Budget wishlist for the property market?

Do you have your personal wish lists? I think everyone has. Below is PropertyGuru’s views about the Budget and the property market Malaysia. I favour any more which does not harm the property market, for example loosening of lending standards. That will harm everyone in the medium term. Anyway, let’s read what PropertyGuru has to say.

— start of press release —

Towards Putting More Roofs Over Heads And Revitalising The Property Sector

PropertyGuru proposes several measures for inclusion in Budget 2018

KUALA LUMPUR, 23
rd
 OCTOBER 2017:
Despite Malaysia’s property market stabilising in 2017 as consumer sentiments improve and prices showing a gradual uptrend, unaffordability remains at the heart of the matter. This continues to impact Malaysians in a profound way:

83 percent believe that properties are overpriced

46 percent feel interest rates are too high

43 percent mentioned dipping into their Employee Provident Fund (“EPF”) savings to purchase property – a 5% increase from last year

69 percent expressed concern over the economy

In addressing these and other concerns towards the ultimate aim of promoting home affordability and ownership, PropertyGuru Malaysia, the country’s top property portal proposes the following for inclusion in Budget 2018:

An Updated Guideline / Definition for Affordable Property

While affordable property may differ from state to state and even location by location, a clearer reference point is needed to support plans for new housing supply, especially in key urban areas such as the city centre.

The definition should include not just price, but also unit size, location, private sector feedback and other considerations. There needs to be a clear consensus between the government, the private sector and the
rakyat
on what is perceived as an affordable home.

Increased Plot Ratios

By increasing plot ratios, developers can build more units – optimising land use and space. This reduces the individual cost of each unit, resulting in more affordable homes. Transit Oriented Developments (TOD) especially should be allowed to have increased plot ratios.

This will not only promote home ownership, but also public transport ridership towards reducing traffic congestion and a more sustainable urban lifestyle,” he added.

Revision to Gross Income to Assess Loan Eligibility,

By reverting to gross income, market transactions would increase significantly and almost immediately. But it can be restricted to special groups of buyers i.e. first-time homeowners only.

Relooking Interest Rates

Given that banks have had a good financial year, PropertyGuru recommends a reduction of 0.5-1.0% of interest rates for first-time homeowners buying affordable properties offer first-time home owners a special interest rate if they bought affordable properties within a specific price range in transit oriented developments (“TOD”).

Landlord Incentives

As we focus on home ownership, there is a need to focus on short-term solutions – providing more rental housing for Malaysians who cannot afford to buy or are saving up to buy but presently need a roof over their heads.

PropertyGuru recommends special incentives provided to homeowners who rent to Malaysians on a longer term basis i.e. 2-5 year tenancy agreements for those within a certain age bracket and income level i.e. the M40 Generation.

— end of press release–

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Buffett’s advice and Federal Reserve’s decision.

The day was speculated to be June 2015. Now, it has been pushed back to September 2015, potentially. If the US economy continues to be weak for Q2, rest assured that the date would be delayed further. Yes, we are talking about the Federal Reserve  raising interest rates once the US economy recovers strongly. The reason fro interest rate being raised is because they fear inflation should the economy move up strongly and interest rates remain too low, thus speculative activities may happen. Well, if they (Federal Reserve) would listen to Warren Buffett, this may have to be pushed back as well. This famous stock guru said that if the interest rates are adjusted upwards, then current stock prices would seem expensive.

Let me explain very briefly. When interest rates are high and perhaps higher than the growth of business for stocks, as an investor of course I would put my money into the Fixed Deposit. It’s also safer. However, when interest rate is very low, lower than even inflation rate and the stocks are showing a higher return than fixed deposits, of course I would have to think of other places to invest and perhaps I may buy stocks instead. This action of buying more stocks would definitely push up the stock price and once stock price is up, the returns in percentage terms would reduce and the interest rates for Fixed Deposit may appear attractive again.

In other words, Warren Buffett wanted to remind the Federal Reserve that the companies are still not performing very strongly. Thus, any interest rate adjustment upwards would be against the stock market currently.

Currently, both the Wall Street and many European stock markets are at an all-round high. The Federal Reserve is evaluating when should they raise interest rates from the current near zero levels and this decision hinges on the strength of the US economy. According to Buffett, US% will continue to serve as the world’s reserve currency 50 years from now. In the US, income inequality issue has become a major issue in the 2016 Presidential election, with both the contenders trying to woo the middle-class with this issue.

The decision does play an important part because US$ is the world currency. Thus, if interest rates were to be raised, it will cause all the currencies to weaken due to the strengthening of the US$. Yet, if it does not, its growth may be hampered by inflation growth as well which in the end meant little even if the economy is growing. Buffett is an influential person. We just have to see how much his influence is with this latest announcement.

written on 4 May 2015

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Build then Sell vs Sell then Build, why not let the market decide?

House Buyers Association (HBA)’s Chang Kim Loong said that Build then Sell (BTS) is a much better system as it is a much safer mode of home delivery for the buyers. This will also be eliminating the cases of abandoned housing projects. In short, buyers would be protected as they would only be forking out a 10% downpayment and will only start paying for the home once it is completed. Developers would be the one who would be dealing with the bank directly for the development financing. HBA’s Vice President, Brig-Gen (R) Datuk Goh Seng Toh said that BTS concept will ensure house prices are stabilised because no developer would then over-price the homes and risk not being able to sell them. The banks would also want the developers to show proof of committed sales before they would approve the project financing.

Khong & Jaafar Sdn Bhd managing director Elvin Fernandez has a different point of view. he said that if BTS is the sole mode of housing delivery for the country, the market will not be healthy. With the imposition of BTS on all developers, many of these smaller players would leave the development field and this will then lead to reduction of supply and you know what would happen in the future if the supply is reduced continuously. He said that whatever weaknesses in the system today, it can be improved by having a better project financing system and better monitoring of developers.

Personally, I feel that BTS has its valid arguments which is hard to dispute. As a buyer, I think BTS is also one concept I would love if it really reduces the risks on my side and the fact that I would need to worry much lesser even with developers who are developing for the first time. My total loss would be just 10%? However, I do not offer my full support to BTS. I would prefer for BTS to be encouraged through ‘encouragement’ from the authorities and not forced upon all. I have met many smaller developers who build really good homes but if it had been BTS, they may not have been able to enter the market. Secondly, if BTS and Sell then Build (STB) is running side by side, we can then let the market forces decide from whom they would like to buy their projects from. Think objectively, it is not likely that all the STB projects would win. In fact it forces both the BTS and STB developers to really be even more efficient; they price their products as competitive as possible versus each other. I think I should have the final choice.

written on 19 July 2014

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Want to build wealth of US$1 million or higher?

Could we build wealth and become a millionaire by saving up as much as our monthly salary as possible? Some would now ask if it’s RM1 million or US$1 million. That’s a big difference.

The answer is a firm yes. It will take time, but yes. We could also chose to buy to continue buying some blue-chip stocks and wait for its price to rise over the years. It worked for my friend. He’s now a high-flyer and no longer works as an engineer. The fastest way may just be an idea which turned into a start-up and well, everything becomes history. If the idea did not work after sometime, then it becomes a memory…

Photo by Andrea Piacquadio on
Pexels.com

Wealth through property

In many countries, property ownership remains to be one simple reason for people to become millionaires. In Malaysia, there is also that possibility too. Of course, if we are talking about net wealth of RM1 million as a millionaire, then one would need a fully paid home of RM1 million to qualify as a millionaire. Else, the home technically belongs to the bank yeah, not us. So, when that happens, we should be close to retirement or already retired. What about a millionaire in US$ then? That’s slightly over 4 times harder because of currency yeah. Then again 0.2% of Malaysians have achieved it.

Article in themalaysianreserve.com
 Credit Suisse Group AG’s latest global wealth report says that total wealth in Malaysia grew 14% year-on-year BUT only 0.2% of adult Malaysians were categorised in the over US$1 million (RM4.18 million) wealth bracket. The Swiss bank noted that its quality of data is not robust.

3.7% Malaysians have US$ 100,000 to US$1 million. (That’s RM418,000 – RM4.18 million) 42.7% has wealth between US$10,000 – US$100,000 and remaining 53.4% has wealth of under US$10,000. (RM41,800). Total wealth in Malaysia also grew to US$682 billion, representing a 14% increase from the US$598 billion last year, comprising 0.2% of the world’s total wealth.

Meanwhile Malaysia’s Gini coefficient reading — which measures the distribution of income in a given population — improved from 82% in 2018 to 79.6% this year. Note that a higher Gini index reading indicates greater income inequality, while lower reading indicates better income equality in a society. The country’s Gini coefficient is also lower than the world average of 88.5% and Asia Pacific’s 88% in 2019. Lots of other numbers in the report. Its within the
Article in themalaysianreserve.com

Aiming at joining the 0.2%? Perhaps aim in local currency first. Easier. We could work harder and climb the corporate ladder faster. At the same time, keep investing into blue-chip stocks. Meanwhile get a nice place to stay and start paying for it. Remember, that RM500,000 home we are staying today may well be RM1,000,000 by the time we retire. By then if we little or no debts left, we have also reached the millionaire target. The last thing is to keep buying handbags and keeping them in a condo somewhere. Happy moving towards the goal.

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Building more affordable homes can help more to own homes, period.

Someone asked me this question maybe last year. “If more affordable homes are built, would it force prices to fall?” Briefly, NO. First question, would owners of current units sell their units as lower prices just because there are more affordable units being built? I give you the conversation below between a potential buyer and the owner of the unit which the potential buyer wants to buy and the owner is NOT in financial distress.

Potential buyer: Hey Mr. Owner, there are 500,000 affordable units coming in the next 5 years. When all these units come, it will definitely force prices to fall. You better sell me your unit at a lower price today.

Mr. Owner: Wow, 500,000 affordable units coming. That’s great news for you. Happy buying one of the 500,000 units at the price you like yeah. Thanks for viewing my unit.

Affordable homes do not push property prices down

Be realistic yeah. Just because there are today many affordable smartphones has very little to do with pushing down prices of iPhones or the latest phones from the more popular brands. They may also launch some cheaper brands or cheaper phones but their flagship phones or the more premium ones will still be priced at a premium. This is why building more and more units simply meant that more people get to own a unit. It is not to push down property prices because it does not happen.

This is going to be the same even in places where the property prices are already beyond the reach of most working professionals.

Article in nst.com.my
   Hong Kong chief executive Carrie Lam announced that the government will identify more land plots in the north to provide as many as 186,000 additional homes, taking the total to 926,000 including existing properties and those already planned. She said this about the new metropolis: “is the most vibrant area where urban development and major population growth of Hong Kong in the next 20 years will take place.”

Patrick Wong, a property analyst with Bloomberg Intelligence says that all these plans are not going to make a dent in the city’s home prices for now. He said, “It isn’t something that can happen instantly.” He predicted that Hong Kong’s home values will rise between five per cent and 10 per cent this year. Please do read the full article with more details here:
Article in nst.com.my

What’s the average home price in Hong Kong?

The average home price in Hong Kong is US$1.25 million (RM5.2 million).
Info Source here: tatlerasia.com

Median income is HK$18,400 (RM9,875)
Info source here: info.gov.hk

It means that if a Hong Kong working adult does not spend a single cent from their pay, it would take them 527 months to pay for a home at the average price. This is a total of 44 years. If a couple buys a unit together, that’s 22 years of not spending a single cent if they like to afford a unit.  Fortunately, they can get property loans from banks yeah.

Now that we are clear about the actual situation, do we think the home prices will drop because the Hong Kong government intends to build a lot of new affordable units for the people? Feel free to have your own opinion yeah.

Without sudden circumstances, home prices for these current units will continue to hold its own or perhaps slowed down when affordable units start to come online. I would wish that all the Hong Kongers in need of a home should be able to afford a home.

Stop thinking about property price dropping. Start scouting for an affordable property instead.

We can choose to buy further if we like to have lower prices. If it’s within what we could afford, it’s within affordable homes. Just need to get used to travelling a little longer versus staying in the city centre. We can choose to buy in less popular neighbourhoods. If we prefer mature and popular neighbourhoods, then do not complain about higher premiums. We can also choose to follow the auction news of secondary properties too. Remember, that affordable property today will also increase in price even if it’s just following the typical inflation every year.

Can we wait instead? Answer is also a YES as well.

As long as our earnings continue to be faster than the home price increase, we can wait as long as we want. In fact if we become super-wealthy, we actually do not even need to buy a home. Just rent, stay and move once you found a place you love more than the current place. Super-wealthy people do have more choices than a typical working professional yeah. So, whether waiting or not waiting does not depend on the market. It depends on us and us alone based on our earnings capability.

So, truth is, affordable homes is not the same for everyone. In fact it’s very different.  Happy evaluating and understanding.

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Bukit Bintang City Centre, launching second quarter 2016

Whether you are the government of the day or a top developer or even potential property investors, what would you do to a piece of land with a prison on it? Haha. You know the answer, you move it away and redevelop the land.That’s Bukit Bintang City Centre. A joint development by UDA Holdings Bhd, Eco World Developmebt Group Bhd and Employees Provident Fund in a 40:40:20 structure. Less than a year ago, these three partners signed up as partners and it has now secured all governmental approvals for the project and Phase One will be launched in Q2 2016. The new sales gallery will showcase the world-class masterplan of BBCC.

The development sits on a plot of 19.4 acre site at the junction of Jalan Imbi and Jalan Pudu or the former Pudu Jail with gross development value (GDV) of RM8.7bil. It will comprise six blocks of serviced apartments, a retail and entertainment block, four-star and five-star hotels, branded and also serviced residences, strata and corporate offices. Phase 1 would have a combined GDV of RM4bil. It will have two blocks of serviced apartments offering 700 residential units as well as one block 45-storey strata office with 350 strata suites. These would then be served by a 1.5 million sq ft retail mall cum entertainment hub and a four-star 300-room hotel with 180 units of branded residence. Looks pretty complete on paper.

Relying on just people who drive there may not be the wisest thing to do. Thus, BBCC would have a new transit hub to serve the three-in-one LRT, Monorail and MRT services. On and off, I would take the monorail to Bukit Bintang area for lunch. I think it has served many lunch-goers very well. On a weekend though, I would prefer to drive. Perhaps this may change in the future, even for me? It’s time to drop by to understand more. Who knows it might be that project that we have been waiting in this current market slowdown? My personal wish is that this will be yet another iconic project for Kuala Lumpur. Happy viewing.

written on 23 Jan 2016

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Bukit Bintang City Centre, Eco World, UDA and EPF

A friend asked me about Bukit Bintang City Centre (BBCC). Yes, he is skeptical. I asked him if he is thinking of buying a unit. He said no because he does not think this project would be successful. I told him that it’s good that he has a different opinion than me because then if I have enough money to buy one unit, he would not be ‘fighting’ with me. He laughed and said that he does not think many people can afford to buy one unit anyway. BBCC is a redevelopment project of the former Pudu Jail into a RM8 Billion GDV project. Total number of years for the full development is 8 years.

Actually, my friend does have his points. The major reason is because the area is considered popular but this also meant that competition is likely to be stiff unless of course the number of visitors to the area increases to a much higher number when the project is completed. Of course my argument would be that this is a plus to the whole area because if I think of visiting some popular malls, I would rather go to places where I can visit more than one mall at one go. Accessibility is good as there is the Hang Tuah LRT station and monorail station which will be integrated with the proposed development site. Besides these, a proposed MRT station will be built about 500 metres away. The project will be built via a Special Purpose Vehicle (SPV). EcoWorld, UDA and EPF would hold 40%, 40% and 20% respectively.

There is no delay. The BBCC project will start in the second quarter of this year. It will have an entertainment block, office towers, a hotel and serviced residences. I think the launch has better be timed appropriately because during unsuitable time, the negatives are likely to be viewed more strongly than the advantages that it may present. If the launch was not successful enough, it will slow down take up tremendously. Yes, the brand name of Eco World would help but this is not a small project and it needs more than just one brand. I personally think this is a good project to have compared to the old prison but I seriously think the developers should be cautiously optimistic and not overly confident. If I am wrong, great for them. I do not wish to be right. Happy waiting for the launch if you are waiting to buy something from BBCC.

written on 6 Feb 2015

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Bukit Jalil City integrated development and secondary choices

I have many younger friends who loves Bukit Jalil. They feel it’s nearby to everything that’s happening. Perhaps this is also the reason why Malton announced in a The Star article that their Bukit Jalil City development has already reached RM1 billion worth of sales. This is their integrated 50-acre which was being developed together with Pavilion Kuala Lumpur. The project consists of the Pavilion Bukit Jalil regional shopping mall, 112 units of Signature Shop Offices, four towers of luxury serviced apartments known as The Park Sky Residence as well as 44 units of Park Point Shop Offices. It will have a link bridge from the project to connect the residents to an 80-acre public park.

For the financial year ended June 30 2015, Malton registered a marginally higher revenue of RM503.4mil, from RM500.3mil in the same period last year. It’s net profit was however lower at RM45.8 million versus RM52 million previously. This gave it a net margin of slightly over 9 percent. In case everyone is wondering why its margin is so low, it’s because a larger portion of the revenue was from the construction division which has lower margins as compared to property division. It’s total outstanding order book stood at RM1.5 billion. Most of these were due to construction projects such as Bukit Jalil City, Pavilion Damansara Heights and Royale Pavilion hotel. It said that The Park Sky Residence which has a selling price per sq ft up to RM855 is already setting a new benchmark in Bukit Jalil. The typical projects being launched in the same area are priced from RM700 to RM750 per sq ft.

What about some of the projects in Bukit Jalil today? Those I term as family type of condos? A search in property guru.com.my revealed the following: (refer side)  In terms of size, it’s pretty generous and choices are still plenty. I think this is one of the few reasons why it’s still a popular choice. Affordability and size. Do note however that one must expect jams during those peak hours.
According to propsocial.my, there are some attractive points but a sore point would be the jams during peak hours with huge traffic flow including those from Puchong. Happy thinking about Bukit Jalil if you are looking at bigger sizes plus the future Pavillion. Happy staying.

written on 26th Nov 2015

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Rejuvenate and enhance Bukit Jalil, get three pieces of land

Bukit Jalil Sports Complex has been around since the day I started working after my first degree. That’s 17 years ago. It will now be redeveloped by Malaysian Resources Corporation Bhd (MRCB) into Kuala Lumpur Sports City. It said that this will be a vibrant sports hub which will not only be accessible to athletes but also the local community, recreational users and the public. MRCB said that this will be a regeneration of the Bukit Jalil Sports Complex and this development will be self-financed. The project was awarded to MRCB subsidiary Rukun Juang Sdn Bhd (RJSB) on a land-swap structure.

RJSB would ensure a few things in order to get three parcels of land in the vicinity of the Bukit Jalil Sports Complex measuring 10.9ha, 6.8ha and 16ha. RJSB also has to offer additional money which was five per cent premium to current valuations. Then, it has to ensure the Bukit Jalil National Stadium is ready to host the 2017 Southeast Asia (SEA) Games. During the same time, RJSB will also carry out works on Putra Stadium, the National Aquatic Centre and the National Hockey Stadium. It will also be improving the integration of the transportation links and increase pedestrian access across the site. In brief, ensuring the place becomes even more vibrant than today.

After the Phase 1, RJSB would then start more works after the 2017 Sea Games. They include Phase 2 will kick off from January 2018 to December 2020, costing RM1.1 billion. Main works include adding a retractable roof, retractable seats, comfort ventilation and track resurfacing to the National Stadium. Other components of the sports city include a mid-scale convention centre, integrated rehab science centre, youth park, sports museum and library, youth hostel, sports mall/retail shops and related building infrastructure. Populous is the designer for the entire project. It is an international stadium specialist who has worked on over 2,000 projects worth US$30 billion and the projects they have worked on include the London Olympic Stadium and Park, Incheon Asian Games 2012 stadium, Wembley Stadium and New York Yankee Stadium. The last one is a famous baseball stadium.

In terms of what to do with the three parcels of lands, Imran said that MRCB has yet to decide. It will depend on the market conditions at the time. I personally think sports facilities would always need rejuvenation from time to time and we really need to encourage more of the obese Malaysians to be active in sports. As for the plan for the three parcels of land, it’s best to decide later. Tonight, when I was attending the Malaysia Property Awards, everyone I spoke to said that the current market situation may persist for yet many more months. Fortunately none said for many more years! Oh yeah, want to know a bit about Bukit Jalil? Do refer to what
propsocial.my
 has compiled for everyone. Happy sporting and in the near future, to visit the new Bukit Jalil Sports Complex.

written on 5 Nov 2015

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Bukit Kledang: Illegal plantation and mixed property development. Stop it!

I think Ipoh needs more positive and good news versus all these negative ones where the authorities are in the dark of some development matters. Seriously, I think these should not happen any longer. Not just in Ipoh but anywhere in Malaysia.
 Article in edgeprop.my here
Perak Menteri Besar Incorporated (MB Inc) today confirmed the existence of illegal land- exploration activities near Bukit Kledang here for the purpose of oil palm plantations. Its chief executive officer, Anuar Zainal Abidin said, “Initial investigations found that besides MB Inc land, affected areas (due to illegal exploration activities) also involved state-owned land.”

He added, “The State Forestry Department (JPNPk) has also confirmed that the land belonging to MB Inc and the affected state government land are not located in the Kledang-Saiong Forest Reserve area, the area has not even been gazetted as Kledang-Saiong Forest Reserve area.” There will be firm action to be taken against irresponsible parties. Anuar shared that when MB Inc visited Bukit Kledang had been on Jan 19, and no illegal exploration activities had been found in the area. As for how to avoid these illegal settlements, Anuar said, “For the record, MB Inc plans to develop a mixed property project in the area dedicated to the placement of people and avoid government-owned land from being exploited by illegal settlers.”
 Article in edgeprop.my here

Another article in FreeMalaysiaToday.com shared the
frustrations of this illegal development. Read here.
Meanwhile Perak MB said he is disappointed with this illegal development in Bukit Kledang. Here’s
that article in astroawani.com
 It is also said that the Perak state government will check the permit of the 400ha forest development.
Article in Malaysiakini.com here.
 Happy following and I hope the state government will be very pro-active in this case because this will give a firm indication as to future potential of such illegal development activities. Imagine anyone spending so much to illegally plant / develop any piece of land and getting blocked within a few days? I think no one would want to take the risk in the future.

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written on 11 Feb 2019

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Bulk Buy? Four is Maximum.

Few days ago, another new measure which is supposed to help in controlling speculation was announced. According to the report in The Star, this will help to stop ‘property clubs’ from walking away with handsome profits, especially in the Klang Valley. Datuk Rahman Dahlan who is the Minister of Urban Wellbeing, Housing and Local Government announced that any developer selling more than four units of their properties to a single buyer or group must obtain prior approval. This move will most likely start to affect the property clubs as they typically takes up many units as they are buying in bulk for their members to take up. Due to the many units booked, developers would normally grant them higher discounts than individual buyers and this in turn benefits the members who have extra margin when they sell once the properties are completed.

Majority of the comments online are either negative or critical of such a move, saying that the prices should be left to market demand and supply and not due to controls by the government. Besides this measure, the Minister said that he will also be calling for a meeting with REHDA (Malaysia). He did not however said what would the meeting be discussing or whether this measure can be negotiated upon.

Personally, I am supportive of such a move but I must say that this is quite tough to implement. Anyway, even for property clubs, if they do not buy with one name, they can still buy in bulk but every 4 units with one name. The main reason why I am supportive of such a move is because I cannot believe that the number of units on sale can be more than half sold right on the day of launch. I have been to launches even in the morning time and even by then, nearly all the units were already taken leaving those on the higher floors which are usually more expensive.

I think developers should also welcome this move because there is no point in earning huge profits only for the whole market to be so speculative that bubbles starts to build. Drive around the newly completed condos in Penang at night and you may know what I mean. I remember when I moved into my condo many years ago, within 6 months, more than half of the units were already occupied. Today, this is no longer the case. Everytime a new project is completed, the total number of units up for sale may be more than half of the whole project!

We shall see how this can be implemented. Who knows, maybe REHDA said they support this move?

written on 17 Feb 2014

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Bullet Train Chiengmai – Bangkok. No to invest. Yes to loans.

When the tsunami hit Japan in April 2011, I was still in Japan as a tourist with my wife and two other close friends. We heard from the our hotel receptionist in Osaka that the Shinkansen (bullet train) service has been stopped. We were supposed to travel the next day to Tokyo and then to fly back to Malaysia 2 days later. We were evaluating if it is better to just fly back from Osaka instead. The very next day, our receptionist told us that the Shinkansen was back in service. During the travel however, we could feel that the track was slightly less smoother than before the tsunami. Maybe just a feeling I guess.  The Shinkansen arrived on time in Osaka and on time in Tokyo. All of us were amazed. During our trips between cities in Japan, it was via bullet trains at all times and it was on time all the time! For our HSR KL – SG, of course I would support either China or Japan to win the bid. What about Shinkansen for Thailand?

Here’s one
latest news in StraitsTimes SG
 about Japan’s participation in Thailand for the Bangkok-Chiengmai route via the bullet train. The Thai government asked for Japan’s investment into the project. This is what the Thai minister Arkhom Termpittayapaisith said on behalf of the government. The deal that he is looking for is to “minimise debt for the government.” Therefore, “We have asked (Japan) to come up with solutions to decrease capital investments, in order to minimise debt on our part. One of the solutions would naturally be a joint investment (between Thailand and Japan).” The Japanese side however insisted that it will offer loans with low interest rates for the project instead. From a study by the Japanese side, the entire Bangkok-Chiang Mai route will cost 420 billion baht (RM52.48 Billion), BangkokPost reported.
Full article in StraitsTimes here.

In terms of Japanese’s participation in the
High
Speed Rail forKL – SG, this is a recent article.
Always invest when we are able to ascertain some forms of returns from our investments. Sometimes, this is not just a personal decision but also the fact that we were not convinced enough by the sales person. Either not enough facts to answer all my queries or perhaps not the right time. Perhaps it’s better for the PM of Thailand to get another professional team to look through the project again, identify even more better reasons why an investment is better than just providing a loan, regardless of how low the interest rate may be. Yes, better connectivity is always good, even if this is in Thailand. I will surely benefit one day when I fly to Bangkok and ‘zoom’ (300km per hour) to Chiengmai.  To a more connected ASEAN cities.

written on 10 Feb 2018

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HSR Bangkok – KL – Singapore! Potentially, anyway

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Helping Malaysians to own a property and escape poverty

Developers usually find it hardest to finish selling the Bumiputera quota in their housing developments. This will usually affect the cashflow of the property developer. Seriously, developers just want to finish selling all units so that they could move on to the next project. Else, the holding costs for these will likely be high and usually it will be months to years before the units are sold or the quota is released. This is also one reason why property prices may have to be higher too. The unsold units are considered a cost and this cost would have to be borne by someone…

Article in
FreeMalaysiaToday: Bumiputera quota for affordable housing to be reviewed, says Zuraida
 She said that the review would include having standardised pricing for affordable homes in the country. She said, “The ministry needs some time to review and get feedback from industry players and home buyers. Basically, the people will be assessed based on their income instead of race. If we set the affordable homes for only those earning RM3,000 and below, we will use the guideline regardless of religion and race.” Recently, Real Estate Housing Developers Association (Rehda) president Soam Heng Choon proposed the review of the Bumiputera housing quota policy to allow for the automatic release of completed but unsold Bumiputera units. Zuraida’s answer on the sales and services tax (SST) exemption on construction materials? She said besides cheaper house prices, developers could also offer “more value for money” for buyers of affordable homes.
The full article in FreeMalaysiaToday

There are many Bumiputera friends whom I know are buying non-Bumiputera units too. Assuming this is just a small 5 percent, how about using this number as an automatic release of the designated Bumiputera units? As for the rest of the Bumiputera units, the upcoming policy from KPKT should be on helping any Malaysian needing assistance to own a home. Without a property, any household will always be held ransom to rentals and when we look at the advanced nations in the world today, lacking of a property is usually one major cause for continuous poverty.
(Earlier article here)

Imagine putting away more than half of the monthly pay just for rental. There’s no way out for many of these families…
Oh yeah, how much can affordable homes appreciate?

Let’s help.

written on 13th Oct 2018

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Affordable housing to worsen the unsold units?

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Below market price bungalow in Penang, anyone?

Good news for upgraders looking for a bungalow in Penang below RM1 million. Land area is 4,400 sq ft and built up is 3,500 sq ft.

Message from PEN Properties E(3)1400

This property is suitable for the three groups as follows:

1) You may currently be staying in a 1,600 sq ft condominium in Penang island but has been seriously considering a size upgrade and an attractive price

2) Your family size is growing. You want to buy a huge place which can also accommodate your parents and you prefer a Gated & Guarded community.

3) You believe Penang will continue to grow and so do mainland. With the low price per sq ft, the opportunity is now.

The property details as follows: (Yes, you can even arrange to view the unit. This is an exclusive sale from the owner via Pen Properties negotiator, Cheston Choo. (012 777 2756)   In March 2017, as per data from brickz.my a similar unit was transacted at RM880,000. Agents with potential buyers can arrange for a co-broke deal too.

Details of the property:

– Juru Heights Bungalow

– Seller’s agreed Reserve Price RM780,000 (For Open Bidding) or RM840K for BUY NOW.
 (versus other units selling closer to RM1 million.)

– Gated & Guarded (24 hours security)

– Fully Furnished & Renovation

– Land Area: 4400sf

– Built Up : 4090sf

Accessibility:

– ICON CITY & Auto City

– Penang 2nd Bridge

– Batu Kawan Industrial area (Boon Siew Honda, Sandisk, BOSE, SEAGATE, Hewlett-Packard HP….)

Prominent developments in progress / completed nearby:

– IKEA

– Premium Outlet Mall

– Penang Design Village

– KDU University

– University Of Hull

– University Metropolis

– Columbia Medical Centre

– International Golf Course

– Vertu Resort

– Proposed Theme Park

Please call Mr. Cheston Choo (012 777 2756) for viewing appointment. Decide only AFTER viewing and understanding. This may be that home sweet home that your family would love.

— end of message —

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High-end properties are in demand. Lively secondary market.

Bungalows are considered a luxury property and actually even landed properties in some exclusive neighbourhood can be pretty expensive. My personal definition of pretty expensive luxury? Anything above RM3 million. Just last month, a detached home was sold for RM5.25 million. The buyer said that the home was in a very exclusive neighbourhood and behind the home was the home of a VIP too.
Here’s that property.
 If we are in the market for bungalows, it may be a good time for us. Well, applicable for the secondary market anyway. In an article in
TheMalaysianReserve here,
 According to
CBD Properties Sdn Bhd MD Datuk Adrian Wang, high-end properties, especially those above RM3 million per unit, are very much in demand. He said,
“There is high demand in the high-end properties. It was very hard to find good bungalows at an affordable price in Tropicana Kota Damansara, Damansara Heights and Bangsar previously, but you can find them being sold at a very good price now.
The owners are reducing the price to compete with other sellers in the market.”

Wang said that one reason for these buyers in selling their homes may be migration or some may be moving to living in apartment or condominium units. Meanwhile
Zerin Properties real estate negotiator Natasha Gideon said,
“There is a high demand for high-end properties because buyers know now is a good time to get a deal.” (I seriously agree with her. In fact for those with deep pockets, this is the time to get properties below the usual market price. I will not say if all these luxury homes should be worth so much but when we are talking about multi-million ringgit homes, the target market is a totally different one from the working household world) Wang shared however that the 14th General Election is
affecting
 Malaysians in their new property purchases. There is also the trend of people renting just to weather the
high-cost entry that includes bigger down payment and legal fees.
Please refer here for the full article again.

Kuala Lumpur properties will always be in demand because of the population growth. It is true that buyers could buy much further away but for the super-wealthy, the location and the neighbourhood of the home is by far more important than the price per sq ft or that buying further means getting a bigger sized home. Driving an hour to get into the city centre does not seem to be something interesting to them too. As for the timing for them to buy, it’s usually the opportunity that will entice them instead. Seriously, buyers of a RM5.25 million home may not be too concerned with good times or bad times. Happy finding that luxury landed home at a good price since the secondary market would offer good deals occasionally. Cheers.

written on 3 May 2018

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Impression U-Thant: Just starting from RM1.3 million or RM1,700 per sq ft

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Burnt today, will still try tomorrow due to greed

During the property boom years in KL, many learnt how to ‘beat the system’ to gain an unfair advantage. They do not actually have the money to buy more than a few properties but they were able to buy a few properties all at once. Some ‘gurus’ taught all these speculators cum short term flippers how to ‘beat the system. Just apply for loans from several banks all at once, at the same time. Due to it being done at the same time, the banks may still see him as creditworthy as the checks were all done at once. It looks simple and promises fast gains. That was one reason why transaction numbers rose extremely fast suddenly within a few years and prices too.

What happens after the loans were approved? This buyer would then have a small window of a few months to quickly sell the properties at a higher price than what he bought. It works like a clockwork in a rising market. Many were also doing it. It depends only on how quickly you started versus those who started later. What if the buyer could NOT sell it fast enough? If the buyer was unlucky and could not sell it before the loan commences, he would have to start servicing the loan. If he could not even rent it out, he would have to bear the full payment by himself. This situation is currently plaguing many of these ‘clever’ buyers and they have been presented with an even worse news; the slowdown is expected to last throughout the whole of 2016. Read here:
Property market: Nothing much in 2016 as per Maybank Research

According to the chief executive officer of the Agency of PPC International Sdn Bhd Siva Shanker in an article in The Star recently, these ‘speculated’ properties could be as high as 5 to 10 percent of the market and these flippers may have to sell even lower than the price they bought previously because they could not afford so many properties in the first place anyway.

What do I think about these flippers? Whether they get burnt or not, looking at the more developed markets would tell us that during good times, they will be back. This is why Bank Negara Malaysia should stay vigilant and take appropriate actions as soon as any irregularities in property prices are detected. While property prices would be hard pressed to fall but for it to increase suddenly is also not recommended. Bubble may build and burst in the near future. Read here:
Spotting signs of a property bubble, 3 points (updated)

Seriously, property is an investment. For an investment, there is no such thing as a fast and huge profit. Sorry, but it does not work this way. Happy investing.

written on 27 Dec 2015

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Business community and me: PTMP is needed for Penang.

I wrote about this earlier. Yes, I support the Penang Transport Master Plan (PTMP).
PTMP: Reclamation alone is RM7 – RM8 billion
 Do it transparently and minimise as much as possible the effects to the environment and the affected parties. The business community in Penang supports this RM27 billion saying that it would ease the growing traffic congestion on the island part of the state. Read here:
What’s up Penang? Jam has worsened.

According to the Federation of Malaysian Manufacturers Penang chairman Datuk Dr Ooi Eng Hock, their members welcome the light rail transit (LRT) and the Pan Island Link (PIL) Highway in the PTMP because this would reduce their transportation cost.

Besides the cost, it would also help to reduce the number of cars on the roads because FMM (Penang)’s members alone has an estimated 165,000 factory workers who travel to work in Bayan Lepas Free Industrial Zone (FIZ) daily using vans and buses. This is expected to increase because 15 out of 100 FMM Penang members in Bayan Lepas are planning to grow their operations.

According to the Real Estate and Housing Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan, PTMP should proceed because it is an integrated, comprehensive and workable plan. He suggested that the PDP and state government to help the fishermen who will be affected to go into fish farming instead. I think if this is doable, it’s a better future compared to the dwindling fish population all over the world. With more population, just relying on fishing is definitely no longer sufficient. He said that the project benefits the larger public and there is little choice for the state government. Datuk Jerry Chan also said something I agree wholeheartedly. Bayan Lepas airport must be upgraded or a new airport is built. Read here:
Penang international sirport expansion and full capacity in 2017?

Penang needs a better transportation masterplan. Period. It’s an island smaller than even Singapore and due to the popularity of the island, the jams have worsened and the slower the state government reacts, the worse it would be. I am not sure if any of the expatriates from the multi-nationals love to be jammed everyday to and from work and even during the weekends should they decide to visit the UNESCO Heritage Georgetown. In fact if they are on a evaluation mission comparing Penang to some other sites and their trip from the Bayan Lepas airport to the potential manufacturing site takes 2 hours, do we seriously still think they are coming? Happy visiting Penang.

written on 22 Dec 2015

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Butter Cake tried and tested recipe

This is a very easy to do cake. In fact I would recommend this to anyone who is starting because this gives a good foundation to whatever cakes you may want to bake in the future. It tastes good as well which is huge plus. The time needed is also very manageable too, unlike cheesecakes which may take you over two hours just for the baking part alone. The below recipe is a for a 1kg cake.

Ingredients:

250gm Butter or Margarine. (Salted or unsalted, your preference)

220gm of castor sugar (250gm for sweet tooth and 180gm for less sweet)

250gm of Self-Raising Flour (MFM or Blue Key, both ok)

4 A-sized Eggs (60gm+ / egg)

Two teaspoons of vanilla essence. (any usual brand would do)

If you are using butter, please let it cool at room temperature before you start to use it.

Blend butter, castor sugar and the vanilla essence first. Once you can see it is well blended, slowly sieve in the self-raising flour. Once the mixture is well mixed, beat in the eggs one after another, always ensure the first egg is well dissolved before the second and so forth. The whole process for these 4 eggs should be just within 3 minutes. Leave the mixture aside.

Preheat Oven to 180 degree celsius for 6 minutes.

Grease a 8 / 9 inch baking pan. Pour the mixture into the baking pan.

Put the baking pan into the oven, set the time as 40 minutes. When reach 40 minutes, test the middle of the cake with a cake tester. If it comes out clean, cake is done. If not, set for another 5 minutes and try again.

Despite many recipes saying 45 minutes, I found that sometimes 45 minutes would cause the cake to be too dry. Then again, some oven needed up to 50 minutes, so this is quite subjective. Please adjust accordingly with your oven.

Once done, there is no need to take the cake out. Let it cool down for an hour or two before taking it out. You may cut one slice for your loved one. I think that would be the “sweetest” cake he / she has ever tasted. Happy Baking.

Note: Recipe does not include making the marble swirl. If you really want, then a very simple way is to take out one huge scoop of the mixture, put in 2 tablespoons of chocolate and mix them. Once done, leave aside. Pour half of your cake mixture into the baking pan. Then pour in your chocolatey mixture and spread them across the cake mixture. Then pour the remaining half into the baking pan and you are ready to bake the cake.

Want to bake a cheesecake instead? Try a tested recipe here.
Baked Cheesecake.
 You do not need the water bath method!

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Butterworth property is BETTER WORTH.

Nearly everyone of my friends said they wanted to stay inside Penang island. No wonderlah the prices are going up a lot. However do you know that there is another place everyone can also consider? In fact it meets majority of what people tell me except for reasons such as ‘all my friends are in island’ or ‘there are no Queensbay, Gurney mall and Paragon mall. I asked an old friend who used to stay in island, in a place every Penangite loves, Greenlane. He is now staying in Butterworth and he said is is definitely ‘BETTER WORTH’. Thanks Jeffrey. 🙂

Affordability. Lets get real, money is never enough but if we use it wisely we can stretch it further than what we can use it for. In Butterworth, a typical terrace is around RM400K – Rm500K depending on actual location / size. A condo ranges from MR360K – Rm450K depending on the size. A famous one would be Ocean View. With this kind of money, there are no Condo projects in the island which is available to you. Typically, for a 1,000sf condo, it would be RM550K – RM650K easily, depending on size, renovations etc. RM500K means you cannot even get any 1,000 sf condo in my favourite place, Sungai Ara. Slightly smaller size, perhaps.

Less jam. It is true. If we consider the slow moving traffic in Butterworth as ‘jam’. Then, you must try going along the Gurney / Greenlane or even the Bayan Lepas during peak hours. That my friend are what real jams are. As of now, there is still the ferry connection but soon, there would be the second bridge as well the next time you would like to go to Queensbay. My friend works in Penang, thus he travels to and fro and thus far he is ok. Actually, everything comes back to getting used to.  Once you are used to it, it becomes ok. My wife was ok to jam 40 minutes from her factory back to our home in Sungai Ara. For me, I travel from Sungai Ara to town everyday for over 2 years and I felt nothing.

Potential capital appreciation. Even if you assume that properties within island appreciates faster than mainland, please be reminded that as long as the island appreciates, the mainland would follow. Or else you may have a RM1,000,000 condo in island and a RM300,000 terrace house in mainland. Does not make sense right. To get this capital appreciation, the capital you need to pay up front is also lower by virtue of the lower property price in Butterworth.

My friend Jeffrey has no plans to move back to his newly completed condo in the island, preferring Butterworth instead. To him, Butterworth is really ‘better worth’.

written on 25 dec 2013

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Balik Pulau, is it far?

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Too good to be true? Buy a home and not needing to pay for 4 years?

Looking to buy a home?

These days, property developers have a lot of different campaigns and attractive offers. There are many offering homes under the Home Ownership Campaign which meant buyers need not pay stamp duty and there’s also that super low downpayment offer. Now, there’s one which says that if you buy one of their selected properties, the buyer may not need to pay anything for the next 4 years. I do not have the details for it yeah. You can read that article in theedgemarkets.com about that developer.

However, do not decide until you have read this article in full yeah. Some steps to choose that right property based on my experience is given below.

Photo by Karl Solano on
Pexels.com

Article in theedgemarkets.com
.
 PETALING JAYA (Jan 20): Mah Sing Group Bhd has launched the “Home with Mah Sing” campaign that enables buyers to own a home payment-free for up to four years. The campaign, which offers various incentives and savings to ease home ownership such as low booking fees from RM500, free duty and legal fees and so on, runs from Jan 11 to March 29 this year.

Mah Sing founder and group managing director Tan Sri Leong Hoy Kum said in a press release: “Under this campaign, buyers have the option of choosing a sales package which offers a payment-free period of up to four years [the exact payment-free tenure differs for each participating project]. You may read the full article for more details yeah.
Article in theedgemarkets.com
.

How do we choose a property?
 I disagree that we should just buy the first property which we view or evaluate yeah. If you ask me for a number, I would think at least 10 different projects so that we understand a lot more on disadvantages and advantages. A good question to ask the sales people is this question below yeah.

Question to ask

“I am considering your property versus THAT [developer name / project name]. Can you share with me what are your advantages versus them?”  Whatever the sales person say, use google to understand if what they say is true. Using this way, learning about different properties and all the different considerations become way faster versus if you only ask the typical questions like how many rooms, what is the size, face which direction etc…

Do we know what we want?

If we want a home close to our office, then do not choose a property far away just because they have a nice pool yeah. If we like a bigger home, then do not be tricked into buying a small sized condo just because it’s nearby some famous landmark and the view looks fantastic yeah. Basic idea is a simple one. Buy what you really NEED and chances are that decision will be a right one. Happy choosing.

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Buy a property, get a new home as long as you own the property.

If you like the idea buying a property and getting a new country to call new home, then this is a news for you. Buy a property, get a new home as long as you still own the property. Okay, let’s be realistic. This is definitely for the very wealthy who has enough money to spend. This offer to all foreigners to the country comes from a country which is close to 6,000km away from Malaysia. Below image is from the one who knows it all; google.com

Yes, it’s from Qatar and the city we are talking about is DOHA. DOHA is the capital city of Qatar and has slightly less than 3 million populations of which only 15% are Qatari citizens. Yes, I know, “wow…”

Article in freemalaysiatoday.com
  DOHA has launched a scheme for foreigners in its property market. Well-heeled individuals are invited to buy a unit in the glistening seaside tower blocks of Doha’s man-made Pearl island or the brand new Lusail city project that flanks a World Cup stadium. Retail units in malls also qualify buyers for residency.

This will help soak up an oversupply of units, which has left gleaming towers half-empty and seen prices drop by almost a third since 2016, according to consultancy ValuStrat’s Price Index for residential property.  While previously an investor needs sponsorship from a Qatari business or individual for residency, but now a US$200,000 (RM814,000) property purchase secures temporary residency for the term of ownership. A US$1 million (RM4.07 million) purchase buys the benefits of permanent residency, including free schools and healthcare. Please do read the full article here.
Article in freemalaysiatoday.com

RM814,000 really do look affordable versus many other advanced nations

I guess the price which is being offered is quite affordable when compared to many other properties from advanced nations. In fact, even when compared to a high-rise unit nearby KLCC, this RM814,000 really do look cheap. Let’s not even need to compare to some high-rise units in some other less developed ASEAN cities for which foreigners are major buyers yeah. Those places are also sold in US$ as well and anyone earning a local currency will never be able to catch up to the rise, forever.

How is DOHA, really?

Here’s a pretty good overview (click here to read)
about DOHA and an image which shows you what has happened to this city which was actually built on a desert…

Image source:
theculturetrip.com

Another image to give an overview about Qatar yeah.

Source:
https://en.wikipedia.org/wiki/Economy_of_Qatar

I have never visited any countries in the Middle East but my good friend who’s staying in Abu Dhabi has offered accommodation if I do visit. Yes, there are direct flights but I guess we can only travel later on when COVID-19 pandemic has subsided. Happy reading about all these interesting news about other countries and their property markets yeah. Cheers.

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MM2H should

be enhanced, encouraged

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Wait. Only buy when property bubble bursts. (updated)

I have a friend who earns very
high salary
. In fact amongst all my friends, I think he is ranked second highest. He knows that I love properties and he told me confidently that he is now keeping his money in FD so that when the bubble bursts, he will enter the market and buy. I said, great, so at what price would you enter? He paused and said ‘when market is low enough’. I asked, when he said low, does he mean 10% down? 20% down? 50% down? He said, ‘of course as low as possible lar’. He concluded, “Have to wait till bubble bursts before I know what price I will enter.”

I really hope when the bubble bursts this friend would really cancel his FD and enter the market because
buying during crisis meant that your profit would be very high once the market recovers.
 From history, we have learnt that in terms of properties, except if the property is in the middle of the desert, most of the time, it will continue to go up again even if slowly. However, he has yet to make a decision as to when he would really enter the market. He does not even read about properties and said that all these news are basically telling you to buy and he will not be persuaded to buy unless the bubble bursts.

Of course, this friend of mine is already very rich and in fact will probably be very rich even if he does not enter the property market. Even leaving his money in FD would have earned him enough and
his EPF is likely to be huge when he retires
. The only thing I would like to reiterate is this, he could have been much richer if he has property investment. Yeah, there are risks definitely versus FD but I am willing to make a calculated one. Yes, he is ready to buy too as soon as the property bubble bursts sometime in future.

The expectations must also be set right, just like if you enter the share market, never say I want to buy when it’s low. We may want to specify and adhere to what we term as low. If we intend to sell when we already have profit, we should sell. Let’s not have the mindset of,
“I will sell when the price is up to my expectations.”
 Yeah, of course I may be wrong. My idea of investment remains that we must go in with both our eyes open and our brain ready with some risk calculations / acceptance.

edited on 12 may 2015.

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Buy Before Price Rises in 2022? Will Prices Really Rise?

Buy Before Price rises in 2022? Will Prices Really Rise?

I am honoured to have been invited by PropertyGuru to speak in the PropertyGuru Expo 2021.  The date is on 13th November 2021 (Yes, Saturday).  The time is 230pm.

My talk will be something very close to my heart because this is always a question which first-time home buyers love to ask. Yet, if they listen to the property developer, of course there is just one answer. If they ask the real estate agent who’s selling that particular property, the answer is also the same.

Well, I do not represent the developer nor the real estate agent yeah. I will just be sharing what I have experienced and what I have read. So, do drop by yeah. I am sure you will gain a lot of new numbers and insights. I have prepared 18 slides for this talk.
Register here and come and listen yeah.

Here’s the link again.
Register here and come and listen yeah.

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Buy what others did not think, see, view, yet

During my recent visit to Sandakan, I spent some quality time dropping by the Sandakan library and read a few magazines and listening to some old songs. I also happen to read an interview in Smart Investor magazine that the famous Robert Kiyosaki gave when he was in Malaysia not too long ago. The question was about the strategy that Robert Kiyosaki would adopt in the current real estate market slowdown in Malaysia. I would not want to summarise his reply. It’s as below, word by word.

Robert Kiyosaki: Don’t look for something that everyone else wants to buy. When I buy real estate, I’m looking for something that nobody wants to buy, something that’s in bad shape. And then I have to do something to fix it and make it better. Most people who flip properties are speculating. And some of them will make money. When I want to buy a house, I’m not looking at the price whether it’s going up or down. When I buy a house, I want to know whether I can make money from it. If I can’t, I don’t touch it. I don’t speculate. I’m an investor. Most people who are speculating are gambling.

To read the full article, it’s here:
http://www.smartinvestor.com.my/the-rich-dad-mindset/

Many times it’s funny because majority would know all these “secrets” but somehow chose to ignore and follow the majority instead. In other words, buying what majority are buying. Reason? It’s simpler and less efforts needed. It’s called “lazy” investment. The best part about this strategy is that since most are investing in what we are investing, chances are the property we buy should also be a favourite of many. The worst part is that probably we would have to buy high and try to sell even higher. In a situation where the property prices are already considered unaffordable, this strategy may give us low returns and at very high risks too.

Let’s talk about buying properties in areas that people are not buying yet because majority of buyers are lazy. Not many bother to check areas which is further and deeper, despite an upcoming new MRT station. The reason? Even with MRT it takes an hour to reach KL city centre! Well, that popular area everyone loves, during peak hours in the morning would take as long or longer. Stressful too. Funnily though, when it’s already a popular area, we are willing to pay double or triple the price per sq ft! We are not talking about RM50k. The actual difference might be RM400,000 for a 1,000 sq ft condo! Are Malaysians really that much richer?

In terms of fixing things up; buying an older place and “modernise” it, this will take even more efforts but sometimes it’s worth the time if we really understand what we intend to do. Question is, do we already have a team doing it or are we still working full time and property investment is just a “second job”? I think for a start, perhaps buying up a place which has been renovated and everything’s in good condition would make sense. That’s what I would normally do. Both my properties in KL were bought fully renovated and I did very little before moving in. Of course, it’s not meeting what I wanted 100 percent but hey, I have saved RM100,000 of renovation or more, why not?

Property investment really do take time, effort and managing risks. If we follow the majority, perhaps we can also have safety in numbers but when it comes to actual returns, sometimes viewing more and offering one that meets all our expectations would be a better choice. No matter how much people love that certain area or that certain type of property, there’s a limit to how much h they could or willing to pay. Reaching that meant the last buyer would lose money instead of gaining unless he holds it until the affordability comes back again. Happy think, see and view.

written on 21 Feb 2016

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It’s the duration, not the distance ok?

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Would you buy a haunted house?

Would you buy a haunted house?

I would not. Watched many haunted movies and does not like the feeling of being in one.

Okay, I would not. Then again I learnt long time ago from my real estate friend that there are people willing to buy a haunted home, as long as it comes with a hefty discount. I repeat, I still would not. Haha. However, frankly speaking, if someone is able to buy a haunted house at a super heavy discount, then ‘clean’ it up, then maybe it’s possible to sell for profit? Else, perhaps buy, ‘clean’ and then use for own stay?

Different religion and you will be okay??!!

My friend also said that as long as different religion, the ghost may not disturb you. Here’s one which is definitely a haunted home and not just some rumours. The price is RM4.4 million and any buyer who buys it may want to tear down the current building and build a new one? Not so sure if there are that many rich people who like to buy a haunted home, just renovate it and then stay there…

Article in says.com
   It’s a 18,694 sq ft building. It’s known as the SG house. There’s a tragic story behind this home. A businessman bought the home and was always not at home. One day his wife found out that he was having an affair. His wife went to find that lady, murdered her and hung her head in front of the house. The businessman came home, saw the head and had a heart attack and died. His wife later committed suicide. Please fo read the full article here:
Article in says.com

Meanwhile the auction notice as below:

Image via
Selangor Auction Property (Facebook)

More article to read on haunted homes and the discounts?

Would you dare to buy a haunted house with 40% discount?
Here’s that article in propertyguru.com.my

Reading about Haunted Homes in
Hong Kong. This is the website.
Meanwhile, image below:

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Buy house, get wife? Deal is done!

Remember earlier reports about a woman offering her house for sale and said that if the offer is right, the price would include her as well? Read here:
Buy property, get wife free.

It has been reported in Time.com that the woman’s offer of both the house and herself has been ‘sold.’ The woman, Wina Lia said, “His name is Redi Eko.” “He is also looking for a wife.” She told Kompas daily. The man, Redi is also a single parent and when he learnt of the deal, he decided to sell his house in Lampung (in Sumatra) and will use the money to buy her house.

The asking price for Wina’s house is S$76,500. It is a two-bedroom, two-bathroom house, which comes with a fish pond and spacious backyard. The home is in Yogyakarta. Red said that he will be moving to Yogyakarta to be closer with his children who happen to be studying in a university there. he did say this to Kompas too, “Whether with Wina or somebody else, I will still live in Yogya.”

Okay, as per reported, both of them have yet to meet one another but they have been speaking on the phone as well as exchange messages daily. Next up would be to go on Umrah (minor pilgrimage to Mecca) soon. If everything goes well, they would be getting married in the next month, according to Wina.

Sometimes things just happen because we try to make them happen. Instead of staying single and have a financial problem unsolved, the woman managed to solve both problems with one solution; property. Now, this gives everyone another reason to buy property. Who knows when you may need to offer it for sale in the future, together with the owner? Alternatively, when you view any property and you happen to know that the owner is single, your offer can always be for a buy one, get another too. Agree? Happy ‘buying’ or ‘offering.’

written on 20 May 2015

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Buy Iskandar today or tomorrow, still a gamble?

Iskandar is a hot topic these days but the contents are all about how ‘cold’ the market is. Take a look at a photo shared to me via WhatsApp recently. It originated from a website called fakemalaysianews.com After my friend sent the photo to me, I told him that perhaps the next photo would be hundreds of Malaysian fishing boats in the sea and the message is, ‘hundreds of fisherman helping to catch international property buyers.’ He laughed. Negative sentiment remains but objectivity is even more important.

Buying to rent in Iskandar. To be very honest, if I am a Malaysian or even a middle income Singaporean, I would prefer to pay for a small room within Singapore or continue to stay in HDB flat versus travelling hours everyday to get to and back from work. Seriously, without additional links which can reduce the travelling time, even the HSR would only be adding to positive sentiment but nothing more.

Waiting to buy. Haha. Objectively, why wait to buy? If you already have the money and wants to wait, why not focus in other markets instead? Why not stocks? Who not REITs? Alternatively if you believe the current situation is just for a couple of years and you are willing to buy and ride it out, then go out there, view and then offer a very attractive price to the buyer. Who knows you may get a very good deal from some distressed buyer? The key is not whether to wait or not to wait. The key is what do you want to do from what you know?

Limits on what foreigners can buy or special international zones or whatever policies from the government. Be reminded, these are policies. When the time comes and this has to be tweaked or removed, it can be tweaked and remove. More important question would always be are the situation different today versus when the policies were put in place? If the property market more conducive today for a change in policy or perhaps an even stricter control?

Remember, the reason you should buy is your personal long term view of the overall market. It must not be based on some short term policies because the market needed it then. Compared to Singapore, the cooling measures implemented has even caused the property prices to come down. Should we then claim that the policy is bad as it has caused some buyers to sell at a loss? Or should we blame the buyer for simply buying at a very high and unsustainable price point previously? Come on, majority of us could never control the policies BUT we can definitely control what we buy and when we buy and why we buy.

We cannot control where the wind blows but we can definitely adjust our sails. Timing is NOT everything. Buying rationally and objectively is. A reader said that even during the boom periods, there are still people who lost money as soon as they buy because of their ‘greedy’ expectations that the prices can reach the sky and beyond. Happy deciding.

written on 23 May 2015

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Very few Singaporean investors want Iskandar.

Iskandar Malaysia, either as a home for myself or as a rental property.

The relatively weak Malaysian Ringgit makes it an enticing proposition, but while personal factors (like the location of friends, lack of personal transport and poor internet infrastructure) ruled out my using the property as a home. I also quickly realized that it’s also an awful idea to buy one as an investment.

Now, I don’t pretend to be an expert in property investing, but what I do have, however, are insights as the son of a real estate agent, and my penchant for analytical thinking.

So why is investing in Properties in Iskandar Malaysia currently a bad idea? Here are some of my reasons:

1. Limits on Foreigners

There are two parts to this.

The 1st one, which is arguably superficial, is that in every project, certain units are always reserved for the local Malay populace. There are informally called ‘Bumi Units’, named after the ‘Bumiputera‘, the policy. You can read more about it here.

In practice, you’ll find that some of the best units will not be available for purchase because you’re not a local Malay. An annoyance for those buying for yourselves, though probably not as big of an issue if you’re planning to rent the place (There are of course loopholes to get around the problem, but we’ll focus on the ‘official’ stuff only).

The most important thing though, is that foreigners are only allowed to buy property above a certain limit. It was RM500,000, and as of 3rd March’14, it has been raised to RM1,000,000.

Understandably, this is to prevent the rapid rise in prices due to over-speculation, which is a good thing for the locals. As an investor, however, this will be a problem for your exit strategy, which we’ll talk about later.

2. Are Businesses Moving In? Who are your Tenants?

Iskandar Malaysia is being sold as a holistic nirvana where anybody can work, play, and live a balanced life.

Be that as it may, there’s one fundamental a lot of new investors miss when they’re considering an investment here; Are businesses moving in?

Think about it. In any new town, businesses must set up shop first before the people (employees of these businesses) move in. I’m not sure that’s the case with this region.

The next time you bring yourself and/or your family along to Johor for your shopping and seafood, keep your eyes open and pay attention to the commercial spaces. Are the shops doing well? Are their customers mostly locals or Singaporeans who visit Malaysia during the weekends? Where are the offices, warehouses and other non-retail spaces? Are they filled or mostly empty? etc.

This is important information because you need to figure out who’s going to rent your property and if there’s demand. From what I see so far, demand from local business staff is extremely low.

The other side of this argument is that because of the increasing cost of living in Singapore, more people will starting living cross-causeway livelihoods, working in Singapore while staying in Johor. A valid point, I concede, but honestly, when will the demand start to rise?

How many are willing to spend the extra time, at least twice a day, five times a week, enduring traffic jams going to and fro work via the check points? Until Singapore and Malaysia stop bickering and solve this fundamental logistical issue can large-scale cross-causeway livelihoods become a reality. This, and the recent measures to (finally) increase the supply of houses in Singapore means that most people will still opt to stay here.

So, who’s going to rent your property?

3. Competition Against Other Investors

I shall attempt to figure out why you’re thinking of investing in Iskandar Malaysia with the help of my crystal ball… let’s see now… mmmm…ahhh… I see…

1. You’re new to property investing.

2. Malaysia is still ‘familiar’ territory compared to, say, the Philippines or Vietnam.

3. Properties in Malaysia are much cheaper than those in Singapore (2.5 times!)

4. No money down. (It seems like the Malaysian government is cracking down on this loophole though)

Close?

Hey, don’t take it personally. Knowing yourself is half the battle won yes? I’m in the same boat as you.

With that done… do you see a problem?

We’ve already established that rental demand isn’t exactly hot in that area right now. And yet, it seems like housing in Iskandar is (or was) selling quite well, and I suspect, to those with the same mindset as you and me.

So, not only do we have uncertain demand, but we also seem to have an oversupply of new wannabe ‘investors’ trying to rent as well, which means there will be a large supply of rental properties in the market. With that, it would mean lower rentals and a lower return on investment, isn’t it?

PM Malaysia at launch

Mmmm… Singapore dollars looking delicious

4. Cheap Investment?

One of my pet peeves is that the word ‘cheap’ is often misused. It’s often used to denote ‘low priced’ when it should mean ‘low for its price’ instead.

Let’s put it this way, buying a $1,000,000 sports car that costs $2,000,000 to make is ‘cheap’, while $7.90 for the same nail clipper that can be bought for $2 at a pasar malam (night market) is called ‘expensive’. Price ? Actual Value.

Anyway, a similar problem plagues the mindset of the wannabe investors who are exploring the possibility of investing in Iskandarian properties; They (or We, I should say) feel that these projects are ‘cheap’ because they’re ‘cheaper’ than properties in Singapore.

In my opinion, Iskandar Malaysia is, especially their residential projects, in effect, like Batam Island, in that they’re made to cater to Singaporean cash cows who are willing to be milked. In other words, most of it is hype, with inflated prices and an excess of fake demand.

5. Exit Strategy?

Let’s say, for whatever reason, the time has come for you to sell this property of yours. Now, before we talk about making or losing money, let’s look at the two primary factors that will affect your ability to do so:

The RM1,000,000 lower purchase limit on foreigners, and the fact that most properties launched are priced between RM500,000 and RM1,000,000.

Oops.

You have to remember that these projects are not made to be affordable for the locals; They’re there to maximize profits from foreigners (read: Singaporeans) with cash to spare. So, unless the government lowers the limit or there’s a miracle spike in property prices, the limit effectively eliminates all foreigners as potential buyers for your property.

So, how can you sell.. when there are no buyers?

Conclusion

1. Limitations on foreigners that limit choices.

2. A practically non-existent rental market.

3. Competing against a large pool of ‘investors’ for a small pool of tenants.

4. Bad value for money.

5. Effectively, no way out of this investment.

Honestly, all one needs to do is to ask some simple questions and do a little research to know that investing in Iskandar Malaysian properties is, at best, a questionable move to make. There are too many things working against you and expecting any of those factors to change is almost akin to gambling, hoping for a good card to appear.

Investing may be a game, but it’s a game you want to win by making informed choices.

There’s a word for taking chances and hoping for the best: Gambling.

At the moment, in my humble opinion, the local government and the property developers made a killing while the ultimate losers are those who bought units before the limit increased to RM1,000,000. These people are stuck with a property that’s extremely difficult sell or rent to break even, much less make a profit out of.

Here’s the thing though; There IS potential for that place. After all, with the cost of living in Singapore on the rise and its government’s penchant for taking short-cuts to solve its population problem, an increasing number of people will consider staying around Iskandar Malaysia as a permanent compromise between convenience and lower cost of living.

That being said, I believe that the potential will only be realised in the relatively far future, and things will only get much worst before it becomes a viable investment option.

I hope this ‘layman’s’ take on the subject has given some insight into the topic. Remember to share this post, especially with those who are considering a purchase in the area.

Do check out another take on the same topic @ Dr Wealth: Iskandar Malaysia is Only Going One Way – Down. Research is always important, yes?

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Havoc Hartanah Iskandar Malaysia – Perception versus Reality

If we do not know why we buy at the time we bought, it’s no longer investment. It’s gambling or speculating. If it was because our friends bought and thus we bought, that’s called following, blindly. Both are very far away from what should be a calculated investment. Thus, knowledge is essential. Understanding is critical. Action then becomes vital once taken. There’s one event in Iskandar that you may want to sign up for. It’s organised by a good friend, Rozalina Rahim of Reconsult Plt jointly with IRDA. More details below:

Havoc Hartanah Iskandar Malaysia 2015

Date: 16
th
& 17
th
 May 2015 (9am – 6pm)

Theme: ISKANDAR MALAYSIA – Perception versus Reality

Venue: Iskandar Malaysia Information Centre (IMIC)

Address: JalanSkudai, Danga Bay, 80200 Johor Bahru from 9am to 6pm.

Day one is in English and Day 2 is in Bahasa Malaysia.

Price: RM50 for one day or RM90 for both days. (includes breakfast, lunch and dinner!)

Contact:
rozalinareconsult@gmail.com or rar0811@gmail.com

Additional feature:

There will be 100 Lucky draws for the participants including a special draw of 50 limited seat for the Cashflow Game Session in Bahasa Malaysia (the Cashflow Game by Mekanik Wang & Robert Kiyosaki – the 1
st
 BM version). The Overall winner will bring home a Cashflow Set worth RM500 for Free.

Agenda:

Hari 1 @ 16hb Mei 2015

English

Presented By

1

Highway Cash

Abang Abu@Mekanik Wang

2.

First Time and Affordable Homes for Johoreans in Iskandar Malaysia

Encik Khalil Adis

3

Iskandar Malaysia – Perception vs Reality

Dr. Daniele Gambero

4.

Legal Aspect of Creative Investment

Cik Elizabeth Siew

5.

How To Pay Less Tax For Your Property Investment

Encik Richard Onn

6.

Master Your Loan Application

Dr. Waqiuddin

Hari 2 @ 17hb Mei 2015

Bahasa Malaysia

Disampaikan Oleh

1.

Rahsia Kaya Hartanah Dibongkar, Jimat Kos 40% Untuk Hiasan Dalaman

Encik Adrian Wee

2

Strategi Membina Portfolio Pelaburan Hartanah RM1 Juta

Tuan MKNK

3.

Hartanah Luar Bandar & Gen Y

Encik Azizul Ali

4.

Jom Pencen Awal Dengan Hartanah

Cik Rohaniah Noor

5.

Memaksimakan Pendapatan Melalui Sublet

Encik Safuan Rahman @ Wan InfoLelong

6

Lebuhraya Wang

Abang Abu@ Mekanik Wang

kopiandproperty.com is not part of this event and this is just a courtesy annoucement for a good friend. There’s also no need to mention kopiandproperty.com No special further discounts. Haha. Truth is, RM90 is chicken feed compared to the potential for an earlier retirement or even financial security for your loved ones. Of course, word of caution. Investment simply means there are chances for profits and in many instances, losses. Remember to do your homework well and do not just listen to any property guru and buy, buy, buy. You may have to cry, cry, cry later. Happy investing.

next suggested article:
Iskandar for Singaporeans: Reversal or realisation?

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RM95 million to buy land in Melaka. What’s next?

Unfortunately for many people including myself, we cannot travel to Melaka because interstate travel is still not allowed. A holiday there including eating, eating and eating the whole day would be a happy experience. Of course if it’s your first trip, there are lots of other things to do as well. Before COVID-19 arrived and after I moved to KL (nearly 8 years ago), I travel to Melaka at least 3 times every year. Come on, it’s so nearby. A weekend trip is just a leisure drive away.

Meanwhile when we refer to the number of overhang units which is so often being reported, Melaka is that one state where the overhang number is very small versus all other states. This means that there’s not enough action in the property market of Melaka? Not really. A land of 210.4 hectares were bought by a developer and this developer has intention to buy more land.

Article in nst.com.my
.
  Melaka-based property developer Teladan Setia Group Bhd has acquired 210.4 hectares for RM95.1 million to develop affordable homes in Melaka. In a statement, it said, “The acquisition is in line with the group’s intention to expand its presence beyond the city centre of Melaka. Prior to this, Teladan Setia has purchased a 46.94 hectare parcel of land in Jasin.”

Teladan Setia is also in the process of completing the acquisition of another five parcels of land totalling 11.82 hectares located in Alor Gajah and central Melaka. It said, “With this acquisition, the company’s total landbank will grow to 299.02 hectares.”

“These three parcels of land are in proximity with one another and we aim to develop landed residential properties priced between RM200,000 to RM400,000.

“Based on our recent market studies, we believe that landed homes remain the property of choice among the local Melaka population for the foreseeable future.”  Please do read the full article here:
Article in nst.com.my
.

Key theme will always be affordability

As per the developer, they will be developing landed residential properties priced between RM200,000 to RM400,000. This is a good sign because it showed that the developer is focused on buyers needing a home and the fact that they are going big also meant that they see the demand as being strong too. More affordable homes meant more Malaccans would have a home sweet home.

I do not own any property in Melaka, yet. Let’s see what happens in the future if I keep going there often. Haha. However, as someone from out of Melaka, my first choice will not be landed. I prefer a place where I have facilities too and if possible some view of the sea would be a plus. See you soon Melaka.

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Dinasours have invaded the Melaka Zoo

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Buy like there’s no tomorrow? Not possible lah…

This morning, the topic on Melody FM was on money. How to reduce expenses since life is hard. A caller called in and said his household income is around RM11,000 and yet every month, he could only save a few hundred ringgit if he is lucky. He asked the invited guest speaker how to save more. The guest speaker said the first thing everyone should note would be to write down things that we are spending today. Chances are there are many that we forget to remember. Cut those… (expensive drinks, food would be major culprits too) Personally, I think these days we no longer buy like there’s no tomorrow. It’s due to
financial awareness too.
 Spending too much may ‘kill’ us when we see the credit card bill. However, I seriously believe that most of us tend to
spend MORE when we earn more.
 The first thing which we must cut is the tendency to buy everything we see and like in the shopping mall, during a CELEBRATION. For example, the upcoming Chinese New Year (CNY).

Let me illustrate just one real example. I saw one long sleeve shirt, brand starts with P the other day. It looks good on me and the colour is right for CNY. However, it was RM199 and has only a 20% discount as it is new arrival. I
 did not proceed to buy
. There are still a lot more important stuffs to buy, not to mention cheaper options. Plus my friends would not know that this RM199 shirt looks better than another one I am wearing during CNY. Last but not least, when it costs 50 percent cheaper towards the end of 2017, it will STILL look good on me. Haha. Okay, hopefully there is still my size. I think the type of malls we go to can also either make us spend more or less; due to the brand choices availability. My favourite mall is 1Utama mall. It’s the nearest mega mall to my home, it has the brands which are considered affordable to me, lots of food choices and of course plenty of parking spaces which is cheaper than the city centre. Yesterday, after parking for slightly over 10 hours, the total parking was still lower than RM10! Haha.

Anyway, there were lots of people there and I can safely say that the mood is now turning into Chinese New Year. The lanterns are being put up, the familiar songs have started and many visitors are buying new clothes for their loved ones. So is everyone buying like there’s no tomorrow? Well, since salary has just been released, there’s definitely more shopping. With Chinese New Year (CNY) being on the tail end of January, it meant that the shopping will continue for the whole of January. Let me predict, the retail numbers for January 2017 would be good. 🙂  It’s important not to overspend these days. However, to deny ourselves some fun in picking nice new clothes, to deny our parents some nice new clothes or a handbag is indeed wrong. Spend responsibly. There’s still a tomorrow that we need our money for, yeah?

written on 3 Jan 2016

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Buy, move away and rent out your RUMAWIP unit?

I am someone who wish that only

qualified buyers would be given the chance
to buy any subsidised homes from the government. This is a basic need that all Malaysians should have. If you disagree with this sentence, skip this article yeah. This is also the reason why I dislike anyone who somehow managed to get a unit even though he does not need it and then rents it out. As usual, he would have to use some unscrupulous way to get it. The worst thing is, after that someone got a unit which he does not really need, he would rent it out to get rental income. He has just gotten richer at the expense of someone who needs one. Okay, what happens if a qualified buyer bought a unit in KL and then he got transferred to another city to work? Should he be allowed to rent out his unit then? Else, he would have to pay for two homes?

According to the Federal Territories Ministry, owners under the Federal Territories Affordable Housing (Rumawip) could rent out their units subject to certain conditions. One example would be when the concerned owners were transferred to another state after purchasing the unit. Its minister Datuk Seri Tengku Adnan Tengku Mansor said “We understand the predicament faced and do not want to burden Rumawip buyers. For instance, if they were transferred to Sarawak, the unit can be rented out as it cannot be left vacant. However, they can only rent out their unit to locals and this matter will be monitored by the Joint Management Body (JMB). Legal action will be taken if they fail to comply.” Rental could only be to locals and not foreigners. Please do read the full article
in iProperty News here.

Personally, I think this will be tough to monitor. Unless the Joint Management Body happens to know nearly everyone within the development. However, perhaps strict monitoring and quick legal actions may help tremendously. Perhaps an even better way would be to make all the owners affected by this transfer to make it known to the JMB. In this way, the JMB surely knows and can start monitoring. If the owners DO NOT declare as such, occasional random checks should be good as well. Once any unit found to be rented out without informing JMB, even if the owner really was transferred, actions should be taken immediately and then publicised to the whole RUMAWIP communities all other Kuala Lumpur. Issue a fine to start with and I think suddenly there would be suddenly many owners who would be registering with the JMB about them moving away. As for how would the JMB knows if the owners really did get transferred? Get their appointment letter and check loh.  It will take a little time but if we are serious, then let’s be serious. Else, as usual, the ‘cakap dulu, buat tidak’ would return.

written on 14 Jan 2018

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Buy,rent out and keep 10 -15 years. Why not?

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