High end KL condos, future looks brighter? More units coming.

According to Nawawi Tie Leung Property Consultants Sdn Bhd (NTL), high-end condominiums in Kuala Lumpur has risen by 4.4% to RM784 per sq ft in the second quarter of 2018 (2Q18). (What this meant is that a 1,000 sq ft high-end condo should be priced at close to RM800,000.  I think if the condo is priced lower than RM600,000 then it is not considered under this high-end category. Yes, I think this apply to those condos in Mont Kiara too. My current office is there inside Solaris Mont Kiara. Based on the food prices there, it’s definitely high-end. Haha…)  There were however a substantial additional supply of 1,168 condominiums into the market. “The two developments are The Fennel in Sentul East (916 units) and Dorsett Residences in Bukit Bintang (252 units),” NTL said in its latest “Kuala Lumpur 2Q18” property report, which was released today.
Full report in EdgeProp here.

According to NTL, within the second half of 2018 (2H18), another 5,260 high-end residential units are expected to be completed, of which 40% will be in the city centre.
(If we refer to the words used where 1,168 new units are considered substantial, I am not sure how to describe these additional 5,260 new high-end condo units. Let’s hope that the market will be supported by many capable buyers, especially the high-rise upgraders.)
 NTL also praised the plan by the new government to build at least one million affordable homes and introduce a special housing loan scheme, which will encourage youths to buy their first home. It said, “These initiatives will likely increase the number of transactions and encourage more affordable housing projects by both public and private sectors.” Here’s
the report in Edgeprop.my

Always be reminded that average numbers are meant as a reference point. Just as when average prices are up, it does not mean every project would have the same change. As for whether the prices will continue to go up, it really depends on the total transactions and not the new units coming into the market. In an earlier report, it was pointed out that the median property price in KL city was RM580,000.
Please refer to the report in TheMalaysianReserve here.
  Based on the B40 and M40 households, I think RM580,000 is out of reach for most of them. This is the reason why the prices would have to be lower for newer units. Size may be the determinant in this case. If we need to maintain the same price, we need to build smaller. Else, we need to buy outside the KL city perhaps. Happy getting your keys.

written on 14 Aug 2018

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Crest Builder with Latitud8 and selling to reduce gearing

I do not think too highly of developers who are taking their own sweet time when it comes to developments. Common, show some vibrancy and aggressiveness. However, I also think having a very high gearing is quite dangerous and may cause the company to face cashflow issues. In fact investors may not want to buy a company which is over-geared especially during a slowdown in general. A developer with a high gearing is Crest Builder. It’s current gearing is 1.7 times. It is looking to reduce this by selling off its Tierra Crest office block in Kelana Jaya. It has a book value of RM158 million and is 90 precent tenanted, it’s managing director Eric Yong revealed.

He said this about its debts. “Yes, we are looking to sell one of our assets but we’re not in a dire situation either. We are staggering our development projects. We have the funding requirements for 2016. We are good for the next 18 months. Our unbilled construction orderbook of RM1.2 billion will keep us in good stead.” According to Yong, the group’s RM510 million sukuk is self sustaining. It is being serviced with the group’s yearly concession income of RM43 million from Universiti Teknologi Mara (UiTM) campus in Tapah, Perak.

Crest Builder is also undertaking the first transit-oriented development with Prasarana Malaysia Bhd. It’s called Latitud8 and is located just above the Dang Wangi underground LRT station. It is a 45-storey mixed-use tower. It will have a lifestyle retail podium with business and convention facilities, open office spaces, SOFO (small office flexible office) suites, SOHO (small office home office) residences, duplexes as well as a rooftop lounge and bar. Under this public private partnership, landowner Prasarana is entitled to 21.2 per cent of the RM1.16 billion gross development value (GDV) of Latitud8, including land cost.

In terms of launching, the selling of the office space and residential space will start from September 2016 while the work on the foundation of the new structure has begun. According to some other media reports, the estimated price per sq ft for the residential component is RM1,300 per sq ft. Everyone should mark these words, ‘Transit-Oriented Development.’ It will be a word used many more times as I think there would be more of these public-private joint ventures moving forward, especially for stations where further developments are possible. Yes, I would definitely drop by for a look since my office is not too far away. As for pricing, I leave it to investors to decide. Happy visiting.

written on 12 June 2016

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High property prices is never a good sign, regardless of country.

It is not a good sign if property prices keep moving up much faster than the salary increments we receive every year. Of course if we get a promotion, the typical increments may be 15-20 percent and this is faster than the typical increment in property prices. However, not everyone gets a promotion every year. So, what should happen is that the market gets injection of more affordable homes to keep it stable and availability in affordable units. The image shows the property price increase for over 20 years on average. What happens when the property prices rise well beyond the reach of the majority; everyone who needs a home could NOT buy a home? Property bubble starts happening as soon as many could not afford to buy due to crazy price increases. Property bubble bursts when majority gave up buying and the banks dare not lend. Let’s look to an example in the world’s largest economy for some ideas.

Here’s the article in Financial Times for reference.
Some highlights in the article? US Mortgage loans are now back at the same level as 2008.
Remember what happened in 2008?

“Housing is often found at the heart of financial crises.” “the housing bubble was the “essential proximate cause of the crisis.” When the 2008 mortgage hit, house prices dropped 35 percent in the U.S. The article says that currently, the situation is pretty encouraging. There are lots of well paid jobs in big cities, the mortgage borrowing costs is low and the current housing supply is the one pushing up prices to record levels. it also shared that based on UBS’s Global Real Estate Bubble Index, there are two markets with higher possibilities of a property bubble bursting; Hong Kong and London. The article highlights the fact that the market is extremely complex because the market is also propped up by many direct and indirect government measures which is not easy to remove. In conclusion, the new Federal Reserve chairman, Jay Powell has a difficult task ahead in normalising the markets back into a free market.

Referring to this sentence, “Housing is often found in the heart of financial crises.”  I think this is very true! Imagine if we need a home but
not a single one is affordable to us.

We would not be able to buy or we would overstretch our actual limits just to buy. Where a small change in our earnings would push us into a deficit immediately. Assuming the banks still lend to us, it meant that they are taking a super huge risk.
Imagine if prices comes down by 10 percent.

The banks would immediately spin into losses even if they were to auction off the property! Yeah, that’s how financial crises actually started. Extremely expensive homes which stretched everyone including the banks to their limits. A sudden change toppled everyone to take a huge ‘cut.’ Hopefully we do not face this yeah. At least hopefully it does not start from within. We cannot control the external environment. Happy following.

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written on 16 March 2018

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High-rise occupancy is 69% in KL.

Reported in a local English daily. According to CH Williams Talhar & Wong managing director Foo Gee Jen, the average occupancy of high-rise residential property in Kuala Lumpur for 2014 was 69%. With more new completion of high-rise residential developments in 2015, this will definitely lower the rental yield as well as the average occupancy rate. In fact rental would come down, benefitting tenants.

If we look at this average number of 69%, this number tells me two things. One, there are already high-rise with low occupancy. I term low occupancy as below 50%. There are also high-rise with high occupancy. I term high occupancy as anything above 80%.  This meant that when we look for secondary properties, it is very important to ensure the total occupancy is high. If it is low, this will remain low or even move lower once the rental of slightly better properties come down and some of these people move out. Remember, there are reasons why some of these high-rise have low occupancy. It may be due to the environment, the maintenance or even because majority of the buyers happen to be investors. These reasons do not disappear. Thus, buy with your eyes wide open.

This number also tells us that there are already some high-rise which are very much in demand. Do note that these high-occupancy high-rises does not necessary mean that they have the best designs etc. However, it tells us that when it was completed, majority of the buyers are looking to stay and as usual, once you have stayed a few years, it will be harder to move. I am not talking about low cost to high end. I am talking about condos which are already good enough to meet our usual needs. These are the places that once we move in, we would stay for a long time, unless circumstances change. Agree?

Buy high-rises which already have good occupancy BUT is still undervalued. There may not be any of these in the usual places you look. Why not look FURTHER away? Yes, literally in terms of kilometres. Places which may be jammed today may have a new MRT within the next 18 months. Understand what you are buying. Just use the occupancy as an important benchmark before you buy. Most of the time, the choices of many may not be the best but it is still the choice of many. You should not have problems in attracting future tenants.

written on 6 Mar 2015

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When there’s high-rise oversupply, the lending is tightened

I think readers of kopiandproperty.com would have noted that my property portfolio consists of ONLY high-rise units, mostly condos. Actually, I do know that this may sometimes be pretty risky. High-rise can reach over-supply situation while landed properties would be pretty safe in terms of over-supply probability. As per reported in domain.com.au, in Melbourne and Sydney, due to the probability of an oversupply for high-rise units, the banks have started to clamp down on lending to residential property developers. One major reason is also because many of these high-rise units were sold to foreigners.

According to Development Finance Experts founder Baxter Gamble, this new tightening is mostly focused on developments with a high percentage of potential foreign buyers. Actually, I am not so sure if the local Australians would
prefer a high-rise unit over a typical landed property
 which is in abundance in the secondary market. Foreigners are not allowed to buy from the secondary market and thus these choices, most of the time cheaper is not available to them. According to Chief executive of business banking at Westpac, David Lindberg this tighter conditions is because banks and regulators trying to deliberately slow growth in the market over the last 12 to 18 months, after a boom period.

I think the
banks and the regulators are thinking ahead
 which is positive for the market. No one would prefer fora bubble to burst instead. The reason why I say so is also because according to a UBS analysis of official figures, the number of multi-story apartments under construction in Sydney hit a record of more than 48,000 in March 2016. In case many do not know, Sydney’s population is 4.3 million (google) which is only slightly more than half that of Greater KL. In other words, many of these high-rise units were built because of foreign buyers.

These days, most of the new launches would be high-rise. Landed properties would be scarce because of affordability. Even building further away would only help prices to stay 20-30% below the above RM1 million price tags of hotspots such as PJ. Thus, to say that the
prices are affordable, even when coupled with further distance is not very valid too
. High-rise is the only option to drive affordability and this is why I think the market would continue to be vibrant. As it is, majority of all Malaysians would not suddenly become super rich. I think investing in a high-rise without overpaying for one is safe. I wish myself the best.

written on 30 July 2016

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High-rise not good price appreciation? These appreciated within 12 months.

High-rise not good price appreciation? These had price appreciation within 12 months.

My high-rise property investment journey

I bought my first high-rise unit in 2003. It was then followed by another high-rise and another and well, high-rise units in 6 cities / towns in Malaysia. I only bought my first landed property in 2020 yeah. So, 17 years of just high-rise units. Did I have any price appreciation at all? Haha. When I speak in any events in the future, do ask me yeah. Will tell you all about it. In the mean time, let’s look at actual numbers from iProperty.com.my’s latest media release.

— start —

iProperty.com.my: High-Rise Properties Near Lush Greenery Achieve High Capital Growth in H1 2022

 These high-rise residential homes in Kuala Lumpur, Selangor, and Penang obtained the highest capital growth in H1 2022 versus H2 2021
 Most of these properties feature tranquil surroundings, are surrounded by lush greenery and have freehold titles.
 One third of the featured properties achieved double digit percentage capital growth

KUALA LUMPUR, 24 NOVEMBER 2022 – In September 2022, the National Property Information Centre (NAPIC) revealed that the Malaysian House Price Index (MHPI)* increased marginally by 0.5% on a year-on-year (y-o-y) basis in Q2 2022. This announcement is not surprising given the ongoing economic challenges such as high inflation, rising interest
rates and political uncertainty.

Nevertheless, the prices of select high-rise properties in prime locations in Malaysia with upscale features have continued to appreciate. Therefore, as part of its efforts to provide potential investment opportunities, iProperty.com.my has identified the top high-rise residential properties in Kuala Lumpur, Selangor, and Penang with the highest H1 2022 capital gains.

Sheldon Fernandez, Country Manager, PropertyGuru Malaysia (PropertyGuru.com.my and iProperty.com.my), said, ” According to NAPIC, high-end residential property transactions in the RM500,000 to RM1 million and the RM1 million and above price category had a substantial 36.3% growth in H1 2022. Interestingly, most of the high-rise properties on our list fall within these price categories, which shows that properties with the right variable are untouched by the post-pandemic effects. The majority of the properties focus on luxurious living with excellent architectural design, lush landscaping, and strategic location near green spaces. Together with winning factors such as good connectivity and proximity to reputable hospitals and education institutions, these high-rise properties are ideal for long-term
investments.”

Below is a rundown of the top high-rise residential properties in Kuala Lumpur, Selangor, and Penang with good capital gains in H1 2022:

Top High-Rise Properties with the Highest H1 2022 Capital Growth in Kuala Lumpur

In Kuala Lumpur, South Brooks in Desa ParkCity tops the list with the highest capital growth at 10.3%. In addition to providing club-level gymnasium facilities, the condominium boasts a landscape with tropical pocket gardens. As South Brooks is within the affluent Desa ParkCity enclave, it has the advantage of being connected by various highways. A renowned international school and private hospital are also a short distance away from South Brooks.

Select high-rise properties in Bukit Jalil also emerged as winners, registering between 3.3% (The Z Residence) and 7.5% (Park Sky Residence) in capital growth. The price growth is spurred by each property’s emphasis on green living and proximity to Bukit Jalil Recreational Park. Meanwhile, Anyaman Residence in Sungai Besi and Laman Sceneria Kiara in Segambut achieved capital growth of 4.0%. Both housing developments provide luxurious living spaces
and calm surroundings for residents.

Top High-Rise Properties with the Highest H1 2022 Capital Growth in Selangor

Two hillside properties, Koi Kinrara Suites in Puchong (16.1%) and Venice Hill Condominium in Cheras (15.0%), gained the highest capital growth in Selangor. These high-rise developments appeal to urbanites who prefer green living environments and modern condominium amenities. Regarding accessibility, Koi Kinrara Suites is well connected to
major highways and is located nearby reputable tertiary educational institutes. Meanwhile, Venice Hill Condominium which is located on a hill, enjoys huge demand from expatriates for its scenic view of Kuala Lumpur City Center.

Setiawalk Residence is another property in Puchong with a double-digit capital growth figure of 12.6%. The service residence is popular among small families and young professionals as it is in a mixed development consisting of retail lots, offices, restaurants, and entertainment outlets. Apart from offering facilities along green landscapes, the property is strategically situated in the heart of Puchong. In Seri Kembangan, Aman Heights Condominium reaped a capital growth of 9.2% due to its peaceful surroundings, verdancy and tropical resort architecture. The condominium has attracted residents who prefer to live in a less hectic suburban area without sacrificing connectivity and access to commercial sites, educational institutions and medical centres.

Top High-Rise Properties with the Highest H1 2022 Capital Growth in Penang

All Seasons Park in Ayer Itam achieved the highest growth with 19.7% because of its clubhouse facilities and an exclusive park with different landscaping themes, water features and hues of greens in keeping with the four seasons theme. Situated along Lebuhraya Thean Teik, residents can easily travel to other parts of the city. Another development, Golden Triangle, gained 6.1% in capital growth and is located in the middle of three prime locations
— Relau, Sungai Ara and Bayan Lepas.

A highlight of this condominium is that residents can enjoy the view of 1.9 acres of green open space. The development is also accessible via the Tun Dr Lim Chong Eu Expressway and is close to the Penang Bridge and Penang Bayan Lepas International Airport.

Other projects on the island round up the list — The Tamarind in Tanjung Tokong (2.9%) and Imperial Residence in Sungai Ara (2.8%). The resort-like design of The Tamarind is ideal for young professionals and families looking to live a seaside lifestyle while being close to The Gurney Drive area. Meanwhile, the main attraction of the Imperial Residence is its spacious layouts, inspired by bungalow and semi-detached homes. Similar to the Golden Triangle, it is
near the airport and the Penang Bridge.

Footnotes
*The Malaysian House Price Index (MHPI) measures the price changes of residential housing in Malaysia as a percentage change from a specific start date

Capital growth is calculated as = Median PSF in H1 2022 – Median PSF in H2 2021 / Median PSF in H2 2021. Median Per Square Foot (PSF) is used to calculate capital growth due to various built-up sizes being transacted.

Only properties that have more than 5 transactions in H2 2021 and H1 2022 were selected to negate the effect of any spikes. The data system from JPPH officially records a property transaction in Malaysia once the stamp duty for the Sales and Purchase Agreement is paid. Analytics is based on the data available at the date of publication and may be subject to revision as and when more data becomes available.

The opinions stated in the press release are not in any form an endorsement or recommendation by iProperty.com.my. Individuals are encouraged to perform their due diligence and seek independent advice prior to making any investment.

— end of media release —

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High-rise units? My personal reasons to getting one.

Until today, I have never purchased a landed property. I do love landed properties but I prefer to buy the strata-titled ones, especially developments with a common clubhouse within a gated and guarded scheme. Today, these are getting very expensive. I am just a working professional with a wife and two kids. I must manage my finances. 🙂 So, my choice would be a high-rise unit. Within a good high-rise development, my kids get to enjoy the swimming pool and the playground, all within the safety and comfort of the development. As for me, the gym is my favourite place. I reduced my weight by 8kg just by going to the gym! There are 6 considerations from my personal view on reasons for high-rise units.

Common, greenery and well-designed spaces.
 Common areas must have have sufficient lighting (preferably natural during the day) and greenery and it should be well-designed (modern and feel spacious). High ceilings would be a must because we do not want to feel ‘trapped.’ This provides a comfortable environment for owners to sit down and chit-chat with friends and families. They could even throw parties for loved ones and invite lots of friends or families over.

Sufficient amenities.
 I personally prefer to buy into a development where the focus is to provide sufficient amenities for my family’s comfort but not too much that I am charged higher maintenance fees but may not enjoy all of them and with each passing year, the cost of repairs from wear and tear may become a huge burden to the development. A swimming pool, a gym and even a lounge would be the three most important ones for me. My father loves to read in a well-lit area during the day instead of being cooped up inside the home.

Density.
 Many of my friends told me that everyone should aim at low density developments wherever possible. I agree and I would like to add that the number of units should still be large enough because I do not wish for too few units which meant that the number and quality of the amenities may need to be reduced while the maintenance charges would go up. My personal thoughts would be that anything below 500 units would be low density enough today while anything below 400 is considered ‘pre-luxury’ already.

Connectivity.
 The crazy jams of today, especially within mature neighbourhoods are going to get worse. We may not want to be like my colleague who has to drive for over 30 minutes just to reach the main road from her home. The distance? 2km. It is thus very advantageous to buy into an area with expressways nearby, LRT stations today and even MRT stations in the future. Expressways allow us to still have the advantage of driving when needed even with LRT / MRT stations nearby.

Family centric.
Let’s be honest. It is not always rosy when one has to stay with the family after getting married. However, staying far away is a no-no for me. I personally believe not staying together helps minimize conflicts but I hate to be staying too far away. Usually, the older generation would have been staying in a mature neighbourhood for a long time. Getting them to move and leave all their usual routines and friends would be tough. Thus, for those who wants to stay nearby their parents but not together, think of getting a
high-rise unit nearby their home.

Location. (Shopping and Food)
A mall, especially a big one of 1,000,000 sq ft of retail space or higher appeals to me a lot. As parking will get ever more expensive, how about one within walking distance? I love window shopping and my wife and I love to do grocery shopping together. Development within a mature neighourhood meanwhile means easy access to many good local food. The local fare continues to have its advantages even if I love air-conditioned restaurants within the malls too. Please do not buy just any development with a mall built by a developer who is not known to be a successful mall operator.

Two weekends ago, I visited a show unit for
UNA.

The development is by
Selangor Dredging Berhad, an award-winning developer.
Taking inspiration from the early New York skyscrapers, UNA, located next to Sunway Velocity is a 46-storey Service Apartment, a potential upcoming prime property within the Jalan Peel / Cochrane locality. Located nearby are IKEA Cheras, My Town Shopping Centre and of course Aeon Maluri, then known as Jaya Jusco and one of the earliest Jaya Jusco to be established in Malaysia. This location certainly suits me as it is just 300m away to Maluri MRT station. If that is not enough, Maluri LRT station is also located nearby. What caught my attention is when the sales person mentioned that owners at UNA can potentially get to Singapore from here without the need to get into a car. Imagine getting on a MRT and transit to MRT2 line (expected completion 2022) at TRX station which is 2 stations away and head to Bandar Malaysia. A proposed High Speed Rail station is to be built at Bandar Malaysia which will connect to Singapore. That’s just a snapshot of what connectivity means from UNA. The connectivity to the various networks of rail lines creates convenience to commute to most parts of Klang Valley. I believe this will shape how people commute in future.

As for the units, built-up area ranges from 807sf 2-bedroom unit to 1,356sf dual key unit. I fancy the idea of Dual Key unit where there is a potential of hosting our elderly parent(s) and having their own private space complete with its own pantry and bathroom yet being close enough to us. That said, renting it out is also a potential option for additional income to support the installment. The units are partly furnished with kitchen cabinets, electrical hood and hob as well as glassed shower screen to the masterbath.

Although the building looks architecturally subtle from the outside, the architectural intent on the inside are impressive especially the 3-storey ceiling height of the sky deck with coffered ceiling which looks like an inverted pyramid (surely something to brag about when you bring friends to visit the development when it is completed). The sky deck also hosts 2 canopy dining with bbq pits for family and friends get-together. For bigger functions, the sky hall could cater up to approximately 100 pax with cooking facilities available. For a moment of quiet contemplation or a more private chat, head to the 2-tiered rooftop garden where the seating are set amongst the greenery with views to the KL skyline. This is certainly going to be my favourite hideaway spot (when I need my time!!).

For regular facilities such as the lap pool, children’s pool, children’s playground and gym, they are all located on level 9. Did I mention that they also have a hydrotherapy pool equipped with hydro jet spray that provide soothing water massage after a long day. There are also various co-working spaces available if there is a need to organize small meetings with colleagues or business partners with printing facilities available at the management office during working hours. If all that is too formal, just hang out and catch up with family and friends at the various spaces.

After a sneak peek into the dual-key show unit and coupled with ‘your architectural masterpiece in the city’ features at UNA, I certainly want a piece of it. So, those of you who wish to get a piece of
UNA
, hurry on to their show unit to have a look or call 017 294 3477 or 03-27873218.

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High Speed Rail Terminus – Announcement soon.

The surprising thing about this is that not a lot of medias reported on this. Perhaps they just wanted the actual news and not the anticipation. Or they think Iskandar news are no longer that hot? Whatever the reason may be, it is reported that the Malaysia-Singapore Joint Ministerial Committee for Iskandar Malaysia (JMCIM)  is looking forward to Singapore announcing the High Speed Rail (HSR) terminus at the upcoming Leaders Retreat. This was announced in a joint statement between both countries in Putrajaya recently. The retreat is pretty soon and will be attended by both the Prime Ministers of Malaysia and Singapore.

What’s so significant with the announcement of the HSR? Well, the real significance is that it may be the injection needed for the next phase of Iskandar. Oversupply currently can be solved if it is clear that both countries would be connected via this High Speed Rail. The announcement would also be able to reaffirm the seriousness of both countries in Iskandar becoming a successful venture for both countries. Both countries have little choice anyway. Iskandar will never happen without Singapore. Yet, without Iskandar, further economic growth in Singapore would have to depend on some other places like Batam which I seriously do not think is anywhere near what Iskandar has to offer. Let’s be very objective in this. Do we seriously believe Singapore can continue growing through land reclamation and even building new centres below the ground versus building just this HSR and connect two markets? Think finance, think time and duration and lastly think longer term cooperation.

Other positive news include the quota for cross-border bus services between Johor and Singapore will be increased from 16 to 20. Yes in other words, this will help increase the number of people going to and fro. Besides this, a new application centre for the Malaysian Automated Clearance System (MACS) has been established in Singapore. This will facilitate the cross-border movement of people and goods. Even more good news? Wait for the announcement after the retreat then.

written on 14 Feb 2015

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High Speed Rail? Completion Timeline ‘derailed’. 2020 not possible.

To many who were waiting to buy along the High Speed Rail, you may need to wait even longer. Instead of 2020, it may be up to 2023 before the High Speed Rail is ready. This is despite the fact that the HSR is already using as much as government land as possible to avoid property-acquisition disputes. One good news stated was that the HSR was not as expensive as what was initially forecasted. This may be due to the many competitive proposals submitted by the French, Japanese, Chinese and German companies. No estimate was however given, only that it would be comparable to international benchmarks for similar system and distance. To understand more, read:
HSR: KL – Singapore, 7 stops in Malaysia, buy, buy and buy now?

The HSR is expected to operate four times hourly with two services, one non-stop and the rest, six stops before Singapore. Those with stops would take two hours, which is still better than to take flight even though flight would only be one hour. The reason for the delay was due to additional elements not considered earlier. It is not possible to rely only on ticket sales alone. It has to include the contribution to the economy as a whole, especially to the cities and towns along the route. The line will try to avoid villages and private properties.

Personally, I love trains more than planes because trains would help many more cities to grow. Look at China, Japan and even Germany. Growth happens to all the cities along the routes. The delay is should however be expected because this is not just a train within Malaysia but it goes into another country. In fact, with the latest rumours, this may even be part of the China – Singapore rail which was being pitched by China to Thailand. For that to happen and to avoid costly adjustments later on, it may be wiser to have the same system all the way from China to Singapore? If that’s the case, perhaps magnetic levitation trains instead of bullet trains. From over 300km / hour, it can thus go to 500km / hour. In fact even Japan will be starting it’s magnetic levitation service between Nagoya and Tokyo. For the same route I have taken their bullet train which was very smooth and comfortable. I think with maglev, it will be even more smoother and faster.

Most importantly, HSR must be finalised as soon as possible. Getting the right technology provider would help tremendously too. Push for everyone to provide their best in their tender. It’s a plus for both economies with a closer integration. This is especially when all the other neighbours have much larger population and thus, in the future, bigger economies compared to Malaysia or Singapore.

written on 29 Oct 2014

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High Speed Rail (HSR) operational by 2026, exciting future

I think the High Speed Rail (HSR) is a very important “connection”for Malaysia and Singapore. Let’s not debate on which country would have more benefits. Seriously, we need to look at a bigger picture. Both countries remain small by
ASEAN standards
. Today, we achieved a new milestone. An MoU was signed between both the countries today. Answering a question, Singapore Prime Minister, Lee Hsien Loong said, “HSR tender process would be carried out objectively with great transparency involving both Malaysia and Singapore. The structure has to be right. The execution has to be properly done. When we evaluate the tenders, it has to be objective, fair and transparent. So when we make the decision, we make sure we get the best value and the best choice for the project.

Prime Minister Najib Razak said, “The project will not only spur economic activities in the Klang Valley and Singapore, but will create multiplier effects along the rail alignment. It will create a very exciting future.” Do note that for a more binding bilateral agreement, it will be signed end of 2016. Tender is thus expected to start next year. The total cost is unknown because tenders have yet to start. I think for all the countries interested to be the main contractor, they would be following this extremely closely. Of course, this 2026 targeted commercial operations would mean that all earlier projections are now totally out of the window. Perhaps this date is more realistic.

Malaysia and Singapore
 achieved a total trade of RM190.6 billion for 2015. Singapore was alsoMalaysia’s second largest trading partner globally and largest trading partner among member countries of Asean. Nope, I still do not think we should buy any properties based on the HSR MoU. Just continue the usual evaluations and for the HSR plans, keep following so that it can form a small part of the decision to buy. Only use it as main reason when there are clearer plans on how the stations and the area around the stations along the route would be developed. Happy following, HSR is going to take a long time more.

written on 19 July 2016

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High Speed Rail (HSR) by Japan?

The High Speed Rail (HSR) between Malaysia – Singapore is something which a few countries have expressed interest in. Many are using their technology as an important winning factor. In fact even in terms of total costs today, I seriously think there is no huge difference whether its an Asian company or even a European one. Even when we look at the currencies, just look at Euro currency, it has gone down a lot. Needless to say, the Japanese Yen may just be that trump card needed for them to win if it comes down to just the price after all other considerations. It actually costs less to travel to Japan today than a few years ago! Yes, for those who do not realise that yet. 🙂

In his working visit to Japan, Deputy Prime Minister Tan Sri Muhyiddin Yassin said that the Japanese government had been aggresive in expressing interest for this project and they are promoting the East Japan Railway Company (JR East) for this project. I have been to Japan twice and in my second time there, I travelled extensively in her network of bullet trains. From Tokyo to Yokohama, Osaka, Kyoto, Nagoya and all the way till Fukuoka. The bullet trains were all on time down to seconds! I know, some would have a cynical look whether Malaysia’s HSR can be the same. My experience thus far with the ETS (Ipoh to KL) has been very good and sometimes, it arrive ahead of time very slightly. This was also the case for the KLIA express. I think I have taken it slightly over 10 times and have never experienced any delay thus far.

Japan’s Prime Minister told Muhyiddin that their technology as well as system is the best. This is especially with its 100% safety record for its bullet train, also known as Shinkansen. Of course this safety record is not only due to the systems but also due to human. For this aspect, let me be frank, Japanese are by far much more ‘serious’ compared to anyone in the world today. Just look at the aftermath of the tsunami in Japan versus the earthquake in New Zealand or even the floods in America. Oh yeah, who would win? I prefer the Asians to win. Sorry to the potential European bidder. I also prefer lots of technology transfer. Haha. As if I am one of those who can make a decision in this right? Will keep everyone updated.

written on 16 Mar 2015

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High Speed Rail (HSR) for KL – Singapore. 2015 Tender.

There were some rumblings about whether the High Speed Rail (HSR) would benefit Malaysia as much as Singapore. It is said that the project will benefit Singapore more. My personal view? As long as there are benefits to both countries and it is an enhancement in connectivity between two small countries when compared to Thailand or even Indonesia, we MUST do it. The economic benefits would be enormous and this is not a calculation of whether Malaysia gains more or Singapore gains more or for a project which benefits both parties at 50:50. There are news that the tender would be called in 2015. If the news is true, then I think 2020 is indeed a very realistic year that I may get to travel to Singapore for lunch after a breakfast in KL and come back in time for dinner in KL after a coffee break session with my friends in Singapore. Life’s good.

Japan’s Sumitomo Corp has expressed its interest to participate in the HSR project and most probably companies from China, Japan, France and even Spain will be bidding for it, jointly with local partners. I think an Asian company would win. I do not wish to doubt the capabilities of any of the companies bidding for it but I think in terms of technology, as long as all of them are able to meet the needed specifications, cost would be the main differentiation factor. In my mind, Asian companies are definitely more cost effective. I welcome the French and the Spanish to prove me wrong. If that happens, the benefits would still be for the HSR.

Just today, a friend who is in a real estate agency asked me about the potential of bubble in Iskandar. To be honest, I seriously do think there’s an oversupply because the Chinese developers from China are really building projects which are huge. Just one Country Garden alone is building a project which are normally carried out by 10 small developers or 5 big developers. However, bubble? I think if the HSR project is abandoned, all the Singaporean companies which is investing in Iskandar decided to pull out, all the universities which are operating or is soon to operate decided not to plus a host of other reasons, then a bubble is a sure thing. As of now, I would think, not.

As for bullet trains, there’s a good reading about bullet trains on
www.mapsofworld.com
  For a good general understanding, do refer to it.

written on 3 Oct 2014

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High Speed Rail (HSR): Journey of 350km (+/-) begins with “We are open…”

Yes, I support HSR for the future of both Malaysia and Singapore

I am a supporter for High Speed Rail (HSR) Malaysia. You are entitled to your own opinion too yeah if you say it’s not going to be profitable. By the way, there’s no way it will be profitable and no one even knows when it would ever be. Just want to remind everyone that Petronas Twin Tower was also money losing for a very long time but it’s a catalyst.

The PLUS expressway was also losing money for a very long time but it’s a catalyst. KLIA was losing money for a very long time but it’s a catalyst too. More examples but it’s okay. if you understand my meaning, then that’s great. Else, feel free to disagree yeah.

If you comment below, I will definitely allow your comment to appear. This has been the case since November 2013. I do not delete comments. That’s a promise.

Coming back to this latest news about HSR KL – Singapore. There is no way that it will be ready within the next 5 years. Furthermore, no one knows what will happen in the 15th General Election yeah. It has to happen before July 2023. That’s around 18 months away. Meanwhile the HSR will take a much longer time and even if an agreement is signed, it could still be terminated with costs… okay?

However, it’s good news lah. Singapore Prime Minister Lee Hsien Loong said, “Singapore looks forward to receiving more details from Malaysia so that we can study them and consider the matter again starting from a clean slate.”

Article in nst.com.my
  Singapore Prime Minister Lee Hsien Loong said, “Prime Minister (Datuk Seri Ismail Sabri Yaakob) suggested reviving discussions on the HSR. I responded to the PM that Singapore and Malaysia had previously reached an agreement to terminate the HSR project, and this had been amicably settled and closed.”

He added, “Nevertheless, Singapore is open to fresh proposals from Malaysia on the HSR project, and the two ministries of transport will discuss the matter. Singapore looks forward to receiving more details from Malaysia so that we can study them and consider the matter again starting from a clean slate.” Do read the full article here for more updates.
Article in nst.com.my

KL – Singapore is the 2nd busiest air-route in the world

According to OAG, Kuala Lumpur to Singapore was
the 2nd busiest international route in the world next to Hong
 Kong-Taipei. The report shows that 5,560,894 ‘seats’ were offered on this route for 2019, 2.4 million fewer than Hong Kong-Taipei, and just 80,000 more than the 3rd busiest service, Jakarta-Singapore.
(Source: Simpleflying.com)

By the way, a ride with HSR will take LESS TIME than taking a flight but that’s not even the reason because the more connected, we will just have more to-and-fro travel between both sides. Both countries could now appeal to any multinational to think of two countries as one when they are deciding on setting up a plant. By the way, there’s really no need to compete too much, better think of how to complete one another. We have so many more much bigger neighbours all around us yeah.

Malaysia will receive even more travellers from Singapore, especially on cities along the route. Let me remind everyone that only around 5% of Singaporeans, PRs and expats in Singapore actually own a car yeah. Thus a family wishing to visit Malaysia would need to have a car or rent a car. Pity the father to drive many hours to and then back and still spending so much. Why not just take the train instead and just relax all the way?

There are a lot of other reasons but let’s look at it again when we have more concrete updates lah. The two Transport Ministers need to meet first and by the time they are about to agree / sign anything, it may be very near that D-Day already yeah. Happy anticipating.

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It does NOT have to be 400km per hour. Ok… Will it be earlier then?

High Speed Rail (HSR) is needed. It is a catalytic project benefiting not just Kuala Lumpur and Singapore but also all the stops along the way. Someone may plan a business meeting in  Singapore in the afternoon and he could still have a good nasi lemak breakfast with his family before boarding the train at 1030am and arrive in Singapore by 12 noon. Then, he is connected to the MRT and before 30 minutes, he is shaking the hand of his business partner in a nice cafe in Singapore.

Now imagine a few hundred of such meetings and when it becomes quite a norm, imagine many more thousands and more of these meetings. I know, someone would like to point out to me that why not use a video call instead? If you are in the business / corporate world for some time, you will understand that nothing beats a meeting in person yeah. Video calls facilitate communication. Period. Not as a real replacement for relationship building.

There is a potential change for our HSR KL – SG yeah. Maybe, just maybe instead of 90 minutes to Singapore, it may take longer. At the moment, we do not have further details but our Prime Minister Tun Dr Mahathir Mohamad shared his views recently.

Article in malaymail.com
    Prime Minister Tun Dr Mahathir Mohamad said that the government will study the feasibility and cost of the project first before making any final decision. He said, “We will go ahead but we will need to find what is the suitable speed that we should have.”

He said, “It is not necessary for it to be 400 kilometres an hour; if it’s 400 kilometres an hour, it could even reach Alor Setar.’’ He added that the HSR project will be scaled down because the government intends to be prudent with its budget. He said, “We would like to spend less money. For me it can be scaled down or have the necessary adjustments in order to reduce the cost.” Do refer to the full
Article in malaymail.com

Good news is that HSR will proceed. There are no bad news. Potentially, the specifications of the HSR may be changed. Higher speeds of high speed rail meant that the current tracks may not be good enough. Lower speeds may mean that the current tracks may just need some upgrading? No idea, let’s wait for more official announcements since HSR was supposed to have been delayed as per earlier announcements. Happy following.

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High Speed Rail – MOU by June 2016

Will HSR be completed in 2021? Or even 2022? Well, 2020 is a little too short as a deadline. Are there people waiting for news about High Speed Rail before buying properties in Greater KL? What about buying properties in the Singaporean side of the HSR station? It was earlier announced that the station would be in Jurong East. Well, to be honest I sometimes forget that we have a High Speed Rail (HSR) project between Kuala Lumpur and Singapore. The news was first announced so many years before and was shelved before being revived because the leaders of both countries felt that this would be a catalyst for further economic integration.

Regardless of which country would benefit more, I think it’s needed especiallly if China’s plans to link ASIA is really happening. Read here:
Kunming to Singapore with Pan-Asian railway

With regards to the HSR, there’s hardly any new news about it. I also think this is a future project because it will help future growth. If we are thinking about buying today and waiting for many years, even if nearby any of the
stations proposed
,
we should abandon the idea for now. There are definitely other better choices which may be slightly shorter in terms officiating time and more certain.

In a local daily today, Prime Minister Datuk Seri Najib Razak announced that the memorandum of understanding (MOU) will be signed with Singapore in mid-2016. I assume this to mean June 2016. Do note that an MOU is not the same a binding agreement and there’s much more items which both countries would need to agree upon before we can talk about the next steps. What are the next steps? Here:
KL – SG High Speed Rail, still many things to talk

Let’s hope something more concrete can be decided during the annual retreat for the leaders of both countries. Last year, it was in May, perhaps this year it would be in May and the MOU signed right after some discussion and agreement on how best to proceed.

I think the two countries waiting even more eagerly would be China and Japan which would be competing to be the provider of the HSR system. I do not think other HSR providers out of Asia would win but let’s wait for the MOU first. Oh yeah, for property investments in Greater KL, buy objectively. I do not believe we should only concentrate on HSR.

written on 12 Apr 2016

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High Speed Rail. News. Images. Comparisons.

Ever since I took bullet trains non-stop in my trip to Japan, I have always been fascinated with high speed rail. I have been taken the Electrified Track System (ETS) and while the speed is nowhere near a bullet train but it’s super comfortable and thus far, on time most of the time. It’s unlike the situation when I drive. There are many potential delays, possibilities and more. Plus the fact that I may also feel sleepy when I drive which is dangerous too!

Now, let’s have some updates about High-Speed Rail operations.

One country leads the world by far… It’s China.

Image source:
https://www.bloomberg.com/news/features/2022-04-18/high-speed-train-from-california-to-vegas-could-be-a-reality

What has happened between 2008 and 2020? It’s a WOW in China.

Source:
https://i.redd.it/6hyb2m58wv581.jpg

How will China’s High-Speed Rail Network look like in 2035?

Source:
https://www.youtube.com/watch?v=belm4kDAHgM

What about United States? It is barely in the top 10 list for High-Speed Rail. Why?

United States of America is a country where people loves cars. That’s why when petrol price goes up, the people does restless as well. The politicians will then try and push oil companies to be responsible even if it’s not really something these oil companies can influence easily. It’s due to the current Russia-Ukraine war yeah…
Here’s that news in thesundaily.my

Thus, more and more roads are built for people to drive and not more railway networks. One latest news is however a potential high-speed rail between Las Vegas to California.
News here: bloomberg.com
 Just need to note that funding would be the issue since profitability is uncommon and may also take a very long time as well. This is why the government support is always necessary.

Malaysia’s High-Speed Rail?

It’s ongoing I think? I mean ongoing as in talking about it between both countries. Nothing has been agreed, nothing has been signed yet.
High Speed Rail (HSR) KL – SG… really coming back
. By the way all would also depend on whether the governments who signed the next deal remain the same too yeah. Too many times everyone has a different idea about what works and what does not. All the best.

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High Speed Rail – overall summary of what’s up.

MyHSR is the new company tasked with Malaysia’s High Speed Rail (HSR). As everyone noted, the timeline of 2020 is most probably off because even the cost sharing between both countries have yet to be agreed, at least based on what’s reported thus far. The new CEO beginning Sept 1 2015 is Mohd Nur Ismail Mohamed Kamal, formerly CEO of Land Public Transport Commission (SPAD, Suruhanjaya Pengangkutan Awam Darat). Below is a summary of what he said in an interview on the HSR, a 330km project which will allow breakfast in KL, lunch in Singapore followed by a dinner in KL, all within the same day. (Yes, I would try this with my Singaporean friends even if it would cost me a bomb and write about it)

Difference of MyHSR and SPAD? MyHSR is the project owner and developer of the HSR while SPAD will remain as policymaker and regulator and would be focussed on the engagement with Singapore. I think what this meant is that high level strategy is by SPAD while the implementation would be all under MyHSR.

Five important elements by MyHSR to keep HSR on track:

1. G-to-G (government- to-government) support for SPAD in the bilateral discussions with Singapore. This helps to finalise the technical, commercial and bilateral agreement.
(Seriously, more transparency and perhaps timeline would be appreciated by all parties instead of an announcement every few months like today)

2. Finalise the station and the alignment. This include a detailed environmental impact assessment, social impact assessment, soil investigation, and to perform land acquisition.
(Again, more transparency and continuous update)

3. Preparation for tender process though this would depend on final operating structure to be agreed by both the governments of Malaysia and Singapore.
(Seriously, this may be hardest because it may involve choosing the systems from the European, China, Japan or South Korea. My wish? An Asian company who’s willing to hire lots of locals and lowest cost of financing please)

4. Maximise benefits of HSR in terms of socioeconomic development opportunities along all the corridors where the stations are located.
I think this is vital which if not meant the only beneficiary is KL and Singapore, hardly worth pursuing since both are already pretty connected currently.

5. Engaging the public based on international best practices so that understand the benefits and convince them that this an economic development project and not just a transport project.
I personally think this is not really necessary if the 4 steps above are done correctly. I am not that confident of the success of this engagement and not really looking forward too based on the current ‘everything negative’ mindset prevailing.

The CEO revealed this: There are still ongoing intense negotiations with Singapore before both parties can agree on certain aspects of HSR operations in the future. These include safety, security, customs, immigration, the alignment, stations, how do we join (the alignment) together as well as if there’s any express or transit services, the control aspect of it, and guarding against security breaches.
This is the reason why I think milestones should be transparently communicated especially on the Malaysian side since I am a Malaysian.

Oh yeah, currently these have been agreed. CIQ (Customs, Immigration and Quarantine complex) is going to be a co-location. Same building, two nations. There would also be immigration counters in Kuala Lumpur, Nusajaya and Singapore.

Following are the few terminus mentioned. Bandar Malaysia, stations in Ayer Keroh, Muar, Batu Pahat and Nusajaya. Plans include developing the whole zones around the station and even up to 5km radius from the station. MyHSR may or may not be developing them but the framework would be put in place so that incentives can be put in to encourage the development from the private sector.

The station is not the end. It’s the beginning of a development of the area surrounding the stations to benefit the state which it is in too. MyHSR will have to put in policies to encourage certain types of investments and human capital attractions to develop certain types of industries. He specifically mentioned that the Korean’s HSR’s plans included even the improvement of existing industries in the towns where these stations are located.

Tender for HSR is expected to begin with the pre-qualifications in middle of 2016. This timeline has to be in line with the bilateral agreement. The actual tender process is not yet finalised but expected to be end of 2016. MyHSR would be the ‘resident expert’ for the HSR.

The decision is quite far away. Final project structure is that it may be private initiative, public-private partnership (PPP) or completely Government-owned. It meant that MyHSR would evolve according to the final decision made.
I seriously do not think it should be government owned.

If this is a profitable project, why is government involved beyond completion of the project? If this is going to be a money losing project, it’s best that the government is not involved.

Well, that’s a lot of information from the new MyHSR CEO. Let’s see if whatever I hoped for in bold above comes true. I think HSR is part of the continuous progress of Malaysia’s economic development and is a necessity rather than a decision of popularity. No matter how much Singapore is looked up to, without being even more integrated into Malaysia, both countries may just be skipped altogether in favour of many other much bigger nations nearby. Instead of competition, I think cooperation is a better bet. Happy anticipating.

written on 27 Sept 2015

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Scrapping the High-Speed Rail: ‘It’s not beneficial.’

Our Prime Minister Tun Dr Mahathir has just confirmed to all medias that the High-Speed Rail (HSR) with Singapore will be scrapped. What is also confirmed is that this has not been discussed with Singapore and Malaysia will have to talk to them about it as well as the compensation to be paid. Tun said, “It’s not beneficial, it’s going to cost us a huge sum of money. We will make no money at all from the operation. It is just a short track.” He also said that the compensation to be paid is supposed to be RM500mil. He had earlier informed Financial Times that unnecessary projects will be scrapped. He said, “We need to do away with some of the unnecessary projects, for example the high-speed rail, which is going to cost us RM110bil and will not earn us a single cent. That will be dropped.”
Here’s that article in TheStar.

I am a supporter of HSR. It’s not because I own lands along the line because I have none. It’s also not because I have properties along the line because I have just one property in Greater Kuala Lumpur which is my current home and it is nowhere near the HSR station too. The reason I support is because it links many cities and towns along the line and this meant that everyone can be helping everyone else grows. The reason I support is also because even today, the KL – SG flight route is already the busiest in the world. An earlier article here:
Positives. Indirectly showing potential for Kuala Lumpur

Another reason I support is also because I think Singapore and Malaysia has a lot of benefits by working together instead of competing against one another. However, I must say that I hold the highest respect and regard for our Team of Eminent Persons and I would love to know what they have planned for Malaysia.

Yes, I guess we will have to see what happens next because everything would still have to depend on the meeting with Singapore and the final compensation to be paid if the decision is final. Actually, it is quite certain that many mega projects would have to be pushed back or scrapped because without GST, there will be a shortfall in revenue and if we would like to maintain the current reduction in deficits, then we can still be on track if we cut the expenditure side. Slightly over a week earlier, Tan Sri Zeti said this is possible if the government prioritises its projects, increasing the efficiency of the public sector, avoiding wastage and exploring new sources of revenue.
Earlier report in TheStar here.
Other mega projects include Bandar Malaysia, Tun Razak Exchange (TRX) and the Pan-Borneo Highway. In brief, the HSR is a 350-km railway scheme linking Kuala Lumpur and Singapore and is expected to start operations from 2026. (Perhaps we should say ‘was’ since it may no longer be built). Happy following.

written on 28 May 2018

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High Speed Rail without Singapore? Alarming.

This is a big unconfirmed news. High Speed Rail without Singapore?  It’s reported in many major medias yesterday and today and I do think we should have more confirmation soon. I am a firm supporter of HSR KL – SG because the BUSIEST international flight route in the WORLD is KL – SG. Total flights are more than 30,000 per year. This means on a daily basis, 82 flights just between KL and SG. Even assuming every flight is just 150 pax this is 12,300 per day. Get the idea? There’s no need to even start calculating how much they will spend here and there.

As for other busy international routes,
Click to see the others.
Now imagine if we are also connected by rail. This will open up both KL and SG to even more travels especially for people who do not want to drive to Singapore and hates arriving 2 hours before the flight because this is an international flight.

Anyway, the news
from freemalaysiatoday.com as follow
:  Singapore’s transport ministry says Malaysia has proposed changes to the Kuala Lumpur-Singapore High Speed Rail (HSR). The spokesperson said, “Singapore continues to believe that the HSR project is beneficial for both countries, and remains fully committed to fulfilling our obligations under the HSR bilateral agreement. We will make our best efforts to conclude discussions with Malaysia by Dec 31, 2020.”

The spokesman added that if Malaysia does not proceed with the project by Dec 31, the country will have to bear costs incurred by Singapore to fulfill its part of the agreement. As per the article, the sources said the new plan was for the line to end in Johor Bahru instead of Singapore and that Putrajaya have informed its Singapore counterpart on the matter. Please do read the article in full here:
freemalaysiatoday.com

I guess just have to wait until the formal announcement. However, if it stops in JB, then logistically it will already be a disadvantage for any traveller intending to go to Singapore. It will be an additional time for them to move from the HSR to the RTS for example plus the fact that this no longer allows for tourists because what happens to all their luggages? Travelling in the RTS with all the luggages? Erm…  Waiting for more confirmation…

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High Speed Rail (HSR) KL – SG… really coming back.

If you think the ticket sales revenue can cover the cost of construction, then this is unlikely to happen. In fact out of the so many public transport projects, probably the only one giving profits would be the Hong Kong model. The rest… the government would have to continue to subsidize it. Then why build? Haha. When the connectivity increases, the economic activity increases. It’s important to look at the economic multiplier effects yeah.

Yes, I am a supporter of this High Speed Rail (HSR) and was very sad when it was shelved and we had to pay compensation. The latest news as below. It’s coming back…

Article in theedgemarkets.com
    Transport Minister Datuk Seri Dr Wee Ka Siong says that the ministry will hold discussions with the Singapore government under new terms and the discussion is still in the early stages. In fact the initial discussions with Singapore will be in the second quarter of 2022.

He said, “In line with the Prime Minister’s visit to Thailand on Feb 25, the ministry is also exploring possibilities of conducting an HSR feasibility study from Kuala Lumpur to Bangkok.”  There are also other news. Read the full article here.
Article in theedgemarkets.com

This time, it should be quicker

I meant the discussion, negotiations and even the construction between Malaysia and Singapore. Everything would have been discussed before. Stay focused on the outcome and make it happen. Plus make it happen as soon as possible so that no matter what happens, this will not get shelved the second time? I mean if this time, it’s really happening again.

Image by
StockSnap
 from
Pixabay

Anyway, construction can also be faster too since I am very sure the companies would have also improved on their technology and capability. Looking forward to more news soon. Yes, I will do best to keep reading and updating everyone too.

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High Tech, Capital-Intensive, Economic Powerhouse

For the past many many many years, before Iskandar attracted so much attention, Johor already have industrial zones. However, these are mostly labour intensive taking advantage of the lower cost of production versus many other countries. Today, for Iskandar to continue its climb, the types of supporting industries may need a huge transformation. In fact, much of it rests on the new high-tech, capital intensive new investments. Without these, the income for its residents may continue to be lower than Klang Valley and if that is continuous, it meant that the supply and the prices of the new upcoming properties are not sustainable in the long run.

Mentri Besar Datuk Mohamed Khaled Nordin said that the state wanted to become an economic powerhouse in the country and this meant shedding the image that only labour-intensive manufacturing activities can happen in Johor. In fact, he gave a few reasons why. Its strategic location at the crossroad of international trading route, the electronics and electrical manufacturing hub in the southern region and it is now time to move forward. Besides that, Johor is also right next to Singapore which was an advantage in attracting investors. Johor also have good road network system, two seaports and an international airport. This meant that exports can be sent out fast from the manufacturing plants.

Personally, I think Johor has much room for continuous growth if it manages to get some catalytic huge technological company to be based there just like how Port Tanjung Pelepas grew after the investment by Maersk. Many years ago, Sony started their manufacturing plant in Penang and it brought with them the whole eco-system to support them. The current focus should however be to attract as many as possible of all the Singaporean companies which are looking to expand, be they MNCs or SMEs. These ready companies which is just an house away meant that the scale can be built up very fast. Once there are more activities, more jobs would be created and this meant that when new companies are set up, they would have more to choose from. Today, majority of companies based in JB said they find it tough to compete with Singapore. As for Singapore, they face cost pressure as they are competing with the world and yet their costs are based in the world’s most expensive city! Both nations would gain, not just Johor, Malaysia.

written on 21 July 2014

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Singapore: Higher auctions and bargain hunters

Just read a piece of news in Bloomberg which said that the total units up for auction in 2014 for Singapore was 10 times higher than 2013. Before you worry, please do not worry, the total number is just 118, most probably those who bought very much later than the earlier batch. Thus, as soon as the rental market slows due to supply increase and demand reduction, these later buyers may not be able to hold on to the unit. Note, despite 10 times increase, the number units are definitely manageable and there should not be a mistake that this is a crisis. Not yet anyway. Then, the report stated that there were 100 bargain hunters who stood side by side inside a room for 50. Hey, double the number of seats available. It meant that people love bargains. More importantly, it meant that if the price is right, the demand will show its might.

The report also said that decline in price has started in 2014, after a 5 year continuous climb. That meant that prices started to increase beginning in 2009, right after the mortgage crisis in 2008. During this 5 year boom, prices climbed 40 percent, mainly because it’s easy to buy and foreign demand was high. Later, total debt repayments were capped at 60% by the Singapore government and this cooled the market. These days, hiring a foreigner is a tough business and this has slowed their numbers tremendously and with them, the rental market. Singapore’s second largest developer City Developments Ltd said that fire-sale may start with the falling rents, especially the high end ones. I think this is very true because some of these expatriates are now based in Iskandar instead. Bigger homes, smaller rentals. Overall though only 1 percent of mortgages were late in payments.

Based on all the numbers, it does not seem that prices would crash. Singapore government is considered a pro-active one and would have been able to take measures if the market is indeed in trouble. Just look at China which also would not allow its property market to collapse. It has started warming up measures. Read here:
Should Singapore follow China for property market ‘warming’?

Buying property is a long term investment. If the buyers are thinking along this line and is ready to hold during slow times, it would always be a managed risk. Objectively, do we seriously believe Singapore would have a slow down forever?

written on 28 Jan 2015

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Higher cost of living versus expensive tastes.

There’s an interesting article about the state of the
property market of Malaysia in TheStar
. It talks about how a ‘rebalancing’ is now happening and the ball is in the court of the developers and the authorities.
 (I do think that the developers are today only launching new units when they are pretty confident that they could sell. Hopefully this helps to reduce the overhang units)
 According to the National Property Information Centre’s (Napic) latest Property Market Status Report for the first quarter of 2017 (1Q17), launched units of condominiums totalled about 30,000. The overhang issue (unsold units) are actually becoming worse, according to Socio-Economic Research Centre executive director Lee Heng Guie. If everyone thinks the oversupply is due to the higher priced units, it’s not entirely true. 28 percent of the total overhang would be for units which are between RM200 – 400k.
(A developer friend shared with me before that many times, the buyers for these affordable units are also not that strong financially. This meant that their chances of getting a home loan approved is even lower, thus he had to sell his affordable units MANY times before it could actually be sold to the one who got his loans approved)
Anyway, do read on as
I think the article has quite a lot of good information for us to grasp.

Everyone kept focusing on higher cost of living. Seriously, if it is due ONLY to higher costs of living, the property market should have collapsed long time ago. In fact, the popular malls would already be empty today. The super wealthy do not need to shop in the popular malls lah. They go to exclusive ones and get served personally. Higher cost of living aside, the only real and tangible reason is because the middle class are spending more than they should and could. This meant that despite having an income which would have gotten their loans approved, they did not have enough savings or down payments to qualify for the unit they want. Furthermore, some wanted units that stretched them to their approval limits. Buying within affordability is not something that they look forward to. Eating is no longer

just to fill the stomach

and thus, their encounter with higher cost of living is intensified.

It’s true for many of my friends and the funny thing is, most of them would be those who has yet to buy a property. For those who has bought properties, like a senior manager friend of mine drives just a Nissan Livina X which is way below what she could easily afford. She said, it’s enough lah. Her actual home? An apartment WITHOUT facilities. Current market value? RM400,000. She has another condo that she rented out. Market value? RM850,000.  Fortunately, she is also very generous. Just the other day, she paid for all our beers at a 5-star hotel. Look at what we earn, put aside as much as possible what we would invest. The remaining would be for everything else. This limits what we have for spending on what we do not need anyway. Money is really powerful only when we use it wisely. Else, it’s just another tool which will turn us into fools. Here’s what a billionaire said.
‘Luxurious coffee and avocado toasts? Skip it to be rich

Happy understanding and start investing.

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written on 1 July 2017

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Property investment: Not always rosy

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Higher density will be a reality for all Malaysian cities, I believe

I was reminded in an article that the density in Penang used to be 30 units per acre but has been increased to 87 units per acre and would be 128 units per acre in future. Full
 article here.
 The density in KL? Well here’s an earlier article.
Higher plot ratio better,right?

Yes, DBKL is also pushing towards higher-density when some of the requirements are met. I do not think a city can be vibrant if the density is low and only the rich could afford to stay within the city. Of course, when it gets way too expensive, then the daytime population and the evening population vary tremendously. For example, the population for Jakarta in the evening is only 10.1 million while the daytime population is over 11 million. Read here to understand more.
The Jakarta Post.

So, what should be the right density? The existing population for a certain popular area would reply, ‘the lower the better.’ We hate noises, pollution and congestion. The ones who could now afford a place in the same area would say, ‘More affordable units please. This area does not belong to only the existing population.’  The local council? Headache lah….Of course, land matters are under the purview of the state government, thus perhaps better town planning is needed. Please use Decision Science and not Political Science…. (Favourite phrase of one of my MBA lecturer about how decisions are made in one country)

What’s most important however is not a debate on whether higher density is warranted. The reason is very simple. Everyone wants to stay in places where everyone wanted to stay in the first place. That’s the reason why prices for
these would always rise faster than other unpopular areas.

Truth is, there are still lots of land in mainland and prices are definitely lower than those within the island, especially the hotspots. When the demand increases, the supply would follow and this is the reason why developers would buy land to develop high-rise units or even buy up existing buildings and rebuild / redevelop. This does not happen only in Penang but also in the Klang Valley. More importantly, are there an upgrade of existing infrastructure? For example, would water / electricity be disrupted? What about the potential for flash floods? Would there be crazy jams? Are there enough schools? Public spaces MUST be optimised so that it can serve more. If the answer is positive to all these questions, I think the density approval should continue to be given. In fact, learning from Singapore may be a very good benchmark for Penang. Here’s 10 of their principles for
Liveable High-Density Cities. Very good reading!
 I have no doubt that higher-density will become more common in future. The question is always, are we ready for Liveable Higher-Density?

written on 9 Mar 2017

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Low density is NOT luxurious, ok?

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Higher end retail still okay? Growing 3-4%.

Actually, it’s quite easy to know if the economy is well or ‘sick.’ Look at retail. When we look at retail, we can look at malls. Read here:
Seriously, when there are just too many malls
 As we may have noted, many malls are today struggling. So, should we conclude that the retail is bad? I was in Genting days ago. I bought two Polo T-shirts in Padini. My brother-in-law likes it, bought two and my potential brother-in-law bought 4! Padini store was packed. I came back, went to 1 Utama, I could hardly find a parking spot. In Atria however, parking was a breeze and there were lots of spots available. It was on the evening of Sunday. No idea if that’s the cause. Was at IKEA just last weekend and the lines were still long.
To be very direct, no one would think of buying furniture or furnishings when they are struggling. It is definitely not a necessity or even a need. Is retail doing badly then?

Pavilion Real Estate Investment Trust (REIT) may be looking at a 3-4 percent growth in retail spending in 2015, according to Affin Hwang Capital Research. This is also supported by a robust fourth quarter due to the year-end festive season. It observed the robust year-end shopper traffic at Pavillion KL. I was at Pavillion KL for lunch just two weeks back. It was very packed. Nearly everyone was holding a shopping bag of some brands. Yes, Pavillion KL are mostly the higher end ones. Perhaps Christmas saved the day? Well, we still have the Chinese New Year coming soon as well. My plan remains the same, three new shirts for Chinese New Year 2016. I have already bought 2, thus I have quota for one more.

In fact, the upcoming renewal of 68% of Pavilion REIT’s net lettable area (NLA) expiring in 2016 is quite positive. The rentals will be revised upwards and this is mostly because the renewing tenants are mostly stable due to the proven track records at Pavillion KL. Even 2016, where many were predicting a worst year for property market may not be affecting Pavillion KL. This is because it caters to the middle and upper-middle class of society. Besides, Affin is expecting the moderation of private consumption growth is likely to be temporary because of the weakness in the ringgit.

This report will not be reflective of many malls. Especially the smaller ones which is close or nearby the bigger and more established ones. With similar brands within the malls, they (smaller malls) will struggle. If I have a family, I would prefer a bigger mall for the variety. If I am bringing my partner, the mall may need to have cinemas as well as lots of food and beverage choices. Oh yeah, more malls are opening in 2016. Let’s visit as many as possible to understand which ones may just not survive beyond the next few years. Car parks would be a good sign, followed by the visitors you can see taking the escalators. Notice in some malls, the whole escalator is full of people while in some, you may be the few taking the escalator at the same time… Happy shopping.

written on 29 Dec 2015

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Klang Valley property retail market? Oh dear…

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Credit Suisse: Malaysian economy growing faster in 2017 versus 2016

2016 has been a bad year? Mixed year? Or for the over 70 percent professionals who are expecting bonusses, perhaps not too bad at all?  Read here:
Malaysian professionals: 77% expects a bonus, 74 percent awaits pay rise

Thus far the expectation from the International Monetary Fund (IMF) is that Malaysia will grow by 4.2 percent for 2016. Credit Suisse expects a 4.1 percent growth for 2016. What about 2017? This is what Credit Suisse says in an article in
 NST
.

Positive(s):

Growth in 2017 is likely to be slightly higher than 2016 due to public infrastructure projects and improving commodity prices. They include the Mass Rapid Transit Line 2 (RM27 billion), Light Rail Transit Line 3 (RM9 billion), and the Pan-Borneo Highway (RM29 billion). These are infrastructure projects that will fuel the economy.

Current account surplus should also improve. It will rise to 2.3 percent of gross domestic product (GDP) versus 1.9 percent of GDP in 2016.

Government’s oil price assumption is US$48 and this is considered conservative. Revenue will rise with higher oil prices. With higher revenues, government has more ability to spend.

Negative(s)

Ringgit’s volatility will continue and this is a concern. It said Bank Negara Malaysia’s restrictions on non-deliverable forward (NDF) trading may not be seen as positive. It said that the long term effects from this is unclear, where foreign direct investments are concerned.
(I do not think it will affect any genuine long term investors because this was not the main reason why BNM sought to increase liquidity within Malaysia instead of some unknown entities out there…)

Consumer price index (CPI) is expected to rise slightly to 2.6 percent.

If ringgit continues to move downwards with the pressure from the dollar, the banking system would face tighter liquidity and there is a risk of bond market collapse as well as pressure on borrowing cost in the debt capital markets.
 (Suddenly, because of another currency all these are happening. So, I am supposed to believe people saying ringgit is going down because fundamentals are bad? Sigh…)

Okay, that’s why one international bank said about Malaysia. As usual, these are analysed by capable analysts with lots of data. So, I am sure they stand for something. Do look at all the positives and understand also that another key sign would be employment rate. As long as majority of everyone has a job and jobs continue to be created, I think our fundamental is intact. As soon as we see a mass deterioration of the
number of jobs available or retrenchments
, then the alarm bells should ring. Having a job also meant debts can be paid. Without a job means debt could not be paid and when a lot of people are unable to pay debts, the non-performing loans go up. When non-performing loans go up, banks are reluctant to lend for fear of further deterioration. The cycle continues and we suddenly start to see signs of financial crisis. As of now, no such signs. As for me, I continue to believe better times are not too far away. Alternatively, keep doing things to ensure on a longer term basis, we should be okay. For example? Property investments loh.

written on 20 Dec 2016

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Higher interest with the property market despite COVID-19

Press Release:
iProperty.com.my Consumer Survey Reveals Encouraging Property Seeking Trends Among Malaysians Despite COVID-19

? 44% of survey respondents were looking to purchase a property before the announcement of MCO.

? Property purchasing interest was not adversely affected by the MCO as the number of home seekers looking to buy properties after the announcement of the MCO increased slightly to 45%.

? 90% of property seeking respondents named easy entry options such as zero down payment, developer discounts and subsidized legal costs as the top factors that will ease their purchase decision.

KUALA LUMPUR, 14
th
JULY 2020
— iProperty.com.my, Malaysia’s No. 1 property portal, has announced the results of its latest consumer survey. The survey aims to understand Malaysians in their property seeking journey during the Movement Control Order (MCO) period and how it has affected them. The survey also analyses the purchasing desire of homebuyers before, during and after MCO. The survey was conducted between 11
th
May – 1
st
June 2020.

44% of survey respondents were looking to purchase a property before the announcement of MCO
The property portal reveals that 44% of the survey respondents are looking to purchase a property before the announcement of the Movement Control Order (MCO). Out of these property seekers, 28% stopped actively looking after the MCO was announced on 16
th
March 2020. However, more than one third of the property seekers who stopped actively searching (38%) stated that they are either waiting for prices to drop or are still open to good property deals.

The top two factors which influence a property seeker when evaluating an online listing is validation of a property’s valuation (pricing trends for similar properties) and listing content which gives a very clear understanding of the property’s space and layout.

Property seeking interest was not adversely affected by the MCO as the number of home seekers looking to buy properties after the announcement of the MCO increased to 45%

According to the survey results, in spite of the unprecedented situation caused by COVID-19, property seeking trends among Malaysians remained encouraging. Interestingly, the survey results reveal that 24% of the respondents who were not looking to buy a property before the MCO are now looking to purchase after the MCO announcement. A majority of these new entrants are either looking at current market conditions as an opportunity to purchase their first homes; to upgrade their existing homes or to invest in property, while the minority mentioned that they are downsizing or moving to more convenient locations.

With these new entrants the percentage of respondents who are actively looking for a property increased to 45% post MCO announcement. On top of this, another 10% of respondents, who are not actively looking for a property post MCO, are open to the right property deals. Taking into account this group, the percentage of respondents who are interested to purchase a property after the MCO announcement tops 55%.

Nevertheless, 92% of the people who are actively seeking for a property state that they have a lower readiness to transact (49% are waiting for prices to drop while 43% are still looking but more cautious about making any financial commitments).

90% of property seeking respondents named easy entry options as the top factor that will ease their transaction decision
The survey further reveals that 90% respondents answered that the factors which will help ease their transaction decisions are easy entry options such as zero down payment, developer discounts and subsidized legal costs. In addition to easy entry points, the survey also reveals that 81% of respondents are looking for trustworthy and reliable developers/ agents.

Also, 89% of property seekers are receptive to the idea of virtual viewings. 75% state that it will help them decide whether or not to view a property in person while the remaining 14% says it is enough for them to decide whether to buy/rent a property.

On the same note, 83% of all respondents want to get updates on good property deals (new properties on promotion, or sub sale properties at good prices), while 54% of respondents are interested in market insights and data, to help them better understand the current state of the property market.

This positive consumer survey highlights the timeliness of the reintroduction of the Home Ownership Campaign (HOC) under the government’s recent Economic Recovery Plan (PENJANA) package. The HOC initiative which features significant stamp duty holidays would help alleviate the financial burden of aspiring home buyers.

Commenting on the consumer survey, Wong Siew Lai, General Manager of Marketing and Communications, iProperty.com.my said, “The findings from this consumer survey revealed something very encouraging on Malaysian property seekers purchasing desires despite the unprecedented situation caused by the COVID-19 pandemic. Overall, volume of demand did not change significantly and

people are still looking for properties. Property seekers are spending more time researching and evaluating their property options online. The market may be much more receptive to property deals and solutions that help them discover those deals, as well as online content that helps them better understand the current market conditions. If they discover the right deal, many opportunistic property seekers are willing to invest even beyond their original budgets.”

FOOTNOTES:

1. The survey was conducted by iProperty.com.my between 11 May – 1 June 2020 2. Respondent generation groups:

? Gen Z, under 1% of respondents

? Gen Y, 67% of respondents

? Gen X, 32% of respondents

— end of press release —

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Higher maintenance fees due to GST

Until today whenever anyone were to ask me if a certain condo is worth buying, I have always asked them to look at the maintenance of the condo. Even if it is a 10 year old project, if the maintenance is ok, they should go ahead. However, for a new condo, if the maintenance starts to deteriorate, better skip until they improve. There are not many cases where ‘sleeping’ management committees suddenly wake up and become first class. However, for a good management committee to keep doing a good job, that’s pretty normal. The reason is, once established and done right, the maintenance is really just maintenance. No one is talking about building a new condo block!

Thus, whenever I hear of any news report saying that the maintenance charges would have to increase due to GST, I always smile. For these management committees, even without GST I think they would already be struggling every month. Are the service providers being engaged by them today really have a very low margin and thus would be out of business as soon as GST kicks in? These management committees really could not engage another vendor who would be willing to charge lower? If GST is the sole reason why these vendors would close shop, then I think it may be best to let them close shop. Looking at even the traditional businesses being listed in BURSA, none of them are aiming for a margin of just 6%. I repeat, NONE are aiming at just 6% margin.

Come on, GST would definitely be implemented. Take steps to prepare for it. This has been delayed and was one of the major reason why rating agencies rated Malaysia lower previously. Get just a few quotations, it would already reveal price differences and for some vendors who are more efficient than others, they would be able to offer a lower rate. Use them. In any business, competition allows everyone to improve and in the future, all the businesses become more resilient. There is also the suggestion that with GST, software and even personnel would have to be hired and this would meant an additional RM4,000 – RM5,000 per month. If only this is true, I think GST would mean the end of all SMEs in Malaysia. If you believe, then better start selling everything you have today before GST and keep cash.

For condos with ‘not so efficient’ management committees, take them out and vote new ones in. There are bound to be successful examples that everyone can follow. My personal conclusion, GST is not going to be that game changer. Other more important stuffs such as ensuring all maintenance fees are collected, making sure vendors are not chosen because of CONNECTIONS, taking serious measures against those who did not pay on time and more. These would be much more important and will ensure the condo continues to increase in price in future. GST would be just a one time adjustment. Happy finding a nice condo with an efficient condo management committee. If not, then good luck.

written on 1 March 2015

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Higher plot ratio better, right?

We have known of the crazy land prices in certain hotspots near KLCC. It can be as high as RM3,500psf and potentially even higher in future. In comparison, my friend’s uncle’s land somewhere in Teluk Intan was sold for just RM8 psf not too long ago. Haha. Yes. RM8 psf versus RM3,500 psf. What’s happening anyway? Well, it depends on the potential gross development value for that piece of land. Surely a piece of land right next to KLCC is going to be expensive because it is a desirable place to stay for the super wealthy. They want to wake up with a view of the tallest twin towers of the world today.

Another reason why certain plots of lands, even if they are nearby one another is different in pricing is also because of the plot ratio. In brief, plot ratio determines how much a developer can build on that piece of land. Assuming the plot ratio is 1:10. This meant that the developer can build something which is 10 times the size of the land area. How? Build up into the sky lah. Now you know why buildings are growing ever taller every year on ever smaller plots of lands?

Sometimes, the plot ratio is also revised upwards for certain reasons such as for affordable housing. Of course, this would also meant that the density is getting higher and the supporting infrastructure such as roads etc must also be upgraded in tandem. Otherwise, welcome to jam havoc in the future. The usual plot ratio for DBKL is 1:6 but it was reported in news reports that for Kampung Baru, the plot ratio can be 1:10. In an article in theedge some months back, according to James Goh, head of investment at Rahim & Co Chartered Surveyors Sdn Bhd there were instances where the plot ratios approved were as high as 1:12 He gave an example, UEM Sunrise Bhd’s parcel, which is the old Wisma Angkasa Raya, has a plot ratio of 1:12

I think if a certain area is well connected via roads, LRTs and even the future MRTs, the plot ratio can be approved higher. Historical numbers may meant nothing more than just historical numbers. Higher plot ratios may also mean a slightly cheaper unit. After all, higher density projects are always priced lower than the lower density ones, right? Happy buying higher density if you are okay with it.

written on 28 June 2015

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Low Density is not luxurious, ok?

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