Our EPF returns over the years?

Our EPF returns over the years?

EPF has no money left

This statement has been mentioned to me many times by many different people. In actual fact, EPF has given me one of the best returns for many years and for recent years, the returns are higher than my FD returns and higher than the home loan repayment interest which I have to pay. There’s no guarantee it could be the same in the future but my wish is for this to continue and remain as high as possible.

This is where EPF is ranked among the other pension fund

Read the full article here by Mercer

Mercer CFA Institute Global Pension Index compares 39 retirement income systems, covering almost two-thirds of the world’s population
Malaysia ranked third among Asian retirement systems and 19th overall with an overall index value of 60.1
The Netherlands and Denmark retain first and second place respectively and the coveted “A” grade
The impact of COVID-19 on the provision of future pensions will be negative due to reduced contributions, lower investment returns and higher government debt

Malaysia’s grade meant that it’s on par with developed economies such as Hong Kong, France and United States.

Read the full article here by Mercer

19th overall in the world yeah and 3rd in Asia yeah. There are 48 countries in Asia just in case you want to know what 3rd in Asia meant.

An employee with a stable and growing salary, would have accumulated a substantial number in EPF when the person retires

Briefly, if one earns RM4,000 then the actual savings going into EPF is RM4,000 x 24% (both employer and employee) = RM960 per month yeah. In one year, this becomes RM11,520 and if we assume the returns from EPF is 5% on average, then 14 years later, the money we have in EPF is doubled. In many countries, employers do NOT need to contribute so much for the employee yeah.

Some other additional information about EPF

We can leave our money in EPF up to the age of 100 and the same “rate of dividends will be paid to all members based on the dividend rate declared for conventional or syariah savings”.

EPF had about 400,000 members with savings of RM500,000 and above in 2018. About 40,000 members have more than RM1 million each, while about three million members have between RM50,000 and RM100,000 in their account. Those with between RM100,000 and RM500,000 in savings make about 2.7 million contributors.
(read here)

One can top up EPF contribution to a maximum of RM60,000 per year. Yes, based on EPF returns versus FD rates, I think this top up does make more financial return sense yeah.
 read here.

Happy learning. Do share with more people if you think they should also know.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
Outlook for the property market 2022

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Out Of The City And Into Seremban 2

Press Release: Out Of The City And Into Seremban 2

Homebuyers prioritising space and peace of mind causing a shift in the property trends

Living in a big city no doubt brings great experience – the advantages that come along are abundant, and that goes without saying, from job opportunities to public transportation and entertainment. But the question is, do big cities bring peace? Of course, some people are big-city enthusiasts who like the rush and bustle of large cities — even when it is momentarily disrupted. COVID, however, has pushed many others to reconsider their living arrangements and contemplate shifting outside big cities.

Based on the Q1 2021 report by
PropertyGuru DataSense
, the property market has seen a shift in trends with buyers moving from city to rural or suburban areas. The demand for homes with larger land in rural areas led to a rise in property purchases in smaller towns. Landed properties were preferred by buyers over high-rise homes, with terrace houses accounting for 54% of purchases in Malaysia, followed by condos (18%).

Seremban, the capital of Negeri Sembilan is one of them that has also seen a rise in population. According to
Macrotrends,
 the population has increased significantly, from about 49,000 in 1950 to 494,000 now.
PropertyGuru Malaysia’s biannual Consumer Sentiment Study for H1 2022
 states homebuyers prefer staying out of Klang Valley but they do not want to compromise their lifestyle in the major metropolis, which includes the conveniences and amenities that are readily available. As a result, Seremban 2 is an ideal choice since homeowners can enjoy the same amenities they had in the big city while also benefiting from the lower housing costs available.

With a goal in mind, leading property developer, IJM Land transformed what was once a barren parcel of agricultural land into a vibrant, self-contained township with a close-knit community. Having witnessed limited value appreciation in the real estate industry, Seremban 2 has undergone a substantial transition with various property developments to suit every residential need.

Nestled within the fully integrated township of Seremban 2, IJM Land recently introduced homebuyers to Rimbun Aman, a single-storeyed link home. With prices starting from RM 350,000 and built-up ranging from 971 to 1,135 sq ft, each unit comes with three bedrooms and two bathrooms. The homes and corresponding decor are specifically crafted to accommodate large numbers of people in a supposedly small area. Upcoming launches this year include Arena,  a 2-storey link home and Ikon, a 2-storey shop situated at the centre of a vibrant commercial development.

Based on the data and statistics collected, IJM Land has reported that the homebuyer demographics showed that people from Negeri Sembilan comprised 78% of the buyers, followed by Selangor/ Kuala Lumpur (15%) which has been increasing gradually, and with other states making up the remaining 7%.

As
stated
, the volume of transactions in the area increased by 39% last year compared with 2020. As buyer preferences shifted away from shorter commuting times toward larger property sizes and costs per square foot, this reflects a strong interest in Seremban’s offerings. Seremban 2 bungalows and semi-detached homes range from RM1.8m to RM3.5m respectively, whereas the link homes start from RM500,000 onwards with generous built-up area for its residents.

“During the lockdown, those who lived in condos or apartments had limited movement within their homes, and some could not leave their homes to use communal facilities. The desire to have their personal large space has resulted in a shift towards landed properties. What we have to offer is very different from what is available in Kuala Lumpur’s residential regions. Keeping our residents in mind, we established an integrated township to improve the quality of life and offer attractive home options without breaking the bank,” said Dato Hoo Kim See, Senior General Manager (Central Region) of IJM Land.

Exploring and going out into nature is a challenge in big cities – you don’t get it right at your doorstep. Seremban 2’s 30-acre Hill Park attracts attention from onlookers with its lush landscape that serves as host to the playground, meandering jogging, and gazebos in charming spots. Understanding the importance of connecting homebuyers to nature while appreciating its beauty, residents get to enjoy a tranquil atmosphere replete with green spaces.  Additionally, the 15-acre City Park is a lovely spot for groups of friends and family to wander.

Properties in the city command exorbitant prices due to their proximity to essential infrastructure and facilities. The self-sufficient Seremban 2 township, however, has raised the bar for living standards in Negeri Sembilan with residents having quick access to a multitude of commercial and retail services including AEON Mall, Mydin Mall, Lotus’s, Palm Mall and NSK Trade City within a 5km distance.

Encompassing all your living needs and amplifying the convenience of living in the township, residents have access to convenient outlets to source basic necessities, the assortment of medical facilities such as hospitals and clinics, and the availability of major bank branches and schools.

Strategically located near major highways, Seremban 2 residents are in close proximity to the North-South Highway, ELITE and LEKAS highways that provide quick access to and from major hotspots such as Kuala Lumpur, Putrajaya, Cyberjaya, Malacca. Furthermore, residents can also access a toll free road that directly connects the township to KLIA and KLIA2. These links facilitate movement as they connect to all of the township’s sections.

“Your preferences, family circumstances, profession, and financial status will decide what is ideal for you. Seremban 2 has everything to offer and you can enjoy all the amenities within the self-contained award-winning township,” concluded Dato Hoo.

For more information, log on to
www.seremban2.ijmland.com

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
https://kopiandproperty.com/alam-suria-fusion/

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Outlook for property market 2022. Views from many property industry players

Outlook for property market 2022. Views from many property industry player

What is my thought for the property market in 2022?

A few weeks ago, I was speaking in Penang and was asked what would be my personal view for the property market in 2022. I shared that as property owner, I would hope for the property market to be better so that the price will be moving upwards. I want to sell at least one property in 2022. However, as a property investor, I would hope for the property market to give me some good opportunities to buy. I hope to also buy another property in 2022. So, am I in a dilemma?  Haha.

Anyway, the below would be the views from many industry players about the property market for 2022. The full article is here:
Article in propertyhunter.com.my
  The views also come from some of my friends as follows:
Adrian Un, Property Advisor, Author and CEO of Skybridge International, Dr Victor Gan, The Property Doctor,
Datuk Chua Soon Ping, President of SHAREDA (Sabah Housing And Real Estate Developers Association)
,
Miichael Yeoh, Property & Mortgage Advisor
,
Enoch Khoo, Director & Group Chief Strategist at PropertyHub Sdn Bhd
. Many more yeah. Read it in full here:
Article in propertyhunter.com.my

As for my views, it is as below:

The property market has been affected by Covid-19 since March 2020. People who needed to buy a property would have had to think thrice. Many real estate agents were suffering when lockdowns were implemented. Many property developers delayed new launches and even had to close their sales galleries. All these slowed down the property transactions in Malaysia for 2020.

In H1 2020, we saw just 115,476 property transactions. This was lower versus H1 2019, 2018 and 2017. With the reopening of the economy and lifting of lockdowns, the H1 2021 saw total transactions of 139,754. This is showing a recovery.

What will happen in the future is anyone’s guess with Omicron starting to flare up but if we look at the property transactions during the lowest point of H1 2020, we need to realise that Malaysia’s property market remains very robust and supported by many factors including demographics and a rapidly changing economy into a higher income economy.

This is why I am optimistic that the numbers for 2022 will show that Covid-19’s effects will lessen and the property market will continue to recover. On a personal note, from March 2020 till December 2021, I did purchase a few properties. Happy viewing and deciding.

— end of my view —

Opportunities will appear when we look for it versus just waiting without any action

If we say we want to buy a property to rent to students, did we drive around some colleges and universities to know the area and available properties better?

If we say we want to buy a property for short-term rental, have we gone to online sites and check out the popular places which everyone loves to rent?

If we say we want to upgrade and needed a bigger sized home, have we looked a little further away versus just the usual mature neighbourhoods and hoping for a miracle?

Opportunities will appear once we start doing something about it. Else, it’s just pure waiting. If that’s the case, stop saying we want to find opportunities.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
Here are the bubble signs which we can see for ourselves

Header Image by
Foundry Co
 from
Pixabay

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Outlook in Iskandar? RTS helps a lot.

Everyone says Singapore is well connected. I am sure they are right because every time I am in Singapore, I have to take the Mass Rapid Transit (MRT). I usually only visit those places which the MRT could reach or walkable from the MRT stations. Over there, UBER, GRAB or even Comfort taxis are still pretty expensive to me when compared to the MRT. So, what about just beside Singapore, in Johor Bahru then? Is it well connected? Let’s not talk about MRT for a minute. Yes, I would definitely say it’s super well connected. This is because it is very jammed in the morning during office hours. Everyone can DRIVE everywhere they want. So, can we make JB more connected to Singapore but without more cars driving into JB? A Rapid Transit System (RTS) can help.

Source: Liew Toh Sen, MABEST Properties

The image above was prepared by
Liew Toh Sen of MABEST Properties
 for MIEA’s Press Conference recently. It shows that JB will be connected to Singapore via the RTS by 2024. Frankly, not that far in the future. It shows that the station within JB would be in Bukit Chagar and it will be connected to the Woodlands North  station and then to the rest of Singapore. It will be jointly operated and 10,000 passengers can be carried every hour in each direction.
Here’s an earlier article about its design and how to make it better.
We can also see that travelling from JB to Singapore will no longer be hours but instead will be on time nearly all the time. Of course for Singaporeans with cars, this will still not be their main choice lah. RTS would serve working people I believe.
His full presentation can be downloaded here.

The RTS would certainly help many Malaysians who are working in Singapore and renting a $800 – S$1,000 rooms currently to move back into JB and perhaps get a property instead of renting. Many developers in JB are building more affordable units too. Assuming the rush office hour is 2 hours, then there are a total of 20,000 people using this service. Just 20% of this 20,000 would mean a potential demand of 4,000 new properties. Not bad at all. I personally rate RTS as the real catalyst for Iskandar instead of just the High Speed Rail or
even the BRT which is more on connectivity efficiency
 within Iskandar. My only wish? Make it happen faster, perhaps instead of 2024. Happy waiting for the day.

written on 9 Jan 2018

Next suggested article:
Travel to SG whether flights or HSR

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Outlook is now negative. It’s NOT because of our finance minister or our BNM

I hope everyone has read the recent outlook downgrade from S&P Global Ratings for Malaysia’s sovereign rating? You missed it? It’s ok, I shall write about it today. The revision was not because of our successful effort (all of us) against COVID-19. It was also not because of the recent
PENJANA which has helped stirred up the market a little.
 It was also not what the Finance Minister said (must not simple say anything which does not help the market) or what Bank Negara Malaysia (BNM)  did to our overnight policy rate (OPR). BNM will have another policy meeting next week and there may be another decision on our OPR.
Read an earlier article here. Lower or Higher both have its own advantages and disadvantages.

Article in thesundaily.my
  S&P Global Ratings Asia-Pacific sovereign & international public finance ratings director & lead analyst, Andrew Wood said that the revision of the outlook to negative was because of the impact of Malaysia’s current political situation. It has affected clarity in terms of policymaking, particularly on the fiscal side of things over the next two to three years.

He said, “There could very well be some significant differences between the Pakatan Harapan (PH) aligned government might take versus a Perikatan Nasional aligned government, especially with regard to revenue-generating measures and those that might replace the zero-rated GST programme, over the next two years, especially when the economy recovers.” Please do read the full report in the article yeah.
Article in thesundaily.my

Before everyone start panicking, please note that our sovereign rating remains under Investment category. It is rated at A- by S&P Global and we maintained the same ‘Investment’ grade rating by all other international rating agencies too. In brief, economically, our country is still doing okay. Could have been better, definitely but at the moment, just enough. Now, with regards to the POLITICAL issue (which is the MAIN thing affecting the outlook revision from stable to negative), I think it’s time all the politicians who said they love Malaysia to really love Malaysia and do something positive about it yeah. You know who lah.

To all other Malaysians, happy travelling within Malaysia while at the same time staying safe by wearing masks and practise social distancing. We can do it together to prevent that never ending ‘second wave’ prediction by many friends on FB.

Please LIKE
kopiandproperty.com FB page
 or
Sign Up for free
 to get daily updates about the property market. Else,
follow me on Twitter here.

Next suggested article:
Yeah, border opening needs to start carefully

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Outlook of a few major property markets in Malaysia by CBRE / WTW

I have a small Whatsapp group of a few colleagues who love to talk about property. One of them has invested only in Klang and he recently asked this question. ‘Anybody buying any property in 2017?’ He said he is still looking but not sure if he should buy or not. He is what I would call ‘cautiously optimistic.’ Haha. Perhaps he can read a report by CBRE / WTW which looked at the Klang Valley, Penang, Johor, Sabah and Sarawak. It should give him a little guidance on what’s the potential like. Bad news may mean great to buy while great news may mean opportunity to buy is shrinking? The full article in
thesundaily is here.

ACCORDING
 to the CBRE / WTW 2017 Real Estate Market Outlook report, the property market dipped further

in Q3 2016. It revealed that transaction activity dropped; agricultural land remained the second most active, after residential properties; the commercial sector fell to third place; followed by development land. City wise, Selangor made it as the most active, followed by Johor. Additionally, the National Property Information Centre (Napic) reported that 57% of residential property transactions in Q3 2016 were priced below RM250,000 while 43% were recorded between RM250,001 and RM1 million.

In the article based on CBRE / WTW 2017 Real Estate Market outlook report, it showed that the property market dipped further in Q3 2016. (This is similar to what UTAR research revealed as well. Article here:
UTAR research: It’s time to start buying your home
)
Selangor remains the most active followed by Johor. For Klang Valley, there are no signs of improvement for 2017. (Oh dear….)  Major reason is because of the many condominiums nearing completion even as the economy slowing down.  In other words, potentially a huge oversupply. A positive note would be the tourist arrivals and there are also interest from foreign investors for our local industrial projects, especially industrial parks.

Penang also showed a downtrend for 2016 when compared to 2015. According to Napic’s data, property transactions dropped across residential,commercial and industrial sectors. A few reasons were mentioned for this slowdown. High loan application rejections, smaller growth in income, rising living costs, negative sentiments after the budget 2017 announcements, depreciating ringgit and other global political occurrences.
(Yes, I think Trump is one of the major reasons here)

Johor’s property market is dependent on Iskandar Malaysia.  The largest contributors from investments into Iskandar would be coming from retail/mixed development, followed by manufacturing, then residential. 2016 was an exciting year for the office sector because there were four office building transactions valued at RM1.24 billion. In fact, rentals for purpose-built offices set a new benchmark in Iskandar Puteri. Overall however, Johor experienced a general slowdown,especially in residential sub-sectors. Thus developers are focusing on offering more affordable products.  (I agree totally. Seriously, not many Johoreans can afford high-end condos or exclusive gated and guarded developments. Developments cannot only depend on foreigners lah)

Sabah’s property market is generally quiet with a slowdown in transaction activities. There were however fewer property launches in 2016 versus 2015. There were a lot more launches of new mid-market segment condominiums. (Yes, I bought one of it last year)

I love Kuching. One day in future, I hope to own a small place there because I think Kuching is developing. Just like all other property markets, Sarawak also saw fewer launches. A positive note is that properties in prime and attractive locations were reported to be still in demand despite the softer market.  There is also a potential for more affordable housing developments because the Sarawak Planning Authority has approved the development density there from eight to 10 units for landed housing and 24 to 30 units for stratified housing. Bintulu and Mukah will spearhead growth in Sarawak due to the implementation of mega projects.  Happy reading and following.

written on 16 Feb 2017

Next suggested article:
Fewer launches, better deals or the other way around?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Over 1,500 sq ft and below RM500k? Got ah…

If we want a HUGE place but we want a SMALLer price, is Selangor still a consideration? Sorry yeah, stop thinking of the usual. These are some of the potential places. Rawang, Sungai Buloh, Seri Kembangan, Kajang, Semenyih, Puchong Perdana and well a few more. Just go to
 iproperty.com.my
 and key in all your requirements, these are the areas with properties which are over 1,500 sq ft and RM500k. We are talking about just the first page of the search result. When we go to
propertyguru.com.my
 the listings which met 1,500 sq ft and around RM500k are for the following areas. Klang, Rawang, Bangi, Cyberjaya, Kajang, Sepang, Semenyih and SUngai Buloh. This meant that a combination of these two property sites would reveal nothing less than 10 different areas for all of us. I know, for those who are richer, the choices available is far wider. Do work harder and earn more to upgrade in the near future yeah, if you think those areas are the ones most appealing to you.

In
propwall’s report
 just days ago, these are the top 10 most searched areas in Q2 2017. Interesting results actually. From number 10 all the way to Number 1, the areas are as follows: Shah Alam, Mont Kiara, Bangsar, Taman Desa, Cheras South, Sentul, Ara Damansara, Bukit Jalil, Old Klang Road and Damansara Perdana. None of these areas are within the search results we obtained from propertyguru and iproperty based on minimum 1,500 sq ft and RM500k or lower. Now we get the idea why properties which are loved by many continue to inch upwards in prices. Do take a look at
brickz.my.
 Just enter the actual development name to find out what are some of the latest transacted prices. They are actual prices and not the prices offered by the seller or the prices offered by the seller. It’s safe to note that more searches could also be due to the fact that there are a lot more units on offer, both within the secondary market or new launches. For a fully mature area or those with small pockets of land, there are definitely searches but the number of searches are not high enough compared to the top 10 searched areas.

Casual reminder. Our searches should always be guided by the
WHY reasons and not the WHERE reason
.

As long as that particular area fulfills all our WHY, it’s time to get one and start paying for it. Starting early is always better than later unless we started on the wrong direction. I was speaking to a group of real estate negotiators two weeks ago and I asked them if 2017 is the best time to buy. There are only 3 more months left. A few of them nodded their heads and I replied, “You are wrong. The best time to buy was 20 years ago.” All of us laughed. Buy a copy of Ho Chin Soon’s books if you are new. Look at the trend for the prices by cities. Go online and search for
property price trends
 for the usual property markets that you know. Look for those years when we were hit by financial crisis. Understanding how the markets should behave in the future helps to guide us in our decisions. Oh yeah, if you intend to just rent, that is also a viable strategy. Just google for ‘why renting is better than buying.’ Lots of reasons why. Happy believing.

written on 19 Sept 2017

Next suggested article:

Property market is slowing. Agree. However there are today MORE interested people.

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Over 20,000 units (properties)with attractive discounts in March 2019.

To buy and wait or to wait and buy? For those who have listened to my talk(s), the answer I gave may no longer be true. Sometimes the answer may not be so direct. Maybe it could be to wait first before buying as per
Reported in Edgeprop.my
 Housing and Local Government (KPKT) Minister Zuraida Kamaruddin announced that the first Home Ownership Expo will showcase over 20,000 units of overhang properties worth RM22.5 billion in March 2019. It will come with attractive discounts or packages for home buyers. This expo will be participated by 180developers nationwide and prospective buyers could expect discounts of AT LEAST 10 percent for the properties. Tentatively, the three-day Home Ownership Expo will be held in March 1 at the Kuala Lumpur Convention Centre.

She added, “Among these properties, 24% are priced below RM400,000 and below. Through this expo, we hope developers could clear some of their overhang properties.” She also urged the banking sector to support the expo by providing end-financing to eligible buyers. The expo will aim at clearing the backlog of unsold residential properties especially those priced between RM300,000 – RM500,000. It is part of the National Home Ownership Campaign. Earlier reports from the National Property Information Centre (Napic) showed that the number of unsold houses in the country reached a record high of 30,115 units in 3Q2018, valued at RM19.54 billion. This is a 48.35% increase from 20,304 units in 3Q2017.

Perhaps it’s okay since many people are saying that they are now extremely busy with Chinese New Year (CNY) preparations and will not have much time in viewing and deciding anyway. So, having an expo 2 weeks after CNY may be a good idea. Yes, I will definitely drop by and write about it. Hopefully someone from KPKT can also send me more information so that I can help them tell more people too. For first-time home buyers, I seriously believe a property is a must-have investment. In fact someone said that it’s best to buy a house first before a car because if we buy a car first, the home loan application may be harder to be approved. Buy a house first and the car loan application still has a higher chance of being approved. Happy enjoying one final weekend of crazy preparing and buying yeah. For non-Chinese, it’s going to be a good holiday ahead.

written on 28 Jan 2019

Next suggested article:
6 things we could do before we retire.

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Over 600,000 units on offer in Malaysia’s largest home expo @ PWTC

Still without a property to your name? Getting one may not be a dream. However we must take some actions to find out more. It does not need to be just one affordable housing programme. There are lots to choose from. It’s the time to drop by one expo with over 600,000 units on offer.

Message from PR1MA.

50,000 units from KPKT. 267,000 units from PR1MA. 99,000 units from SPNB. 51,000 from RUMAWIP. 141,000 from PPA1M and MANY MORE. In fact visiting the event may be a lucky dar for some people. From a free PR1MA apartment to a new MYVi and lots of other electrical appliances and items, many people may return home with gift(s). Terms & Conditions apply okay. That’s not all. Famous artistes will be performing too. They include Tomok, Dato’ Hattan, ELLA and Marsha.

Details for the event:

24 March – 1st April 2018 @ PWTC.  Time is 10am – 10pm.

Next suggested article:
Financing options for first-time home buyers?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Media Release –
Over 85% Take-Up for Sime Darby Property’s Elmina Green Three Within
 15 Minutes

ARA DAMANSARA, 23 JUNE 2020 –
Demand for property in the City of Elmina continues to rise as 187 units of the first two phases of Elmina Green Three homes were taken up within minutes of their preview.

Elmina Green Three is the latest phase of freehold two-storey houses in the Sime Darby Property’s award-winning township in Shah Alam. It comprises 412 units of 20×80 extended linked homes with built-up areas from 2,262 sq ft to 2,983 sq ft.

91 units of Phase 1 homes were open for pre-launch sale during an online preview on 6 June with 100% take-up rate within 15 minutes. Phase 2 preview on 20 June saw a 76% take-up rate in less than half hour. The units are priced from RM709,999 and RM714,499, respectively after rebates and before Bumiputra discount.

Both previews drew great interest from potential homeowners from not just within Malaysia, but also Hong Kong, Singapore, Brunei, and the United Kingdom (UK).

Muhammad Naim Mahmud, who resides in the UK, said that he is familiar with the quality of Sime Darby Property’s products, hence returning as a satisfied buyer.

After reading various online reviews on Elmina Green Three, 49-year-old Naim said the product’s layout and special fittings like water heater, water filter and grilles, drew his interest. He believes these are significant advantages to homebuyers as they do not have to install the features themselves.

Petaling Jaya resident Matthew Anthony sees Elmina Green Three as a long-term family home. The 34-year-old IT security analyst was attracted to the value for money product which offers additional fittings, rebates and reasonable interest rates during this period.

Elmina Green Three comes with an improved interior finishing. Potential homeowners will have a hassle-free move in experience with FittingsPlus+ features such as instant water heaters, outdoor water filter, air conditioning unit points and piping (without indoor unit), booster pump, and built-in MS Grilles. These features offer peace of mind while maintaining the signature Elmina Green façade.

Sime Darby Property Chief Operating Officer – Township Development Dato’ Wan Hashimi Albakri said the response to Elmina Green Three was overwhelming.

“We were astounded that it took about 15 minutes for all Phase 1 units to be reserved. The Phase 2 public preview last weekend also drew good results with 96 out of 127 units booked.”

“The reception towards Elmina Green Three has given us a sense of comfort in knowing that despite the current period of uncertainty, people are still interested in purchasing a property. The success of our previews demonstrates that with the right marketing strategy and better products, customers will continue to show support,” he said.

Prior to the launch of Elmina Green Three, there was an increase in the company’s website traffic, with enquiries and bookings flooding in on a steady basis for available Sime Darby Property projects. Wan Hashimi believes that the consistent strong brand of City of Elmina is able to attract new prospects and returning customers who are looking for a modern wellness living.

He said that the use of an online portal for bookings was a digital transformation initiative aimed to revolutionise the company’s property buying process, adding that future Sime Darby Property launches will also utilise and benefit from the system.

— end of media release —

Please LIKE
kopiandproperty.com FB page
 or
Sign Up for free
 to get daily updates about the property market. Else,
follow me on Twitter here.

Next suggested article:
City of Elmina driving revenues for Sime Darby

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Over-leveraged? Foundation’s wobbly?

Malaysians used to save a lot. I say used to because even for Gen-X like me, I am also struggling to save and stop myself from buying 7 new long sleeve shirts this 2018 Chinese New Year. Let me explain. From 73kg, just a year ago, I am back to 80kg today. It meant that all my M-sized long sleeve shirts I have could no longer be worn and L-sized ones would make me look better. I do have L-sized ones but there were from 2016. I can’t be wearing those every day. At least 7 new long sleeve shirts meant that I have some extra ones to mix and match for 2018. All seven was bought at discounts yeah and the total prices for these 7 is lower than RM500. I can wear them for years which meant value for money. Next year, I will go back to just 2 like 2016, 2015. High savings rate would form a natural financial defence for countries. It seems that this defence line is getting weaker by the year.

My parents, even though both were civil servants could save a lot! If they did not, it would have been hard for me to have graduated from Bristol, UK. What about the current generation? They are called the Millenials. I think they can also be known as the ‘spending’ generation because they are used to spending. I tried but could not find the latest savings rate for Malaysians. If anyone has this info, please share yeah. However, I found out that this is true even for China and that this will bean Achilles’s heel in the future if not remedied.
Here’s that full article in TheStar.

It says that for years, economists and policymakers have hailed the propensity of Chinese to save. This meant that China has low household debts and this is main reason why financial crash will not happen in China. Over the past two weeks however, the banking regulators sound especially concerned because some latest data showed that Chinese households borrowed 910 billion renminbi ($143 billion) in January — nearly a third of all RMB-denominated bank loans extended that month. Between January and October last year, according to recent data from Southwestern University of Finance and Economics, Chinese household leverage rose more than eight percentage points, from 44.8 percent to 53.2 percent of GDP — a record increase. Before 2009, the household debt levels were only at around 18 percent of GDP for five years. Besides that, younger, urban Chinese are proving more willing to bring their consumption forward to today rather than pushing it off to the future as their parents did. (VERY TRUE). Of course, one other reason is because of the skyrocketing home prices. In conclusion, it says that once households start borrowing and spending more, the pool of cash to finance investment dries up. This will cause banks to lose their most potent firefighting tool: a stable funding base.
The full article by Bloomberg in TheStar here.

Learnt anything? Yea, struggle as we may, savings would help us in future. Assuming prices suddenly drop due to a correction, only those with lots of savings would be able to take immediate action. If we need to borrow, it’s already too late. Secondly, we must watch the household debts and look at it versus the assets. It should

be much smaller than asset for the market to be still safe.

Oh yeah, please do not overstretch because when the Bank Negara Malaysia felt that people are simply borrowing too much, they will increase the OvernightPolicy Rate further and this will affect weaker borrowers. Stay on the safe side when we save more. Happy saving.

Please LIKE
kopiandproperty.com FB page
 or
Sign Up for free
 to get daily updates about the property market.

written on 20 Feb 2018

Next suggested article:
If savings is the base of everything, we need a strong one

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Over RM1 million for a garage of 146 sq ft. Nice and dangerous.

Do we know about that international property market loved by many investors from throughout the world? Especially the Chinese from China and Malaysians? Yeah, it’s London. It’s also my first choice if my kids want to study overseas. In a recent media report, it was highlighted that one GARAGE in the upmarket London district of Chelsea will be auctioned for £180,000 (RM1.08 million) or more. the size for this garage is ONLY 146 sq ft. Savills estate agents said that this type of garage car park space is “rarely available.” What a statement for such a small space and expensive price tag. Oh yeah, the final price may be even higher.

A bit more details on the garage. It provides for a secure off street parking and these garages are becoming increasingly rare in central London. In fact even some extremely high value properties may lack off street parking according to Chris Coleman, head of Savills auctions. Oh yeah, for this price, the buyer can also get an average house in England and Wales, which is £188,270, according to the Land Registry House Price Index. In London however, the average has hit £514,097 in December 2015. This showed a huge increase of 12.4 percent and continue to show how London prices are further away from elsewhere.

Halifax housing economist, Martin Ellis, said that these prices increases within London and elsewhere would continue to persist and this mean increasing affordability with prices continue increase faster than  wage growth. This should help to slow down the demand for housing and may allow prices to ease. Earlier article on the ever ‘crazy’ prices in Greater London:
Greater London, severely unaffordable. Start thinking Greater KL

Sometimes, when we read these news, we should really think again about the potential possibilities here at home. Both the potential gains and losses, not just one side. Seriously, we must be wary if the Malaysian property market reach such levels which hopefully should have a soft landing instead of a hard one. Where affordability is concerned, let’s note that there are already lots of properties within Greater KL which are already way above the average prices of homes and the significance that MRT stations would be bringing beginning 2017. Read here:
MRT stations will change the area dynamics

Buy based on affordability even if many famous property gurus are telling us that 2016 is going to be a bargain year for properties. Happy investing.

written on 11 Feb 2016

Next suggested article:
London property market is now risky?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Getting worse?  Overhang growing by 44%. (14,792 units!)

When overhang grows it is not a good sign. If market is healthy the overhang would continue to reduce and not keep going up.  According to National Property Information Centre (Napic) in an article in
Theedgeproperty
 today, value of transactions for 2016 has dropped 3 percent to RM145.1 billion. It was RM149.9 billion a year ago. The transactions by volume has dropped 11.5 percent to just 320,000 transactions for the whole of 2016 from 362,105 transactions in 2015. The overhang units has increased. The residential overhang numbers grew to 14,792 units worth RM8.56 billion. This is an increase of 44 percent in volume versus 2015 and 70.7 percent in value to RM8.56 billion.
What were the numbers for Q1 – Q3 2016? Here:
Property transactions and price, both dropping.(Jan – Sept 2016)

Total launchings decreased to just 53,000 units compared to 58,000 units in 2015. (I think this is good and I would be more worried if the launchings showed an increasing trend but I wonder if these numbers already include
PR1MA
, Rumah Selangorku and
RUMAWIP
. All three has been launching a lot of units as per many news reports)

Over 65 percent of residential transactions were for property priced from RM300,000 and below. (Demand is still strong. I do not think this is a sector for speculators) Deputy Finance Minister 1 Datuk Othman Aziz said, “As we know, due to the challenging and uncertain state of the global economy, the Malaysian economy has also recorded a slower gross domestic product (GDP) growth at 4.2% in 2016 as opposed to 5% and 6% in 2015 and 2014, respectively. Due to the sluggish growth, no sector is spared including the real estate sector.” (As I have written before, when the world slows, everyone will slow but our current GDP growth is definitely still
healthy and we are not about to go bankrupt
)  This is what the International Monetary Run
(IMF) said recently about Malaysia.

Nope, I also do not think it’s possible to ‘force’ IMF to say something positive about us)   House Price Index meanwhile showed a 5.5 percent growth which was lower than the 7.2 percent in 2015 and 8 percent in 2014. (Many would still say that this is still high because the official inflation rate is still lower than this rate of increase.)

Next statement can be a concern or an opportunity. Valuation and Property Services Department (JPPH) director general Dr Rahah Ismail expects the property market
“to remain soft for the next few years”.
 Let’s
just say I prefer to look at it as an opportunity. As a working professional, it’s not possible for me to save downpayment within a few months.  The longer the slowdown, the more downpayment I can save which is better too. Else, I could buy nothing. She added, “As we move towards a maturing economy, there has been a shift to more transactions being carried out in the secondary market at 80% and 20% in the primary market as opposed to previously at
60% (the secondary market) and 40% (primary market).

 Seriously, I agree and I do think secondary market, especially those where there are still lots of newly completed empty units should be the first to be cleared by the market. Hopefully my next unit would be a secondary. Can slowly view lah.

written on 18 April 2017

Next suggested article:
Most wealthy Malaysians – the top 40

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overhang Properties in Malaysia. Going up or coming down?

No, your decision to buy or not to buy is not tied to overhang properties

A few years ago, a friend asked me whether it’s still a good time to buy a property. I asked him why he asked such a question. He said the overhang is getting higher and higher. I asked him if he’s interested in any of the overhang properties. By the way, this is how overhang properties are defined.

NAPIC: Napic defines ‘overhang’ as
residential units that have received certificates of completion and compliance but remain unsold for more than nine months after launch
.

In other words, somehow the property was not sold during soft-launch, not sold during actual launch and not sold even after keys were handed over for past 9 months. Ever wondered why? There could be many reasons but one reason may be price versus attractiveness. Truth is, if the property is attracting lost of interest, price would be high. If it did not and the price is not lowered then it will just remain unsold.

So, if we are not interested with the overhang properties, why do we allow it to decide for us whether to buy or not to buy? However, if we are interested in these overhang property, it’s really possible to go to the developer and get a good deal. After all, the developer is definitely wanting to sell versus to hold.

Note: Some developers can hold for a very long time! They have good cash flows from other developments or even other businesses.

What’s the latest situation on overhang properties?

Let’s look at the trend below from NAPIC. It was 32k in 2018, dropped to 30k in 2019 (which is supposed to be a good sign) and it dropped even further to just 29k in 2020 but everyone knows what happened in 2020 yeah. Covid-19 came. Thus the overhang increased to 36k in 2021. Guess what, we are now back on track and the overhang properties are the lowest in the past 5 years yeah. It’s now at 27,746 units. So, is the decision to buy now? Haha. Reminder. Overhang number should not be your main reason whether to buy or not to buy.

If you hated it last year, you will still hate it this year

Let’s not even talk about property. If there’s a car model you hated last year, what’s the chance you will suddenly fall in love with it this year? Well… unless of course the price has now become very attractive, right? For most, they will still hate it. This is why the overhang property will take some time to clear. However, properties which are at a great location, properties with superb township development and many other properties with specific purpose, say for medical tourism etc will not face much problems in selling and certainly will not add to the overhang numbers.

Happy deciding.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
It’s not an investment if we know nothing about it

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


When overhang property shows a rising trend

Unsold property is defined as overhang after keys are handed over and they remain unsold for 9 months. So, total unsold property is not equal to total overhang property. However, many may think they are the same and that’s really an issue. Furthermore many people love bad news, thus media just wanted to satisfy what they wanted to read.

Unsold property may also include homes which are in progress, homes which has yet to start construction but has obtained the Advertising Permit and Developer’s License (APDL) and homes which has just been completed but is still unsold and is still owned the developer. Actually, I personally know some developers continue to hold a lot of units which they have completed and yet still unsold. Yes, some of these units are already classified as overhang property too.

Below is a very clear image showing the overhang property over the years. From 2008 until 2020. What’s very clear from the image is that the overhang property used to comprise of just homes which are RM500,000 and below. Then, the RM500,000 to RM1 million homes within this overhang property started to increase and soon, it reached 11.6% in 2014 and this has continued to rise until 30.5% in Q2 2020.

Image source: edgeprop.my

The chart comes from an article by
Dr. Foo Chee Hung in edgeprop.my
  It’s a very comprehensive article and have a lot more details for our reference. Do read it yeah. It’s here at an article by
Dr. Foo Chee Hung in edgeprop.my

Panic starts now?

Before everyone start to panic, let me tell you about 2008. In 2008, there really are not that many units which are above RM500,000.  However, homes priced at RM500,000 or higher started to become popular at the time. When some developers were able to sell these RM500,000 or higher priced units, more developers jumped in and the units being offered suddenly increased.

This is also the reason why the number of these properties priced above RM500,000 continued to increase. Today, RM500,000 home is quite common and I dare say that even homes which are in the suburbs are also around this price today. Those within planned townships are usually priced higher than RM500,000.

As for the overhang property, let’s be objective yeah.

Read this recent article to understand too:
How many of us are looking to buy overhang property in 2021?
  Staying focus on what we need. If it’s a home for our growing family, please see beyond the price and look into the size too. If it’s to rent out to students, then it’s important that there is a private university nearby. A local university may not provide the same kind of potential tenants. It does not matter whether the property is from the overhang market, the primary market, the secondary market or even the auction market. As they say, any property which meets our needs and expectations is a good property. Haha. “They” here is Charles Tan lah…

All the best in your property in vestment journey.

Love news like this and more?
Sign up for daily investment news updates.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Sign up for KopiWeekly. (only once per week of property, finance, investment news and more)

Next suggested article:
Property price on a downtrend, right?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Alarming. Overhang property is a worry, right?

Someone posted some comments about overhang numbers in Malaysia. Overhang property is a worry, right?

Overhang property looks worrying?

Perhaps for many first-timers the overhang property seems scary. So, will the overhang properties crash the property market? I answer this as an owner. I have no idea. Without unforeseen circumstances, no. There’s no guarantee that the property market will not suddenly collapse if the economy suddenly crashes okay.
This is the latest about the economic situation in Malaysia and ASEAN. (click to read)

However, if the economy is doing just fine and unemployment numbers kept
going down, (latest article here on unemployment)
 then the overhang numbers should continue to reduce in numbers slowly. UNLESS of course most of these overhang properties were due to
mismatch in demand (what people wanted / needed / could afford) versus supply (what was actually built).
 If this is the case, then these overhang numbers may just continue to appear quarter after quarter.

From the Perspective of Demand vs Supply

To put things into perspective, the latest 1H 2020, total transactions for residential properties alone is
75,000. Read here if you like to know details.
 In other words, if developers stopped building and people only focused on buying the overhang units, we would have completely wiped the overhang property clean within less than a year. So, is demand really so small when compared to the overhang?

The answer is a simple one. Demand is by far higher than supply and there are reasons for the overhang and not just simply due to oversupply / overbuilt or whatever. Please do refer to the image below for the total overhang.

As an owner? Depends on what you own

If you are an owner of a property which is wanted by many people, this overhang issue will not affect you. When you want to sell, you will still find lots of people wanting to buy.  If you are an owner to an overpriced property, whether or not there’s overhang, you will still not be able to sell at a price close to what you paid.

If you are an owner who just want to stay in your current property, happy staying because nothing is happening to you just because the market has overhang of property. So, overhang property is a worry only to some people who would still worry even without overhang property.

As a buyer? Depends on what you want to buy

If you want to buy into the area where there’s no overhang and everyone wants to buy there, sorry yeah, most likely you will not get much discount.  If you  want to buy into the overhang property because you like it, then you are in luck because there’s HOC and developer is more than willing to sell it to you. They need to clear current stocks to launch future projects.

If you have no intention to buy any property then you will not gain anything or lose anything. This is why it’s super important to understand what is our intention for this current market condition. Overhang property is a worry? Better focus on identifying the right investments because there will be opportunities in a slow market. When the market is booming, it will become riskier because everything is fully valued and sometimes over-valued. Happy understanding.

Love to be updated of investment news?
Sign up for KopiWeekly. (once per week for property, finance, investment news and more)

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
Oversupply = unsold, true. Unsold is not necessary overhang yeah

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overhang properties up means property prices down?

Actually, how many is our overhang property units?

Let’s look at the Total Overhang Units to have an idea how many residential units are actually classified as overhang. Overhang property unit is defined as
units that have received their Certificate of Completion and Compliance but remain unsold for more than nine months after launch
.

Why do we have overhang properties?

There could be lots of reasons. First and foremost is that people did not want to buy it. They may not like the location, they may not like the price, they may not like the design, they may not like the developer and maybe they just do not think property investment is a clever thing to do. Perhaps they prefer to invest in something else or even just buy more materials goods and make themselves happy.

Regardless of the reason(s), what’s certain is that unsold properties are usually unwanted…

Why do property transactions happen?

Just within H1 2022, we have 118,000 residential property transactions. (by the way, the unsold properties are way smaller than this total transactions). Why does property transaction happen? Well, people may want to buy their first property, they may want to upgrade, they are thinking of staying closer to their in-laws, they bought a new car and needed a bigger house to park the car and more. In fact it may also be because they read kopiandproperty.com and realised property investment is compulsory!

Regardless of the reason(s), what’s certain is that property transactions happen because people wanted it and could afford to buy it.

Would prices go up if the property is under overhang?

Well, if the property developer could not sell the property at RM500,000 until it becomes classified as overhang then what is the chance that the developer can sell it by selling at a higher price? By the way, asking / selling prices can go up or come down but… without a transaction, then nothing happens to the property price yeah. It’s like we like to sell at RM500,000 and another wants to sell at RM400,000 and another wants to sell at RM600,000, the final price recorded officially into the national statistics would be the one that got transacted and not the ones which did not get transacted,

So, you can say that technically, property prices do not move up for unsold properties since there it was not transacted.

Why do property prices move up for property transactions?

I often ask this question when I am speaking in some public engagements.

“If you bought a property at RM500,000 what is the chance that you would sell the property for a lower price?”

Everyone in the hall would smile and answer a firm NO WAY.

I would respond the same if you ask me.

Now, let’s go to the potential buyer side then. When you love that particular property, would you be willing to pay a slightly higher price since the seller is not going to sell you lower than the price he / she bought? the answer is usually a Yes. Of course, some would argue that what if there’s a crisis? Surely the seller is willing to take a lower price? Well, in a crisis, the number of AVAILABLE and QUALIFIED buyers also reduced tremendously too…

In fact, even getting approval for the home loan may become harder as banks need to be even more diligent in their checking before lending to the potential buyer. So, total transactions would go down and in fact most sellers who could not hold would have sold but if majority of sellers are still selling at a price they like albeit lower, total prices would still show an increase.

Surely there are times when property prices would drop? (overhang is not the main reason)

Definitely. It has been shown throughout history that during the years of financial crisis, property prices do drop. We just need to remember what happened to the property prices after the financial crisis is over and then compare the prices 20 years ago versus 10 years ago and 10 years ago versus today. Then, read a little about inflation and 10 years later, you may want to compare to the prices today.

By the way, prices higher does NOT mean it’s higher value to owner

Surely everyone would have heard of RM50 10 years ago is more than RM50 today and RM50 10 years later will be lesser than RM50 today. This is the same as property price. RM500,000 today may just be equivalent to RM300,000 10 years ago, maybe. RM800,000 10 years later may just be RM500,000 today.

My question is a simple one. Could you save RM200,000 during that 10 years that property prices rose from RM300,000 to RM500,000? If you could, then do not buy property lah. Save the time, effort. Just save up the money. It’s the same question to those who say RM1,000,000 in the future is just like RM500,000 today. Could you save RM500,000 from now till that time when RM1,000,000 value drops to RM500,000? If you could, then forget property investment yeah.

Look at the property and look at the benefits. Not look at the overhang. It’s the wrong perspective.

All the best and take care.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
JRK Convena, let’s look at the 6Cs and decide

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overhang property. Too high and thus causing property price to drop?

Overhang property trend

The image below is showing actual overhang status right below. Property overhang was 25,455 units way back in 2006 before it went down every year until it was only 10,285 units in 2015. It has since gone up to highest point in 2018 which was 32,313 units but since 2019, 2020 has been on a very slow downtrend. However, the number remains extremely high. Some say, overhang should cause property prices to drop. Right?

With such a high number of overhang units, why is the price not coming down? Let us ask the owners, shall we? Property owners including me lah. I do want to sell one or two of my properties at the moment.

Image Source: iproperty.com

#1 question. If you bought at RM400,000 would you want to sell at RM300,000?

If I am the owner being asked this question, I do think the one who asked the question was just asking for fun. How many of us would want to sell something at a lower price if we bought it at higher price? With cars, we have to sell at a lower price because of depreciation but what about property?  Just need to ask the earlier buyers of all the mature townships of today if they could sell you their properties at a price they bought long time ago when no one wanted to buy…

#2 question. If you do not really need the money, would you sell at a lower price?

If I do not really needed the money, I will not be willing to sell at a lower price. I will hold on for as long as possible. This is the reason why owners do not usually sell at a lower price because it would make them feel bad. No one wants to feel bad in any decision they do.

Of course, If it’s for emergency, then I would sell at any price… If this is happening, then it happens at ALL TIME, not just during the time when there’s property overhang yeah.

If I needed the money for renovation for my new home which will happen one year later, then I may sell when the price is right and as my renovation date nears, then I may sell at a lower price too. By the way, if I needed the money for renovation, the question of selling during overhang or no overhang is also not applicable. I just needed the money.

#3 question. If I am not under financial pressure and I still want to sell, then how?

If I do not have any financial pressure but I just want to sell because I just do not want to continue holding the property and prefers cash, then what would be the price I may sell?  I will sell at … extra 1%. Haha. Okay, we assume the market price / transacted prices to be RM500,000 currently.

If I am selling that RM500,000 home, I will be willing to sell at RM505,000 (1% extra just to make me feel better) even if I spent RM100,000 for my renovation. The buyer to this RM505,000 property would be happy because he can buy a fully renovated home at just RM505,000 versus a market price of RM500,000 for a partially renovated one.

Unless of course the buyer was lucky and found a financially distressed seller. Else, my RM505,000 unit is a very good deal as he can easily save the renovation fee with just minor touch-ups. RM505,000 is still showing a 1% higher in property price when it comes to the statistics.

#4 question. Then what happens if there is a financial crisis?

During a financial crisis, we would suddenly have a big group of sellers who needs money. When we have a sudden huge supply, then the pressure will cause prices to drop and it’s usually fast too. So, when there is a financial crisis, property prices being transacted always show a downtrend. At that time, cash is king. Buyers are usually the ones with bargaining powers.

For example, during the 1998 ASEAN financial crisis, property prices in Malaysia dropped by double digits. if I remember correctly, it was 16%. Image below from ceicdata.com

https://www.ceicdata.com/en/indicator/malaysia/real-residential-property-price-index-growth

We just need to be aware that usually, when financial crisis is over, property prices will start to rise again because now, the ones who could hold is more than the ones who are desperate. The desperate ones would have sold their properties earlier, during the financial crisis period. If they could hold on during the financial crisis period, they will now not be willing to sell lower since financial crisis is over.

#5 question. What’s the reason there’s an overhang in the first place?

If the new property development does not sell well for whatever reasons, it will soon become an overhang property. Overhang property are properties which have received Certificate of Completion and Compliance (CCC) but remained unsold for more than 9 months.

Now, the next question is, when it did not sell last year, can it sell well this year? If it is to sell well this year, then prices would have to be adjusted. How about 10% lower? No one has any interest if is just 10% lower for properties which people did not want previously.

How about 20% lower? Maybe a small number of potential buyers who think it’s already a good deal.

What about 30% lower or higher than 30%? Haha. If it’s 30% or higher, then we need to think about why they can actually discount 30% from the initial price in the first place… Unless of course the units are all the very old units, then still possible that the developer wants to have cash versus keeping the property.

Conclusion?

Overhang does not cause prices to drop. Overpriced property will cause prices to drop. Financial crisis will cause prices to drop. A badly designed property using sub-quality materials will soon cause prices to drop. In fact, even financially stressed sellers will cause property price to drop. We can see there are many reasons which will cause property prices to drop. Happy evaluating.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
Bankruptcy in Malaysia during the MCO period. High or low?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


How many of us are looking to buy overhang property in 2021?

Overhang property would be properties which have been completed and remain unsold for 9 months. If the property is under construction, it is not part of overhang. If they property has just been completed, it is also not part of the overhang. So, it is definitely possible to say that any unsold property which has been completed may soon become overhang statistics. When it has remained unsold for 9 months. So, how bad is the overhang property in Malaysia? There was a recent infographics from thestar.com.my as below.

Total for overhang properties? (residential and commercial)

Total overhang units would be 65,552 and this is for both residential and commercial units. If we look at just residential and serviced apartments, then actual number is 55,195 units. This is considered as a huge number without any doubt. My question is, how many readers of kopiandproperty.com are now in progress of buying one of these overhang units? By the way, these overhang units usually comes with very good offers because developers have completed them and if they could sell, they would definitely do so. Question is, why is it unsold?

Could the market bought the whole overhang if they wanted to?

In H1 2020 (6 months of which 2 months were under MCO…), total transactions ONLY for residential units alone is over 75,000 units. Take a look at the image below for the actual number. Just add the numbers for Q1 and Q2. What this number tells us is that IF the whole market prefers to buy the overhang versus new launches or from the secondary market, then the 55,195 units of overhang residential units is NOT enough to even satisfy the buyers for 2 quarters.

There are many reasons why they prefer other non-overhang units or even buying from the secondary market but suffice to say, the overhang number is not the issue. It is the attractiveness of these overhang units to the buyers. In other words, why are we so fixated on the overhang number if they are just not ‘good enough’ for all the buyers in 2020?

This is what Rahim & Co International said

Article in themalaysianreserve.com
 Rahim and Co International Research director Sulaiman Saheh said this about the overhang property.

“While this may be due to the pandemic’s effect, the persisting overhang numbers is evident of a problem that is yet to be tackled effectively.”

“However, properties that are located in urban areas are still receiving strong demand and are likely to alleviate this problem if prices are adjusted.”

“Overall, we believe that the number of unsold properties is unlikely to decline significantly this year. It may be stable but the numbers are expected to remain high.”  Do read the full article here:
Article in themalaysianreserve.com

Conclusion

By the way, please remember that IF overhang number is very small, it may also meant that the market may be buying everything that was launched as well. This is also not as good sign to have as it may be pointing towards speculative property purchase and in the long run, should some unforeseen circumstances happen, guess what will happen to the property market and the property price? I will be worried if that should happen. You should too.

Stay focused on
WHY we wanted to buy in the first place.
The overhang number is really just a distraction. If we bought the wrong property, no one could save us. Happy understanding.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Love to be updated on all investment news?
Sign up for KopiWeekly. (only once per week of property, finance, investment news and more)

Next suggested article:
My property as a gift to my daughter. No stamp duty

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


31,948 overhang units as at Sept 30. (not Malaysia)

The state of property overhang in Malaysia? Too many articles and non-stop every other month and every quarter and every half-yearly too. Transaction numbers? Actually, it’s positive growth versus the year before BUT the newly completed units are still higher versus sold units yeah. Latest transactions here:
Property transactions still going up
  We are not doing that awesome, I know. Perhaps we also get an update on our neighbour down south.

Article in themalaysianreserve.com
   According to the Urban Redevelopment Authority, the current overhang in Singapore is 31,948 units as at Sept 30. Sales are averaging 2,500 per quarter this year and using the same rate, it will take almost four years to clear the backlog according to Christine Li, head of research for Singapore and South-East Asia at Cushman & Wakefield plc.

Christine Sun, head of research at OrangeTee & Tie Pte Ltd said that sales may fall 5-10 percent next year though property prices could still rise between 1-3 percent. This is on assumption that the economy does not deteriorate excessively next year. More of the overhang units are in outlying suburban areas versus areas closer to downtown because the nearer to downtown areas have better  access to top schools, shopping streets and the central business district are drawcards.

Developers are hoping that the government will wind back hefty stamp duties for foreign buyers as well as more time to sell the projects. Without more time, the developers will have to pay a levy of 25 percent. This levy is applicable to developers who were unable to fully sell all units within 5 years of purchasing the land. Please refer to the
Article in themalaysianreserve.com

As I have explained before, there is little need to forecast what will happen to the property market of Malaysia. Advanced property markets will actually show the way. First is that overhang does not happen just in Malaysia but elsewhere and the major reason is due to the economy causing the demand to slow down.

Prices meanwhile will stay the same or even rising slowly BECAUSE no buyers are willing to sell at a lower price than they bought… Unless of course the economy deteriorates to such a negative situation that people start losing their jobs and thus the pressure to sell fast mounts. This is why it’s best to identify the property we like to buy and offer a price we feel comfortable versus waiting for the worst case scenario and everyone sells at the same time. At that time, should we buy or wait? Hmm…  Lots of learnings from advanced property markets yeah.

Please LIKE
kopiandproperty.com FB page
 or
Sign Up for free
 to get daily updates about the property market. Else,
follow me on Twitter here.

Next suggested article:
Danger is when property prices are below mortgage

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overhang units and unsold units. Are they “same same?”

Overhang units and unsold units, same same?

Overhang for residential units

After residential units have obtained their Certificate of Completion and Compliance (CCC) and Temporary Certificate of Fitness for Occupation (CFO) and they are STILL unsold, they are still classified as unsold units.  They will move into the overhang units category after 9 months of the CCC an CFO. So, briefly, overhang residential units is really units which did not receive enough demand from the people!
Here’s an earlier article about overhang which is good reading.

Unsold residential property?

As explained slightly above, unsold residential property may NOT be overhang property. Unsold properties can be residential units with building plan approval that has not yet begin construction and it remains unsold for 9 months after official launch. Note that it is official launch and not some other terms like ‘soft-launch’ or ‘vip launch’ or ‘promo launch’ or whatever.

Official Launch is usually mentioned when it’s an Official Launch

There will always be the term “Officially Launched” in the press release of property developers. These properties, if unsold will be defined as unsold NOT constructed property. So, remember, these can also be included into the UNSOLD category and that’s precisely why unsold and overhang units should be clearly distinguished and many of these writers for media SHOULD KNOW versus writing as if both are the same.

Then when they start construction…

Meanwhile, as soon as the construction begins, then these unsold units will be moved to under-construction property category is it remains unsold more than nine months. Again, unsold and overhang even for this category is very different from one another. Please do write properly yeah, so that people do not have the wrong idea and suddenly thinks the market is in danger and they all hold back from buying. More unfortunate thing is, the downpayment they saved, they went on to spend in
Shopee. 🙂  Here’s an article about Shopee’s Buy Now Pay Later article. They offered me up to RM3,000! Did they offer you the same?

Whenever we read articles, note the actual words used

Hopefully now when we read articles about overhang and unsold residential properties, we are aware if the writer knows what he / she is writing. By the way, the overhang residential units is BY FAR lower than the total unsold properties.  Briefly, overhang means the unit has gotten COO + CFO and unsold properties can just be any property which is not yet constructed or in-construction.

Why do properties go into the overhang statistics?

First, if the overhang property was the property which is loved by everyone, would it go into overhang statistics? Usually, the are sold out fast.

Secondly, if the property was loved by many people but the price was just too high, would it go into overhang statistics? Usually, when the price is just too high, people have to move on.

Th, if the property was loved by many and price was great BUT the neighbourhood was NOT loved by the targeted buyer group, would it go into overhang statistics? Many times we have those ‘popular’ places people love, so there are definitely areas which are lower in demand too.

Sometimes, it’s just due to unforeseen circumstances too

There are many reasons why the property goes into the overhang statistics and sometimes it is just because of a slow market (wrong timing), for example Covid-19 lockdowns will definitely slow down the viewing and signing of Sale and Purchase Agreements too. This is why not all overhang properties are equal and there are definitely some gems to be found there. In fact sometimes, if it’s the final few units, the developer may even offer a very good offer for it!

If I am a developer and I have old unsold units a.k.a overhang units, would I like cash or the unit?

If I am the developer, I would prefer money versus holding on to the property even if the market value for that property is higher. It makes better sense for my financial reports yeah. Remember, once the developer has managed to break-even, every unit sold after that contributes to the profit numbers too. This is why occasionally the very old units which was left unsold (thus part of overhang units) may be sold at an attractive price a few years later.

Happy viewing and buying whether overhang, unsold or even newly launched or secondary market units.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
If income is higher, would unsold units be lower?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overhang units? We have none says CEO Datuk Chang.

Certainly a refreshing revelation. Budget 2019 was focused on reduction of overhang units. We even have the
Home Ownership Campaign (HOC) 2019 as per earlier article here.
 All these point to the seriousness of overhang units and why reducing them as soon as possible will bring about positive sentiments. Then, I read this in an
Article in NST here. CEO: No overhang units at EcoWorld
 ECO World Development Group Bhd (EcoWorld) president and chief executive officer Datuk Chang Khim Wah says that Eco World has no overhang units despite the weak property market environment. He said, “We always hear negative news about the property market, such as the increasing overhang units and affordable homes issue, but it is quite the opposite for EcoWorld Malaysia.”

As at 3rd quarter 2018, National Property Information Centre reported that the number of unsold houses in Malaysia reached a record high of 30,115 units valued at RM19.54 billion.  He added that EcoWorld consistently sells between RM3 billion and RM4 billion worth of properties every year. Chang says that he is optimistic for EcoWorld Malaysia’s prospects with the launch of HOPE (Home Ownership Programme).This applies to EcoWorld Malaysia’s residential properties and is expected to raise RM6 billion in sales for the financial years 2019 and 2020. , and is optimistic about its prospects following the success of a similar campaign which ran from July to October last year. HOPE offers two methods—stay2own (S2O) and help2own (H2O) for purchasers to start their home ownership journey.
Earlier article here on HOPE here.
  As for reference to
the NST article, please click here.

Chang also said something very relevant to the young. He said, “If we are able to assist the young to own a good home earlier, it will also enable them to accumulate wealth sooner.”  I would like to remind everyone that property is a necessity and whether we want or don’t want, having a property enables us to either gain from capital appreciation of hedge against the effects of inflation. Starting young meanwhile meant that one has time on their side and upgrades to a better property in the future years would meant that one has already started their property investment journey. How to calculate the returns from the property price appreciation?
Property investment is not low risk and low returns
 Happy following.

written on 1 Feb 2019

Next suggested article:
My children and their future through property investment

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overnight parking in KLIA needed? (save $$$) Another option for ‘Damansarians’ :P

I went to Kota Kinabalu last weekend, again. Event was the Home OwnershipCampaign Expo 2019 where I spoke on
“10 things a First-Timer should know when it comes to property investment.”
Haha. Yes, as someone from Peninsular Malaysia, I think I am well above average in terms of travelling to East Malaysia. When I told my business partner that I will park my car overnight in KLIA2 because it’s cheaper, better and quicker than to take a GRAB / taxi, he said, ‘Best option is to take the SKYBUS and park your car in 1Utama instead. The SKYBUS is RM15. The parking is just RM4 per day.” That’s not all, you also get to rest because you do not need to drive to and fro which will take easily 2 hours.

In comparison to the option of driving by myself? Distance is roughly 60km or 120km to and fro. That will be close to 2 hours of driving which the most productive thing I could do is to listen to nice soothing music. PLUS toll is RM16.80 to and fro. (Sg. Buloh – KLIA). The parking per day (24 hours) in KLIA is RM46. They have a special rate from
Day 4 onwards at RM20 per day.
 There’s also another option in the Long Term Car Park area where you will need to take a shuttle from the car park to KLIA. That’s RM32 per day. GRAB’s offer is RM65 per trip, if I remember correctly and that’s RM130 to and fro. Fuel consumption on my 9.5 year old Persona is 7.5 litres per 100km. So, it’s roughly 16 sen per km for RM2.10 RON 95 fuel. 16 sen x 120km = RM19.20  So, if we have a short business trip and we drove and parked one night in KLIA, total cost will be RM16.80 + RM46 + RM19.20 + 2 hours = RM82 and 2 hours.

As for letting the bus driver drive for us and we park in 1Utama and take the SKYBUS, that’ll be RM4 + RM15 + 2 hours of extra time on the bus to … write blogs (or play your favourite smartphone games). Haha. The downside is of course, we will have to see if the bus schedule actually is meeting the flight time or not. We still need to arrive a little earlier just in case. I chose to arrive around 2 hours before my flight so that I could enjoy a free breakfast in Plaza Premium Lounge.
(lots of cards have access these days. Apply for one)
Okay, this may not be the best option for Puchong people or Cyberjaya people. However, for most of us here in Damansara, it’s a great option. Happy travelling and save money and time. Please tell us if you have an even better option to save more!

Please LIKE
kopiandproperty.com FB page
 or
Sign Up for free
 to get daily updates about the property market. Else,
follow me on Twitter here.

<Featured Image is courtesy of
Stock Photos
 from Billion Photos>

Next suggested article:

written on 3 March 2019

Next suggested article:
RM1 billion investment and creation of thousands of new jobs

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Same mortgage rates into 2016

Would you be happy if your mortgage payment(s) remain the same throughout 2015? I think I would be happy. For those on the borderline who kept shouting that they needed help, they should also be happy. In fact, I think the ones who are neutral would be those who are debt free and out all their savings into FD waiting for slightly higher returns. If you are one of them, please rethink and reconsider your 100% FD policy. No further comments though. According to one latest news, Standard & Poor’s (S&P) Ratings Services said that they believe Bank Negara Malaysia (BNM) will maintain the overnight policy rate of 3.25% into 2016. In other words, no changes are expected for the whole of 2015.

It’s not actually an easy decision, especially with the depreciating Ringgit. An adjustment would be able to help stem the outflow and thus continuous depreciation of Ringgit. How much is really a huge question. Perhaps even with interest rates up, Ringgit’s depreciation may still continue and this will be counter-productive because businesses would find it ever harder to service their debts and the debt level for everyone would increase. If the rate of household debts increase versus the slowing GDP, think what would happen to the Ringgit? Yes, further depreciation. Thus the current low rate is expected to be accommodative to the pro-growth stance of BNM thus far. Inflation is no longer a worry even with GST due to the much lower oil price today.

Personally, I would prefer an even lower rate next year if possible. Pro-growth stance should continue, the uncertainty and negative sentiment due to GST should have been negligible by mid of 2015 and with a lower rate, more businesses may be tempted to grow their businesses further. Yes, I am no economist but I think economic growth is not just about fiscal policies but also the management of sentiments. Is demand for property lower today than two years ago? Has the fundamental of the country suddenly changed totally within the past 6 months when Ringgit started depreciating? Are there more people out of job today or are there more jobs chasing talents today? The answer is no to all three. In other words, everything should do fine, yet, majority of the comments online are mostly negative. Why? Sentiment of uncertainty, staying on the sidelines due to GST and negative reports typically sell better too. It’s funny right? Think clearly. Act objectively. May we enjoy a 2015 of prosperity.

written on 8 Feb 2015

Next suggested article:
Stock down? Stock up!

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overnight Policy Rate maintained at 2.75pct. Negative?

How can central banks support economic growth?

Central banks would always try to help the expansion of the economy. If the economy is slowing down, one possible way the central bank could encourage economic expansion is to reduce the interest rate. This makes it less attractive to put the money into bank and people may choose to invest those instead. With a lower interest rate, the businesses may also take this opportunity to borrow money and expand their business. People may also think it is a good time to invest into property for example. So, reducing the interest rate is one such measure.

Below is the full Monetary Policy Statement from BNM.

Monetary Policy Statement

09 Mar 2023

At its meeting today, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to maintain the Overnight Policy Rate ( OPR ) at 2.75 percent.

In the global economy, there were some positive developments with the reopening of China’s economy and better-than-expected growth outturns in major economies, supported by resilient domestic demand.  Nevertheless, the global economy continues to be weighed down by elevated cost pressures and higher interest rates. Headline inflation moderated slightly from high levels in recent months, but core inflation remained above historical averages. Some central banks are expected to continue raising interest rates to manage inflationary pressures. This will continue to pose headwinds to the global growth outlook. The growth outlook remains subject to downside risks, mainly from an escalation of geopolitical tensions, higher-than-anticipated inflation outturns, and a sharp tightening in financial market conditions.

The Malaysian economy expanded strongly by 8.7% in 2022 driven by the recovery in private and public sector spending following the full reopening of the economy. After the strong performance in 2022, the economy is expected to moderate in 2023 amid a slower global economy. Growth will remain driven by domestic demand. Household spending will be underpinned by sustained improvements in employment and income prospects. Tourist arrivals are expected to continue rising, further lifting tourism-related activities. The continued progress of multi-year infrastructure projects will support investment activity. The implementation of projects from the recently re-tabled Budget 2023 would provide upside risks to the domestic growth outlook. Downside risks continue to stem mainly from global developments, including from weaker-than-expected growth outturns or much tighter and more volatile global financial conditions.

Headline and core inflation are expected to moderate over the course of 2023, but will continue to be elevated amid lingering demand and cost factors. The extent of upward pressures to inflation will remain partly contained by existing price controls and fuel subsidies, and the remaining spare capacity in the economy. The balance of risk to the inflation outlook is tilted to the upside and continues to be highly subject to any changes to domestic policy on subsidies and price controls, as well as global commodity price developments.

At the current OPR level, the stance of monetary policy remains accommodative and supportive of economic growth. The MPC will continue to assess the impact of the cumulative OPR adjustments, given the lag effects of monetary policy on the economy. The MPC remains vigilant to cost factors, including those arising from financial market developments, that could affect the inflation outlook. Further normalisation to the degree of monetary policy accommodation would be informed by the evolving conditions and their implications to the domestic inflation and growth outlook. The MPC will continue to calibrate the monetary policy settings that balance the risks to domestic inflation and sustainable growth.

See also
:

Monetary Policy Statement (MPS) Snapshot: March 2023

Frequently Asked Questions

Bank Negara Malaysia
09 March 2023

— end of BNM’s Monetary Policy Statement

What is accommodative stance for Overnight Policy Rate (OPR)?

If the central bank maintains the interest rate, it meant that it sees the economy to be moving positively. Thus perhaps just let the economy continue to grow by itself versus doing too many things. So, what is happening in Malaysia? Bank Negara Malaysia (BNM) has decided that the economy is growing. Thus the interest rate is maintained so that it is accommodative to growth. Briefly, it meant that economy Malaysia is moving in the right direction and there are no sign(s) of that often quoted recession here in Malaysia. This is based on the latest numbers yeah. No one knows what may happen later.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Next suggested article:
It’s not an investment if we know nothing about it

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overnight Policy Rate: Why it stays at 1.75%?

A few days ago, an economist says that
Malaysia’s Bank Negara (BNM) should adjust the Overnight Policy Rate downwards to support the economy. (Read here)
 I sent the news to a few friends and said I disagree. There is really no need to adjust if the external environment is recovering and is able to support our exports. Plus the fact that the Covid-19 situation in Malaysia is indeed getting better. We even have a better new Health Minister!

In other words, the economy will definitely have better days ahead. Let’s keep the ‘bullet’ instead of firing it now unless it’s truly necessary to adjust the overnight Policy Rate. By the way, we even have inflation yeah. That’s indeed a good sign that demand is up and supply is still adjusting. Let’s read what BNM has to say.

Photo by Karolina Grabowska on
Pexels.com

— Start of media release —

At its meeting today, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 1.75 percent.

The global economy continues to recover, supported by improvements in manufacturing and services activity. The strength of the recovery remains varied across countries mainly corresponding to their vaccination coverage, relaxation of containment measures and degree of policy support. Economies with better progress in their vaccination programmes have eased containment measures, enabling a continued recovery in domestic activity.

Sizeable fiscal and monetary stimulus in several major economies continue to support the recovery momentum. Financial conditions also remain supportive of growth. Overall, the balance of risks to the global growth outlook is tilted to the downside.

This is attributed mainly to uncertainty over the path of the pandemic amid the emergence of variants of concern, and potential risk of heightened financial market volatility amid adjustments in monetary policy in major economies.

For the Malaysian economy, the re-imposition of nation-wide containment measures to curb the resurgence in COVID-19 cases had dampened the growth momentum. However, the recent gradual relaxations for more economic sectors to operate, along with higher adaptability of firms to the new operating environment and continued policy support, would partly mitigate the impact and allow the economy to resume its recovery path.

Moving forward, the further easing of containment measures, rapid progress of the domestic vaccination programme and continued expansion in global demand will support the growth momentum going into 2022. Risks to the growth outlook, however, remain tilted to the downside due to external and domestic factors.

These include delays in the easing or re-imposition of broad-based containment measures due to the impact of new COVID-19 variants of concern and a weaker-than-expected global growth recovery.

Year-to-date, headline inflation has averaged 2.3%, and is projected to average between 2.0% and 3.0% for 2021. Underlying inflation, as measured by core inflation, is expected to remain subdued, averaging between 0.5% and 1.5% for the year, amid continued spare capacity in the economy.

The outlook, however, continues to be subject to global commodity price developments and policy measures to alleviate the cost burden of the public. Underlying inflation, however, is expected to remain relatively subdued in 2022.

The MPC considers the stance of monetary policy to be appropriate and accommodative. In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households and provide support to economic activity.

Given the uncertainties surrounding the pandemic, the stance of monetary policy will continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth. The Bank remains committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.

Bank Negara Malaysia
09 Sep 2021

— end of media release —

Malaysia’s economy and the words used by BNM in the media release for Overnight Policy Rate

Let’s look at some of the sentences. Important ones.

The global economy continues to recover, supported by improvements in manufacturing and services activity.

Economies with better progress in their vaccination programmes have eased containment measures, enabling a continued recovery in domestic activity.

Overall, the balance of risks to the global growth outlook is tilted to the downside.

Moving forward, the further easing of containment measures, rapid progress of the domestic vaccination programme and continued expansion in global demand will support the growth momentum going into 2022.

Yes, Covid-19 is definitely an endemic (not a pandemic once it’s under control)

We will have to continue adjusting policies to live with Covid-19. Once the situation is under control; ICU cases are down to 20% of the capacity, we can take even more steps to reopen the economy. By the way, Singapore thinks of Covid-19 as endemic. So, a travel bubble between two countries having the same policy is going to be possible too. Support one another, that’s what neighbours are for. I look forward to better days. What about you?

Love news like this and more?
Sign up for daily investment news updates.
 Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles. Else,
follow me on Twitter here.

Sign up for KopiWeekly. (only once per week of property, finance, investment news and more)

Next suggested article:
Property market will be slowed down if it has been moving too fast

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Overnight Policy Rate on 6th Nov meeting? Non-Issue.

Remember at the beginning of this year, everyone was speculating on when would Bank Negara Malaysia (BNM)  increase its Overnight Policy Rate (OPR)? It seemed so important but the latest one was no longer so important. Perhaps because no one is expecting any further adjustments until Q3 of 2015? In fact, one reason why the stock market and even the currency is volatile or weakened was also attributed to this. It seems that if the rate is higher, more investors would be interested with Malaysia and perhaps the currency value can be strengthened too. Don’t read too much. There’s no such thing as BNM’s decision affecting the stock market or the currency. it will affect the long term growth of the country, of course but short term changes in the stock market and the currency? Sigh, now you know why I dislike speculators? Market is up, they have their reasons. Market is down, they have their reasons too.

Anyway, the following are some of the reasons why the Overnight Policy Rate is maintained at 3.25% by BNM. It said that ‘current stance of monetary policy remains accommodative and was appropriate in monetary and financial conditions’. What would make BNM change the OPR? They include outlook for domestic growth and inflation as well as destabilising financial imbalances. In fact it has already facotred in the higher inflation beginning this year and would continue to be above its long-term average next year due to domestic cost factors. Without doubt, one would be GST. It said that, “While the moderating trends will affect the overall growth prospect, the Malaysian economy is still projected to remain on a steady growth path,”.

In one sentence: The economy remains healthy enough, even with inflation and external demand going down, thus OPR would only be changed due to unforeseen circumstances. I think that unforeseen circumstances has to come from external.

Remember my thoughts earlier? Read here:
No Adjustments to Overnight Policy Rate, so many so happy
  My thoughts remain the same. Buying property should be based on many other real reasons but it should never be affected by a change of 25 basis points or even 50 basis points. Happy waiting for the next adjustment in OPR and happy investing.

written on 9 Nov 2014

Next suggested article:
Bloomberg, Bank Negara Malaysia, rate adjustment and economic growth

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...