Opportunities with limited supply heritage properties

Sometimes there are news which is both positive and yet negative at the same time. Positive because foreigners love the investment opportunities presented to them. Negative because the locals may not the beneficiaries of these opportunities. I read such an article in
NST today.
 It interviewed a foreign landlord who shared how he and his friends who bought properties along several main lanes within the heritage zone a few years ago. They have seven properties today.  They were able to rent it out easily, starting from RM1,800 and now raised to RM5,000. He also shared that they did not evict the tenants but treating this as an investment and a business. He said, “We are not here to destroy the heritage enclave, but to get a good return for our investment. “I believe local landlords also see it that way and had raised their rentals.”

Most of the time, locals may not be the first to realise the value of investing in the local properties.
Locals may not be the first to buy; beware locals

The main reason is because these foreigners who can either be from outside Malaysia or even from bigger cities would have seen how property prices tend to appreciate with more economic activities. These experienced investors would be the first batch of buyers. In fact sometimes, the locals may not realise until the prices have gone up a lot. That’s when some started to buy and many started to complain. The remedy is just to continue to read more about what’s happening the property market scene and not to know nothing, read nothing and buy nothing. In the end, foreigners may own a huge chunk while the locals own almost nothing.

There are also those with an existing heritage building passed down from their parents. Should they invest in the buildings and transform into an investment? If yes, what should they do and what could they do, within the boundaries of heritage conservation? In an
earlier article
not too long ago,my good friend Michael Geh said something very real that needs more attention. Representing the Penang Chinese Chamber of Commerce as their heritage and tourism spokesperson, Michael Geh said locals were not selling off their properties to the highest bidder, as widely felt. But conservation red tape with the authorities has forced them to do so. This is one of the main reasons heritage property owners give up their inheritance.” Many times, some of the owners would love to preserve it but without clear guidelines or even tough ones, it may not be feasible, especially when the owners may own just one unit for example. That’s the reason why when foreign buyers come, they do not buy one unit but they would prefer a few units or one whole row. It gives them the economies of scale. Visit
shewalkstheworld.com
 for more photos.

According to the
NST article
, Penang Heritage Trust vice-president Khoo Salma Nasution, these foreign acquisitions is not a bad thing but it would be negative once it becomes rampant and there was bulk buying. She reminded everyone that “Penang heritage is touted as a living heritage. This status comes from the fact that Penang folks inhabit the cities. Foreign buyers are driving up property prices and rental rates. Many families are cannot afford the rentals and are forced to move out.” She asked, “Is it a living heritage city or a tourist city? A place owned and inhabited by locals or a place owned by foreigners and inhabited by whoever pays the most?”  Property market is always ‘open for business’. There are certain limitations to foreigners buying the local properties but perhaps the issue would lie with how do we assist the locals to use what they have as well as to appeal to locals with deep pockets to do a bit more. It is their home. Yes, I like to walk around the heritage areas in Penang. Lots to see and appreciate.

written on 11 Feb 2017

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Limited Units for many months, do not rush, buy objectively

Have you been observing the properties in the market for the past few months? Past year? Have you seen some advertisements which said ‘limited units’? Or ‘Final 40 units’? These days, irregardless of the project that you see being advertised, just do one thing extra, go online and search for it. You will most probably learnt of the time that the developer was first launched. Many times, you will see that the project would have been in the market for some time. Maybe even over one year. For these ‘limited units’, my suggestion is for you to call and ask for special deals. For example, a special one time discount. If their answer is none, then you may want to forget about this project and move on.

Still remember long time ago when your parents were buying properties? At that time, even the number of developers were not as many as today. Today, every week there is a launching. Question is only whether the launching is near where you want or is it further away. Thus, do not worry too much about missing out on a certain property. Don’t believe me? Look at the launches from bigger developers or even the more established ones. Do they rely on just leaflets these days? Sell to the neighbourhood? I can see billboards about Cyberjaya properties in Damansara. There are three major property portals in Malaysia and lots of other Facebook pages loaded with new launches every other day. In fact, if you were to refer to PTLM, I dare to say, it’s every day that I see a new launching.

Dear developers, understand objectively about all these transparency in the market today. There is no point in trying to ‘cheat’ buyers by saying that your pricing is attractive if it is just not attractive. Chances are, buyers would have already know all the prices of all the projects surrounding yours. Please also do not just use the amazing traditional media; newspapers. If you use only newspapers or launching a new property without even a simple and proper website detailing what the project is about? I would wish you all the best.

Dear buyers, there is actually no need to rush. For primary properties, new launches today, especially for developers who really have done sufficient market research meant that the prices offered would be very competitive. Launching at over RM700 psf today, whether it is in any of the usual major markets meant that you better be ready to do lots of explaining. Unless of course the project is in a very prime location (there’s less of these nowadays) and happen to be landed, otherwise, take a little bit more time in considering. The ‘rush hour’ 5 years ago are not the case today. 5 years ago, I lost out in purchasing one unit due to minutes. 3 years ago, my friend lost out in purchasing a unit because of 15 seconds!

written on 6 Sept 2014

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We have limited wealth, thus stay focused on building it up

The prices of condos in certain areas have reached RM1 million even for just a slightly over 1,000 sq ft unit. There’s already no way for me to buy it anymore even if I work harder. It’s too late. I might as well just keep renting. Everyone my age is doing the same anyway. How many of us have this thought in our mind today? First of all, it’s very real. There are already condos which are above RM1 million and the size is just slightly above 1,000 sq ft. It’s also true that it might be too late to buy such condos in such areas. It may well be very real that all your friends are renting and you think since they are renting, then you can also continue renting, right? Wrong.

There are still condos available which are cheaper. You would still have to work harder not just to climb up the corporate ladder but also to keep your job. Maybe not even from fellow Malaysians but keeping your job from being ‘stolen’ by other better people in other countries. If everyone is renting today, then tell me why are the transactions numbers still show such a huge number, even if it’s on a downtrend. Who are these buyers? Are they only the super-rich who are now buying so that they can rent to all those who think renting is better?

I hope we are now suddenly awake? Yes, while we are thinking that renting is the best, there are people who are buying more units so that they can continue to rent to us! Life’s not a fair one, like many people have commented. That’s the reason why blamers blame everyone while successful ones focus on opportunities all the time and take actions. We WANT great areas, no wonder those areas are selling at prices higher than the moon. We actually just NEED some stuffs within those areas we want. If we want a place next to LRT or MRT, take a look at the stations again. Many are in areas which are much more affordable than you thought. If we want international schools, so understand that staying just an additional 10 minutes away from these schools would mean a much lower price. If we want the place to be nearby expressways, do note that there are LOTS of expressways and not just that few which we normally uses.

Unfortunately, many of us do not have unlimited wealth. That’s ok because majority are like us. This is why we still have opportunity to stay ahead. Imagine everyone having more wealth than us today. If this happened, we would always be poor until the day we say bye-bye. Long time ago, these potential opportunities do not exist. Today, it’s even bigger due to the continuous urbanization which meant more housing is needed.

What we do from today onwards may determine if we continue to be just the majority or start moving towards the above average and later the top 10 percent. Think again, there are lots to learn and do. If the majority loves to rent, then why not make them happy by buying a unit and rent to them? Happy investing or renting.

written on 11 Jan 2016

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Why stock prices can fall 25 percent suddenly?

The stock that we are discussing today is that of LinkedIn. It is a listed entity and recently, it issued a second quarter earnings guide which was way below that expected by analysts. It said it expected only 28 cents (US$) per share  while the market survey of analysts by Thomson Reuters has expected 74 cents. The yearly earnings is also very far from that expected by analysts; US$1.90 versus US$3.03. Now, you understand why the stock price has fallen so much within one day? For the past 12 months, shares of LinkedIn were up 64 percent but within one day, it has fallen 25 percent. Looking closer, LinkedIn posted a first-quarter LOSS of US$42.4 million which was 3 times higher than the loss one year earlier. This loss was also attributed to stock-based compensation and other items.

Yes, you may want to ask why a company suffering losses still issue stock-based compensation which eats into its profits? In America, this is common. Perhaps it’s just harder to attract good people without these stock-based compensation. You may also want to ask if the stock has been suffering losses from one year ago and the stock-based compensation has been announced earlier, why did the share price still went up 64 percent within the past one year? It’s all about expectations. The investors believed that the company would perform very well, thus they bought into the growth story and when this did not happen, many chose to dump the stock.

Oh yeah, last but not least, despite all these current circumstances, LinkedIn has announced the acquisition of lynda.com for US$1.5 billion. It’s CEO Jeff Weiner said that t
he first quarter “was a solid quarter.” The company also announced that its membership grew to more than 350 million and this is nearly 17 percent higher than a year earlier.

It’s very important NOT to buy stocks because of very huge expectations. If you are working as a sales person, you may understand that many times, a growth of 50 percent is already considered crazy and some sales people given a 30 percent target increase may just resign. Yes, for internet or online business, the growth may easily exceed the usual traditional business but it is also as likely not to hit whatever is expected unlike the traditional businesses which may continue to grow even if the growth may be slower these days. Also, for stocks many times I prefer to buy a business which I understand. LinkedIn’s business I have to admit I do not understand enough.

written on 2 May 2015

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Linking KL, Iskandar, Malaysia – Singapore by High Speed Rail (HSR) and Rail Transit System (RTS)

This article was published in MAPEX JB 2014’s ShowGuide.

Full article as follows:

On 7
th
 April 2014, a very significant joint announcement was done by both Prime Minsters of Malaysia and Singapore. The proposed High Speed Rail (HSR) as well as the Rapid Transit System (RTS) is on track. The HSR is expected to be ready by 2020. This is the one whereby it’s possible to have a breakfast in Kuala Lumpur, lunch in Iskandar and dinner in Singapore before a supper with ‘teh tarik’ and ‘mee goreng’ back in KL. This was announced right after the 5th Malaysia-Singapore Leaders’ Retreat in Kuala Lumpur.

This announcement meant that the linkages between both countries would be closer than ever in both business as well as leisure. Additionally, Singapore’s stations may be located in Tuas West or Jurong East while Malaysia’s side may be in Sungai Besi, KL. Of course, this cannot happen suddenly because this is not a domestic project. This is a joint project between two countries. There’s design, financing, security and even immigration requirements. Perhaps even the time when the trains depart may be have to be slightly different.

One highlight in the announcement was the fact that both leaders spoke about the possibility of having just ONE (1) checkpoint instead of two to ensure efficiency of travel for goods, services and people between Malaysia and Singapore.

Iskandar Malaysia was also mentioned. As at today, many still think of Iskandar as just a place where more condos are being launched but to both of them (PMs), Iskandar Malaysia must not only be covering services or residential properties. It must march towards manufacturing, creating more jobs, attracting new investments and thus having an organic, comprehensive, dynamic centre of economic vitality in Johor. In fact, it was envisioned that Iskandar Malaysia is the key to making both Malaysia and Singapore even more complementary to one another as well as closely integrated. This is the fifth Leaders’ Retreat for Malaysia and Singapore and the next one would be held in 2015 in Singapore. Personally I think this cooperation is vital because when we look at the big picture, both countries are still smaller in population size when compared to Thailand, Indonesia or The Philippines. Thus, the more integrated both countries are, the better the GDP growth may be, just like what is happening to Indonesia or Thailand today where the domestic economy itself is a big driver to the respective country’s economy and not just the FDI.

In terms of Singapore government’s own projection of population growth to between 6.5 million to 6.9 million by year 2030, it means Singapore will continue to grow from current 5.3 million by another 1.2 million – 1.6 million. Yearly basis, this is up to 100,000 new population per year. On a ratio of 1:3 based on just this growth, Singapore needs 30,000 units of new properties per year. HDB is expected to offer up to 24,000 flats in 2014. Do you see clearly now, why property prices in Singapore has to rise, even if currently, it has been on a downtrend since end of 2013.

I wish the story can unfold faster but there’s just way too many things to discuss further before all these can start. Rest assured, implementation wise, if it is supported by both the highest ranking officers from both countries, it will be prioritized once it’s finalised. For now, the current relationship between these two ‘brothers’ can be described as cordial and integration between Johor and Singapore is continuous. Will keep everyone updated as things happen.

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Linking KL, Iskandar, Malaysia – Singapore by HSR and RTS

A very significant joint announcement today (7 April 2014) was that the proposed High Speed Rail (HSR) as well as the Rapid Transit System is on track. The HSR is expected to be ready by 2020. This was announced in the 5th Malaysia-Singapore Leaders’ Retreat in Kuala Lumpur. These are expected to ensure seamless travel between Kuala Lumpur and Singapore as well as the enhancement of business linkages and both countries closer than ever. Additionally, Singapore’s stations may be located in Tuas West or Jurong East while Malaysia’s side may be in Sungai Besi. It will not happen suddenly though as there are still so many matters to discuss and decide like design financing, security and immigration requirements. In fact, both leaders spoke about the possibility of having just ONE (1) checkpoint instead of two to ensure efficiency of travel for goods, services and people between Malaysia and Singapore.

Iskandar Malaysia was also mentioned. Both agreed that Iskandar Malaysia is not just for services or residential properties but should also encompass manufacturing, create more jobs, attract investments and thus having an organic, comprehensive, dynamic centre of economic vitality in Johor. it is envisioned that Iskandar Malaysia may be a strategic play for both Singapore and Malaysia to be even more integrated and complementing each another in terms of economies. This is the fifth Leaders’ Retreat for Malaysia and Singapore and the next one would be held in 2015 in Singapore. If you wish, do read the full article here:   http://www.channelnewsasia.com/news/singapore/m-sia-s-pore-welcome/1061266.html

Personally I think this cooperation should continue because both countries are not that huge when compared to to even Thailand, Indonesia or Philippines. Thus, the more integrated both countries are, the better the GDP growth may be, just like what is happening to Indonesia or Thailand today where the domestic economy is a big driver to the respective country’s economy. In fact, if we look at Singapore’s projection of hitting between 6.5 million to 6.9 million by year 2030, it means Singapore will continue to grow from current 5.3 million by another 1.2 million – 1.6 million. Yearly basis, this is up to 100,000 new population per year. On a ratio of 1:3 based on just this growth, Singapore needs 30,000 units of new properties per year. HDB is expected to offer up to 24,000 flats in 2014. Do you see one reason why property prices will continue to be on uptrend in future even if currently, it seems to have declined a little.

There are way too many things that needs to be discussed. Will continue to write on this continuously. For now, just get to know that the current relationship is cordial and integration between Johor and Singapore is continuous. The most important catalyst for the growth to spike is just more links. It can be RTS or HSR or even another bridge. Just get it done asap because today, during peak hours, it is impossible to cross between both countries in less than 1.5 hours despite the fact that on non peak hours, it takes nothing more than just 30 minutes. (23km)  More economic growth? More links please.

written on 77 April 2014

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Little difference, thus buy RON97 instead?

RON97 gives you more power. RON95 gives you less. Thats what everyone says. It’s also proven scientifically apparently. RON91? It’s dirty and will damage your engine more than RON95 or RON97. Well, fyi, RON91 is loved by many Australians still, today and majority of cars are built to use RON91 including my rented Hyundai Elantra. So, what happens when Ron97 is not that expensive when compared to RON95? Well, everyone pumps it! This is despite the fact that many are still complaining that with the world oil price dropping so much, the petrol prices should go down more than just the 4 cents. Personally I think the market has accepted that the petrol price is unlikely to go back to the subsidy days of yesterday. This will happen whether or not we change government. When we look at Indonesia and Thailand as the nearest example, we would see that the petrol prices in Malaysia still have room to move upwards. Their petrol prices are already more expensive than us but the number of cars entering their roads per year is still growing year after year. In terms of income, they are nowhere near the typical medium income Malaysians as yet. See the relevance?

Ok, in Malaysia, RON97 is now facing shortage and the oil companies are working hard to replenish the stations. Current difference? RON95 (RM2.26 per litre) and RON97 (RM2.46). Difference of 20 cents per litre. Most cars can easily do 10km per litre which meant that per km the difference is 2 cents or less. Assuming one whole year of 20,000km travel, that’s just RM400. Difference per month? Well, RM33 or about RM1 per day. Suddenly do you see some reasoning why RON97’s demand has spiked tremendously versus RON95? It has always been believed that when we use better fuel, it will help to maintain the engine better and mileage per km is also better. In other words, the savings above of RM400 per year may be even lesser. Perhaps RON97 may be even more value for money! Haha. Assuming RON97 gives you just 10% more mileage?
Just 10% more mileage meant that it’s better RON97 versus RON95!
 Calculation: RM2.46 / 11km = 22.36 cents versus 22.6 cents for RON95. I am not sure if it’s just a feeling but when I pump RON97, it does seem smoother.

What happens if oil prices continue its drop (these few days, it has stabilised) and the petrol prices are also adjusted lower? I think we have better start looking at every businesses which increased their prices because they said petrol prices went up. These businesses should be lowering their prices, no? There was also a study which said that if petrol prices go up, the construction costs would also go up, thus the developers may pass it to buyers thus contributing to higher house prices. Okay, if petrol prices do go down further, I think the developers have to issue some new public statements yeah. I am really waiting for that. You may think I am just being sarcastic but fyi, one major reason why prices do not go up easily in Europe or even Japan is because the businesses are much more honest and are not greedy that they increase their profits ever higher every year! Their Ramen or even Fish and Chips has never doubled or tripled in prices despite all the fluctuation of petrol prices all these years but some of the FAMOUS fried char koay teow has doubled in prices and people are still queuing for it. Yes, the difference is YOU and ME. We accepted all these price increases just like that, so they would continue to increase!  Please proceed to calculate the usual costs of that plate, you think it should be sold for over RM10 simply because they said costs are increasing? Haha.. Ok, please proceed to eat it. No further comments.

written on 4 Dec 2014

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Enjoy it. Little luxury before flight. Easier these days.

Do you like free stuffs? I do. I have travelled to around 20 countries thus far. No plans to increase that at this moment. During those flights, I have never been on a Business Class or First Class seat before. Thus, I have never been able to get into those airline lounges. Well not until Plaza Premium Lounge came into the picture. Now, I have credit cards that has enabled me to enter lounges within many airports in Malaysia, Thailand, Singapore, Hong Kong and more. For FREE. What are the banks offering such benefits? Attached would the image of all the banks for the Plaza Premium Lounge inside KLIA. Some are a few times per year, some would limit you to just the KLIA airports, some would need additional requirements and a some provides Unlimited entries. Do check out the details yeah. I hold a CIMB and an AMBANK one. Combined, they complement one another. For example, CIMB does not provide entry into Hong Kong International Airport but AMBANK does and AMBANK does not provide entry into Thailand’s Suvarnabhumi Airport but CIMB does. Just need to choose the one providing entries to those airports you travel to often.

Many smaller airlines would not want to maintain their own lounges. It’s just too expensive. These airlines would still want / need to provide their premium customers with a lounge access. In this case, it will be with the Plaza Premium Lounge. Take a look at some of those airlines at the image shown. I think the founder of Plaza Premium Lounge is a very visionary person. He has discovered a niche.
Read more about them here.
Why would banks want to provide the access to their customers? I think they are charged by Plaza Premium Lounge every time that the customer drops by the lounge before their flight. Banks are very competitive these days. Every bank is looking at attracting good clients. Whether the clients could pay in full or not in full, the banks earn from both sides. Every purchase that we do, the bank gains and every month that we have balance unpaid, the banks would earn from the interest levied on the remaining amount. So, they would have to also provide benefits that we want in order to get ‘quality’ customers.

Many of my colleagues still are not aware that they now have such an access, as long as they are using the cards from the right banks. I think this is a benefit that all of us can enjoy these days. Here’s a good article on the top credit cards for free lounge access. Take a look:
ringgitplus.com
  Of course, for those who are already flying with Business or First Class, do continue enjoying your lounges. I understand that these airline lounges provide even more food choices. For the rest of us, including myself who feels that travelling by economy is just fine, we can still enjoy a latte and a piece of cheesecake at many airports. Perhaps even a pint of beer or a bowl of curry noodle too. Happy travelling.

written on 23 May 2017

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Press Release: Live In Your Own Masterpiece, With IJM Land Homes

RHB partners IJM Land to provide a safety net for home buyers with its SWITCH Scheme.

The desire for a dream place to call home has never waned in the hearts of most Malaysians. However, challenging economic situations and financial obligations have resulted in most people postponing this goal.

Even with various incentives from the home ownership campaign and package deals thrown in by developers, it is not easy to own a home. Building your dream home from scratch can be a tedious job. It requires great commitment, from finding the right location to deciding your budget and searching for home inspiration or designs.

IJM Land understands Malaysians’ need to end their renting days and has taken many initiatives to ensure that their dreams can become a reality. Hence a robust collection of incentives, savings and perks alongside wonderful campaigns have been tailored to fit the varying needs of different home buyers.

Novel solutions to an old conundrum

IJM Land has formed a strategic partnership with RHB Bank Berhad (RHB) to bring forth a buy-back scheme for home buyers and homeowners. This scheme marks its entrance as the first-ever innovative financial solution in the property industry – SWITCH.

The partnership is bound to make the SWITCH Scheme a success, allowing homeowners to return their property to the developer in the event of involuntary unemployment by their employers during the coverage period, from the date of the Sale & Purchase Agreement and up to a 12-month period from the date of CCC (Certificate of Completion & Compliance).

Two projects, Savvy @ Riana Dutamas KL and Duta Perintis Apartments @ Bandar Alam Suria, will kick start this pilot scheme. Savvy @ Riana Dutamas KL is a freehold serviced residence with a built-up size ranging from 722 to 1,232 sq ft. Conveniently located near KL City and close to public amenities, the property’s starting price is from RM540,000 and is expected to complete by 2024. Duta Perintis on the other hand is a low-density apartment that measures about 850 sq ft, with three bedrooms, two bathrooms, and along with two designated car park bays. Selling at an affordable price, starting from RM310,000, Duta Perintis is a must-have address for nature lovers and families.

 “IJM Land has always been devoted to the aspiration of Malaysians who yearn to own a place called home. We are working diligently towards ensuring that their dreams will become a reality, and together with RHB as our partner, this entails the creation of value-added packages, one-of-a-kind campaigns, benefits and incentives that will make home ownership easier and less burdensome for all,” said Dato Edward Chong, Chief Financial Officer of IJM Corporation Berhad.

“We are proud to be working closely with established property development partners such as IJM Land to enable customers to buy the home of their dreams. SWITCH helps to address some key challenges faced by aspiring new homeowners, including the possibility of involuntary unemployment. This allows them to step confidently ahead towards owning their own homes,” said Jeffrey Ng Eow Oo, Managing Director of Group Community Banking, RHB Banking Group.

Your Home, Your Way

Running in conjunction with the SWITCH Scheme is no other than the group’s first annual campaign, Living Masterpiece. Under this campaign, IJM Land is here to assist aspiring home seekers in owning their dream home by offering attractive deals and customise easy ownership plans according to their lifestyle and requirements. With that, IJM Land customers can create their own masterpiece in the property of their choice.

Imagine a home where the layout can be shaped according to your needs and desires, unlike the conventional products where everything has to conform with the blueprints. Get creative and let your interior design ideas go wild as you transform your home into Living Masterpieces. IJM Land is offering complimentary interior design concepts (selected properties) to IJM Land home buyers as home ideas and inspirations.

The Living Masterpiece campaign recognises that every individual has a unique personality which is best expressed through the homes they live in. The time has come for you to make your very own, an indelible statement in your work-of-art dream home. Homebuyers will also benefit from their customisable easy ownership schemes, great savings and incentives ranging from free loan legal fee, free stamp duty on MOT, and free furnishing packages (applicable to selected properties, and the terms and conditions apply).

Note that this campaign will cover projects under construction and ready-to-move-in homes in the Northern, Central Seremban 2 and Southern East Malaysia regions. The Living Masterpiece Campaign will run from 1st July 2022 to 31st December 2022.

When dream homes become reality

Home buyers can pick their ideal home from a curated list of choice properties across the state, ranging from single-storey terraces, double-storey terraces, semi-d, bungalows, bungalow land, apartment and condominium.

Choose from towering projects within the convenience of the city, or the picturesque houses poised at the waterfront. Nature lovers can find peace through the ample developments raised upon natural themes and greeneries. From Klang Valley, Seremban, Penang, Johor, Kuching to Sandakan, all these homes are designed with flexibility and practical designs to suit the post-pandemic lifestyle.

Master developer and town maker IJM Land inspires residents to live vibrantly and create cherished bonding moments together. Speaking of benefits, existing IJM Land customers can also participate in the Priority Programme, where they are entitled to rewards of 1% (silver), 1.25% (gold), and platinum (1.5%) on their new property purchases. These and many other considerations form the holistic package that is bound to make homeownership an easy and seamless experience for all, granting them a peace of mind.

For more information, log on to
www.ijmland.com
/livingmasterpiece.

-End-

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We REALLY do need to live with Covid-19

We REALLY do need to live with Covid-19

As I watched the Tokyo 2020 Olympics (yes, it’s 2020 and not 2021) on 23 July 2021 (yes, it’s 2021 and not 2020), I think of the pressure the organising country must have felt. Covid-19 cases are rising again, even in countries where vaccinations have already hit the minimum number of 50% full vaccinations.

Just look at the image to understand better on the rising trend of Covid-19 cases on a worldwide basis. This is info from
https://www.worldometers.info/coronavirus/

Source:
https://www.worldometers.info/coronavirus/

However, what has also happened at the same time is that with vaccinations, the number of deaths did not rise in-tandem fortunately. Of course, IT WOULD HAVE BEEN BETTER IF all the countries are already at 50% vaccinations but unfortunately, many countries are still struggling to obtain sufficient doses. If we look closer to the image below, we could see very clearly that the number of deaths from countries with HIGH vaccination numbers are way lower than countries with low vaccinations. High vaccinations? USA vs India. Look at the big difference? USA has nearly double the number of cases versus India but the total deaths are lower.

France has 21,000 cases and this is similar to Russia but the deaths in France is 11 while Russia has close to 800. The UK is another nation with high vaccinations and we can see clearly that despite higher number of new cases versus many other countries, it has kept its death rates low.

This brings us back to Tokyo 2020 Olympics. It is happening not because he number of infections are now on a downtrend. It is happening because we are learning to live with Covid-19.

When we look at Malaysia, we may have also read this news today.
Article in nst.com.my
 Less than 2% of healthcare workers (out of close to 296,000) who has received their vaccinations are infected. Out of this total, there are five (0.1 per cent) under Category 3 (pneumonia); three (0.1 per cent) Category 4 (need oxygen) and one in Category 5. In other words, 9 people out of a total of close to 246,000 are in danger. This is why vaccinations are super important. Do read the article in full here:
Article in nst.com.my

No one is safe until everyone is safe

By the way, what Covid-19 Delta variant has proved is that whatever vaccine brand out there, the infections are increasing much faster than earlier Covid-19 variants. However, what all the vaccines have also proven is that if we are protected by vaccinations, then the effect from Delta is reduced tremendously. This is seen from all the numbers as above.

US President Joe Biden said this is now the pandemic of the unvaccinated

If you need one more, than over 99% of ALL DEATHS in June for America from Covid-19 infections are from unvaccinated patients. Simple fact. Please do tell all the people around us all these facts and tell them to stop listening to some viral news in their Whatsapp. Thank you for protecting all of us.

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Liveability KL, a greater city in future.

Can Kuala Lumpur be on par with the major cities of the world today? New York? London? Tokyo? To be honest, no. Not yet, not in near future and perhaps may never catch up. The reason is because these world cities continue to improve as well and not waiting for KL to catch up. According to a report in local English daily, the Malaysian Institute of Planners (MIP) general manager Khairiah Talha said that livability covers not just economic and social well-being but it also includes political stability. One liveability factor is the transportation system.

On the account of transportation, I am still not sure what would really happen after MRT KL starts. Would people give up their cars and ride the MRT? In Hong Kong, parking your car costs a fortune even for a senior manager. In Singapore, it’s virtually impossible to buy a new car unless one is earning well above everyone else. Only around 10% of Singaporeans own a car today. In KL, everyone seems to be driving some kind of car and if the latest stats are to be believed, there are more richer people these days. Just look at the non-national marques since last year. The car ownership is not going to help much. In Singapore, even the middle managers are all MRT users.

Every major city should be connected via a super efficient and very integrated public transportation. It is not just MRTs. It should be ONE access for all types of transportation. Are MALAYSIANs working in KL ready for this? To change their lifestyle because one end to the other end may still be taking an hour or higher. Perhaps the heavier jams should do the trick. Perhaps the parking rates may do the job. Of course maybe even the crazy petrol price in future when the world oil price recovers to new highs.

I still think more has to be done to ‘encourage’ the MRT usage in future. We will see.

written on 7 June 2015

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Living longer and staying healthier. Up to 78 years old!

Living longer and staying healthier. This is super important and I have written about this before. Earlier article here:
Living Longer, Yeah. More money needed, Oops
.
 What we need to know is that as we could live longer, we also need to stretch our money over a longer period of time too. I shared during many talks that Malaysians used to work for 30 years and when they retire, they only need the accumulated savings to last another 10 years. Today, we may work for 30 years but our savings better be enough to last twice or longer years. Coming back to what’s happening to Malaysians who live longer as per shared by Khazanah Research Institute.

Article in themalaysianreserve.com
.
 Khazanah Research Institute’s (KRI) latest publication – Social Inequalities and Health in Malaysia show that Malaysians are now living longer with a male and female newborn in 2020 can expect to live to the age of 72.6 and 77.6 years, respectively, about 11 years longer compared to newborns in 1970.

However, there’s also a caution. The report read, “Many Malaysians experience debilitating health conditions such as heart diseases, back pain and mental ill health, especially in their later years. Thus, discussions on health must be expanded beyond the length of years lived to how much of those years are lived in good health.”   It shared that an average person’s healthy life expectancy in 2019 was 65.5 years. Please do read the full article here:
Article in themalaysianreserve.com
.

Staying healthier is not just possible but also affordable

As for staying healthier, fortunately it’s something within our control too. Exercising is FREE unless we need to go to some fancy gyms. Wearing a usual T-shirt is perfectly fine too and there’s no need to buy a new T-shirt just for exercising. A RM49.90 sports shoe
(can buy here at my favourite branded store)
  which lasts 1 year is far better than a RM200 shoe which lasts 3 years. I could go on but I think we get the point. It’s all about choices, really.

Let’s do it for our loved ones

and what we love

For parents with children, do you want to watch them grow into adults and maybe even play with your grandchildren? Stay healthy.  For couples, would you not want to spend more time with your partner? Stay healthy. For singles who just want to live life to the fullest, loves to travel the world, then better stay healthy too.  Overweight is usually the start of everything downhill when it comes to being healthy yeah. Eat healthy too.

Photo by Zen Chung on
Pexels.com

Stay safe and stay healthy.  Till the next article.

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Not saying these things, just like the rich, shall we?

According to an article in Reader’s Digest, there are
13 things that the rich never, ever say. Here’s that article in rd.com
 Let’s look at just 4 of them which I think is applicable to property investment. First one, “Can I afford it?” I did write something similar earlier. Here’s that article:
Stay safe, buy within affordability and stop bubble building

Whether it’s a car or a property, the question should be the same. It’s not whether I could afford it (capability) but it’s can I afford it, means SHOULD I get it?  People complain that their salary is not enough but they refuse to buy a smaller home further away which would have been much cheaper. They refuse to get a reliable second hand car but prefers to get a brand new car and having to pay for it for the next 9 years! A friend who’s a junior executive bought a brand new car, brand new notebook and owns two smartphones! Anyway, it did not work out and soon he lost most of the items he bought. Please remember yeah, ‘can I afford it?’

Second one, ‘I’m not good with money.’ Hahaha… I have written about this too. Here’s that earlier article:
Lacking in financial awareness today? Peril awaits

May I know if majority of the rich people ever got rich because they were good with money suddenly? No… they read, they learnt, they asked and they attended talks from those who knows. That’s how they became good with money. That’s how they used their small salary to build wealth slowly and over time they gained more experience and well, another guy richer than the average Joe is born. Please stop giving excuses yeah and one of the worst excuses ever is this, ‘I’m not good with money.’ Oh yeah, it can be extended to, ‘I don’t know anything about property investment.’ Or I do not know what’s property type is suitable for me.

Third one, ‘How much can I earn from this investment?’  Honestly, until today, I do not think any property expert in the market can tell you exactly what’s the actual return that one will get from buying a property. However, they can show you the property price increase for the past 26 years for example and tell you that perhaps that could be a key. When we ask how much I can earn from this investment, we are usually looking at some short term kind of investments, maybe even potentially scams. The reason is simple. Returns from Fixed Deposits would take 12 months. Returns from unit trust funds will take years depending on what we buy and cannot be guaranteed at all. Even when we buy blue chip stocks, their dividend declaration if any, is only quarterly and even they could not tell us about the actual returns… Understand what we invest and what’s the historical returns are like. Risk will always be there yeah…

Last one, ‘I don’t need to save money.’ I have written a few articles in this. Here’s one:
If savings is the base of everything, we need a strong one

Do we really believe we will be healthy forever? Medical expenses will be getting ever more expensive. Do we think everything will be just fine and we will not face unforeseen circumstances like a minor accident? Or like me, an
Appendicitis operations in Singapore?
  The only reason why a country can be strong is because of the savings rate of its citizens. Imagine losing our jobs during a financial crisis and having to rely on our savings for a few months while we look for a new job? Please, save. Sikit-sikit, lama-lama jadi bukit…
Here’s that article in rd.com for reference. There are many more other things that the rich people will never say.
 Happy saying… ops, I meant saving.

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written on 4 June 2018

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Loan eligibility from 17 financial institutions in 10 minutes. (Cool!)

When I bought my first apartment over 15 years ago, the loan application took close to 2 weeks. These days, many real estate negotiators would tell me that it takes not more than a few days. They could also do some Debt Service Ratio (DSR) calculation and give me an assessment in 10 minutes probably. Well, we could now get the reply from 17 financial institutions in 10 minutes for the question of ‘Loan Eligibility.’  This is not the actual approval but this is very good to know if we should or should not proceed with the purchase. For many homebuyers, this is something worth checking out.

Press Release: IQI and Finology Partner to Facilitate Loan Approvals for Property Buyers

On Monday 26 November 2018, IQI formalised a deal with Finology to use its instant loan eligibility check system for property buyers via their product
Loanplus.

IQI is a leading real estate firm in Malaysia, with over 5,000 agents and with business interests around the world. IQI strongly believes in technology and is constantly researching and pioneering cutting-edge services in the property sector, connecting buyers, agents, properties and facilitating transaction execution.

Currently, property buyers face challenges finding out their property loan eligibility and accessing information on the best possible loans for them. The team at Finology has developed a complete solution to address these issues under the Loanplus product. With Loanplus, buyers can find out detailed information about their loan eligibility with 17 financial institutions in around 10 minutes.

“At IQI we believe in technology and are a keen advocate and supporter of technology in the real estate sector. Technologies such as blockchain will transform real estate transactions and at IQI we have dedicated teams working on areas such as smart contracts – one of the key components in digitizing real estate transactions in a blockchain. Coming together with Finology will be mutually beneficial for both parties and ultimately provide a superior service to buyers.” said Kashif Ansari, Group CEO of IQI.

Group CTO at IQI, Nabeel Mungaye said “Innovation is the key to any industrial expansion and this partnership will ensure the growth and advancement of the real estate market in Malaysia.”

Jared Lim Chu Ern, Managing Director at Finology said: “We are delighted with this partnership and to have been selected by IQI. The Loanplus platform will benefit all IQI agents and their buyers – we look forward to rolling out across the whole IQI network”.

The IQI and Finology partnership enables:

• IQI property agents to qualify property buyers within minutes

• Property buyers to understand their loan eligibility and best matched property loans across 17 financial institutions in • just 10 minutes

About IQI Global

IQI Global, the multi-award winning real estate agency and advisory firm, with a strong worldwide presence and a dedicated international team of real estate and marketing experts, working with world-class partners, investors and developers around the globe, to reshape the property industry through innovation and technology.

http://www.iqiglobal.com

About Finology

Finology, winner of the APICTA FinTech award, is a Malaysian Fintech company driving change in the banking, property, and insurance industries. Finology is the company behind the established brands Loanstreet and Loanplus. The company also provides cutting edge white-labelled solutions for MNC clients through its consultancy arm Fincon.

https://www.finology.com.my

About Loanplus

Loanplus provides innovative Loan Checking and Loan Screening solutions for Property Developers & for the Automotive industry. The company provides fast and accurate Loan Checks and loan screening results across 17 banks, Best Matched Loans and also comprehensive end-to-end loan application and loan approval tracking. Loanplus is part of the Finology Group.

https://www.loanplus.com.my

Media Enquiries:

Selina Chong, IQI Global

Address: Block 6, level – 10, VSQ at PJ Center. Jalan Utara, Section 14, Petaling Jaya, 46200 Petaling Jaya, Selangor Email : selina@iqiglobal.com

Phone : +603 7450 6655

Mobile : +6012 943 2768

Paul Sykes, Finology Media Relations Manager Email : paul.sykes@finology.com.my

Mobile : +6014 714 3767

— end of Press Release —

For more property investment resources, like our
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Loan growth in Malaysia will be higher for 2022

Loans growth is usually a sign of the economy.
Investopedia says this about loan.
Loans allow for growth in the overall
money supply
 in an economy and open up competition by lending to new businesses. The interest and fees from loans are a primary source of revenue for many banks, as well as some retailers through the use of
credit facilities
 and credit cards.
Read it in full at investopedia.

Since it’s considered positive, let’s see how the loan growth in Malaysia would be for 2022.

Article in themalaysianreserve.com
  MARC Rating Corp Bhd head Ratings Portfolio for Financial Services Institutions Mohd Izazee Ismail said, “With the gradual reopening of all economic sectors and lifting of restrictions, we expect the banking industry to gain growth momentum and chart higher loan growth in 2022. Nonetheless, any change in the pace of recovery as a result of the impact of the new Covid-19 variant could result in a setback to growth.”

MIDF Amanah Investment Bank Bhd (MIDF Research) forecasted the industry loan growth for this year to stand at 5%. It said in a note recently, “We are counting on business loans to sustain its high level of growth, in tandem with consumer spending to ramp up retail loans.”
Article in themalaysianreserve.com

Why loan growth is important?

When a business wants to expand, they will need a loan from the bank. Just growing organically will be very limiting. The banks love these loans.

For example, building a bigger factory and trying to get a bigger order from customers is not the same as trying to get a bigger order first and then only start building the factory. Build factory first and then go and get more business is a business risk. Get more orders and then only start building a factory? That’s called zero possibility. Not many customers, if any at all would sign a purchase order and then wait for the factory to be built…

Buying a car with loan?

People say car is a depreciating asset.  We just need to remember that when people buy a car, the sales person has commission, the car sales agency has profits, the car manufacturer has to produce more cars and many more other stakeholders would also benefit. The salary received will enable the person to buy more goods and services too. This is why as long as loan is growing, then the economy continues to grow. This is not a debate on whether buying a car with a loan is a bad or a good decision.

Happy reading.

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Loan Rejection. Why do banks refuse to lend to some of us?

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Loan rejection, buyer quality, build quality and promises

Mah Sing announced recently about their RM3.4 Billion worth of development in both Penang and Kuala Lumpur over the next 5 years. Two of the projects would be located in Penang while another two would be in Kuala Lumpur. They are The Coastal (RM320 million) in Batu Maung and the Ferringhi Residence Precinct 2 (RM750 million) in Batu Ferringhi. Personally, I would love Batu Maung more but if you are more Penangite in heart, then perhaps Batu Ferringhi. In Kuala Lumpur, the projects are the RM1.5bil Lakeville Residence in Taman Wahyu, Jalan Ipoh, and the RM900mil D’sara Sentral in Sungai Buloh. Personally, I like the one in Sungai Buloh. That will bring up the whole area surrounding it.

Next is something which I have always been wondering all along, the quality of the buyers for some of these reputable developers which typically carry premiums over the not so well known or well known for cutting corner. If I remember correctly, when Mah Sing launched their landed project in Batu Maung, the premium it carried was close to 20% versus a project in the surrounding. Today, this same project has appreciated 100%, according to Mah Sing. Thus, I think in this regard perhaps the bank rejections in terms of loans for their buyers are lower than the industry average. My friends in the industry were telling me about one developer which had over 50% loan rejection. If true, it means banks are still very strict. if not true, it means no one is buying what the developer is selling and they are trying to cover up. Either way, it’s good for the industry. Forces developers to rethink about their pricing strategy as the current market is indeed much more savvy and informed.

Personally, for primary properties, I am skewed towards reputable developers, not necessarily Mah Sing and also a few boutique developers whom I know personally. To me, if you are thinking about development as a continuous business for a very long time, everything should be done in the most professional manner possible. Do not sell lower but instead of actually lowering your margin, it’s just the lowering of the overall quality. Instead of the thicker tiles, you use the much cheaper and more fragile thinner tiles. For buyers, it’s pretty straight forward, always visit and understand what are some of the qualities of tiles which are in the market today. Then, you decide whether the developer is cheating on you or are they giving what they are promising. If they did not, make noise, put in Facebook and I think if the effect is big enough this particular developer would then be willing to shed 1% extra of its margin to rectify what they promised but never delivered. 🙂

written on 12 August 2014

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BNM: Loan rejection is ok, no need to ease lending conditions

Reported in The Star, an article quoted Bank Negara sources which said that there are no reasons to ease lending conditions. Actually, I read a similar view from the Singapore side just a few days ago. The Singaporean government is reluctant to ease cooling measures even if property prices have started easing. They are more afraid of speculative activities instead. Bank Negara Malaysia (BNM) sources said that the main reason not to ease the lending conditions is because the housing loan rejection rates are reducing from 30 percent in 2014 to just 20 percent in 2015. In fact, housing loans are still growing at double digits!

Secondly, BNM sources said that there are no special restrictions imposed by BNM. Today, the banks have a broad set of guidelines and when developers are asking for loosening of restrictions, what sort of restrictions are they referring to? Maximum tenure of 35 years is so that retirees are not burdened with debts and buyers for third property onwards should have 30 percent downpayment. If developers are talking about easier mortgage financing, it meant that the developers are transferring their burden to the households. BNM wants quality loans and not for buyers to buy beyond their affordability causing the buyer to default later. The source also does not agree to have the Developer Interest Bearing Scheme to be reintroduced saying that this simply meant that buyers are saddled with high instalments.

I personally disagree with anyone who tries to stretch and buy at the maximum limit of their capacity. It is not endangering just himself because if a lot of people does the same and suddenly a big number of them got retrenched, the property market may suddenly be destabilised. For anyone looking for quick money, perhaps the stock market may be a better BET. Alternatively, a casino would provide immediate results. Hit it, or Hit by it. Property remains a necessity which meant that if we invest and buy a fewer units, in the future, we should earn good returns. Assuming majority intends to rent, the units would still have to be owned by someone, right? Happy buying.

written on 20 Apr 2016

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Loan Rejection. Who’s Fault?

How many times have we heard of loan rejections on the rise? Well this has been happening even before the cooling measures started. Perhaps it got worse after the stern warning from
BNM to all commercial banks
. Actually who’s fault is it? Is it the Bank Negara Malaysia’s fault for forcing the banks to be super stringent in their loan approval evaluations? Let’s be very real. The only entity that should always be very wary of what is really happening must be BNM. I would be very worried if BNM did nothing until today when all the other countries have been trying their best to cool the property market.

Is it the banks who are to be blamed for being very careful and not simply lend? If we look at the
non-performing-loan ratio of Malaysian banks
, hey we are one of the best in the world. Seriously, do you want them to simply lend like those days during the 1998 crisis where some banks were so overstretched that they had to be ‘rescued’ by stronger banks or they may pull down everyone else?

Perhaps it is because the buyers’ themselves who are trying to overstretch themselves to buy the biggest and most expensive one that they can afford for the fear of losing ‘face’ if they bought a
smaller and inferior unit?
 If you said no to this, I have to ask you to rethink. How many of your friends actually tell you that paying for mortgage is easy because it’s one or two levels below what they can actually afford?

Or is the reason simply due to affordability? Prices becoming way too high that no one could afford them and thus their loans are rejected? Personally, amongst my friends, many of them have bought homes, some more than one and thus far I think they are able to get loans. There was even a few who have worked just 5 years but already own more than one property. Of course, to be honest, majority has yet to buy one which is key reason
why property investment is a serious long term investment.

When not many buys, we BUY. When everyone has a home and everyone is buying their second home for investment, WE should try other investments.

I think the answer is clear. One word, affordability. Buyers must buy responsibly and objectively. Sorry, you do not buy the most expensive property that you can because by doing so, you either get your loan rejected or you have just pushed the prices even higher because you contributed to the demand. Buy based on what we truly need and not based on what we feel we want.
Thus think affordability.
 Developers have no choice but to plan along the lines of affordability. Anything above RM600,000 is indeed a very high number and is going to be a good measurement for few more years to come while waiting for incomes to also rise. It does not matter what we believe. it matters only what we actually do. Happy buying or waiting.

written on 14 Feb 2015

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Loan Rejection. Why do banks refuse to lend to some of us?

Article was first written in 2018. Still applicable today. Edited on 7th October 2021.

Banks are no longer lending. Loan rejection is rising?

A banker friend said something which I agree wholeheartedly. This banker friend has heart, not just thinking about money. He said that many people say banks are not lending anymore but the truth is, the borrowers must also play their part lah. If banks take too high risks, then what will happen to their shareholders?

If banks suffer losses. (Google for some of those banks who suffer huge losses in 1998) What about their employees? They may lose their job. Please do not try to guess which banker friend. I only have around 78 banker friends ok. (maybe more) I share this in a story format and perhaps we see whether it makes sense yeah. Loan rejection should be the case for many of the scenarios before if we think logically.

By the way, this is the state of the banks’ loan impairment. (Still low and if it gets higher and higher, it’s not good)

Image source:
https://www.theedgemarkets.com/article/impaired-loans-creep-nineyear-high

Header Photo Powered by
Cheston Choo

Are banks too stringent and thus increasing loan rejection numbers?

We do have people saying that the banks are not really lending or that they are too stringent. Actually, the banks are also saying that they are not to be blamed because they are still lending. Anyway, if banks do not lend, then what else do you want the banks to do? They exist because they want profits from LENDING… Plus their investments but generally they earn money when they lend and people PAY THEM.

If they do not lend, their staffs would be worried… would the banks still need so many of them if they are not lending money at all…? Maybe some of my 78 banker friends may also lose their job! Hopefully banks will continue lending lah. Okay, for the question of why must the banks lend ever higher to buyers? Why loan rejection cannot be an actual solution?
On a separate matter, if you like to avoid your loan from becoming a loan rejection statistics, here are some tips. Happy reading. (click here)

Let’s look at these four loan lending or loan rejection scenarios

Assuming there are 4 units up for sale in a certain location. Median price is RM500,000 for similar units elsewhere. We assume the buyer’s financial status is healthy yeah. Not with huge credit card debts, not with lots of personal loans etc. Someone who can get his loan approved and that he could afford the RM500,000 home.

Seller 1 sells his unit at RM500,000 and the buyer asked for 90 percent loan at RM450,000. Bank approved. Happy!

Seller 2 has some minor renovations and wanted RM520,000.  Buyer likes it, applied for 90 percent loan at RM468,000. Valuer agrees with the value of RM520,000 due to renovation. Bank approved. Happy!

Seller 3’s unit is not well maintained but he wants RM500,000.  Buyer thinks it’s ok and applied for 90 percent loan. Bank’s valuer thinks it’s ok. Bank approved because the median price in the area is RM500,000 anyway. Happy.

Seller 4 has EXTENSIVE renovation costing RM100,000. He wants RM550,000. Buyer think it’s value for money! RM500,000 is for units without renovation. This one extensive renovation, yet just priced at RM550,000. He applies for 90 percent loan. Bank approved but only for 85 percent loan after appealing. Buyer aborted the deal. Seller is furious that bank did not approve the loan even though buyer was ready to buy at RM550,000.

Loan Approval or Loan Rejection for Seller 4’s unit?

If you are the bank, would you also approve the buyer for Seller 4’s unit? At 90% loan for RM550,000 value? Means buyer only needs to fork out RM55,000? Or you think the bank was right in offering a 85% loan which meant that the buyer needs to fork out RM82,500 instead? So, the bank will lend RM467,500 instead? By the way, even for the same property, every valuer would have their own expert opinion on the property value. Every buyer would have different preference too.

Banks should be conservative, they are a business with shareholders

As for the banks, they may feel that want to err on the side of caution. If it’s RM550,000 valuation at 90% loan, the bank will be lending out RM495,000. If the buyer defaults in the future, the bank will have to put up the property for sale under auction. Do we realistically think that the bank would be able to sell that property at the original price of RM550,000? I am a licensed auctioneer, I can tell you, the answer is most probably no.

Banks must manage their risks.

Yes, they can also stop bubbles too, read here for an earlier article. Why Banks Need to Stop Bubbles.

Banks need to manage their risks when lending. If they suffer losses, many people will be affected. Shareholders, employees and even the government of the day as they depend on the tax earnings.

As for the buyer, it’s good to note that when banks do this, it could actually benefit you as well. Loan rejection may be a blessing in disguise. Else, you may be paying too much for the property from the banks eyes. That is not good for you nor the bank. Remember, you want to buy as low as possible, not higher than the market.

Okay, the seller may have to take a cut but please understand that the money we pour into renovation does not mean the valuation of the property goes up by the same number.

Happy understanding. (Yes, I still think bank stocks are good dividend stocks with potential capital appreciation)

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Happy if loan tenure extended to 45 years? Proposed…

Affordability, long time ago

Before we go into loan tenure extended to 45 years topic, please allow me to tell you how many people think about affordability long, long, long time ago. My parents think of affordability based on their savings. Once they have enough savings for a downpayment for a home of RM85,000 they will look around for houses which are cheaper than RM85,000. They saved so hard for the downpayment, they will not want to use all of it so easily.

Affordability, nowadays

Now, how do people think about affordability nowadays? They think of affordability based on the INSTALMENT! Yes… RM4,500 smartphone is AFFORDABLE because the instalment is spread over 24 months and therefore, it’s just RM187.50 per month, interest free. Buying a new Japanese B segment car of RM75,000? It’s affordable if spread over 9 years lah… This is why we need to think on their behalf and not just allow them to think of affordability based on instalment. Now, let’s talk about the recent news. Loan tenure extended to 45 years.

Just like the image below showing this long long road… Imagine if we are moving one step at a time… (monthly repayment). Let’s go to the article I read about the suggestion for a 45-year tenure.

Photo by Pixabay on
Pexels.com

Article in nst.com.my
 .  Mah Sing Group Bhd founder and group managing director Tan Sri Leong Hoy Kum wish the government will reinstate the maximum loan tenure to 45 years from the current 35 years. At the same time, the calculation to use gross income rather than net income in the loan application review.

He also hoped that the government will consider allowing Developer Interest Bearing Scheme for first-time homebuyers. He said, “This will allow first-time homebuyers to not service their loan interest and rentals at the same time during the construction period. We are also hopeful for the government to continue working with financial institutions to relax lending requirements to boost homeownership, especially for first-time homebuyers.”

He also gave many other suggestions. Please do read them here:
Article in nst.com.my

Affordability if loan tenure extended to 45 years

First of all, loan tenure extended to 45 years is not necessary a bad thing. It will enable many people who could not afford to actually be able to afford a property. Everyone must understand that a property is compulsory because rental does not stop when one retires. No owner would tell the tenant that since you have paid me rental for the last 30 years, when you retire, you can continue staying for free… None that I know of anyway.

Affordability turning into liability?

However, there’s also the possibility that this affordability goes back into the instalment mode like buying a handphone. If there were no instalments available, people may buy that RM599 handphone. However there’s an attractive 12 months instalment plan, suddenly they will now buy that RM3999 smartphone instead. If this is the mindset of the buyer when they buy, then we will have buyers who SHOULD only buy a home of RM350,000 now stretching himself to buy a RM500,000 home instead…

By the way, the intention is for the buyer to STILL buy the same RM350,000 home, pay lower instalments and he use the savings from lower mortgage to invest too. At the moment, this is just a proposal. Loan tenure extended to 45 years should not be happening anytime soon. Remember this? “Money is the root of all evil”  By the way, the root of all evil are people themselves yeah.

This tenure extension is not a bad thing if we look at the advantages part too. However, people may still turn it into something bad. It will be a huge issue because buying a home is usually the single largest purchase ever in our life. This is why it will require a lot more thoughts and new supporting requirements too. Happy anticipating whatever happens in the very near future. Yes, the property market transactions are still happening. Earlier article here:
Official: Property market transactions Malaysia

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Household loans growth? Slow and slowing too.

Are people still buying cars, properties and even smartphones? Of course they are, but signs are there showing ever slowing trends. An article in The Star showed the chart for loans growth for both the household and business from August 2012 to August 2015. Still remember the  alarm about the extremely high household debt to GDP? Read here:
Household Debt Malaysia? Better

Actually, when we refer to the line in the chart, from August 2014 till to date, the loans growth for the household is still increasing but the pace is getting much slower. From the double digits of over 12 percent just over a year ago, this has gone down to the latest number of just 8.3 percent in August 2015. This can be easily explained by the many recent reports about retail growth, car sales and even property transactions.

Easy example, not many are looking at replacing their current LCD TV with a bigger LED Smart TV which will incur debts. In fact, the retail growth is very subdued. Read here:
Retail sales still growing but forecast is lowered, again

Last year, the prediction of the car sales numbers were still based on expectations that by H2 2015, things should be back to normal. Well, overall car sales numbers are also dropping too. Read here:
Lower car sales growth, not a good sign

I do not think we need to ask any property agents today. I think many have stopped doing it full time and may need to find something else to do. Requests to view versus decisions to buy are having a huge gap currently. Property Transactions are down. Read here:
Residential property transactions see a slight drop nationwide in first quarter of 2015

Enough about household loans. According to analysts in the article in The Star, business loans have also started slowing down too even though it has remained strong all these times that household loans growth were slowing down. The reason is because companies are starting to scale back their expansion plans and even banks are more cautious in lending today. In fact, as at August 2015, business loans are still growing when compared to July and June. The analysts who spoke to Starbiz said that the growth of above 11 percent cannot continue as the economy is slowing down. Malaysia’s gross domestic product (GDP) for 2015 is expected to slow to 4.7 percent for 2015 from 6 percent in 2014 by World Bank. Nomura Bank of Japan meanwhile gave a slightly higher number, 5 percent GDP growth for Malaysia for 2015.

Do note that loans are still growing, whether household or business. However, if the current negative sentiment persists despite the current numbers still in the positive territory, it would just be time when the numbers follow the sentiment. Hang in there and as for Malaysians, time to show our resilience. Exports did grow continuously for 4 months thus far while imports continue to rationalise and this gave us the largest trade surplus in August which was a pleasant surprise and one contributing reason to Ringgit’s good run for past one week. Happy reading.

written on 12 Oct 2015

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Locals may not be the first to buy; beware locals

They say, when we want to know about great food we should ask the locals. I agree. However, when it comes to property developments, especially the out of the ordinary ones, asking locals may meant you buy what only the locals like or you ended up not buying anything. When all these projects are successful, the locals would then complain about foreigners pushing up the prices. Sounds familiar? From my own personal experience, this has been true for many markets, especially those which the locals would take it as out of the ordinary.

When the first luxury condo called The Haven was launched in Ipoh a few years ago, every Ipohan I know laughed at the project. I told them that if I have excess funds, I would buy one and all of them asked me not to even if I have money. Everyone thought the project was another crazy one because no one in the right frame of mind would be
willing to pay higher prices
 for a ‘luxury condo’ compared to the typical terrace landed homes in Ipoh then. The Haven is today considered a success and is often quoted by some newer condo projects in Ipoh as well. The first batch of buyers? Well, their investment would have been a huge return on investment. If you think this happens just in Ipoh, it’s not true.

I am not a Penangite. Thus, I have no emotional attachment to any areas in Penang. Certainly none of the ‘born here, study here, work here, die here’ type of attachment. Around 10 years ago, when I first viewed a condo project in
Sungai Ara called Regency Heights
, every local I met gave negative comments. It ranges from why not Gelugor? Why not buy nearby Goldcoast instead? Why condo when the landed in Sungai Ara is still affordable? Why not think about Tanjung Bungah instead? One even gave the comment that the water quality in Sungai Ara is bad! None of them considered the fact that Regency Heights was 1,258 sq ft, developed by a reputable developer, priced from just RM209,000 onwards. I did not care and I bought despite all the negative comments. Recent years, the comments sounded like this, ‘I should have bought…..’

Hope everyone understands, if you have your own reasons after doing your own calculations based on the knowledge you have from research and your experience, please proceed to buy. Trust the locals for the best food, the best hiking trails, the best ‘lepakking’ place. For properties, trust your own objective decision. The locals whom you spoke to may not have
investment experience
 in other places except their own preferred space. It’s not because they are wrong, it’s only because they do not know enough. Always remember that property prices in secondary places do not need to be the leader. It can always be the follower for the primary ones. That’s why when we buy the right secondary areas, the return on investment in terms of percentage may be better than even the primary ones. Happy deciding.

written on 20 Oct 2015

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Lockdown or no lockdown? It’s the compliance, really.

We have this from Selangor Menteri Besar about potential for full lockdown. Article in
themalaysianreserve.com
  Selangor Mentri Besar Datuk Seri Amirudin Shari said the state government agrees that such respite is vital to curb the Covid-19 spread, but it needs to be discussed in detail to minimise the impact on economy and people’s livelihoods. He suggested that if this happens, then the federal government must allow automatic moratorium for affected lives, direct aids to the bottom 40 (B40) group, effective online learning at home, clear standard operating procedures (SOPs) and guidelines, and mass testing in the community. Read the full article here:
themalaysianreserve.com

Meanwhile our Finance Minister said this.
Article in themalaysianreserve.com
  Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that no other country in the world has completely shut down their economies in the face of second and third wave of Covid-19. Instead, the focus is on tightening their standard operating procedures (SOPs) and restricting social activities only. he said, “With the full closure of economic activities such as (under)
Movement Control Order (MCO)
 1.0, the number of unemployed people is expected to reach one million. It also will negatively be impacting the income of 2.8 million informal sector workers who are currently in a vulnerable state.”  Do read his full comments in the article here:
Article in themalaysianreserve.com

Frankly, it’s not lockdown or no lockdown

People still going out of their home for ‘sxxxxx’ reasons. People are still NOT wearing their masks and arguing that there were NO ONE nearby. People were still trying their best to go back to hometown despite warned not to do so. People who were sick still refuse to just stay home and thinks nothing will happen. People still prefer to believe viral news WITHOUT any valid source in their whatsapp and thus they prefer not to register for vaccinations, they think this is better than that (despite tens and hundreds of millions of people ALREADY got vaccinated with that vaccine which they think is inferior) and more.

The issue is COMPLIANCE to the SOPs. Of course some would argue that the enforcement should be better. I fully agree but if it is just enforcement alone… then we do not need to say anything else, just do a total lockdown and when a total lockdown happens, imagine what will happen to the many who needed to work in order to have salary in order to pay rental and for food? What happens when everyone follows SOPs even at working place?  Look at the image below.

Image source:
Southwestern Vermont Healthcare

If we could do this well, we could continue to function. I do not support a total lockdown because it is very detrimental to the economy. Stay focused. We can do this if there is enough compliance and everyone registers for the vaccination too.  Thank you.

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Press Release: SEDCO’s SUDC launching Lok Kawi development. Positive for the area.

This is a project by Sabah Urban Development Corporation (SUDC) and it’s a property development arm of Sabah Economic Development Corporation (SEDCO). In brief, SUDC by SEDCO.

Press Release: LOK KAWI TO PROSPER FURTHER WITH NEW SUDC PROJECT

The community’s value in and around the Lok Kawi area is expected to grow further thanks to the new residential project by Sabah Urban Development Corporation Sdn Bhd (SUDC).

SUDC, the property development arm of Sabah Economic Development Corporation
(SEDCO)
, has once again showcased its commitment to building affordable houses for Sabah.

Seri Sutera is a smart partnership between SUDC and Besta Wijaya Sdn Bhd (BWSB), where SUDC is the developer and BWSB is the financing contractor

With an estimated Gross Development Value (GDV) of RM66.7 million, the low-density apartment sits on a 2.42-acre of land. It consists of two 7-storey blocks and collectively house 238 modernly designed residential units.

Anthony Dumpangol, Managing Director of SUDC
, said, “SUDC is committed to developing and stimulating the Sabah state economy through our property development activities. Seri Sutera is one of our ongoing activities.”

“This affordable housing project reflects our commitment to building homes that not only last for generations but appreciate in value. Seri Sutera also showcased our ability to transform what was previously a rugged terrain in the less developed area of Lok Kawi into a self-sustainable community.”

“Given its strategic location, Seri Sutera has achieved a take-up rate of 70%. We are humbled by the good response of this affordable housing project. This clearly shows the confidence that the buyers have in us and this location.”

“Papar is indeed a blessed district with immense potential for further growth. It is surrounded by thriving districts like Putatan in the North and Kinarut in the South. In addition, it is located around the border of Penampang and Papar,” added Dumpangol.

“Furthermore, the town is expected to benefit when the Papar-Kota Kinabalu road, which is part of the Pan-Borneo Highway, is upgraded to improve the traffic flow brought about by rapid developments.”

“There are also exciting upcoming projects along the Lok Kawi coastline. These include the KK Resort City that is worth up to RM5 billion as well as a mixed seafront development worth RM7 billion. These tourism-related projects will undoubtedly create plenty of job opportunities around the Lok Kawi area. Eventually, this affordable housing project will stand to benefit as the workforce that will come on stream in the next few years, “said Dumpangol.

Seri Sutera is surrounded by various amenities, including eateries and grocery shopping like KFC, CKS and G-Mart; schools and healthcare such as SMK Kinarut and Klinik Kesihatan Kinarut; and Kota Kinabalu International Airport. All these are within a 15 km radius.

The residential development features four layouts – Type A: 1,079 square feet (sq.ft.); Type B:943 sq.ft.; Type C: 890 sq.ft. and Type D: 568 sq.ft. Each floor comprises seventeen units that are served by two (2) lifts. Each unit is functionally designed to maximize space usability, with laminated flooring as well as celling-height tiles. Units are priced from RM175,000 onwards.

Facilities include a modern security entrance, tranquil pond and leisure walkway, car wash area, ample parking space, and ultimately complimentary membership to Mont Elkay Clubhouse. Buyers will get to enjoy recreational facilities such as swimming pool, indoor gymnasium, badminton court, children’s playground, BBQ pits, Kopitiam, Convenient Store, as well as Multi-purpose hall.

Seri Sutera is set to complete by 2021. For more information about
Seri Sutera
, please  visit
http://serisuteraresidence.com/
, contact +6012 767 5441 or email to
bwsb.sales@gmail.com
.

-End Of Press Release-

This is SEDCO’s website for further reference.

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London properties down, affecting Britain’s number.

Last year, London propped up the national average of house prices in Britain. There’s no such support this year. Centre for Economics and Business Research (CEBR) expects London to fall 3.3 percent this year. Before everyone say, oh dear, another down, more to come? Do note that London has been rising for many years. If we do not want the property bubble to suddenly burst, a breather is good. In fact one more year of breather may be better. No point in bursting and affecting all other property markets with a negative sentiment. The leading indicators are already showing according to the CEBR. Fewer new buyer enquiries and properties taking longer to sell are already pointing to falling prices. Of course, this may also meant more people are on the sidelines and sellers are holding back due to offers which are falling too short of their expectations. To know the actual situation? 12 more months, we should know. 🙂

Anyway, for 2015, CEBR expects the property prices to be negative followed by a steady growth in years to come. Steady growth would normally point to a sustainable one, in other words, small number. Oh yeah, one main reason is also because the foreign buying may be dropping. According to the Department for Business, Innovation and Skills, 17 percent of property sales in the heart of London are to buyers from Russia, Italy, France and Middle East. As soon as there are some volatility, foreigners would be wary of buying in other countries. Then again, foreign developers are still buying and building. Just look at the few Malaysian developers who are there. Some are even blamed! Read here:
Londoners, homeless. Malaysian caused?

It is important to note that other than CEBR, all the other predictions are positive. The Royal Institution of Chartered Surveyors expects an increase of 3 percent. Halifax expects an increase of between three to five percent. Savills said an increase of two percent while the Office for Budget Responsibility predicted an increase of 7.4%.  I cannot believe the last prediction. At current juncture still 7.4 percent? If that happens, then it’s like London is a fairy tale amidst all the current ongoing developments where even the second largest economy is growing much, much slower than previous years. Happy knowing.

written on 10 Jan 2015

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London property market dwarfs the rest but has stopped booming

Source:
http://www.dailymail.co.uk/property/article-5422215/Londons-homes-worth-twice-value-nine-cities.html

London property market is obviously loved by most property investors. Especially the super-wealthy ones and it’s not only due to the exchange rate because even for Londoners,
 they are struggling to buy a home sweet home.

There’s
an article about its size and attractiveness in dailymail.co.uk

 recently. The total value for the London property market is £1.5 Trillion (RM8.21 trillion) and this is twice as large as the next 9 largest UK cities combined. COMBINED. The city with the second highest property value is Bristol (the city I graduated from in 1998) and the total property value there is only £115.21bn (RM630.6 billion). Fortunately for Londoners, the price increase has slowed tremendously and it’s the slowest among all the cities. Take a look at the areas which are the most valuable ones. Obviously the higher the price, the harder for it to grow fast. (In fact when we look at all the top 10 most valuable areas, all of them have highly regarded universities too. Perhaps this is a good complementary factor too; education, especially in attracting international students too.)

Second article about London property market is in
independent.co.uk and it talks about how ‘home sellers must be more realistic with their asking prices.’
 (Yea, sounds painful but for the buyers who bought many years before, reducing a bit of their asking prices today is still okay.)  According to
Rightmove,
asking prices actually dropped 1 percent when compared to a year ago. It says that the mean asking price in London this month was almost £630,000 (RM3.5 million). This is more than 20 times average UK earnings. (Yea, 20 times of local currency and not in RM.
Average salaries is around £33,000 per annum currently)
Rightmove even have a time to sell the property statistics. Instead of 73 days, it is now 83 days. (Be reminded that taking longer to sell does not mean property prices are going to drop a lot, it may also be due to a slow market, high asking prices or inflexible sellers who refuse to cut prices further. If it’s the last reason, it meant the holding power is still there, for now)

Another article which is much earlier talks about reason to buy a London property today.
It’s in mylondonhome.com
 It actually gave 5 reasons including the value of Pound which is already lower today than before the Brexit decision. If you are able to borrow from banks there, the rates are low! According to Financial Times, the property prices in London is already very low and is in fact lowest since 2008. There are  also many major new developments coming up which will certainly spice up the market. They include Columbia Gardens, Elephant Park, Embassy Gardens, The Nova Building and Royal Wharf. (By the way, there are over 20 major universities within Greater London itself. This does not include all other tertiary institutions which are not yet a university. I think for super-wealthy parents with teenage kids today, this is extremely important too.
Here’s the list of all those universities
) Happy following the London property market yeah. Cheers.

written on 24 Feb 2018

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London property market: protests against overseas property investors

Everyone knows London is an international property market favoured by many, especially Malaysian parents whose kids are studying there. Property prices are high and it has continued to rise despite some prediction of a bubble. How much do we know about Londoners themselves? People who were born there, study there, stay there and work there? I think they should be doing well and are happy that London is an international destination for many. Well, it’s not the case with a recent case where up to 400 people tried to disrupt a prestigious property event in London. They were hoping to highlight the rising cost of living which was caused among others by the inflating of property prices by overseas buyers.

The situation was under control because the police held back the protesters and prevented them from entering the conference area. I am not sure what would have happened if the commotion was inside the event venue instead of outside. For the past 12 months, there has been a growing anti-foreign buying resentment. This caused a few high profile developers to pledge that they would sell their properties within UK first before opening it to the overseas market.

Actually, these situations always happen to locals. The reason is because for the locals, they would normally already own a property or stay with their parents. Thus, the newer launchings due to its price would seldom attract the locals first. With London being an international city, the developers would naturally sell overseas. Some of these properties were attractively priced and the first batch of investors were primarily the super rich followed by those who were thinking of diversification of their property portfolios. Of course these days, it is no longer limited to just these two groups as even the middle income Singaporeans may find London property prices acceptable even when compared to their home. Another plus point would be, all these owners would be proud to tell their friends that they own a property in London.

If you are thinking of buying London, I seriously think it would be okay if you are ready to hold if situation suddenly take a bad turn. After all, it’s London. However, please bear in mind that prices have continuously been challenging new highs and there’s no such thing as forever higher than the sky prices.

written on 16 Oct 2014

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London property market is now risky?

I think it’s worth noting a piece of news I read in a local English daily. Especially for those intending to buy in London currently. According to UK daily The Independent, Sime Darby’s luxury homes in the Battersea development has experienced a 10-percent drop in value. This is because of the dampened demand and the currency volatility today. Ringgit and other South East Asian currencies have been falling with China’s current economy uncertainty. Due to this negative sentiment, it has also affected the interest level of buyers from Malaysia and South East Asian regions.

Cheshire Pau, Emeritus professor of economic geography at the London School of Economics offer an even more sobering fact. London property market is now seen as ‘risky’ investment. The paper cited global property consultant Knight Frank as saying that purchases of prime London properties by Chinese-ationals, Russians and Singapore has slumped in first 6 months of 2015 versus the same period in 2014. This may have been affected indirectly by a report by Transparency International that revealed that over 36,000 London properties including up to 9.3 percent properties in city of Westminster that were owned by offshore companies for which identity is protected.

I do not own any overseas property. This is because there are a lot more complexities because the property market in such advanced markets may already be very highly priced. The currency fluctuations may not happen in our favour. It is also not easy to manage the property. Thus, I believe that any foreign property investment must be evaluated more carefully compared to if I am buying in an area that I am familiar with. Maybe the message is, unless you really have lots of money to spare, it may not be worth taking on such a ‘faraway’ calculated and risky investment. If the question is asked again in 15 years time and I am serious in sending my children for studies overseas, then the buying decision may be a clearer and easier one. Happy visiting London.

written on 27 Aug 2015

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