Greater London, severely unaffordable. Start thinking Greater KL.

London is an international property market. I would personally rank it in terms of availability and vibrancy ahead of even those cities labelled as most liveable in the world such as Melbourne or Sydney. Given a choice between a UK degree or an Australian one, I can safely say UK is still ahead. Think Cambridge or Oxford or even LSE? Yes, I noted on University of Melbourne or Sydney. Of course, the largest group of property buyers for all these should be Chinese from China and even with the current hiccup with China’s economy, they remain the biggest. In Melbourne, the percentage is over a quarter.
Crazily hot. 28% of Melbourne apartments bought by foreigners

The latest numbers are however not that healthy for Londoners, especially those who may not be earning enough for a home within London. A research by estate agency Stirling Ackroyd based on its own data and Land Registry figures for prices paid found that of the 279 postcode districts in Greater London, 51% (142) of them has an average price of at least £500,000. Before anyone reply that their salaries are HIGHER, well, the current median salary in London is £48,023. Source: Office of National Statistics Annual Survey of Hours and Earnings. In brief, it simply meant that London’s property market is severely unaffordable. To be affordable, the median property price should be nothing more than 3 times the median salary. (Yes, the property prices in hotspots in KL are definitely also ranked as severely unaffordable too)

If we believe that the property market Malaysia would continue to grow in terms of attractiveness and becoming even more international, I think it’s very clear that London is a very good benchmark instead of HongKong or Singapore. Assuming Greater KL is 10-15 years behind London property market of today, I think we have to start to be serious about property investments here in Greater KL. When I studied in Bristol, I met many of my university mates from other smaller cities in London. What this tells me is that London is the magnet for all the smaller cities and urbanisation meant London is a main choice, just like here in Malaysia where the first city we would think about for career growth would be Kuala Lumpur.

There’s no need to ask for a more accurate prediction of when KL’s property price would reach the unaffordable levels of London. It’s best to start understanding if we have enough financial capital and understanding
to think big, start small.

It’s unlucky to buy the wrong property somehow but to be ignorant of the potential with the greater KL property market will be disastrous too unless we intend to just work, save lots of money and move back to our little hometown when we need to retire. The best solution is still to buy something to stay and then sell it when we need to leave. Most of the time, unless we are truly unlucky, we should have some profits from it. Happy believing.

written on 7 Feb 2016

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London housing shortage, Eco World adds 2,773 units.

Reported in a local English daily. The London Plan is a plan by the London authorities to ensure sufficient housing demand in the city aims to build 42,389 homes per year. The reality? Well, in 2013 a total of 26,230 homes were built while in 2014, this increased to 28,733 units. In brief, huge shortage. In conclusion, no wonder the prices in London continued to rise despite the current uncertainty in Europe caused by Greece’s default. As a metropolitan, London recorded the fastest growth in population in Europe and it is now home to 8.6 million people since end of 2014. Let me repeat, 8.6 million. This is bigger than the whole of Hong Kong, at around 7.2 million in mid 2014.

Fortunately, Eco World Investment Co Ltd (EWI) has plans to add to the shortage. Yes, a Malaysian company helping London authorities. It will be launching 3 projects with total units of 2,463 private housing and 310 affordable homes. They include The The London City Island, Embassy Gardens and Warden London. Total gross development value is estimated at £2.257bil (RM13.33bil). Price range for these three projects ranges from £820-£1600 per sq ft (psf) and they are situated in different parts of London.

According to Tan Sri Liew Kee Sin , London faces housing supply limitation but the city has small pockets of land and regeneration sites. Though there are competition, he is confident of EWI because it is able to provide the best product, best service, best pricing and connectivity.

His confidence of EWI’s London project is supported by views from Savills Malaysia deputy managing director Paul Khong who said that with the recent Conservative’s election victory, the London property prices are on the rise again. In fact, it has forecasted that the prices in London market to rise 22.7% over the next 5 years. Assuming that he is right, it meant the ROI is likely to be huge if one were to pay just 10 percent and got the rest on loan. Thinking of London property market and wanted to buy something with familiarity? Happy investing.

written on 17 July 2015

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Londoners, homeless. Malaysian caused?

Before I started to write this article, I searched for properties in London at the property site called rightmove.co.uk  Curious to at least understand if its true the allegations that Londoners are made homeless due to just 10 investors from Hong Kong, Malaysia, Australia, China, Sweden and Singapore. Please take a look at what I found for less than £500,000. Actually, the number of properties available for below this half a million mark is still aplenty in London. Perhaps it’s just a matter of choice then that some Londoners are not able to find a home they want and they are all waiting to buy the properties being built by these 10 foreign investors in London. Something like Malaysians in Malaysia refusing to buy secondary properties slightly further away and wants the developers to build affordable homes nearby KLCC or inside Desa Parkcity. How should I react? Well, I have no idea. Take a look at the available homes.

In a report by Guardian, it said that Tan Sri Ananda Khrisnan is one out of 10 foreign developers who will be developing properties which are not affordable to Britons. His company will be turning a former barrack into 104 luxury homes expected to be priced from £5m (RM37 million) each. there would also be detached mansions which will be even higher priced. This development is part of the over 30,000 homes in London to be developed by this small group of 10. The famous mayor of London Boris Johnson meanwhile ‘challenged’ these foreign developers to sell the proposed developments to locals first or at least, at the same time as foreign buyers. Do note that he did not say to price it lower. He said try to sell to locals first. If it is true that Londoners could not afford the £5m price tag, offering first, alongside or not offering is actually no different. As an international property market, the mayor is unlikely to ‘force’ the developers to build affordable homes instead. Haha. No one would buy an expensive piece of land to develop low-end properties, objectively.

Perhaps a better way would be to stop these foreigners from buying lands and limit them to just buying built properties? Well, if this happens, then the development of properties which appeal to the international buyers would be reduced and very soon, London as an international property destination is just a myth. Personally, majority would say that KL would not reach London’s level within the next 20 years. Well, truth is I like that. Haha. I am not sure how many Malaysians would feel if majority of whatever land left are all bought by foreign developers and they build ONLY for foreigners because Malaysians could not afford it anyway. Don’t worry, impossible to happen within the near future. As for London, great to know that it continues to be a magnet to the world. Happy buying London, one day.

written on 6 Jan 2015

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Lonely Planet: Perak is top 10 region to visit for 2017

Please do not say you do not know who or what is
lonelyplanet
.
Do google them up. In brief, they are the world’s largest travel guide book publisher. I had one copy when I was travelling around in Europe many years ago. Very handy indeed. Okay, one piece of significant news that was published in many medias recently was that Perak (yes, my home state) has been listed within the top 10 “must visit” regions for 2017. It is ranked 9th and other regions include Choquequirao (Peru), Taranaki (New Zealand), The Azores (Portugal), North Wales (United Kingdom), South Australia, Ayse´n (Chile), The Tuamotus (French Polynesia) and Coastal Georgia, USA. The Skellig Ring, Ireland was ranked number 10.

Before everyone start asking me if it’s the time to buy property since visitors are going to swarm into Perak in 2017, let’s get this very straight. Assuming your property really could be rented out for the whole 2017, then what’s next? Think a little more long term before buying. As long as you are connected to one very reliable homestay agent, then by all means get your place furnished soonest and be ready. My personal thoughts, even if Perak is my home state is this, the number of foreign visitors cannot suddenly double. The reason is because of limitations in terms of connectivity into Perak via flights. Seriously, assuming I am a foreigner who trusts LonelyPlanet totally and thinks Perak is an awesome choice, then what? Fly into Kuala Lumpur and skip KL altogether so that I can visit only Perak? Hmmm

Of course, I would always be doing my part to get more friends to visit Perak, mostly Ipoh, Sitiawan and Teluk Intan which is more closely connected to me. One was the place I was born and stayed till 10. One is my father’s hometown which we still frequent on a yearly basis. Ipoh is whereby parents stay today. Some of the plus points listed by Lonely Planet? Ipoh has both heritage and historical sites. It has many classic and vintage cafes and where nature is concerned, it has the Royal Belum National Park and also Pangkor Island. If I may add, there is also Lumut where along some stretches of the beach, you can dig for ‘kepah’ which is awesome when stir-fried or made into omelettes. There’s also historical hiking trails in Taiping, seafood in many smaller towns and one of the best dim sums you can find in Malaysia. Last but not least, buying a home in Ipoh for your future retirement is going to be a good one because I intend to retire there too. Haha. As for buying a property to rent out to tourists because of this top 10 ranking? Your decision lah. Happy visiting Ipoh.

written on 25 Oct 2016

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Still ‘A’ long-term ratings for Malaysia

It was considered a huge success when Malaysia managed to raise US$1.5 billion sukuk two days ago. Wait a minute, what is sukuk? Well this is definition of sukuk, ‘Sukuk commonly refers to the Islamic equivalent of bonds. However, as opposed to conventional bonds, which merely confer ownership of a debt, Sukuk grants the investor a share of an asset, along with the commensurate cash flows and risk.’ The issuance was oversubscribed. It attracted an aggregate interest of over US$9 billion from a total investor base of 450 accounts. In brief, the confidence level of investors to this sukuk issuance is high and more people wanted to subscribe to it versus what Malaysia wanted to raise.

Imagine if Malaysia had wanted to raise US$1.5 billion but the sukuk was NOT wanted by the international investor community? I think the rating agencies would start downgrading us very soon. This is because currently, Malaysia is still rated under the ‘investment grade’ rating by all three major rating agencies. Of course just one month ago, one of the three, Fitch Ratings has announced publicly that Malaysia’s current lowest investment rating may be downgraded in the near future and the possibility is over 50 percent; very high. It rated Malaysia ‘A-‘ currently.

Meanwhile, Standard & Poors (S&P)  said that it’s current view for Malaysia remains the same. It said the outlook on the long-term rating is stable. S&P also affirmed its ‘A-‘ long-term and ‘A-2’ short-term foreign currency sovereign credit ratings on Malaysia. At the same time, it also affirmed its ‘A’ long-term and ‘A-1’ short-term local currency ratings on Malaysia. Don’t worry if you do not know a lot about these ratings. If you get an A as a grade, you can briefly say you are doing fine. Perhaps not excellent but still fine. S&P also said that whatever weakness in the energy sector can be balanced by Malaysia’s fairly diversified and broad-based growth. Its ratings was also based on Malaysia’s strong external position which was result of many years of account surpluses.

Thus, for those who are holding cash and waiting for property bubble to burst, perhaps you may have to wait a little longer or perhaps you may want to aim at the luxury ones which with or without a crisis or rating downgrade, I think prices should soften. Even KLCC view ones would still not be able to escape the current huge supply and downtrend in transactions. Oh yeah, since everyone loves saying this, I will repeat this too. GST is also causing the current negative sentiment in everything, including the property market. Happy deciding your next course of action with the current small boost in confidence for Malaysia.

written on 18 Apr 2015

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Long term uptrend intact – HLIB

HLIB (Hong Leong Investment Bank Research) said that there are still many projects that continue to register high take up rate and gave an example of Paloma by Tropicana Corp Bhd which achieved 60% sales within one month of launch. This is still happening despite the tightening of the property market with more cooling measures such as 30% RPGT (real property gains tax) and minimum purchase price for foreigners raised to RM1 million. The RM1 million threshold has yet to be gazetted though and expected to be in force only April / May. I think this will give some breathing space tot he market instead of everything happening all at once. Developers are also banned from offering Developer Interest Bearing Scheme. This is important because otherwise, the buyers can basically pay a small downpayment and nothing else till completion and sell their units as soon as it is completed.

Again, Penang was mentioned as the property market which remain strong especially with land reclamations on the island as well as developers starting to buy up lands in the mainland. I think another significant point would be the opening of the Second Bridge. If you have never ever considered staying in Batu Kawan before, you may change your mind if you find it quite easy to commute between Batu Kawan – Batu Maung after this.

HLIB however expects Johor (Iskandar) to take a somewhat longer time to recover. I do not really agree with this assessment because if this is true, I think the Iskandar property market may be on a longer term downtrend. This is because of the recent huge land acquisitions by the Chinese developer companies. I do not think any developer would want to hold the land for more than one year without doing anything to it. As for the buyers, do expect more Chinese from China snapping the units up and to be followed by Malaysians working in Singapore and Singaporean PRs who are finding it not just tough but near to impossible to buy secondary properties there.

I agree with their final conclusion, that the long-term outlook remains fundamentally unchanged and Malaysia’s property prices will continue their long-term upward trend. For a nation with such a huge % of its population yet to own a home and the developed nation’s ratio of 1 home to 3 persons or lower, it is not hard not to see the potential. However, on behalf of all Malaysians, I hope the price would only gradually increase and not the double digit growth for the past few years.

written on 19 jan 2014

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or do read the
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Look at rental potential first, then the price.

A very capable young lady who has yet to buy a home had lunch with me on Monday. She asked if there were any area which I think is worth buying currently. Else, she intends to buy in Bangsar, where she was staying with her parents currently. She also asked what’s the price range which she should look at. She has no intention to stay in the unit she will be buying because she is comfortable staying with her parents at the moment.

I told her that if she loves the area where she was staying, then it’s worth buying as soon as she could find a property which could be easily rented out. She asked how does she know, I told her to look at rental advertisements as well as to ask the question when viewing the unit with a good real estate negotiator. Then, I remembered a chart from
Knight Frank’s Real Estate Highlights for 201
9
. (click here to read the copy).
 Image for average asking rentals for the following area as follows:

Source: Knight Frank Real Estate Highlights for 2020.

The above image does not mean every single property will be priced within the range. In order to use it as a very rough guide, then example as below:  Assuming the property is a 1,000 sq ft condo in Bangsar. Based on the above, the rental for such a unit will be around RM2,400 – RM4,000 per month. It has remained unchanged. If the property was in Damansara Heights, then the lower end rental has actually gone up. Taking the same 1,000 sq ft, we learnt that the rental has increased by between RM200 – RM300.

Secondly, it is also based on ASKING RENTALs. Thus, it has to be assumed that these rental rates are the rates which are generally accepted in the market. Assuming rental if RM2,400 – RM4,000 per month, then the maximum price which one should consider buying should be between RM480,000 to RM800,000. In other words, RENTAL FIRST, before buying price. When the rental could cover the property price, that would be an ideal situation.

Again, this depends on our current age (how long could we stretch the loan to) and our salary (how much we could actually qualify). Remember, regardless of how awesome that area is, look at the rental numbers first before the selling prices. However, if it’s for own stay and one must stay very close to the mother-in-law because she cooks every night and her food is tasty, then please do not look at rental. Just look at what you could afford. Period. Happy deciding.

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Looking at RM versus more currencies

Looking at RM versus more currencies

Too many people are trying to ‘sell their business or their programme’ by harping on ringgit’s depreciation versus the US$. It’s like if anyone are still foolish enough to invest in Ringgit based investments, it will be the end of the world for them. (the investors). By the way, I remain extremely confident with the Ringgit especially currently when Ringgit is definitely undervalued if we look at the trade surplus. Countries with trade deficits, their currency should drop! Else we are no longer talking about fundamental and more on speculation.

Anyway, perhaps we start with just Ringgit versus some major currencies, ok? Or perhaps all these other major currencies are all in trouble too? Since they have also all depreciated versus the US$. So the only country who is the best to invest into is America? Erm…

#1 – RM vs Yen. 5 years ago, RM1 can only get 25.85 Yen.  Today, it’s 30.33 Yen. Ringgit has appreciated vs Yen.

#2 – Pound Sterling vs RM. 5 years ago, 1 Pound can get RM5.58. Today, it’s RM5.38. Ringgit has appreciated versus Pound Sterling.

#3 – Euro vs RM. 5 years ago, 1 Euro can get RM5.04. Today, it’s RM4.54. Ringgit has appreciated versus Euro.

#4 – RM vs Chinese Yuan (RMB). 5 years ago, RM 1 can get RMB 1.57  Today, it’s RMB 1.52. Ringgit has appreciated (very marginally) versus RMB.

Let’s look at our valuation model; DEER

Article in theedgedaily.com
  DBS Foreign Exchange and Macro Strategist Chang Wei Liang wrote in a note on Tuesday (Aug 2) that an under-valued ringgit has unsurprisingly bolstered Malaysia’s 12-month trade surplus to a record high of over US$60 billion, which is double of its pre-Covid-19 norms of around US$30 billion. The DEER valuations as below image.

Take action as per what you believe, there are no certainty these days

Would Ringgit depreciate further? I have no idea. Would it appreciate? I also have no idea. I am just giving you another perspective which you may not have seen because if you relied on social media, it shows you MOST of the news that you want to read / see. That’s why we think something is like that but the truth is because we did not have the other perspective in order to make a more rational decision.

However, to simply invest into whatever scheme by someone who gave you all the bad news about Ringgit because you think Ringgit is the worst currency in the world means you are not well informed. Happy investing and remember that we live in a very uncertain world. Always go back to fundamental and less of just speculative investments all the time. On a longer term, one will provide a consistent return while the speculative one may give us huge returns or maybe big losses too. All the best.

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Losing your job, can you survive 6 months?

Seriously, today there are many negative news online. Every now and then, someone would be predicting that Malaysia will go bankrupt soon due to one institution. In fact many have said that the
household debt versus GDP is so high that it is unsustainable.
 Many would tell you that the property prices are seriously way too high and that every Gen-Y today may never own a property.  With GST’s implementation, so many people remarked that Malaysia is on a path of no return. Costs have increased so much that many businesses could no longer sustain itself and would be shutting down. And More.

No comments on even a single item above. My question would be, IF the above happen, I am pretty sure some of us may be out of job. Come on, during any crisis at all, surely some companies would shut down or some MNCs move elsewhere etc. So, are we ready with
sufficient savings to last us at least 6 months
, while we look for another job, most probably paying lower pay. To those who still bought a new iPhone or Samsung even though the price is more than half of their monthly pay, ties would be hard soon. Your phone is not likely to have appreciated in price when crisis really do come.

To those who had just
overstretched to buy a Japanese branded car
 to ‘tell’ everyone of their peers that I am ‘better’ than you, I think tough times are coming. Second-hand car prices are going down these days because even the prices of new cars have dropped. It meant when you sell your car, even if it is a Toyota, you are going to lose lots of money. Of course as they say, selling a Proton is even worst. (Opps, talking about me.) Do not worry, if crisis does not happen, you can continue telling all your friends who are driving a Proton that you are better off since you drive a Japanese car. 🙂

Personally, I am still using my mid-range OPPO smartphone which I bought over 14 months ago. I am still driving a Proton which the power window and everything else has not yet failed. I have bought undervalued stocks based on my own calculations. Hopefully I am right. I continue to save more because I now have 2 kids. Yes, I work very hard in my full-time job so that if they were to think of who to fire during bad times, they may retain me. Finally, I do have sufficient FD to last my family and myself for 6 months. Yes, I am prepared whether or not a crisis is coming.

To those who reads only the negative news everyday, I hope you are also ready.
Think objectively, act quickly if you believe so seriously.

written on 13 May 2015

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Losing deposit money of RM18.85 million, anyone?

Usually, we will pay deposit when we intend to buy a particular property. This is so that no one else could buy that property and gives time for us to get our loan approved. It may not be 10% of the property price, sometimes just a couple of thousand ringgit. I do not think there are that many Malaysians who would pay a deposit and then walk away without buying and thus losing the deposit, right? Well, there’s one buyer who paid a deposit of HK$36.09 Million (RM18.85 million) and then decided that he did not want the house anymore and thus, he forfeited his deposit of RM18.85 million!
Article in South China Morning Post

The house was a luxury home on The Peak and the price of the unit was HK$721.88 million (RM377 million). Speaking about the deal, JLL executive director Joseph Tsang said, “It is definitely not good news for the market.” This is the particulars about the particular house. It has a private garden, rooftop and swimming pool in Asia’s most expensive address and was sold at a unit price of HK$90,484 per square foot in December 2018. This is already more than 7 per cent cheaper than the adjoining house which was sold in April 2018. The project, Mount Nicholson became the priciest address in Hong Kong with the top three most expensive units in Asia in 2017. In November 2017, a single buyer paid HK$1.16 billion (US$149 million) for two units on the same day. Hong Kong’s property market is cooling rapidly due to a slowing economy,rising mortgage rates as well as uncertainties over the US-China trade war. Tsang said that there are now a rising number of homes being repossessed by banks but it is still too early to say whether it would trigger a wave of defaults. Do refer to the much longer
Article in South China Morning Post

Personally, I have not heard of any such news here in Malaysia. However, a good friend who’s an auctioneer for over 10 years said that there are now more cases where properties which he thought was attractively priced were not sold. There were enquiries but when it came to the day, no bidder came with the required bank draft to register.  I think the issue is not because of getting bank loans. I think the issue is sentiment driven and for this, we need confidence boosters and not more ‘roadblocks’ or obstacles yeah. In the 4Ps (POLICY) is by the government. Let’s see what happens next.

written on 12th Jan 2019

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Below 40s are the ones losing their job.

I hope all the working professionals who are reading kopiandproperty.com is working hard and continued to get monthly salaries yeah. As we have read, the unemployment rate has risen and is very close to 4%. (Some say should already be higher…) A recent survey has showed that most of those losing their jobs were below 40 years of age. Yes, the below 40s are the ones losing their job during these few months.

Looking deeper, the main reason was not because they could not adapt to technology. Or that the company they worked for closed down. The major reason was because many of them were not in formal jobs with companies. In the U.S., these may also be known as gig economies. As soon as lockdown stops, the demand for services drop and thus these people would stop receiving any orders.

Article in malaymail.com
 Three out of five people who lost jobs in recent months were below 40 years of age and most of them do not have the protection of any social security net, according to DM-Analytic Sdn Bhd economist Zouhair Rosli.

He said, “(A total of) 2.5 million Malaysians were employed in the informal sectors. The number of youths between 20 and 30 years old working in informal sectors doubled from 6 per cent in 2016 to 12 per cent in 2019, despite the jobs not offering fixed wages.”

“Those who managed to keep their jobs saw their income reduced by 90 per cent. This group admitted that they did not have enough savings even to last for a month.”  Do read in full the article here:
Article in malaymail.com

As the saying goes, ‘to make hay while the sun shines.’ This meant that if we intend to be engaged in the informal work, then it’s extremely important to be more prepared because there is no security safety net, for example, EPF contributions. One would have to be even more disciplined in saving a portion of the monthly earnings for rainy days. Yes, current situation is one. Besides that, it’s extremely important to also ask ourselves if we are suitable for the informal work yeah. My wish is of course for everyone to be able to get back their jobs and for the informal sector workers, hope the demand for services will start to come back since the economy starts reopening. Stay safe.

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Losing money based on %? Are you serious?

I read an article by a very prominent financial website on which are the cars that is worth buying based on the value of depreciation over a period of 5 years. It said that certain cars are worth buying because they lose less in terms of % over a period of 5 years. Sorry but I beg to differ. When it’s LOSS, it should be based on actual figure instead of %. Basic example, if a company loses 50% of its value after 10 years, would you still buy its shares? However, if you sell a property during a downturn, instead of earning RM100,000, you only get RM50,000. Do you see the real difference here? For losses, especially for cars, it should be in absolute numbers because in actual fact this is the actual money you lost! Imagine you buy a car for RM86,000.  After 10 years, somehow you can still sell it for RM43,000, so you only lost 50%. In actual fact you have lost RM43,000 which could have been downpayment for a RM430,000 property! And if this RM430,000 property ONLY increase by 1% in price every year, after ten years, your ROI is easily 5% or more per year, better than FD. I have not even began to count the rental from this property for ten years.

Of course, for those who are able to afford Mercedes, I do not think they care about the losses. However, I can safely tell you that the reason why people buy a RM86,000 car is definitely not because they are way too rich. It’s because that’s the car they believe gives them some ‘face’ amongst the peers. Please do not start to tell me that it saves fuel, I will just let you win if you want to argue about fuel savings. Please do a calculation before you even start to talk about this savings. 3 years ago, I bought my car for RM43,000 (year end discount) and if I drive it for ten years and I can only sell it for RM10,000 my actual loss is only RM33,000.  Assuming I could not sell and its value dropped to zero, it meant I lost the same amount as the one who paid much higher price for their car. However, every month for 10 years, I am able to save on car loan and perhaps can change handphone every 4 months? (If I just want to waste money).

If you sincerely want to save money, Perodua Viva’s fuel consumption is very low. If you want value, Segment B Persona has the most superior features you can ever have for less than RM46,000 over cars twice its price. Alternatively, lots of well maintained second hand cars. Oh yeah, a second hand Hyundai Sonata 2.0 with 4 airbags is only RM35,000. My friend survived a highway crash in one due to its rigid body and airbag. Her company cars are now full of these second hand Hyundai Sonatas. Think objectively, what is it that you want? Losing less money in real RM or losing less money in terms of %. Then, you decide.

Written on 14 Feb 2014

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‘Losing’ a bit now to have a ‘Winning’ surprise in future.

My parents find it hard to understand why people could spend RM13 for a latte. They have advised me to
save, save and save
 as soon as I started working. Well, it’s tough to save on a monthly basis and therefore, I forced myself to ‘lost’ some money. Yes, I put it somewhere I would not be touching it again for an extremely long time. For me, savings is a must even if investment is the thing that may determine if I get to retire earlier or later. In my early days when I did not know much about
unit trust
, I chose to believe my ex-colleague who sold me savings plans. The first plan I ever bought was RM200 per year for 20 years. Yes, I am about to get that whole chunk of money in a few years’ time.

Do we know how much we could have saved if we only put RM200 into a savings plan or even a conservative unit trust for a period of 30 years with just a return of 3 percent? Take a look at the image of what happens. Assuming we found a RM100 note in our car when we were cleaning it, we would be extremely happy at our luck, right? Well, what if we suddenly receive a cheque for RM115,000. Bearing in mind I have already forgotten that on a monthly basis, my account was debited with this amount. Too used to it.

I know, some would now say but
inflation would have eaten most of it
. I am not sure about you but I am quite sure RM115,000 can buy me at least a few years of lunches even if inflation has consumed a lot of it. If you really must know, then assuming the economy rice by then costs RM50 per one meat and 2 vege, this money can give us over 6 years of lunches. Since this is a sudden surprise in future, it would be a good one. What happens if we were to spend an extra RM200 per month? You just need to spend RM50 per lunch in the future…… Yes, over the years, I have added a bit more into these kind of ‘forced’ savings. For now, I am just waiting for the cheque for my very first savings plan. Not much, I know but still a pleasant surprise. Perhaps I should just bring my parents for another short holiday.
Oh yeah, saving is also the start of an investment journey.

Happy ‘losing’ today and ‘winning’ in future.

written on 29 June 2016

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Losing RM45 billion is scary, really. Please get it back, get more.

Tourism industry is not in a good shape for the past many months. No inbound tourists from overseas, no local tourists because everyone must stay at home. Now that it’s Recovery Movement Control Order (RMCO), some of these tourism players may get some business again. It will not recover suddenly yeah. Unemployment number shot up to 5.3% in month of May. Perhaps June may see a similar number.  Please do understand that jobs are the base for everything, even the property market for Greater Kuala Lumpur and other bigger cities.

This following news show how bad the tourism industry is.
“Malaysia tourism faces up to RM45 billion losses due to COVID-19.” (click to read the article)
  Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri says that Malaysia ’s tourism sector is estimated to suffer losses amounting to RM45 billion this year as a result of the closure of the country’s borders due to the COVID-19 pandemic.

She said, “Based on the ministry’s statistics, for the period of January to March this year, international tourist spending recorded a decrease of 41.5 per cent from RM21.4 billion in 2019 to RM12.5 billion, this year.”  She shared some good news. She said that some hotels had begun to record high occupancy rate of up to 75 percent after the domestic tourism segment starts moving again.
Do read here for the full article.

I think what most of the players in the tourism industry wants to hear is how soon could we implement the travel bubble which has been talked about for a few weeks now. Truth is, there is pent-up demand in many of these countries which has managed to control COVID-19 better than many countries outside Asia. the first country with all the SOPs and approvals in place may see a good recovery in the tourism sector.

I know everyone wants to tell me that COVID-19 is still around. Let’s just note that this statement that COVID-19 is still around will still be around for the next 12-18 months if not more. Sorry yeah, it depends on what we do and how we do it. It is not only going back to normal when COVID-19 is eradicated. If we do that, I am not sure how many things we would also need to save everyone from. Remember yeah, just these lockdowns for a few months and we have seen the unemployment spike. Thanks for understanding.

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Losing still selling, money needed, 7% of all transactions affected

I just read an article by The Business Times (Singapore) that 7% of all transactions in prime districts 9,10 and 11 were sold at a loss within the first eight months of 2014. This was higher than 5.5% in the same period just a year ago. Data was compiled by STproperty.sg from URA Realis. The report said that with the current situation, those who do not have holding power are now selling. Besides that, yields were also under pressure and in some cases, the monthly rentals could not cover monthly mortgage instalments. Of course it also said that not all of these transactiosn were due to pressure, some just wanted to exit today rather than later as they felt that the situation would not be changing anytime soon. The prime districts stated here include: prime districts 9 (Orchard Road, River Valley), 10 (Bukit Timah, Holland, Balmoral) and 11 (Novena, Newton, Thomson). Most of the time, the rental market depends on the expatriates who loves staying near the city. However, these days, with budget cuts, many of these foreign employees are being moved to the city fringes and suburbs and some even HDB flats!

Some examples of the prices of District 11 here: (from propertyguru.com.sg)  Examples are only for those of 1,000sf to 1,200sf only.

Hey, I seriously think whatever is happening in Singapore may happen in Malaysia too. Perhaps it is already happening, just that the statistics available is not yet updated. Seriously, I do not believe that luxury condo prices can continue to rise even if they have KLCC view, even if they are next to KLCC, even if they are next to a huge mall that you love to visit every weekend. To expats, the most important thing for them is to have a place which they feel at ease, a mall which they can visit when they needed, perhaps even enjoy a cuppa every few days. Tell me, don’t you think this can be found in many places today? Of course, the only point would be how many expats are staying in that particular area. Most of them love to stay close to each other which is understandable. Just look at Chinatowns all over the developed countries and you would understand why.

I am looking forward to transactions data for these equivalent units in Malaysia. Perhaps the holding power is stronger because most of the time, the prices they bought were much lower than today. It meant that rental may be under pressure but selling at a loss may not be a case even at this moment and even at 20% down from current prices, unless the said luxury property was bought towards the end of 2012? A reader commented that prices of luxury condos are under pressure in even Penang island and thus sellers may be forced to sell lower if they intend to sell fast. I agree. Sell fast, sell lower. However, selling at a loss is another matter altogether. Of course, all these are talking about luxury condos. For those owning the cheaper condos which is being rented out or even your very own home sweet home, I don’t think rental or property prices would be a concern yet. Unlikely too. Happy staying.

written on 16 Sept 2014

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Loss in revenue, gains for the rakyat

The reason I put the title as such is to tell everyone that when it comes to public transport, it is important for the public to enjoy as much as possible; lower rates. However, by giving lower rates, it will also mean that the government will have to subsidise the potential loss in revenue from all the special rates. For understanding, KTM is has a very small profit for FY2017. It posted a pre-tax profit of RM4.5 million. This was said to be the FIRST in 20 years. On a longer term, it’s accumulated losses are
RM2.9 billion. Article in theedgemarkets.com here.

Before everyone starts saying why can’t KTMB be profitable… This is what Singapore’s Transport Minister said about the MRT network in Singapore (which is already taken by majority of Singaporeans today). He said, “On the issue of government grant and subsidies for MRT lines, Mr Khaw said the Government has invested and subsidised heavily to ensure that Singapore’s rail network is “reliable, convenient and affordable”.
Article in straitstimes.com.sg here.
If it’s already profitable, there’s no need for subsidies…

This is why I welcomed the MY100 initiative by our
Transport Minister Anthony Loke Siew Fook. Earlier article here.
Now, he has more good news for all of us who thinks driving is expensive. Beginning April 1, Malaysians are granted a 20% discount when using the KTM Komuter service, said Transport Minister Anthony Loke Siew Fook. This is to help reduce the cost of living of Malaysian commuter users and increase ridership. KTM’s revenue is expected to reduce by RM43 million yearly and this would be met by the Railway Assets Corporation (RAC). The discount given would be of benefit to around 94,000 commuters daily on five routes. He said, “The public can enjoy the discount for one year and we will be reviewing it to determine its effectiveness. Commuters who are already enjoying a 20% discount when they go cashless will get another 20% discount on top of this.”
Article in TheStar.com.my here.

It’s not easy to change habits but imagine the potential savings over the long run and the potential that those savings could become savings for the first property? MY100 has started and now, 20 percent discount for KTM’s services have also started. Well, Anthony has started the ball rolling. Perhaps it’s time we ‘score’ together. As for the loss in revenue, when more people take KTMB services, I think it will just be time before the loss in revenue is recovered. Happy travelling and yes ETS is super comfortable compared to riding in a sedan car. Safer too.

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Article written and edited by Charles. News article summarised by Dina Batrisyia.  21 Feb 2019.

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From loss to RM7 billion GDV within 8 years

I have bought a shirt from Yong Tai before, many years ago. It was attractively priced and the material was good. Thus, when I read about Yong Tai having property developments with a gross development value (GDV) of RM7 billion, my interest was piqued. Garment manufacturer also a property development? These are two very different businesses, aren’t they? Well, according to its executive director Ng Jet Heong, the group currently has 60:40 (property development: garment manufacturing) and this would change with the new projects to 80:20 It means currently, Yong Tai is already a property developer. In the near future, Yong Tai would be known as more of a property developer than a garment manufacturer. According to Ng, these developments would help Yong Tai to be back in black after suffering many years of losses.

Actually, it’s not easy for clothing manufacturers nowadays. There’s just way too many brands and then again, there are brands that I would never consider to buy. Maybe because of its design, maybe because of its general branding. Many times, I would not want to pay a premium for them. Yong Tai may not have the pricing attractiveness vis-a-vis it’s brand compared to local brands such as Padini or even international ones such as Uniqlo. Even Padini’s performance has been affected by Uniqlo. Thus, losses may be expected when the competition gets tough. As a sector, the “Textiles and Clothing” has also weakened based on the latest available data from the Purchasing Managers’ Index (PMI). To be objective, when times are uncertain, no one is going to shop for clothes…..

Of course, on another note while the profit margin for property development is still healthier than garment manufacturing based on Yong Tai’s current result, I think it is important to note that this is not the best time for property development. Last year, sub RM500,000 properties was quite well received but this year, many friends are telling me that even this segment is slowing down. Perhaps one major reason is because the number of units for these are getting larger. 1,200 units are considered on the low side these days. Some mixed developments can offer over 2,000 units! As usual, more units equals to cheaper price per unit but more units meant it will take longer to sell too. Reminder, if buying for own stay, the cheaper the better. However, if buying for investment, the many units meant that it will need some time to ‘digest’ once the keys are handed over and you want to put it up for sale. Happy buying.

written on 4 Aug 2015

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Yes, it’s definitely safe for a long time yet; property investment

Let me tell you why I feel confident about property investment after my weekend with my family. I was at my favourite mall today, Setia City Mall. Read here why I love certain malls:
My MUST have list formally, both old and new
 It’s nowhere near One Utama or MidValley in terms of size but I just think the size and the variety is just right. Plus, you have the inside and the outside as well when you visit Setia City Mall. Yes, the baby rooms are well equipped not to mention the many exits to the car park. I was there for an interview session by Property Insight magazine. Felt very honoured as this is the leading property magazine in Malaysia today.

When I arrived, I dropped by Starbucks first and I noticed majority of the tables were occupied by people younger than me by 10-15 years. Haha. Yes, I am not that young today.  After that, I had lunch with my family in Sushi Zanmai and it was full of families, many with little ones just like mine. There was even one baby seated next table which cried so loud and caused my baby boy to also cry. Haha. Somehow, after some shopping, changing diapers, etc, it came to dinner time. We went into a restaurant called KD Hong Kong. After we sat down, I noticed the two tables in front of us had a total of 3 toddlers. The table right next to ours had a baby girl slightly older than my daughter and behind me, to my right side and in fact kids were in nearly every table in KD Hong Kong!

Maybe they attract mostly families but hey, this gives me great confidence to continue investing in properties. These little ones would have to grow up and they would have to find a place to stay. Even i they could not afford to buy just by themselves, surely their parents would help. It’s true that these Millenials and Gen-Zs may be looking for smaller units due to their lifestyle but be reminded that even if just 10 percent of them got married and needed a bigger place, think of the demand…

Actually, I think these younger people may get married even later than people today and may have even fewer kids, some may choose not to have at all. However, this would be more than 20 years or more down the road. For the next 10-20 years, rest assured, the demand for that property that you bought today would still be there. See, analyse, decide and action. Oh yeah, if property is just not your cup of tea, please do buy some baby related stocks. For example, diaper manufacturers? Perhaps even those involved in baby clothing, baby lotions and more. I think it’s safe to say that unless some unforeseen circumstances happen to these companies, sooner or later the price you paid for these shares would double and so on. Happy investing and happy noticing all the things happening right in front of you.

written on 12 Dec 2015

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Affordable homes within 9,192 acres of land and ‘profitable’ public transport company

Let’s get the first question out of the way. Will huge numbers of affordable home crash the property market? No. Huge numbers of really attractive and affordable homes will stabilise the market because there would be by far more choices for everyone instead of the current situation where the demand for certain hotspots far outstrip supply, pushing up prices. I call it
Location Supply Scarcity

Too many people love too few areas and within those few areas, there are even fewer units up for sale. Every time a transaction happens, the price inched upwards. Imagine what happens after 10 transactions in a year? Yes, I seriously welcome more affordable and attractive homes. Every Malaysian should have a home, especially the

M40 and the B20. Who are they? Earlier article here.

Frankly, without a home, it is seriously tough for them to hedge against inflation. At least with a home, they have something at the end of their working life. What will happen to a RM300k home every year? Here’s an earlier article:
RM300k property versus just increments

According to an
article in edgeprop.my,
a lot more affordable homes may be coming. Transport Minister Anthony Loke shared that the Ministry of Transport (MoT) is planning to develop affordable housing projects on Railway Assets Corp’s (RAC) 9,192 acres of land to generate better returns for the company. He said, “I have requested for RAC to come up with a list of their lands that are available for development by this Friday and I will submit the list to the Cabinet next Wednesday to seek approval for developing the lands. Once we have gotten the approval, we will then call for open tenders for the lands.” He added that the lands should not be used for office blocks but should be for affordable housing projects to allow more people to live nearby the railways and use public transport to commute to work.”  (NOBLE goal for Malaysians indeed. Let’s keep following from this announcement yeah.)  RAC owns a total 31,712 acres of land along the KTM railways as well as pockets of land in prime areas, of which 9,192 acres are available for development, while the remaining 22,520 acres are reserve land.

He then said this, “If RAC is able to generate more income through unlocking the value of its landbank, it will have more flexibility to develop our railway service and provide better service to the public.” (THIS IS THE BULLSEYE. Frankly, public transportation company running just public transportation will be at a loss most of the time. In brief, can the fares be increased after the first year? Most of the time, it is increased only after many years! At the same time however, the company must still give increments to the staff, must still maintain the services and this is getting expensive year after year and the company must even handle customer complaints and spend money to resolve them even though the fares could not be increased! Hong Kong’s MTR is profitable because it has the property development and management business as well. Who knows, we may have this in the future with RAC?
 Do read the full article here.
 Yes, I think our new Transport Minister has done his homework well. If he reads this article and needs my inputs, please tell me yeah. Haha. Happy pushing for a ‘profitable’ RAC.

written on 26 June 2018

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Lots of money to lend but not enough borrowers? Hmm…

Okay, I have always have this thought that banks love to lend and that the borrowers just have to qualify for it when they are applying for one. There are many who continue to argue that banks are no longer lending. In fact banks are now rejecting most applicants. Whatever thoughts one may have matters little. Banks will have more money to lend but it does seem that the number of borrowers are just not enough. In other words, demand for these newly available funds are lacking.

Article in theedgemarkets.com here.
  Bank Negara Malaysia’s (BNM) move to reduce the statutory reserve requirement (SRR) ratio to 3% from 3.5% meant that the banks will have more money in hand to lend out. This 0.5% cut in SRR is expected to release RM7.35 billion into the banking system.

RHB Research analyst Fiona Leong opines that the SRR cut may not be able to improve loan growth significantly. She said, “A cut means the liquidity will be released back to the banking system. But if you looked at the system’s loan growth, the problem is not so much on the liquidity within the system that contributes to the soft loan growth. The (loan) growth has been soft because the demand is weak. Even BNM cuts the SRR to put money into the (banking) system, it is not going to help much.” There are many more comments from other bank analysts but generally the views are the same. Read it in
Article in theedgemarkets.com here.

Briefly, when the economy slows down, even the demand for loans from the business sector will be reducing. Businesses do not see the need to expand if they do not expect their business to pick up. Meanwhile, consumers, especially the first timers may still be uncertain and many continue to be thinking that it’s best to wait for the best time to buy. This is despite the fact that not many understand that the best time was during a financial crisis.

When it (financial crisis) really do come, I wonder how many are courageously entering the market when they did not dare to enter the market at a time when the sellers have a weaker bargaining power. Anyway, it’s good to know that the banks will have more liquidity and this definitely gives them extra flexibility in deciding if they wish to increase their lending or perhaps assume a slightly higher risk too. Happy investing.

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Developers love to build “affordable” these days

I think there are lots of property choices in the Klang Valley. SMSes are sent to me every few days of a good offer. Well, when the property market slows, the developers need to really step back and decide what should they build. I personally believe all developers are building based on their own forecasted / predicted demand from the public. For example, the number of registrations for interest would have given them some clue as well. Hopefully there are no or very few developers who are still building simply because they believe the market would absorb everything they build, regardless
of type, price and location.
 According to CBRE/WTW’s managing director Foo Gee Jen, more developers are moving into the affordable segment. Full article in
themalaymail
 here. I believe everyone should own at least the home that they stay in. This is so that they have something to fall back on when they no longer work in the future.

Foo also explained that property remained a more popular investment destination in the country than most other sectors. (He did not explain how he derived this conclusion but I think its safe to assume it’s due to the value of a property. We do not buy RM500,000 worth of unit trusts but we do buy a RM500,000 home) He also shared that if the demand was not present, then developers would have no choice but to discount. This is especially true for some high-end products which are not selling. This is main reason why the developers are moving into the affordable segment instead. He said the demand for small and flexible offices (SOHO/SOFO) will fall by up to 15 per cent compared to 2015. This decline in demand would last another three to four years. With Malaysian buyers becoming ever savvier in the properties that they buy, itwill be ever more challenging for developers in 2017. Three other reasons are also not on the developers side; weak ringgit, commodity prices and markets elsewhere.

When developers themselves are moving into the affordable segment, there are two things we should pay attention to. First thing is that for buyers, the opportunity to buy a more affordable home is more possible. Choices are definitely increasing. Time to make a choice if primary market is where we want to head to. No idea if we should rush but do note that the current cycle is one of gradual decline in property prices.
An analysis by UTAR here.

Second thing is the demand and supply equation which will affect future property price appreciation. As there are many similarly priced properties, it pays to be more objective when we choose. The reasons
‘WHY’ is now more important than ever.
 Property prices would always be based on demand and supply. However, if we are going to hold the property we buy for many years, then even the usual inflation rate increase would help the property prices tremendously. For example, a RM400,000 home with a 2% increase every year is still RM8,000 per year. RM8,000 per year is still an increase of RM666 per month. How many Malaysians have an increment of RM666 per month recently?
NOTE: LONG TERM ok….

Property is not for speculation. For that, go to the casinos. It’s faster. Happy investing in one.

written on 21 Jan 2017

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Love conquers all, perhaps. Money pays the bills, okay?

Whether you are a guy or a lady, just remember that money pays the bills, okay? Love is that cream on top.

Guys, do you love someone today? Regardless of who you love, do you think the single most important thing in a relationship is love? Or… money? Well, one soothes the heart and makes you feel alive and excited. The other one makes you feel sufficient and safe and you will know that if your loved one falls sick, you could quickly bring them to get medical attention. If they feel hot, you could switch on the air-conditioner without too much worry about the bill for electricity at the end of the month. Agree? Of course, time continue to change too.

Photo by energepic.com on
Pexels.com

I think it was much easier for a man to propose to his girl friend and get a positive answer say 20 years ago versus today. I proposed to my wife around 17 years ago. I mentioned to her that we will save money together and I will be responsible enough not to spend all the money on things which does not matter. Holidays do matter though, it helps us relax and then can come back and work harder for our future together.  That was why she agreed to marry me then. What about today then?

I think if I were to propose to her today, perhaps I should bring her to a branded handbag shop which we have been before a week earlier. I will show her one of those handbags she had indicated she like a week earlier and ask her to open and view the handbag one more time. When she opens the handbag, she will find a little red box with a ring inside (also from a branded brand and not some obscure gold / diamond shop) and she will hug me and said YES. Haha. Of course, need to get co-operation from the sales staff prior to the visit. So, is love harder to show nowadays?

Has love changed? I think not. At least not by a lot. BUT money pays the bills. There are still guys who are doing his best to make ends meet and the wife who’s willing to do more and continue to support him too. However, money is today playing a much more important part because BOTH the guy and the girl HAVE a lot of things they would like to have these days.

My wife, if she was thinking of a handphone during our time then would be a Nokia (due to her brother’s influence) or Ericsson (due to my influence).  The prices for both? Sub-RM1,000. Both our kids were born in private hospitals because she wanted a dedicated doctor and attention too. The medical fees are getting ever more expensive. So, you could see that even when my wife loves me (and I love her), money pays the bills.

Overseas holidays are becoming common (everyone loves a holiday, right?) because flight tickets are cheaper BUT these trips will drain a lot of our money too.
Earlier: Travelling is making it harder to buy a property
 When we got home from the overseas holidays, the credit card bill will come the month after.

Love is thus becoming more complicated these days with the availability of more things which money could buy. This is why love may still conquer all but the one that will pay the bills would be money. Yes, please put this into your mind. money pays the bills. Let’s remember also that one major cause of divorce is MONEY, or the lack of it. Remember to be responsible to the loved ones by being responsible with our earnings and expenditures.

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Love it even more because now it offers MORE; Decathlon Sri Damansara

I wrote about Decathlon Sri Damansara quite some time back. Here’s my first impression.
Decathlon in Sri Damansara, worth a visit definitely

Since then, I have visited Decathlon many times. Every time, it’s over an hour. I have introduced it to many people and they have visited it more than once ever since. Perhaps it’s because of the variety of choices, from the basic ones to the professional ones. Sports shoes and even hiking shoes start from RM59 onwards. Gym t-shirts? RM12 onwards. A basic squash racquet starts from RM39. Head lights for hiking are available and it starts from RM12. These are some of the items that I have bought on my trips there. If you buy 5 items and above, they even give you a big Decathlon recycle bag which of course you can recycle again and again. The image shows only one small section, the bicyles and the accessories. Yes, it’s even possible to ride a bit around the place. It’s wide enough.

Perhaps it’s just the sheer number of choices which has attracted me and my family members. One example, to pick a hiking shoe, we can try it by walking on a ‘testing’ ground. My brother-in-law spent over half an hour just to make sure he bought the best value hiking shoe. The most comfortable at the best price point. My kids and my in-laws’ kids? They have lots of fun diving into the tents on display and well, just running around because space is something not lacking in Decathlon Sri Damansara. Yes, I have even played ping pong inside because they actually provide a table for you to play. Everything that is being sold has a display unit which we can try or touch before we buy. Take a look at the image. Kids can try out the skates before they buy, in a safe environment. Cool right. Parents, please stay outside and watch. Haha. My daughter is still not comfortable with the skating bike. Will get her one soon.

I have not been there for the past few months and guess what, it has grown bigger! Well, I think at least 150 percent bigger than before. Brightly lit, lots of space and lots of people and yet we do not feel suffocating. Okay, I think this is one reason it’s opened here instead of the city centre because space would have cost a lot more money. It’s like Sports Direct except that it is in-house brands and the choices and the way they display and sell is different. Note though that if your favourite brand is only Nike or Adidas, then you will not find it here. Another image. Look at the queue to pay. It’s a weekend and many families were there. I think this can be made into a family get-together session too. Happy enjoying and buying.

written on 10 April 2017

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Love your job or lose your job.

A close friend was asking me about his career. He said he felt that he was doing way too many things and that perhaps he should just do one thing really well instead. I asked him if he likes all the things that he was doing currently. His answer was a YES. I shared with him that he would somehow need to make it work. The reason is simple. In the very near future, if our job description is the exact same one as the one when we started our work many years ago, get ready to be retrenched.

The reason? There is already someone in another faraway country who is learning today and is eager to do what we are currently doing for lesser pay. Yea, we can always ridicule the Ringgit versus stronger currencies but frankly if we have same talent pool as some other advanced nations, their professionals would lose their jobs instead. Just look at the mushrooming of Business Process Outsourcing centres which is now a common feature in Malaysia today. These jobs were once in more ‘expensive’ countries.

Then, I read about an article written by contributors to Forbes.
‘3 reasons you need to either love your job or lose it.’
The writer shared three things. If we do not love our job, we would usually be stressed by it. A few examples were given and they make sense too. Secondly, if we do not like our job, the accomplishments are harder to come by and in the end, we usually regret because we did not do the best we could, simply because we did not like our job! (Well, we did apply for it in the beginning…).

Third, when we do not like our job, it usually meant we are not performing and this will really affect our future potential. Seriously, if we do not have any achievements, the next job is not going to pay us a higher pay. Makes perfect sense. The article concluded by saying that we should produce great work. Well, every time we produce great work, we are doing better. In other words, it is harder for people to learn what we do. If they could not do what we do, then lower pay matters little.

I could still remember how desperate I was to look for a job in July 1998. I was a fresh graduate and had zero working experience. There were just two pages of job advertisements in newspapers and even JobStreet was only starting. Somehow I got myself a sales job. Well, my Japanese General Manager told me this. ‘As long as you do well, I will promote you.’ I did really well.

It made me realise that interest can be built when we really love our job. Achievements follow once we love our job and work hard for it. Well, sales jobs pay REALLY WELL too. Think about it. Today, when retrenchments happen, it is always those doing the same thing day in and day out for the past few years. If we continue to build our skills (plus invest our money well lah), then I think we should do just fine. By the way, only by doing extremely well that we will keep earning higher pay. Love our job, else get ready to lose it.

written on 11 Nov 2017

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Career ‘safety’ career growth and the investment actions to take

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Nothing to do with properties. Just LOVEly videos. Enjoy!

This is the first year that I watched over 10 CNY videos. Somehow, this year I chanced upon one which made me think a bit more about relationships. Then, the I watched the second one and then more. There are many good CNY videos this year. Nope, i did not choose the usual ones that you may have watched. 🙂   Here are a few of them for our enjoyment and well, perhaps more.

Even more videos that you love? Comment with the URL links yeah.  Xin Nian Kuai Le and Enjoy your break! (Don’t eat too much…………. like me. Burp…)

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Luxury cannot be low-cost. True?

Someone read this article:
Key theme is affordability (click to read)
 and said that luxury cannot be low-cost. Once it’s low-cost, then that luxury advantage is gone. Perhaps I share three examples instead to show the reason why low-cost is now the strategy because the world is now very much more connected and transparent than ever. Selling with super high margins in one market and way lower prices in another will not work because price comparison will happen and immediately the buyers paying way higher prices will be very angry and that’s the end of any further sales.

Property in hotspots.
When it’s a hotspot, everyone knows that demand will be high. However, hotspots also meant that prices will be very high. Yet, majority do not earn very high salaries. Still, more than half of everyone who’s working may want to buy into that hotspot! So, instead of 1,000 sq ft @ RM1,500 per sq ft for RM1.5 million which majority could not buy anyway, the developer will now build 400 sq ft @ RM1,500 per sq ft and the price will just be RM600,000. This is still way higher than what majority could afford but hey, demand is now expanded to people who would otherwise be fully locked out due to the price being RM1.5 million.

Long Sleeve business shirts.
I love buying shirts and have probably 40 plus of them. There are shirts of the same brand which are RM169.00 and those priced at RM89.00 If we just look at the design or even the colour, we may not feel a huge difference, then why the difference in price? Look closely at the stitching. The more expensive ones will have double stitchings while the lower-cost ones will have just one. The higher priced ones will have two buttons at the sleeve area while the lower-cost ones will usually have just one. Touch the materials and we will realise one may crumple easily while the other one is almost iron-free. Last but not least look at the chest pocket, usually the more expensive ones will have the logo of the brand stitched on while the cheaper shirts will not have the logo… There are more differences but you get my point…

“LEATHER” shoes.
Look very closely at the shoes we buy.  The design will be very attractive and the comfort may be similar. However, the same brand may have one at RM399 and RM119.  Why the huge difference? Well, look very closely yeah. Any genuine leather shoe will write ‘Genuine Leather’ in the inner part of the shoe. The cheaper version from the same brand may not be leather but of synthetic material instead. By the way, no one can see whether it’s real leather or synthetic material just by looking at you wearing it yeah. The only thing we will know is that leather shoes are much more durable (many. many years easily) while the synthetic one will start to show the wear and tear after a while.

Actually, this is true even for
travel tour packages
 yeah. We may be going to the same country (those seemingly expensive advanced countries and not some developing country) but the price difference could be huge. The difference? The hotels we stay, the flights we take, the food we are served, the transport (40-seater bus or 20-seater) and even the places the tour guide will bring us. These are why the SAME expensive country could be enjoyed by MORE people. Happy understanding that luxury does have a lower cost version because the target is both those who could pay a lot more as well as those who love the same thing but needs it to be cheaper.

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Low density, huge in size and RM775 per sq ft in Penang

Are you thinking about Penang properties? Do you like a really low-density luxurious project within the island of Penang for RM775 per sq ft? Even the location is considered prime by many Penangites. It is in Tanjung Bungah. Well, there’s one from a prominent Penang based developer, Hunza Properties Bhd. The development is known as Alila 2 condominium. As per reported in The Star online, it’s group managing director Khor Siang Gin said that the group is promoting its 9.8-acre project in Indonesia, Hong Kong and Singapore early next year.

The few key attractions include ONLY 270 units, generous sizes of between 1,900 sq ft and 3,300 sq ft and prices starting from RM775 per sq ft. Yes, the final price is definitely out of the reach or the majority but their target market would be a totally different segment altogether. Hunza would also be allocated another three acres of untouched hill land for recreational activities within the development. The development would also be aiming for the Green Building Index certification. Currently, 30 percent of Alila 2 has been sold.

Based on the prices, I think going overseas is definitely a needed step. It would also give that ‘multi-national’ feeling which is definitely a plus as Penang grows slowly as a world property destination. Truth is, London, Melbourne, Singapore did not become a world property market because only the locals buy….. However, I have yet to hear about Penang becoming a favourite for Singaporeans. I always believe that for any Malaysian cities to start becoming internationally acknowledged as a property destination, it should start with Singaporean buyers. Happy buying one if you happen to be a Singaporean who intends to stay in a culturally richer island with a real stretch of beach. Yes, where you can suddenly become 3 times wealthier too where money is concerned.

written on 16 Dec 2015

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Low Density is NOT luxurious, ok?

One point that is always being mentioned by developers who are developing a small piece of land  and thus could not build many units is this. “This project is low density and thus it is luxurious.” In fact, I think I have many friends who have remarked to me many times that when a project is
 high density, it cannot be luxurious.
 Especially one Penangite friend who bought a ‘low density’ condo project from a small developer and told everyone that her project is a ‘luxury’ project while those high-density ones are not luxurious. When asked about the facilities available, she said ‘got everything.’ However, only one car park was provided. I think she is right. Perhaps the super rich have drivers anyway, why would they need two car parks.

Let me share my personal opinion about low density and luxury. Low density plus luxury is applicable IF you (developer) have a huge piece of land but you are building very few units and thus proving these units beyond the affordability of majority. In the end, only the few
super wealthy people
 are able to buy and more often than not, the units are empty because these might just be a vacation home for them. I seriously think the current mindset of super wealthy Malaysians would be to stay in big bungalows or even a huge semi-detached home within a gated and guarded environment. The super wealthy ones who are reading this, please correct me if I am wrong and that with your money you would prefer to stay in a ‘low density’ condo which typically means less than 500 units?

In KL, many new condo projects which are also touted as being above average with lots of access to malls and future MRT stations are often 1,000 units or higher. Even in Penang, quite a number of years ago, if you have 500 units or higher within the same compound, that’s high density. I think today, these 500 units is nowhere near the really high-density ones coming up in the near future. Read here:
Penang affordability, higher units definitely
   Seriously hope that everyone is clear about what is low density and what is luxury. If a project has just 200 units but few facilities and not even a nice garden within the project or very limited car park spaces, that’s just low density. Can even be low-end, really.

At its simplest form, luxury equals comfort. It has less to do with the price we pay.
Luxury also means sufficient space
 to do what you want. Luxury is to be able to enjoy the facilities as and when you want and luxury is also having to park your second or third car within the safety of the project and not outside or along the roads somewhere and having to run to your project when you come home late at night. Luxury also means it attracts a better crowd and not just any Tom, Dick and Harry. So, yes, it can’t be too cheap. Am I staying in a low density and luxury unit today? To be honest, based on my own strict assessment, my condo does not qualify under the low-density or even the luxury category. Do I like my current condo? YES. Cheers.

written on 4 May 2015

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Weakening demand for luxury condos, increasing prices for cheaper condos

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Condo. Low floors vs high floors. Buying which?

The highest level for a high-rise which I have bought thus far is 21st floor. Lowest? Level 1. The rest are in-betweens but except for that 21st floor, all the rest are below 10. What have I learnt from buying all these low floors over the years? It does NOT have to be high floors.  Perhaps I share my personal experience with low levels then? 7 things I have learnt about the advantages of low floors. By the way, I personally look at anything below 10 as low floors. Anything higher than 20 can start to be considered as high floors.

Prime premium.
Frankly, the higher we want to buy, the higher the price would be. Every floor, depending on the project may be a few thousand ringgit extra and thus, level 1 and level 20, that difference may easily be RM20,000 – RM50,000 if not more. By the way, when we sell in the future, that would also be the difference too, if any. Save that difference for a family holiday maybe? Else, that same master-room higher up or lower down is exactly the same sized…

Better Views.
 The sales people will tell us that we can see very far, we could see the Petronas Twin Towers for example. Actually, do we really need to see very far everyday? What time do we wake up and what time do we come home every day?  During the weekends, do we even stay at home and do nothing but looking far away from the balcony? 😛  I have to agree however that the view from my 21st floor unit is better than my level 1 unit yeah.

Easier to sell in future.
  If we really want to sell it faster in the future, get an extra car park instead, that helps much more than higher floors.  I did just that and sold my level 5 for a RM50,000 premium many years ago. The extra premium I paid for that car park? RM10,500 only.  Imagine if your unit is on a higher floor but with just ONE car park? These higher up units could not even price their units close to my 5th level unit when I sold my unit.

Quieter.
There’s actually some truths in this. Just remember yeah, when you buy a condo next to some expressways where the mat-rempits love to race, then unless you are extremely high up, otherwise, there’s really no big difference between the 5th and the 20th floor.  You are still going to be awaken in the wee hours of the morning. This is why it’s super important to look at the location the condo is situated and NOT the levels in the condo development.

I have a unit on level 8. It’s on the same level as the facilities floor. I think that’s a huge advantage. Whether its for the elderly or the kids, it’s direct access into where all the facilities and even the walking path is. I also own a unit at Level 1 which is ALSO same level as the facilities level where the pool, playground, BBQ pits and even the sauna rooms are.

Remember yeah, when we do BBQ party, it’s BEST to have direct access versus having to wait for lift, go back to the unit, take stuffs and wait for the lift again! Haha… Unfortunately for those not on the same level as the facilities floor, that’s your issue. Fortunately for those on the same floor as facility which is usually on the lower floors, that’s our advantage. By the way, buy the floor you feel the most comfortable with. My views are just my views. Happy buying and enjoying.

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Low income equals low savings? Do something about it.

Someone mentioned that other day that it is not easy to help those with low incomes. The reason he said so was that these people may have way too little to save and without much savings, there’s little they could use for investments anyway. I would not say what he said was not true. However, I think the definition of ‘poor’ may need to be properly addressed. Poor because every sen of their income were used for NEEDS, then yes these poor people needs government intervention. One example? The policy of minimum wage. As long as inflation remains low, an increase in the income will go a long way. If this is the case, then it’s true that without anything left after all the NEEDS were paid for, then there’s no way that the person could start investing. If we were to look at the M40 group for example, they definitely have something to spare,if only they spend on NEEDS and not WANTS. Then again, think harder. What’s the possibility that this person (really no savings) could read, study and rise up the ranks?

What’s the possibility that beyond just read, study and rise up the career ladder, the person should also think about working a few hours extra everyday for the extra money for savings and thus, investing? A close friend is a real estate negotiator and he’s also helping with his family’s orchard and at the same time is also a plumber and electrician. His earnings? Doubled. Somehow, he has time for his family because he loves his daughter a lot. By the way, even Charles of kopiandproperty.com is only blogging on a part-time basis while he is still having a full-time job. Read about his experience with the blog here:
the journey to earn more than pocket money
  Oh yeah, Charles Tan is me. Haha. The cost to start blogging something of interest? Nearly nil by the way. Just need effort, time and discipline. Most of us would have heard of the famous quote. ‘When there’s a will, there’s a way.’ There’s a similar one in BM too: “Hendak Seribu Daya, Tak Hendak Seribu Dalih.

Conclusively though, low savings equal to low investment potential. Low income can be remedied by getting a promotion or working two jobs. At least for a short period of time and not until the day we retire. However low savings will haunt the person when he is old enough to realise that he should have invested more. Well, if you are reading this now, perhaps it’s time to save more and start that investment journey. Relying on the government should be the last resort. EPF should just be a supplementary savings for the golden days. It should not be the only one. It is already a proven fact that retirees in many developed nations are struggling because they are living longer but financially poorer. Better start something, somehow. Happy understanding.

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written on 12 Aug 2018

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Too high interest with the property market because of too low interest rates is a big issue!

When we have low interest rates, it could lead to speculative activities. Everything seems ‘cheap.’ For example, buying properties because of lower mortgage payments and even pushing up prices in the stock market because many withdrew their Fixed Deposits to invest in the stock market instead. In Malaysia, typical returns to fixed deposits are 2 percent or lower currently. This is also the reason why some are moving these parked money into the stock market with the focus on higher returns. Just need to remember that higher yields also mean higher risks too.

However, the low interest rates are also accommodative to the economic growth if the sentiment is too negative and no one is buying / consuming / investing. Bank Negara Malaysia (BNM)’s next meeting to determine the Overnight Policy Rate (OPR) would be in March 2021. There is a forecast that they may reduce the
OPR further. My personal views on their decision is here. (click to read)
When it comes to low interest rates which are causing too high interest in the stock market, one country’s leadership has spoken.

Photo by George Becker on
Pexels.com

Article in nst.com.my
  Singapore’s deputy prime minister Heng Swee Keat warned warned that low interest rates can lead to distortions in asset prices.

He said, “The interest rates today are ultra low, and in some cases even negative, so this can lead to a significant mispricing of asset prices and a significant risk of investing in the wrong places.”

“When individuals commit to buying a property, they are making a big part of their life savings in it and we want to make sure that it is something that’s sustainable.”

He also shared that since the global financial crises, “we have developed a fairly good risk dashboard for the whole economy.”  Please do read the full article here:
Article in nst.com.my

Low Rates are definitely an issue

If we look around the world today, we would notice that many countries are having very low interest rates. The thinking behind these low rates is that they needed to stimulate the economy.  This tinkering via interest rates is also known as monetary policy. Yes, usually this involves making the money supply in the market becomes much larger than usual. This is why when there are such measures, the stock market is usually very vibrant because there is just no incentive to keep the money in the bank!

Sometimes, government still know best

Governments should not interfere too much in what the people want to do with their money, correct? Well, not totally correct. We have many who may not understand the risks of taking out all their money and “investing” it into some other high return “assets.” Furthermore, the sales and marketing people for these higher rates yielding assets are very good with their work and they would easily reach out to these people when they use social media too.

This is why cooling measures undertaken by the government is definitely necessary to prevent the situation from getting out of control. Remember this from Singapore’s deputy prime minister. He said, “When individuals commit to buying a property, they are making a big part of their life savings in it and we want to make sure that it is something that’s sustainable.”

My wish for property prices

This is why I do think that property prices should just rise slowly and preferably below the increments too. Great enough for me. Earlier article here:
Property prices rise following inflation
. By the way, even if the percentage rise in property price is lower than the dividends from the dividend stock, it’s still way better yeah. Poperty investment usually requires just a 10% downpayment while the ROI is based on the total property price and not the 10% downpayment.

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Low OPR Continues to Provide Short-term Relief to Property Owners

Press Note by Shylendra Nathan, General Manager of iProperty.com.my

On behalf of iProperty.com.my, Malaysia’s No.1 property site, we would like to share our thoughts on Bank Negara Malaysia’s recent announcement regarding the overnight policy rate (OPR) being maintained at 1.75%. We are very supportive of this announcement as it will continue to provide short-term relief for property owners with existing home loans and lower home loan interest rates for property seekers looking at home financing.

While the recent reimposition of the Movement Control Order (MCO) in select areas in the country will affect economic activity in the short term, the impact will be less severe as almost all economic sectors, including the property sector is allowed to operate. In addition, Bank Negara Malaysia’s announcement is timely as every ringgit will matter for Malaysians in household spending and securing essential needs. The few hundred ringgit saved on home loan monthly instalments will mean more cash on hand to spend on essential needs such as food, medicine, and child care.

For landlords, low OPR will assist them to save money especially when movements are restricted which resulted in the difficulty of finding tenants. Furthermore, the lower financing cost advantage will help to offset the drop in rental income. That being said, tenants are still in a better position to negotiate rental prices and this has been reflected in slight drops in rental yields.

The current low OPR environment will continue to supplement the ongoing vaccination program and the recent voluntary AstraZeneca vaccination program as our country works toward sustained economic recovery. As of 4th May 2021, over 900,000 people in the country of 32.7 million had received at least one vaccine dose according to health ministry datai. In the foreseeable future, the ongoing vaccination program is again crucial to recovery of the local property market. The government has secured enough vaccine doses to enable the country to achieve some form of herd immunity by the end of 2021, despite supply challenges and signs of vaccine hesitancy in the short term. Hopefully we get to see the drop in infection rate which will translate to higher consumer confidence and bolster the property market’s recovery in H2 2021.

Interest in property is encouraging despite the COVID-19 pandemic with more property seekers shifting to digital platforms such as iProperty.com.my to find their dream homes. We believe this trend will continue as more Malaysians turn to the convenience and safety of digital platforms for their property journey. Today, digital platforms are crucial in helping property seekers in making informed decisions, be it buying or renting.

i According to
https://www.vaksincovid.gov.my/statistik/

— end of press note —

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Low pay and property investment, how ironic!

Yesterday, I had dinner with a senior manager of a top developer in Malaysia. He told me that he intends to buy another property for
potential capital appreciation.

He already owns more than 2 properties, so it’s not that easy to buy another one but he is doing his best to ensure the bank approves his loan. Many months back, an ex-colleague bought her 2nd property after understanding a little bit more about property investment from me. Her salary is below RM4k. 15 years ago, I was forced to buy my first property, an apartment of 730 sq ft. What do all these three people have in common? All three are working people. Okay, one earns a huge five figure income, another earns below RM4k and 15 years ago, I think my pay was also around RM4k. Second thing we have in common? Our properties would continue to increase in price, even if slowly and the amount is huge, in comparison to the potential yearly increments. Take a look.

Case 1. RM800k landed, growing by just 2% per year is RM16,000 per year or RM1,333 per month.  Assuming this senior manager earns RM18,000 per month and receives a typical 6% increment, that’s an extra RM1,080 per month. It is still lower than the potential capital appreciation from his property. Yes, I know many would like to point out that he is also paying interests for the property. Well, what if he rented it out and the rental covers ONLY the interest portion? 🙂

Case 2. RM350,000, growing by just 2% per year is RM7,000 per year or RM583 per month. Assuming that ex-colleague earned RM4k and has a typical increment of 6 percent, she would receive extra RM240 extra per month. Looks okay as this extra RM240 surely give her a bit more shopping options. However, this is less than half of what her new property is potential giving her.

Case 3. RM123,000, growing by 2% per year = RM2,460 per year or RM205 per month. Assuming I was actually earning RM4k then. With an increment of 6 percent, I would receive RM240 extra per month. Hey, my salary increment is higher than the property price increase! Did I make a loss then from buying the property? In the 4 years that I owned the property, four people stayed in this apartment that I bought. My sister and brother-in-law also pays me room rental every month and it is BY FAR higher than RM240 per month. 🙂

Whether we are a
senior manager or a junior executive (like my ex-colleague)

or a senior executive like me 15 years ago, we can see that as long as we did not buy some wrong property somewhere, the financial benefits are clear. Property acts as a hedge against the inflation and helps in wealth build-up. I also have another ex-colleague who earns around RM4k (a few years ago) and he says he could not buy a property because his pay is still low. He needs more time to save money. He has TWO cars. One that he drives daily and another one that he uses for driving sessions with his buddies. He has a more expensive handphone than me too. Sometimes, we wonder why our pay is low and we think property investment is always too expensive to start. Well, perhaps it’s time to think of these two as opposite sides instead?The lower our pay the more important property investment is, perhaps? No right or wrong, everyone should enjoy their lives the way they like it. As for those who think perhaps it’s time to start, then really put some efforts into it. Happy investing or driving a ‘better’ car.

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written on 15 March 2018

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Dream on. Dream away or even start dreaming

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