When affordable homes are too many, would this cause property prices to drop. Scary for owners and Happy for buyers?

Dilemma for me

By the way, I am an owner. I hope prices continue rising. I am also a potential buyer. I also hope prices would drop so that I could enter. What a dilemma, right? This is why I smile when property developers issue press releases saying that property prices will rise and I also smile when there are good opportunities appearing because of the current market circumstances. You see, I love to smile. Haha.

What if hundreds of thousands of affordable homes were built?

Anyway, there are announcements about many thousands of new affordable homes or even hundreds of thousands when we stretch over a few years which will be built here in the Klang Valley. If it’s really hundreds of thousands of units, it would flood the market and then the market would turn negative. Then, surely property prices will start to drop since the supply is just too many.
Like the overhang issue which people say would cause property prices to drop! (Here’s the earlier article about this)

Now, let’s answer the question of whether affordable homes would cause the whole property market to be feeling ‘just too much’ and then start to have a ‘landslide’ in property prices.

#1 Are the target markets the same?

For product A to impact product B’s pricing, then product A would have to appeal to buyers of Product B as well. When there is competition, then there will be a pressure on pricing. There are certainly differences between these simple and new flats versus the many apartments priced from RM400k and has facilities. They are unlikely to be appeal to the same group of buyers.

If they did, I think this is good for the market. More people who may be renting those RM400k properties with a rental of RM1,300 per month may now be tempted to buy instead. Positive for the market as a whole yeah.

#2 Are there really such a Demand when we look at the population without a home?

Let’s understand that within H1 2020 itself (of which two months were under MCO), the total residential property transactions topped 75,000 units. This meant that the demand is still super big and one main reason people could not buy is that the properties were unaffordable. When we look deeper, then we would know that many of these lower income
households within the M40 (click here to know what is M40)
are renting.

They are the ones who really need a property instead of keep paying for rental which will mean they remain poor for generations after generations. A simple calculation? RM600 (rental) x 12 months x 30 years = RM216,000. These are their money which they are giving away to the home owner… Their next generation would still have to keep paying this. Help them move away from this for their future please.

#3 Property market is well supported… lah.

Since 2014, we have always been having predictions after predictions that property price for the whole market is about to drop. There were even forecasts with details such as the exact time for it to happen and even the actual % which the price would drop to. Fortunately, all these forecasts did not happen and we still have a stable market.

Looking deeper, we would realise one major reason is because it’s NOT EASY to get a home loan approved. Ask around and one would understand that the banks are super conservative before they approve any new home loan applications. When the quality of borrowers are not just any Tom, Dick and Harry, they will also not suddenly stop paying the their home loans become
non-performing loans. (Take a look at the actual NPL status in Malaysia here)

#4 Property prices will drop IF …

These new flats / apartments become an eye-sore in just a few years. This is why MAINTENANCE is essential. This is why MAKING SURE the people pay their maintenance fee is essential. Please put these in place BEFORE the buyers are allowed to buy a unit. TAKE FAST action as soon as someone’s not paying their maintenance fees. This is not the time to be SLOW in acting and in the end, all the owners who paid suffered.
 It’s actually already possible under law yeah. (Read here)

Conclusion

Just building more of these affordable units will benefit the needy. There are many Malaysians in need of a home. Please do not ignore them. We somehow must help them so that they could stop making the owner rich. Remember, no landlord will tell them to stop paying rental if they have paid rental for the last 30 years.

Property is already a cause for poverty in many advanced countries. In the old days, people continue to be poor for generations simple because they were not land owners. Today, people will remain poor when 30-40 % of their monthly salaries are given to the owner of the home they stay for years after years.

What I hope is that these affordable units are PLANNED based on available demand for that area and not simply building it when there are NO buyers! Thank you.

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...


Property Prices too high? YOU might be the main reason.

This is not a joke. Seriously, during my talk in a Singaporean bank, a few of the participants were talking with me after my talk and we came to the issue of property prices being too high. It’s true, in some areas, RM1,000 psf is STILL
considered very attractive
 while in other areas, even a RM400,000 landed property is considered not attractive. Attractively priced versus attractively placed. Just could not mix together right? Well, it really depends on individual. My ex manager stays in just an apartment without facilities and despite having bought another condo, she said she is selling the condo but staying in her apartment. Her balcony gives her views of a huge cemetery. From the price she bought, the property has appreciated 50%. She is truly happy there, its near to places she would like to go, it’s convenient for her mother to be looked after by other relatives and many more reasons which some of us have never thought of.

Coming back to
property prices being way too high
 in certain areas. Do you think the cause is the land price? The construction costs? The greedy developers or the state government which did not do its job in controlling the price? Well, what about it’s all because of YOU? Disagree? Sure, go ahead because I also disagree with you. Haha. Look at the property portals and you would find many units below RM300,000 which in terms of size and convenience would surely meet your expectations but
NOT the area which the property is situated.
 So, what do you do? You skip this area and look at the popular ones which everyone wants. When everyone wants to buy in the same area, the prices would of course be higher. The sellers would try to sell ever higher. In your mind, you think, RM30,000 extra is ok. Divided into 30 years, this is very little! Yet, few units later, the prices went up another RM30,000 and this cycle repeats itself until voila, RM1,000 psf is considered ok!

Step back and think for a while. What if, the demand for these hot spots is halved. Do you think the
prices would still shoot up so fast
? How about spreading it into slightly not as popular areas? Some areas where there are slightly more flats, slightly further away (10 minutes duration), mall is not next your home and schools are 10 minutes away? Suddenly, your choice widens, your monthly installment goes down and you helped to make a less popular area become slightly more popular. Of course, once more people stay in that less popular area, what will happen? After a few months, you would have already gotten use to it and after a while, it is just another home sweet home. There are going to be
more malls being built
, not less. If you love private hospitals, guess what, there’s more being built every year and there’s bound to be one within less than 20 minutes from you even if you stay in less popular areas today.

Yeah sure, if you insist that you can still afford the usual few hotspots, please go ahead. It’s your choice to feel superior anyway. Since you are already earning so much, you should treat yourself better. At least, that’s what you think. I still think my cheaper huge condo and my awesome park beats your expensive and tiny small condo in a perceived high end area.  I have always been a ‘low end’ person. It’s ok.  🙂

written on 5 Nov 2014

Next suggested article:
Buying terrace houses in Rawang below RM300,000

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Huh? Property prices up 5-8 percent in 2016?

Sometimes I really do wonder what is really happening with the property market. I have many real examples showing that real estate negotiators are struggling. Some are now UBER driver, some have found new jobs and many are themselves negative about the market. A few people told me that the rental is also falling and one colleague took months to rent out his landed home in a mature neighbourhood despite agreeing to a lower rental from his wanted asking price. Suddenly, now news report are quoting some experts saying that property prices would be rising in 2016? Transactions are falling and prices are rising?

In their property market review, Rahim & Co Chartered Surveyors Sdn Bhd director Sulaiman Akhmady Mohd Saheh said that he expects prices to rise and expects marginal price gain for the residential sector. The increase would be between 5% and 8% this year, compared with 7% to 10% last year. He said, “Depending on location and type of property, some may see price consolidation as the gap between sellers’ asking prices is closing towards the buyers’ expected prices.” So, the prices are CLOSER to the buyers’ expected price. He said that due to the slower increase in property prices versus the average annual household incomes, the housing affordability for terrace homes improved slightly last year.

I think the assessment is true enough. Sellers are definitely not as desperate as what we believe them to be, at least majority of them and currently. A colleague viewed many units of a condo recently and chose to offer one unit at RM600k instead of the selling price of RM650k. The seller offered RM640k and nothing else. My colleague will continue to view more units from the same project and the seller has yet to call back with a lower offer. Another colleague wanted to buy a landed property in Sungai Besi and asked for abetter price from the seller, a lady. She refused and my colleague has since bought another bigger unit for slightly higher price, RM2.1 million. The property market is alive and well for those who has deeper pockets and has a need for a home.

According to Rahim & Co Chartered Surveyors Sdn Bhd executive chairman, Tan Sri Abdul Rahim Abdul Rahman, “The ratio improved from 3.6 in 2014 to 3.4 last year, which indicates that an average terraced house would cost an average household or family in Malaysia 3.4 times its annual gross income.” Ratios in other states are as follows: 5.7 times ratio for Sabah, 5.3 times for Penang, 5.2 times for Kuala Lumpur and 4.5 times for Sarawak. These ratio showed that the house prices are moderately unaffordable and for Sabah, Penang and Kuala Lumpur, average prices of terraced houses are even categorised as severely unaffordable.

Personally, I always think the current slowdown is a good thing. It makes everyone, from sellers to buyers and even developers to think more rationally. Need to sell? Then, be less greedy. Need to buy? Then be open to more choices, further away.  It gives some time for more affordable units to be completed as well. It should at least stem the property price increase for the medium-end ones. As for the luxury ones, it’s very clear there is now an oversupply in KL. Read here:
Luxury condominiums oversupply in Kuala Lumpur

Let’s wish for a more resilient property market Malaysia instead of a speculative one.

written on 5 Feb 2016

Next suggested article:
Developers are unlikely toreduce prices drastically? True, but.

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property prices up due to GST? Developers should just absorb it.

In an online news portal, it was reported that The Royal Institute of Surveyors Malaysia (RISM) would be conducting a study on reasons as to why property price increases and provide recommendations on remedy by end of 2014. I think RISM can also talk to HBA, REHDA, MIEA etc and everyone would more or less have DIFFERENT ideas about why house prices have been increasing. Of course, I would still love to hear what RISM’s final recommendations would be. Would they recommend how to reduce how prices? Well, highly unlikely. Prices, once risen would find it hard to go down, except for another round of crisis which most probably has to start in the property markets of the developed countries.

Shareda’s President, Goh said that property developers do not normally earn 20% and said that 20% is indeed a very reasonable one. Any developer who is able to earn more than 20% would be laughing all the way to the bank. The reason for this is due to the long process from day one till completion. Typically this may take up to 6 years for a developer starting from acquisition of land till the completion of the intended project. I do not think it takes up to 6 years for a seasoned developer, especially those with already existing land bank. However, 6 years is okay as a typical benchmark.

In terms of the 20% profit, based on listed property developers, what he said is quite accurate. Read here:
Developers and their profit margins, recent updates, Sept 2014.
 However, this profit margin is really dependent on the type of property, the developer’s ability and all the other costs during the construction stage. If the developer has owned the land for a long time, it is likely that the cost is much lower compared to a developer who bought land for development recently.

Another thing that I must highlight is something I spoke about recently.
With the implementation of GST next year, the potential one time increase of between 2.6% to 4% should be absorbed by the developers. Shareda’s president Goh validated this when he urged Shareda’s members to absorb this small increase.
 Whether the members absorb or not actually would depend also on the market direction next year. If transactions continue to be so slow, I think the absorption alone may be not sufficient to move the market. A further reduction may be necessary or perhaps the relaxing of some cooling measures. 🙂

written on 31 Oct 2014

Next suggested article:
Double storey terrace in Kota Kinabalu outskirt is now RM450,000

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property prices to go up SIGNIFICANTLY in 2021?

Honestly, I do NOT believe the property bubble crash predictions. I prefer to look at the potential signs by myself instead. Even if I may not be right all the time, I also do not look too highly at predictions by property people or even academicians. The signs? Read here:
Understanding 3 property bubble signs and more

I also do not believe anyone telling me that property prices will drop because of unsold property numbers or even overhang. I always ask the home owners who are not facing any financial difficulties this question. “Would you sell your property at lower prices just because someone tells you that the unsold property numbers are going up?” The answer is a clear, NO. Earlier article here:
Of course prices can drop if we sell lower than the price we bought

However if someone were to tell me that property prices will always be going up, I will believe.  It’s not even due to demand and supply. It’s simply because of inflation. My mother told me that her monthly salary was at one time just RM150. Today, a salary of RM1,500 is said to be insufficient to even survive. The semi-detached home my parents bought was just RM35,000 long time ago but today, it is easily RM550,000. Thus, inflation and the value of money meant that property prices will keep rising in the future.

If someone were to predict a certain year that property prices will rise, I think we should take it as a reference and not a firm direction. Let’s see what’s the prediction by a few hundred Malaysian real estate agents yeah.

Article in nst.com.my
   A survey of 386 Malaysian real estate agents showed that they believe that Malaysia’s residential real estate prices, rents, and sales numbers will increase significantly next year and in 2021. The survey was conducted in November 2019 by Juwai IQI, one of the largest real estate groups in Southeast Asia with more than 7,000 agents.

Juwai.com executive chairman Georg Chmiel said Malaysia is attracting companies and operations that otherwise might have gone to China. He added,  “The lower price threshold for foreign buyer purchasing will also help absorb some of the unsold inventory that has been weighing on the market. While the price thresholds are only being lowered for one year, hopefully that will give foreign investors enough time to purchase.” Please read the
Article in nst.com.my

It’s always a good idea to compare prices per sq ft for similar properties within the same neighbourhood to understand if we are buying high or low. If prices are similar, then it’s time to contrast. Look at the features; facilities, maintenance, year of built and more. It’s quite usual for older condos to be priced slightly lower because its design may not look so contemporary anymore.

However, a lower price simply because of design alone represents value yeah especially if you do not mind about the outdated design for example. Happy understanding before we buy any property 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:
Property prices rising too fast is bad for the banks and for the owners too unless

Header image from
shutterstock photo by Andrii Yalanskyi

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property prices up highest within last 17 years. Good news or?

What are your thoughts with this, “property prices up highest within last 17 years.”

To those who think property prices will be dropping, perhaps the wait also needs a reason? If the reason is valid please continue waiting. If the reason is simply a thought, then think again and perhaps look deeper into more potential reasons too. Property prices do not drop simply because people are expecting it to drop. In 1998 for example, property prices did drop more than 10% but that was a one-time occurrence and property prices have since recovered. So, the potential of another property price drop may need to be caused by another financial crisis first.

Now, let’s look at an advanced property market. Way more advanced than ours. It’s the Australian property market and the city is none other than Melbourne.
Article in nst.com.my
Australia’s housing market is booming again and it has the biggest monthly price gain in 17 years. CoreLogic Inc. data released Monday showed that prices in capital cities rose two per cent, led by Sydney and Melbourne.

Tim Lawless, head of research at CoreLogic said, “Australia’s housing market is in the midst of a broad-based boom.” The rapid gains have been “spurred on by a combination of record-low mortgage rates, improving economic conditions, government incentives and low advertised supply levels.”

Image Source:
nst.com.my

The article is a comprehensive one and has more details on the property market including the auction market (their auction is not from the distressed market, just another form of selling their home)
Article in nst.com.my

By the way, property prices going up by 2% every month is BAD news

I know, if I am the owner, I would welcome this good news of 2% up per month. However, if we understand that property prices must be supported by a similar rise in income, else it would soon become  unaffordable and when that happens, prices are considered speculative. No one I know have salary increments every month. On a yearly basis, probably 5-6 percent increment in salary is more appropriate which meant that it is not enough to keep up with the monthly property price increase.

If this happens for just one year because the year before was very bad for property prices, then it could still be acceptable. However, on a continuous basis, this will mean that very soon, not many people could afford to buy a property. As an owner, I wish for an orderly price increase. I actually do not need any sudden jump in property prices nor would I want any sudden decrease in property prices too.

Photo by Catarina Sousa on
Pexels.com

I think we will just have to wait and see what happens a few months down the road. The amazing thing about some of these advanced property market is that their data is by far more transparent and are up-to-date and usually available very quickly versus having those numbers only one quarter or 6 months later which does not help with planning.

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:
Too many affordable properties will cause property prices to drop?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Time to cherry pick as property prices will soar post-Covid 19, say experts

Today (25th Aug 2021), my views about post-Covid19 property market was published.
Time to cherry pick as prices will soar post-Covid 19, say experts.
This is the title of the article in TheStar.com.my The article included views from Datuk Seri Gavin Tee and also Chris Tan as well.

Original article is here:
Article in thestar.my

KUALA LUMPUR
: The Covid-19 induced new normal will be a boon to mixed property developments, especially projects that combine all three components, namely hotel, commercial and residential, within a single address.

The new normal dictates the types of preferred properties home buyers may want to live in. One that takes into account the extra care taken to remain safe when doing business, the need to avoid travelling too far, the demand for stable internet connectivity for working from home, a sense of security and shopping convenience.

The Health Ministry’s standard operating procedure (SOP) to avert coronavirus infection has generally dampened market sentiment, but in this case, it did the reverse for SOP-conscious house buyers.

DSGT Consultancy Sdn Bhd property investment principal Datuk Seri Gavin Tee said once a neglected property segment, mixed development is trending and getting the attention it deserves as a good peg for property investment, and a perfect fit is when the property is in a prime location and freehold.

He said mixed developments fit the requirements of the new normal. People, he added, are dying to go out to travel, and because of border restrictions, domestic tourism will see a boom and there will be an uptake in demand for hotel rooms.

Tee said mixed developments fit the requirements of the new normal.

Given these positive factors, he said, mixed developments with all three components will command a premium, and it is wise to invest in such properties even now during the pandemic.

Almost all mixed development projects are commercial and residential property, but very few include the hotel component. One such upcoming mixed development with a hotel that real estate agents are hot after is the RM450mil Alfa Bangsar project at Jalan Maarof in Bangsar.

Online property portal kopiandproperty.com editor Charles Tan said there are always opportunities to explore when all seems dire, especially during a crisis such as the pandemic.

“Opportunity exists because many are pulling back. Whilst during good times, many are jumping in and are queuing up during new launches and many would decide on the spot. When the whole world knows about it, the opportunity ceases to exist,” he said.

Opportunity exists because many are pulling back, said Tan.

Tan said any investment in a mature and affluent neighbourhood in locations like Bangsar would continue to be favoured even after Covid-19 is under control.

“It won’t lose its lustre as you can’t be wrong choosing property in such a high-end matured neighbourhood,” he  added.

Property investment speaker Chris Tan said property, especially in vibrant Bangsar, is sought-after and buying now makes sense as the pre-Covid price was never lower than RM1,000 per sq ft.

“Bangsar is a mature location and when a project is completed in a few years’ time, the post-Covid prices will rise driven by inflation, and the property there may double and hit RM2,000 per sq ft.

“There is no need to justify the attractions of any new projects in Bangsar which is a first-choice destination. The idea is to buy now as you won’t get it at the current price in a location full with landed properties that are expensive,” said Chris, who is also the principal owner of law firm Chur Associates.

Vibrant Bangsar remains as a sought-after location, said Chris.

Sri Seltra CEO Terence Chia said even before the sales launch of his company’s mixed development in Bangsar, it had already received over 500 early registrations of interest.

He said the project site was once the car showroom and workshop for Alfa Romeo cars that the company was selling for two decades.

“Our land is freehold and is the remaining few parcels left in Bangsar. The mixed development comprises an upscale hotel, commercial spaces and serviced apartments within a single site.

“It will be a landmark that will prosper all businesses in the vicinity here. Alfa Bangsar will take the concept of serviced apartments to the next level of work-life balance with a wellness theme,” said Chia.

He said Sri Seltra, under the parent City Motors Group, will also develop a similar mixed development project that is much larger in scale on a freehold plot in Bukit Bintang next year.

Please do refer to the original article here:
Article in thestar.my

My full views with some numbers in the next article

When I was asked to comment for this article by the writer, I gave a longer assessment but since only a small part was published, let me write an article as a follow-up to this tomorrow. In the mean time, continue to scout around for the properties to buy because property market is always a cycle. A lively market (just before Covid-19 arrived) may turn into a quiet market (like today with all the restrictions and lockdowns) BUT when we look at property prices, it’s quite a certainty; up.

Briefly, there are many examples of property markets where the vaccinations have been far higher than Malaysia and how their property market has been after Covid-19 is under control. I repeat, ‘under control’ and not zero infections. Zero infections have not happened no matter what brand the vaccine is and in all countries. Happy knowing.

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:
8 things about property investment before it’s too late

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Thinking property? Rating of BBB probably says Fitch Ratings.

Reported in Bloomberg, Fitch Ratings reiterated its earlier stand; that Malaysia’s credit rating should drop and the likelihood is higher than 50 percent. Its head of Asia Pacific Andrew Colquhoun was quoted as saying that Malaysia is more suited to be in the BBB range. Major reason remain the same, 1MDB’s ability to meet debt obligations. Thus, due to 1MDB, it will affect Malaysia’s credit rating. Currently, Malaysia is still rated at A- by Fitch. The decision would be made next quarter. This may mean as early as July 2015. For the record, Fitch has assigned a Negative outlook to Malaysia since July 2013 and thus far this has been maintained.

As of now, Fitch’s assessment remain different from that of Moody’s Investors Service and Standard & Poor’s (S&P).
Moody’s affirmed its A3 rating and positive outlook in January. It also said that its decision is supported by Malaysia’s macroeconomic stability and the current fiscal deficit steps by the government. Meanwhile, S&P maintained its A- rank and stable view in February and said that Malaysia’s economy has no issues to withstand some weakness in energy sector.

Do note that all these ratings would have implications on how investors see / invest in Malaysia. Once the rating is down, the investors tend to also look elsewhere and this would most probably cause more weakness to the Ringgit. My personal opinion remains the same, 1MDB is a weakness to some important people and is a good political topic but it should not be used as a rating reason when compared to the current economy of Malaysia where all indicators remain positive. Of course, I am just a very normal Malaysian and my views would remain just my views. Be reminded, if you personally feel that the Malaysian economy is not going to do well very soon, please start to keep cash and not pouring more money into property. There’s no reason to get trapped when things suddenly turn for the worse.

written on 22 May 2015

Next suggested article:
Still ‘A’ long-term ratings for Malaysia

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Like property but risky? REIT is your key, another one listing

If you like to read some financial tips for 2017, here’s a good compilation of many tips from different experts by
mr-stingy.com
, another site I frequent occasionally. One particular financial advice given within the compilation is one on Real Estate Investment Trusts (REIT). It saidthat this is a good investment potential. I think I agree too. REITs are considered stable due to the revenue which is mostly from leasing activities. Due to the current share market, REITs are also attractively priced these days and its dividends can easily be 50 percent higher than fixed deposit. Current FD rate is around 4 percent while the dividend returns for REITs can be as high as 8 percent. On average, it’s around 5.8%. Take a look at all of them here:
REITs Malaysia
 Another one is coming up. KIP REIT. This is under Kepong Industrial Park (KIP) Group.

It will be listed in Malaysia on 6 February 2017. As per documents lodged with the Securities Commission of Malaysia on 30 December, it will be offering 234.15 million units of which 13.5 million units are open to retail investors. Its portfolio includes the KIP Mart outlets in Tampoi, Kota Tinggi, Masai, Melaka, Bangi, and Senawang. All these properties are valued at MYR580 million (USD130 million) and the aggregate occupancy rate is around 85.3 percent for the four month period ended in October 2016. At the indicative price of MYR1.00 per unit, KIP REIT seeks to raise at least MYR234 (USD52 million) million from the offering. Final listing price for units of KIP REIT has been set for 17 January. You can read the full article here:
KIP REIT
 upcoming listing.

To those who feel the
property market is too volatile

but you still think property market will be healthy over a longer period of time, REIT may be something worth considering. After all, many of these REITs already have track records. As usual, do our own due diligence. Drop by the properties owned by them, see if they are doing well. As long as we could see the property, say the shopping mall is doing well, then that particular REIT would do well. REITs do not fluctuate a lot throughout the year because tenancy agreements are mostly long term and not monthly. Oh
yeah, property stocks too, if

you believe a certain developer is doing well. Happy investing.

written on 5 Jan 2017

Next suggested article:
property market will be worse with Trump’s win?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Earning RM2,500 and buying a RM360,000 property? Possible?

These days, the requirements to get a loan seems tougher than ever. Actually, is it because of the loan or is it because of the person? Banks need to lend, else they have no profits and could not even pay the interest on our fixed deposits. Okay, they could invest in many other stuffs but generally if they stop lending, they stop earning. Properties have to be affordable enough for the masses to buy. However,
Khazanah Research Institute’s

study showed that on a median household income basis, a Malaysian household could only afford a property of up to RM270,000. Most unsold units here in Malaysia are priced above RM250,000. That explains a bit.

Have we wondered if someone earns just RM2,500 could they afford a property which is priced much higher than RM270,000? Housing Affordability Index says that to be really affordable, the calculation is as such:  Yearly income x 3. Using a Malaysian earning just RM2,500 per month, the calculation would be RM2500 x 12 (months) x 3 (Affordable) = RM90,000. It is the same for Australia. In their case, for the property to be categorised as affordable, it would be AUD2,500 x 12 (months) x 3 = AUD90,000. Refer to the image for what happens if it is X4 or X5 instead.  Anything above 5.1 is considered SEVERELY Unaffordable.

As per the calculation, a RM300,000 home is affordable to someone earning RM100,000 per annum. Actually, have we wondered, what if that someone earns just RM2,500 / month or RM30,000 per year could he get a home loan approved for a home priced at RM360,000? ACTUALLY, it is a potential YES. As long as they have no other loans and earns a net income of RM2,500 the banks may just lend them the money to buy this RM360,000 home based on a Debt Service Ratio of less than 70 percent! Please refer to the image. That RM360,000 property requires a mortgage payment of around RM1,641 per month and this is only 66% DSR for the borrower. By the way, the owner could even rent out one or two rooms from the home he bought to get additional money to supplement his monthly income! Note: As long as this person is totally free of any other debts including credit cards, car or other instalments.

These days however, this individual will be considered a ‘rare breed’ if any or ‘extinct’ in many countries. There’s just too many other distractions which will take away our money. The question of whether someone earning RM30,000 per year could afford a RM360,000 property is thus a yes. By the way, Hong Kong’s median income versus the median home price has a House Affordability Index of 20. In other words, the calculation would have been like this: RM30,000 x 20 = RM600,000. By the way, in many countries, their Housing Affordability Index is above 5 and for Hong Kong it is 20. Happy understanding.

written on 4 Nov 2018

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:
When we are living longer, better prepare more

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property sales may suffer when it’s hillslopes and flood prone areas

We have often been reading about the Klang Valley property market. Here’s one recent one:
High end KL condos, future looks brighter? More units coming

Do we know what’s happening with the Penang property market? Here’s one
article in TheStar quoting many property experts.
 In brief, Penang’s unsold supply of residential units are concentrated in the higher-end market with properties priced from RM500,000 onwards and in areas such as Mount Erskine, Tanjung Tokong, Batu Ferringhi, Sungai Ara and Bayan Baru.  According to Raine & Horne Malaysia senior partner Michael Geh, the overhang in these locations does not come as a surprise because certain areas in Tanjung Tokong, Batu Ferringhi and Bayan Baru are prone to flooding. Some projects are near hillslopes. In fact, during the final quarter of 2017 when the rain storms wrecked havoc, the sales of properties near hill slopes and flood prone areas were badly affected. (Yes, I could still remember one desperate seller suddenly call a REN friend of mine and reduced his price by over 30 percent. The road in front of his landed suffered soil erosion…)

As for the term ‘overhang,’ the National Property Information Centre defines a property overhang as units which have been issued with the certificate of fitness for occupation (CF) and which had been on the market for more than nine months but remained unsold.  There were 1,482 units of unsold units of residential properties priced from RM500,000 to RM1mil.  Geh said, “A household would require at least RM10,000 income to purchase properties priced from RM400,000 and above. The median monthly household income in Malaysia is currently about RM5,228.”Geh then mentioned that the proposal to implement essential components of the Penang Transport Master Plan (PTMP) such as the LRT and Pan Island Link will boost the value of properties near the routes.
Here’s that article in TheStar for reference.
 Here’s my earlier article about PIL.
The best option for Penangites. Train vs Tram.

It is a worrying sign if most of the unsold units in the market are under the affordable segment. This may show that the demand is weak, probably because the people are not earning enough or may have lost their jobs for example. However, if the unsold units are under the luxury segment, it may meant that the supply is too many to be absorbed within a short period of time or that these wealthier Malaysians are a little more apprehensive about buying a unit; sentiment not that positive. Personally, I think we should worry more if the mass market (affordable segment) is in trouble because that would mean the whole Malaysian property market is weak. Yes, I am looking forward to the New Housing Policy 2.0 which has been in the news quite a lot recently. Hopefully it addresses most of the issues plaguing the market currently. Everyone should own a home, period. Happy waiting.

written on 27 Aug 2018

Next suggested article:
Affordability of homes getting worse or better, now and future

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property sector becoming a risk to economic growth

Just last week, many reports have highlighted the danger of the increasing household debt. I wrote an article about it too. Here:
Since household debt vd GDP so high, should we stop buying properties
  Reported in MalayMailOnline yesterday, Business Monitor International Ldt (BMI) said that the current slowing down of the property market may turn Malaysia’s household debt into a risk to the economic growth. The reason is because mortgages remain the prime contribute to Malaysians’ debt over the past 5 years. This is happening even as consumers continue cutting back borrowing for other expenditure.

Currently, the household debt is at 89 percent versus Malaysia’s GDP. Yes, this is highest in the region. Yet, if you ask me if it’s better to buy Philippines stocks instead, my answer is negative. Choosing just one, I would prefer undervalued stocks in Bursa anytime. BMI said that the risk of a softer property market meant that the value of property would grow slowly and this would limit customers’ ability to obtain additional credit. This has already affected the consumer sentiment which has worsened in recent years. BMI also shared that the value of assets of households in Malaysia is two to three times the size of debt which implies low risk.

I am not sure if BMI also took into account that banks in Malaysia do not lend to those who could not qualify. In fact getting a mortgage loan approved in Malaysia has been tough for many years and not just last year. Read here:
Jan 2016: Whopping 62 percent loan rejection
 This is the main reason why the non performing loans (NPLs) did not rise fast like what happened in a certain developed country way back in 2008. For 2016, I think the household debt in percentage versus GDP will get worse. This is despite the fact that Bank Negara Malaysia keeping to its targeted annual growth of between 4.0 and 4.5 per cent. Some analysts are expecting lower.

Whether property market is having a bubble or bursting, there are some signs we can take note of ourselves. Read here:
Spotting signs of a property bubble, 3 points (updated)

In terms of property sector becoming a risk to the economic growth, I think this meant that without much property transactions, it would not contribute much to the GDP numbers. As long as the transactions are from genuine demand instead of speculative ones, I think it is ok. It’s better for us to focus on other sectors instead of having property rising fast like a few years ago. Happy investing.

written on 5 Apr 2016

Next suggested article:
Property bubble in 2016? Huh?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property exhibitions minus the banks?

Every time there’s any property exhibition, be they big or small, there are bound to be many financial institutions. This is because when we are interested with any property in the show, the banks would want to be the first in our consideration. A latest statement from the Real Estate and Housing Developers’ Association (REHDA) has showed otherwise. According to REHDA’s committee chairman Datuk Ng Seing Liong, the number of banks participating in the property expo (MAPEX) has become ‘too small.’ This is not good because banks are supposed to help first-time home buyers to get a home in the current tough environment.

Actually, I think the number of banks in these property shows are not reducing simply because they do not wish to lend. I think they are also not so keen in participating because many of these visitors may not be showing such keen interest like a few years ago. For the repeat buyers, they would already have their personal favourite banks and may not be looking to have 3 different banks for their three different properties and the 4th bank for their 4th property. Seriously, there’s little advantage to do so. Banks are also not there because most of the time, if they have tied up with these developers, they would station their officers within the developers’ booth instead. I think this is better for them too as the approval for the buyers of these projects would be smoother and easier.

Oh yeah, I still think it’s good to visit property fairs but I think these days if any developer are there to show-off their SAME project which has been in the market for over 18 months, all the best to you. With the online exposure and everyone would already know when your project was first launched and what were the prices then and the prices today. Please, do not sell too high and then start giving ever more rebates later on. Just study the market well, decide on a lower margin, quickly sell them by using as many media as possible. There are still many first-time buyers but there are just not too many ignorant first-time buyers who still believe the high prices of yesterday. Perhaps many also could not get that loan too because banks are wary and has taken a more prudent stance today. Happy visiting and if you should need to know more about mortgages, online is a very good friend to start. However nothing beats having someone to explain in person.

written on 12 Sept 2015

Next suggested article:
Easier to get loan approval, a good sign?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


SP Setia: The worst is over for the property market, RM3b launchings coming

Property market is bad, according to some analysts
.

Property market is going to be good soon, according to some predictions. What do I personally believe? I believe in only numbers, results and by talking to my good friends from the property industry. Must keep myself updated. SP Setia meanwhile believes that the property market will improve and has lined up RM3 billion worth of launches for the second half of 2017 (yes, that’s now). Its president and CEO Datuk Khor Chap Jen said, “The worst is over. We see the market coming up but whether it will come up in a strong way or not, that depends a lot on sentiments. We find that actually it has bottomed out.” He also shared that for the first half of 2017, SP Setia group has sold RM2.07 billion worth of properties of which RM1.08 billion were from domestic and RM996.5 million were from international projects.
That full article by TheSun Daily here.

SP Setis is also optimistic with hitting the RM4 billion sales target because of the planned launches in the Klang Valley and Johor. Most of the launches would be for mid-range landed properties where demand is still strong. (Yes, I agree too because landed is really short in supply versus the actual demand for them, as long as the price is affordable. Seriously, if the price is almost the same between landed and a high-rise, which one would you choose? Even a RM200,000 loan difference, when spread over a 30-year loan is less than RM1,000 per month. For a couple, that’s less than RM500 difference. A Tumi handbag meanwhile would already set us back RM2,200 or a new Samsung Note 8. Well…..)  Khor shared that they will target more local buyers for the second half.  On the acquisition of I&P Group Sdn Bhd, executive vice-president and CFO Choy Kah Yew said that it is currently obtaining Bursa Malaysia’s approval and that the exercise is on track for completion by year-end.

Net profit margin for H1 2017 came it at 13.96%. This was achieved on the back of a RM241.50 million net profit versus a revenue of RM1.73 billion. A dividend of 4 sen per share was declared. Want to know what analysts are saying for SP Setia? Refer to the image (screenshot) from a famous investment site
i3investor.com
 Analysts in general like the share and based on its closing share price of RM3.34 per unit, there’s a potential upside of 15.3 percent. I do not own any units of SP Setia currently but intend to buy 1,000 unit (RM3,340) to beat the FD’s interest of less than 4 percent currently. Next week then since it’s already weekend currently. Happy following and buying.

written on 19 Aug 2017

Next suggested article:
600 units RUMAWIP, 882 sq ft from RM300,000, 4km from city centre

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property staging. What’s that? How do it well.

Briefly, property staging means making sure our property is at its best looking state when prospective buyers / tenants are viewing it. I had this first hand experience when I was selling my condominium in Kelana Jaya many years ago. I did not think it was important to clear all my remaining stuffs in the condo and I also did not repaint the interior which has faded a little since the condo was already over 10 years old. I did get the unit cleaned but my real estate agent said that I needed to do more if I intend to sell faster.

So, I cleared everything and spend RM2,500 to repaint the unit. From RM430k asking price which was unsold for 3 months, that real estate agent who made me spend extra few thousand ringgit sold the unit for RM460k. Perhaps it was not just the staging but it was also his contact but I do understand the emotional benefit of having a unit looking its best when prospective buyer / tenant is viewing. Here are the 5 things we could think of doing for staging.

Clean and Clear
(no, not that face wash cream). Making sure the whole unit is cleaned thoroughly helps tremendously. Do we want to show a house with some spider webs and even dust gathering on the table and the sofa? Hire those temporary maids and they will be able to do it for you at a speed you could not do.

Do we wish to show a house where some leftover stuffs are still inside the home and making the home look dirty and smaller than it is? Do we wish the tenant to say it’s warm / hot and when we try to switch on the fan or the air-conditioner, it does not work?! Haha.

Do we wish to show a home where some shoes which we no longer wear are beside the main door? Old shoes perhaps? Even if there’s no smell, such sights do not help the viewing to be a positive one yeah.

Presentation is key
 If someone feel good when they enter the home, they will value it higher versus an empty home for example. Just look at the developers’ show room for some easy to implement ideas. Some paintings on the wall should help a little too.

By the way, please remove all the personal stuffs including that wedding photo taken many years ago. I am not sure how many potential buyers appreciate how handsome or beautiful the couple who owns the house is.

Have enough lights in the house and if possible, changing the light bulbs to higher wattage bulbs. Please ensure all of them work as well. Feeling comfortable is pre-requisite. Feeling uncomfortable just because of the lack of light bulbs? That’s a disaster yeah. This is not the time to switch off lights when it’s not in use.

It will be great to play the music too. These days, bluetooth speakers are easily available. Buy and place them strategically. Play some relaxing music perhaps and you could even tell the potential  tenant or buyer that you love to just laze around, listen to music and relax the mind. That emotional statement will help to inject some positive imagination too. (whether or not they will be doing the same!)

Selling a home is never an easy task and we want to ensure our home is considered as better than the rest. Many months back, a potential tenant viewed 5 units within the same development and chose my unit in the end. 3 of those units were quite bare, another unit has renovations but no staging.

My unit? Well, the 55 inch LED TV was on when the potential tenant came… the air-conditioner in the master-room was already switched on 15 minutes before she came. The fridge was already switched on and a few bottles of mineral water was also inside of which one bottle was offered to her. Yes, the unit was cleaned up the day before. I paid RM80 for the cleaners. She chose my unit and has been paying rental on time thus far. Happy staging your unit, okay?

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:
6 reasons I love secondary properties

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property stats Malaysia for Q1 2021

When someone does not believe in property investment, please let them be okay. There’s really no need to debate and please just advise them to invest their money whether or not it’s property. if they spent it, then that’s really a road towards financial ruin.

As for those who still think that property investment is something they like to start their journey on, let’s just look at numbers today. Plus some explanations on what the charts are saying. Yes, it may be different from what your friends are saying. The property numbers for Q1 2021.

Property transactions are still happening.

In fact, it seems to have built up speed BUT… then the lockdown returned yeah. Q1 2021 showed that the total transactions are around 10% higher versus Q1 2020.

Residential units comprise 65% of all transactions. This is a total of 52,273 units. Yes, this number showed that people are buying and banks are lending. Majority of all these homes could not have been bought with cash.

Completion has slowed down but more developments are starting

Take a look at the completion and I think we could see that the total units completed in Q1 2021 has dropped to 15k from nearly 27k in Q4 2020. Just need to note that this Q1 2021 should be compared to a similar quarter which is Q1 2020 yeah.

The fact that more developments are starting also showed that people are buying but perhaps the type of projects they buy is now different. Perhaps more affordable ones too. Meanwhile, the future is less clear. Developers should think twice about launching more new projects if the current one is still unsold.

The three states with the most overhang are Penang, Selangor and Johor. However, if we look at the number of units versus the population, I think Selangor’s overhang issue is becoming less of an issue moving forward. Do note that Klang Valley will be that magnet to all the graduates who may now still be in their home state. Let’s see if I am right by end of 2021, when things are clearer.

It’s true. Property prices are falling if we look at quarter to quarter basis. Just remember yeah, that Index continue to say 218.9%, 196.4%, 176.4% and even 168.9% for terraced, high-rise, semi-detached and detached respectively. What this tells us is that property investment is for long term and on a long term basis, prices will rise. Period.

As for the rest of the charts, here is the file for your reference if you want to view the
full document from NAPIC (JPPH)

Happy digesting and happy investing.

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:
Is boiling a positive word for the property market?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property Stocks no Value? No worry, I privatise.

Why are property stocks being privatised these days? I thought it happens only in Malaysia but it’s also happening in Singapore. In one latest report by Bloomberg, it said that 66 percent of the listed property developers are trading at less than the value of their net assets. In other words, if you were to buy their stocks and they decided to stop being listed, you would get more money in return after they have sold off all their assets. Beginning 2010, six developers have been privatised with an average share-premium of 26 percent.

The reason they are privatised is simple. The money paid to buy up the remaining shares held by public versus its potential returns and even its assets are money well spent. This applies to any listed developer which may not need much funding. In fact once privatised, funding can come from its parent company. This is a good time to buy because due to the negative property market sentiment, it is harder to sell what they build and this in turn has affected the revenue as well as profits. With worse results, the prices take a further beating. Privatising now may even be hugely profitable once the companies are relisted in future during buoyant property market situation.

In Malaysia, one huge case is the one by IJM. Read here:
IJM Corp, IJM Land, RM1.98B privatisation deal

The reasons are similar to what was listed above. In Singapore, some of other potential developers to be delisted include Ho Bee Land Ltd., Wheelock Properties Singapore Ltd. and Guocoland Ltd. Main reason for these three, according to  Vibrant Pandey, an analyst with UOB-Kay Hian Holdings Ltd is because their shares are cheap. They are trading at only 0.6 times and 0.8 times their book value based on data compiled by Bloomberg.

2015 is unlikely to see any sudden recovery of the property market in Singapore. In fact it has dropped to a six-year low in 2014 according to data from Urban Redevelopment Authority. I have no overseas account to trade Singapore stocks but I think if it is really trading at only 0.6 times its book value, I would buy and just let it be either until it is privatised or when the market recovers and pushes up the price to a more reasonable level. I follow only a few Malaysian property stocks. If anyone knows of similar stocks, please let me know yeah. Cheers.

written on 1 May 2015

Next suggested article:
Overweight on property sector – buy property stocks now?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property stocks may now be in favour? Value vs price.

If we love property but we think we need to save more before buying one, how about using some of that savings to buy the property developers instead? It does not need to be RM50,000 downpayment in this case because buying 1,000 units of S P Setia Berhad will need just RM2,160. Based on an average target price of RM3.53 from analysts, there is a potential upside of 63.43 percent. Here’s
that reference from i3investor.com
 This is a very good site where stocks are concerned. It tells everything about stocks and it’s possible to read lots of funny comments too. Beyond just one listed property company, the KL Property Index (KLPI) is actually lagging the Bursa Malaysia’s performance to date.

An article in TheStar tells just that.
KLPI is now at a seven-year low. The valuations of property stocks have become rather attractive as they trade at multi-year lows, especially among the larger capitalised listed players. Within the KLPI, there is a total of about 100 companies in the index and some 18 of them are deemed to be large capitalised companies with market capitalisation of RM1bil and above. Within today’s weak demand scenario, there are 16 out of the 18 top listed properties companies which are trading at prices below even their respective book values and this is way off their respective RNAV levels.
 (Click here to understand what is RNAV)

This is not all. Most of these stocks are profitable and in terms of net gearing level (except for two) are between 3 to 80 percent. As usual, the stronger players in terms of balance sheet strength, judged by low net gearing or net cash, tends to trade at a higher price-to-book multiple while weaker net gearing companies tend to trade at lower multiples. Some of these companies are owned by institutions like PNB or Khazanah or the very least supported by strong individuals or institutions. This is why even though the market sentiment is causing the prices to be suppressed, the current valuation looks rather attractive for value buys for investors. In fact, some of these beaten-up large capitalised property related companies are now at bargain levels.
Here’s that article in TheStar for reference.

Happy identifying that particular developer company you like and research about them. Their stock price may already be below the value of their developments and land. In other words, when we buy their stocks, it’s going to be very safe because it’s backed by physical assets. Buying these counters are not the same as buying into an online based company. The potential growth for those are many times faster than that of property developer stocks. However, the risks are also higher because the stocks have no physical assets to back it up; which could be sold and easily valued. Cheers.

written on 20th Oct 2018

Next suggested article:
Be like the rich. Stop saying these things.

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property stocks Malaysia at 7-month low. What’s UP?

If you love commercial property but does not have a couple of hundred thousand ringgit for the downpayment, you can also choose to
buy REITs instead.
Real Estate Investment Trusts (REIT) allow us exposure into the commercial property world at a very small investment. The returns are not necessarily low either. It should be better than your current FD and hey, you are indirectly the owner of some magnificent looking office towers or malls. Alternatively, if you love some developments which are over RM1 million and you do not have the money to buy those, how about buying the developer which is developing instead? The stocks of your favourite property developers. Their stocks, in terms of prices may NOT be doing well currently. There’s an article about how low these stocks are trading currently in
asia.nikkei.com

In brief, the report says that the Bursa Malaysia Property Index is at its lowest point since March 2017. (7-month low) It quoted some top fund official experts saying that a rebound is likely due to value-buying. Besides that, recent sales activities has shown some signs of recovery too. Affin Hwang Asset Management’s head of equity strategy Gan Eng Peng said, “Malaysia’s property sector is poised to rebound after a four-year softening cycle, helped by strong demand and improving bank approval rates.” Besides that, the Malaysian property market could also take the cue from a recovering Singapore property market. Gan added, “Singapore’s government announced some easing on property market measures earlier this year and there’s speculation we might follow. Perhaps some initiatives may be announced in the budget next week.” Potentially, large-cap stocks with both construction and property divisions are preferred. Especially those able to capture upcoming infrastructure contract awards.

Let’s get exposed to the property market somehow. Haha. I still think buying a property gives me the most satisfaction. Somehow, the emotional attachment is way better than owning some e-paper (I mean stocks). Haha. However, I think it’s much wiser to look at it from an

investment point of view
 instead. We could always be exposed to the property market and we do not need lots of money to do so. Buying REITS or the stocks itself would enable us to profit from whatever successes they have. Love a particular developer? As long as they are a listen entity, own a piece of them and drop by during their annual general meeting for a cup of tea and listen to the management. If they are impressive, buy more. If they are not, switching to another property stock is extremely easy to do. Happy investing.

written on 23 Oct 2017

Next suggested article:
Global property bubble about to pop? Pop means kaboom.

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property stocks undervalued: 52 percent discount – AmResearch

Today, when I was giving a presentation to my colleagues, I asked if any of them bought any shares / stocks. Everyone said no. I laughed and told them that everyone should also think about this as another form of long term investment. I explained briefly about LinkedIn which is a listed company in US. It is trading at over 800x Price Earning ratio. Briefly, it meant that if you were to buy the stock at RM100 today, it would take the company 800 years to double your RM100 into RM200.

The current FD rate of 4% would enable you to double your money in 18 years. Then, why are so many investors still buying LinkedIn shares? Well, one word, ‘expectations.’ They believe this company would somehow earn enough to justify their current share price. For their sake, I also hope LinkedIn would do better for 2015 versus their 2014 results. Thus far, Q1 result has not been impressive but who knows….. right?

I always believe Warren Buffett when he said that when we buy undervalued companies, their business performance would soon be reflected in its share price. How about 52 percent undervalued shares? According to AmResearch, it has reaffirmed its ‘overweight’ outlook for the property sector. In fact, the stocks under their current coverage are having a steep 52 percent discount vis-a-vis their net asset value. Briefly, this means that if you buy them today and they go bankrupt tomorrow, the money you will get is more than the money you paid. Great deal right? Well, recently I found them giving some reports on MRCB and Mah Sing. Please read carefully before you buy.

Oh yeah, please do not buy simply because AmResearch says so, ok? Their own words, reported in an online article in a local newspaper. “While we expect residential prices to continue moving sideways in 2015, a return of pent-up demand towards end-2015 – barring external shocks – is possible as the market is still awash with liquidity. ” Briefly, this meant lots of people have money but no one has really bought. Happy buying or waiting.

written on 22 May 2015

Next suggested article:
Stock down? Stock up!

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property strategy? Just do, no need overthinking. (that’s just excuses)

There are surely thousands of readings on why we should invest into a property. There are probably many more thousands of reasons telling us not to invest into a property. Just yesterday evening, I was speaking to a 21 year old intern about property investment. Well, he told me that his intention is to have two. One for his own stay and another one would be where people pay him monthly rental. I like his plan and wish him all the best.

Many friends ask me this amazing question which most people would ask and then never take any action. “Where is the best place to buy?” or “Is this a good time to buy a property?”  If they are merely an acquaintance, I would give a super short answer of “buy where you like” or “anytime is a good time to buy.” If they are good friends, I will give the same answer BUT it will have explanations why I say so. Today, I elaborate a little for everyone.

Buy where you like

I repeat, it’s “where you like” and not where your friends like or the location which the attractive sales person in a nice sales gallery tells you.  Where you like may include where you find things which meets your expectations; nearby your office, nearby a public transport station, nearby your favourite mall or even nearby your in-laws. I mean, if that’s what you like.

Two reasons why you must like. First one is that you will be spending the biggest amount of money you will ever be spending on an asset. Yes, property is always an asset. Plus if you like it and you are not someone out of this world, surely there would be others who would also love that property that you bought and will buy it from you in the future.

Second is that you will be staying there for a long time. At the very least many years until the current place no longer meets your future requirements. Even for someone who’s moving a bit like me, I still stay an average of 5 years before moving. I have worked for 24 years and during these years, I have bought and moved homes 4 times. I am moving again next year, so that’s 25 years and 5 properties. Once every 5 years.

Anytime is a good time to buy

Try and google for house price trend in [fill in your country]. The usual and typical countries lah. Then see if there are any which shows a downtrend every year. If you really found such a place, it means the cost of the living there goes down every year! Wow, maybe a great place for us to stay until retire then? Not for me yeah. Haha. I prefer one where value of my asset continue to increase every year.

Try and google for intlation trend in (fill in your country). You may now realise that inflation comes and keep coming and there’s no stopping it. The only way to counter inflation is to always be ahead of it. Property is certainly that one way which many people have stayed ahead of inflation. Your salary will not be able to rise fast enough unless you are a top performer at work. Meanwhile, even a 1% increase in a RM500,000 property is still RM5,000 per year yeah. That’s a lot of money if we compare it to the yearly increment…

Conclusion

Property strategy? Just do, no need overthinking. (that’s just excuses). Keep reading more prior to buying lah. At the very least, a viewing of 20 properties so that you have a better idea what is it that you are buying into. In fact you may learn something which many have not discovered yet. Most people are only familiar with some areas. Go and be the expert yeah. Cheers.

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:
Saving money will never be outdated

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property thoughts: Better to Rent or Buy?

A good friend in Melaka asked me this question recently. If it is Melaka, should we buy or should we rent? Actually, for Melaka, when we look at the median property price today, it’s
BEST to buy. Potential project?
Waiting until price becomes higher is not a good option. However, today let’s look at things from a bigger perspective. Everyone knows, it’s a never-ending debate. Google for ‘Buy vs Rent’ and we get millions of search results. So, who wins? I would say both have their own points, really. However, if we are living in Malaysia and is a Malaysian, perhaps the answer can be slightly clearer. The answer will also differ with age yeah. It depends also on whether we are a working professional or a retiree… Decision is yours to make but read on for kopiandproperty.com’s version of Buy vs Rent.

Why better to rent?

#1 – Really short-term basis.

If we are moving to a new place because of work and we think we may only stay
for lesser than 12 months, it may make more time and money sense to rent versus
buying a place. The reason is because just the viewing, comparing and even
negotiating successfully would take us months, followed by the usual process of
applying for a loan and going through land office will take many more months.
This is just for the buying part. We have to repeat the process when we sell
the place.

Source:
https://www.macrobusiness.com.au/2017/01/2017-demographia-housing-affordability-survey/

#2 – Mortgage Slave Markets.
 In some property markets, the prices are already very high. Let’s look at the below median household income versus median home prices of the world. In some countries, the only way for buyers to buy is to fork out 70% of their monthly salary for mortgage. For these markets, it’s better to rent because it will be far cheaper! In Malaysia, if we have to fork out 70% of our salary ONLY for property, it is unlikely that we will get our loan application approved. We are just plain lucky.

#3 – If there are better investment alternatives.
There are people who are extremely good with
alternative investments. Stock market for example where these people are able
to buy and sell for profits almost instantly by studying charts. There are also
those who specialises in commodities; for example gold or silver. They always
knew the best timing to buy and sell. This is why they should not tie up their
money into property. Just let it multiply faster, perhaps. Please note though
that cryptocurrency would be of a much higher risks yeah and is not considered
an investment by most countries.

#4 – Dislike for properties.
In
case anyone thinks I am joking, this was the view of a managerial staff of an
MNC in Penang many years ago. “Property is not needed at all. Money is
needed. Just think very carefully, how many of us could bring our property
along when we say goodbye?” While his argument looks okay but the truth
is, property is also an asset and could also be turned into money. The
downside? It will take a little more time than holding cash in our hands,
that’s for sure. The person is still renting a room today. It’s much cheaper
than renting the whole unit.

Why Best to Buy?

#1
– Property allows us to leverage. If there’s one single reason, it’s the
leverage. Imagine buying a property of RM250,000. We only need to come up with
10 percent downpayment while the rest are through bank loan. In other types of
investments, the returns are based on how much we invested in. For property,
price increase is based on property price and not how much we invested in. In
fact, it may even sound like a scam if someone were to tell you that returns
are usually double digits per year. Do take a look at the next point yeah.

#2
– Exciting return on investment (ROI). We buy a property of RM250,000 and pay
RM25,000 as downpayment. Assuming the property price did not move much, perhaps
just 3% per year for the next 5 years. This is RM250,000 x 3% x 5 consecutive
years = RM289,819 at the end of the 5 years. This is RM39,819 divided by
RM25,000 (downpayment) = 159%. Divided into 5 years = 31 percent returns per
year. Sounds crazy but imagine if we used the same amount and put into FD, that
will be RM25,000 x 4% x 5 consecutive years = RM30,416. This is a total of
RM5,416 after 5 years. Sad but true. As for how much was the average property
price increase, do take a look at the chart yeah. (Note: Historical data does
not mean future will be the same yeah)

#3 – Property is a NEED. We should buy one which could also double up as an investment.

Everyone tells me that in the future, the next generation will rent instead of owning a home. My response is simple. If they need to rent, they could rent from me. 😛 A home is not a car. We can choose to take the MRT / LRT or even paster our colleague to fetch us to work everyday. However, we could not sleep under the bridge and we definitely will not be welcomed to stay at our colleague’s home for more than a few days. This is why demand will always be existent and supply will just have to meet the demand. Where price is concerned, let’s understand that MAMEE has been sold at 20 sen for as long as I could remember. However, the size is now many times smaller than previously. In the property world, the price of a home may continue to be affordable but the size will become smaller or developers build further away.

#4
– We are Malaysians! I do not wish to say that everyone must invest in a
property for all countries. Let’s understand that there are countries where the
median age is already pretty ‘high.’ I always love to ask this question. ‘Will
you buy a new property if you are already 60?’ The answer is usually no.
However, for Malaysians, we must note that the median age for Malaysia is still
29. The demand will continue to be very strong and if we look at supermarkets,
the product with the most choices today would be baby products. Take a look at
the demographics. If the top part is much bigger than the bottom part, it may
be better not to buy.

#5 – Property investment is easy.
View a unit. Then view a few more units. Drive around the area. Are there amenities which you like?
Look at the developer’s track record (a good one here).

Have they been around for over 20 years? Compare the prices of equivalent units in nearby neighbourhoods and even cities. We could even look at transacted prices of the properties in
brickz.my
 This is unlike many other kinds of investments where the winners are usually just the best in their field or the richest. With property, it’s possible to start with just a right one and move along to the next one.

#6 – Renting is best when we retire.
A good friend who’s a very prominent person in the world real estate scene once told me that everyone should aim to have 3 properties when we retire. One for own-stay, one for rental income and another one which we could sell and use the proceeds to do anything we like. While I agree, perhaps we could also think about selling all the three units and use the proceeds to do whatever we like. At that time, I will travel instead of staying in one place and watch TV day in day out. Since I travel, of course renting a place is the best. Agree with me?
 Perhaps a look at Melaka?

There are no such thing as a 100 percent right or wrong answers. Everyone has their own bias depending on different circumstances. However, if you are reading this in kopiandproperty.com right now, I think we may have some similarities in thoughts. Truth is, it’s a very good time to rent currently. There are many home owners who are over-stretched financially and they are willing to rent out their homes at below market rental rates just so that they could cover some of their mortgage payments. This is why some high-rise units in Kuala Lumpur worth RM800,000 may only be rented out at RM2,500 per month today. However, the question is, how long will this last. Secondly, is it not then the best time to enter the property market? When developers are also more willing to have lower profit margins? Happy following and deciding.

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.

written on 15 February 2019

Next suggested article:
Advantages of buying new vs sub-sale

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property Transaction and Prices – 1H2010 – 1H2013 (actual numbers)

A picture is worth a thousands words. Thanks to Mr.Michael Geh, Senior Partner of Raine & Horne, we have a very clear chart on the number of transactions in Malaysia from 1H 2010 to 1H 2013. I remembered in 2011, everytime a new project was launched, it was completely sold out within days. It is not just the top developers but every single developer. Not all locations though but majority of the locations. It was like the stock market rush! Of course, for those who bought then, the property may have just been completed or nearing completion. If we look at the number of transactions in the primary market, the numbers went up tremendously. This was not so in the secondary market which almost maintained it’s numbers. These brings us to two possible conclusions for 2014.

Primary market will be flooded with a lot of newly completed properties and thus will face price pressure. This is because if we look at the transactions between 2010 versus 2011 and beyond, it is IMPOSSIBLE that REAL DEMAND suddenly grew nearly 3 times! Now you know there are truths in blaming speculators for the price increase.

The secondary market in 1H 2013 was virtually unchanged compared to 1H2010! How could this be? Well, I think for the past two years, the rush was focussed on primary market leaving the secondary market growing on a gradual path. What’s the average value of the primary properties sold in 2013? The answer is an average of RM317,000. This is not considered very high. However, this is national average and takes into account as well the prices of properties in secondary markets which are without any doubt is lower compared to KL / Selangor / Penang and more recent years, Iskandar.

We can also see clearly why the cooling measures were intensified in 2013. Imagine a property market where prices grow by double digit every year. There would soon be bubble and if it bursts, the economy suddenly grinds to a halt. Property prices fall and yet due to unemployment / layoffs, many would not be thinking about buying a property. Do you sincerely want such a situation? 🙂   That was why I think we should allow the market to really cool down and the prices to perhaps even drop a little. Let real demand and supply come back into the equation. Remember, property investment is for the long run. Prices in 2020 will most likely be higher than today. Along the way though, expect bumps.

written on 15 Jan 2013

Next suggested article:
Property prices staying put till 2016

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


One picture is worth 1,000 words? Maybe just enough to cover 2 questions?

Okay, not really a picture but more like the latest property transactions 2020 chart from National Property Information Centre (NAPIC). Today, we use this one chart to explain 2 questions many first-time home buyers have in their mind. Oh yeah, there are no links at the end of the article to buy any property yeah. There are only explanations based on one important chart from NAPIC which hopefully has revealed a lot of important overview about a year we want to forget and wish it never come back; 2020.

Question #1:   2020 must have been a bad year for property market
 because of COVID-19 lockdowns and shutdowns.   First thing we need to note is that a total of 295,968 property transactions HAPPENED. That’s very close to 300,000.  Second thing is that residential transactions alone comprise of 191,354 units.  I seriously doubt this is considered a small / bad number if we have this number despite such a negative 2020.

When so many transactions happen, it has also revealed two important things. One is that people continue to have good confidence about their financial health in the foreseeable future. If we believe we may be losing our job in the near future, do we buy a property? Or even anything at all? However, if we have confidence with continuation of our job, then we would have confidence to buy a property. In 2020, close to 200,000 residential property transactions happened.

Let’s conclude that 2020 was still considered a very happening year even if there were news of shops closing, companies retrenching and malls struggling.

Question #2:  It’s super tough to get bank loans approved.
The banks are in bad shape and may not want to lend.   Looking at the answer for Question #1 should give us a big clue. Thus far, I only know very few people who bought a property with cash. Okay, it includes the one who bought my RM640,000 condo in Penang but other than him, I have not encountered any such buyers. From the numbers, banks are confident of these borrowers and have thus decided to lend them money. Of course, they would have managed their risks too by being more conservative.

We need to also note that if non-performing loan (NPLs) are rising fast, the banks would definitely slow down their lending. Thus far, NPLs look manageable and the full effects may have been lessened tremendously by the moratorium. In fact providing moratorium for so many months also tell us that the banks are healthy and strong. In conclusion, lending from the banks has not stopped. It’s continuing at a healthy pace. The borrower just need to make sure they qualify…

Wish for 2021?

Malaysia to hit full vaccinations within 2021 instead of beginning of 2022. That would be the catalyst for many other potential activities including bubbles.. I meant travel bubbles. MRT 3 Circle Line has also made the market excited too. Let’s hope that this one chart will become even more positive in 2021. Happy learning and deciding.

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:
4 property bubble signs we should be aware of. (even if it seems like not so possible)

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property transactions due to marriage and divorce cases. Up or down?

Marriage and Property Demand

When a couple gets married, usually they will prefer to buy a home of their own. Of course, they may need to have the financial part sorted out but if they could, they would prefer to stay in their own home versus having to share a room within a home with strangers or even friends. Some may stay with their parents and that’s good as well.

Just need to note that having dinner occasionally with in-laws versus staying together everyday may be different yeah. Oh yeah, I will follow what my father-in-law did to me 19 years ago. He said, “It’s best to only get married if you have a home of your own…” Haha. That was why and how I bought my first property way back in 2003.

Divorce and Property Demand

Meanwhile, if a couple has decided that they could no longer accept the other as their life partner, then a divorce happens. When a divorce happens, the couple would usually need to find a different place to stay. One party may move out while the other may continue to stay in the same place.

Alternatively, both may choose to move out to other places versus staying at the same home due to emotional reasons too. This is why instead of one home, there may be a total of 3 transactions, one sell and two buys. Of course, I hope these kind of transactions due to divorce cases do not go up.

What has happened to number of marriages?

Info Source:
Article in thestar.com.my

What has happened to number of divorce cases?

Property Transactions will continue to happen

Beyond just marriage and divorce cases, property transactions also happen because some are buying their first home, some were lucky as their down-payment was paid by their parents, some may be earning higher salary and thus were upgrading and some may have just bought because they listened to some influential speakers.

Just note that the last situation (listened to some influential speaker) may be dangerous if the buyer actually does not understand the reason they were buying. Property will always be one of the most expensive thing we will ever buy in our life. Be wary and be careful. Happy buying.

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:
Property Investment: Best Time, Worst Time, Sometime

Header Image by
Olessya
 from
Pixabay

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property transactions Malaysia for 2019? Going up until arrival of Covid-19.

The property transaction numbers for Malaysia were announced just a few days ago. Positively, we had a good 2019.  Overall number of property transactions for 2019 was higher than 2018.  In case you do not know, the total property transactions for year 2018 was already a better year than 2017 even if it was only marginally higher then.  Do take a look at the chart below for a good overview quarter by quarter basis all the way back to 2014! (Thank you
Raine
 & Horne International Zaki & Partners Sdn Bhd senior partner
Michael Geh
 for these charts)

The total property transactions in Malaysia for the
whole of 2019
is 328,647 units worth RM141.40 billion compared to 313,710 units worth RM140.33 billion in 2018, showing an increase of 4.8% volume and 0.8% in value. This is total for all properties, not just the residential ones yeah.

By the way, a 4.8% rise in volume and just a rice of 0.8% in value meant that the price of properties transacted in the whole of 2019 is rising very slowly. In fact average property price transacted would have shown a decline too.  In brief, buyers are buying cheaper properties instead. So, is this happening to the residential property transactions as well? Let’s look at the image below then. In brief, positive trend as well; going up.

The total transactions for
RESIDENTIAL
properties in Malaysia for the
whole of 2019
is 209,295 units worth RM72.42 billion compared to 197,385 units worth RM68.75 billion in 2018, showing an increase by 6.0% in volume and 5.3% in value.  Owners / developers may have sold their properties at a slightly lower average price instead.

What buyers may not prefer is to have value of transactions going up higher than the volume yeah. Fortunately this did not happen. In fact, the transactions would have shown a slight decline in the average value of the transacted properties.  2020 is not going to be a great year for businesses and working professionals.  Thus, property prices should preferably stay almost the same…?

Happy noting that the final two quarters of 2019 actually show a positive rising trend yeah. Some may say this showed the property market was recovering. Well, some would also argue it was due to the effects of Home Ownership Campaign (HOC) instead. Just remember that when it comes to property, find a good one then buy and wait.  Do not wait to buy because that time may never come.  Happy following.

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:
Property sector recovery starts in Q4 2020?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property transactions and price, both dropping. (Jan – Sept 2016)

When more units are launched with lower prices, it simply meant that in the future, the average prices would drop. Just look around at the continuous new launches of affordable units these days. Higher density and smaller-sized units are the norm as bigger and more expensive ones take a backseat. Special offers are sent to my smartphone at minimum every few days. Unfortunately I do not have unlimited funds and thus would have to ignore them and continue writing here in kopiandproperty.com Haha. Anyway, take a look at an earlier chart from year 2014. The
annual median household income
 has increased but when we look at the ‘Affordability Rating’ we would note that there’s still a gap between the income versus property prices in both Kuala Lumpur and Selangor.

In terms of 2016, for the periods of January to September, Malaysia’s residential property transactions has declined in both volume and value. This is according to Deputy Finance Minister Datuk Lee Chee Leong who spoke during the International Real Estate Federation (Fiabci) Premium Property Showcase 2016. He shared that in comparison to the same period last year, the volume of transactions in the residential property sector has dropped 14 percent to just 152,000 units while the value has dropped 11 percent to RM48.36 billion. Major reason is because of this, “Overall, the
housing market has indeed softened
 since the Government introduced a slew of cooling measures to curb speculations and rein in the rapid rise in house prices.” 80 percent of all the residential transactions were for house prices RM500,000 or below.

Do not fret too much.
Negative numbers are not necessary negative news,
 especially if you are one of those waiting to buy /invest. Just remember buying a wrong one can happen any time. In weeks, we should have some reports soon on all the different segments of the residential transactions. By then we can get to know a bit more detail on what’s really up and what’s really down. Happy following.

written on 4th Nov 2016

Next suggested article:
Luxury car sales are up and yet property transactions are falling?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Why do property transactions happen and prices usually up.

Two good friends of mine were discussing with me the other day about buying a home sweet home. The guy, Mr. C said that he has viewed a family-sized condo in Kuchai Lama and he loves it. In fact his wife likes the thoughtfulness of the design too. However, they would still be buying back nearer to their current home which is actually next to the parent’s place inside ‘PJ.’ Petaling Jaya is actually a huge area which covers even the PJ Utara and PJ Selatan. The ‘PJ’ we are talking about for this article covers just landed homes which are RM1 million and above, if you know where I am talking about. SS2, SS3, for example? So, they are considering another family-sized condo but which is priced about 30 percent higher in terms of price per sq ft.

The reason that he was moving? Well, his landed double-storey terraced home was broken into just recently and he fears for the safety of his wife and kids when he travels. Landed homes which are gated and guarded is meanwhile too expensive to his liking (My personal thoughts, ‘actually he could afford it!’) Plus the fact that he has started to like the idea of having a swimming pool and a gym that he could use occasionally. The other good friend, Ms. J then commented that it is almost impossible to move ‘PJ’ people out of ‘PJ’ because ‘PJ’ is a city by itself. It has everything. She did however manage to convince her husband to move to Puchong which is near to her parent’s home. The reason her husband agreed to move? Their new home is just 20 minutes away from the husband’s working place. She meanwhile uses the public transport whenever she could. So, the reason for moving in this case may just be the duration of travelling to work.

Mr. C is moving into a
high-rise for safety reasons.

Ms. J managed to move her husband out of PJ into Puchong because of travelling duration to work. The reason why she wanted to be in Puchong? Well, her parents are there. The reasons are all different but the outcome is the same. There are now more property transactions. In fact, when both of them move, total transactions are a minimum of 4 property transactions, if not more. They buy a new home and people buy their current home. Both could make the decision to move because all 4 of them (husband and wife x 2) are holding managerial positions in multi-nationals in the Klang Valley.

Beyond just the number of transactions, usually, the price paid for the new property today is higher than the price paid for the current property many years ago. People are usually upgrading plus the fact that the value of money is

getting smaller due to inflation.

This is the reason why the statistics would usually show total prices per property on an average basis is usually up when the transactions continue to happen. There will be years during some financial crisis that the prices would dip. Perhaps that’s the best time to quickly buy and wait for the recovery. Cheers.

written on 6 Oct 2017

Next suggested article:
Are sellers really desperate, would we reach it?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property values to suffer without MRT 3? Will it come back?

Will property prices be hit by the axing of MRT 3 (Circle Line) by our PM Tun Dr. Mahathir? Of course it should not affect the whole Greater KL property market but the line would pass through these key stops: Ampang Jaya, Jalan Bukit Bintang, the Tun Razak Exchange, Bandar Malaysia, Kerinchi, Pusat Bandar Damansara, Mont Kiara, Sri Hartamas and Sentul. Actually, this is the MRT line which will be passing through densely-populated areas. It is the line that will integrate the first two MRT lines as well as other rail transportation.  So, perhaps it will be the one affecting property prices the most? Personally, I do not think so but the below would be prominent experts discussing this in an article in Edgeprop.my
 The full article for reference here. In brief, the answer is NO.

” Property prices will not be affecting property prices along the MRT Line 3.”

Some of the prominent expert’s opinions as below:

CBRE|WTW managing director Foo Gee Jen said the MRT lines will be incomplete without the MRT 3.
“
Some of the developments surrounding MRT Line 3 have been given a high plot ratio for development with the anticipation of the scheduled completion date, [and with the scrapping of the MRT 3] this will affect the efficiency and day-to-day business process.”
(A very objective and logical comment actually. Perhaps the authority may have to revise the plot ratio next?)

Goh Bok Yen, director of MAG Technical and Development Consultant Sdn Bhd says that there is a need for a multiple model transit system which could connect the existing rail transportation, including LRT, MRT, Monorail and KTM. He added, “However, the cancellation of MRT 3 also means that there will be a need for alternatives, such as increased bus or coach services, to connect the missing links of the existing public transportation system.”
(Yes! Increase transit services would be good for now. Make the MRT Line 1 busier first. Change people’s lifestyle so that they think of MRT as Malaysians Ride This)

As for whether some developers would lose out after buying land along the alignment, Tang Chee Meng, chief operating officer of Henry Butcher Malaysia said, “It [the decision to call off the MRT 3] will impact the developers, who bought and planned developments along the MRT 3 line and were banking on the potential of value appreciation. This (the cancellation of MRT 3) will [also] inject more uncertainly into the current soft property market, especially following the dampened infrastructure construction sector. I foresee in the industry maybe be a property glut in the short term.”
(I would say that the property market slowdown is due more to sentiment rather than the market demand. As long as sentiment turns positive, the buying will start)
Please do refer here for full article where there are other experts’ opinions too.

The general conclusion thus far is that MRT Line 3 is NOT a bad thing. However, perhaps this is not the best time to be building it yet. Perhaps it’s even better to wait and see what’s the demand like since MRT Line 1 and Line 2 will both be fully operational by 2022, or earlier maybe. Perhaps the comment from The One Property International’s Yew sums it up best the typical opinion from the many property people in the market: “I believe the cancellation of MRT 3 will not be forever. The freeze is just for the time being while the new government needs to prioritise other issues. I have no doubt that the upgrade of city’s transportation infrastructure plan is part of the long-term development plan.” (Yes, I definitely believe public transport projects will continue and that includes even the High-Speed Rail in the future, if not within these few years. Let’s not have the One Belt One Road HSRs stopping only in Bangkok from China’s Kunming. Happy following.

written on 1 June 2018

Next suggested article:
Reasons why MRT should affect your property buying decisions

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...