Of leaking units and maintenance fee defaulters for strata owners

If we suffer from a leaking unit because of the unit above us, what can we do? Well, we could drop by the unit above us and asked for ‘assistance’. We could also ask the management office for assistance to investigate too and even help to liaise with the owner of the unit above us. Thus far, I have faced this issue twice (both times in KL for two different condos) and somehow, the owner of the unit above me was proactive enough to quickly solve the issue without much fuss. I think it’s because I asked nicely. 🙂   What about newly completed high-rise units where the owners conveniently ‘forgotten’ to
pay maintenance fees

with the reasoning that they will be selling the unit anyway, thus the new owner can minus the outstanding maintenance fees from the selling price later. What if 30 percent of the owners have the same thought? Well, very soon the maintenance of the development would suffer and it will affect ALL units and not just the 30 percent who chose not to pay, yet. Can we take some useful actions against these ‘forgetful’ owners?

As per article in NST.

According to National House Buyers Association (HBA), actions can be taken against these defaulters under the Strata Management Act (SMA) and the Strata Management (Maintenance and Management) Regulations (SMR). Its honorary secretary general Chang Kim Loong said, “Under SMR, the management can publish the details of defaulters on the building’s notice board, deactivate electromagnetic access cards and suspend a defaulter from using common facilities.” Sometimes, this is not effective because the defaulter may not live in the unit. Thus, another way is through the Housing and Strata Management Tribunal (TPPS) or a commissioner of buildings (COB).  The TPPS is headquartered in Putrajaya and it has offices in Johor Bahru, Kuala Terengganu and Kepala Batas in Penang. It has several courts across Peninsular Malaysia. Its jurisdiction is limited to Peninsular Malaysia and Labuan while Sabah and Sarawak’s housing matters in the two states coming under the jurisdiction of their respective state housing ministries.

Change shared, “First, the management of a condominium or apartment complex has to serve a written notice to the defaulter to pay up within 14 days. Failing that, the management can go to the TPPS to recover the outstanding sum.”  If TPPS has made a decision and the defaulters still fail to comply, they are liable for a maximum fine of RM250,000 or a jail term of up to three years or both. Any apartment owner who continues to be in default after the tribunal’s ruling is liable to a further fine of up to RM5,000 a day. The cost to file a case with TPPS is just RM100.  If the management committee goes through a COB, then the defaulters’ movable properties could be seized and auctioned off.  (Movable here means everything inside the home, usually)
Here’s that full article in NST again.

TPPS website is here.
www.kpkt.gov.my
   The Putrajaya HQ’s contact details as below:

Tribunal Perumahan Dan Pengurusan Strata (TPPS)

Aras 3, No. 51, Presint 4, Persiaran Perdana, 62100 Putrajaya.

Tel : +(6)03-8891 3284 (Hotline)

Faks : +(6)03-8891 4755

Emel :
tribunal@kpkt.gov.my

Yes, strata owners do have a place to lodge an effective complaint if the friendly approach does not work well. Anyway, as I have explained, my friendly approach to the two owners worked, so I did not need to go to the TPPS. Oh yeah, in one of my case, the management office helped tremendously in the ‘talking’ part. The owner called me almost immediately to tell me the timelines and hope that I could accept his proposal and to tell the management office of my agreement. He was still staying there and he does not want the management to take any actions that would inconvenience him. After his contractor has completed the work, he Whatsapped me the photo too. Happy speaking in a friendly manner first but TPPS is ever ready to accept your complaint too.

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written on 20 March 2018

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Lots of activities at Carcosa and Seri Negara

Lots of activities for you and family. It’s also a very nice place to visit. Take a look at all that’s happening at Carcosa and Seri Negara. From nature to architectural, documentary to vocal performances and even joget tea party, forum, music performance and even screening of Malaysian film making, it’s a full day of fun-filled entertaining activities. Happy dropping by.

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Actually, do you need a US$595 million salary yeah?

Who earns a salary of US$595 million (RM2,538 billion)? Well, only one man currently. Let’s have the details later. However, I actually wanted to ask if there should be any CEO who should earn so much money, even assuming his company is REALLY so profitable…  Think a little yeah. If he earns 2% lower which is RM5 billion lower, this RM5 billion divided by 1,000 staffs for one year is equal to nearly RM500,000 salary per staff per year! With this 2% gone, he gets 98% of the remaining. Well, perhaps only the person could decide then. Okay, details as below:

Article in straitstimes.com.sg
 Mr Elon Musk has just earned a pay-day of US$595 million and this made him the highest-paid chief executive in the United States. Mr. Musk is now the world’s seventh-richest person, also ahead of tech titans Larry Ellison and Sergey Brin. He owns about a fifth of Tesla’s outstanding stock and this gives him a US$70.5 billion fortune. His majority ownership of closely held SpaceX accounts for about US$15 billion.

Mr Mike Novogratz, the long-time money manager who now runs digital currency investor Galaxy Digital Holdings has warned that valuations of technology companies are getting way too high and that small investors should get out of the market before it crashes. He gave this assessment, “We are in irrational exuberance – this is a bubble.” Here are the top 10 billionaires list:

1. Jeff Bezos US$189 billion (US, tech)

2. Bill Gates US$116b (US, tech)

3. Mark Zuckerberg US$93.0b (US, tech)

4. Bernard Arnault US$92.6b (France, consumer)

5. Steve Ballmer US$76.8b (US, tech)

6. Larry Page US$72.7b (US, tech)

7. Elon Musk US$70.5b (US, tech)

8. Sergey Brin US$70.4b (US, tech)

9. Mukesh Ambani US$70.2b (India, energy)

10. Warren Buffett US$69.2b (US, diversified)

For full article please read:
Article in straitstimes.com.sg

Everyone knows the richest will get ever richer and the poorer, well stays poor. However, a salary of US$500 million a year? The company did not get to where it was because of one person and even assuming it’s really due to that one person, perhaps a small portion of the salary (as calculated above) could have gone to all the people in the company who has worked as hard if not harder so that the vision of the founder could be achieved. Happy following all these news of ever richer multi-billionaires.

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ADAPT International Convention – 18th – 21st November 2020. Extra Free Tickets.

ADAPT International Convention will start on 18th November and ends on 21st November 2020.
My first 50 free tickets as the media partner to ADAPT International Convention have all been taken up by kopiandproperty.com readers.
 That is good news yeah. Now for an even better news. As one of the speakers, I have a final 10 tickets to be given away free. As usual, I will just leave it to the first come first serve basis. Go to the official website, click ‘buy ticket’ and enter the code: CHARLES

When you get that free ticket, you get to listen not just my talk. There will be so many speakers, so many topics and so many new learnings yeah. As for my session, it will be on 18th November 2020 from 2pm. “7 Ways Technology Will Change Our Property Buying Decision”
Click here for the agenda a
nd the below image shows you some of the speakers on the same day as me.

Be aware of all the new trending issues. Usually, one could spot opportunities.   Be hungry for knowledge by learning from other people’s experience because it’s impossible to have all those experience and knowledge just by doing it ourselves. We do not have so much time.  Be there on time. Choose the speakers and topics you would like to listen to, set it into your calendar invite so that you do not miss it. All the talks are virtual which means it’s so easy to listen and you could even be running at the gym while listening. Cheers.

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Price will always rise from the leader. Think objectively

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#ADAPT International Convention. Only the first 50 readers get FREE tickets.

I am honoured to be one of the speakers for Juwai IQI’s #ADAPT International Convention. I have looked through the speakers list. It’s like WOW.

This is billed as the World’s Largest Tech Conference. 35+ languages. 200+ Speakers and Industry Speakers. Over 200,000 viewers. This event is by Juwai-IQI. This will be an event which everyone will be learning a lot. My topic is related to proptech. “7 ways technology will change our property buying decision.” Nope this has NOT been written before. So, for kopiandproperty.com readers, do attend for FREE yeah. Not everyone, sorry.  I do have 50 FREE tickets and it will be based on first-come-first-serve basis.

How to enjoy this? Just follow the 4 simple steps below.

#1 – Go here:
https://adaptconvention.com/#

#2 – Click on ‘Buy Ticket’

#3 – Enter Kopi into the Promo Code and click ‘Apply’

#4 – The ticket price should be showing
ZERO
 now.  Proceed to check out.

If you do miss out the first 50, still sign up and come and listen to all the speakers.  One event. over 200 speakers… I do not think anyone could find such an international event beyond this ADAPT International Convention.

At least for the 50 people, do tell me what you learnt yeah. Let’s keep sharing for better learning for everyone.  Thank you and take care.

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Adding Colour to Life with KL Sentral

City dwellers who have a taste for fast-paced lifestyle will love KL Sentral with the NU Sentral integrated green lifestyle retail mall, the five international hotels in the area and unparalleled public transportation. Popping out during and after work for a drink with friends has never been easier, and getting home during peak hour traffic congestion has never been more stress-free.

Some of the internationally recognised international hotels in KL Sentral that attract international tourists are Hilton Kuala Lumpur, Le Meridien, Ascott Sentral and Aloft. Added to this is the recent opening of the six-star St Regis which has created a new landmark in the country’s international tourism promotion. Unknown to many is that some of the best restaurants, bars, clubs and live bands can be found in the
Kuala Lumpur Sentral CBD
.

If St Regis is the new landmark, then Aloft is its entertainment counterpart which enhances the city’s hospitality industry by offering different levels of services to business and leisure travellers. Its selling point is its direct connection to the Nu Sentral shopping mall via an air-conditioned bridge.

Offered at this mall is a 1.8-acre rooftop garden that comes with a huge event and concert area and alfresco dining. Within the building is an exciting mix of the most popular retail and entertainment options such as megaplex cinemas and a bowling centre. It also comes with an extensive range of retail shops, entertainment venues and dining choices, emphasising on its lifestyle mall concept.

Nu Sentral has transformed shopping experience with its convenience of direct access to the Stesen Sentral Kuala Lumpur and Kuala Lumpur Sentral Monorail station. With its direct connection to train stations, Nu Sentral has the distinction of being the first transit mall in Malaysia. It provides the unique feature of providing global connectivity that accommodates active lifestyles.

Living in KL Sentral adds colour to life, with there always being something new around the corner and something different going on every other day. The latest addition to
KL Sentral — Sentral Suites
 gives the opportunity to live the life to the fullest. Designed to provide work-life balance, anything is possible at the Kuala Lumpur Sentral CBD.

Article by
PropertyGuru.com.my

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An additional HSR station in Forest City, Iskandar?

High Speed Rail KL – SG (HSR)  should have more developments by the end of 2018. In fact based on some latest media reports, land acquisition process has begun. MyHSR has already submitted application to freeze land development so that the viability of the pre-selected corridor could be studied. Within a few days time, a public consultation should also be launched. Here’s
that article in StraitsTimes about it.
This consultation would be for 3 months and the areas selected may be refined further after the feedback. I know, some would think that feedback does not necessary equate to changes but if there is no feedback from the affected stakeholders, then there would definitely be no further changes. The HSR is supposed to be ready by 2026 and has eight stations of which seven within Malaysia namely Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Iskandar Puteri. The Singapore station would be in Jurong East.

There was also a suggestion that the HSR should have an additional station within the Forest City, Iskandar. This proposal was put forth to Land Public Transport Commission (SPAD). As at latest news however, this proposal is still being studied. There was also no mention on the timeline that SPAD required to complete the study and this was what SPAD chief executive officer Mohd Azharuddin Mat Sah said,  “The addition of a station at Forest City has not been finalised yet. SPAD is still carrying out a detailed study on its necessity. If there is a need, we will propose and the government will decide,” he was quoted saying by local daily
Sinar Harian
. Full article in
 TheMalayMailonline here.
 According to a StraitsTimes report, the cost for this additional branch from the HSR will have to be borne by Malaysia. (I certainly think if the developer is willing to bear the cost, then the decision may be easier for the government)

Some recent news?
This is the HSR’s Joint Development Partner

There was also an article which speculated that the cost for the HSR could top RM77 billion. Here’s that full article in
FreeMalaysiaToday.
 This number was given by a senior fellow of the Institute of Southeast Asia Studies (Iseas), Francis E Hutchison who said said that the cost could go up to as high as S$25 billion (RM77 billion). In terms of the government side,  the Second Finance Minister Johari Abdul Ghani was reported to have said that the project cost will be about RM50-60 billion. (I think the main issue would always be how to ensure this project could give returns much more than the cost of building it. As per all public transportation projects, it is usually a loss making one because there is really no way that the ticket prices could be set up so high that it becomes profitable without any government support. Do google to understand more yeah. I think the only profitable model would be the Hong Kong’s MTR. It’s profitable because it owns properties along the line that it was leasing out and not from the ticket sales..). Happy following.

written on 30 Oct 2017

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Is Iskandar getting better? Or worse? Media reports

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Advantages of buying a renovated unit

My first apartment in Penang was a renovated unit. The first owner stayed there for a few years and sold it so that he could stay in the upper floor of his new shop-house instead. The shop-house was just outside the apartment. I think it is a clever move on his part. As for me, I spent only an extra RM10,000 for minor touch-ups. My first condo in Kelana Jaya was also a renovated unit. The real estate negotiator told me that the owner was moving to somewhere more upscale. I spent only money on cleaning up the unit. Both were secondary units bought from the market. When we look at buying some units to be rented out, I would prefer a renovated one. Renovated units would beat empty units anytime, hands down. EXCEPT if the renovation is really extremely ugly and it would take a lot of money to tear everything down before ‘re-renovating’. Here are advantages of a renovated unit if one is not too picky. Not applicable to everyone, okay.

SAVINGs ($$$) . Except for built-in closets or kitchen cabinets which are falling apart, there is really no need to redo these which could easily cost RM10,000 each. As you may know, those electrical cooker and hob, once installed is usually there for the next buyer too. This is another RM2,000 or more for a new one. Depending on the brand, the price can easily double. Many times, the curtain railing is already done and we may just have to order new curtains or if the current one is still new, then have it washed! New curtains for the whole house may be another RM3,000 or more depending on where you buy. The railings are usually a few hundred ringgit, still a very good savings!

SAVINGs (TIME). It may take 1 month for renovations but that’s not the main issue. The main issue is the time(s) that you want to drop by and see the progress. By the way, this is assuming you found a good contractor to help you. As for the renovation, you are worried that it may not be what you wanted. The contractor may call you and ask you to drop by to discuss some matters. All these would take a lot of your productive time that you could have used elsewhere. Playing squash with your kids for example. By the way, the seller would usually NOT allow you to start the renovations before everything is completed. On the other hand, it may NOT be wise to start renovating unless all the documentations are fully completed and you have got the keys officially.

There are certainly disadvantages though. For example, paying ‘higher’ for a renovated unit. I say higher because when compared to non-renovated empty units, the prices are higher. Well, up to 10 percent higher anyway. However, the SAVINGs (Time + Money) above would be more than the slightly higher price paid. Always remember that even if we have spent RM100,000 in renovation, it does not mean that the selling price can be up by RM100,000. The buyer may not like our taste for example. The buyer may want to renovate the unit to his taste for example. Imagine if we are the buyer and there are 3 units. One empty unit for RM500,000, one partially renovated for RM520,000 and a renovated unit for RM580,000 what are the chances that the buyer would take the renovated unit? I think it is highly unlikely unless the owner is willing to give a discount and well, suffer some ‘losses’ from his renovation costs.

What if you really and totally dislike the renovations? Move on to the next unit lah. Surely it’s better to buy an empty unit then. If you want to renovate the unit to your highest satisfaction, its best to get an empty unit and start everything from scratch. Depending on how you do it, it’s really possible to reduce the overall expenses to a minimum. Time and effort must still be spent though unless we have a contractor who knows our wants and needs very well.  Happy buying a renovated unit or if you are getting an empty unit, then happy renovating

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written on 12 Feb 2018

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Well meant advice or it’s just tough to get a perfect property?

I remember the first time I told my parents that I was going to buy a property. Their first question was, can you afford one? I was only a junior executive then, can’t blame them. Second question was the location that I was buying. They stay in a very good area in Ipoh. Third question and fourth question were because I told them I was buying only an apartment of 700sf. Is there a place to cook? Would there be a place for me to dry my clothes? Fortunately, I chose that apartment because I can do up a kitchen and there’s a balcony where the sun shines every day. So, I passed all these questions and I bought that apartment that I wanted, together with my wife and stayed there for 4 years. What about you? I think perhaps instead of being asked, many would offer you advice instead? I come across this very good article in propsocial.my that I must share. You can read their full article here:
Too many cooks spoil the broth

Some selected tips include:

– Do not face North: Hard to dry clothes

– Do not face South: Too hot

– Do not face East: Morning sun

– Do not face West: Evening sun

Nearby these areas?

– Cemetery (night time visitors)

– Hospital (ambulance siren 24/7)

– Facing T-Junction (resting point for spirits trying to decide which way to go)

– Facing dead end (in case of emergency you have no alternative way out)

– Facing mountains (the mountains are supposed to be behind you to back you up, not in front of you where it represents a block in your life)

– House number which has number 4 or anything adding up to 4 (die early)

As mentioned, the tips that they have is more than these two items that I feel are quite funny. Take a look at their full article here:
Too many cooks spoil the broth
  Oh yeah, I think if we follow every advice listed, the conclusion is just one. Continue staying with our parents or renting. Buying our own home sweet home might just be a wrong choice no matter how we come to the conclusion. Happy deciding whether you have lots of advice or no advice.

written on 27 March 2015

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Buying Penang properties near cemetery?

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Property tips from a man with 170 properties.

I read some tips from a man, Nathan Birch from Australia who owns 170 properties in Sydney Morning Herald and I think it’s great to share his few tips here. I think they are good because we may be a little lost, a little blind, a little naive when we first started. Property investment is definitely not a miracle. Do it right, get good returns. Get it wrong, it will be many years later for recovery before we could try again. Oh yeah, he has net rental income of A$500,000, after expenses. His tips:

Make sure you understand why you are buying your property.

Set strong goals from the start and only accumulate properties in line with your goals.

Don’t buy with emotion. It’s about numbers. Treat property investing like a business with no emotion.

The three main keys when accumulating property: buy below market value; it should have an upside to growth and a good cash flow.

We may be buying our first property when we are young. That’s when we have a little more flexibility in what we intend to buy. We could take a little more risk, we could stretch the mortgage longer and we should aim for capital appreciation first instead of stable rental income with positive rental yield. Read here:
Rental yields versus property price appreciation

What’s the goal?

Buy one every year? That’s considered aggressive but definitely doable. Buy residential? If residential, buy high-rise? Buy landed? Why buy such property types? Landed may be better for capital appreciation due to scarcity but high-rise is definitely better for positive rental yields. Buy both? Sure, if you could.

Buy objectively.

Buy a property simply because it could give good returns. Do not buy because you like the layout or the garden and pay a higher price for it.  That future buyer may not share the same sentiment. Buying as low as possible is easier under current situation. Do take advantage of this and quickly view more and offer.

Whether Nathan started at a great time or was lucky is really secondary. He actually started as soon as he could sign a contract, at 18. Have we started today? Or still waiting for a crisis to strike before we start? The full article is here:
Man with 170 properties
 Honestly, the best time would have been 20 years ago or the best time could be when we were younger. Read here:
Start as young as you can
 Happy thinking.

written on 20Apr 2016

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Buying properties? Think big, start small, my view

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AEON Klebang Ipoh, another mall to visit

It’s my first visit to Ipoh’s latest AEON mall in Klebang. As someone who has been based in KL and visits malls every other weekend, AEON Klebang is definitely not at the same level as Mid-Valley or 1Utama. However, I think it’s more than enough. I have never managed to finish strolling through Mid-Valley or 1Utama in my usual 3 hour visits thus far. I think this is a good addition to Ipoh. Come to think of it, even in that city up north, they have just two prominent ones with a few upcoming ones anyway. That two most prominent would only be either Gurney Mall or Queensway Mall. The rest? Well, to be frank they are still ‘trying.’

What are some of the shops available? I got the following from a site I visit on and off for Ipoh stuffs. That site is http://pemerintahberani.blogspot.my. Please do refer to the full list below:

Food and Beverage

The Cruises Steak House, Kenny Rogers, Starbucks, Boat Noodle Nando’s, Vivo Pizza and Panini, Purple Cane, WindMill, Teh Tarik Place, Shihlin Taiwanese Snacks, Black Canyon, Johnny’s Restaurant, Ice Bucket, Kopitiam Avenue, Mexico Taste, KFC, Boost Juice, The Chicken Rice Shop, Auntie Anne, Famous Amos, Sushi King, Baskin Robbins, Orchid Bistro, Secret Recipe, Yoshinoya and Hanamaru

Fashion

Fossil, H&M, Guess Jeans, Esprit, MNG, Uniqlo, G2000, Valentino Rudy, Sembonia, Carlo Rino, Timberland, Brands Outlet, COTTON ON, Bata, Giordano, Polo Haus, Hush Puppies, Smart Master, fyi, Pierre Cardin, Hang Ten, Young Hearts, TRIO by Jerasia

Sports

Al-Ikhsan, Adidas, Royal Sporting House, Skechers, Arena, FILA

Watch and Jewellery

Tissot, Poh Kong, City Chain, Watch Engine, TOMEI

Beauty and Care

SEPHORA, SASA, Eu Yan Sang, Caring Pharmacy, The Body Shop, Shins, Kiehl’s, Always 21, Guardians

Others

DAISO, Popular Bookstore, Universal Traveller, KAISON, Focus Point, Soxworld, Fitness Concept, My News, OSIM, Gintell, Mr. DIY, My Home One, Samsung, Lenovo, Akemi, Seen, CELCOM, Maxis, Yes, Hinode, Gadget Hub, IT World, TGV Cinema

I think whatever of the usual and even the not so usual that you are looking for should already be available. Of course, Klebang is not considered a central location but all these are just time based. If there are no other bigger malls around and AEON Klebang continues to have lots of promotions, events and visitors, it’s location would soon be accepted by majority. Come on, if you are a new couple, you would want to visit the biggest mall and be seen to be following the trend, right? Haha. Actually, I was disappointed with Ipoh Parade for not having proper baby rooms even within its anchor tenant; Parkson. At least AEON Mall Klebang did not disappoint me in this respect. Read what I want all malls to provide here:
My MUST HAVE list for malls, both old and new

Happy visiting.

written on 24 Oct 2015

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Food, entertainment and accessibility, that’s Ipoh

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Aeropolis KLIA, major thrusts and plans, RM7 billion investments

I wrote about this so long ago that I have forgotten all about it. Read here:
Airport within a mall, Mitsuit Outlet and Aeropolis
  I have been to the Mitsui Outlet twice since then. Want to know my thoughts?
Read Here.

I think the concept is good if it could happen as envisioned; an Aeropolis or also known as Airport City. According to some media reports, Airport operator Malaysia Airports Holdings Bhd (MAHB) has mapped out big plans to develop 1,000 acres of landbank near its airports. Within 5 years, it may generate RM7billion in investments.

It will be developed through three major clusters – air cargo and logistics (200 acres); business and aviation parks (400 acres); as well as meetings, incentives, conferences and events (MICE) and leisure (400 acres). Some of the identified key projects include a theme park, hotel, KLIA Aerotech Park, KLIA Cargo and Logistics Park and Regional Transshipment Centre.” Where funding is concerned, it is possible for joint-ventures like the Mitsui Outlet Park.
(Seriously, it’s better for joint ventures so that it does not drain MAHB’s resources which should be used to focus on its main business, as an airport operator)

Oh yeah, a more detailed plan would be announced on 23 May. Perhaps MAHB is trying to tie up some loose ends, especially with regards to their potential JV partners. I also do not hope that they do it by themselves because their expertise for real estate development is likely to be limited. Happy following.

written on 26 Apr 2016

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Penang: PTMP, new airport, catalyst till 2050

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300 staffs to go for efficiency and productivity

Efficiency is a compulsory push for all organisations. In fact, when the organisation is overstaffed and business is not expanding as fast, it will drag down the profit numbers. Previously, there were lots of uncertainties in the oil and gas industry players. It has quietened down. Finance is the other sector which may be shedding a lot of their people as the push is now towards online. Fintech companies would need more people but no longer need traditional roles. It meant that staffs who is not up-to-date with the current market requirements may soon find themselves out of job. Of course, even for banks, those in sales jobs are pretty safe for now even as every industry is facing shortages of good sales people. Question is, are you ready to engage and sell?

One piece of news brought many to the harsh realities of today. Affin will be reducing its workforce by up to 6 percent. Read the news here:
NST: Affin to trim up to 300 staffs to be efficient and productive.
 The article quoted its group chief executive officer Kamarul Ariffin Mohd Jamil saying, “At the overall level, the exercise will affect about 300 staff, and hopefully with the inevitable cut, it will create productivity and efficiency.” In February 2017, in an article in
TheStar: Retrenchmants Ahead says MEF.
 Its executive director Datuk Shamsuddin Bardan said, “In 2015, said Shamsuddin, about 18,000 of those who lost their jobs were from the banking sector due to the introduction of what he termed as “disruptive technology”, where banks were increasingly adopting online transactions, for example.” He also further shared that retrenchments within 2017 is going to be slightly higher than 2016.
Full article here.

It’s not clever to overspend. With jobs, we could pay for our home, cars and holidays. Without a job for a few months, we would be forced to dip into our savings. Do we have enough savings?
Did we just spent an unnecessary RM500 for a new pair of shoe?
 Keep our jobs by really knowing what’s happening to the world market today. Malaysia is not considered an advanced market which meant that things should usually happen externally first before us. Retrenchments in the banking sector has happened for a very long time in many advanced nations. Surely it will continue to happen and Malaysian banks would not be spared. Happy working hard reading more.

written on 5 Oct 2017

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Whatever works for you, do it well, that’s all

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What if we cannot afford to retire?

What if we cannot afford to retire? Work past 60 year old then?

A good friend of mine would be 60 years old next year. She says she will definitely retire and enjoy travelling after that. She’s already financially independent. Not many people could be like my good friend who could choose whether or not to renew her employment contract which is on a yearly basis. The company would like to keep her, she’s the one who decides if they get to keep her.

Today, I read this news and it saddened me a little. “Many Malaysians need to work past 60 after Covid withdrawals”
Article in themalaysianreserve.com (click here to read in full)

What the article is basically saying is that because of the dip into the EPF during the Covid-19, more Malaysians would be forced to work past retirement age. In this case, it’s 60. An earlier study also showed that 2 out of 3 EPF members aged 54 have retirement savings lower than RM50,000.  Imagine needing to have money to last at least the next 20-25 years after retiring at 56 and suddenly we realise how dire the situation is. Of course, these Malaysians would also have other assets and perhaps savings in the bank and not just the EPF money alone. However, let’s be savvy to the fact that 25 years of expenditure is still likely to be a huge chunk and one needs the money prepared before then.

It’s not just savings, that’s for sure

My advice is a simple one so that we can afford to retire. Not sure if it’s fully applicable since I have yet to retire as well.

Savings will form the core but we need to ensure we keep earning higher too. Are we also climbing the career ladder and earning higher or are we only relying on doing the same thing for higher pay every year? Then, we realise suddenly that someone could do what we do in a lower cost country and we will immediately lose our job.

After earning enough, we need to save. After saving some money, we must be financially savvy enough to start investing these savings so that it builds up our wealth further versus just a paltry less than 2% in the Fixed Deposits today. If we want to double our money with 2%, it takes 36 years ladies and gentlemen. Please find other options and keep just enough emergency funds in the Fixed Deposits.

Remember to also secure what we have by insuring ourselves sufficiently. No point in saving like crazy and then when we need to he hospitalised, the bill came to a few years’ worth of savings. Get a medical card and cover this potential big loss. Get insured so that our loved ones are protected. If unforeseen circumstances happen, they may lose everything because the home is still under mortgage and the wife’s salary alone may not be enough.

What if we need to work past 60? (but maybe we can afford to retire)

Have a healthy body. Enjoy what we do. I had lunch with a longtime friend just a few days ago. He is now 70 and if he did not remind me, I thought he’s in his 50s.  That’s how healthy he is and he says it’s all down to eating right and exercise daily. I think his advice is really the key IF we really do need to work past 60.

Please do not think that only Malaysians work past 6 yeah. IN many advanced countries, the retirement age is already 60 or higher… In many cases it’s not necessarily because they cannot afford to retire. Happy understanding.

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

This article was first published in the Property Hunter Magazine, Nov 2014 Issue. For more articles, please refer to their online portal here.
Property Hunter
.

Budget 2015 tries to address two chief concerns in the property market; affordability and availability. In KL, the average price for property has reached RM700,000 and has shown no signs of weakening despite transactions on a downtrend since 2012. Within the Penang island, it is almost impossible to get a family-sized condo within the ranges of RM450,000 – RM550,000. My term for family-sized is a minimum of 1,000sf and higher. Let’s get real, landed properties are no longer an option for any hot areas. Well, since we are talking about affordability and availability, if we look at the Malaysian property market today, is it heading towards a bubble in the near future? After all, the average prices of properties in major property markets like KL, Penang, Iskandar and even Kota Kinabalu, has been rising even with the downtrend in transactions since 2012. My personal opinion after referring to a few major property portals in Malaysia? No.

Let’s look at the first concern; affordability. Most of the time, this is the first sign of bubble. In Malaysia, no bubble is waiting to burst because those who could not afford or could barely afford just could not get a loan to buy any unit. Fortunately, the banks are very strict as they are also afraid of having bad loans. Unfortunately for buyers, this has made it much harder for them to get their dream home. Malaysia is still a young country and with continuous urbanization, majority of us are working and living in bigger cities. This meant demand is strong but if affordability is not addressed, we are looking at one whole generation of people without homes. For this, Budget 2015 gave the married youths between the ages of 25-40 something to cheer about. If they are buying for the very first time, they can get a 10% loan guarantee and this facility is available to the first 20,000 units only. The property price should not exceed RM500,000. This is a smart partnership between the government, Bank Simpanan Nasional, Employees Provident Fund and Cagamas, If you are still single, it may be time to get married. Trust me, its fun. I have been married for over 11 years.

Besides this, a total of 143,000 low cost housing units would be built. There were not much details made available for this yet but my guess is that it includes all the affordable schemes that the government has announced including PR1MA. This is good news because one latest study has shown that there are still 2 million Malaysian households living on less than RM3,000 per month. A roof over their heads is of utmost importance. Failing to address this sufficiently is likely to cause social problems which will escalate to many other negative issues. Let us not go into that.

The only reminder would be on the implementation and the rules governing the 20,000 units. I feel that everything must be made transparent as much as possible. Target the needy and not just anybody. Once they are accepted as a buyer, they should not be allowed to profit from this. Not just RPGT but beyond that. Perhaps a period of 10 years like what the Penang state government has announced? Seriously, those who are really buying it for their family and trying their best to avoid loan rejection would not be moving home so soon. Strictly only for those buying first property, whether its residential or commercial. 20,000 units are really not that many to begin with.

Second concern is availability. Availability of properties in areas we want. For this concern, Budget 2015 is addressing this through the expenditure on infrastructure. New LRT extensions between Shah Alam and Klang as well as the second MRT Line from Selayang to Putrajaya. This meant that areas that was once hard to reach or considered outskirts would now be just a train ride away. These new infrastructure would help to expand the choices available instead of everyone trying to buy where everyone wanted to buy cause prices to move up too fast. If you think Selayang is not as great as Cheras, think again. Why not? Cheaper today for better convenience tomorrow. I am staying on the fringes of Sungai Buloh and have faced much less jams compared to many other hotter areas. One major reason? MRT Line 1 which is less than few minutes of drive away and affordability.

What about GST? Would it affect property price? GST is well on track and the proof is the reduction of both the individual income tax and corporate income tax. I do not believe GST would affect the property market too much beyond a one time tiny adjustment, if any. Looking at the few latest property fairs in KL and the crowd, I think the developers would be glad to absorb that increase if they can sell faster.

What about subsidy? With lesser subsidy, some say that the affordability may be lower. I am not sure if anyone relies on subsidy to buy homes but I do not think it works. Subsidy rationalization would continue to happen and the next step would be to ensure those who really needs it gets it. I am firm believer of targeted subsidy and not for all. I know that since I am driving a 1.6 litre car, the revised petrol subsidy may just miss me. It is ok. There are only two ways to go about it. Get used to it if we can afford it or make ourselves poorer so that we will get the subsidy. You decide.

Instead of supporting the property market, Budget 2015 is mostly focused on the first-time buyers. For now, this is okay even though transactions are still on a downtrend. A prolonged downtrend plus a negative sentiment is however not healthy for the country. Imagine if no developers are interested to build because no buyers are interested to buy and this continues for many years. Stop speculation, without any doubt but the right market growth needs to be proactively supported. Just look at China. After much cooling, it has started ‘warming’ recently. More importantly, Budget 2015 must be followed through with effective and efficient implementation.

written on Oct 14 2014

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Budget 2015 – Property Related, Overall Summary

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Affordability Availability: Penang Properties (Island).

Recently, just did some latest review of some of the latest available properties in Penang which are below RM300,000 and considered affordable. The list is non exhaustive but now sharing some of them here. Many people think affordable must always be primary properties. While primary property’s main advantage is due to newer design, cleaner environment and the good feeling of buying a new property, do note that if you really need a roof over your head, why not consider secondary property as well? Nevertheless, let’s be realistic, there are some areas in Penang island today where these so called affordable properties are not available.

There, these are just some of the available ones and there are many more of such units. Typically a 700sf apartment comes with a minimum of 2 rooms or 3 rooms and it’s suitable for a family of up to 5. Anything more than 5, perhaps a bigger one, say 1000sf would be better. Nevertheless, start somewhere. Never buy too high, you may face difficulty during tough economic times. Control you wants, manage your needs. You will be just fine, no matter what may happen. One reader of kopiandproperty.com predicted that economic crisis will come very soon and he is keeping cash. I am very sure he has his rationale for saying so. My opinion differs even if I am not predicting that prices will rise like few years before this.

written on 28 June 2014.

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Why property prices would fall, my view

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Affordability, Availability vs Salary

What kind of property can a couple with a household net income of RM8,000 buy today in Penang? My assumption is simple, both are working adults with 5 years experience. Wife is a manager and husband is a senior engineer. 🙂   Who says man must earn more than his wife?

We also assume both do not simply buy whatever they like and does not buy things to show off to their friends and colleagues that they are so amazingly successful. Together, both of them collectively save just RM1,000 per month for the last 5 years. Thus, their total savings come up to RM60,000.

Considering this is their first purchase, they can choose to pay 10% downpayment for a RM600,000 condo. Wait a minute, they cannot afford a RM600,000 condo. Is it not too highly priced for them?

The below is a home loan calculator which is publicly available in
http://www.iproperty.com.my

Based on a typical BLR – 2.2%, 35 year repayment period, the monthly repayment for a RM600,000 is just RM2,522. With some banks, it may be lower. This is 31% of their monthly net income which will grow if they work hard while their mortgage may stay almost the same unless the interest rate suddenly rises tremendously.

Now do we know why for a few years, condo prices continued to rise from RM250,000 up to current RM600,000? Having said that I believe there’s a limit to how fast prices can go up. That’s why if you look at new launches recently in Penang, a few developers have gone back to more modest condos in Relau, Sg. Ara and pricing their condos at between RM450 – RM500 psf. Thus, the condo prices now start below RM500,000 and goes up from there.

If you have yet to afford a condo, fret not, there are a lot of choices for 700sf apartments in Penang. The mortgage definitely looks attractive. Again, home loan calculator from
http://www.iproperty.com.my

The important thing about property is, you, should buy one based on affordability, availability and your current salary. It is not about wait and see.

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Bangsar for less than RM800psf? Yes, still available.

There are a few hotspots which many of my colleagues love. They include Desa Parkcity, Bangsar, KLCC and Mont Kiara. If I am buying today, for my family of 4, my top choice would be Desa Parkcity. However, if I prefer convenience so that it’s nearer to my office, I would take Bangsar. So, are there choices which are at least, acceptable and affordable in Bangsar? Well, according to statistics analysis by theedgeproperty, the lowest and most affordable development in bangs based on price per sf is Tivoli Villas. Typical transacted price is RM728,000. Hey, looks attractive until they tell you that the typical size for this typical price is only around 700sf.

However, for those willing to consider slightly larger units for a family of four, there are those which are 1,100 sf which are priced below RM800 psf! Okay, overall prices will exceed RM800,000 but price psf is still attractive for the area. After a check, some examples from iproperty.com.my here:

I think two more important factors to consider would be the jams in Bangsar for much of the usual office hours. If one is ready to face these jams by leaving home earlier and leaving office later than the usual peak hours, I think this should be okay. Second factor for this Tivoli Villas would be the age of the condo. It has reached ten years old (data from Propwall). Thus, during the viewing, attention must be paid to watermarks as well as the usability of all electrical points. If there are issues to any one of these two areas, please note that some costs must be incurred to take care of them.

Environment wise, I love Bangsar. Somehow these matured neighbourhood feels relaxed and there are definitely lots of trees too. Malls, shops, restaurants are easily available too. Oh yeah, besides Tivoli Villas, other potential considerations can include the following too. Bayu Angkasa, Bangsar Puteri and Sri Kasturina. In terms of names, I think it is not as modern or catchy as newer ones but then again, no one buys a home based on the project name, do they? Happy researching further and making Bangsar your home.

written on 29 May 2015

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Important question on distance vs affordability and expenses

A reader sent in a simple question of distance versus affordability and expenses. I think this would be a question many would have since there are now more huge integrated developments further away from KL instead of just the current Greater KL plan. Plus the fact that those who would like to buy closer to the city centre would have to either be earning extraordinary income or forget about it. As for myself, I am staying within the 25km radius from KL city centre today. Question as below:

Mr. CC:  Should I buy somewhere further from KL area say Nilai or
Semenyih
 if I’m working close to the city? There are rising development in those area but unsure of it’s future development but since the houses selling there are quite affordable but because the travel journey is unfavourable plus with the tolls. Should I travel back and forth just to buy an affordable home?

My opinion:  Buying further away needs adjustments in our lifestyle. Starting earlier to beat the morning jams as well as leaving right on time everyday or to have dinner outside before going home. We need to do this everyday. The good thing is, once it becomes a habit, we could hardly feel it. I have many colleagues driving from Klang everyday and when I asked them if it’s far, they replied that in the beginning, it was extremely far. These days, it’s just another normal day.

In terms of
potential property price appreciation
 for these further away areas, do note that the push factor would be the property prices closer to the city. Once some of these hotspots become unbearably expensive, people start looking for alternatives. This is where secondary areas start to become a more realistic choice. The first consideration would definitely be the 15km radius from the city centre. This is where anyone can just arrive within 15 minutes during non-peak hours. Choices are becoming more limited these days
(unless we would like to consider secondary choices too)
 and thus, looking at 25km radius may be more realistic. Semenyih would be another 10 – 15 minutes away. (Image)

Just for fun, calculation for the potential toll as follows:

Assuming toll to be paid is RM20 per working day. That’s RM20 x 22 working days = RM440. On a yearly basis, it’s RM440 x 12 = RM5,280. Assuming we do not change our lifestyle or home for the next 30 years. That’s RM5,280 x 30 years = RM158k. Comparing the price of a condo nearby KLCC versus similar properties further away, the price difference is definitely more than RM158k. Oh yeah, RM158k is over 30 years…..  Yes, it’s definitely choices. No such thing
as perfect choice
, only the best choice based on what we want, what we could and what we can accept. Happy selecting!

written on 17 Oct 2016

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Talk: Property Investment is about Affordability, Flexibility and Location.

Dear kopiandproperty.com readers, I will be speaking this Sunday. Do drop by and listen to my sharing yeah. Do reserve a seat by Whatsapp to 011-1089 7687.

For this session, the details as follows:

Date: 9th September (12pm – 4pm).  My session is at 12 noon.

Title: Property Investment is all about Affordability, Flexibility and Location.

Venue: (25-G, AG U5/AG, Seksyen U5, Jalan Uranus, Bandar Pinggiran Subang, 40150 Shah Alam, Selangor).

If needed, You can download the file here too:
Investment Talk
   Besides my sharing, you will also get to listen to another talk from Ms. Asley Liew, Creative Director of A Plus Interior.

Refreshments will be served.  Cheers.

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Affordability of homes getting worse or better, now and future.

Is it easy to buy a place that has what we want at the price we could afford here in Malaysia? Perhaps within the KL property market? This was a recent ‘debate.’ Rehda (Real Estate Housing Developers Association) patron and Rehda Institute Tan Sri Eddy Chen said that there is now already an overbuilding of affordable housing. The reason is because many developers are now building in that segment because they want to counter high loan rejection rates. This oversupply is made worse by a lack of accurate and timely property market data.This is the
article in TheEdge Markets.
 Well, our Bank Negara Malaysia (BNM) said that Rehda’s definition of affordable houses with the price range of RM300,000 to RM500,000 is inaccurate. In a posting in factwatch.my, it said, “Houses in the price range of RM300,000 to RM500,000 are beyond what is affordable to the households earning the median income in Malaysia.”
Factwatch.my is a website
 by BNM with the aim of #letthefactsspeakforthemselves. There’s also another website by BNM too for the
property market; housingwatch.my

Source:
https://www.macrobusiness.com.au/2017/01/2017-demographia-housing-affordability-survey/

BNM explained that it is using international standards; Housing Cost Burden approach to estimate the affordable home price. Based on a median household income of RM5,228 in 2016 as per Department of Statistics’ “Household Income and Expensditure Survey”, the maximum price of an affordable home is estimated to be only RM282,000. In brief, calculation comes from RM5,228 x 12 (months) x 4.5 (years) = RM282,312. Anything higher than this number would be categorised as ‘severely unaffordable.’ Take a look at some of the other countries’ median affordable home price vs household income in the image. BNM also said that there remains a mismatch between what was built versus what was demanded by the households. Using numbers, BNM explained, “”According to the fourth-quarter 2017 data by National Property Information Centre (Napic), only 39% of new housing launches were priced up to RM300,000 over the years 2016-2017. This is insufficient to cater to the demand by 50% of households in Malaysia earning up to the median income.”

BNM also shared, “Napic data also suggests that the issue of unsold affordable homes priced below RM300,000 is the least severe compared to other price ranges. As at fourth quarter of 2017, unsold residential units priced below RM300,000 constitute the lowest share (20%) of total unsold residential properties under construction in Malaysia (RM300k-500k: 35%; above RM500k: 45%).” More importantly, BNM added, “Beyond prices of new launches, equally important are other aspects of what constitutes an affordable home such as connectivity from centres of employment, sufficient living space.” it added.
Here’s that article in EdgeMarkets again.

Personally, there are three important things that I would say, as a
working professional for the past 20 years
.

First, it is not just the responsibility of Rehda or even the BNM alone but also us, the working people too. Remember, whether it’s affordable or not is not just about the price but also how much one could save / earn / invest. Higher savings simply meant making some
better choices every time we need to spend.

Earning more simply meant that we keep improving with what we do and climb ever higher (corporate ladder and promotions) because only that would give us
a higher monthly income in order to save more.

Investing is meanwhile just having
sufficient financial knowledge
 so that our money works harder for us and suddenly we start noticing that we are ahead of our peers, financially. They talk about upcoming movies, we discuss about potential returns. The bad thing is that most people would prefer not to think, plan and do and well, this issue of affordability would never go away. This is why whether in Malaysia or in some advanced markets, the question of
property affordability has never subsided.

While the policy makers and the private sector does their best, we better also be doing our best. Happy learning.

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written on 6 May 2018

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About the unsold units? We still need more units, actually

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Affordability of homes? It’s an issue EVERYWHERE.

A friend said that homes in Malaysia are getting way too expensive and soon no one could even afford one. I told him that every year we continue to have huge numbers of transactions running in hundreds of thousands. He questioned, ‘Then why unsold properties are so high?’
(Earlier article here)
 I replied, ‘let’s just say you are right but the issue is not happening just in Malaysia.’ He then shared how his friends were able to buy a huge landed property in an advanced country near us. 😛 Perhaps we take a look at just a few countries where affordability seems to be a big issue?

Australia.
Article in news.com.au:
 This is the result of a survey by a lender. “First home buyers are still worried about housing being too expensive, with 77 per cent saying they’re ‘worried that housing is increasingly out of reach.” 84 percent of Australians believe that housing affordability is still worsening. Anyway, this was what MEAndrew Bartolo said, “The Australian property market has seen seven price declines-recover cycles in Sydney since 1984 and all have seen prices recover, most within four years.”

Britain. Report by
UBS analysts. Article in TheGuardian.com

House prices in London are the most over-valued of any major city in the world and are in “bubble-risk territory”, a
report by economists at UBS
 has found. It found
London
 was less affordable for locals who wanted to buy than any city except Hong Kong, and that it was at most risk of prices falling.
Meanwhile, wage growth has been sluggish, and the price increases have made London one of the most expensive cities in the world based on price-to-income and price-to-rent ratios, the UBS report said.

Hong Kong? Actually, we do not need to compare Malaysia to Hong Kong. They are just too far ahead for us to catch up.
Earlier article here.
However, their government, just like many governments world wide are trying to help the people own a place they could call their own. Here’s that recent article:
Cheapest Home in the most expensive city
. Let’s also note that our new government is also doing a lot to provide Malaysians with a home. However, it should also start from the individual too. Learn more, earn higher and well affordability gets better with the right understanding of
WHY buy property instead of just WHERE.
 Happy investing.

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written on 26 Dec 2018

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Penang properties – Affordability equals to Availability

The State local government traffic management and flood mitigation committee chairman, Chow Kon Yeow said that the current higher density approval of 87 units per acre may not be a permanent feature in Penang. He was speaking in the Penang Property Summit 2015 representing the Penang Chief Minister Lim Guan Eng. This change was effected in 2012. The previous maximum allowable density was 30 per acre. In fact the major reason why this is done is to ensure the availability of affordable units for the people. The higher number allows for a lower cost per unit and thus this ‘additional’ availability ensures affordability. According to him, there are between 40,000 – 50,000 middle-income applicants for affordable housing in Penang and thus this need must be served. Once these needs are satisfied, perhaps this 87 units per acre policy may be tightened in future.

Meanwhile the state executive councillor Jagdeep Sing Deo said that the state government is planning to build about 50,000 units of affordable houses in Penang of which the Penang Development Corporation would be building 20,000 units. A RM500 million fund has been allocated for this purpose. No timeline was mentioned but since the plan is there, perhaps it should be incoming within these few years. He also mentioned about the Tri-Pinnacle condo units which are not just attractively priced but even the location is good. The size must also be appropriate. These days, every applicant for low cost and low medium cost units are vetted thoroughly. No one should think about going through any ‘undertable’ means anymore. I think he has a valid point, if the size is way too small, I do not think it would be applicable to the middle-income families.

PDC’s Dato Rosli said that PDC will be building 4,000 new units of affordable homes and it will be completed within 2 years. This is a good announcement. It meant that at least 4,000 units of these affordable homes would be ready latest by 2017. He said high-density is needed because the demand is currently still huge. If good units are built, it will attract a good community and these would mean that the whole development would be sustainable. I think what he wanted to say is that in the future, everyone would not look down on these affordable units as ‘dirty’, ‘messy’ or even ‘rundown’. This is indeed what we need because when we go to the little island down south, all their HDB flats are well maintained. Yes, it does not come with nice swimming pools or even a car park but it’s clean. That’s the most important factor; the environment.

REHDA’s Dato Jerry said that the demand remain strong but the support from bank may be lacking. In fact the loan approvals are very low. Personally I have heard a joke from someone that when developers sell their units, they have to sell two times just in case the first buyer failed his loan application. He also reiterated the fact that Penang continues to attract even more buyers because the state government has been running the state well.

I think Penang state should be seeing much more of these affordable units soon. The reason is because it is tough to continue repeating the same thing but without any new units to show. However, my personal concern would be that the people are still not so keen on the mainland units. Batu Kawan versus Georgetown or Ayer Itam? Somehow, it’s just not attractive enough. My personal hope is that more focus should be put to change this perception or even to ‘force’ some of these people to buy there. Truth is, if we do not know, we do not normally love. However, when advice fails, perhaps a harder approach may be needed. Come on, half an hour away is really still okay. It’s just that the Penangites staying in island has yet to get used to it yet!

Penang Property Summit 2015 is still on. Do not miss visiting it this weekend! Read here:
Penang Property Summit 2015. Not to be missed.

reported on 9 Jan 2015

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‘Affordability Upgraded’: Penang affordable homes for Penangites

Sorry, only open for Penangites. To those who qualify and would like an ‘upgrade’, read on. I said ‘affordability upgraded’ because many years ago, when we hear about affordable units, we think of uncut grasses within the compound, lifts which do not work every few weeks, corridors which are dark, small units without a good design, cars parked haphazardly and more. Well, from the plans of the newest and latest affordable homes from the past few years, we can see all these are changing. In fact affordable’ no longer equate to ‘low cost’. Affordable is now upgraded. In fact the aim is now more on the lower medium income families. Take a look at some of the designs and I think you would agree that it’s really not like the low cost flats that you have been to before this. Of course, ONLY if you qualify.

For Penangites, one major website you can refer to would be
http://www.penangpropertytalk.com
 which I think is one of the designated sites for all the affordable projects in Penang. In fact it has allocated one whole page for these affordable projects. All the projects and the information needed is accessible there. I have cut and paste a few of them below.

For a full list and ‘Apply Now’, you may go to
http://www.penangpropertytalk.com/affordable-housing/project-information-location/

written on 21 Sept 2014

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Hijau E-Komuniti, Penang’s answer to affordable homes

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Will your affordable apartment be RM1 million one day?

Was 2016 a bad year for property or was it a record breaking year? Well, for HDB flats in Singapore, it was the latter. 19 of them were sold for more than SGD1 million. (RM3.1 million) Yes, 19 owners who has just got themselves added into the millionaires list in Singapore.
 This is HDB flat
. No private car parks, no swimming pools but you have a clean environment, working lifts and it’s almost always nearby to anything and everything. I think it should be the most successful government-run public housing programme in the world; HDB. Of course, there are requirements and not everyone can just get it immediately but somehow based on time factor, you will get one, if you qualify and applied for one. If you are thinking what I am thinking now, here are my thoughts. What if the high-rise unit that you have just paid for, say 850 sq ft and RM350,000 can one day become RM1 million. I know, some wanted to say but ringgit is disappearing…. (Please continue sleeping).  Even if I have RM1 million ringgit after another 10 years, this RM1 million is still going to be worth a LOT of money my friend. So, time to buy? I would say buy is a must but dreaming of RM 1million may have to wait a little bit. I am very sure it will happen but it must not happen too fast, else we are looking at a property bubble bursting. Read here:
Spotting signs of a property bubble, 3 points (updated)

We have
RUMAWIP
,
PR1MA
 and
RumahSelangorku
 within the Greater Klang Valley. It’s targeted at the masses with a noble intention of ensuring everyone has a roof over their head. Assuming you paid RM300k for your sub 900sq ft affordable apartment, when do you think it will reach RM1 million? It depends on how far and fast urbanisation into Greater KL continue to happen. Every 1 million new population, based on 4 to 1 home means a need for another 250,000 new homes. The property prices tend to move up faster when the supply is slower than the demand. This is one factor.

It’s pretty true that Greater KL is huge. So huge that there are areas that people shun and labels them ‘too far.’ Yeap, even though it is STILL
within Greater KL.
 Haha. So, as long as more people move in and everyone refuses to move further away from the city centre, then those affordable apartments / condos nearer to city centre would have an advantage to move up faster. This is the same as those HDB flats. They have to be within good areas that everyone wants. So, location remains very important.

Lastly, I personally do not believe most of Singapore’s HDB flats would ever reach SGD1 million. Median household income for Singapore stands at SGD8,666 and this is the latest available number. Source: Department of Statistics, Singapore.
Link here.
 Not many would be willing to spend about half of their household income just for a HDB flat. I think some may prefer to get a car for convenience instead. Some parts should go into holidays. And more… Which brings us to the question of ‘how many Malaysian households would be willing to spend RM1 million to get a high-rise near to city centre?’ There are already many such instances though they are
 mostly luxury condos and not apartments
 or even flats (regardless of how well maintained they are). If I am that Malaysian, I would prefer to buy much further away, with more space for my family.

So, should we stop buying then? Let’s stop joking ok. Buying is a must and RM1 million target is not a realistic one but as a form of hedging for our poorer future, yes. Property prices will continue to rise. If we can afford, we MUST buy one. Look at all stats from advanced nations or even look at Singapore as a benchmark. Their property market is far more advanced, that’s why we can see all these happenings in advance. It’s always buying cheaper but further and later, as further becomes nearer, then it’s buying smaller for affordability. The cycle repeats everywhere.
Be savvy and take the right actions
yeah. Your future depends on you and not anyone else.

written on 1st Jan 2016

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Affordable homes a need, stop “playing” to all

Reported in The Star today, the Penang state Housing Committee chairman Jagdeep Singh Deo said that due to the non-issuance of Advertising Permit and Developer License (APDL), more than 3,000 middle-class families in Penang will not be able to buy low-cost, low-medium cost and affordable housing projects. This affected 10 of such projects. He said these are the families which could not afford any property above RM400,000. Total units affected is 3,188. He said he will remind the Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan to respond soonest possible. He further elaborated that any government who turns a blind eye to these people in need is an irresponsible government.

Actually these ‘arguments’ have been happening for some time already. It is always one side accusing the other side. I seriously believe that the people must start to force both sides to explain in detail the reasons for the delay. Yes, I am also talking about the complaints about federal government affordable projects not being given approval by the state government to proceed. I personally do not agree to any delay and as long as both sides continue to ‘play’ these kind of blaming games, all these would continue. Come on Penangites, you deserve better. Anytime one side said something, force both sides to state their case. Supporting just one side is not going to solve anything.

Affordable housing is a NEED. This is not something that should be politicised and the politicians better understand this. If it is true that some of the documentations are incomplete, publish them and detail each and everyone of them. Whoever is lying or delaying should be ‘punished’ by the public. Happy pressuring both sides.

written on 28 Nov 2015

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Affordability and availability in Johor’s ‘Bangsar?’

Everyone thinks highly of Bangsar as a location of choice as well as the type of residents there. Thus, the price has been increasing steadily and is definitely higher than another hotspot, Mont Kiara. Well, have you heard of “Bangsar” in Johor Bahru? According to the managing director of Casa Andaman Sdn Bhd (better known as Andaman Group), Datuk Seri Vincent Tiew, Austin Hills in Johor Bahru is the equivalent of Bangsar. Some of the reasons include the location which is just 15km away from the city centre, right next to a scenic gold course, 5km away from institutions such as Sunway College, KFCH International College and Fairview International College.

Capitalising on its strategic location and all the amenities, Andaman Group is developing a project called ARC@ Austin Hills in Taman Daya. It is their first project in Johor Bahru and the three block serviced apartment has 1,843 units and a gross development value (GDV) of RM600 million. Sizes include 650sq ft (two bedrooms), 850sq ft (three bedrooms) and 900sq ft (three bedrooms). Prices start from RM420 psf. It was launched on 31st July 2015 and will be completing in Q1 2019. Besides the institutions of learning, it is also nearby Hospital Sultan Ismail, AEON Tebrau City and Tesco Tebrau City, and the upcoming Austin Heights Water Theme Park (scheduled to open at the end of the year]. For those who are thinking of buying fresh ingredients on a daily basis, it is also near the largest morning market in Taman Daya and Taman Mount Austin.

When I was in Johor Bahru nearly twice a month for work previously, I have sung karaoke in Mount Austin. I have also had many meetings with customers within Mount Austin. There are many shops to choose from and I find the environment to be clean. Rows of shophouses are also tidy and quite busy with people. That was over 2 years ago. I think it should have improved even further. In fact I am looking forward to the upcoming waterpark as the developer is also an industry friend.

ARC@ AUstin Hills is built on a piece of 5.11 acres freehold land owned by Majlis Bandaraya Johor Bahru. From the launch to date, the response is considered good as Tiew said that close to 40% of the available units have been taken up. In fact the price is kept at a very affordable level (20% lower) compared to the other developments nearby.  Their target market are those with an average household income of between RM5,000 to below RM10,000 and the development is perfect for those who can only afford homes below RM500,000. However, he said that at least 30 percent of ARC buyers are investors due to the apartment being just 17km from the Customs Immigration and Quarantine Complex.

Facilities include an Olympic-size swimming pool, a jacuzzi, barbeque pits, squash courts, an outdoor sky garden and a Japanese-inspired garden with a koi pond. It also comes with a multi-tiered security system with CCTV at our perimeter fencing and card access. The residents will also be able to access Singapore TV channels and a satellite master antenna relevision point will be provided. Actually, it looks pretty complete. If the owner is working in Singapore, then perhaps he may just have to wake up much earlier to skip the potential jams going into Singapore. Oh yeah, do note that 1,843 units would not be a small number and when added with more other nearby developments, jams would start to build up. Time management is thus essential. Anyway, today if I stay in Bangsar and I start my journey only at 7pm, the jams would have already started.

I think when the development remains fairly affordable, it would attract buyers, especially Malaysians working in Singapore who may want their family staying in Malaysia to stay in a safer place too. Buying a gated and guarded may not be within that affordable category and thus high-rise would be the next best choice. Jams are just inevitable though because popular areas would always be popular. Somehow buyers are always attracting more buyers, haha. Today, even the Bangsar of Klang Valley today faces traffic jams on a daily basis. That is something everyone just have to be flexible about or buy right nearer to the working place. Happy thinking or buying.

written on 16 Sept 2015

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Over 2,000 units built and below RM300,000 but only over 200 applicants. Hmm…

If I have a manufacturing plant, I will wait for firm orders before I start producing. This will be what I do even if everyone is telling me that there is a huge demand for what I produce or that what I produce is cheap enough for everyone. Seriously, if I were to produce first and it was really cheap, what happens if no one buys it? What happens if the demand is there but somehow people are still not buying?

Actually, some of our unsold units in the property market were also because of similar reasons. Some  were not in the best locations even though the price was low. Some developers may not have done an effective study on whether demand was existing or not. Of course, there are also those who built units with specifications which the buyer did not think meets their expectations. All these will create an image in future buyers’ minds that these ‘affordable’ units are of suspect quality. Here’s one case which needs some intervention from the Minister of Housing and Local Government.

Article in edgeprop.my
  Minister of Housing and Local Government Zuraida Kamaruddin shared a recent project which was 90 percent complete for a total of 1,080 units. The total units on offer is 2,160 and it’s targeted at those who need a home with an affordable price tag. She said, “We do not know why the number of applicants is low, considering the fact that this is an area which is experiencing rapid growth and the cost is below RM300,000.”

Total applicants attracted were just 248. Zuraida said that she will be raising the matter with the Kelantan state government and will request for their assistance to publicise the homes among state government officers. The option which the ministry will be providing to Liziz Standaco will be either to continue the construction or to change the remaining unconstructed units into other types of affordable homes and offer them to the public. More information in the
Article in edgeprop.my

I think moving forward, it’s super important to understand the demand before creating the supply. Registration of applications should be undertaken much earlier to gauge interest level before any official launch and the start of construction. Our current overhang number is already high enough to scare everyone, especially those thinking whether or not to buy a property for the very first time.

I do not know many people who bought affordable homes because they intend to flip…  Thus, people who are buying these homes are aiming to stay and anyway, the reasons for the government to encourage these homes were also for buyers to stay instead of speculating. This meant that IF the units were not sellable, people are not looking at them as a good home sweet home. This has nothing to do with a slow property market for example. Happy understanding.

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How about Desa Petaling for your home? Still affordable.

I was at Desa Petaling to sign some documents at my lawyer’s place on Monday evening. I arrived at his office at 540pm and left around 6pm. It’s a weekday, thus jam is expected. I wanted to just drop by any mall for a nice dinner. As per Waze, it would take me an hour to reach my home in
Damansara Damai
. Well, I think I better drop by somewhere for dinner first. I chose a mall I m familiar with, Paradigm Mall.  I took the road towards Bandar Sunway / Subang / Bangsar and surprisingly, I arrived in Paradigm Mall in 22 minutes! This was at a time when the jam is supposed to be engulfing the whole klang Valley! Haha. So, guys if you are staying in Desa Petaling and during a weekday at a peak period,
Paradigm Mall
 can be a good choice.

Some high-rise choices in Desa Petaling for below RM400,000 and with a minimum size of 1,000sf? Well, a check in iproperty.com.my revealed the following choices. Note that I have NOT visited any of these units. From the price levels, it is clear that Desa Petaling is also not under the top choice category like all the ‘Kiara’ or the ‘City’. Haha. However, I always believe that we should buy a home we can afford and save up to upgrade in future. This has been the same strategy I employed long time ago and I think this is applicable for a long time to come because of the demographics of Malaysia. It is impossible to save enough for a better home in future without having a home today which can help up hedge against the continuous house price appreciation. Oh yeah, on a day without jam, Desa Petaling is only 12km / 15 minutes away from the KL city centre. Not many areas can claim to be as near as this. Even my current home is 21km / 25 minutes away.

Additional points from a friend, Asali who’s more familiar with Desa Petaling. There is one shortcut which can reach the Terminal Bersepadu Selatan (TBS) LRT station in less than 5 minutes. Besides that, one can also drive to the future Kuchai Lama MRT Line 2 station too. If you search online, you can also find one boutique development selling for less than RM500 per sq ft that comes with free legal fee, 3 car parks, fixtures, 6 air-conds and more. Only buy if you find it fitting to your needs. Oh yeah, Asali said that during the jam periods, you can also try driving to Mid-Valley too. I checked, it’s just 10km / 12 minutes away. Perhaps add a bit for the usual jams.

Since high-rise condominium is still affordable, surely the landed ones are also okay? I checked both iproperty.com.my and property guru.com.my and the results are ‘negative.’ There are none below RM700,000.  Well for those which are higher priced, I would prefer to buy further away and bigger units too. Think
Sungai Buloh
 or Kajang. With regards to MRTs, I could not find any station in both MRT Line 1 and Line 2 which would be passing through Desa Petaling which is one reason why the prices has not appreciated like those nearby or around the new MRT stations. I personally think this boils down to individual choice. If you think Desa Petaling meets all your requirements, this is considered very affordable, even when compared to the many affordable new developments upcoming. If
MRT is a must
, then Desa Petaling is not for you. Happy deciding.

written on 29 Aug 2015 with additional points from Asali.

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Waiting for affordable dream home? 7 things you could do today.

Many say they want to buy a home. Many say they want an affordable dream home. Many could describe their dream home. Many say even affordable is still not affordable. Many say the problem is not them, it’s the banks who refuse to lend them what they wanted. Truth is, many are still without a home because many did not do something in order to buy an affordable home. What could we do if we really are serious about buying an affordable home? I offer to you 7 important things to start doing today.

#1 – How much is affordable for you.
 We need to understand how much is affordable to us because everyone’s definition of affordability could be vastly different! As a general benchmark, the mortgage repayment per month should be 35% of your monthly net pay. If we earn RM5,000 per month, then the maximum repayment should just be RM1,750. What is the price of the home which we could afford with RM1,750? Looking at calculator.com.my that amount is around RM450,000.

#2 – Have you saved enough downpayment?
 It’s always good to be ready with this part, whether or not we intend to buy today, tomorrow or next year. Just remember that planting that tree is needed today whether or not we intend to eat the fruits in the future. The reason is because if we suddenly wanted to eat the fruits, it’s impossible to plant a fruit tree and have the fruits tomorrow!

Are you saving every month? Have you ensure this particular savings is NOT accessible for you to use to buy some other unnecessary stuffs? Downpayment is usually the hardest and this is the reason why many people say, ‘just rent lah, it’s cheaper.’ Truth is, they just do not have the downpayment and they have also forgotten that paying rental is forever. That expensive mortgage usually has an end date. Think seriously.

#3 – Do you really want to buy?
 Being able to afford is a great feeling.  However, think really carefully if you really want to buy. If we do not think the current company is the one we will be working for a long time and we may not know where would we go next, perhaps it’s better to keep renting for a while more. If our rental for that home is super low because the owner is under pressure from many competing units, I do think it may be worth to continue renting for a while more. There are definitely other reasons and if those reasons are strong, there is really no need to buy even if they say there are campaigns or exemptions. Stay focused on what matters more.

#4 Have you understood what you really need?
 If that affordable home you are eyeing is because your good friend is buying, please understand that your good friend would have his reasons. Are your reasons same as his?  Close to office? Close to wife’s office? Close to the favourite mall? Right next to the mother-in-law’s home? There has to be reasons which is yours and yours only. By the way, it can be as simple as when I step into the house, it gives me the feeling of home sweet home. Just need to understand what you really need prior to deciding.

#5 Are you sure it’s not overpriced?
 If that affordable home that you are eyeing is because the discount is very attractive, please do some due diligence. If it’s a new property, who’s the developer? If it’s secondary property, have you inspected it well? if it’s from the auction market, have you at least try and see if everything looks okay enough?  Driven there at night to see if there are lights? If still occupied, it will take some time to remove them. Get to know real reasons why is it so cheap?

Have you driven around the area in the morning, afternoon and even evening. If you have no time, then use google map for an initial understanding. Remember, when it’s overpriced, you need to be ready to hold and that’s not such a great strategy.

#6 Have you compared enough?
 Long time ago, there were very few projects to choose from. It’s either you buy it or you have to wait for the next one. These days, there are too many choices to choose from. These days, as you scroll your FB page, you will see advertisements after advertisements. All pitching that theirs is the best. Truth is, we will become very objective once we really compare a few projects.

In fact we will now be considered an expert of affordable homes if we have looked through say 10 and know what’s good, what’s bad between all the 10. Decision would then come easy and the potential risks have been minimised too. Just remember that there’s no such thing as zero-risk yeah.

#7 Learn from advanced property markets.
 Let’s just look at a few recent articles.
UK: Home prices are still surging and likely to continue.
We should not just look at the UK and decide.
United States: House prices accelerate due to positive sentiments.
 Closer to home, Australia:
Melbourne median home prices passes AUD1 million for the first time.
(Used to be just Sydney). Or the one next to us?
Singapore: Private home prices beat estimates. Will rise 3.3% in Q1 2021.
 Or let’s look at Canada which is seldom on our radar for property? Canada:
Young Canadians home ownership dreams dashed as house prices soar

I do hope everyone realised that home prices do not need to rise due to speculation. Even if it rises following inflation and inflation is just 2% per year, that RM500,000 home will be RM510,000 next year. How many of us can save RM10,000 every year? This is why property has always been known to be a hedge against inflation.

All the best and keep reading kopiandproperty.com  We are not part of any property developer, not part of any real estate agency and not part of any banks.  Cheers.

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Affordable not just focus of developers.

These days, developers whether big or small are focussing on affordable units. They are worried if they launch the more luxurious ones, it would not sell. They are right. For now, not many sane Malaysians would rush to buy anything which they think is overpriced. In fact, even retail sales is down. However, apart from developer, don’t you think that we should also focus on affordability? Yes, us, the residential unit buyers who are buying for own stay. The buyers of second properties for investment purpose. We should ALSO focus on affordability. Why do I say so? My personal term for affordable are those homes less than RM600,000 today.

Uncertainty. I have written this before. Malaysian economy is nowhere near crisis level even if Ringgit’s value is nearing the 1998 peg level. However, be reminded that Greece is expected to default soon and no one can yet predict what will happen to Europe and later the world. Property prices in many developed nations are reaching ever new highs. China has yet to really show a stable path towards strong growth. America’s growth even if encouraging remain vulnerable to many sudden shocks. Just look at how careful Federal Reserve is and you should get the idea. Thus, times are indeed uncertain and it may be prudent to buy affordable properties instead. Besides, it’s a good time to get a better bargain!

Undervalued secondary market versus primary. The differences are still there between the new properties versus the secondary and OLDER units. It does seem that buyers are ‘allergic’ to these older units and must buy new. The newly completed ones are not really increasing in prices versus those of years ago but the prices they command remain a premium when compared to the older units. So, my recommendation, just like some of my property guru friends remain to try and look at secondary market first, especially for those buying their first homes. Take a look at places which meets all your expectations in terms of conveniences but is not the current hotspots.

Calculative risk. Think really objectively. If prices were to fall, and EVERYTHING falls in price, which property would give you larger losses? The affordable ones or the luxurious ones? If you do not know, read a bit about some of the recent huge losses for sellers of the luxurious units in Singapore. The losses would numb you for a while. When the markets recover, which one would quickly grow back to the affordable levels of today? The luxurious ones? Haha. Hope you get my idea.

Oh yeah, in a recent article in a local English daily, even Hua Yang’s chief executive officer Ho Wen Yan said similar things. As a developer, Hua Yang agrees that the property market outlook is difficult but since Hua Yang had always been focussed on the affordable segment, it should do fine. He said that the middle-income and younger market segment’s demand would continue to increase due to continued economic progress and urbanisation.

If you are buying, the focus on affordability would be much more advantageous than buying more expensive ones simply because everyone tells you so. This is applicable not just during slower times but should be the correct view all the time. If majority thinks this way, even during high growth periods, the developers would not simply build ever more expensive units and telling you that the market is like that. The market is based on you and me. It should not be based on what the developers build. Many have proven that during slower times, they can build ‘cheaper’ units. Happy buying.

written on 17 June 2015

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B40 will face more issues with BMF’s affordable home proposal

One month ago, an affordable homes from as low as RM120,000 each in the Klang Valley was proposed by Better Malaysia Foundation (BMF). In fact, the sizes would range from 450 sq ft, 600 sq ft, 750 sq ft and 900 sq ft, selling from the price range of RM120,000 to RM300,000 each. BMF founder Tan Sri Vincent Tan said, “We believe this price range is achievable with government support in terms of charging lower land premiums and nominal development charges for affordable housing projects.”

BMF will also propose to the government to allow banks and financial institutions to provide 100% financing to B40 house buyers with two-generation home loans of between 40 and 60 years duration and this will make loan repayments more affordable and manageable. The earlier article here:
900 sq ft, 5 bedrooms and just RM300,000?

Article in themalaysianreserve.com
 Khazanah Research Institute (KRI) director Dr Suraya Ismail said, “Essentially, this proposed scheme takes money from the bottom 40% (B40) community in the form of intergenerational loans, therefore, the B40 pays at least two times more for the houses compared to shorter term mortgage tenures.”

“Additionally, the scheme also takes land from the state at a lower cost, ostensibly for building affordable homes.”

“In essence, intergenerational house loan for the B40 just means that children in this category will be more likely to inherit a ‘house loan’ — though not necessarily a house,” she said.

“Let us be clear. Greater financialisation does not equate to either higher affordability.”

“Rather, it creates more household indebtedness, ‘house poor’ conditions and even worse, possible foreclosures and bankruptcy of families,” she stressed. To read the article in full, it’s here:
Article in themalaysianreserve.com

Space, Price and Design is really dependent on need

A single or a bachelor would not need a big place which he / she will have issues in paying and cleaning up. A couple who may only want a baby later does not need to immediately buy a bigger home today and clogged up all their investment funds. A family of 4 in need of a bigger space should be given a choice of a bigger space and yet still affordable even if it may be lightly further.

The seniors really do not need a big home where they need to climb the staircase everyday. They need a place where they have a community, where they have access to health facilities and they could have access to this by selling their current home and move into this new option. Looking at these examples would tell us that one size does not fit all and one price is even further away from fitting anything at all.

I disagree to a longer loan tenure if there are other options

I think it’s important to remember that a home is a need BUT we should not be paying for a home long time after our income stops. This is the case even if the next generation could continue paying for them. Please do look around the world. It’s really possible to build further and get it connected to the city centres. Encourage the acceptance of price vs size vs duration and a lifestyle change. Malaysia will not be the first because all over the world, suburb is a popular word. Plus if it’s connected, then it does not even need to be affordable landed properties. Developers could even build high rise and it will be very affordable too. Thanks.

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