Higher prices due to higher taxes? Buying continuing yeah.

What happens when additional property related taxes are levied on foreigner buyers? Well, it’s supposed to start deterring foreigners from buying indiscriminately. Singapore introduced cooling measures in July 2018 because it did not want property prices to rise indiscriminately. These included raising stamp duties for second homes, tightening loan-to-value limits for housing loans granted by financial institutions and making it more expensive for foreigners to enter the market.
(Read more in themalaysianreserve.com here)

This has helped to slow down the property price increase. Look at the image below to understand that prices are still rising yeah.

Image source:
https://themalaysianreserve.com/2020/01/03/singapore-private-home-prices-moderate-amid-apartment-glut/

Article in thedgemarkets.com
   Article says that there are Chinese families who are shopping for luxury apartments in Singapore instead of having traditional reunion dinners. One reason for this is because of the current political unrest in Hong Kong which has not shown any signs of stopping. Thus, Singapore as the other Asia’s major financial centre is in focus. Rich foreigners are NOT deterred by the higher taxes which are levied on them.

Georg Chmiel, executive chairman of China-based property portal Juwai.com said, “Wealthy mainland Chinese are seeking a way to safely diversify and guard a portion of their wealth in offshore assets.” According to List Sotheby’sInternational Realty analysis of government data, Chinese nationals are set to top Singapore’s list of foreign buyers in 7 out of 10 years. Chmiel also added of Chinese buyers thinking of property in Hong Kong, “Whereas a year ago they were enthusiastic, mainland buyers today are cautious or downright skeptical.” “Either they’re postponing their purchase in Hong Kong or deciding against it altogether.”
Article in thedgemarkets.com

I have written about this many times but I think it’s always good to remind everyone that property buying is not about the price. It’s about the economy. A growing economy, a robust one should spur more investments and it will eventually help the property market.
The economy should determine the property price, more natural.
 Without a corresponding economic growth, the property market growth (whether transactions or even price increase) should not / will not be sustainable.

As for Singapore as an advanced economy, it may have just grown 0.7% in 2019 but it is considered a safe haven because of the pro-activeness of government policies. Investors buying into Singapore are not worried as long as they have a longer term view about their investments. This is one reason why they are buying and it has nothing to do with the fact that Singapore is already considered one of the most expensive cities in the world. As per The Economist Intelligence Unit, it is ranked no.1 most expensive among the cities in the world. I do hope those pushing Malaysian properties to understand this fact too. Happy attracting.

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Higher rates, lower prices. Just one of the measures to cool rising prices.

I wrote this article on property price and interest rate recently. Property price to me is ultimately due to demand and supply; which side has stronger holding / negotiation power. Even if two person were to buy the same property, the end result may be totally different. Take a look at how interest rate may also influence a bit. Read:
Higher interest rates means higher or lower property prices?

Here’s a look at one country which is doing it’s best to control the surging home prices by increasing the interest rates. It does seem to be working for this advanced economy. Nope, not the UK, not Australia and not Singapore.

Article in nst.com.my
 Canada’s central bank hiked the interest rate a month ago to rein in surging home prices. There are signs that this is working. Toronto’s average selling price dropped 2.6% in March versus February 2022.

Sal Guatieri, a senior economist at BMO Capital Markets said, “The higher rates will douse the flames somewhat. We likely will see sales pull back from elevated levels and almost certainly see a slowing in unsustainable house price growth.”

However, Canada’s economy is also increasingly relying on real estate and this meant that the government will not do too much and kill the golden goose. Christopher Alexander, president of real estate firm RE/MAX Canada said, “It’s not just the sale of homes, but all the spinoffs you get. Contractor work, appliance sales, furniture.”  Please do read the full article here:
Article in nst.com.my

Real estate is not just about homes

When we look at a new development, it’s not just about the homes. It’s also about the construction industry which will hire a lot of people. It’s also about the renovation industry which will serve the many new home buyers. They will also hire more people. It is also about the furniture industry which will need to manufacture more furniture when people are moving into new homes. They will also need to hire more people. Ultimately, all these new people being hired would be spending their salaries on goods and services.

At the most basic level, supermarkets would be selling a lot more groceries and they would need to hire more people and their vendors would also need to ramp up their production to supply to the supermarkets. Okay, we should also add the fact that barbers would also have more business too. This is why when property development slows down, it will also have slow down many other industries as well.

Happy understanding that for some countries, increasing the interest rates would have a dampening effect on the property market. Yes, Malaysia’s Bank Negara Malaysia (BNM) is said to be increasing our rates in the second half of 2022 as well. That’s very soon yeah. So, how would it affect the Malaysia property market then?

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Property Investment 101: Increasing monthly rental versus paying higher monthly rental

From an article I read where the link is provided just below, it tells me that it is not just the working professionals who may face rental increase when the demand is higher than the supply of homes. Even the wealthier ones are also affected by rental increase. Yes, the wealthier ones also rent and does not necessarily own the place. 🙂   Imagine the person these wealthy ones are renting from. Below is a chart showing that Singapore has beaten New York in terms of luxury property rental growth.

Article in themalaysianreserve.com
   Singapore pushed New York off the top spot for the strongest growth in residential rents in the last quarter of 2022, fueled by a supply crunch and strong demand.

The city-state saw annual rents jump 28% in the quarter from a year earlier, according to a report by Knight Frank. New York followed with 19% growth, while London and Toronto took the third and fourth spots, according to the survey of prime residential rents across 10 cities. While prime rents have remained robust across many global cities, the overall rate of annual growth is starting to slow, Knight Frank said. Do read the full article here:
Article in themalaysianreserve.com

Image Source:
https://themalaysianreserve.com/2023/03/16/luxury-property-rents-increase-faster-in-singapore-than-new-york/

If the wealthier ones are renting, why not the less wealthier ones?

Truth is, nothing should stop anyone from renting versus buying. As we can read from the article, rental is going up and all these data comes from the fact that rental has gone up but people are still renting. Else, if just rental going up but no one is renting, it does not show anything yeah. It means that the wealthier ones who are renting, they could afford all these increase. It also meant that for the owners of these premium homes, they would now become even more wealthier yeah. Which world would you prefer to be in this case? The one increasing the rental or the one paying higher rental?

Happy deciding.

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Higher salary does not equate to better future, immediately

A very long time ago (not a fairy-tale lah), someone told me before that there is no such thing as planning for the future. Could I even know what will happen in the future? How could I be so sure that the future would be like what I told him? He uses his salary he earned that year, within that year, sometimes sooner. I have lost track of this acquaintance. The value of money diminishes over time because of something we call inflation. In terms of inflation, it’s not that hard to see. Every time demand pushes prices up for anything at all, that’s general inflation. Anytime we feel we have a lot of money in our pocket and buys a few extra pairs of shoes, that pushes up our own ‘inflation’ a.k.a expenses. Well, unless of course those items that we bought could become an asset in the future.

How do we have more money in our pockets? Well, higher increments for example. The typical salary increment when we change job for a higher position may be up to 30 percent. If it’s just to change to a similar position for a higher pay, then perhaps up to 15 percent. Do try not to change for more pay and same job description. I love mee goreng but I hate to buy the SAME plate of mee goreng at a higher price every few months unless that plate of mee goreng adds in more stuffs, right? What happens when your same plate of mee goreng becomes too
expensive and there are LOTS of other cheaper mee goreng?
 That’s when one get stuck in the same job and keep complaining all the time loh. Remember, when the market are full of other professionals who can do the same work as us for less pay, we are stuck. For some expensive countries, this was the reason why so many jobs were outsourced to countries where the workers can perform the same job for less money.

Okay, I will stop being long-winded. I am just 40 years old anyway. How do we earn higher pay then? When we look around us a
little more objectively,
 we usually get the answer. There are a small percentage of our fellow professionals who work harder than everyone else. They are always able to come up with better ideas (Nope, not because they are cleverer but because they know more through reading more). They always seem very motivated in what they do because they are clearer about what they want to achieve (that’s because they read about success stories by some other people and they benchmark the best). They are either
promoted by their company, faster than their peers OR
 they get head-hunted to join another organisation if their current management / company somehow missed treating these people as a special talent worth keeping. Actually, the cost of hiring, retraining and re-energizing new people would be many times more expensive than to pay a few thousand ringgit extra per month or to make these talents as partners to the company.  (stock options for example).  Nope, this is still not the end of my article. 🙂

Do these people have a better future when they get a higher pay? As long as their expenses are similar to their peers and they earn incomes which are 30-40 percent higher, of course their lives are going to be way better, in future. As for those who feels that corporate career ladder is not for them and do not wish to do something illegal, then invest those incomes lah.

Here are some resources to do more.
Or keep reading kopiandproperty.com for property investments. Malaysians can generally live to over 70 years old these days and maybe up to 80 soon. This is the reason why incomes we earn today must be stretched longer. So, it’s either earn more from our work or earn more from pushing our incomes to work. Of course, if we start a business which becomes as big as GRAB, then that’s another story altogether. Happy thinking and working at the same time.

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written on 30 Sept 2017

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Higher salary does not mean one is richer yeah. TRUE.

In an article
I read in FreeMalaysiaToday.com,

this is what our PM Tun Dr. Mahathir Mohamad said. A rich country is determined by the strength of its people’s purchasing power, not just high salaries. Even if one were to have a salary increase of 10% to 25%, this would come to naught it the cost of living rises by the same number. Then he said this which is SUPER TRUE!  “Production costs will increase, and so will the cost of living. Even with a salary increase of up to 25%, our purchasing power does not necessarily increase by 25%. So again, there will be requests for higher salaries and wages, but if there is a salary increase without an increase in production, the money we get will not have any meaning at all.” He encourage the younger generation to embrace noble values such as being hardworking and focus on higher productivity instead of just asking for higher salaries. Here’s that
full article in FMT for reference.

Some time back, I wrote this:
Higher salary does not equate to better future, immediately
  This was one part of my conclusion: “Do people have a better future when they get a higher pay? Well, as long as their expenses expenses are similar to their peers and they earn incomes which are 30-40 percent higher, of course their lives are going to be way better.” I think this will always be true. When we look at higher salary per month basis, it is even more important that we work on building up that wealth further. First is by not overspending on the unnecessary and second would be to invest it into something useful. We must remember that property is usually the largest purchase we will ever make in our lives and this is why if we do not own one, then the expenses to have a roof over our heads; rental will always haunt every month.
Here’s an earlier article showing why even when people earn US$2,400 (RM9,600) in some cities in the U.S
. they are still classified under the poverty category.

The reason is simple. When we are still working, rental is easily covered by the monthly salary. We may not feel it at all. This is assuming we prefer to rent and not to invest into a unit and pay slightly higher maybe. Well, with retirement at 60 and living till 80, that’s another 20 years of monthly rental yeah. If we have no recurring income and has to rely only on savings, then this is the potential rental amount we need to have.  RM1,000 (typical rental) x 12 (months) x 20 (years) = RM240,000. If we are lucky, our partner shares half of this rental with us, then it’s RM120,000 for the next 20 years if the rental stays the same for the next 20 years yeah. If only I have RM240,000 I would prefer to use it for some local and overseas travel when I have more time. By then, I could travel during those low seasons and thus get the best value for my money. I do not wish to worry about paying rental even when I travel. Happy working harder and earning more.

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written on 13 Aug 2018

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Pressuring your manager to give you higher salary may not work

Pressuring your manager to give you higher pay may not work.

The story of my close friend, L

A close friend, L who’s managing a few people in a medical institution told me this conversation a few years ago.

L’s staff said, “I am not satisfied with my increment. How can you help me? The company did not keep its promise. How am I supposed to live with a small increment?”

Has any of your staffs asked you this question before? Over the past 19 years, I think I have this question asked to me a few times. Truth is, the manager does not have a lot to say. The decision lies with the management and many times, this is the reason why the employee would soon resign (if the employee is indeed very capable) or the employee would soon become toxic to the company (if the employee is not able to get another company to recognise his / her capability).

Coming back to my close friend L’s case. His staff’s salary is already at the ceiling of the salary range for her job grade. She needs to get a promotion to the next grade before she can get higher pay. Obviously, she is trying her luck since my friend is her latest manager.

I asked L if she is hardworking? L said NO and she is very lazy too. I asked if she volunteers to help other peers. L said NO and as much as possible, she will try not to take up anything extra to do. I guess everyone now has an answer. These are the people that I really hate and if I have my way, I would not want to be her colleague in the near future. (Yes, politely ask her to change job)

My personal experience

I worked very closely with the HR people for 15 years in one of my earlier roles. I can safely say that performers does not need to negotiate too much with the boss. If we helped the company to earn new businesses because we are capable and the company does not respond positively, it’s time to give our skills to another one which would appreciate it more. I have personally ‘requested’ super politely and company responded quickly a few times. Haha. Yes, I was considered a top performer, so it’s either they try to keep me or I have to show them others may appreciate me too.

All the top performers better be looked after

The top sales people in the company DEFINITELY needs to be treated differently. The best PROGRAMMER better be provided with a special pay package because if he resigns, his work may need 3-4 programmers to do. There’s even a company which provides its best R&D engineers with a bonus of 6 months if they were to stay for 2 years.
Seriously, if these great people leave, the cost to rehire is going to be high and the cost of NOT having them working is even higher. Imagine just 3 months without your best sales person, programmer and R&D engineer.

Working for salary is unfortunately not enough these days

By the way, careers aside, remember to invest your earnings. Needless to say, if we have children, it’s good to aim to be able to provide for them more. As for changing your job, for the younger ones, choose a job which allows you to move UP in role and responsibilities. If we are underpaid for our role and responsibilities, we will soon be paid well. If we are overpaid for our role and responsibilities, we will be the first to be retrenched and will not be able to get back the same salary because we actually do not possess the skills. Jobs are aplenty yeah. The below list is as per 12 March 2022.

Source: jobstreet.com.my

All the best everyone.

first written on 23 July 2017. Updated 12 March 2022

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Higher unemployment in Malaysia? 30 percent?

Many people say actually… there’s a likelihood of a higher unemployment in Malaysia. Just that these data were not captured properly. Well, I do think most people in most countries may also think the same except for a few countries yeah. Anyway, officially we are around 5% for unemployment. Earlier article here:
Unemployment highest since a very long time. Going higher?
  So what is the latest views about the unemployment rate in Malaysia?

Article in themalaysianreserve.com
   Dr Nungsari Ahmad Radhi said statistically, Malaysia has a 5% unemployment rate, but economically, the country has a 30% unemployment rate as our labour participation is below 70%.  He then asked, “The real question is, do we have the ability to create new activity to reduce unemployment?”

He continued, “What is important now, Malaysia needs to create a social safety net to protect those who are not even in the labour market.”

Next we have Khazanah Research Institute visiting senior fellow Dr Jomo Kwame Sundaram who said that the current global financial crisis brought by Covid-19 may bring a global economic system in favour of “deglobalisation” or “slowbalisation”.  He said (Yes, I agree with what he saiad), “The Group of 20 countries, while preaching trade liberalisation to the rest of the world, introduce various actions which amount to economic protection.” Do read the full article here yeah. Lots more information and views here:
Article in themalaysianreserve.com

Photo by Anna Shvets on
Pexels.com

Economy and Unemployment

Okay, so generally when the economy is not doing well, we will have higher unemployment in Malaysia.  What’s equally important to note is that saving jobs need to start with saving businesses. Else, how long can the business continue to pay to keep the jobs? However, if we are looking at what is happening currently, it’s most important to give back confidence to the people and that could happen only if the vaccines are fully approved and ready and available for people anytime it’s needed.

When will the vaccines be arriving then?

Latest news?  End of 2020.
That’s fast really. It’s already mid October now. Here’s that news.
Should we still worry?  Sure. Should we do nothing?  That’s at your own risk yeah.  Should we buy a property then?  Come on… if you found a good one, why not?  I really do not know how to answer if someone were to ask me if they should buy during bad times or good times. Seriously, think harder yeah.  As for what should we do now, well just stay home until the end of CMCO if you could.

By the way, vaccines do not reduce the higher unemployment in Malaysia yeah. It gives good vibes, confidence and when people start spending money again, businesses thrive and job markets prosper. That would reduce the higher unemployment in Malaysia. Nope it will NOT reduce a lot of that 30% claim. It will just reduce that 5% down to probably 4.5%…  For now, happy watching lots of shows yeah.

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Higher yields also mean higher risks

As much as I like to be positive about the Greater KL property market, we must still be wary of world happenings too. It’s uncommon for companies to use up all their cash reserves for operating expenses. The reason is because cash reserves enable the companies to have opportunities to take up sudden available opportunities, for example an acquisition of a strategic company. However, for the usual operating expenses, the company may choose to borrow instead because the cost of funds is usually low enough. For example, single digit interest rates. What happens when companies wish to borrow but the lenders are less willing? The borrowers would offer to pay higher rates to the lenders.

Article in TheStar.com.my here.
  It says that there are now developers which are paying double digit rates for bonds. For example, Chinese property developer Times China Holdings offered a yield of 11 percent on a two-year bond recently. This tells us about the drastically higher cost of financing for Chinese developers, which are being squeezed by rising U.S. interest rates, growing investor aversion to risk taking and China’s cooling property market. Evergrande Group also sold an additional $1 billion of two-year bonds at 11 percent. Developer Agile Group sold a three-year bond in July at a yield of 8.5 percent, but last week paid 9.5 percent for $400 million in two-year bonds, rated BB by S&P. Greenland sold a 1.5-year $200 million bond at a yield of 9.25 percent on Monday. The article says that only 15 companies across Asia-Pacific have paid double-digit rates for bonds of at least $100 million with similar tenors in the past two years, according to Refinitiv data. Twelve of those are Chinese property developers.
Full article for reference here.

What this tells us is that a slowing property market meant that sales numbers are slower to come by and thus, developers cashflow may be affected. In fact, it may also meant that developers are spending more marketing dollars. Of course there’s also that possibility that some companies may have expanded way too fast in the last few years in anticipating of a huge demand. That demand did not arrive, yet. As for the lenders, it’s a fact that the higher risks that they feel they are taking on, then the yields would have to be higher, else they are not willing to lend. At the moment, these situations have yet to show up in Malaysia. Let’s hope it stays that way until the sentiment turns positive. Happy following.

written on 20 Nov 2018

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Highest exports in Oct 2015 since Jan 2014!

I checked. Not even one person shared this piece of news in their Facebook page. I guess this is just too small a news even if every international rating agency would always be looking at export growth before they rate any country. Plus, the exports would determine the trade surplus / deficit and if the country shows a narrowing gap or a deficit, it would get a lower rating and so on. Malaysia’s exports surged to RM75.8bil in October, 2015 and this is the highest ever since January of 2014. Main reasons are due to robust demand from major markets including Asean, China, the EU and the US. The rise in exports were mainly to China, EU, US, Singapore, and Australia.

Malaysia has been having trade surpluses for 216 consecutive months since November 1997. Not a typo, that’s already 18 years of trade surpluses. Does not really sound like a country about to go Greece’s way, right? Total trade surplus for 2015 is RM76.07 billion. While exports grew tremendously, imports are down marginally, by 0.4 percent. Thus, the main reason for the huge surplus is simply because Malaysia is exporting much more. Malaysia imports the most from the following countries: China, US, Taiwan, Thailand and EU. Yes, one missing country would be Singapore. I would have loved it more if Singapore and Malaysia has a much higher trades between us than today.

Latest update: Bank Negara has announced on Monday that it’s international reserves is at RM420.1 billion or equivalent to US$94.6 billion as at Nov 30. This is higher than RM417.2 billion recorded on Nov 13, 2015. The reserves position is sufficient to finance 8.6 months of retained imports and is 1.1 times the short-term external debt.

I remain steadfast with my views that Ringgit is undervalued if we are evaluating Malaysia on the same benchmark(s) with that currency which has been appreciating against majority of all countries in the world. Let’s wish this favourite country of many the best so that rates would be raised within December 2015 itself and continues to be normalised over the next few years. The right action if you believe the worst is not over for Ringgit? Don’t buy properties in places where the prices are already higher than the sky, even if Chinese (China) buyers ask you for advice. Perhaps to ensure flexibility, one can even buy stocks in our southern neighbour. This allows us to hedge against that continuous drop in Ringgit. Happy analyzing and deciding.

written on 4 Dec 2015

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Country with the highest GDP per capita? Is our own income higher?

Country with the highest GDP per capita? Is our own higher?

Country with the highest GDP per capita in 2021 is Luxembourg at US$126,000 (RM534,000) pear year. WOW. Second place is much further away, Ireland at US$90,000 (RM381,000). Still pretty high. Switzerland is almost the same followed by another double digit percentage drop for Norway at US$76,000 (RM322,000). United States round up the top 5 GDP per capita at US$66,000 (RM280,000).

Already the top 5 highest yeah

These are the countries where the GDP per capita is the highest in the world. In other words, it will just get lower after these 5 countries. I know, some wants to ask where is Malaysia?

Malaysia is around US$11,000 (RM47,000). However, this should not be the main focus. For readers of kopiandproperty.com stay focus on what matters more.

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Highest paid TVB actor has a property in Malaysia

Someone earning a HK$ salary may not find it easy to buy a property in Hong Kong. Even if they could the size is likely to be small or they have to buy much further away from the island side. If they choose to buy a property in Malaysia, then they would think that the prices are rather affordable. That’s why we occasionally read about Hong Kong stars buying a property in Malaysia.

Not too long back, we have heard of some purchases of Malaysian properties by Hong Kong movie stars.
For example, Bosco Wong. (read here for his purchase back in 2019)
  Another
example is more recent, Eric Tsang with a property in KL. (click here to read)
 There is another one. This is said to be TVB’s highest paid actor. Yes, from all those entertainment news, it does seem that this is a nice guy.

Article in malaymail.com
  TVB’s highest-paid actor Moses Chan says that he will be visiting Malaysia more often now that he owns a property here.
Sina.com
reported that Chan was given a serviced residential unit worth RM845,800 during his appearance at the launch of Maris Place KLCC recently.

Oriental Daily
quoted Chan as saying that this was his first time being gifted a property and all his properties are for his three children. He said, “I am just a worker, earning money diligently from my acting jobs and cafe.” He also shared this about his investment, “Even when I invest in share markets, I will opt for long-term investments that will give me two or three-fold returns.” Do read the article:
Article in malaymail.com

What does this tell us about property?

Two important things. A developer will be willing to get an ambassador for its project if this ambassador is someone well known. Of course one major attraction for other buyers is that they would have a neighbour who is a HK TVB major star. Who knows if they could be at the gym at the same time as the movie star? In the future lah, not immediately.

Second thing is that real estate will always be favoured by many. As we can read from the article, eventhough the property in Malaysia was a gifted one, Moses has purchased properties for his children. This meant that he believed in property even before this particular property gift. He wanted to gift these properties to his children yeah. So, Malaysian fathers, think about it.

It’s also not just about Hong Kong stars yeah, over 40% of the wealthiest Malaysians are real estate related yeah.
40% of richest Malaysians are property related
. If this is still not enough to tell you the importance of property investment, then please just continue to invest in anything you think highly of okay. Property is not the only type of investment available to us.

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That place with the highest per capita income in the world?

I have been to Macau 5 times I think. Usually, it’s part of the Hong Kong trip because somehow I think Hong Kong has far more attractions. 😛  Here’s one latest news about Macau. By 2020, according to the International Monetary Fund (IMF), Macau will would overtake oil-rich Qatar with the highest per-capita gross domestic product of any country or jurisdiction on earth. In numbers? Macau currently has US$122,489 per capita GDP, second behind Qatar which is at US$128,702. Singapore was ranked fourth with US$98,014, just behind Luxembourg with US$110,870 while Hong Kong took 10th place with a per capita GDP of US$64,533. (Yes, Singaporeans on an average basis has a higher per capita GDP than Hong Kong yeah. By the way, HongKong’s population is 7.4 million versus 5.8 million for Singapore. This may explain a bit on the GDP per capita yeah) .
 Full article in NST here.

IMF expects continuing economic growth in Macau, the casino hub and it will leapfrog Qatar by 2020. Macau will have  a per capita GDP of US$143,116 while Qatar will only reach US$139,151. In fact IMF sees Macau continuing to open up a gap versus its rivals until 2023. Macau has only a of just over 650,000 but all are packed into just 30.8 sq km which meant that Macau also holds top spot as the most densely populated place on Earth, according to the United Nations. This meant that the casino city has 21,322 people per square kilometre packed into its bustling streets. Hong Kong is fourth most densely populated place on the planet behind Monaco and Singapore and it has 6,490 people per square kilometre. Of course this is also because Hong Kong is much larger. Within Hong Kong, in MongKok for example, the population density is more than 120,000 people per square kilometre, according to the Population Division of the United Nations Department of Economic and Social Affairs.
 Full article in NST here.

Macau’s property market price lags that in Hong Kong despite them being just an hour away via high-speed ferry. This may change in the near future yeah.
Here’s that article in South China Morning Post.
 Analysts say that the opening of the Hong Kong-Zhuhai-Macau bridge later this year will narrow the gap between Hong Kong and Macau house prices. An analyst, Raymond Kwok, associate director at Guo Du Real Estate even predicted that as soon as the bridge opens the residential property market in Macau could experience growth of anywhere between 5 per cent and 10 per cent. That’s quite a good number if this is just the start. Then again, remember that property prices in Macau would still be following that of Hong Kong and unlikely to exceed it unless suddenly people prefer to stay in Macau versus Hong Kong. Happy visiting both in the near future.

written on  17 Aug 2018

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Highland Towers redevelopment. A park perhaps.

I love public spaces in the many countries I visit. For example, the gardens in the many Australian cities I have visited are usually well maintained and it’s enjoyed by many families. Just a week ago, I was at the Menjalara Lake park. I think it’s well maintained and there were lots of people from all walks of life enjoying a stroll or a run there. Image attached. I think as Malaysia moves on from a developing nation to a developed one, one thing we must have would be recreational public spaces. This is for everyone to relax and enjoy some quality time together.

Another one may be coming in Ampang. Actually, it’s an interesting piece of news. Yes, there has been many cynical remarks in Facebook when it was announced that the infamous Highland Towers would be redeveloped into a park or recreational space. Housing and Local Government Minister Zuraida Kamaruddin said, “I was made to understand that the Highland Towers site is not suitable for buildings or houses, so one idea is for it to be turned to a park or recreational space. I will ensure that the ministry will approve the plan for the park if that is the committee’s intention. Having a park would also be beneficial to the people, particularly those in my constituency.” The redevelopment plan is from The Highland Towers redevelopment committee and it is now at the planning stage in terms of coming up with ideas to redevelop the site in Ampang. Zuraida added that the committee had met five times and identified the property owners, as well as sort out legal matters.
Here’s that reference in TheStar.

For the younger ones, this is an easy
to read understanding about the Highland Towers.
 I was in secondary school and I remember watching the television (RTM of course) showing the scene where in the background, the firemen were doing their best and they had sniffing dogs to help them too. In total the tragedy claimed 48 lives. I think I agree with the redevelopment plan (if it’s really a park / recreational space) but as usual, it is the financing part that will involve a bit more details. Surely the park will not be built with public money or from the Housing and Local government ministry’s current allocations. If this is the case, then there are a lot other parks which will also be asking for the same. When the financial part has been sorted out, it may be good for the plans to be shared so that all the stakeholders can also put forth their ideas too. Perhaps the minister can be the moderator in this case. Happy following.

written on 20 Aug 2018

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Hijau E-Komuniti, Penang’s answer to affordable homes

11,800 units of affordable properties of which the highest priced ones would only be RM400,000? Yes, that’s being built in Penang. It’s not within the island but in the mainland, near to the second bridge. Thus, it is now possible to stay at a good place, for an affordable price and commute to and fro to work within 30 minutes. Yes, it is true, once everyone uses the bridge and more developments come up, the 30 minute goal will be harder but the price is half of what is available in Penang, what’s extra 20 minutes when it really happen? Details are as follows:

Message from the state government:

Gateway to Penang… & Beyond

Following the completion of Sultan Abdul Halim Mu’adzam Shah (Second Penang Bridge) in March 2014, it is no exaggeration to say that Batu Kawan is poised to emerge as one of Penang’s most rapidly developing regions in the coming years. A 20-minute drive through the 2nd Penang Bridge brings you to Bayan Lepas, Penang’s main industrial hub. Additionally a wide range of amenities and facilities including schools, wet markets, banks, health clinics, hypermarkets and other industrial parks are only within a short drive away from Hijau E-Komuniti.

I read in forums of some comments such as 11,800 units are too high density. Some even compared it to Penang island’s N park and said that he would not be buying one. I think the answer to these people is simple. If you area already staying in a good area, good sized condo and low density, then I am not sure why you would still want to go and comment in a forum for Penangites who just want a roof over their head and does not mind the slightly higher density. The design is also based on a Singaporean company which has wide experience with HDB flats in Singapore. I have never heard of people saying HDB flats are too high density.

Eligibility:Only eligible applicants will be registered. Eligibility requirements are as follow:-i) Malaysian citizen.

ii) Penang-born working in Penang and a registered voter in Penang or; Residing in Penang for at least 5 years from the date of application and a registered voter in Penang.

iii) Aged 21 years and above as at the date of application.

iv) Income not exceeding RM2,500 for Low Cost (husband and wife).

v) Income not exceeding RM3,500 for Low Medium Cost (husband and wife).

vi) Income not exceeding RM6,000 for Affordable Homes priced at RM200,000 (husband and wife).

vii) Income not exceeding RM8,000 for Affordable Homes priced at RM300,000 (husband and wife).

viii) Income not exceeding RM10,000 for Affordable Homes priced at RM400,000 (husband and wife).

ix) For Low Cost/Low Medium Cost applications, the applicant and spouse must not own any property in any state in Malaysia; For Affordable Housing applications, the applicant and spouse must not own any property in any state in Malaysia except Low Cost homes.

More information needed? Here:   http://www.pmm.gov.my/

written on 4 July 2014

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Hike interest rate? But why …

First, I hope the U.S Federal Reserve would
CONTINUE to hike the up the rates, slowly and continuously.
 It would mean that their economy is doing well enough and thus warranting an increase. Yes, I do believe every time the investors anticipate this potential change, they may prefer to drop their holdings here in Asia, including Malaysia and buy into the U.S instead. Let’s hope some would decide that perhaps investments into this part of the world is better; diversification mah. Second, I do not agree with the thinking that our Bank Negara should increase the rates. Well, not until we really show solid growths for the whole year and the world shows a recovery too. This is especially for those who link the rate increase with the ringgit’s appreciation or depreciation. Ringgit should rise or fall due to trade, due to higher surpluses or if deficits, then the value should drop. It’s time to be ‘economical’ about this. There’s too many messy theories already.

Malaysia is a top 25 trading nation in the world. Here’s an
article about our aspiration to be within the top 20.
Based on just the population alone, we are already punching above what we should. However, we remain to be a small nation by GDP and it’s easy to overlook us for much bigger nations. Oil and Gas production is only 10 percent in terms of contribution to the GDP. This is what Nomura senior economist for Southeast Asia, Euben Paracuelles says about the oil price today in terms of effects to the Malaysian economy. “Low Brent crude oil prices no longer have a prominent fiscal effect on the Malaysian economy.”
Full article in TheEdgeMarkets here.
 Hope everyone noted that oil price up a lot should also not affect Malaysia too much in future, okay. Do not link oil price to the ringgit every time there’s a fall in-tandem for example. Yes, I do think that an

accommodative stance is better too for the economy.

Some other reports about Malaysia’s economy.
S&P affirms its investment grade rating for Malaysia.
 This is a good news since any downgrade would already mean we are out of investment grade.
Exports continue to grow robustly.
Whether it is due to ringgit or because we are more competitive productively, as long as exports are growing it means surpluses are continuing. Ringgit is meanwhile facing a different pressure altogether compared to the 1998 crisis.
Confidence could not yet be regained confidently.
 My investments are only in Malaysia, except for some unit trust which is focused on Indonesia.
(Yes, I am an ASEAN supporter)
 I also hope Thailand’s economy to do even better once the Prime Minister has more sincere economic advisers. As for Singapore, the goal is easy. Leverage on Iskandar’s resources to continue diversifying and encouraging more SMEs. I reiterate, I hope rates are maintained for as long as possible. I think property investors may be happier with my suggestion. Cheers.

written on 5 July 2017

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Historic low yields. Sharp correction unlikely.

Prices too high?

When someone asked me if property prices are too high today, I will tell them that property prices may be better determined by rental yields.

For example, if a unit could only fetch a rental of RM2,500 per month, then the property should be priced at RM500,000 or thereabouts instead of over RM600,000 or even RM800,000.

An earlier article here:
Rental to determine property price, seems clearer
  When a property gives negative yields, it gives pressure to the owner to sell his unit and usually at a lower price too.

I also do not support the assertion that if one is buying for own-stay, then any price is okay.

Seriously, these couple of years are no longer the time to buy overvalued properties yeah.

Now, everything should seem clearer already. As for the world, let’s look at what JLL has to say yeah.

Article in PRNewswire.com here.
  Some general conclusions include the below:

London remains the largest commercial real estate investment market in the world
Investors favor familiar cities with well-established investment markets and high levels of transparency
JLL projects 2019 investment volumes will be approximately 5 to 10 percent below the 2018 total, driven by investor caution and selectivity

Richard Bloxam, Global Head of Capital Markets
 at JLL, said:

“In a year when investors have had to deal with increasing populism, protectionism and political uncertainty, the appeal of real estate as an asset class has continued to increase.

Interestingly, investors remain focused on gateway cities, despite tight pricing.

Many are looking at alternative or emerging locations, as well as varying real estate property types within these cities, rather than exploring other less familiar cities.

A notable trend is that half of these established gateway cities are in Asia Pacific.

Increasing transparency in these markets is encouraging more investment, moving these cities even higher up the rankings in 2019 and beyond.”

Please look at this particular point.

“Investors remain focused on gateway cities, despite tight pricing…”
This tells us the reason why prices in the usual hotspots continue to hold its position even as many other less popular areas reduce their prices to attract buyers.
It also tells us that if we are looking at VALUE, then considering some emerging spots are advisable too and not just the usual hotspots)

JLL’s conclusion:  Yields are now at historic lows in most markets across the globe.

A sharp correction is unlikely, as there is still a significant weight of capital looking to invest in real estate, and corporate occupier market fundamentals across many markets are positive.

This creates the potential for continued income growth.

However, in 2019, overall investment volumes are expected to fall approximately 5 to 10 percent below the 2018 total, driven by a slightly reduced appetite from investors to sell, as well as continued selectivity in acquisitions.

That full article for reference here.

We’re not ‘there’ yet.

Malaysia is not a ‘gateway’ property market as per the above article.

It also meant that we are usually not the top-of-mind market for global property investors.

This will usually tell us that as much as we believe our prices are high, it’s usually not yet.

As for the prediction that historic low yields will not cause a property market crash, let’s just leave it as it is.

JLL has by far more access to data and statistics than kopiandproperty.com

What’s super important is that as property investors, we should look at a much longer term than just that 12-24 months kind of outlook.

Crash may happen and yet it’s just a phase.

I am old enough to have seen at least 3 of these including the worst one for me the 1997/98 ASEAN financial crisis.

(So hard to find a job!) I hope it (the crisis) does not return or at least not at the full extent. Happy following.

Happy understanding.

written on 23 Jan 2019

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Press Release: Hitting A Home Run: IJM Land Launches Final Sierra Hijauan Phases

Strong demand spurs the early launch of Sierra Hijauan’s final two phases

Sierra Hijauan has been a resounding success, with phases 2E and 2H achieving remarkable take-up rates of 88% and 95% respectively, within just two months of their launch. The overwhelming demand and positive response from homebuyers have prompted the early launch of the final two phases, Phase 2F and 2G2, originally scheduled for Q3, now set to be unveiled and launched in June 2023.

This decision by IJM Land is a testament to the strong market demand, showcasing the development’s appeal and meeting the desires of long-term homebuyers in Klang Valley for quality indoor and outdoor spaces for work, relaxation, and recreational activities.

Sierra Hijauan’s brisk take-up rate can be attributed to two main factors. Firstly, its strategic location sets it apart. Nestled right next to the Hulu Gombak and Ampang Forest Reserve, this project stands as a rare green gem in Klang Valley. The scarcity of new landed, gated, and guarded projects in the vicinity adds to its exclusivity.

Secondly, Sierra Hijauan distinguishes itself as an intentionally low-density development. With only 310 units spread across its sizable 32.77-acre land, the various link villas, semi-detached homes, and large bungalows are highly sought after for their spacious, private, and cosy attributes.

The upcoming launch of Phase 2F and 2G2 marks the culmination of a well-received development in the coveted Ampang address. This locale attracts affluent C-suite executives, business owners, and professionals due to its proximity to major corporations, diplomatic embassies, and also upscale shopping malls. And then there’s also the mainstay Ampang residents who are a part of this vibrant community.

As many of Ampang’s next-generation dwellers advance in their careers and seek to upgrade their living arrangements, they naturally desire to remain close to their families and familiar surroundings in the city. Sierra Hijauan’s suitability for their current lifestyle needs, positions it in its own niche as a highly exclusive property for both the local affluent market and foreign investors and expatriates.

QUIET SETTING

Sierra Hijauan perfectly embodies the essence of the IJM brand—an unwavering commitment to curating prestigious and livable neighbourhoods, along with the versatility to develop burgeoning satellite townships. Nestled amidst lush hilly surroundings, fresh air, and nature’s soothing embrace, Sierra Hijauan harmoniously integrates contemporary homes within its idyllic location.

Living here is a true luxury, as residents are shielded from the bustling city, immersing themselves in a serene setting surrounded by abundant greenery. With over 20% of the development dedicated to scenic garden landscapes, Sierra Hijauan offers a picturesque backdrop. Remarkably, despite its tranquillity, Sierra Hijauan is conveniently situated a mere 15km from the heart of Kuala Lumpur City Centre, allowing residents easy access to urban amenities.

Surrounded by established neighbourhoods such as Taman Melawati, Setiawangsa, and Wangsa Maju, Sierra Hijauan seamlessly blends into its surroundings. Moreover, its strategic location provides excellent connectivity to major highways, including MRR2, Duke Highway, Ampang-Kuala Lumpur Elevated Highway (AKLEH), Jalan Ampang, Karak Highway, and the upcoming East Klang Valley Expressway (EKVE). Residents also enjoy the convenience of nearby international schools, top-notch private institutions, and specialist hospitals.

“Sierra Hijauan is meticulously crafted to be the epitome of an ideal residential enclave for landed homes for the new norm,” stated Mr. Chai Kian Soon, Senior General Manager of IJM Land. “It is the culmination of years of conceptualization, planning, and dedicated hard work by our team at IJM. With great excitement, we are delighted to unveil the final phases of Sierra Hijauan to the public, showcasing the realisation of our vision.”

HOME GROUND

A glance at the stylish homes reveals a balanced approach to quiet luxury, avoiding excessive indulgence. Spanning 2.39 acres, the new Phase 2F boasts a Gross Development Value (GDV) of RM51,745,000. It comprises 18 units of 2 ½-storey semi-detached homes and two prized 3-storey bungalows, priced from RM2,409,800 onwards. One of the bungalows features its own lap pool, epitomising an elevated lifestyle.

Completing the development, the final 3.28-acre Phase 2G2 holds a GDV of RM47,075,600. It comprises 12 units of 2 ½-storey semi-detached homes, 4 units of 3-storey semi-detached homes and one 3-storey bungalow, priced from RM2,535,800 onwards. These phases represent the pinnacle of Sierra Hijauan, with an expected completion date in Q32026.

Each unit is thoughtfully designed with a ground living area that offers an efficient floor plan, providing residents with flexibility in interior layout and the ability to personalise their living experience.The modern facade with rectangular frames and vertical planes creates a captivating depth perception. Ample natural lighting and ventilation grace every room, infusing vitality and enhancing the homes’ aesthetic appeal while embodying comfort, style, and functionality.

“These homes offer unparalleled privacy and ample space compared to their high-rise counterparts,” explained Mr. Chai. “They are perfectly suited for families and individuals seeking a secluded, eco-conscious living environment, while finding solace through a deep connection with mother nature.”

PLAY PARADIGM

Sierra Hijauan offers a plethora of communal bonding and recreational activities for residents of all ages and lifestyles. Those seeking a contemplative respite can enjoy features like the meditation deck, nature trail, reflexology area, yoga area, picnic area, hammock area, as well as a water feature and terrace garden.

Fitness enthusiasts can take advantage of the jogging track, basketball court, and swimming pool, while the little ones have their own play square and mound garden. And of course, an exclusive community wouldn’t be complete without a resident clubhouse featuring a gymnasium, multipurpose hall, and games room.

An added convenience is that the last two phases, 2F and 2G2, are conveniently located next to the clubhouse. IJM has also prioritised residents’ safety by providing 24-hour surveillance and professionally-trained security, with strategically placed security cameras and guard patrols.

“It’s an incredible experience to be part of this community,” added Mr. Chai. “We are immensely proud of our achievements and grateful for the positive response from new homeowners at Sierra Hijauan. I am eagerly looking forward to witnessing the final picturesque version of this passion project in the coming years. We will eagerly await their return to this green paradise everyday.”

For more information about Sierra Hijauan, log on to:
http://www.sierrahijauan.my
.

-End-

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Highest pay bracket may still not mean much, for property.

In many places, including some Kuala Lumpur neighbourhoods, only the combined household income would enable a family to buy a very decent property. I personally define a very decent home as anything above RM1 million. Obviously, my home is below that. Actually, as soon as we look at the landed properties, it would usually be 7 figures or higher. A condo with over 1,400 sq ft in a good neighbourhood is definitely over RM1 million as well. Based on the mortgage calculator from
calculator.com.my,
 (refer to image), the typical monthly mortgage for such a property is around RM4,500. (Assuming it’sRM1 million) Coupled with some typical maintenance fee (either gated and guarded or luxury high-rise), it would rise to around RM5,000 per month. The combined household income to buy such a property should be at least RM15,000. Yea, the family would also need to have a savings of RM100,000 first, as downpayment. Any household earning a RM15,000 combined income would place them in the top 20 percent bracket here in Malaysia. As per a household income survey, the T20 bracket (Top 20) household’s earn a median income of RM13,148 per month. Here’s that report in
TheStar.

I used to have teams in Hong Kong, Bangkok and even Singapore. My Hong Kong staffs’ monthly salary is pretty decent, by Hong Kong standard. (Too bad, I am working in Malaysia. Haha).  Anyway, according to an article in
Reuters.com
, the typical median income for Hong Kong professionals are HK$17,000 (RM9,148) per month. Someone earning HK$40,000 would place him in the top 15 bracket for Hong Kong’s workforce. The only issue is that even for someone earning HK$40,000 RM21,596) it is tough to buy a decent home. The reason is this:
Tesla and a similar sized flat

Based on the size, we cannot consider it as a decent home for a family but this is the current situation in Hong Kong. As per the article, most people in Hong Kong aspires to own a home and it is a life goal. (Malaysians should have the same thought, right?)  The price per square feet according property agent Midland Realty is now at an average of roughly HK$12,000 (RM6,465) per square foot or (HK$130,000 per square metre). In order to afford a 650 sq ft flat near the city centre, a skilled worker (specialised professional), the person would need to work 20 years. (I think it’s much tougher than this unless the person is a special breed, save everything, non-stop increments and keep getting promotions every couple of years)
Full report in Reuters here.

Just a few days ago, I was talking to my branch head here in KL. He asked what’s the reason people like
living within the city centre.
 It’s so ‘cramped.’ Let’s define city centre here as anywhere within minutes from KLCC ok. He is not wrong actually. These days, with prices of easily RM1,600 per sq ft or higher depending on the size, it meant that if we want to stay in the city centre, it will be ever smaller sizes. That’s one reason, plus the fact that ever higher density is now the order of the day. Ever higher too and even the

Petronas Twin Tower is
going to be just another tall building within KL city centre.  Coming back to the reason why. Actually, it’s not that bad. City centre gives lots of flexibility in terms of duration to go office, usually less than 10 minutes. As long as the office is 2-3 stations away or it’s within a walking distance. A typical Malaysian may not be that
open to walking but any Malaysian

who has worked overseas would know that walking is pretty common and the morning or evening sun is actually okay! (not too hot lah). Expats love it too because most of all the other expats could gather somewhere easily. Versus if one is to stay at the Damansara side and another is staying Puchong side. In terms of accessibility, there is a reason it is called city centre you know. Haha. It is a maximum of 35 minutes away from the KLIA and within a few stops from KL Sentral, we can reach almost anywhere. However, all these brings us back to the reality. Many of these prices would also meant that most would not be able to afford to house their family within the city centre, not even for
households with two senior managers

and 2 kids. (Coz usually these two senior managers would be driving nicer cars too. Haha.).  It’s always a choice. Duration versus size versus $$. Happy understanding.

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written on 15 Oct 2017

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HOC 2019? 20 pct discount, please?

Remember the good news about Home Ownership Campaign 2019 where developers promised a 10 percent discount of all homes whether completed or in construction? Earlier article here:
Buy, Buy, Buy is Back?
 Then, it was also clarified that it’s applicable to ALL buyers during the campaign period and not just first-timers? Here’s that earlier article:
Not just for first-time home buyers
 Well, it seems that there’s another piece of good news if what our Finance Minister Lim Guan Eng announced is followed through by the developers. He asked developers to offer discounts which is double what was committed. Instead of 10 percent, he asked for 20 percent instead.
Article in TheMalaysianReserve.com

The discount is hoped to help clear the RM20 billion worth of backlog in the housing market. Lim said the effort is in line with the government’s mea-sure to tackle the overhang in supply, but also improve homeownership for the public at large. Reported earlier was the HOC event in March 2019 where 30,115 units of unsold homes worth RM22.5 billion nationwide will be on sale at double digit discount. (10%…) Lim said, “Rehda said they are going to start the campaign by March 1, while developers are expected to advertise their old selling price compared to the discounted one. I hope they would not only offer a 10% discount (the floor percentage that was set in the initial stage), but increase the discount to about 15% or 20%. That would make it.”

Rehda president Datuk Soam Heng Choon, in response to Lim’s request said, that REHDAm embers are ready to commit on the 10% price cut. He added, “I cannot speak on behalf of the developers of how much higher they could offer but 10% is the minimum discount requested (earlier). The maximum is up to the developers.” He shared that REHDA will encourage its members to offer higher discounts. He said the campaign would see the sales of RM3 billion worth of housing properties under construction. The three-day HOC Mapex in Kuala Lumpur would also be joined by government developers like UDA Holdings Bhd and Permodalan Nasional Bhd. The HOC is also expected to offer 3,384 affordable houses priced below the RM150,000 price range targeted at the B40 group who qualifies for financing under the new Bank Negara Malaysia’s sponsored RM1 billion fund.
Article in TheMalaysianReserve.com

Ladies and gentlemen, please remember it’s not the wisest to just walk around the showcase and buy that property offering the highest discount, whatever that % may be yeah. 😛 A very good example is an empty unit with 20% discount and a furnished unit with a 10% discount and both are in areas we like. Which one we choose depends on the actual furnishings / renovations which we could then do a rough calculation with. Perhaps the 10% discount may be more value for money if the free renovation is an extensive one. Happy understanding and buying yeah.

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written on 7 Feb 2019

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HOC 2019: Not just completed properties yeah. (but not for sub-sales too)

Someone asked if the Housing Ownership Campaign (HOC) 2019 is only for first-time home buyers. Answer is NO. It is now open to ALL transactions during the HOC 2019 period from 1st January to 30 June 2019. Someone asked if this is for completed properties only since the Ministry of Finance is targeting to clear the unsold and completed property stocks which are said to be sky-high or highest in whatever period. Answer is NO. It is open to ALL properties whether completed or under construction AS LONG as these properties are registered and approved by the Real Estate Housing Developers Association (REHDA).
Here’s that actual statement in their press release here.

PROJECT REGISTRATION & CERTIFICATION
– REHDA is the authorized agent to certify the properties participating in HOC.
– Developers are required to submit the name of project, copy of APDL, and other
 relevant documents to REHDA Malaysia.

Project registration fees is RM150/unit to RM2,000max for each project for REHDA members. Project registration fees is RM200/unit to RM6,000max for each project for non-members.

Each property from the registered project will then be certified by REHDA Branch after the SPA is signed. Property certification fee is as follow:

All project certifications must be submitted to REHDA by 26 July 2019.

One very important point. The SPA price must be at least 10% lower than the price stated in APDL. All the prices stated must follow the APDL (look at that very small print at the bottom of property advertisements, the approved prices are there). In conclusion, It’s important for all stakeholders to play a part. Not just the Ministry of Finance or REHDA. This includes also the media because they are influencers too. Else I am not sure how long this negative sentiment plaguing the market will end. In fact, if it gets worse, the potential buyers could have even spent their savings on something else and not property! As for whether this will move the market, time will tell. Happy investing everyone.

written on 1st Feb 2019

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HOC is over? No extension thus far. Discounts of up to 20% to continue.

There has been no announcement of an extension for Home Ownership Campaign (HOC) thus far. Perhaps this is because of the success thus far. It has hit its target and has helped to clear quite a number of unsold units from the market including those built under PR1MA programme. The HOC’s results article here:
HOC success is not successful enough. Unsold is still rising.

Anyway, PR1MA has already indicated that it will continue to offer discounts of up to 20%.

Article in themalaysianreserve.com
  PR1MA says that despite the absence of HOC, it will continue to offer discounts of up to 20% to buyers as it aims to clear off at least RM3 billion of unsold houses. It said, “Up to 53 PR1MA projects nationwide, totalling more than 13,000 units with a gross development value of more than RM3 billion, will be opened for discounts and rebates throughout 2020.”

During the 12-month HOC in 2019, PR1MA sold 9,306 units. Housing and Local Government Minister Zuraida Kamaruddin also announced that 56,342 units of homes under remaining 65 PR1MA projects have been approved for resumption. PR1MA’s debts will be zero-rised by 2023. Zuraida also said that under the realignment with the National Affordable Housing Policy launched by the KPKT in May 2019, PR1MA will now be developing more homes priced below RM300,000.
Article in themalaysianreserve.com

Frankly, if HOC is to continue, it has to start to be more targeted. It’s not something for everyone and certainly not to benefit the experienced investors. Aim at just First-Time Home Buyers perhaps. Plus it is worth noting that should some of these first-time home buyers fail to have sufficient downpayment, it may be a better choice to provide them with a rent-to-own scheme versus asking them to continue saving up until they have the downpayment.

I am not sure if their salaries could rise faster than property price increase unless of course the RM300,000 price tag will remain the same for many more years to come. Added to the fact that these first-time home buyers should also be financially savvy not to spend their money on something unnecessary all the time.  So, in the mean time, PR1MA’s discounts may really come in handy. Start viewing.

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31,415 residential units sold! Already 36% higher than targeted (as at end Nov).

This is positive news. I repeat, this is positive news. So, I think this article will not be a popular one. Haha. Funny right. Even readers of kopiandproperty.com are selective. When the article has a negative title and it tells of a negative situation, that article will be popular. There will even be more sharing in Facebook than usual. It’s okay, as someone owning properties in Malaysia, I will write both the good and the bad and will be writing daily too.

Remember the famous Home Ownership Campaign (HOC)? The one which made the government ‘lose’ money? The buyers need not pay the stamp duty mah… The goal was to reduce the unsold units or more specifically, focused on the overhang units; unsold units after handover of 9 months. It was extended till 31st December 2019 because of good response and perhaps many buyers were in the process of buying one when the deadline arrived.

Article in themalaysianreserve.com
   Housing and Local Government Minister Zuraida Kamaruddin said that the HOC programme has cleared 31,415 residential units developed by federal and state governments, and private builders. She said, “This is above our target. The private developers are very satisfied with HOC because it helped and encouraged them to ease their overhang units. They said they can offer their own discounts for buyers without HOC after this, so they can further minimise their losses.”

The HOC has sold some RM23.9 billion worth of houses and this was above the initial target of RM17 billion. This RM23.9 billion is only as at November 2019. It meant that the actual number at the end of December 2019 will be higher. The HOC was designed to reduce the overhang in the property market valued at RM20 billion. Zuraida shared that there are no plans to extend the HOC for 2020. However if the overhang is still high, her ministry could run other incentive programmes.

The data also showed that houses priced between RM300,000 and RM599,999 recorded the most take-up, with 17,217 units (54.8%) transacted, followed by houses that were priced between RM600,000 and RM999,999, with 10,970 units (34.92%) sold. For a comprehensive  report, do refer to the
Article in themalaysianreserve.com

You heard it from the minister herself. There’s not going to be extension for the HOC but if the overhang remained high (or continue to go up…), there will be fresh initiatives to reduce them. Just remember that the focus is not on unsold units yeah. The focus is only on overhang units which briefly meant completed units which has remained unsold for 9 months. It’s also not correct to attribute the unsold units to just pricing yeah.

The reasons for being unsold could range from pricing to location and even to marketing activities; lacking of effective ones. Have you been to some sales galleries where the sales people could not answer any of your questions about the property market or even their nearby competing developers but could also keep talking about the features? Dear sales people, if I needed to know about the features, I could get it online…  Happy selling.

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HOC’s success from the number of sales? Will it be extended then?

Home Ownership Campaign (HOC) is ending in around 3 weeks’ time. Has the results been positive thus far? Briefly, yes. Many have also been asking me if I believe the HOC 2019 may just become HOC 2020 as well. I think they may be thinking if they should proceed now or wait till next year. First advice is to buy a good property and not buy because the developer gave you extra discount because of HOC yeah.

As for the question of extension, if you ask me, I would think HOC may just be extended but will ONLY be open to first-time home buyers only. This was not a programme aimed at letting all the property owners with many units to buy ever more units. This was a temporary solution to ensure our total unsold units in the market does not rise to become higher than the highest peak in
South East Asia; Mount Kinabalu. (Yes, I climbed it before, twice)

Article in themalaysianreserve.com
  Housing and Local Government Minister Zuraida Kamaruddin announced recently in Parliament that the Home Ownership Campaign (HOC) has surpassed the projected RM15 billion sales target. It had sold a record 27,823 residential units valued at RM17.66 billion sold as of Nov 11.

PR1MA was also taking advantage of HOC and it offered discounts of up to 30% for its housing projects. Due to this as of Sept, a total of RM3.4 billion worth of PR1MA homes were sold. A total of 16,200 homes under PR1MA were sold via the HOC-related events, with loan approvals for 4,000 units pending.

If we look at actual demand for homes, we will see that Selangor leads with 8,269 units sold followed by Kuala Lumpur with 4,775 units, Johor (2,026), Penang (1,401), Melaka (1,394), Negri Sembilan (991), Perak (516), Kedah/Perlis (361), Pahang (48), Terengganu (nine) and Kelantan (four).  For more details, do refer to the
Article in themalaysianreserve.com

Whether HOC is extended or not will depend on what’s the actual number of unsold units by the end of 2019. If the numbers remain super huge and the prices of those properties are above RM600,000 for example, then I think chances that the extension will continue is extremely high.

As for first-timers who are looking at PR1MA units, it may be better to buy now than hoping that PR1MA may continue this huge discount next year. Their earlier buyers who bought at the launching price are very complaining loud already and they are very dissatisfied because later buyers were given lower prices. Early bird did not catch the worm this time. Happy understanding that there are always two sides to any coin.

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HOC’s success is not successful enough? Unsold continue going up?

Recently, we heard about the success of the Home Ownership Campaign (HOC) and how it has helped to push up the number of transactions in the property market. The earlier article here:
HOC sold more than targeted numbers
 I actually consider that as good news. Apparently, some believe the HOC is still not successful enough. The reason is because the number of unsold continue to inch upwards.

In other words, demand is somehow still not faster than the rate of supply coming into the market. Earlier article about the potential demand for 2020 here:
Slow, Slow, Slow no grow property market 2020
  Of course this is not too hard to see since there continue to be projects which had been completed and the developer sales team was still selling them. Perhaps we look at some numbers then?

Article in themalaysianreserve.com
 .  Official figures from the National Property Information Centre showed unsold homes reached 31,092 units at the end of September last year compared to 30,115 units in the third quarter of 2018 (3Q18). The the value of the unsold residential units dropped to RM18.77 billion for 3Q19 compared to RM19.54 billion in 3Q18.

Johor tops the list for unsold residential units, totalling 5,470 units as well as a total of 12,371 units of serviced apartments in 3Q19. Next in line would be Perak with 5,126 units and  Selangor with 4,872 units. Within the residential property category of unsold, condominium and flat accounted for 46.1%, two-and-three-storey terrace is 29.9% and semi-detached and detached houses with 12.8%. It’s good to note that if we compare it on a quarterly basis, the residential overhang declined from a total of 32,810 units valued at RM19.76 billion in 2Q19 to 31,092 units valued at RM18.77 billion in 3Q19. Please do read the comprehensive
Article in themalaysianreserve.com

I think a few key things we should take note of. HOC has definitely helped to clear quite a lot of properties which would have remained unsold without it.  Demand from the market is still lacklustre because negative news are abound and only the more seasoned property buyers are continuing to view and buy when they see good opportunities. Many first-timers are taking a wait-and-see attitude and some may have been too optimistic and chose a PERFECT property instead of one which is acceptable and well, affordable too. Happy understanding that things are not as bad as what people perceive and if they are, then it’s best to quickly grab the chance of a lifetime…

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HOC will restart property market activities

Press Release by Knight Frank Malaysia:
Reintroduction of Home Ownership Campaign to pave the way to housing market recovery

13 July 2020, Malaysia
– Knight Frank Malaysia launches the latest research report, Real Estate Highlights 1
st
Half of 2020 today, which highlights the property trends and outlook in key markets of Malaysia.

The residential market showed signs that it had bottomed out late last year. However, the onset of the COVID-19 pandemic in 1Q2020 continues to bring much uncertainty and this has derailed the recovery momentum. With severe disruptions to the economy leading to rising unemployment, potential buyers and investors have delayed making big-ticket purchases.

Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia,
said, “During the first half of the year, the central areas of Kuala Lumpur saw fewer residential project launches and lower level of transactional activity. Still, against this backdrop, we observed active bookings of rightly positioned residential products of reputable developers in city fringe and popular / upcoming suburbs. The reintroduction of the Home Ownership Campaign (HOC) featuring stamp duty exemptions and the uplifting of margin of financing limit for the third housing loan onwards for property valued at RM600,000 as well as Real Property Gains Tax (RPGT) exemption unveiled in the short-term Economic Recovery Plan (PENJANA) will help to simulate the property market.

Alexel Chen, Executive Director of Knight Frank Sabah
, said, “Meanwhile in Kota Kinabalu, we observed that some developers are now relooking into their products with a shift in focus to quality and well-priced residential products, both landed and high-rise at mature and growing residential areas. In Malaysia where the homeownership rate remains relatively high, there are still genuine homebuyers in the market awaiting for the right residential products.”

Sarkunan
added, “The central bank has cut the Overnight Policy Rate (OPR) thrice during the first half of the year with a further 25 basis points reduction to 1.75% last week, to help speed economic recovery. The lower monthly loan repayments coupled with the automatic loan moratorium for six months from 1 April will provide some financial relief to households amid the current crisis. Also, with lower monthly repayment sum, borrowers who failed to obtain a loan due to the restriction of one third Debt Service Ratio (DSR) rule, may now have higher chances of securing financing.”

Outlook

“The residential market is expected to see a slow uptick post-MCO, supported by various stimulus provided by the government, especially the reintroduction of the HOC featuring stamp duty exemptions and other incentives. Developers may also reconsider their product positioning and marketing strategies including leveraging on the technologies and partnering with e-commerce platforms to improve their sales moving forward”,
Sarkunan
concluded.

—
END of Press Release —

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Holding Back, There’s too much negativity in Penang Property Market

For Penang, 2015 may turn out to be a quiet year where new property development is concerned. This is if whatever said by the REHDA Penang Chairman Datuk Jerry Chan comes true. He said due to various reasons such as rising power costs, fuel subsidy cuts and house buyers’ cautious stance, the REHDA members are thinking harder before launching new properties. Besides these reasons, the red tapes in obtaining developers’ licences and advertising permits for new launches plus the rising construction costs and compliance costs meant that it’s getting harder to be a developer. High land costs, especially in Penang island is also a deterrent. His deputy, IJM’s northern region general Manager Datuk Toh concurred and added that many buyers are unsure too due to the impending Goods & Services Tax (GST). The market has also cooled a lot ever since the cooling measures and until today there has been no signs of any new actions to help the current soft market. Penang developers are also forking out the highest charges compared to the rest of the country. Since all the costs are going up and affordability is a concern, the future units would be built smaller.

I think the comments are valid. However, in terms of whether the developers would wait instead of launching, I think this will not depend on the land costs. The reason is because the land costs versus the GDV is still considered low for Malaysia. Current land costs versus GDV for more developed countries are many times higher than Malaysia’s typical cost of below 15%. This is based on some of the recent reports from the market on the land costs versus the GDV being planned by the many developers. The developers would however needed to be more efficient and perhaps slightly more willing to have a lower margin. The rising compliance costs would however be a deterrent because these are continuously increasing.

Besides that, until today the demand is still there, it’s just that the prices has gone beyond affordability and many would have to get married in order to afford a unit. For the singles, even if the units are made smaller but at a location that they want at a price they can afford, I think the purchase would continue. In fact this may even jumpstart the market. Penang as a property market will always be attractive because despite being such a small state, it continues to attract many new workforce from outside of Penang and this meant new demand is always increasing. Mainland has long been a secondary choice for any Penangite buyer but it can be made attractive for newer buyers. The only concern might be more of the lifestyle. There are no choices like Queensbay or Paragon Mall or Gurney Mall there. This is necessary because of the younger buyers today. We are not talking about those about to retire etc. We are talking about the typical 30 – 35 year old Senior Executives / Junior Managers and these people’s preference would play an important part in their choices. No mall? No entertainment outlets? No ‘peer’ crowds? Well, that’s why they prefer island and that’s why they are not buying because a 1,000sf condo today is RM650,000. How many can actually afford it? Happy searching for your favourite property.

I have written way too many times that secondary market is another important consideration and not just the new ones. I will not say anything about them this time. Read here if needed:
Secondary property market, now?

written on 4 Dec 2014

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Holiday Villa news. Property development is always on value creation.

This was also big news. The Holiday Villa Hotel in Subang stopped its operation on 1st October 2021. Everyone was saying how awesome the place was and sharing all the memories they had with the place. Some say they are sad that the Covid-19 has caused so many hotels to shut their operations.
At the same time, we also have hotels which are expanding their offerings too. This is one recent article about Sunway Hotel Big Box

Actually, there’s a lot more to just hotels shutting down their operations yeah. Question is not the closure. Question is on WHAT the owner intends to do with the place. That’s the real WHY for the closure yeah. Every business is all about value creation. Property development is always on value creation.

Article in nst.com.my
   The Holiday Villa Hotel in Subang is no longer in operation since October 1, 2021. IJM Land Bhd, which owns the hotel, is said to be examining a range of options to boost the property’s value. The business resort hotel is situated on 2.75 hectares of landscaped ground on Jalan SS12/1, with views of the Subang Ria Recreational lake and park. Subang Medical Centre and Dorsett Grand Subang are both just a short distance away.

A source told NST Property, “Due to the current market conditions, IJM may not wish to sell the hotel at this moment because it will not receive a fair price. We anticipate that, rather than selling the asset to maximise its worth, IJM would examine other options for it.”

Holiday Villa Hotels & Resorts is a rapidly expanding company. It presently operates five hotels in Malaysia, with two more set to open soon, as well as 17 hotels in significant international markets such as Saudi Arabia, Qatar, Bali, and China. Please do read the full article here:
Article in nst.com.my

Options are aplenty definitely

Hotel operations are based on recurring income. In other words, if it’s well maintained, the profits will be higher than the maintenance and operating cost and the owner will continue to earn profits year after year.

Property development, say a high-rise development would provide a bigger profit but it’s more of a one-off and the property developer would then need to use the profits to invest into something else for more earnings.

Transformation of a hotel operations into a mixed-development could maybe provide the best of both worlds but this is much harder to do and it may fail on both the fronts; residential part not many like and the commercial part, not many takers.

I am very sure the options are aplenty because this land in which Holiday Villa Subang is situated is definitely a prime piece of land today. Plus the fact that it is owned by IJM Land would definitely be helpful in having the financial muscle to do more. Let’s keep reading and see what happens next.

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Do you want to know how much you could borrow for your next property? Here’s a free resource. Please read on.

Press Release: The Launch of ‘PropertyGuru Home Affordability Tool’

In conjunction with GuruDeals, PropertyGuru is also launching the Home Affordability Tool, which helps Malaysians determine their creditworthiness and home loan eligibility. The PropertyGuru Home Affordability Tool is the first-ever online loan eligibility solution in Malaysia and is developed in collaboration with MHub – a real estate fintech platform that helps qualified buyers to get their homes – and powered by CTOS – Malaysia’s leading credit reporting agency.

This free online tool enables homebuyers to get pre-qualified – quickly and safely. Leveraging consumer credit insights and comprehensive data from CTOS and MHub’s proprietary algorithm, the

PropertyGuru Home Affordability Tool requires prospective buyers to key in their personal details to almost immediately retrieve their estimated eligible loan amount, Debt Service Ratio (DSR) and personalised advice on how to improve their DSR.

Vivek Kumar, Director of Consumer Products at PropertyGuru, shared, “In Malaysia, personal debt ratios are extremely high and it’s hard for many Malaysians to get credit to buy homes. At last check, home loan rejection rate was at an all-time high – at approximately 60%. With PropertyGuru Home Affordability Tool, we’re equipping Malaysians to estimate the maximum housing loan amount based on their annual income and ability to service the loan, evaluate their DSR, and know the price range of homes they can afford to buy – all under five minutes and free of charge!”

Equipped with this knowledge, buyers are better equipped to not just avoid home loan rejection but also better strategize their budget for buying a home.

“PropertyGuru has always been at the forefront of providing property intelligence and democratising the property purchase process. We believe that every homebuyer should have access to the most current property information and insights to make confident property decisions, and the PropertyGuru Home Affordability Tool is another undertaking by us to realise this mission,” added Sheldon.

The Home Affordability Tool is available at
www.propertyguru.com.my/mortgage/home-affordability-tool
.

— end of press release —

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Home for own stay is NOT an investment?

Home for own stay is not an investment.

There’s just too many misconception about buying a property and too many people continue to spend away whatever money they have simply because someone told them renting is cheaper versus buying and that if it’s buying for own stay, that’s not an investment! Many of these advice were given by those who are sharing about financial management?

Famous quote: “It’s only an investment if it gives you return every month.” Oh, so if I am an owner and the rental paid by my tenant is lower than my mortgage, my home is not an investment?

You mean… if I am renting a home, I get returns every month? Something like this? After I rent the same home for a few years, the landlord gives me free stay for 12 months? Get serious. RM1,500 rental per month and RM18,000 per per is LOST forever. That’s definitely no gain at all.

Photo by Joanna Bogacz on
Pexels.com

Let me also share with you 5 other reasons why buying that first property is DEFINITELY an investment.

Pay rental for 30 years and you get to stay free till you say bye bye

Seriously, any landlords who read this statement above and say, ‘Hey that’s me. If my tenant pays me rental on time and I like him / her a lot, then I will allow them to stay for free after they have paid me for 30 years. I am a good landlord. Caring and charitable too. By the way, I would not want to debate on this but if you are currently renting and your landlord actually promised you this, then I am happy for you. Your landlord is a really nice person. Please do not move because that next landlord may not treat you the same.

Mortgage so high, rental so low, renting means saving more money.

This is a fact which is hard to debate. I am serious.  Many of my friends are renting out their units at below the monthly mortgage every month.  Their tenants must be very happy to SAVE money every month.  I just hope they really do something ROI related with their savings and not spend it.

Anyway, just go to any mortgage calculator, look at the actual mortgage payment per month and separate out the interest we paid and the principal we paid. If the rental from the tenant covers more than the interest portion, we are actually gaining and not losing. I cannot say the same for the tenant.  May not be a lot but when times get better… we have upside potential. Tenants? Well their only advantage is that they could move on to the next property. (they better wish market is forever this slow…)

Are you an expert in some other types of investment?

Any type is fine. Whether it’s the stock market (value investing) or even speculating on some potential trends / news / rumours. As long as you could do this very well and is earning lots of returns which can easily cover the rental, then keep doing it and keep renting that place. However, if you are not, which majority of everyone I know is not, then it’s best not to waste the time and start buying a property and building up that asset. At least you have that home which price will grow slowly following inflation…

Most of us have no other choice anyway

Everyone would love to be the CEO of a startup moving on towards a billion (USD is best but RM is fine) valuation. Very few are.  EVEN if you are now working towards this startup goal, please at least have a property to your name which you have the discipline to keep paying for.

Only 1% of all the employees in a multi-national of a few hundred people are the top management. Add another 4% for the senior managers and we have just 5% in total. Not many Malaysians are in this category and could be earning half a million ringgit a year or more (plus they remembered to save those money…)

Moving down, we go to the
T20 households in Malaysia. (click here to read)
Yes, they earn higher than the remaining 80% of Malaysian households. However, imagine if they did not buy a home and now they have retired. Do we seriously think all their earnings would have been enough for them to keep paying rental for the next 20 years? RM2,000 (rental) x 12 (months) x 20 (years) is still HALF a million ringgit!  Why not take this half a million ringgit to do something we love instead of paying rental?

I am not a billionaire, not from developer, not from real estate agency and not a mutual fund agent

Nothing to buy at the end of the article yeah. Not going to tell you to buy any property to start your first-home. Go find it at many other property listing sites.  No courses for you to attend too, sorry. I am not qualified as I do not buy 10 properties at one go. My advice comes from my experience and how property investment has continued to be a rewarding one. It also comes from the fact that there’s too many experts who kept telling us how to save money, save money and save money but then they included the renting as part of the saving money advice. Sigh…

Conclusion

Feel free to disagree and just do what you think is right. It’s your life and it’s also my life. Just remember that calculation on top yeah. Half a million. We assume rental stays exactly the same too by the way. Happy investing.

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