1.02 acre site can yield a GDV of RM1.91 billion.

How much gross development value (GDV) can we get from a piece of one acre land in Kuala Lumpur? These days, a small plot of land within the KLCC area would cost easily RM3,000 per sqft. Read here:
Property prices, primelocations, embassy land sale

However, on an overall basis, the land cost vs GDV remains healthy by any developed property market standard. As a Malaysian developer, opportunities would also exist in markets outside Malaysia. This is especially when the profits from such developments are in a far stronger foreign currency. Let’s look at SP Setia’s 5th plot of land in Melbourne, Australia.

As per reported in Bernama, SP Setia would be buying a plot of 1.02 acre land. This small piece of land will however be worth A$640 million (RM1.91 billion) in GDV. Of course the location is in a Central Business District (CBD) in the city. SP Setia is the purchaser of this 1.02 acre site. They won a highly competitive International International Expression of Interest bidding exercise” from Australian telecommunications company Telstra Corp Ltd. Total purchase price would be A$101 million (RM300.96 million). Land cost vs GDV is thus around 15.8 percent. Still a very healthy number.

According to SP Setia president and chief executive officer Datuk Khor Chap Jen, the development would be the epicentre of Melbourne CBD’s cultural, commercial, education and city garden hubs. The land would be redeveloped into two residential towers with up to 800 residential units with a retail podium. It will also include prime A-grade office space besides these two luxurious apartment towers. The launching would be in the second half of 2017. Besides this current piece of land, Setia Melbourne has undertaken two successful condominium projects in Melbourne (Parque and Fulton Lane). It has two other niche developments in Melbourne currently; Prahran and Carnagie. I wish them all the best. Always feel good when Malaysian developers are successful overseas.

written on 5th May 2016

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1.41 billion population is not enough. 3 child per couple please.

With a 1.44 billion population, China has a median population age of 38 years. In other words, it has an ‘older’ population than Malaysia. Our median age is around 30. An ageing nation is when 7% of its population is 65 or older. An aged nation is one where 14% of its population is 65 years old or older. A super-aged nation is when 20% or more of the population is 65 years or older. Malaysia will reach ageing nation status by 2030 or earlier. China is already an aged nation. It has over 17% of its population aged 65 or higher.
Please refer to the info source here at Statista.

China is doing something to reverse this aged status

Article in nst.com.my
   China has relaxed its family planning policy. For almost 40 years, China enforced a “one-child policy” which was lifted in 2016 due to widespread concerns over an ageing workforce and economic stagnation. Citing a Monday meeting of China’s Politburo leadership committee hosted by President Xi Jinping, Xin Hua said, “To actively respond to the ageing of the population … a couple can have three children.”

National Bureau of Statistics reported that China’s annual births have continued to drop and it was a record low of 12 million in 2020. China’s fertility rate stands at 1.3 — below the level needed to maintain a stable population, the bureau revealed. China also have a gender balance due to decades of one-child policy and a traditional social preference for boys which prompted a generation of sex-selective abortions and abandoned baby girls.
Article in nst.com.my

3 major advantages of a positive population growth

#1 –
Labour Force.
For businesses to grow, it needs to expand. To expand, it needs a bigger labour force. When the population is shrinking, the availability of labour force turns into scarcity. Businesses will find it hard to expand. Automation may help. Robots may help. However, people will always be necessary. I would not want to work in the whole factory with no one but robots…

#2 –
Larger Market.
 When the population is shrinking, the demand for goods and services will continue to reduce with every passing year. Businesses would have to scramble for every customer. The population base is no longer growing and thus, with every passing year, businesses will soon shut its doors as it continue to face escalating cost without sufficient economies of scale. This is a vicious cycle which will be hard to be reversed.

#3 –
Prevents ageing population
. Imagine the whole town full of people over 65 and very few school-going children. Schools would be so lonely. Teachers may outnumber new students. Imagine whole village, all but deserted as population continue shrinking to a point where there’s just not enough people to provide necessary services and even if they provide, there’s just not enough demand!

Are there just advantages for a growing population?

There are disadvantages too when the population’s growing too fast. That one I leave it to you to google yeah. My preference is for a bigger population because it could spur domestic consumption too. Just need to look at all those big nations and one would realize with a bigger population also comes with a lot more potential opportunities. If one is selling a very good product, it is far better to be selling it within a nation of 1 billion versus a nation where there’s just 100 million population.

Property market popularity?

Property market also does not work when there are fewer demands for homes yeah. Fortunately, the demand for homes are also changing because of demographics. From 10 to a home or 8 to a home, this has gradually decrease to 4 and if we look to the example from advanced nations, this may drop further. People are not just getting married later but there are fewer couples with babies which meant that the demand for homes continue changing too. Stop saying only landed will be in demand yeah…

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1 hour ‘sold out’ landed property launch

When the right property at the right price comes along, buyers are ready, usually. Of course I do wonder if these buyers were buying as an upgrade to a bigger place or a landed property from their current smaller home or high-rise property home. It would be even better if developers were to ask all their buyers this question and inform the media. Speaking of a 1 hour sold out landed property even currently? Developer is Sime Darby Property.  Project is Serenia City and the price starts from below RM600,000.

It’s at Nilai Impian.

The below is a press release by Sime Darby property. It is for their launch event just yesterday.

— start of press release —

Sold out in just 1 hour!

Strong Demand for Sime Darby Property Launches

First phase of Serenia City sold out and 80% take up rate for Nilai Impian

ARA DAMANSARA, 1 April 2018 –
The crowds came to the Serenia City sales gallery as early as 4pm the day before the official launch. When the launch was open on 31 March, it was all sold out in just one hour.

Double storey link homes in Serenia City, Sime Darby Property Berhad’s first township offering in five years, proved to be a hit with the public yesterday. The company similarly received strong demand for the same products in Nilai Impian recently when nearly 80 percent of the units offered were taken up.

“This is an indication that the right product offered at the right location will be well received by the market. It also signifies that there is great demand for reasonably priced residential developments in both Serenia City and Nilai Impian, townships which offer existing and planned facilities, amenities, and excellent connectivity,”
said

Sime Darby Property Chief Operating Officer – Township, Dato’ Wan Hashimi Albakri.

Serenia Amani, Serenia City’s first residential development, is a freehold development which spans 25.14 acres and comprises 302 units of 20’x70’ double storey link homes with a built up area from 1,830 – 2,055 sq ft. Sime Darby Property is offering the first phase of 126 units for sale with prices starting from RM536,888.

Serenia City is strategically located within Kuala Lumpur’s southern growth corridor and also home of KLIA Aeropolis, the premier digital hub of the first Digital Free Trade Zone (DFTZ) in the world. The 1,775-acre Serenia City is located within close proximity to the Kuala Lumpur International Airport (KLIA) and KLIA2.

The Bandar Serenia interchange, targeted for completion by October 2018, directly links the township to the ELITE Highway, further enhancing connectivity to and from Serenia City, which is already connected to the North-South Expressway (NSE), the MEX Highway, and is situated near the Salak Tinggi ERL station.

Orkid, Sime Darby Property’s newest residential development in its vibrant township of Nilai Impian, achieved a strong 76% take-up rate on the day of its official public launch on 24 March 2018.

Orkid is a 10.07-acre freehold development comprising 132 units of 20’ x 65’ and 22’ x 65’ double-storey link homes with spacious built up areas of  4 bedrooms and 3 bathrooms. Offering easy ownership, prices start from an affordable RM488,888.

Nilai Impian will form the gateway to  Malaysia Vision Valley (MVV), which is part of Sime Darby Property’s long term growth plan. The MVV development is expected to span over 30 years, and will be an extension of the Greater Kuala Lumpur area. A key infrastructure for MVV is the Kuala Lumpur – Singapore High Speed Rail (HSR) link project and one of its stations will be located in Labu.

Served by major highways such as the North-South Expressway (NSE), Kajang-Seremban Expressway (LEKAS) and ELITE Expressway, this township is right next to and directly connected to the Nilai Interchange via the PLUS highway.

— end of press release —

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1 Million affordable homes. I like. Just note that quality is important too.

By the way, I have little doubts that when we work very hard towards achieving a goal, we will usually be able to achieve it. Or at least pretty near to it. Shoot for the stars, if you do not hit it, at least you hit the clouds. Good enough. Malaysia has a problem every country is facing. We have unsold properties and after a while they become overhang properties. At the same time, we have fellow Malaysians needing homes in convenient locations and at a price which they could afford.

The term affordability can also mean a lower property price as well as a lower monthly expenditure which meant that one has more money to be saved for a downpayment for a home in the near future. The best is of course for the property price to remain stagnant while salaries continue to go higher. The buyer is thus able to buy a property after some time as long as they have been saving diligently for a couple of years.

Article in nst.com.my
 . Housing and Local Government Minister Zuraida Kamaruddin says that the government is on track to build 1 million homes within 10 years for the B40 by 2028. She says that private developers are willing to build homes priced at less than RM300,000. Currently, 39,864 units of affordable homes have been completed nationwide while another 181,211 units are still under construction. 386,340 units are being planned.

Zuraida said that in order to stop any future mismatches in property being built versus the demand, KPKT is developing a big data system that will provide information based on projected housing demand according to location and price. She said, “The system is expected to be ready by the end of 2020. This data will provide a more accurate analysis of housing planning especially for private developers.”  She also mentioned that there are rent to own (RTO) programmes too. More details in the
Article in nst.com.my

There’s a reason for the overhang units.  There are also reasons why so many people who earn RM6,000 or higher but still unable to even pay for a RM300,000 home too. Thus, all the measures must tackle both. Else, nothing happens and we can stop whatever measures we have which aims at getting people to buy.

When everyone just do not have the money, then we need to focus on giving homes for people to rent instead. Not the best option but a necessity since accommodation accounts for a huge chunk of their monthly salary most of the time. In some countries, the rental alone is already half of the monthly salary. Fortunately, this is not the case in Malaysia because everyone is telling me that it’s now the renter’s market. Happy following.

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In 1997, my Honours project paper was on pharmaceutical firms. Thus, I understood then that for a new drug to be developed, it may take years. This is because way before the human testing  stage, it would have had to pass many different stages of testing so that it will be safe for human testing. Even here, the testing does not mean that it will surely go into production yeah. If it does not work as intended during human testing, then it will be back to the earlier stages.

So, when someone tells you that the COVID-19 vaccines will take between 12 – 18 months to complete, I will tell you that this is already considered super fast. Could this be made even faster then? Well, it could but the efficacy may be in doubt. Efficacy is defined as ‘the ability to produce a desired and intended result.’   Who said that they will have 1 million doses of COVID-19 vaccines by September 2020?

Article in bbc.co.uk
    Scientists at the University of Oxford say they should have at least a million doses of a coronavirus vaccine by September this year.  The first patients are expected to take part in the Oxford trials next week. The UK government which is backing the project says that there were ‘no guarantees’ and that it was not possible to put any date on a vaccine.

There are approximately 80 groups around the world which are trying to develop a vaccine and some have begun human trials. Years of research work are condensed into months. Prof Sarah Gilbert, the lead researcher developing the vaccine, says she is 80% sure of their current research work. She said, “This is my view, because I’ve worked with this technology a lot, and I’ve worked on the Mers-vaccine trials [another type of coronavirus], and I’ve seen what that can do. And, I think, it has a very strong chance of working.”

Meanwhile, even at the current testing stage, plans are already in place to mass produce the vaccines. Prof Adrian Hill said, “The aim is to have at least a million doses by about September, once you know the vaccine efficacy results and then move even faster from there.” Please do proceed to read the full and comprehensive article here:
Article in bbc.co.uk

What would the news of a COVID-19 vaccine going into mass production be for the world? Specifically the current negative sentiment? Well, it will help tremendously in the stock market as a start. However everyone must understand that all these so-called predictions or assumptions depend on the final results from the human trials. If it achieve the intended results, then the mass production news would be a catalyst.

If it does not, then many who bought with high hopes will now have to sell their shares at a loss. So, if we intend to believe these researchers in University of Oxford, then only buy some good stocks with spare cash and be prepared to hold until the actual good news come if September 2020 did not happen. By the way, I do think a vaccine will be found yeah.  Just like the UK government, there is no guarantee about any dates until it happens. Happy following and continue hoping for the vaccine.

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A different purpose for Rent-to-Own. Different from just affordable home.

What’s the main difference between Rent-to-Own (RTO) versus affordable homes? Why not just build homes which are below RM200,000 so that most of everyone could afford to buy one? The difference is RM34,000. Okay, for those scratching your heads right now, that difference is the downpayment plus all the other fees. The image shows the calculation.
The link in propertypricetag is here.
 Many of the households in the M40 could not come up with the downpayment necessary to buy a home of RM200,000 because the amount they need to prepare is RM34,000. Who’s the M40? Read here.
T20, M40 and B40

This does not yet include all the other creature comforts like air-conditioner units, washing machine, refrigerator and perhaps a L-shaped sofa. There’s more actually. This is where the RTO comes in to fill the gap. So, the first gap it intends to fill would be the downpayment and all other fees which for a RM200,000 home may be RM34,000.

The second gap it intends to fill would be the ‘trust’ part. Banks would usually lend only to buyers whom they trust could repay their borrowings. Sound credit ratings. With RTO, the tenant could start showing the bank that they could pay their rental (mortgage) on a continuous basis without fail. This will build their credit trustworthiness. If the buyer is able to pay without fail for 2-5 years for example, it is quite safe to assume that the buyer would continue to pay for the home after the ‘monthly rental’ becomes a monthly mortgage.

Third gap is the
‘
better buy now’ mentality.
 Well, it’s true in some sense because the cost of producing a home will increase with time. Thus, buyers who takes the RTO route today would secure the property price at today’s price instead of trying to save faster than the property price increase. By the way, there’s nothing to stop us from taking this RTO route and then renting out a room to a relative or colleague. The extra rental will come in extremely handy for renovation later once we convert the RTO into SPA.

In Malaysia, there are a few RTO schemes being offered today.
One of it would be Houzkey. Read it here.
 Another one would be by
PRIMA. Please read it here.
 Should one consider the RTO if one has the downpayment ready? I think one major reason why RTO schemes were made available was because of the downpayment issue. Thus, if one could save sufficient downpayment, one can proceed to buy even from the secondary market and not necessarily just the homes being offered under these RTO schemes.
Do note that the most important consideration is whether the home is the one we want

Happy renting or buying.

written on 13 May 2018

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1 million trees instead of more high-rise buildings or hotels?

According to the Natural Resources and Environment Minister Datuk Seri G. Palanivel, a programme to plant one million trees in Cameron Highland will be started instead of more high-rise buildings or hotels. This one million trees will be planted to reduce soil erosion and avoid landslides. I think this is a response to the recent clampdown on illegal plantations on Cameron Highlands. While this new 1 million trees is definitely welcomed, this does not take away the problem of illegal farms in Cameron Highlands.

Many friends said this is because the land officers there never kept track of new illegal farms. This is partially true but why did the people who saw these illegal farms NEVER reported it too. I think, one can only conclude that many people are benefiting from this, thus no one wanted to stop the party. This may not be a wise move for the long run. Soon, it will be Cameron ‘Hot’ land instead of Highlands. Without trees, tempetatures would definitely go up and once this happens, even 10 million trees could not stop it. By then, it would have been too late. Even the tourists would no longer go up and all these illegal farming would just be abandoned and the operators proceed to ‘rape’ other hills once they are opened.

I love Cameron Highland. On a yearly basis, I would go up at least once. On two separate occasions, I have attempted to buy a property there to be rented out but on both occasions, the prices were not to my expectations or the unit is somehow not what I wanted. There are also many newer high-rise projects which I think has got potential but the prices have gone a little high for my liking and thus I did not proceed beyond asking for the details. I think with this latest event, it may be slightly more riskier to buy.

It’s so important that whatever the development is, it must be controlled. For now, with so much noise from the public, it may be tough for the illegal operators to operate, hopefully. 6 months later, what would happen? I hope at least a few hundred trees would have been plated, some of the illegal plantation plots have been cleared and this time, the existing LEGAL ones better report the illegal ones or I think we would see this repeating until a time when it’s bye-bye for Cameron Highlands. Pity, but true. It may happen.

written on 15 Nov 2014

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Need to apply for a home loan? Approval in 60 seconds.

I remember the time when it took weeks for my home loan application to be approved. That was years ago. These days, any approval beyond one week is considered really slow. How long did it take you in your last home loan application? 3 days? 48 hours or even the same day? Well, there’s one which is one minute. This is the 1-Minute Home Financing by CIMB Bank which was just launched yesterday. Within the day of the launch, we already have these following developers participating in it. The heavyweights actually. The developers are Eco World Development Group Berhad, IJM Land Berhad, IOI Properties Group Berhad, Mah Sing Group Berhad, Sime Darby Property Berhad, SP Setia Berhad, Tropicana Corporation Berhad and UEM Sunrise Berhad. A total of 60 projects are said to be included into this scheme and more are coming too. Read on yeah.
By the way, if you want to compare bank loans from 15 banks at the same place, here’s a good choice.

Press Release by CIMB Bank

— start —

CIMB Introduces 1-Minute Home Financing InstaApproval Game-changing digital platform facilitates speedy approval for customer’s ultimate convenience Tuesday, 6 March 2018 for immediate release Kuala Lumpur: CIMB Bank Berhad and CIMB Islamic Bank Berhad (“CIMB”) have launched the 1-Minute Home Financing as part of CIMB’s InstaApproval platform. The CIMB 1-Minute Home Financing facilitates complete approval within a single minute upon full submission of information and documents, enabling a faster, secure, paperless and hassle-free home ownership journey for customers. Most home financing typically require several days for approval, which is inconvenient for buyers.

A home is probably the biggest investment in any person’s lifetime, but the journey is often fraught with anxiety due to the cumbersome process, and the waiting time. With the CIMB 1-Minute Home Financing InstaApproval, the homeownership journey is made more pleasant through the instant approval process, with an official Letter of Offer, as opposed to a conditional or “in-principle” approval. Samir Gupta, CEO, Group Consumer Banking, CIMB Group said, “In our aim to become a leading ASEAN universal bank, CIMB has been leveraging on digital in a big way since the start of our T18 mid-term growth strategy in 2015. CIMB’s InstaApproval proposition reflects our promise to provide customers with not only great financial products and services, but also speediness of their delivery.

The InstaApproval series also represents a fulfilment of CIMB’s commitment to continuously enhance our customer experience.” This facility will be available for properties bought from developers directly at developers’ property launches and sales galleries. Currently, eight developers are participating in the CIMB 1-Minute Home Financing InstaApproval, through a total of 60 property projects. The developers are Eco World Development Group Berhad, IJM Land Berhad, IOI Properties Group Berhad, Mah Sing Group Berhad, Sime Darby Property Berhad, SP Setia Berhad, Tropicana Corporation Berhad and UEM Sunrise Berhad.

More developers and projects will be added to this platform over time. The CIMB InstaApproval platform also facilitates applications for personal financing, Amanah Saham Bumiputera financing and credit cards. The CIMB InstaApproval enables a secure, paperless process involving, among others, biometric fingerprint identification and other verification steps completely online. For the CIMB 1-Minute Home Financing, the approval is considered a full approval and the Letter of Offer can be printed immediately for the customer’s signature.

— end —

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Do you know how many people own 82 percent of total wealth in 2017?

My personal belief is this. There is no way any TRADITIONAL working professional can be richer than a successful entrepreneur or a business owner. These successful entrepreneurs would grow their company and they then become billionaires.
Of course startups are an awesome vehicle these days.
 Some keep making losses but new investors kept coming in. So, the founders get richer and richer….  What about the working population? Working population means the typical 9am – 5 pm kind of working people, doing the same thing, day in and day out and perhaps just changing the way they do their work when the supporting systems are changed. Else, everything remains the same. Yet, many of us wonder why
is our salary not growing fast enough?

Investment is thus needed, long term investment and not something bought today and goes up many times within a few months. That would be more like ‘taking a chance.’ Come on, property prices grew continuously when we plot it over a period of 10, 20 or even 30 years… Take a look at the image for the average property price increase for the past 17 years. On average it grows over 6 percent but if I am allowed to comment, I think 6.5 percent is too high. Perhaps a 4-5 percent is a more comfortable level and if possible, the new influx if affordable homes into the market should help to contain this overall increase even further. We shall see. As many of us know, the property prices for many of these heavily subsidised homes could not be sold for 10 years. Plus, the slowdown in the property market has also affected the selling prices too. Good for the market. Cool it down…..  Coming back to the business owners, the successful ones are REALLY getting super-duper extraordinary richer than ever.

In fact 1 percent of the people in the globe actually got 82 percent of the wealth of the world last year.
Here’s that full article in BBC News.

The report comes from Oxfam. The reasons the super wealthy are getting every wealthier? They include tax evasion, firms’ influence on policy, erosion of workers’ rights, and cost cutting for the widening gap. It says that the trend of “widening inequality” remained. The charity is urging a rethink of business models, arguing their focus on maximising shareholder returns over broader social impact is wrong.

Of course, the report from Oxfam is not a conclusive one. For example, Mark Littlewood, director general at free market think tank The Institute of Economic Affairs, said Oxfam was becoming “obsessed with the rich rather than the poor”.
 (Frankly, he has a point there. Remember the fact that many of these billionaires were actually working people like the majority of us? Well, they had a great idea, took a huge risk and even potential bankruptcies in order to be successful. Even President Trump did not become a billionaire in his first try..)
He added, “Higher taxes and redistribution will do nothing to help the poor; wealth is not a fixed pie. Richer people are also highly taxed people – reducing their wealth won’t lead to redistribution, it will destroy it to the benefit of no one.”
Here’s that full article in BBC again.

It is clear. The richest few would always be growing their wealth faster than the majority of anyone in this place we call Earth. Out of these successful people, there were many who failed too but that’s not the main thing we should think about. I think the question most of us working people should ask ourselves is this. Did I do even better in 2017 versus 2016? Am I a valuable employee? Am I investing some parts of my small salary into something which can bring me bigger returns? By the way, it does not need to be into property yeah. It can be into seminars / courses / workshops that provides us with more resources to better our lives, financially. Happy working on it.

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written on 23 Jan 2018

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1 Utama E (600,000 sq ft NEW extension) and FULL MRT link opened

I learnt the hard way when I tried the MRT from Sg. Buloh to 1 Utama a couple of weeks ago. I had to walk for at least 500 metres I think to reach 1 Utama mall. It was 2pm in the afternoon and well, I had to cool down when I arrived. From today onwards, I think I will try again. The link from the MRT station to 1 Utama Mall is OPEN. Frankly, without this direct link, there’s NO WAY many people would want to even try. It’s just too cumbersome. There’s also another reason to try. It’s new extension, 1 Utama E is open too. It adds an additional 600,000 sq ft to the existing 5 million sq ft mall. According to 1Utama’s website, it is the world’s 4th largest shopping mall. I could not find any news about any change in its standing with this new addition. Happy trying it out yeah.
1 Utama E’s opening news in TheEdge here.
 MRT Link open
News from paultan.org as below:

The pedestrian link directly connecting the Bandar Utama MRT Station to 1 Utama is finally open. Now, commuters no longer need to head towards 1 Powerhouse (Entrance A) to walk or take a shuttle to the shopping mall.

The station’s Entrance B takes you to One World Hotel near the newly relocated Zuan Yuan Chinese Restaurant and the ground floor of 1 Utama. Users can also reach the IBM and KPMG office towers, Media Prima and 1 First Avenue via this entrance.

The 35-metre link-bridge was constructed by Bandar Utama City Corporation (BUCC), the owner of 1 Utama and the adjacent buildings. The free shuttle bus service to and fro the mall from the 1 Powerhouse MRT Feeder Bus Terminal and MRT Park & Ride will continue.

“As with any work involving more than one party, there were interfacing issues which had to be ironed out. We are happy that MRT Corp and BUCC have managed to work together closely to get this link opened. With the link, it will be easier for shoppers to get to 1 Utama seamlessly. At the same time, this will encourage more people to use the MRT. This is certainly a win-win situation for all parties involved and the public,” said MRT Corp director of strategic communications and stakeholder relations Datuk Najmuddin Abdullah.

There’s more to come from Malaysia’s largest shopping mall. “Phase 1 of our newest mall extension 1 Utama E was just launched last week and we will be building more pedestrian links from the MRT station to 1 Utama E with seamless connections to 1 Utama as we work towards constructing Phase 2 to be completed by mid-2019,” said 1 Utama director Tan Sri Teo Chiang Kok.

1 Utama E will add almost 600,000 sq.ft. to the mall’s six million sq.ft. of gross built-up area. There will be an additional three levels of basement carpark with a direct access ramp off Lebuh Bandar Utama as well as via Dataran Bandar Utama and Persiaran Bandar Utama.

— end —

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Another RM10 billion investments into Kuantan?

My good colleague who promised to bring me to her hometown Kuantan has YET to fulfil her promise. Haha.   I think in my next visit, I have to also drive around the huge industrial park bring developed jointly by Malaysian and Chinese companies. As per a report in
thestar
, the park, called The Malaysia-China Kuantan Industrial Park Sdn Bhd (MCKIPSB) had secured a total investments of RM5.6bil last year. For 2017, it is hoping to get another RM8 billion to RM10 billion new investments. This was shared by its chairman Datuk Soam Heng Choon (He is also IJM Corp Bhd’s CEO and MD) He said, “We want to seek for quality investments and are working to ramp up more investments.”

MCKIPSB, is a 51:49 joint venture between two consortiums from Malaysia and China. The Malaysian consortium includes public-private partnership comprising IJM Land Bhd, Sime Darby Property Bhd and the Pahang State Government. On the Chinese side, it is led by the state-owned conglomerate Guangxi Beibu Gulf International Port Group and Qinzhou Investment Development Co Ltd. Currently, MCKIP’s first and largest investor is Alliance Steel (M) Sdn Bhd. It is investing RM5.6bil to develop a of 3.5 million tonnes capacity steel mill at the industrial park. Total committed investments within the past three years has reached RM19billion. This includes a RM4bil project by Wuxi Suntech Power Co Ltd to develop crystalline silicon solar cells and module secured in the last quarter of 2016. Soam said that MCKIP is open to industries of all sizes even though it is currently beginning with the heavy industries.

Every time we read of investments into smaller cities / towns Malaysia, it’s always good to be there personally to understand a bit more. No harm in knowing more because huge investments would bring more jobs and with more jobs, the demand for everything would increase, including properties. Most of the time, these huge companies would also be bringing in their vendors who will also set-up their plants nearby in order to provide support. As long as the business is continuous, buying earlier may provide us an opportunity for capital gain. Of course, if we have only funds enough to buy one property, it may be best to get a property which is easier to rent out too. An attendee to BLT’s latest Property Outlook 2017 seminar asked me if he should buy in his hometown, Perlis first or buy in KL first. He is working in KL. The answer is obvious. If we are diversifying, then we can think a bit more. Else, it is less riskier to focus in established cities. If I do manage to drive around the industrial park, will update with a report. Cheers.

written on 10 Jan 2017

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10% buyers owns 40% of property purchases. Aiming to be that 10%?

10 percent of property buyers are the ‘owners’ of 40% of the property purchases in 2011. This has risen from 35% in 1997. This was revealed by a paper entitled “Is equality in Malaysia really going down?” This is a joint paper by the University of Malaya (UM) and Khazanah Research Institute. In laymen term, the conclusion was that the gap between the rich and poor is widening when it comes to home ownership as well as the public and private sector wages. Richer are buying more properties versus the poor. Or rather the richer are buying ever more expensive properties while the homes for the lower brackets did not appreciate as much. Salaries for the professionals and management in both the public and private is also rising much faster compared to the lower ranked staffs. Yes, this is true for both the public and private sectors. Ever wondered now why so many are saying they needed a bigger pay as well as access to an affordable home? You can read the full article here:
Income Disparity Widening – The Malay Mail online

If we look closely at the 1997 number versus the 2011 number, it has actually not changed a lot. 5% up in a total of 14 years despite the fact that everyone knows, the richer always become richer, unless they bet wrongly. In my previous role, I always tell my staffs, it is true that buying the first property is tough. However, buying the second one would be easier and by the third property, you would be advising people how to get their first property. Despite my advice, only one is actively seeking to increase her property portfolio. The rest? Well, they know it’s very important but words continue to be louder than their actions, for now. This number is likely to stay stagnant or go lower because the total transactions continue to go dow which meant that only those who really need one would buy one and investors are less likely to buy. When we include in the total number of affordable properties today, including the fact that more people are aware that there are still lots of secondary gems in the market, you can see this number either staying stagnant or reducing. We shall see when they run this study again.

Okay, how should we react when we see this ‘equality report’? From the report itself, we can already note that the rich are also becoming richer because of…. property. In fact because they took their chances, buy earlier, it appreciated thus their share of the total property purchases go up. Most of them definitely do not own just one property. What should you do? Well, as they say, the best time to plant a tree was 20 years ago. Second best time? Today. It is just absurd to buy in hotspots and pay through your nose for it but to snub everything else is pretty risky too. Imagine the next report coming out in a few years time, would you want your name in the top or the bottom. Please do not ask about the possibility of bubble bursting. Even if bubble were to burst, if you are renting, you are STILL going to continue renting. Of course, if you do not buy and you really did keep all the cash in readiness for the price falling down, then perhaps you may just get lucky. Yeah, you may just get lucky.  Happy waiting or investing or even renting. Never do things you are not comfortable with.

written on 6 Nov 2014

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10 nice CNY videos for enjoyment

These days, videos are the rage everywhere. Instead of reading long articles, it’s far more interesting to just view, listen and learn. Chinese New Year videos among property developers are becoming a norm too. Here are 10 of those I like, need not be from property developers yeah. (In no particular order) Some are FUNNY, some are going to be TEARY…and well some are just DRAMAtic… Enjoy. The best if of course, if it’s done by the staffs themselves.

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Why 10 percent is a significant number for me.

How much should the price go up before we should think about selling our property? The higher the better of course. What about the percentage drop before we buy that home we have been aiming for? To those who say wait till it hits bottom, I say good luck. To those who answered 20%, do look at Singapore’s example of cooling measures. It has not even reduced the prices to anywhere near that and we are talking about just the luxury ones. The HDB ones hardly moved in terms of prices. In Malaysia, despite property transactions going down and market being so negative, the prices have not really moved to. Selectively perhaps but not in that few hotspots that many are waiting for. For the remaining who think like me and believe 10 percent is already significant, well read on.

If the property price of the place I am eyeing drops 10 percent, I would somehow find a way to buy one unit. The reason is very simple. Despite Singapore having a much tougher cooling measure regime than Malaysia, the property prices have only fallen less than 10 percent thus far, from its peak. Sigh. Read here:

Lifting cooling measures? Too soon: MAS

This does not mean that property prices would not drop more than 10 percent. It only tells us that I have no idea what’s the bottom but 10 percent represents a significant value and potential capital appreciation to me. Besides, this 10 percent may already meant a positive rental yield from the current low or negative yields.

If the property price for a secondary property I bought has gone up more than 10 percent per year for just half of the Real Property Gains Tax number of years, I would sell and reinvest in other undervalued but easy to rent out units. In the process, I would also give my family a nice little holiday in some overseas country we have never been before. 10 percent up is a huge gain actually and not just 10 percent gain. What about if the price went up just 10% after 5 years? Example:

Current price: RM300k

Assuming 10% downpayment + fees and taxes is RM40k

Overall price after 5 years? 10 percent up. In amount, it is RM30k

Gross return: 75% based on total capital invested.

Total returns per year?  75 percent divided by 5 = 15 percent per year.

I think the gain is pretty decent and we have not added the rental which would have also contributed to the principal portion for the past 5 years. I am very sure, some would say that we would incur additional fees and taxes when we sell. Very true. Perhaps it’s better to put the RM40,000 into FD instead and take the 4% return per year which by the end of 5 years would give us RM8,667. Sigh……

In conclusion, any adjustment in excess of 10 percent, whether up or down is considered significant to me. I would personally take appropriate actions when that happens. To the authorities, I think it’s safe to readjust the cooling measures when the market has adjusted either 10 percent up or down. A responsible regulator should not wait till the property prices have gone up or come down too much before taking any actions. In the mean time, help the first timers buy their first home. Forcing the developers may not be the best option. Take the challenge up, build quality and sell affordably. Set in some measures to ensure price stability for these units at least for a few years. Happy taking actions.

written on 13 Oct 2015

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10 reasons for property investment? (more actually)

Google for reasons for property investment and you will an unlimited number of articles about this topic. After having invested into property for the last 18 years or so and having properties in 6 cities / towns in Malaysia, here are 10 reasons I think are important for property investment. All the WHYs…

Let’s not kid ourselves. There are a lot of reasons to buy or not to buy a property. In fact depending on which side we are in, we could debate until the fish can fly and we will still be debating. For those who seriously are starting to believe, here’s one article for you. “10 reasons why we should buy a property.” For those who prefers to rent, feel free to google for why renting is better than buying too. Hundreds of thousands of articles I think. Happy reading to both sides yeah. Here are the 10 reasons according to me.

#1 – It’s safe and real.
Shelter is the first thing everyone needs based on
Maslow’s hierarchy of needs.
 In brief, this is the foundation before we start thinking of other things. Imagine getting a job within Greater KL (Selangor too) but we have no place to stay?  Yes, it’s true, we do NOT need to BUY because we can rent too. Well, someone has to buy that property to rent to people who love to rent, no?

#2 -It’s safer and easier.
View a home, like it. View the surrounding amenities, like it. Check google map for the duration of drive to office every morning, like it. With these three likes, we have already done the minimum due diligence if we are buying a home for own-stay. Of course, then look at the price. Try doing the same with stocks? Understand the business… maybe. Get to know the management team… maybe. Know who their competitors are, know the industry and more… wah, not easy. It’s not that easy to invest into a stock yeah… Buying one is easy, not investing into a good one.

#3 – Leverage is possible.

Invest RM50,000 into the stock market and when it rises by 10 percent, we gained 10 percent. Invest RM50,000 into the property market (10% downpayment) and even if it gains just 5%, that’s RM500,000 x 5% up which is RM25,000. Our total investment was RM50,000. Return on Investment is thus RM25,000 which is 50%. The reason is because we usually buy a home with a loan and usually it’s with 90% home loan. Sounds unreal, just like a scam…

#4 – FORCED to save.
 In a good way, anyway. We buy an affordable place to stay as a start. A RM200,000 home with just a 2% increase in price every year will be RM500,000 30 years later. 2% is like inflation rate. Someone would exclaim that RM500,000 30 years later is NOT MUCH! It’s true, RM500,000 30 years later may not mean much but how else could we save RM500,000 if not forced through buying a property? By the way, the property price increase has been 6.7% on average for the periods of 1990 – 2016 for Malaysia.
Here’s that earlier article.

#5 – It does not suddenly lose half of its value overnight.
Okay, except for that time when it dropped by double digits in 1998. As for losing the investment value suddenly, there are many other types of investments which would lose that. If you are around my age, you would remember a company called Enron. The stock price was over US$90 and in a few months dropped to less than US$1 and in the end, worth nearly nothing. Gold fluctuations? Oil fluctuations? It’s hard to control them but with a property, as long as we did not buy the wrong one and we could wait, the trend is always moving upwards.

#6 – Demand will always be around.
 (I meant for Malaysia).  Looking at the demographics, Malaysia has a median age of 29. This is as safe as we can get. Any lower and Malaysians may not have enough demand since not that many Malaysians have worked and saved enough yet. At 29, that’s pretty okay! Graduated at 23, worked for 6 years, saved RM8,000 per year and that’s already RM50,000 for a first property… Plus the fact that people at 30 may have just gotten married and is now looking for an upgrade property followed by another one a few years later when a baby comes.

#7 – Everyone’s on your side.
Developers would not want prices to fall. Block 1 at RM400,000 and Block B at RM350,000? I think the developer would need security guards to protect them… Banks would not want prices to fall. They lent to us based on a value of RM400,000.  A year later, the price falls to RM350,000? I think the banks will be sweating because if something happens, they will immediately lose RM50,000 even if they were to auction our property…. The government will not want prices to fall. They prefer prices to stay almost the same so that voters will be happy that they could buy.

#8 – It’s the least we could give to our kids?

Let’s not think about giving them money because in future, that money we give them will only be enough for them to buy a home VERY far from us or VERY SMALL if it’s nearer. However, if we give them a property, they will thank us for thinking well ahead before they even need to think about property. Plus, if we suddenly need money for their studies, we could also sell that property too. Saving half a million ringgit for their studies is super hard. Slowly paying for a half a million ringgit property is much easier.

#9 – Retiring better if not earlier.
Without an income when we retire, do we really want to worry about rental if we did not own a property by then? If we bought a property every 10 years, we should have 3 properties when we retire at 65. Selling one is more than enough to last us longer than what the average Malaysians have in their EPF account. EPF says the minimum savings one should have would be RM228,000 in their account when they retire. At the moment, majority of Malaysians are nowhere near this number.

#10 – When we get lucky in property, it’s super huge.
Our RM50,000 worth of stocks may increase 3 times and we suddenly have an extra RM150,000 to spend. However, if we used the same RM50,000 for a 10% dow npayment and our RM500,000 property tripled, that’s RM1,500,000 of extra money. I am not saying it could happen but the possibility is there… (Think old PJ and current PJ?) Think Desa Parkcity then and Desa Parkcity now. Think Shah Alam then and Shah Alam now. Well, most areas anyway.

Last but not least

If we google for ‘reasons to invest in properties,’ there will be never ending articles about it. Don’t worry. If we google for ‘why NOT to buy a property,’ there are just as many articles. So, the world is fair and everyone has their own say. From my understanding, no one has actually gone bankrupt simply because they did not buy a property yeah. It’s usually due to some other reasons.

Haha. If we dive deeper into the types of properties to buy, then we have even MORE debates; high-rise versus landed, popular hotspots versus emerging new spots and more. Renting to students or to office professionals. Perhaps that’s for another article. Till then, happy deciding.

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first written on 6th Oct 2018, edited 9th Dec 2019 and reedited 3rd May 2021.

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10 reasons why we should buy a property (Part 1)

kopiandproperty.com readers would have noticed that I do not usually do “top 10 reasons …. ” or “top ten things…” kind of articles. However, when I
wrote “10 reasons why we will fail to buy a property” last week,
 the number of shares were like 5x higher than usual. Perhaps these type of articles are easier to read and thus to share. Here’s another one. “10 reasons why we should buy a property.”

Source:
https://www.simplypsychology.org/maslow.html

#1 – It’s safe and real. Shelter is the first thing everyone needs based on Maslow’s hierarchy of needs. In brief, this is the foundation before we start thinking of other things. Imagine getting a job within Greater KL but we have no place to stay?  Yes, it’s true, we do NOT need to BUY because we can rent too. Well, someone has to buy that property to rent to us, no?

#2 -It’s safer and easier.  View a home, like it. View the surrounding amenities, like it. Check google map for the duration of drive to office every morning, like it. With these three likes, we have already done sufficient due diligence if we are buying a home for own-stay. Try doing the same with stocks? Understand the business… well. Get to know the management team…well. Know who their competitors are, know the industry and more… It’s not easy to buy a stock yeah… Let’s not even start about buying commodities or even cryptocurrencies yeah…

#3 – Leverage. Invest RM50,000 into the stock market and it rises by 10 percent, we gained 10 percent. Invest RM50,000 into the property market (10% downpayment) and even if it gains just 5%, that’s RM500,000 x 5% up which is RM25,000. Our total investment was RM50,000. Return on Investment is thus RM25,000 which is 50%. Sounds unreal, just like a scam…

#4 – FORCED to save. In a good way, anyway. We buy an affordable place to stay as a start. A RM200,000 home with just a 2% increase in price every year will be RM500,000 30 years later. It’s true, RM500,000 30 years later may not mean much but how else could we save RM500,000 if not forced, by property? By the way, the property price increase has been 6.7% on average for the periods of 1990 – 2016 for Malaysia.
Here’s that earlier article.

#5 – It does not suddenly lose half of its value overnight. Many other types of investments would lose that. Remember a company called Enron? It was overUS$90 and in a few months dropped to less than US$1 and in the end, worth nearly nothing. Gold fluctuations? Oil fluctuations? It’s hard to control them but a property which is NOT a wrong buy will usually be just alright.

Part (2) tomorrow yeah…. Articles which are too long are usually not popular…

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written on 6th Oct 2018

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10 reasons why we will fail to buy a property.

Not everyone loves to buy a property. Some (usually the younger ones) say vacations are better than a property. The former gives FEELING of happiness. The latter merely adds debt and worry of not being able to pay on time. Plus the fact that they can show off to their peers when they post those photos in Facebook.Here are 10 reasons why we may fail to buy that first property in the near future. They are in no particular order and some people may have more reasons than others.

1) Paying too high rental today versus your salary. Two issues here. One, rental of RM2,000 per month means you are usually staying in a property valued at RM500-600k. (Yes, rental market is not awesome for some owners right now). Two, you will not want to downgrade by buying a property of your own and paying more. RM600,000 property requires a monthly mortgage of RM2,700. We have yet to calculate the renovation and the furnishings…

2) No money left every month.
Choices, Choices and plenty of Choices today (earlier article here).

Wants versus needs is usually blurry until you really write it down and categorise them accordingly yeah. RM300 saved is enough to pay for a property which is nearly RM70,000 higher. Crazy but true…

3) Most of my friends don’t have a property anyway. (They have the latest iPhone though or that Yellow thing…). Peer pressure is working negatively here. Courtesy reminder yeah, usually only the minority will be better off than the majority. That’s why there’s just one manager and hundreds of junior executives…

4) Buying that property can wait. I am still young. Frankly, this is quite true. Prices will always have to be affordable regardless of when we buy, whether it’s today, tomorrow or 10 years later. The reason for affordability? They will use distance (build it further away) or size (build it smaller). So, think if we own a BIGGER property and NEARER versus in the future when it’s further and smaller, which will be more valuable?

5) Staying with my parents lah.  They love me and I don’t want to move out. Haha. It’s the best opportunity to buy a property, rent it out and still stay with your parents. Many people do not have this option…Alway be grateful with what we have and make it work.
(Earlier article here)

6) I need a BETTER car lah. Better is very subjective. For a junior executive, a Vios enables him to be ‘looked very high’ versus all his peers but actually there will be time when a Vios could be bought with just the credit card alone… (High credit limit). However, buying that Vios versus that reliable Axia for example will really take away too much of our salary every month.

7) Nothing fits me in the market.  This is a super-duper awesome reason.  The ones we want are too expensive. The ones we don’t want are within what we could afford. By the way, that first property will usually not be the property we stay until they say we say bye-bye. Buy one, start paying and a few years down the road, upgrade to a better unit and sell the current one or rent it out. Few years later, the rental yield is usually already positive.

8) I hate property lah. Ok, this one particular reason is a very good one. Just remember that a property can be a key to everything you like. Selling a RM400,000 property which has appreciated to RM500,000 6 years down the road is a vacation plus a new Vios and many more other smaller stuffs…. IF you still hate property at that time, you can sell and keep that RM100,000 or more. Surely we do not hate cash?

9) The banks kept rejecting my loans. Whoa, if this is the reason, is it the fault of the bank? (
How not get rejected article here
) Actually when banks stop lending, they stop earning profits. They want to lend to you yeah. Just try to ensure we qualify for one and everyone’s happy.

10) I actually want to buy. I am just waiting for the property bubble to burst. This is a question of when, right? Here are some reasons for a property bubble to burst. Real economic indicators, not speculations.
3 Property bubble signs and more

By the way, there are no ending when it comes to reasons not to buy. Here are just the typical 10 and if you know of other even better reasons, please feel free to comment. If they are ones I missed, I will add it in and credit you too. Happy thinking and not everyone needs a property, seriously.  They
just need to be financially-savvy
 (article here)
because the world today is no longer the world yesterday.

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written on 6th Oct 2018

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100% stamp duty exemption for first-time homebuyers

Good news for first-time home buyers

Yes, this is definitely good news for many potential homebuyers. Not sure how many first time homebuyers were waiting for this extra savings when they buy their very first property. This was just announced by Prime Minister Datuk Seri Ismail Sabri Yaakob yesterday. Please note that this is only for properties priced RM500,000 and below only. Meanwhile if the property is between RM500,001 and RM1,000,000 then they will get 50% off their stamp duty. This will be valid until December 2023.

News in bernama.com here.
  Prime Minister Datuk Seri Ismail Sabri Yaakob has announced that first-time Malaysian homeowners in the country will be receiving 100% stamp duty exemption for properties priced RM500,000 and below from now until December 2023. Made through the Keluarga Malaysia Home Ownership Initiative (i-MILIKI), first time Malaysian homeowners of properties priced between RM500,000 and RM1 million will also be getting 50% off their stamp duty.

The Prime Minister asserted,
“For the record, the Inland Revenue Board (IRB) said that stamp duty exemption claims under the HOC (Home Ownership Campaign) are RM957.8 million. In fact, the highest stamp duty exemption claim is for homes priced RM500,000 and below.”
 Do read the full article here:
News in bernama.com here.

I was also worried with my first property buy

My advice is that if any first-time home buyer is thinking of buying, it’s important to see where most of your money is spent every month. If most of it went to unnecessary stuffs, then this is the best time to buy that first property and channelling all these unnecessary expenses into a necessary investment. That was what happened to me for my first property. Suddenly I was extremely careful how much I spend on food, how much I spend for movies, how much I spend for anything everyday!

First property is just a start!

After my first property, it became clear to me that it’s possible to buy, work harder and be prepared for the second property. Second property was my second home, third property was in Kelana Jaya (which eventually became my home many years later when I moved to Kuala Lumpur) and 4th and so on. Remember, a journey of a thousand miles begins with the first step yeah. Starting is the hardest. I can safely tell you this was my feeling too.

Happy deciding and remember, do not buy if you could not afford. No point stressing yourself too.

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1,000 jobs to go because Online is the future

In a report in a local daily newspaper dated 2 July 2015, it was announced that over 1,000 jobs may be cut because of the continuous reduction of people watching traditional TV in Britain. British Broadcasting Corporation (BBC) will be cutting more than 1,000 jobs as part of a long-term savings programme. Main reason? Viewers are shifting to online and this is expected to reduce the funding it gets from British households with a TV. It currently gets funding via the levy from viewers with a TV. The number of viewers ditching their TVs and switching to online is increasing very fast and according to Ofcom, only 50 percent of viewers aged 16 to 24 are watching live TV. There are no data available for Malaysia but I think it is safe to say that the trend is definitely true as well.

These viewers in Britain are switching to online services such as Netflix and “catch-up” services provided by broadcasters which allows them to watch their favourite shows whenever they want. Yes, here in Malaysia, ASTRO is already offering such a service. In fact even the youth TV channel BBC Three would be closed and moved entirely to online. BBC said, “The licence fee income in 2016/17 is now forecast to be £150 million less than it was expected to be in 2011.” Due to this, more than 1,000 positions would be cut with cost savings programmes such as merging some departments, cutting management layers and even simplifying support services such as marketing, finance, human resources and IT. I hope those being let go would quickly find jobs at online related companies.

To be very honest, until today there are still marketing department in housing developers which tells the world that they can sell by posting only in newspaper. I am very sure they are right since they still get to keep their job thus far. However, think objectively, would smartphones and online accessibility be increasing or decreasing? The unfortunate thing about traditional media is the inability to customise their messages to the different crowds. With online media, smartphone Apps and smartphones, the world is changing very fast. There are NO branded developers I know who launches project without any online presence. Please tell me if you know any. Let me learn something new.

Let’s not even start talking about the cost of one day traditional media versus months of online exposure. Of course, any online media which is too generic may not work in the future as well. The key is to have even more customisation, integration between different platforms and ever wider presence. Of course, this would not happen overnight. However, to believe that it would not happen would be totally suicidal. Always future proof our career. Learning about online helps tremendously. Happy marketing your projects with ALL medias, whether traditional or online.

written on 2 July 2015

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Affordable units? 1,000 people per 44,000sf

According to wikipedia, a typical prison cell is 48 sf. Thus, if 1,000 people have to stay within a 44,000sf building, that means each person would have only 44 ft to themselves. This is smaller than a prison cell! Do not worry, if there are ten floors, then each would now have 440sf and if there are 20 floors, each would have close to 900sf, big enough even for a small family. The Kuala Lumpur City Hall (DBKL) has begun allowing developers to build higher density when they are building affordable units. Instead of the current 240 persons per acre, the newly approved ones can be up to 1,000 persons per acre. Of course, this is for high rise, thus the 1,000 persons should still have a decent and typical unit for their comfort and not living like sardines.

DBKL said that they had approved construction of 27,000 housing units under the affordable housing project, “Rumah Mampu Milik Wilayah Persekutuan” (Rumawip) since March 2015. Private developers would build these units with lands provided by the federal government. It pointed out a real problem which is a lack of affordable housing units in the capital. Exorbitant land price due to land scarcity is the main reason for these shortages. Fortunately however, these units are no longer the flats of yesterday but is supposed to be medium low-cost units with facilities.

Personally, I prefer to see more transparency and the completion of some of these units before believing that these units are actually doable. More importantly, the allocation should be transparent and the buyers should be FORCED to sign certain agreements whereby if they are caught renting the units out, they would have to pay a heavy penalty. The units should also not be sold to any third party and if needed to be sold should only be back the next approved buyer by DBKL. Yes, of course the price should be slightly higher then with the usual inflation rate adjustment. Proper housing is a right for all. Hopefully, no one calls me me up offering me a unit if I were to pay some “undertable” money. I will report this to MACC gladly.

written on 17 June 2015

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10,000 units of below RM400,000 homes in Penang, starting soon.

Yes, the PR1MA and Penang story is a continuous one. This one should be another piece of good news for people working in Penang, especially those struggling to get a decent unit for own stay. Reported in a few local medias, PR1MA’s Chief Operating Officer Datuk Aminuddin A Manaf said it hopes to start construction on 10,000 units by end of 2016 if the state government of Penang approves their applications for planning approval. He said there were already approval for 1,017 units in Permatang Pauh currently.

The total units that PR1MA would be building is 19,566 and these are units Bukit Gelugor (1,124 units), Batu Ferringhi (1,520 units), Teluk Kumbar (3,944 units), Tasek Gelugor (2,387 units) and Balik Pulau (9,564 units). It’s certainly good to note that all these units are within island for which most of my Penangites friends would say is more popular than similar units in the mainland. Aminuddin further added, “I believe the Bukit Gelugor and Teluk Kumbar projects will begin construction this year, subject to approval from the authorities, and sales are expected to begin in line with the construction work.”

The main reason for the pending approval is because PR1MA is still in discussion with state authorities on some of the projects due to zoning and density issues. In KL, the density for affordable units can be up to this:
Affordable units? 1,000 people per 44,000sf

PR1MA said that there were 88,000 people in Penang applying for PR1MA homes. Going deeper into the price levels, 84 percent of it are priced below RM300,000 and another 14 per cent are between RM300,000 and RM350,000. Remaining 2 percent are at the ceiling price of RM400,000.

Let’s keep following this and make sure what’s announced will take off. Penang sorely needs more of these affordable units because the number of apartment units bigger than 750 sqft but smaller than 1,000 sq ft is not many. Thus, the prices are either below RM350,000 for the smaller ones or over RM550,000 for the bigger ones. I think there’s a gap which these new affordable units would be able to fill. Happy following.

written on 10 Apr 2016

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Balik Pulau versus mainland Penang?

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10,000 cars in Cameron Highlands during holidays. WOW.

I love Cameron Highlands. It’s relaxing and well, there’s always new things to see when we visit it once or twice per year. Beyond just the cactus or the sweet corn, the view from BOH Sungai Palas tea centre is good enough to fool some friends that I went overseas. 🙂  Okay, now for the SMALL issue. Haha. During holidays, it’s extremely jammed up there. The reason is because it’s still a small place and there’s just one road up there even if there are many roads going up Cameron Highlands these days. From Ipoh, one can go up via Simpang Pulai. From KL, one can drive up via Tapah. There are also some people driving in from Gua Musang too.

This is the latest news about Cameron Highlands.
Article in EdeProp.my here.
  Tanah Rata assemblyman Chiong Yoke Kong has suggested to restrict vehicle entry into Cameron Highlands during long weekends. As quoted by the Malay Mail, he suggested that the local government must start studying public transport policy, enforce traffic laws and restrict the influx of vehicles during holidays. He said during the recent long weekend, travelling 2 to 3km took three to four hours! He shared, “Cameron Highlands District Council can utilise the entrances at Blue Valley and Ringlet, and can even cooperate with the Perak state government to build parking lots at Tapah and Simpang Pulai which are at foothills in order to implement vehicle restrictions and provide feeder services such as small buses that bring tourists to Cameron Highlands.”

He said that during long holidays the average number of cars in Cameron Highlands exceeded 10,000 daily. He said, “The unplanned and disorganised development by the local and state government has created several traffic bottlenecks in Cameron Highlands.” Beyond just the traffic, the local authorities have been lax in enforcing the law against vendors and tourists who park illegally.
Here’s the report in Edgeprop.my

I do not foresee the issue to be solved soon. However, I think as a start, perhaps the area where the cars could be parked be identified in advance. Depending on who is the owner of the land, some negotiations on the utilisation will need to happen. Remember yeah, if the parking fees are exorbitant, asking people to park their cars and have the inconvenience of taking the public transport will not work. Then, we will have to see how efficient and effective would the public transport be. Frankly, old buses re-designated from some nearby towns are not going to work. For the public transport to work, there must really be an enforcement of no-car policy. Else, if it still takes 2-3 hours when one is travelling via the bus, it will just fail spectacularly. I do not have issues parking my car and taking the bus. Alternatively, I can even take the bus from KL itself. Just make it friendly yeah.

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written on 11 Sept 2018

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100,000 affordable homes per year to be built. (Yes, 100k)

I shared with a room of over 150 property investors on 5th Jan (Sat) that Malaysia is actually facing a shortage of homes and not really an oversupply of homes today. Fortunately for me, this room of people were all members of the
KL & Selangor Property Investors Club.
(Someone told me that combined, the club members own about RM1 billion worth of properties). I could see they believe me. Anyway, our Housing and Local Government Ministry has reaffirmed this. Our new government will build 1 Million of new homes in Malaysia within 10 years. In other words, 100,000 units of affordable homes every year beginning 2019. Here’s that article in
Edgeprop.my
  So, the minister Zuraida Kamaruddin has directly confirmed that there is no oversupply. Else, everyone may think the government is trying to sink the property market?

Zuraida shared that these units are for the low income earners to also become house owners. Her ministry would coordinate all housing projects under Syarikat Perumahan Negara Bhd (SPNB) and would build 100,000 units of houses a year  beginning this year. She said, “The 100,000 units will comprise affordable homes for all, especially those in the B40 group so that they, too, can each own a house.”  For the financial commitment, Zuraida added, “Those in the low income group can afford to pay the monthly instalments. Their problem is coming up with the deposit payment, so we are discussing with the financial institutions to find a solution to this. The ministry is also discussing with Bank Negara and housing investors that agree to come forward to provide financing scheme.” Do refer to the article in
Edgeprop.my

To add to the topic on unsold units which seem to be the bone of contention about whether there’s an oversupply, do refer to the chart.  Actual unsold units by states are clearly stated too. Selangor and Kuala Lumpur, where unsold properties are concerned has a much lower percentage when compared to the national average. This shows that Zuraida is also right when she mentioned that the government’s 100,000 unit will not add to the glut of unsold units of today. I have to say that I agree as long as these 100,000 units being built was due to applications for it well in advance instead of building first and try to sell later. There has been many examples of some affordable homes being built in locations not loved by people. Let’s not repeat that yeah my dear Minister? Happy following.

written on 7 Jan 2019

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100,000 empty apartments! May be more, soon.

Yeah, I think everyone who has read
kopiandproperty.com
 for some time would know that Malaysia has unsold properties and some of it has turned into overhang properties too.
Unsold units may not be overhang
  In fact there were also some measures to attract some foreign purchasers too.
RM600,000 threshold for foreigners to buy KL properties
 . We are definitely not alone here in ASEAN.

I think we also know that Singapore has some of these unsold units too.
Some challenges in the Singapore property market
 What about our neighbouring country up north then? By the way, Bangkok’s property scene where foreign buyers are concerned is more vibrant than Malaysia’s. They have a lot more of these foreign buyers and that’s both a plus and a minus too. Latest developments in brief is that there are now an estimated 100,000 empty apartments there.

Article in thestar.com.my
  Bangkok’s condominium market which was once a favourite of Chinese investors are attracting far fewer these days due to the COVID-19 issue. From 20% previously, the share of foreign purchase of properties has halved to just 10% predicted for 2020. This is estimated by consultancy Agency for Real Estate Affairs estimates.

Sopon Pornchokchai, the consultancy’s president said, “The demand from foreigners may disappear in the first half following the outbreak.” He also added that there are now 100,000 vacant condominiums in and around Bangkok and it will not be easy to rely only on local buyers.

The real estate sector slowdown is among the many challenges ahead for the Thai economy. However Aliwassa Pathnadabutr managing director of CBRE Group Inc in Thailand says that first half would be slow due to the travel restrictions caused by the virus but the property sector will eventually recover quickly.

Phattarachai Taweewong, associate director of Colliers International Group’s Thai unit said, “It’s a tough situation in 2020.  Hopefully, the market can go back to a balanced supply and demand again in the next three years.”   Please do refer to the full article here:
Article in thestar.com.my

I love Thailand. I love the Thais, I love Thai food. Haha. Yeah, I think if you ask me, I would love to own a property there some day too. We just need to understand that unsold properties as an issue is not happening just in Malaysia. In every market where demand suddenly started and supply could not suddenly keep up (it takes 3 years to build a property…), this will cause many buyers who were not that genuine or thinks of flipping.

For these demands, as soon as they realise the market is no longer hot, they will pull back very suddenly too. If these buyers were mostly owners, then demand and supply would have been more aligned. Perhaps it’s a good period where all stakeholders learnt something and hopefully, this huge unsold situation will not happen so frequently yeah.  I wonder when’s my next trip to Thailand. Maybe May would be a good month.

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100,000 new units vs 140,000 new household formation. Prices up? Do not agree.

In Business Times (1 Aug 2014), REHDA’s new President, Datuk Seri FD Iskandar Mansor said that property prices will continue to rise because of the lower supply versus the higher demands as well as high land cost. According to the National Property Information Centre (NAPIC), the average housing completion was 100,000 units against the average household formation of 140,000. Actually, one day when Malaysia becomes a more matured and developed nation in terms of the housing and urbanisation starts to slowdown, these numbers would really give a good idea. However, at this moment, I think the Malaysian property market is still growing, statistics are still not that readily available. Thus, the prices definitely are not really in reference to these numbers.
It is more emotional driven. More prominent people loves staying in Area A, everyone flocks to Area A and the prices for Area A goes up. Prominent people said Area B not good, too far. Everyone believe and skip Area B. So, Area B prices remain low. This is more likely the case.

He also said that the profit margin for developers are no longer like previously. These days instead of the typical 30%, developers are now making only around 15%. This is due to high compliance cost, development and infrastructure changes, quit rent and stamp duty. He said land is also getting scarce and thus more expensive. As an example, when Glomac bought land nearby the Petronas Twin Towers, the seller asked for RM1,000psf and Glomac bought it as they already have firm plans on what to build there. Today, that same piece of land is worth RM3,500psf. Then he said something which I like very much even if this control has to be improved. He said, “We are in an industry which is highly regulated. We are governed by three different authorities, namely the state government, the Federal Government and the local authorities. If we don’t comply, we won’t be able to get development approvals.”

I hope that all these development plans are as transparent as possible. I also hope the flow is within 3 months. I also hope all developers are treated equally whether they are big or small or private vs GLCs. There should however not be less regulation. Merely, everything must be made more systematic from currently. I still firmly believe that the state government and the federal government must continue to monitor and take pro-active steps and measures to ensure the market is as fair as possible to the potential buyers in future, with special emphasis on first time buyers. Without any control, look at what happened to USA during the mortgage crisis. I do not wish for the same to happen here, where many of the banks which were exposed during the mortgage crisis had to ask for help from the government who naturally ‘helped’ them. So much for so called , ‘free from intervention’ preach by USA to the world…..

written on 2 Aug 2014

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60,000 in 3 years. 100,000 by 2023. Affordability in JB.

Looks like great news for Johoreans or ‘new’ Johoreans; those from outside the state who’s going there to find a job or look for a career.
 Here’s that recent news article in TheStar.
 Recently, a Johorean good friend says that the properties in Johor Bahru (JB) is getting way too expensive and that not many could afford a new home. She had just moved into a new gated and guarded scheme home, paying very close to RM1 million for it. Hmm… A Seremban good friend says that properties in the Klang Valley are getting way too expensive and that not many could afford a new home! She had just gotten the keys to her close to RM1 million home, also a gated and guarded scheme and I got to know not too long ago that a close friend of mine also bought a unit at the same development! Both were my colleagues. (Perhaps I was underpaid??!! Haha).

Source: iProperty.com.my

Before we get too carried away by all these comments of people who continue to buy and yet kept telling everyone that it’s a gloomy time, my new good friend (yes, I am adding good friends occasionally. Haha.) told me that her sister bought a landed property in JB for less than RM200,000. Okay, it’s not a gated or a guarded home but a landed double-storey terrace for less than RM200,000? A check with two prominent property listings sites revealed that her comments are real.  Look at the image from
iProperty.com.my
 The built-up is definitely much smaller than those of my two friends above but they are both still double-storey terrace houses, right? It’s always a question of demand versus supply in this case. if there are a lot of these units but demand has not grown fast enough, then of course the prices continue to lag versus those which are getting ever more expensive by the day.

Source: propertyguru.com.my

Another image different property listings from different real estate negotiators in
propertyguru.com.my
  Do search and call them if you need a landed home below RM200,000 yeah.  Note though that the number of listings for these below RM200,000 landed homes are not too many. So, if demand were to increase suddenly, all these would be taken up quite fast. Beyond just these comments from my friends, it seems that even more affordable homes would be built in Johor Bahru. I think this is also in anticipation of even more
demand when more people work in Johor Bahru.

According to the Johor Menteri Besar Datuk Seri Khaled Nordin, a total of 60,000 homes under the affordable housing scheme would be built by 2020 and another 40,000 units by 2023. He said, “Johor is able to build many of such (affordable) homes compared to other states due to the cooperation between the government and developers in which the houses are subsidised. This is why the state government aims to build an additional 40,000 units by 2023 to make the total of 100,000 affordable homes within the next six years.”
He then issued a warning to all those who got themselves an affordable home but are renting them out instead. He warned these people that who rented out their allocations may have their homes seized.
Here’s that article in TheStar again.

I seriously hope this becomes a legislation. People who need a home and needs help to own one should be given priority. Anyone abusing it must be punished sternly. Else, we are only talking and in the end, abuses will continue to happen. Hopefully, Johor would be a state that could copy its next door neighbour in enforcements. All the best yeah. Yes, I am confident that barring any unforeseen circumstances, JB / Iskandar will be successful.

written on 2 Dec 2017

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100k bankrupt Malaysians. 70% has less than RM50k in EPF.

Without our own additional savings, it’s only the EPF savings by the time we retire. However, the scariest thing is when we do not own the place we live in when we retire. Earlier article here:
Escape poverty through property
  By then, without an income and still needing to pay a monthly rental is going to be a nightmare. One major reason for this was because of the lack of financial management understanding. In fact, I think we (Malaysians) are still stuck at the awareness level instead of understanding it better. Perhaps all university students must take a module in Personal Finance Management. I think I will be happy to contribute too, if requested formally. PLEASE NOTE, this is NOT about getting rich quickly through some unscrupulous or illegal way okay… For that, please go elsewhere, kopiandproperty.com is not the site to visit. 🙂

Article in Thestar.com.my here.
One major reason why many Malaysians end up as a bankrupt is because of low financial literacy. A report by S&P Global Literacy Financial in 2014 says financial literacy rate in Malaysia is only at 36% while developed countries are at 59%. Lim said 100,610 Malaysians are declared bankrupt between 2013-2017. Based on EPF estimations, a person needs RM240,000 by 55 years old to retire comfortably. However, active contributors aged 54 only have an average of RM214,000 based on the EPF 2017 report. Lim said two thirds of contributors aged 54 only have RM50,000 maximum in their EPF accounts as of 2015 and proceeded to say that RM50,000 is insufficient and could run out within the first five years of retirement.
Article in Thestar.com.my here.

How does one become a bankrupt? Here’s an earlier article.
Bankruptcy, usual questions and answers
 It’s extremely scary if money runs out within 5 years because Malaysians are now living much longer.
Earlier article here: When we are living longer, better prepare more.
 Remember yeah, if we rent just a room and the rental is RM500 per month, that’s RM6,000 per year. That RM50,000 in EPF is enough to only last 8 years even if we use it only for rental. Perhaps staying in a small town will stretch this longer but this will depend on whether it’s the life we aspire to have. However, if we have a fully paid home by then, even if it’s just an affordable apartment, that RM50,000 could then be used for other monthly expenses. How much could an affordable apartment be worth 30 years later? Actually, quite a lot (because money gets smaller…) Here’s that article:
When we are 60, having just one RM1,000,000 property, possible?
  Happy understanding.

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

written on 6 March 2019

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1,016,000 applicants for PR1MA?

Yes, PR1MA said that is has received 1,016,000 number of applications thus far for the supply of affordable homes. It’s a number which is hard to believe because if the number is true, we are looking at demands which far exceeds whatever supply there are in Malaysia. Yes, not even the 100,000 new homes target per year is able to satisfy this demand in 10 years and by then, the demand would have exceeded supply many times over again. As per reported in local English daily, the total units of affordable houses to be approved by PR1MA’s board of directors by the end of 2015 would be 250,000 units. This is of course nowhere near the total number of applications. Currently, a total of 153,000 units have been approved in 110 locations nationwide except for Labuan.

Just like all the other affordable homes projects from the state level, all these units are targeted at middle-income Malaysians who has been complaining about their inability to buy a home due to the high prices currently. The prices for all these are priced at a maximum of RM400,000 and as per PR1MA, there are actually very few units priced above RM350,000. The weightage for first-time buyer is much higher compared to those buying a second property. For example, the ratio allotted could range from 9:1 to 7:3 depending on location and said that out of the 1,016,000 applicants, 90% were first-time buyers.

Despite all these encouragement news about more units being made available, the probability to get a unit seems very small. In a recent balloting of 325 apartments, every unit received 16 applicants. Probability is thus only 6 percent. Out of 100 applicants, only 6 would eventually get a unit. The rest would have to wait for the next ‘probability.’ Within 2015, despite the approved 113,000 currently, only a total of 6,240 units in right projects would be balloted.

Are you one of the applicants? Would love to hear some real life accounts about what the applicants really face when applying for these programmes. Not just PR1MA but all the other programmes as well. It would be great if there are full transparency about which of these programmes, whether by federal or state governments which are doing very well. As for RM400,000 or lower, there are still many secondary choices. For those who could not afford to wait, do browse online and pick one. Please use ‘necessity’ as a primary consideration and not the location or the area as your main consideration. Happy balloting to those who are in the queue.

written on 11 July 2015

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11.6 percent average rental yield is CRAZY…

Image source: thegeographist.wordpress.com

If someone were to tell me that there are still properties out there which gives positive rental yields today, I would ask, where? If that someone were to tell me that I can still get double digits in rental yields, I would think it’s a scam, seriously. From Singapore to London and even Malaysia, due to the property prices rising way too fast versus the rental, the yield has dropped. Perhaps the current cooling measures will help in stabilising prices and rental will now have time to catch-up. When it comes to the UK property market, one city always pop up; London. One of the top finance capital city of the world. There are a lot of articles about them, today’s let’s look at the second largest city in the UK; Birmingham. Image shows the top 10 cities by population in the UK.

In a article in lettingagent.co.uk
, it shows an analysis by online letting agency Urban.co.uk showing UK’s second largest city Birmingham has an average rental yield of 11.66% in the areas surrounding both Aston and Birmingham City universities. There are other locations where landlords can gain a very good return too. They include areas around Teeside University, Leeds Arts University, the University of Edinburgh, Nottingham Trent University and Bangor University – all of which have an average rental yield of over 8%. Next would be areas where the rental yields are poor. According to Urban, the least desirable university to purchase a property close by is South Kensington’s Heythrop College with an average expected yield of just 2.49% per year.  Other poor performers include the University of Westminster (2.67%), the University of Cambridge (2.87%), Anglia Ruskin University (2.92%) and Leeds Trinity University (2.93%).  Adam Male, founder of Urban.co.uk explains further, “The buy-to-let market will always be a profitable business close to the nation’s university campuses despite the impositions that have been forced on the buy-to-let market of late, as thousands of students are in desperate need for accommodation every year.”
The full article for reference here.

My brother-in-law loved his time in Birmingham University where he studied engineering. If only he had bought a unit there when he was studying. Haha. As for those studying in Cambridge University, well, the parents need not buy a property there because the yields are just too low. Better invest somewhere else. Recently, there’s also an article for the
Birmingham property market in iProperty.com.my  Read it here
  The article ends with this conclusion: “Ten years ago few would have believed that the city would transform so dramatically. With further transformational projects underway and exciting plans in the pipeline, the future looks bright for the Birmingham housing market.”  I have no overseas property but all these are always good points to note. More options are always better than just London all the time.

*Featured image source: http://visitbirmingham.com/what-to-do/shopping/shopping-centres

written on 27 Oct 2018

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11 Malaysian companies in Forbes Asia’s Best Under a Billion 2021 list

We often think it’s not easy to identify a good listed company to invest into. So many different companies, how to choose the perfect one? Here’s the issue. There is no such thing as the perfect listed company to invest into. It’s the same as there’s no perfect property too.

I am not sure how many would claim their partner is the perfect one but that’s their own opinion and I will just have to accept it. We have another 11 to check out. These 11 are the Malaysian companies which are listed in Forbes Asia’s Best Under a Billion 2021 list.

Article in thesundaily.my
    Eleven Malaysian companies made it to Forbes Asia’s Best Under A Billion 2021, which recognises 200 top performing publicly listed small and midsized companies in the Asia-Pacific region with less than US$1 billion (RM4.16 billion) in revenue and consistent top- and bottom-line growth.

Malaysian companies in Best Under A Billion 2021 according to their market capitalisation are:

ViTrox in the technology hardware & equipment industry (US$2.1 billion);

Scientex in the plastic products industry (US$1.5 billion);

D&O Green Technologies in the semiconductor industry (US$1.4 billion);

Frontken in the industrial services industry (US$1.3 billion);

Dufu Technology in the manufacturing industry (US$558 million);

UG Healthcare in the healthcare industry (US$259 million);

Comfort Gloves in the healthcare industry (US$252 million);

Thong Guan Industries in the plastic products industry (US$220 million);

Revenue Group the software industry (US$208 million);

FoundPac in the electronic components industry (US$110 million); and
Dancomech Holdings in the trading industry (US$38 million).

Forbes Asia noted that the top 200 companies’ sound financial figures in the midst of a global pandemic reflects how well these companies have coped with the situation.

From a universe of 20,000 publicly traded companies in the Asia-Pacific region with annual revenue above US$10 million and below US$1 billion, only these 200 companies were selected. Please do read the report in full in the article here:
Article in thesundaily.my

Invest, Invest and Invest? Check their financials first.

I do know a few of these companies and once owned shares in them. I will definitely take a closer look at their latest financials. Perhaps can invest a bit into one or two. My preference is always technology based companies which are already exporting majority of their products to advanced countries. That proves a lot about its competitiveness.

Happy researching them further yeah. Due diligence is always needed no matter what we do because it’s our hard earned money.

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