. However, if we think it’s just a window of opportunity, then identifying and buying into some undervalued investments may be the action we need to take. Yeah, in the mean time, feel free to wear the face mask for that extra security yeah. Happy understanding.

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Corporate Leaders Forum – Leadership in the Pandemic Era & Beyond

Public Message for Toastmasters International District 51

Covid-19 changed many things. It changed our working place. It changed our behaviors. It changed how we interact with all our family, friends, colleagues and even acquaintances. It has changed the our world and it will be lingering around for some time more.

What it does not change is the need for leadership especially during tough times. As they say, when the goings get tough, the tough gets going. Whether we are leading a family, a company or a small team, with all these changes come the need for us to lead and communicate.

Leadership has become vital. How do we lead ourselves, our loved ones, our people and influence positively? In times of darkness, do we grapple in the dark or do we become the light instead? This is a forum where our invited panelists will share a topic of great importance. “Leadership in the Pandemic Era and beyond.

Young aspiring leaders will benefit by getting a head start for gaining new insights on the potential leadership opportunities for their future career advancement. While those currently leading teams will be able to consider the different options and perspectives that may be relevant to their circumstances.

Do not miss out on this forum. It’s not easy to get all these 4 panelists into the same forum.

Register now:
bit.ly/D51SSW9
Join
#StarSPeakersWebinars
, see you on 30th May!

#leadership
#leadershipdevelopment
#hr
#humanresources
#ToastmastersInternational
#DIstrict51

Register here. Do not miss learning from all these experts.

Thank you making the world a better place by becoming a better leader and communicator.

Charles Tan, DTM

Club Growth Director Elect (Term 2021 – 2022)

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Of cost efficiency, higher profits and even investing in ourselves. Be ready!

Is Malaysia considered a competitive nation? According to ranking in Global Competitiveness Report by World Economic Forum (WEF), Malaysia is ranked 23rd in the world. In Asia, we are only behind Japan and Australia (if you consider them as within Asia). In fact our position is relatively high when compared to majority of the countries in the world. However, this meant that we must work even harder because many other nations would continue to improve their competitiveness. They want to get all those Foreign Direct Investments (FDI) that we got. In 2017, FDI totalled RM41.04 billion and this is lower than 2016 where Malaysia’s FDI reached
RM47.03 billion. Source: TradingEconomics.com
 This amount will make some countries do anything and everything for it, just in case anyone thinks the amount is not that much. Haha.

Anyway, going a little deeper, are the companies operating in Malaysia competitive enough? Well, I think we are okay lah. Our banks are fundamentally sound, at least. It’s TOUGH to get loans approved when we do not qualify… right? There are companies which are not doing well, even when so many
new shops are setting up here. Earlier article here.
There’s another world famous brand which is profitable but is still focusing on how to increase it’s operational efficiency. Nestle is the world’s largest food company. It’s extremely profitable too. However, Nestle SA have plans to cut as many as 500 jobs in its home market of Switzerland. The reason is because its Chief Executive Officer Mark Schneider aims to boost profitability. The job cuts will be in computer-services positions but the company will offer employees training to switch to other positions or accept voluntary departures. (Yes, sometimes it’s called Voluntary Separation Scheme too).  Nestle has 323,000 employees and is the sixth largest European employers.  One main reason it has to cut cost was caused by the entry of a new activist investor.
Please read the full article in TheStar here.

Let’s remember that whatever is happening elsewhere can and will happen here too. That job that we have today may not be available tomorrow even if the company is profitable because the company wants to be even more profitable. Salaries must be a starting point and we need to use it to do more instead of just buying, buying and buying. Well, unless what we are buying are gold bars, properties and stocks. Beyond just profitable companies, there are also loss-making companies and when we start to learn that our salaries are delayed for example, better be ready instead of just taking actions only when it happens. The scariest part of any job is to do the exact same thing every year but getting paid ever higher salaries because there will be a time when someone in another country could do what we do for less. Businesses will continue to seek out competitive countries to invest in. Let’s prepare well for it. We could either be the top 10 percent top performing employees or well, INVEST in ourselves. Happy working.

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written on 31 May 2018

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Cost of a degree in Malaysia? International qualification but paying in RM?

Many years ago, someone told me that if I have two children, I need to have at least RM2 million for their education. When I asked further, the person (who’s in the financial industry) told me that it’s RM250,000 per year for a 4 year programme in the UK. He said the fee alone is
£
15,000 and another
£
12,000 for living expenses. So, it’s
£
27,000 or RM150,000 per year. I asked why he said it’s RM250,000 then? He said must include inflation mah…

The article below is more about UK qualification because I am also a UK graduate for my first degree. My alumni is University of the West of England (UWE), UK.

Is Malaysia popular for international students intending to do a degree?

Perhaps it’s good to note that it’s possible to graduate with a UK degree here within Malaysia itself. In fact, we have over
130,000
 international students doing just that; studying for a degree in Malaysia. Close to 100,000 are in private tertiary institutions and these institutions are most probably running a course where the student could graduate with a foreign degree as well.
Info source: themalaysianreserve.com

More information from an
 informational website: studymalaysia.com
  Just always note that the numbers will always differ depending on the tertiary institution yeah. This is their disclaimer which is definitely a valid one. (Note: All figures are estimates and serve only as a guideline)

UK Engineering Degree in Malaysia?

If an international student wishes to study for a UK degree and they do it here in Malaysia with a tertiary institution which has been approved to run the course with the foreign university, below would be the typical total fee plus living expenses here in Malaysia. Just need to note that if someone prefers to rent one whole condo versus one room, then of course the cost below will not be so low.

Image source:
https://www.studymalaysia.com/education/top-stories/the-cost-of-higher-education-in-malaysia

Typical fees for Business and IT disciplines

Generally, the most expensive one is usually Engineering because of the need to use machines and other equipments. Even at the most expensive course, the investment would be roughly RM50,000 – RM85,000 for the whole course yeah. If we include the living expenses as per what was mentioned above, it’s an extra RM54,000. Thus, total cost for an Engineering degree (franchised UK engineering programme) would only come up to RM140,000.

Two kids? RM140,000 x 2 = RM280,000. Manageable yeah. Just need to start sooner than later so that the money will be available by then.  Alternatively, local universities are pretty well ranked even against many of these foreign UK universities which are the awarding university yeah.    Please do refer to this
informational website: studymalaysia.com

Expectations of the partner UK university for an engineering degree programme?

Which UK university engineering programme could a student expect to study for if they do it here in Malaysia? Here’s one. Coventry University, UK. INTI International University (Yes, I am an alumni of INTI) runs an engineering course in collaboration with Coventry University.
It’s ranked top 50 in the UK out of probably 200 universities. (click here to view)
  As for the world, it’s ranked 601 – 650 and this is around top 3% university in the world.
Of course this is not Cambridge or Oxford University but top 3% is okay lah. Click here to view.

Some comparisons with local institutions with engineering programmes as well?

If you need a comparison,
University Malaya is ranked at 65th in the world. (click here to view)
 This is our top university in Malaysia. Meanwhile if we look at private universities which are homegrown, we have
Taylor’s University which is ranked top 332 in the world. (click here for the ranking)
 Or
Sunway University which is ranked 651 – 700 in the world. (click here to view)
  By the way, this is also the reason why we have many international students here in Malaysia. Be proud yeah, we have come a long way from the time when I studied for my degree way back in 1994.

Image source:
https://www.studymalaysia.com/education/top-stories/the-cost-of-higher-education-in-malaysia

Yes, you should come to Malaysia if you are an international student

The degrees are conducted in English. This is a super plus. The degrees are internationally recognised. Depending on which is the awarding university, you may be getting a UK degree and yet can spend much lower than going directly to the foreign country. Third, you are not going to be the first batch or second batch yeah. You are just adding on to the over 130,000 international students today.

As a Malaysian, I welcome all of you yeah. By the way, the typical accommodation cost which you pay in the UK for ONE ROOM, you could rent one whole apartment here in Malaysia if truly necessary.

Is a degree needed in the current world?

As they say, a degree is not so special these days (throw a stone and it may land on a degree holder) but a degree will always be a stepping stone for many people. By the way, the throw a stone and hit a degree holder is not so true yeah. The % is probably 20% or thereabouts versus 50%.
Why I say so is because even in Singapore, they have only reached 33% in 2020. (click here to view)

We can also say many successful entrepreneurs can be successful without a degree and that’s true as well. Just look a little further below the entreprenurs and we would realise that most of their staffs, the managers do have tertiary qualifications yeah. Happy studying for your first degree. Perhaps a Master degree may be the minimum in the future yeah. Yes, I have an
MBA from UUM, Malaysia. Oh yeah, UUM is ranked 511-520 in the world yeah. (clikc here to view)
 Happy studying even if you think you want to be an entrepreneur in the future.

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Cost of Land increasing vs GDV

These days, every time we hear of new launchings in a popular area, the prices goes up. The developers said this is because of the cost of materials, labour, land and even compliance costs. The buyers said the developers are trying to maximise the profits they could. The government introduced cooling measures to deter speculators. Today, let’s see whether what the developers said is true, at least partially true. The cost of land. For any development to proceed, developers needs to buy the land that the property is to be built on.

If we look at Mah Sing’s land purchase since 2012 versus the estimated GDV, you can see a trend. A trend of increasing land cost. From their first purchase where the land cost is only 6.3% of GDV, it has been rising and their most latest purchase showed that the cost of land is now 13%. In other words, the land cost has doubled within just less than 2 years. In Singapore, Donald Han, managing director of the Singapore unit of Chesterton Singapore Pte said, ‘The increase in land prices has had a tremendous impact on developers’ profit margins. Developers that used to enjoy margins in excess of 20 percent will now have to contend with narrower returns.”

I remember over a year ago, REHDA Penang’s chairman, Dato Jerry said in a public presentation that the land prices in Penang has risen so fast that it was already two years faster than what it should be and that’s giving huge pressure to the developers which is not having an easy time. For land prices to drop, the whole property market must drop first, at least for 2 years or more. If this happens, then the land prices would drop.

If you ask the developers if they would prefer for this to happen versus land prices continue to go up from current level, I think the answer is clear, they’d choose the latter. At least they can still build even smaller units to make it affordable enough to sell. If we think of Penang island as the next Singapore within the next decade, I think we can safely conclude that ‘buying property in Penang’ is likely to be harder in terms of affordability. Land costs are going to continue to increase versus GDV.

written on 10 May 2014

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Could buy, Can buy and Need to buy. Who are these people?

With the current COVID-19 still in our midst, the sentiment has remained negative. Most messages on Facebook are about how bad the situation is. When we look at the property market, we have some who say that developers must start focusing on digital marketing so that they could sell. We even have people saying that even with the PENJANA incentives, there’s no way that the property market will move up.

Maybe we look deeper and we maybe we could see that for the market recovery to start, we need to look at three different groups of potential buyers and get them to buy. In my opinion, there are three distinct groups of potential buyers. They are as follows:

#1 – Who could buy. (buying is within their capability)
These are usually people who still have jobs, still have salaries and still have savings and usually already paying for that home they are staying today. I think they are small business owners (business still doing fine) or working professional couples. In other words, they could buy if they are convinced that the situation is safe for them to buy. They may even decide to upgrade their current home into a bigger one. For this to happen, they need to be assured that the window to buy may just be now.

#2 – Who can buy (more than capable to just decide).
  These are people who have already diversified their investment portfolios. They continue to look for investment opportunities and property is just one of those choices, not the most loved ones, not at the moment anyway. They may choose to evaluate a little longer than usual because they know this is the investors’ / buyers’ market. Stock market has good valuations. Property prices are not going anywhere. How do we tell them that now the window of opportunity has opened? An earlier article showed some of these people:
Buy Buy Buy Singapore to Sydney

#3 – Who needs to buy (has actual need to buy)
 These are the first-time home buyers. They could be couples expecting a baby but their current home (maybe rented) is too small or too uncomfortable. They could already be considering to buy to upgrade for some time but is still worried if they should do it now.  They do not have enough experience and too many people say the property market is in deep trouble.  So, the decision continued to be delayed… How do we tell them that  the time to make that decision may be now? (By the way, rental they pay does not build up any wealth yeah…)

Group 3, unfortunately may not be the first group to decide. However, when they read more good news about property market (because of groups 1 and 2 buying), then they may now join the purchase. Group 3 is truly the largest group in any market and Malaysia, being a developing nation meant that the demand for homes remain very strong. However, in order for the market to move, we need catalysts yeah.

This is no different from most other businesses. For example, that biggest manufacturer may decide to build a new base in a new country.  When they have started operating successfully, many of the smaller ones could see this happening and they know that it’s safe and all of them would start to come in and operate in the same country as well. This can be known as the Flying Geese effect too.  The geese flies in a V-shaped formation but it has to start with that one leader goose.

Let’s just see what happens in the next couple of months with these three distinct groups of property buyers yeah. Happy understanding and even if we are not the target to buy properties, if we help to spend a bit for holidays within Malaysia, this will also help boost employment which will then potentially boost the property market in the future. Not immediately lah. Cheers.

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Like them but could not afford them? Buy shares lo

I have many friends who love Eco World, as a brand. Only a few has bought their properties. Probably not the time yet, no suitable ones or some other personal reasons. Anyway, I think they (Eco World) are one of the most prominent developer today and as long as they continue to develop whatever they planned, they should do very well. In fact, for the past 1 year, their sales held up well and Eco World is looking to up the ante for FY 2016. Read here:
Eco World: Has hit RM3bil target, aiming at RM4 bill for 2016

As usual, if we like a certain brand but you could not afford it, what could we do? In this case for Eco World, there’s now the possibility to buy shares from Eco World International Bhd (EWI) which is aiming to get listed by mid-2016.

Reported in NST, Eco World International Bhd (EWI) has obtained the Securities Commission’s nod for its proposed listing. The listing will involve an initial public offering of up to 2.15 billion new shares representing up to 89.7 per cent of EWI’s enlarged issued and paid-up share capital. There would also be a total of 960 million bonus issue of free warrants in EWI (“Warrants”) on the basis of two warrants for every five shares held after the IPO. EWI’s executive vice chairman Tan Sri Liew Kee Sin said, “The approval is a significant milestone in EWI’s journey to become a listed entity.”

With this listing, EWI would have more funds to grow its business internationally and take advantage of any new development opportunities. Yes, funds are needed for faster expansion even if the company may have capable top management team. It currently has projects in London, United Kingdom and Parramatta (West Sydney), Australia. Thus far, these projects have a cumulative sales of 712.5 million pound (RM3.953 billion) as at January 31 2016.

I do not believe I would be buying their properties anytime soon as my funds are very limited. However, I think I may still have a little left for some stocks, as long as the share price has not appreciated way too much simply because of the ‘brand.’ Oh yeah, read a bit about buying stocks here:
Good notes for stock investing from an investment guru
 Yes, as a Malaysian I am proud to be a small participant via shares in a Malaysian developer which is active in the developed property markets of the world. Happy waiting.

written on 7 Apr 2016

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