Buying undervalued property is possible, really

What is an undervalued property? It is a property which we like and is being sold at a price lower than the market value. If we do not like the property, then undervalued or overvalued has no meaning to us anyway. Emotions aside, undervalued property means for the same amount of money, we can buy a bigger and better place. Yes, this is just my personal opinion. This place should also be similar in terms of travelling distance to our working place. There’s no point in buying too far simply because we wanted a much bigger place. An earlier article here:
It’s the duration, not the distance, ok?

Of course, as soon as we put back emotions into the calculation, then we may not consider some of these secondary areas of today. We would then go back to the usual choices and pray that someone would suddenly wanted to sell their property to us below the market price. Hopefully, a few thousand Ringgit lower. For those properties worth a few millions, we would hope for a few hundred thousand Ringgit below market rate. Actually, it is for this reason that so many who could afford to buy are still not buying, yet. They are still waiting for an undervalued property in an area where the demand far exceeds the supply! Why not venture outside the box?

Secondary properties are already undervalued compared to new properties today. It’s also available almost immediately versus having to wait for the new property to complete and in the mean time kept paying rental which is a total loss anyway. Read here:
Sometimes, secondary property is a better choice

Properties in less favourable and newer areas or further away are already undervalued compared to properties in hotspots today. Imagine more flats, some factories, dusty roads etc. Read here:
Staying further is a fact of life, everywhere

Older properties in need of a make-up is already undervalued when compared to a modern looking new property of today. The ‘make-up’ is going to be much lower than having to buy a totally new place and yet still spending to renovate it! Read here:
Buying a renovated unit, why not?

Undervalued properties are all around us and yet we may not see them. Buy properties which others have not yet discovered yet. Read here:
Buy what others did not think, see, view yet

Of course, we can also ask our best friend to sell to us their home at below market rate. That is also another way to get undervalued properties. However, how many of such friends do we have anyway. Main point is, there is no need to confine ourselves to the usual choices of the majority. If the majority are always right, why are the wealth in majority of all countries being concentrated in a small  percentage of the population? Invest is not the same as buying what others are buying. All the best in understanding why and taking actions.

written on 26 Mar 2016

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Buying undervalued property? Please do NOT do this.

Everyone wants to buy undervalued property. People who wants to start investing wants undervalued property. People who has been investing would want to buy undervalued property. People who does not know what they want to do with property investment also wants to buy an undervalued property. I must share this classic conversation with someone who wants to buy an undervalued property. Happy reading!

Thinking about undervalued property (still thinking…)

Mr. Wait and See:  I want to buy an undervalued property!

Charles: That’s a very good idea. Where are you buying?

Mr Wait and See: Oh, I have no idea yet. Maybe that XXX area. You know that area?

Charles: Yes, that XXX area, everyone knows about it and many people are thinking of buying into that XXX area too.

Mr. Wait and See: Yea, you see, when everyone knows about it, then it will be really easy to rent out!

Identified the undervalued property already?

Charles: Maybe you are right since that XXX area should be a popular one. So, have you identified which property yet?

Mr. Wait and See: Oh, I think I want to wait and see if the market will be affected more by the uncertainties. I am sure the prices may go lower.

Charles: Oh, you have NOT identified any property yet?

Mr. Wait and See: You do not understand. I do not want to limit myself to just one or two targets. I want to be open to opportunities.

Charles: Oh, that’s good idea too. Have you went to view some properties, get a few good real estate negotiators to help you and to inform you when there are any which meets your expectations?

Mr. Wait and See: I think that can be later. You see, I do not like people who keep calling me and asking me to buy and then make me feel bad since I am waiting for the best opportunity

Charles: Please allow me to share this with you on undervalued property yeah.

Three things about undervalued properties

First, assuming you want to sell quickly and is willing to sell below the market price, the few people who may know about it first may be the family members, good friends or even neighbours.  We assume, these relatives, good friends and neighbours did not buy that property.

The next person who would get the news about this undervalued property would be the real estate negotiators. Maybe three of them, maybe four of them or maybe five of them. We assume every one of these real estate negotiators did not want to buy that property despite knowing it is undervalued.

Then, the next person to buy would be the customers who have informed these real estate negotiators of what they want to buy, the price they want to buy and even the location they want to buy. The fact is, you are NOT in the first list, second list, third list or whatever list of potential buyers for this undervalued property at all.

If it’s truly undervalued, you think you can get to buy it at all? Happy waiting yeah… Cheers.

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Buying vs Renting a House: Which is a Better Value-for-Money Decision?

The following article has been contributed by
CompareHero.my
  This is a website I frequent occasionally when I needed to do some comparisons of financial products. Check them out.

As young professionals who always striving to achieve your short and long term goals, there will come a time when you will eventually ask yourself: is it better to rent or buy a house?

The answer to this dilemma varies at different stages in life. Many of us often feel the urge to live independently sometime after college. When we finally decided to move out of our parents’ house, the faster and cheaper option was to rent a flat. Renting a place has its advantages and disadvantages. Some leasing agents offer flexible terms plus when renting, tenants don’t have to shoulder expenses for repairs and renovations.

However, after a few years of living alone, you can’t help but wonder when is the right time to purchase your own house? Truthfully, there might be no exact age for this. The perfect time is whenever you feel that you are financially capable of standing on your own.

You can learn the pros and cons of buying a house by reading online articles and home magazines. Some of the points to ponder in purchasing a new abode are the following: it is a lifetime asset; it gives you freedom to decide on things, but also requires huge upfront payments. You may also
read this handy guide written by CompareHero
 to help you decide for your future home.

Here are some important questions you can ask your real estate agent if you want to buy or lease a house:

Who were the last people to live in the property?

Why is the owner leasing or selling the property?

What is the owners’ housing tenure?

What is the total land area?

What is the current condition of the property?

Is the property fully-furnished or not? Are there built-ins kitchen and bedroom cabinets?

Is the property near any establishments like government offices, supermarkets, shopping malls, or school?

Many trusted agents suggest being patient and not to buy a house in a hurry. Make the most of your time to do thorough research as well as schedule viewings to see which property will best suit your needs.

This article is contributed by
CompareHero.my
, Malaysia’s leading financial comparison portal which helps consumers in making informed choices and getting the best rates today.

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Buying is Yes. Following guidelines is MUST. Penang’s UNESCO city.

Penang was where I started my career. I stayed there for 15 years until I accepted a regional position based in Kuala Lumpur 5 years ago. It was also the state which my property investment journey started. It will not end anytime soon. In fact, the progress of developments may be accelerating with the new Chief Minister in Chow Kon Yeow working closely with the the ex Chief Minister of Penang who is now the Finance Minister. Remember the worry about heritage properties being snapped up by foreigners? Earlier article here:
Protect Penang’s heritage buildings for the future generations

There’s now an even stronger push towards protecting Penang’s heritage buildings.
News article in thesundaily.my here: Foreigners can own heritage property in Penang (updated)

First of all, let’s be not too worried about the situation of Penang’s heritage properties falling into the hands of foreigners. Penang Chief Minister Chow Kon Yeow shared that only a total of around 3-4 percent of some 40,000 shop houses and other properties within the 109.38 zone are owned by foreigners.
News article in thesundaily.my here.
 He also said that the government is not stopping foreigners from buying the over a century-old shop houses within the Unesco World Heritage enclave. The only thing that these buyers must note is that they must adhere to guidelines on conservation and preserving the properties. Penang welcomes investors who are keen to participate in the long-term conservation and preservation of the heritage zone as stipulated by Unesco. This is important because foreigners must understand the need for Penang to undertake a strong effort to protect its heritage legacy. For the next 10 years of its UNESCO listing, Chow wants Penang to be an exemplary township in terms of reliving its heritage values. He also said that the buildings must be preserved in its original form before allowing tenancy or commercial occupants to move in.

With regards to heritage buildings preservation, I know this is quite strictly adhered to because my friend’s cafe within the heritage zone was asked NOT TO RENOVATE any part of the building but he could only move in his stuffs for the business. I have just returned from trips to Sydney and Melbourne. What I can say is that preservation of all the heritage buildings has made these modern cities look even more grand. As Penang continues to move on towards becoming another modern city rivalling the best in the world, our resolve to protect and maintain our unique heritage will make us stand out from just another modern city with sky bars for example. Let’s keep reminding us of this advantage that we have so that we enhance it over time and not losing it. Once gone, it’s gone forever. Happy visiting Penang. Oh yeah, their property choices are awesome too. Earlier article here:
2019 is the year when home prices strengthen. KL and Penang’best buy’

*header image source:
https://mypenang.gov.my/culture-heritage/heritage-zones/

written on 21 June 2018

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Buying yes. Moving yes, too?

It must be the first ‘buy, buy, buy’ scene for 2016. EcoWorld’s Semenyih project. Karisma Apartment at Eco Majestic. This is an affordable apartment of 800 sq ft and price starts from RM260,000 and every unit comes with 2 car parks. There are a total of 750 units housed in two blocks. Each unit three bedrooms and two bathrooms. Karisma has some of the usual facilities including a playground, multi-purpose court, swimming pool, children pool, public amenities area, grand guardhouse, surau and covered walkway to multi storey carpark. It opens for booking on 20th Feb 2016 and I think for the results, check out some of the online media. My sources told me that hundreds of units have been booked and the scene looked ‘full of eager buyers.’

I always think apartments are a great way to start owning a property. It’s cheap enough to buy and good enough to stay. My first apartment was just 730 sq ft, also with three bedrooms and two bathrooms. I loved it and stayed for 4 years before upgrading to a 1,258 sq ft condo. I used the swimming pool for at least 6 times during those 4 years there. Haha. I think some buyers of Karisma may have the same thoughts as me. It was in Relau, also considered a secondary area within the Penang island. The only difference is that Relau is only 5-6km to the Bayan Lepas industrial park where majority of all the engineers are based in Penang. In other words, lots of interest.

I have a colleague who is already talking about the renovations to her landed home in Eco Majestic. It’s really her dream home with her husband. I have little doubt that lots of people would love to move to a majestic development and Eco Majestic certainly is. Just look at the image. It looks grand. Just google for some of the photos and you would understand my meaning. However, let’s be really objective, is everyone ready to move there within a few years’ time? The topic today is not about landed properties. We are talking about a 800 sq ft apartment and it’s 45km away from KL city centre. Those working nearby or those who are ready to move, do book soonest.

Personally? Know what we really want and not buy because our friends are buying. There are lots of other closer choices which are today already deemed as far. MRTs would however link some of these less popular choices of today. It may change the dynamics of these areas too. Read here:
MRT stations will change the area dynamics
  To all those who asked me about it, my question remains the same. Are you ready to move there? If you are, then by all means buy and try to coax a few more friends to buy too. Just do not buy simply because we intend to flip it for a huge premium when the keys are handed over. If it happens I am very happy for the buyers too. I alway think property investment is the best. Happy buying or loving or moving.

written on 20 Feb 2016

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Buying your First Home and feeling lost? 5 panelists share their experience.

If you are thinking of buying your first home, it’s super important to understand what is it that you are going to get into. This is usually the single largest purchase in your life. Get it wrong and it will set you back many years. Understand the potential and the potential risks because not all properties are suitable for first time home buyers. In fact, over-stretching is likely to be very dangerous because there’s also no guarantee that the low interest rate will stay low forever.

There will be a FB Live session by 4 super duper speakers and 1 blogger. Yea, that blogger is me. The rest of them include following:

VIP Guest Sr. Michael Geh who has vast experience in the real estate industry and is the Immediate Past President of FIABCI (Malaysian chapter) He also speaks out against speculative buy, especially against multiple-submissions frequently.

Miichael Yeoh dislikes speculation in the property market and teaches people how to get their mortgages approved.

Elane Goh continues to share with people why wealth protection is very important.

SC Tan will be sharing from the point of a working professional property investor.

Charles Tan is the founder of kopiandproperty.com yeah.

Please do refer to below attached flyer and please do register soonest yeah. This sharing about buying your first home session is free. I also think this is the fastest way to get experience transfer. Keep asking questions so that the panel could answer. See you soon yeah. Details as below:

Date: 15th October 2020 (Thursday)

Time: 8:30pm
Venue:  FB Live at Miichael Yeoh page.

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I wonder how, I wonder why. 600,000 people needed a NEW car in 2019.

People say that people need a car even here in Greater Kuala Lumpur because our current public transportation is just not comprehensive enough. Well, I could only think of a few higher end areas where there’s no MRT / LRT stations within a few minutes of walking or driving. As for the locations where most of my friends are staying, I know that they could DRIVE to the nearest MRT / LRT stations and it will take them probably 10 minutes.

One senior manager could walk to the nearest station which is minutes away from the door to her high-rise condo nearby KLCC. So, do people really need a car? I think I will leave it to their personal choices. However, with regards to the question of whether people need a NEW car instead of a second-hand one, the answer is YES. 600,000 of them certainly believes in 2019.

Article in themalaysianreserve.com
 Kenanga Research analyst Wan Mustaqim Wan Ab Aziz is optimistic that car makers would be able to sell more than 600,000 cars for 2019. This is especially so with the year-end promotional activities currently. He said, “I think there would be no problem. The number as of end-October stood at 496,000 units, which means about 104,000 units left. Based on rough calculations, car sales this year would be well above 600,000 units if a similar figure in October is achieved in November and December.”

The two local brands; Perodua and Proton have been doing well this year. Perodua is expected to retain its No 1 ranking with the last reported number of cars sold hitting over 201,000 units as of October. Meanwhile Proton is on course to settle in the No 2 position based on volume and market share this year after a four-year absence, edging out Honda Malaysia Sdn Bhd in an increasingly competitive market. Do refer to the full
Article in themalaysianreserve.com

Anyway, assuming people are right. Without cars, they could not go to work, then WHY must it be new cars then? Perhaps the reason is more to do with choice… and not so much of just convenience alone. Plus, it is plain to see that people are earning enough salary that their car loans were approved by the banks. Does this mean that buying a car may just be the stumbling block to a property instead?

Of course, besides buying a car, there’s also this important reason too. Earlier article here:
Travelling is making it harder to buy a property
  Nope, I did not buy a new car in 2019. I did buy a new car in 2009 and 2013. Perhaps I may become a statistic in 2020? At the moment, still undecided. Happy deciding yeah.

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Cable Car, Tunnel, LRT, more roads and PTMP. Action!

Penang Chief Minister Lim Guan Eng announced that a new ‘Penang Sky Cab’ (cable car) project would link the Penang Sentral in Butterworth to Gat album Nordic in the island and this would be operational by 2018. It can carry up to 1,000 passengers per hour and will take 15 minutes travel. This is certainly faster than driving across the bridge during jams but I am really not sure how many would take this cable car since Penangites still love cars. Yes, I think this is a good news as an alternative but I seriously think this link is secondary compared to a totally comprehensive transportation masterplan. Remember the new outer ring roads, tunnel and more roads within Penang?

Yes, these days, Penang island is getting pretty jammed. Just google for the recent approvals for development projects within the island. You would notice majority of the projects are pretty high density and this meant more people and more cars are coming into the existing roads. The current plan for these Penang roads? There’s a comprehensive one. It’s called The Penang Transport Master Plan (PTMP). It sounds very grand because it is indeed a very huge one. RM27 billion to be exact.

Due to the sheer size of the project, the Penang state government is inviting companies to bid to become a Project Delivery Partner (PDP). In brief, a PDP would be the project manager to ensure the whole project starts and ends on time. It would have the full authorities with regards to whom they choose because if the delivery is on time or earlier, the PDP gets paid but if it is late, they would have wasted all their time and effort for virtually nothing. Latest news was that only 6 have actually submitted their bids before the deadline, out of a total of 55. All are huge names in Malaysia. The four mentioned include Gamuda Bhd, IJM Corporation Bhd, WCT Bhd and even Prasarana Malaysia Bhd. According to AMResearch Sdn Bhd, the other two remaining ones are Singapore-based CGC Group Pte Ltd and two Hong Kong investors.

This PDP would also handle the LRT project linking the city centre with the Penang International Airport. It will cost RM4.5 billion but at this moment, the PDP has yet to be finalised. How would the PDP be paid? Well, they would get lands and…. more lands. Instead of getting money, the Penang state government would offer lands in attractive areas. For example, the Eastern & Oriental’s STP2 of which after reclamation, the state government would actually get 110 acres out of the total reclaimed area of 361 acres. So, the PDP gets to develop these land and earn their own fee / profit. The current price of the condos in Seri Tanjung Pinang has already reached RM1,000 psf today, if not higher.

Another suggestion on how the state government may pay the PDP would be the awarding of reclamation rights to the Penang Middlebank which is a piece of land located between the Penang island and the Penang river mouth. Do note though that should this be the case, it is likely to be a thorny issue with the environmentalist NGOs. I think PTMP must succeed, for Penang’s sake. There’s really nothing much to be done with the existing road connections and whatever plans the state government has must start. I have my preference for the company that wins but it’s ok. Let the state government decide then. Happy anticipating.

written on 14 Apr 2015

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LRT in Penang, Tunnels and up to RM27 Billion Transportation System

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Call it condo, make it proper.

I viewed a ‘condo’ today. Location wise, very near to a famous noodle restaurant. It is also near to an expressway which meant accessibility is good. Pricing wise, attractive too and is cheaper than a few other condos which are within a 10km radius. However, there are three things I would like to remind the developer about.

Staff’s attitude. Regardless of whether it is nearly fully sold or just starting to sell, that attitude better be positive. Unless of course this is the only development that you (developer) will ever have. If it is, then I will remember NOT to buy from you and I will tell another 50 friends about you too. It is so easy for the staff to smile, to say hi and and to ask questions like,
‘are you buying to stay?

How many pax in the family?Let me introduce you to the right unit’ Today, when I visited, the showroom had just one staff. Totally okay for me since it is a Sunday. She did not smile, did not give us a brochure and did not even tell us about a show unit at the back of the showroom. Haha.

Car Parks. TWO, please. Else have enough of them so that people can buy an extra one if needed. Seriously, I could not remember any of my friends with a family that has just one car today. Regardless of whether MRT is next door or not, a car is a convenience which is a must. Today, the ‘Condo’ I visited, the sales person said that all units come with just one car park and to my question of whether could I buy another unit, she said, ALL SOLD OUT. Haha. Anyway, this

particular condo’s car park are around the condo

and there is not even covered walkways to the building. In other words, get ready to be wet when there’s rain. I know some would like to argue that the driver could let everyone get down first and ….. well… then stop calling this a condo!

Design, security and facilities. There are so many reference points these days.
 View 10 different CONDOs to get some idea.

Use the good ones and discard the bad ones. Briefly, it’s called BENCHMARKING. Security post would reveal a lot about the developer’s philosophy. If it’s a very badly designed one, get ready for the fact that the remaining facilities will be based on ‘available’ and not ‘desirable’. Yes, I have viewed enough condos to note the relevance between the guard post and all the other facilities. All these are usually related. The next time you view a proper condo, take a look at its guard house and see if ONLY the guard house is poorly equipped while everything else is top notch…

Lots of other stuffs but I guess these three major reasons are enough to put me off. I did not even take a brochure this time. Yea, the brochure look nice though. The fortunate thing? It’s nearly fully sold if the stickers are true. The workers were already doing final touches. The current show unit would soon make way for a gym which will be facing a small swimming pool. Wishing the developer all the best. Perhaps they will improve in their future project. Happy viewing and buying.

written on 27 Aug 2017

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Cameron Highlands: centre for trade, investment and logistics. Property opportunity?

I do not wish for Cameron Highlands to be as developed like Genting Highlands. Definitely not all the high-rise developments. Let Cameron Highlands be the quieter (introvert) highland sibling and Genting Highlands to be the extrovert one instead. Everytime I go up Cameron Highlands, the typical things I do is to buy vegetables and then buy fruits and then buy vegetables and fruits. Haha.

Okay, I love to visit the pasar malam and eat all those fried stuffs too. I love the cooling environment and will always enjoy one or two cups of tea, especially the one in Palas Boh Tea cafe. Where temperature is concerned, I do think it’s warmer than when I was younger. Perhaps it was all just imagination in my head. Anyway, cooling enough that I will go at least 3-4 times per year. Cuti-Cuti Malaysia bah. So, does Cameron Highlands has a lot more to offer beyond just tourism related activities? Well, maybe.

Article in edgeprop.my here.
 The state government of Pahang has just established the Cameron Highlands Development Corporation. (PKCH) Menteri Besar Datuk Seri Wan Rosdy Wan Ismail said the establishment of PKCH would also play a role in promoting Cameron Highlands as a centre for trade, investment and logistics, as well as assisting in the socio-economic, infrastructure, residential and agricultural development planning.

PKCH will be chaired by Menteri Besar with the state secretary as its deputy chairman, PKCH members comprised five representatives of state government, three from the federal government and two experts. He said, “The state government has also made several key decisions including all agricultural land in Cameron Highlands which has been issued with the Temporary Occupation Licence is given the ownership title for Perbadanan Setiausaha Kerajaan Pahang to lease out the land to farmers within the stipulated period. Farmers who wish to lease the land must first obtain the Malaysian Good Agricultural Practices certificate issued by the Agriculture Department.”  Do read full
Article in edgeprop.my here.

Since this has just been formed, I think we have to wait. The first thing which must be looked into would be illegal farming. Seriously, all those landslides should not continue to happen. Enforcement must be top notch (super speed) yeah. Else, once the farm is already up and running and producing, it’s already a little too late.

Second thing is to get rid of the traffic jams. More roads may be just temporary solution. Cameron Highlands can certainly be visited by more people but NOT more cars all at the same time.Think a little further okay.

Third thing is NOT to allow overbuilding of properties there yeah. Some crunching of numbers of population + visitors versus the number of homes needed please. PKCH, you should have all those numbers.  Hmm… I wonder when is my next trip. Hopefully January 2020.

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Cameron Highlands, a heavy downpour and the power of nature

I think I go up Cameron Highlands twice per year. When I posted an article about Cameron Highlands the other day, it was clicked and viewed by a surprisingly large number of people. I guess Cameron Highlands is a favourite place of many. Here’s that article:
Cameron Highland and the over 10,000 cars per day!
  I think Malaysia needs some measures to ensure Cameron Highland’s growth is on a measured pace. We want the goose to keep laying eggs for a long time. We do not want to destroy it by forcing it to lay too many eggs per day. Over-development will not help the cause yeah. Here’s another reason why. One heavy downpour exposes the power of nature. (Featured image by https://www.bohtea.com/about/home-of-boh/)

Yesterday, as per
an article in TheStar.com.my here,
 a mudslide happened in KM42 on Jalan Simpang Pulai – Cameron Highlands. At press time (means just before the newspaper gets printed), half of the road was still closed to traffic as the mud was still flowing down the hill slope. Fortunately the rain has stopped. It quoted Cameron Highlands Fire and Rescue Services Department chief Mohd Hilmi Kashfi as saying that the incident happened at about 2.45pm after a heavy rain that began at about noon. He said, “A concrete retaining wall broke as a result of the rain, sending a river of mud water down the hill slope. No casualties were reported,” he said here on Wednesday (Sept 26). His advice is for motorists heading to or from Cameron Highlands to be careful as the work to clean up the debris from the road is still underway. Do view the video below:

Oh yeah, some time back, this was what our previous Natural Resources and Environment Minister Datuk Seri G. Palanivel said. The government wants to plant
1 million trees instead of more high-rise buildings or hotels
. I wonder how many has been planted since then. Hopefully our new YB Yeo Bee Yin, Minister of Energy, Technology, Science, Climate Change and Environment would have even better plans for Cameron Highlands and actually tell us the progress on a periodical basis. My next visit up Cameron Highlands should be happening soon. Cooling, relaxing and just eating… why not right?

written on 27 Sept 2018

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Cameron Highlands? Still cold, still my favourite

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Cameron Highlands? Still cold, still lots of visitors, still a favourite

There’s nothing in Cameron Highlands! Why do you go there every year?! I still remember a friend once told me. It’s hard to argue because perhaps he is right? Haha. It’s okay, let me tell you a few good reasons to drop by Cameron Highlands for the weekend.

Near enough to drive. From Penang it’s 3.5 hours BUT you get to stop by Ipoh for an amazing breakfast or lunch first. Stop joking and note that Ipoh is way beyond Ngar Choy Kai. If you disagree, too bad…  🙂  From KL, it’s around 3 hours and I would definitely urge you to drop by Ipoh too for a breakfast or a lunch. The usual hotel check-in time is 3pm anyway.

Family friendly. Kids get to see strawberries, cactuses, flowers, rows and rows of tea plantations and even deep fried mushroom /  sweet potato balls. Both are awesome by the way. Enjoy a cup of tea on the hills and just chit-chat with family and friends. Buy sweet corns on the way back. My kids love it and could eat it just that for lunch and dinner.

Cooling. I hardly sweat there unless I walk under the hot sun for more than 10 minutes. Please don’t because the sun is still extremely hot. Haha. It was 17 celcius last weekend in the evening. Of course it may also be 24 or 25 Celcius too in the afternoon. For people like me who prefer cooling weather, Cameron Highlands is just right.

Cheap lah. Whether it’s food or stay, in comparison to Genting Highlands or even Bukit Tinggi, the options in Cameron Highlands are aplenty. From the usual fast food to steamboat, western delights and even Restoran Sri Brinchang (good Indian food), we have lots of varieties too. I stayed in Aranda Nova Hotel this time and the suite is spacious and clean. (Still new too). RM235 per night is a good price. Comes with a good buffet breakfast for two as well. (Kids below 5 eat free)

Not so good? Well, there’s no casino. There’s no international standard themed building
like the Star Avenue.
There are no future international theme parks. There are no expensive world class dining experience. There’s JAM, especially during school holidays. It can be an hour or more just to pass a few km of road. Fortunately, there are two roads up, so you can always choose the other side to skip the jam, unless if you happen to be at the top. There’s really not a LOT of variety if you are thinking of lots of excitement. There’s no beach too….

By the way, I will be dropping by more often next year too since I have bought a small place there. Hopefully once per quarter? So, yes I love Cameron Highlands, just as I love Kuching, Langkawi, Kota Kinabalu, Sandakan, Penang and more. Maybe it’s because they are cheaper than if I were to buy a flight ticket and fly away to some overseas destination. If you like the few reasons stated above, perhaps it’s time to drop by. Send me an email for my itineary if you really need one. Happy enjoying.

written on 20 Aug 2017

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My favourite Cameron Highlands is getting higher visits again

Yes, if you ask me if I would like to drop by Cameron Highlands every other month, the answer is a Yes. Somehow, drinking tea over there and watching the tea plantation is something I could do every other month. Haha. Plus, my parents love it too, so if they like it, let’s go more often. My brother and sister likes it too but probably not every other month. Okay, with the current relaxation of movement, it seems that Malaysians have started to drive up Cameron Highlands again. Buying vegetables perhaps or just to enjoy a cold evening up there. Regardless, relaxation is a must okay.

Article in nst.com.my
 Temperatures as low as 14 degrees Celcius is one attraction in Cameron Highlands and the number of people going up is going up again. (pun intended). Many people love to visit the must-see places including the Kea Farm market, tea plantations and flower farms. Visitors were required to write their names and phone numbers, wear masks and have body temperature taken before they could enter the selling area for fresh fruits and vegetables.

According to director of the Pahang Tourism Ministry, Arts and Culture Ministry Office, Datuk Idros Yahya, the number of tourists here increased after interstate travel was allowed, with most focusing on ecotourism and food centres. He said, “Most people like to visit countries with cooler weather such as New Zealand, China, Korea and Japan, so when they were not allowed to travel overseas, they sought out hilly areas like Cameron Highlands.” Please do read the full article yeah.
Article in nst.com.my

Well, what are you waiting for? Oh, you are waiting for the coming weekend. Okay, remember to start planning yeah. I browsed booking.com  Many attractive room offers yeah. Below image is as at currently.

Image source: booking.com

If we suddenly meet there and you happened to recognise me, let’s enjoy a teh tarik on me! yes, I do think I will be going up Cameron Highlands within the next few weekends. Happy booking yeah.

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Camp Cool, Times Square of Ipoh, Treetops and sustainable development

It’s me again, reporting about Ipoh. Do you know a good word to describe Ipoh? Timeless. Or another one, Nostalgic. How about two words? It’s called ‘sustainable development’. I mean until today, in all the major cities, which city has changed the least? Penang? KL? JB? Or even KK or Kuching or even Melaka! Some people say but that’s because Ipoh is slow. I beg to differ. It’s called ‘sustainable development’. How many times have you gone back to Ipoh and you can still find your favourite food stall? How many times have you gone back and feel Ipoh is always home always?

Ok, coming back to the latest three developments in Ipoh. All three are by Team Keris. This is quite a famous developer in Ipoh. Though not big nationally but it is a well known developer in Ipoh for sure. It recently launched Camp Cool, which is a landed property with extra privacy. This is because the house comes with basement parking lot. Yes, you park your car and go UP into your house. Team Keris executive chairman Datuk Lee Seng Hee said that he got this idea from Beijing and Shanghai. Besides this, Camp Cool is also a gated-and-guarded development and it is located on a freehold land off Jalan Raja Dr Nazrin Shah (Jalan Gopeng). The pricing is very interesting. It starts from just RM448,000 per unit. Almost same price with my 1,055sf condo in Kelana Jaya and RM200K cheaper than my condo in Penang which is just 1,258sf. Ipoh properties are still affordable. Not cheap definitely but still affordable.

Another project is Treetops. This is a development which would be featuring a green and well- landscaped environment. For this project, he is engaging a landscape consultant to create a conducive green environment for Treetops. It’s a freehold project built on a 5.3 acre land. The best part is, if you are buying Camp Cool, you can also buy a unit of Treetop as it is just next to Camp Cool.

Besides that, Times Square Ipoh is another project which is described as ‘suave, cool and sassy’. Personally, I am not so sure about any ‘Times Square’ named project because Times Square Penang I feel has not lived up to its hype and I was hoping that it can be much more grander than currently where the number of retail lots opened remained low. Times Square KL is fully occupied but because of my age, I feel it is not a mall to my liking. Perhaps younger people may like it more than me. I’d prefer a community mall with some good brands anytime over anything huge but not filled with shops I desire. Anyway, since this is in Ipoh, I would definitely be visiting it once it is completed and I do hope the retail mix would be what is suitable for me. Haha. I mean my age.

There should be continuous development in Ipoh but it’s best that it does not grow like Iskandar or even Penang. Then again I think it is not going to happen because… Ipoh does not have an international airport. No matter what happens though, Ipoh will remain my only hometown no matter how many years I have stayed in Penang or how many years I will be staying in KL. I am Ipoh mali. Cheers.

written on 16 April 2014

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Can banks help 2 stop property bubble?

Can banks help to stop property bubble?

Can banks help to stop property bubble? Why we must stop property bubble potential? No new private equity funds for residential property developments.

Just yesterday evening, I was sharing about the Penang property market with one group of real estate negotiators. Slightly over 100 of them from Penang, Melaka and Klang Valley. After the session, many questions were asked and one of them asked about the potential property bubble for Penang.

Briefly, I do not foresee any numbers supporting this property bubble potential. However, if there are some potential bubble building up, it’s very important that the authorities take immediate action to stem any potential bubble building up. When the government acts too late or believe the market will correct itself, we may have another mortgage crisis like in 2008. Maybe this is why China is taking some immediate action?

Article in nst.com.my
 The government-endorsed Asset Management Association of China, or AMAC, has verbally informed private equity firms it would no longer be accepting the required registrations to set up funds to invest in projects, people familiar with the decision said, requesting not to be named because the matter is private. Applications that have already been made would also be denied, while existing funds wouldn’t be affected, the people said.

This suspension adds to the challenges for Chinese property developers after regulators tightened funding channels including bank loans and trust funding as part of a campaign over the past years to reduce risks.

As traditional avenues of funding were choked off, real estate companies turned to private equity funds backed by high net worth individuals and institutions to raise money, often using land or cash flow income from the project sales as guarantee. Please do refer to the comprehensive article here:
Article in nst.com.my

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Get to know. Can I build 1,000 units on a 1-acre land?

Well, technically that’s possible since we can build high up, I mean very high up. Anyway, to know if we could or could not, we need to understand the plot ratio. So, what is a plot ratio?  Well, very briefly, this is what is defined as plot ratio by the
Town and Country Planning Act 1976
.  “The ratio of the total floor area of a building to the area of the building plot as measured between the survey boundary lines or, if there are no survey boundary lines, between the provisional boundary lines.”

In case you are not even more blur… Briefly, this is just as follows:

Calculation

Your land size is 1 acre. That’s 44,000 sq ft.  Your approved plot ratio by the council is 5. Without taking into account any of the boundary lines, we just use the full 44,000 sq ft and that is 44,000 sq ft (land size) x 5 (approved plot ratio) = 220,000 sq ft.

Build 1,000 units? Yes, we could.

So, just now we were asking if this 1 acre land could be used to build 1,000 units? Well, this is the calculation. 220,000 (approved) divided by 1,000 units = 220 sq ft.  So, it meant that if we intend to build 1,000 units, then the size of the units would be on average around 200 sq ft. Yeah, probably small sized SOHO units versus a unit which is suitable for a family.

Build 1,000 sq ft units? Yes, we could.

How about if we intend to build a 1,000 sq ft condo instead of the 220 sq ft SOHO? We could. 220,000 sq ft (approved) divided by 1,000 sq ft = 220 units.  So, we could actually build 1,000 sq ft units but the number of units would now only be 220 and not 1,000 units anymore. Now, imagine if the approved plot ratio was 1:10!

Calculation as follows: 44,000 x 10 = 440,000 sq ft. Even if we are to build 1,000 sq ft condos, we could still build up to 440 units! WOW. So, are there lands were the plot ratio is 1:10? Well, there are those which are even higher than 1:10.  However, based on the Kuala Lumpur City Plan 2020, the plot ratio is set to a maximum of 1:10.

What happens when the ratio is set too high?

Of course, we would be faced with heavy congestion. Imagine one development within a one acre land and there are 1,000 cars driving out every morning?!  What’s so good about such a high ratio then? Of course, it would be the property price. The more units are built, the lower the cost per unit would be. This is because the cost is dependent on the price of land. If we build more units on the same piece of land, the developers could price it lower and still get the same profits.

Why not set the plot ratios as low as possible then?

Ahem… if gross development value (GDV) is RM200 million for that one piece of land, then building 100 units meant that each unit would cost RM2,000,000. I am not sure how many people could afford to buy.  If however, 400 units were built, then the price per unit comes down to a more manageable RM500,000.  Calculation is RM200 million (GDV) divided by 100 units = super high. Or RM200 million (GDV) divided by 400 units which is now RM500,000 per unit.

Do developers prefer higher or lower number of units then?

If you are a seller and you could sell 100 items and earn RM1 million of profit or you could sell 400 units to earn the same RM1 million, would you prefer to sell 100 units (faster) or sell 400 units (slower, more issues, more potential delays etc…)?  The choice is clear, the lower the better but the developer cannot also sell too few units because the price would become too expensive and it becomes unaffordable…

Hope this gives a brief idea to everyone on plot ratio and why it’s not as simple as just deciding. It has to depend on demand, has to depend on need, depend on the area and well also depend on the market. Some times, during a hot market period, maximising number of units and maximising the selling price could happen at the same time. In slow markets, well…  It’s the current situation loh.  Happy deciding.

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Can you retire with just RM900,000?

Can you retire with just RM900,000?  This was one of the keyword search which one of the reader to kopiandproperty.com entered. How unusual. Is RM900,000 a lot of money after we have deducted the inflation depreciation to it? Assuming we are 56 today and tomorrow we retires, with RM900,000 in cash. Can we survive the remaining of our productive years? Let’s assume we live until 81 years old. That’s 25 years away. In months it is 25 x 12 = 300 months. RM900,000 divided by 300 months = RM3,000 per month. Assuming inflation is really low, at 2% per year. Based on simple calculation, your RM3,000 would be just RM1,500.  Suddenly it does not seem like a lot right? My mother would tell you it is enough for two persons. My father and she. Why would I agree with her? Well if you have the following done before you retire, then perhaps you are still safe.

Medical Insurance – Better be covered. This is a critical part to preserving your wealth. Imagine just one kidney stone operation every five years, that would have cost you easily 6% of your RM900,000. (RM10,000 per kidney operation). There are many more surgeries which costs many times higher.

Car Loan – Do not tell me that you are buying a new car when you retire? It’s not like you need the car to race against all your other retired friends right. Make sure you get a reliable car though and not one which requires huge maintenance even if it looks great outside and inside.

Housing Loan
 – Hopefully by the time you retire, you would have repaid your loan in full. Do not overburden yourself once you retire. It’s time to go enjoy etc. Perhaps at this time, REITs may be a better bet.

Credit Card – My father even called the bank to limit his credit limit because he would not be spending so much anyway. Pay them all within the same month. Manage it well. If you have outstanding balance today, maybe you are spending too much.

Luxury – Branded smartphones.

 Do you need just a smartphone which can do everything you need or you need a smartphone that can make people feel you are successful? If you think this is just little, please be reminded that if you change your smartphone on a yearly basis, from Iphone 4 to 4S to 5S and most probably in a few months time, Iphone 6, you would have spent over 1% of your RM900,000 just within 4 years, on nothing more than just SMARTPHONE.

Holidays – One holiday every quarter is still possible if you go for one by yourself and the other three sponsored by your kids. Yes, I am serious. You should have kids! Teach them well and watch them grow to be great, just like you. My parents love China, that’s pretty okay as it’s cheap. Alternatively, they have no issues to buy Air Asia months ahead and save huge money. Imagine a holiday for two by flights to Kuching, together with stay at Tune Hotel for 2 nights for just RM116.  I am not joking, I have done it before. 🙂

Think about it. What’s needed, what’s wanted.
Manage your needs, Control your wants.

Yes, I think I will manage based on my mother’s way and I think I may just survive the next 25 years after retirement with RM900,000. Now for the hard part, how to get to RM900,000 before I retire. Oh yeah, EPF helps a bit too.

written on 5 June 2014

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Canada Pension Fund and Malaysian investment

The Canada Pension Plan Investment Board (CPPIB), the largest pension fund manager in Canada has taken a stake of 49 percent in Pavillion Damansara Heights. The other half is owned by the Pavillion Group. The stake is worth US$130 million (RM550 million) based on latest exchange rate. This will be CPPIB’s first direct real estate investment in Southeast Asia region. The project is a freehold development which has corporate towers, luxury residences and a retail galleria which is less than 10km away from Petronas Twin Towers. The size of the development is 15.84 acres and will be divided into two development phases.

As per reported in the media, unconfirmed reports said that nine of the office blocks have been sold on an anabolic basis to corporations at a benchmark price of RM1,500 per sq ft. These corporations can rename the towers too, a plus point for additional branding. Based on calculation, the rental price will fetch RM8 per sq ft and this gives an annual yield of 6%. My previous  company was renting an office lot in Bangsar South for RM5.50 psf. Thus, RM8 per sq ft is very good price indeed and furthermore, this is not in the city centre but is in Damansara Heights. I find it hard to believe but the report said that with the great response to the office units, the residential high-rise units may be preview at RM1,500 per sq ft. This would set a new benchmark as prices in Bangsar is lower. Read here:
Bangsar for less than RM800psf? Yes, Still available

No matter what the actual prices may be, let’s wait for the formal announcement. The most important point is that this Canadian pension fund is investing in Malaysia at a time when every negative comment in Facebook are predicting Malaysia to become a ‘failed state.’ Read my personal views here:
Uncertainty in Malaysia? My personal 4 signs

Anyway, just wanted to let everyone know that I dislike excessive speculation. This is especially to those who believe in paying premiums on top of premiums and hope that when the keys are handed over, they can sell ever higher! However, for certain areas where they are already a primary spot, the interest remain strong thus far under the current slowdown of transactions. Hope the second Canadian fund comes, followed by the third and so on. Welcome Canada! Let’s  grow together.

written on 4 Sept 201

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If couldn’t afford, DON’T rent, buy something you COULD afford

Someone sent me an infographic the other day about the pros and cons of renting versus buying a home. It looked interesting but when I asked, I got to know that it was done internally based on some research by asking Gen-Yers. Nothing wrong but perhaps let me write some comments based on my personal interactions with Gen-Yers, both those who love property as an investment or those who prefer to enjoy renting instead. One day, in the future, the house prices would be extremely high. So high that everyone would have no choice but to rent…..
a space in a room instead
. Until that day comes, it’s still best to buy.

In the infographics, the advice given was that if we do not yet have enough downpayment for the property that we want, we should rent first. Actually renting is a
pretty dangerous game to play
. The reason is because even when we rent, we want to rent at places where we like. Perhaps it’s the area that we may potentially buy in the future. That’s why rental in many of these ‘hotter’ spots are also higher too. Do we know
WHO GAINS the most from our rental
? Yes, the owner of that place we are currently renting.

Coming back to renting instead of buying. Would we try to rent as LOW as possible so that we can save as MUCH as possible? Are we sure that we would rather rent an old place so that we can save RM400 per month or more? Honestly, not many are willing to stay in flats while saving tobuy a condo. They are more likely to rent a condo instead and then found out that their savings per month is too slow compared to the potential price increase for condos in hotspots. Assuming that the rental difference between a flat and a condo is just RM400 per month. That’s RM4,800 per year and within 5 years, we would have accumulated close to RM30,000 from rental SAVINGS alone.

Hopefully, we are now jolted awake. That’s why if we could not yet afford the place we love, buy somewhere we could afford first. Oh yeah, the rental that we paid is considered a ‘loss,’ while the mortgage payments that we struggle to pay every month? That’s called, ‘owning our own home’ in the future. Slowly but surely. Do note that there’s really no such as thing as right or wrong. Some may just prefer to rent their whole lives and still be extremely happy. Some may suffer after buying their first property with never ending issues with the property. Just do what we believe is the best for us and love it. Happy thinking and deciding.

written on 10 May 2016

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Capital Control, not this time

It was 1998. I was taking the module of ‘International Business in Emerging Markets’ for my first degree in Bristol when the  lecturer asked the class what do we think about Malaysia’s capital control. In brief, I replied that capital control allows breathing space for some measures to be implemented. Then, the lecturer said that he believe it will be hard for Malaysia to recover as fast as countries which asked for IMF’s assistance. In fact from an economist’s point of view, capital control is never good. I think majority of the students agreed with him but I said, I do not and we would know in a few years time. I think the capital control has helped Malaysia weather the many uncertainties and with a more stable environment, things can move again. After 1998, Malaysia’s capital control became case studies in many universities. In fact, today, capital control is no longer considered no-no but is in fact recommended for some countries but it should not be used unless circumstances forces it.

Towards final few months of 2014, RM as well as Bursa has been under lots of volatility. Mostly down. Recently, when asked if Malaysia would try capital control again, Bank Negara Malaysia (BNM) said no. In fact Malaysia has ‘moved on’ from using controls to manage capital flows. Capital controls are only for extreme periods and we are not experiencing extreme periods currently. Besides, the current banking sector is much stronger than previously after the many liberalisation and enhancement of its competitiveness. As at today, Malaysia is still growing steadily and unemployment remain low.

To those who believe that 1998 is coming back, I think you should have or must take steps to prepare for it. Cash, lots of it. Unwind and sell everything that you have today and get ready, if you truly believe 1998 is coming back. However, if you do not think so, then at least stop spreading false and negative rumours. Until today, irregardless of research houses or banks, the growth for Malaysia is projected to continue and worst case estimation has been that for 2016, our growth may be slightly below 5%. The property market is also on a downtrend in terms of transactions thus far but if the developers are willing to sell lower and more affordable units come into the market, the total transaction numbers for primary market is likely to hold steady or increasing again. Of course, if you are buying at RM800psf today and hopes for RM1,000psf in a few years time, I can only wish you good luck. Always understand that the growth of the country or the lack of would be a major determinant of the property market. Low unemployment meant a lot of people   have potential to buy but final decision is based on affordability.  Happy understanding.

written on 16 Jan 2015

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Car bookings tripled. So many people NEED a car?

How long have you driven your current car? Long enough to think about changing to a new car? Thinking of upgrading your car since you now have an upgrade in position? Are you buying a car soon? Sales tax for new cars are now 100% exempted (local CKD models). Reported recently were some positive comments from some car brands. For one of them, the car bookings have tripled when compared to the period before the announcement of the car sales tax exemption.

Article in carsifu.my
  MIDF Research said Bermaz Auto (BAuto) saw almost a tripling in daily bookings compared to post-movement control order (MCO) levels. It said in a note, “Our channel checks with selective industry players suggested possible early signs of improvement in sales. BAuto (which sells Mazda cars), for example, saw a strong rebound in daily bookings post the automotive tax-holiday announcement on Friday last week.”

Maybank Investment Bank Research (Maybank IB) said the introduction of the tax exemption is a timely inducement to spur sales decimated by the MCO exercise since March. It said, “We are positive on this, for it will spur purchases and reduce inventory build-up. Sales were severely curtailed during the MCO period. We draw parallel of this ‘tax incentive scenario’ to the situation back in June to August 2018, when the 6% goods and services tax was zero-rated.”  Please do read the article in full yeah.
Article in carsifu.my

By the way, assuming all these car bookings do turn into actual buys, it tells a lot more than just car numbers yeah. It’s a positive sign that people continue to have money to spend. It tells of people still having stable jobs with stable salaries. Do note that when the job is not secure, no one thinks of buying a car. Definitely not a new car. Secondly, if I have no money, I have no money. Simple fact. If no money, how to buy a car?
Perhaps should think about MY100 instead?
 To be certain, we need a few more months of numbers. In the mean time, feel free to start test driving some models you have been eyeing on.  Happy enjoying.

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You sure you can get your car loan approved?

Sales tax for new cars is now exempted fully (for CKD models) from now till end of the year. So, perhaps this is a great time to get that new car we have been eyeing for a long time. The savings from the sales tax is enough for a cuti-cuti Malaysia or a cuti-cuti at South Korea depending on the car model which you will buy. Anyhow, it’s a savings and that’s a good thing even if we do not use the money saved to go for a holiday yeah.

However, there’s this little problem unless you will be paying for the car with cash. If you intend to get a car loan instead, then here’s some potential bad news. Banks are stricter when it comes to car loan approval because they are worried that you may still lose your job even if you have a job today. It’s like those days when banks have stricter requirements for people working in the oil and gas sector…

Article in themalaysianreserve.com
  Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said lenders are stricter and this means longer approval times. She said, “The banks are looking at many angles, such as whether the applicant is working from home or is the industry thriving, because they are concerned about the person’s ability to pay. Previously, the assessment normally takes three to five days, but now it could be a week or longer.”

She also shared that it’s now difficult to get a 9-year loan and customers could only secure a seven-year loan and a maximum of 90% financing. All these depend on their creditworthiness.  She said that beyond just becoming stricter, banks have also reduced hire purchase loan quantum, particularly for used vehicles, and it varies based on brands. Do read the article in full. A lot more details.
Article in themalaysianreserve.com

I think we should not be too worried. If we really have saved enough for that new car, surely our financial foundation is strong enough to get the car loan approved. Perhaps we just need to watch the price of the car we buy. If we use 9-year loan as calculation, we may be able to afford a more expensive car. if we use a 7-year loan as calculation, I think the chances of us getting the loan approved is much higher. Of course this meant buying a cheaper car which may not allow us to show off that much. Well, if we are not happy about it, then do not buy yeah. No one is forcing us. Happy driving your current car if it still works well.

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Car loan savings. 5 versus 9 years. Which is better, really…

Not many of us buy a car without a loan. Do we know enough about car loan savings? The higher the number of years, the higher the actual interest paid. The lower the number of years, the lower the interest which we will pay. Statistically, this is true and this is why some would recommend that we fully pay for the car within shortest time frame possible. This will save us lots of interest payments. By the way, this is true yeah. The faster we pay, the lower the total interest which we will have to bear. However, we should also understand another side of the story yeah. There are two sides to a coin, right?

RM100,000 car, okay?

We assume we are buying a typical RM100,000 car. Note, this is only for the purpose of showing the number and not intended to ask you to buy any car, whether below or above RM100,000. The calculation is as below for a RM100,000 car with a 10% downpayment and a loan period of 9 years. Total monthly repayment is RM1,095.83 or RM1,096 if we rounded it up. Total actual loan interest payable at the end of 9 years is RM56,700.

The image right after the below one shows what happens when it is a 5 year loan.

Source:
http://calculator.com.my

Source:
calculator.com.my

Total monthly repayment is RM1,762.50 or if we round it up, RM1,763.00  Total interest payable for this loan is only RM31,500.   Compared to a 9 year loan, this is a savings of RM56,700 – RM31,500 = RM25,200

How much extra per month?

If we take this RM25,200 extra and we divided it by 9 years, then this is an extra RM2,800 per year. Divided by 12 months, that’s an extra RM233 which one technically bears every month. I know, everyone would now share with us all the many extra things we could buy if we have an extra RM233 every month. Let’s also look at the monthly repayment now.

Monthly repayment for that 9-year loan? RM1,096.  Monthly repayment for that 5-year loan? RM1,763.  The difference every month in terms of amount? RM1,763 – RM1,096 = RM667 per month. RM667 per month is quite a significant amount because within a year, we could have saved RM8,004 which we could then use to invest into a stock which gives a return of 8%? That’s extra RM640 per year for 9 years and it would be an extra RM5,763.

(I know, you wanted to say it’s just 8 years since first 12 months was used to save, then I wanted to also remind you that we use a simple calculation versus a compounding interest… give and take yeah)  Plus we have not even factored that we may have bought a good stock and there’s capital appreciation gains. Forget that for now.

Total interest difference just now was RM25,200 after 9 years. Total interest we earn from our FIRST year savings is RM5,763 and this meant ACTUAL savings from the interest is now just RM25,200 – RM5,763 = RM19,437

What happens end of year 2 and beyond?

This does not yet include what happened to the 12 months savings on year 2 and we reinvested the same amount. It does not yet include the year 3 savings and so on. I will not continue the calculation but I hope this tells all of us another side of the story and it’s not just that simple argument that paying in 5 year is way better than paying in 9 years yeah.

I know, now someone may want to point out that my loan repayment stops after 5 years while that person paying for 9 years would have to keep paying for the next 4 years. Just note that the person paying in 5 years have paid ALL the necessary interest in 5 years while the one paying in 9 years are paying over 9 years.

Personally, I have never taken a 9-year car loan

By the way, I do not have any car loan which is 9 years. Wife’s ex Kelisa was 5 years. Her current Persona was 7 years but we paid in full by the end of 5th year because of a huge gain from a property sold. My ex Persona (yes, we had TWO Personas) was 7 years but was fully paid in 3rd year because of the same gain from that one property we sold. My current Exora is 7 years and I have not sold any property, so, I think will just let it run its course. 🙂

More savings, possible?

Happy understanding that financial knowledge is super important and IF we really wanted to save more interest, then the right thing to do is to buy a cheaper car and not that RM100,000 car. Looking for safety? Most cars have 5-star crash safety rating these days, including a RM50,000 car. Looking to boost your image? Erm… RM100,000 car does not do much beyond boosting our image among our peers.

Our friend who’s much more successful would probably be driving a car more than twice the price of our RM100,000 car. My ex-staff drives a car which is double the price of my car when I hired him many years ago. Oops… Plus, our CEO who’s earning RM30,000 per month would definitely have more than enough to buy a RM250,000 base model luxury car too. Not so sure if he wanted to get a RM100,000 car instead… Does not boost his image as a CEO.

Let’s also not forget that IF we could save RM667 per month, then 5 years later, we have enough downpayment for a RM400,000 property…  RM667 x 12 x 5 = RM40,020. This is 10% downpayment for a RM400,000 property.  Happy understanding both sides of the story. No links below for you to buy a car or get a loan yeah. Just sharing numbers. Final decision is definitely ours to make. Remember yeah, we also did not yet talk about the depreciation loss.

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Car vs property? Well, car ownership do mean something, luxury one please.

I love both properties and cars. Both are important if you ask me. One to make sure we are okay in the future (investment), when the prices of the property goes up. One is to tell people that we are doing okay; we could afford to drive since toll, petrol and parking will still cost hundreds of ringgit per month if we happened to stay in Kuala Lumpur. We have no yet included the typical maintenance yet. Anyway, I also do not think my wife fancies bringing my two kids to nursery every morning via GRAB or even the MRT. Of course if either of my two cars (my wife drives an Exora, I drive a Persona) give me problems, I will change that particular car in 48 hours. Haha. Okay, let me be frank, I cannot be changing to a new Segment D car immediately but I think a second hand one is still possible. Nope, I would not want to drive a

BMW and having to eat bread every evening.
My Home Minister would not approve too… (Too flashy…)

If the question is why didn’t I buy a more expensive car, well the answer is simply, ‘I could not afford loh. Well, if we really check all the cars in the market, I actually did not buy the cheapest Segment B car or the cheapest MPV lah, okay. 😛 )  However, my situation may only be applicable for Malaysian professionals. Actually, many non-managerial friends of mine already drive a Honda Civic which meant that this is not considered a ‘luxury’ car anymore. Perhaps the minimum car under the ‘luxury’ category should be a Camry? Or Teana or even Accord? Or should we put the benchmark higher? Audi / BMW / Mercedes? Applicable only to Malaysia lah because in Singapore, owning a car is a super huge thing. Even if that car is an entry-level 1.6 litre model. Let’s not even talk about the colour of the plates yet yeah. Both require substantial investments anyway even if in Singapore, even the colour of the plate would make a huge difference.
Reported in channelnewsasia.com is ‘How much it really costs to own a car in Singapore’

This is one of the paragraph inside the article:
“Owning a car in Singapore, even an entry-level model, is a signal that you’ve finally arrived in the world. But it also means that you’ve also stepped onto a recurring financial treadmill of instalment payments, fuel, insurance and maintenance bills.”
 Based on the calculations provided inside the article, the cost to own an entry-level 1.6 litre car is around S$1,600 per month. Frankly, not that super expensive since Singaporeans are earning S$ anyway. However, the S$1,600 also meant that the buyer needed to pay 30 percent downpayment for that S$100,000 (RM296,000) entry-level car. That’s S$30,000 of cash, first. Just for comparison, the lowest variant of a Toyota Camry is S$150,000. (RM444,000) The Certificate of Entitlement (COE) which is included into the car price is currently around S$40,000 (This is considered on the low side since market is a little weak.
Do read here for the full article in straitstimes.com
  Why is the COE considered on the low side currently? Here’s one
Full article for reference.

For Malaysians who own cheaper cars like me, it’s okay. Our good friends would not mind anyway. As for our ‘enemies’, unless they are driving a minimum Segment D car, we can still tell them that we are almost the same lah. That extra RM30,000 that they paid, over 9 years is only extra RM300 per month lah. So it’s more of a choice rather than affordability even when your car is more expensive than mine by RM30,000.  However, one thing is very important. Regardless of the car we drive, make sure we OWN a home for us to park that car. If we own TWO cars, it would be better to own MORE than two homes. 🙂  We must also be savvy to the fact that regardless of the car brand that we own, it depreciates every year. Meanwhile, as long as our property is not something ‘extraordinary’, it usually appreciates in value every year. Nope, not because it looks awesome but usually because everything else is going up. Cost of land, labour, machines and even building materials. Happy comparing and driving the car you love and parking it in a house you bought and not rented.

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written on 21 April 2018

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Car parks, do not be oblivious to the obvious

Assuming a condo project is launched today and the sales person at the showroom told you that the price after discount is just RM550 psf and you think the location is still okay what should be your next question? I think it should be
“how many car parks”
. This is an important factor which many have often overlooked in their calculation for the overall price per sf. For example, if the size of the unit is 1,000sf and its RM550,000 with one car park, then the price per sf is NOT RM550 psf. Please add another RM40,000 as the price to buy another additional car park or whatever the price of the additional car park is. This means an additional RM40 psf is to be added into the final price psf. So, RM550 would become RM590 psf. Yes, RM590 psf is definitely not a low price for a secondary choice location under current circumstances.

What if the sales person tells you that you should not worry because that particular condo is within
walking distance to the MRT station
? Thus, one car park is sufficient? Should you still insist on buying an additional car park? My personal recommendation remain the same, all new condos today should have two car parks. Just look at those driving in the morning when you are on the way to work, there’s no way that each household would have just ONE (1) car even if we have MRT coming up soon.

These days, when we are driving in certain areas, no matter how many turns we do, empty car park space is hard to come by. Thus, please do not believe that in future car parks would be easier to find when you have more than one car and only one can be parked inside the condo. When you have intention to sell your unit for profit, it will be much
easier to sell your condo
 with two car parks. In fact, it will also carry a premium over those with just one car park. In countries overseas, car parks can be even a few hundred thousands because there’s just no empty space available to park the car!

In Hong Kong’s CBD, you cannot even afford to buy a car park space. In 2014 as reported in CNN, one car space in Hong Kong was sold for HK$547,000 (RM270,000). This was in 2014. Just last month, a reader of kopiandproperty.com, Jason commented the following: :”My family just sold our parking slot for $1.4 million hkd last month (originally bought for $200k back in 2003) and guess what? I just checked the transaction records online and realised a parking slot in our neighbourhood has been sold for $1.6 million recently. Crazy right? I can’t wait for the bubble to burst :P”

Yes, I am asking everyone to factor in just RM40,000 for that extra car park space. What about Australia? Read here:
RM348,000 for a 12-square metre car park slot

There has been little doubt that MRT would be operational in future. Soon and it would herald a new era of ridership. However, we must not be oblivious to the obvious. Car ownership is not about to go down anytime soon. Just have to be savvy about it and make our buying decisions wisely. Happy buying a condo with TWO (2) car parks.

written on 6 July 2015

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When even the car parks can be bought and sold like a home

I love extra car parks. It’s a great convenience. My earlier article here:
Should I buy the 3rd car park?
In fact, as long as a developer is building condos, they must ensure there’s sufficient car parks within the project. In some projects an additional car park can be RM50,000. This is considered very ‘painful’ to the wallet but I think if one loves the project, then one must be willing to get an additional car park space for the future. As for how crazily expensive car parks can be, well let’s look at a photo I took just yesterday in Sydney. Image attached. When parking starts from AUD7 for first 30 minutes, it’s no wonder that parking space becomes a luxury! Yeah, that’s the reason I did not rent a car this third visit to Australia. Parking would have cost much more than the car rental! Now, how about earning some money by buying and selling one?

Here’s an investment which could net you US$330,000 (RM1.3 million) within 9 months. Nope, it’s not via kopiandproperty.com super-duper scam. Haha. It’s by buying a space and selling that space. The space is a carpark. The place is Hong Kong. According
to an article in South China Morning Post here,
this is a single parking space in Sun Hung Kai Properties’ Ultima apartment complex in the Kowloon district. The seller is a Hong Kong couple who paid HK$3.4 (RM1.72 million) for it in September 2017, according to Land Registry documents. The parking space has set a new world record when it was sold at HK$6 million (RM3.04 million) or HK$44,444 (RM22,539) per square foot. This is what Sandia Lau, a director at Centaline Property Agency said of the sale, “The development is in a luxury residential area. The residents have a lot of cash and simply do not care about a few million dollars when a flat there costs about HK$100 million.” She added, “Their convenience is more important.” Here’s that full
article in SCMP again.

Well, technically this car park in Hong Kong is many times more expensive than the affordable apartments that are being built today in Greater KL. Perhaps up to 10 different apartments are possible with the tag price of RM3 million. I know, we want to say that Hong Kong is small,that’s why space is limited. Let me tell you that for the same price of HK$6 million, even Hong Kongers can still get a flat but it will not be within Hong Kong Island or Kow Loon, that’s all. That tells us that it’s not just land size but it’s the demand for convenience and the demand by the super-wealthy that will drive up the price. Remember what Sandia said in the article? Yes, the people are super-wealthy and cares nothing for convenience by paying a few extra millions. Amazing thought for the day. Happy buying your next car park!

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written on 8 June 2018

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Car prices, going down or up due to Ringgit?

A few weeks ago, someone told me that the car prices are going up due to the Ringgit weakening. I told him that I think the prices would have to depend on demand and less of the Ringgit. He wanted to debate further but I told him I have little interest. He is entitled to believe what he wants to believe from what he reads. Yesterday, my brother told me about Proton’s discount due to it’s 30th anniversary. Obviously this is a gimmick due to its slowing sales but if it helps in sales why not? Is Proton the only one doing this because of its slowing down sales? Following are some other discounts or offers:

Honda – Up to 8 months free instalments. Yes, depending on the model that you are buying, its a minimum of 3 months of free instalments for the CRV and up to 8 months for the Accord. There is even a free Year-End Surprise gift as well as a chance to win a RM2,000 pre-loaded debt card.

Infinity – Maximum performance and minimum payments. It’s Q50 Premium Sports Sedan 2.0L Turbo starts with an instalment of just RM1,999 per month! The car is also fully imported from Japan. For the richer ones, better be fast as the offer ends 30th November 2015.

Peugeot – BIG 5 Ownership specials. 5 Years free service, Peugeot Protect and Warranty and Unlimited Mileage. If you choose Peugeot 508 THP, you get RM6,000 savings and if you are aiming at Peugeot 408, then it’s up to RM16,000 rebate. You get Leather seats for Free too.

Toyota – WOW Year-End Deals. Many models are now offered with attractive cash rebates and lots of free stuffs. For financing, 2-Tier Plan. Get to pay lower amounts for the first 6 years! The final 3 years are higher but if you want, you can also trade in your Toyota car for a new Toyota car then!

Perodua -RM2,500 cash redemption when you buy a MyVI. RM2,000 cash redemption when you buy an Alza. This is ONLY valid till 31st October which meant that their offers are ending soon.

Volvo – My father-in-law’s favourite car brand which he has recommended to me for the past 10 years. It’s now “Enjoy 10% off when you purchase a new Volvo V40 T5, V40 Cross Country or XC60 T5 Polestar Edition.” How much is this 10% off? Well, let’s just say it’s nearly the price of a Proton Saga. 🙂

List is non-exhaustive. Many more are offering special discounts too. Okay, enough of offers. If you need a car, take your pick. Ringgit will not be the main deal-breaker. It’s definitely the demand. Increase the prices and lose more orders? Fixed costs are still continuing even when sales are down, please remember that. It may be better to sell more with lower margins. Perhaps I would like to add, it may also be prudent to get a cheaper second-hand car. Make sure it’s  one of those low maintenance type. These days, it’s best to preserve as much cash as possible. It should create a chance for you to grab some potential opportunities along the way until the world economy starts showing better signs and the ringgit stabilising after that ‘green’ coloured currency has had its rate increase. Oh yeah, according to Citibank’s latest forecast, the world economy is heading for a recession in 2016. That’s just months away. Better beware brother. (BBB).

written on 24 Oct 2015

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7 things about car sales in Malaysia. Why is it important?

Car sales in Malaysia has been on an uptrend. Probably a lot of it has to do with the fact that there are many new models being launched as well as the exemption of car sales tax until 31st December 2020. There’s the
Proton X50 which has hit over 27,000 bookings.

Image Source: paultan.org

Yeah, I do think this is totally unexpected. There’s
that 1.0 litre turbo engine Nissan Almera
which has received lots of good reviews.

Image Source: wapcar.my

We also cannot run away from the brand which showed how many cars were left behind because it
has 253 Nm. The powerful Honda City RS i-MMD.

Want to know how much you could save?  Click here.

By the way, this is NOT a buy car article yeah. Do read the end for the 7 reasons why car sales in Malaysia is so important as a barometer of the market.  Coming back to these few models, whichever is your favourite choice, happy buying and driving! As for me, well, no extra budgets for cars this year (yes, bought a new home). Probably will drive the current two cars for two more years and then we will see what’s available in the market at the time.

The one I want too expensive, the one I could afford, well too many are driving already

Anyway, the car I really want is just too expensive. As for the cars I could afford, I do not feel it’s worth paying so much and drive a car which majority of anyone with a manager salary could afford. Haha. Let’s  get to know what’s happening with the car company who’s having the top market share in Malaysia.

Article in themalaysianreserve.com
  UMW Holdings Bhd says that as a group, it’s automotive market share is estimated at 58% in October and this was an increase from 51.4% in 2019. Part of the reason for it doing well is because of the sales exemption from the government.

Perodua broke its monthly sales record in October with a total registration of 26,852 units, a 7.3% increase from the 25,035 units in September. Malaysia’s top carmaker delivered 171,864 vehicles in the January-October period, which was 81.8% of its 210,000 units targets for the year. UMW said Perodua’s two plants have been running almost at its maximum capacity since August in order to meet the strong demand. Do read the full article here:
Article in themalaysianreserve.com

So, why are car sales in Malaysia so important and it is so important to the market in general?

#1  – Perodua cars are NOT really a showing-off car

I do not know that many friends who bought Perodua cars to show off that they have ‘arrived.’ I mean it’s a car for moving around, that’s about it.  So, the buyers are the usual working professionals and they would represent the majority of Malaysians. If they could still continue to buy new cars, it showed that they continue to have jobs and could still afford to get their car loans approved by the bank. Definitely a positive sign.

#2 – Banks are still lending

A good friend from a major European brand once told me that at least half of the potential buyers are those who are on the borderline of approval from the bank. What’s important is this. The banks are still lending even for these borderline cases. In other words, it is not true that the banks are no longer lending or that approvals are now hard to come by. Perodua sold record number of cars every month, loans are still being given yeah.

#3 – Positive sentiment still prevail

How many of us who’s on the brink of losing our job would still be thinking of buying a new car? If we were about to lose our job, no matter how attractive the tax savings, we are not going to take the risk and buy the car. Thus, what we are witnessing now is that the people remain positive with what they are currently doing and have the confidence to go ahead and buy a car which they now have to pay for the next 7 years or higher.

#4 – When there are good choices, there will be good demand

I am not sure about you but I do think that if these brands continue to sell the SAME car year after year, by the 4th or the 5th year, the number of people thinking of buying would reduce tremendously. This is actually the same as in the property market. If the same property which has been completed was still being sold at the same price as newer properties, it will be super hard to sell. The design is already dated…  So, good choices will help create demand.

#5 – We need a place to park the car… right?

Sometimes, we buy a new home and we drive an old car and we feel that the new home deserves a new car… Sometimes, we buy a new car and we stay in a rented place and we do not like the neighbourhood. Well, we may think the new car deserve to be parked in a nice home… So, whether it’s buy a car first or buy a house first, this demand for new cars would be a good sign for the property market too.

#6 – It’s NOT just Perodua

Beyond the average Malaysians, if we move up the household income ladder, we could also see that the sales for all these more expensive models which would require RM2,000 monthly repayments are also seeing higher sales. Volkswagen, Volvo, Lexus, Porsche were some of the brands which were seeing a higher number of cars being sold. This really help us to understand that the market is generally doing okay, whether the middle income households or high income households.

#7 – Jobs, Jobs and Jobs

When the car companies sell more cars, they need to manufacture more cars. Thus, employment within the industry would remain healthy and this industry is not facing a bleak situation like the tourism industry. Even if we assume the industry is not hiring ever more people, it is plain to see that the industry is not retrenching since they would need these people to work very hard to deliver the demand for the new cars.

Conclusion

Beyond just the usual indicators such as unemployment rate or the non-performing loan, car sales is another good indicator for the market. Always watch this number; car sales in Malaysia to gauge the confidence level.  Oh yeah, if you have bought a new car, do enjoy it yeah. If you are thinking of buying a new car, better be quick yeah. The sales tax exemption is only until 31st December 2020.

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That car you want? 4 months left to get it without the car sales tax.

Sometimes a new car is really necessary investment

People say buying a new car is not a clever decision. We are spending money into something that depreciates. Actually, it really depends on how we want to look at the decision yeah. A close friend has to buy a luxury car (brand starts with B) because it’s not possible to motivate her sales people to sell more, get more commission and then… drive a Vios? So, for her, it’s really an investment into her future. The car is necessary.

A company loves their CEO, right?

A company will buy a luxury car for the management team NOT because they love the CEO lah. (maybe a bit) However, they will buy the luxury car so that the customers will think highly of the CEO. The luxury car will also help the company with its branding and status. Seriously, this is also for the company’s benefit. People may have less confidence with the company if they could not even afford a proper car for the CEO and if they saw the CEO arriving at the meeting place in his 12 year old Persona.

Many other valid reasons to buy a car

Before everyone now thinks that we should only buy a car for these reasons, let me say this too. If we earn enough money to afford a luxury car (luxury car is a minimum Segment D), we should proceed to buy and enjoy the car. Always be good to ourselves first.

If we just needed to buy a new car to show our friends that we are more capable than them, then go ahead and buy one too. If we need to buy a car because the current one keeps breaking down, please go ahead too. If we like to buy a new car for our parents, then this is a super reason to buy too. Just remember… sales tax exemptions are ending in the near future yeah.

Article in themalaysianreserve.com
    Finance Minister Tengku Datuk Seri Zafrul  Abdul Aziz reminded Malaysians that there are four months left to buy locally made or imported cars and enjoy tax incentives.

He said, “Under Budget 2022, the car sales tax exemption remains the same as before, that is 100 per cent sales tax exemption on locally assembled passenger cars (CKD).”

He added, “Meanwhile, a sales tax exemption of 50 per cent is given to foreign assembled passenger vehicles (CBUs) including MPVs and SUVs, including new imported CBUs and used imported CBUs.”
Article in themalaysianreserve.com

Overstretching financially remains high risk

Regardless of how valid the reason to buy a car is, just need to remember not to overstretch because no one knows if unforeseen circumstances may unfold. Covid-19 was one of those. We may suddenly lose the ability to service the car loan and lose both the car and also our financial freedom too. If we could afford RM1,000 for a monthly car loan repayment, how about getting one for RM600 instead? The extra RM400 savings every month will help a lot in unforeseen situations.

All the best and yes, do support the car industry by buying a new car. We need more new car sales transactions if we like to go back to the typical 600,000 car transactions every year before the arrival of Covid-19. Perhaps that next new car could just be an EV (electric vehicle) too.

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Of car sales, unemployment and property market; related definitely

Car sales, those of the more expensive ones were up last year.
Malaysia: Negative sentiment, positive luxury car sales

General conclusion? Perhaps the richer ones were still rich and many of them decided to change cars last year. Or perhaps many of their children got new cars last year. 🙂  My Exora is already in its 3rd year, so it was not included in the list and definitely not under the luxury category.
Based on an article in TheStar.
Well, number for March 2016 is HIGH. Much higher than February 2017. Reasons? More days plus many companies were rushing the deliveries as their financial year was ending on March 31 2017. (Tax purpose lah…)  Total units rose 26.5 percent to nearly 54,000 units in march 2016 and the Malaysian Automotive Association (MAA) said on Tuesday that the April numbers should match March’s. It said one key reason for this good numbers would be the promotional campaigns by the car companies. (Generally, I do agree but we should note that if the sales numbers are good in the first place, promotions need not be so aggressive.)

This brings us to my personal reasons why car sales are still up. Well, many Malaysians continue to have a job (means low unemployment rate) and many remain
upbeat about their career prospects.

Let’s be real, if we fear the loss of our job within the next few months or next year, would we be buying a car this year? More likely for us to get a cheaper second-hand car, right? For those who want to say but I can get a (Energy Efficient Vehicle) EEV car. Allow me to smile at you. Next go to those car listing sites and take a look at what’s available for half the price of that EEV car that you are talking about. Whatever fuel you can save is NOT likely to save you RM20,000 within 9 years. Not a joke. Don’t believe me? Assuming the usual cost per km is 25 cents. (latest fuel price and car is a Persona 1.6; old car lah). Assuming your awesome EEV cost per km is ONLY 10 cents per km. That’s 15 cents per km difference. Every year, you drive 20,000km, that’s a savings of RM3,000. After 9 years and hitting close to 200,000km (which majority would never hit anyway), you got to save RM27,000.  WOW…. However if the reason to buy a new car is because you want to show off (you have a promotion or still have a job) or you just love the new car smell, then your reasons are all  valid. Please go get a new car. Stop telling people about the fuel saving reason.

What about the property market then? Well, remember all those stories circulating around saying home loan rejections are high? Well, if we earn X amount and we bought a new car which needs an instalment of over RM1,000 then the banks would definitely wonder if we could really afford a property, since we are already paying for a new car which will take another 9 years. Especially when that home loan would border on our Debt Service Ratio. When banks feel unsafe, they would not take the risks lah. No banks love the potential for non-performing loans. (NPL). Of course, I would also hope that all those buying cars are those that got a good promotion and a big increment, then the home loan approval would have no issues. Happy buying things that we love. Live life without regrets. If we intend to regret, then it’s best not to buy or get a cheaper car instead.

written on 18 April 2017

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, says the MAA.

MAA added the March vehicle sales were also higher than a year ago, registering a 10% growth of 4,929 units than a year ago.

The March 2017 sales of 53,717 units comprises of 48,355 cars and the rest were commercial vehicles.

Year-to-date, total industry vehicle sales rose  7.3% to 140,839 units comprising 127,530 passenger vehicles and 13,309 commercial vehicles from the 131,251 units in the previous corresponding period.

The MAA data also showed that production rose to 49,356 vehicles in March this year, an increase of 3.2% from 47,810 units a year ago. Passenger vehicles totalled 45,124 units and commercial vehicles at 4,232.

Read more at
http://www.thestar.com.my/business/business-news/2017/04/18/march-vehicle-sales-vroom-past-february-volume/#T1MPe2fxS1OAXDWM.99

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