Luxury condo and Ipoh Jam

How many times have you heard of jams caused by the MRT project? How about the jam across the causeway from JB to Singapore? The next news, you would not hear often. JAM in IPOH caused by a 23-storey luxury condo development! Yes, heavy jams in my beloved city of Ipoh because of the construction which is in full swing and would be continuous for a long time to come. The project is known as Octagon. It will also be the tallest building in Ipoh once completed? Would Ipoh be a skyscraper city in future. Stop dreaming, for now.

I remember I visited the sales office for the Octagon project many months ago. Sales was brisk and my friend who was the sales director for the appointed real estate agency said that majority of the units were snapped up very fast. The location itself is right smack in the middle of the city. I wrote about the potential of
Ipoh becoming a haven for condos
 after many new condos were launched but up till today, I am still not convinced that Ipoh is able to support huge numbers of condos unless it becomes even more popular than today as a destination of choice for Penangites or KLites. There are a lot more day trippers but not many stay beyond one night. For those who think there’s nothing beyond just food in Ipoh, you cannot be more wrong. Have a read here:
All About Ipoh

The purpose of this article is not to brag about Ipoh having jams. It is to tell you that there is hope that Ipoh will not be known as a city for old people. After an article about the growth of cafes in Ipoh, my friends in KL actually asked me if the report is real. How can Ipoh support so many new cafes? In fact, the cafe scene can be said to be even more vibrant than Penang. I can safely tell you that majority of these cafes have been around for some time and I have yet to find any which has closed down.

Ipoh can be said to be unlucky because it is sandwiched right in the middle of the Pearl of the Orient as well as Klang Valley. Thus, much of the growth has happened in both these places with international airports as well as manufacturing industries and financial and banking sector. However, Ipoh can also be said to be very lucky because up till today, Ipoh retains its old time charms and you can still have coffee in many of its old kopitiams. In fact, except for the occasional jams during holidays, Ipoh can be considered jam free. For those who still insist Ipoh has jams, please try the Penang Bridge after office hours or LDP in KL for majority of the day. My brother and myself have plans that when we are older, Ipoh is where we want to stay, not anywhere else.
If only Ipoh has an airport.

written on 25 March 2014.

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Luxury Condo bargains within 6-9 months, 5,000-6,000 units to enter the market

Everytime anyone asked me about buying condo, my advice has always been, if you buy for your own stay, buy one which you like, even if it slightly premium compared to another one which is further and meeting 90% of your expectations. However, if you are buying for investment, strive for rental first instead of thinking about the capital appreciation of few years ago. It is not likely to happen again. Not impossible but not likely. There’s too many restrictions in the market today which is good, keeps the market healthier instead of speculative all the time.

In The Star, dated 9th July, it was reported that there may be a ‘price war’ for rental because of the completion of new units of luxury condos. This was the view of the Malaysia Institute of Estate Agents (MIEA) president Siva Shanker. According to CH Williams Talhar & Wong Sdn Bhd (WTW) managing director Foo Gee Jen, these units which ranges from RM1,000psf to RM1,500 psf will be coming into the market within 6-9 months more and is likely to cause a ‘frightening’ time.

I always think that RM1,000 psf is considered high, irregardless of area because the truth is, there are still so many plots of lands which developers can build. Plus, for a typical family of 4 with two breadwinners, they need a 1,200sf condo to be comfortable but to pay RM1,200,000 for it, plus the usual RM100,000 renovation, this family is likely to be cutting down a lot of their other expenses if they are to afford such a new condo. For those who are single, I think the likelihood that they are willing to pay over RM500,000 for a 500sf unit is going to be small. At least I personally think it’s really a waste of money. Why not just buy a cheaper and bigger condo and rent out one or two rooms instead?

Anyway, I am not any developer or real estate agency owner, thus my view remain to be a very tiny little opinion of a small time property investor. I will not be buying anything above RM1,000 psf anytime soon because I do not believe this market is robust enough currently to withstand any prolonged slowdown. Ok, the real reason, I could not afford such units, happy? My focus remain for a much longer term continuous rental and slow appreciation of capital. I think this should be a safe view until I retire.

written on 9 July 2014

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Luxury condominiums oversupply in Kuala Lumpur

I wrote an earlier article about luxury condominiums. Read here:
I do not believe majority can buy RM900psf, sorry
  Well, one article appeared in a local English daily quoting many famous property gurus which tells about the oversupply situation of luxury condominiums in Kuala Lumpur. It quoted Savills Malaysia’s Asian Cities report which revealed that there were 21,069 units of luxury residential units priced above RM800 per sq ft in Kuala Lumpur. This grew 21% year on year. I am not sure if the wealthy ones are increasing as fast. 🙂 The new ones include Setia Sky Residence Block C (Jalan Tun Razak), The Greens (TTDI) and Icon Residence Mont Kiara (Tower 1 & 2) at Dutamas KL. Those launched end 2014 included The Residences @ Platinum Park along Jalan Stonor, KLCC and The Robertson (South Tower) at Jalan Pudu, KL.

The three areas which is still increasing in terms of price per sq ft includes KLCC, Bangsar and Mont Kiara. Hardly surprising because my KLCC articles always attract more attention than others such as Setapak or Sungai Buloh. The report said that the average transaction price for the three areas was RM871 per sq ft as at end 2014. Savills said that the subdued overall property market sentiment since 2014 will continue into the second half of 2015. As we noted, there were some predictions that H2 2015 should be better than H1 2015. Well, if Savills is right, this is no longer happening. May have to look forward to 2016 instead.

In terms of occupancy rate, KL has an average of 68%. Bangsar has an average of 84% while Mont Kiara / Hartamas is at 61%. So, if you must stay at any of these two spots (Bangsar / Mont Kiara), the latter may be a good place to start searching. In terms of buying in anticipating of an increase in price from current levels, please rethink or focus only on undervalued ones. Even if property prices would always increase in prices, I would not bet on every single one of these luxury developments being well sought after. Sooner or later, due to market preferences, some of these slightly less attractive ones would start losing out.

Come on, just look at the same area, even if on the same road, the prices can be very different. Be reminded that anything close to these price levels meant that many are certainly not qualified to buy. As for buying and waiting for international buyers, just make sure that development is already full of these foreigners first. If I am a foreigner, one of the first question I would normally ask would be whether there are already some of my fellow citizens residing in the condo that I am buying. Happy buying and waiting if luxury is your game.

written on 30 Aug 2015

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ropping, not their values.”

According to CH Williams Talhar & Wong’s (WTW) property market report 2015, the luxury condo segment saw a slowdown with fewer transaction activities recorded in 2014 compared with 2013.

“As of 2014, total luxury high-rise residential units was 31,402 units, with the prime locations being Kuala Lumpur City Centre, Ampang/U Thant, Kenny Hills, Mont’Kiara/Sri Hartamas and Golden Triangle area where luxury developments remained highly sought after by both foreign and local investors.

“Last year witnessed the completion of more serviced residences compared with condominium units. As recorded in 2014, serviced residence was 54% of the total cumulative supplies of high-rise residential, which had surpassed condominiums.

Newly completed serviced residences units were priced between RM701 and RM1,500 per sq ft.”

In Kuala Lumpur, WTW says the average transacted price per sq ft for luxury condominium had decreased 6.1%, to hover around RM1,070 psf in 2014.

“Luxury high-rise residential located outside the Golden Triangle area has seen an upward trend since 2011, with average transacted prices increased by 10.5% to RM840 per sq ft in 2014.”

It adds that there were few newer launches in 2014.

“These include Anjali North Kiara (365 units; RM580 per sq ft), Block B of Residensi 22 (270 units; RM800 per sq ft) and The Mews (256 units; RM1,700 per sq ft). “Serviced Residences developments that were launched in 2014 were Dorsett Residences (252 units; RM2,100 per sq ft), Ritz Carlton Residences (287 units, RM2,500 per sq ft) and The Establishment (646 units; RM1,200 per sq ft).”

Overall, average occupancy rate in Kuala Lumpur remained stable in 2014 at 68%, says WTW.

“Developments in Bangsar outperformed other localities, registering an average of 84% whilst Mont’Kiara/Sri Hartamas have seen only a satisfying occupancy rate, averaging at 61%.”

According to the report, condos that were completed in 2013 are still experiencing low occupancy rate in 2014 although all units were fully sold.

“Moving forward, the completion of on-going construction is expected to exert more pressure on the existing condominiums/serviced residences, resulting in the decrease of the average occupancy rate in 2015 and a more competitive rental market, one that is favourable to tenants.

The rest of 2015 is expected to be “lacklustre” as 2014 due to the stringent lending regulations and the implementation of GST where some buyers are cautious over their decision making, the report says.

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Luxury goods tax will not affect tourism. What about GST then?

Deputy Finance Minister Steven Sim Chee Keong said that the luxury goods tax which is being fine-tuned will not affect the country’s tourism sector.
Article in nst.com.my here.

What’s your take on this?

You have worked hard. You needed a vacation. You checked out several countries. You checked out the sights, the entertainment scene, the shopping malls, the white sandy beaches and perhaps even the attractiveness of the hotel rates. Have you ever decided whether to go or not to go to a country based on the country’s consumption tax?Also known as Goods and Services Tax (GST)?

If you have, please do let me know which country was that and in the end which country did you go to which did not have such a high tax versus that country you decided not to go?

Here are more details from Steven Sim:

He said tourists to Malaysia were not interested in shopping for luxury goods, instead they came here to visit interesting destinations, national heritage sites and buy local handicrafts.

“At the same time, they also get tax relief on the purchase of Malaysian handicrafts. If we look at it from that perspective, we are actually encouraging more people to come,” he told reporters at the lobby of Parliament building today.

He was commenting on the call by former prime minister Datuk Seri Ismail Sabri Yaakob for the government to reconsider the implementation of the luxury goods tax as this would deter tourists who wish to shop in Malaysia.
Please do read the full article in nst.com.my here.

Here’s my take on any tax (all are GSTs… if you know my meaning dear Malaysia)

Singapore has 7% Goods and Services Tax (GST). Australia has 10% Goods and Services Tax (GST). Japan has a Consumption Tax (aka GST) at 10%. UK has a GST of 20%. I have been to all these countries. Would I still want to go? Yes, of course. I have been to Singapore no less than 10 times, maybe more. I have been to Perth, Sydney and Melbourne and hopefully I could visit another city next.

I have been to many different cities in Japan and in terms of the country, I have been there three times. Meanwhile I am a UK graduate from Bristol and it is definitely a place I would like to visit again. Briefly, after all these explanations is that I DO NOT choose whether to go to a country for a holiday just because they have GST or Consumption Tax. I am there to spend my money and of course spend my time and get new experience. So, the overall experience I get is the only consideration and not the GST.

Stay focused on making the country an attractive holiday destination

Some important things to do? Make sure locals are employed in the tourism industry and NOT foreigners.  This is a Malaysian destination yeah. Ensure cleanliness of all the places of interest. Close those places as soon as the cleanliness is not maintained.  Continue the great campaigns of making Malaysia the most attractive destination in Asia. For example, Malaysia Truly Asia.

Promote the really Malaysian stuffs which are only available in Malaysia! For example, a cooking course of Malay, Chinese and Indian cuisines within the same class! My foreign friends love to ask me what’s the best food in Malaysia. I struggle to answer because I can eat Indian curry everyday, I have ordered mee rojak for 7 nights consecutively, I love ayam masak merah on my nasi lemak and a whole lot more.

These are all things which NO OTHER country has. No matter whether it’s Indonesia, China or India. I have not even included our amazing Nyonya food, the spicy and flavourful Portugese food and well, this is Malaysia yeah.

Now, if we are talking about tax this and tax that all the time, then that’s scary and not friendly at all

GST is consumption tax as the name already tells us. We spend, we pay. Simple fact. We spend more, we pay more. When we could afford to spend more, we could afford to pay more. However, if we do not have GST and yet we want to cover as much tax coverage as possible for everything outside sales and service (coz we have just SST), then it will always be new tax here and new tax there. Even when the economy expands, the government does not have higher revenue if the tax coverage is too narrow.

This is why the government would then have to think of how to get additional tax revenue since the economy is expanding. If you still do not get my meaning, well, all the best yeah. Without GST, it does not mean less tax to pay. Without sufficient tax revenue, that’s going to be a problem for the country. All these talk about reducing expenditure also tells us that there is a limit yeah. kopiandproperty.com is an independent media and we are not affiliated with any political party or even NGOs. Cheers.

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Luxury high rise? Rising higher next year.

Source: iproperty.com.my

Yes, I love high-rise. No, I do not have any landed units, even the one I am staying. Those that I really like is a little too expensive. Those that I could afford is a little too small in my opinion. So, I prefer to get a huge unit of high-rise instead. No, I do not own any luxury high-rise units even today. This is my personal definition for luxury high-rise. As at today, my personal definition for luxury high-rise would be homes of RM1 million or higher. I know, this amount is unlikely to enable anyone to buy some gated and guarded landed homes even if it is outside Kuala Lumpur. It would not even buy my colleague’s terrace home in PJ today. His is a non-gated, non-guarded unit. Some of those units which are just RM1,000,000 to buy and a bit more to renovate? Do refer to the image. There are definitely more expensive units but these at least matches the minimum width I have in mind. Anything smaller would be tough to park two Segment C ( Civic / Cerato / Altis) cars side by side and still have enough space to open all doors. Let’s look at luxury high-rise units instead today.

According to an article in
TheStar however, the luxury condominiums are those priced from RM700,000 to RM1.5 million.
This was what  Axis REIT Managers Bhd head of investments and Malaysian Institute of Estate Agents immediate past-president Siva Shanker said of the luxury condominium market. “There has been overwhelming supply for units between the RM700,000 and RM1.5mil range and over the past two years, developers have either slowed down or held back launches of these units. With fewer of these launches and less supply, the oversupply is slowly correcting and the sector will be close to an equilibrium.”  CBRE|WTW managing director Foo Gee Jen added that we would see improvement in the luxury condominium market. Some reasons he stated include: Malaysian economy growing steadily, general election should also spur investments into the country. (I have no idea why investors would love Malaysia due to an election. Perhaps after the election, the country would be more stable and thus is more conducive for investors? Foo also shared that due to an oversupply of small office home office or SoHo units within the market, it will take longer to recover.
Do read the full article here. Quite informative with lots of numbers.

Well, if you are currently

staying in a luxury condominium,

great news for you even if you may not want to sell since it’s going to get more expensive. If you are currently thinking of getting a luxury condominium, time to view many more units and push for the best price which is acceptable to you. If the predictions by these famous property experts are true, then the better units are definitely going to increase in price, next year. If you are struggling to pay for that luxury condominium which you bought during the double digit price growth years, hold on.
Good times are coming
, again depending on how accurate the predictions are. As for the rest of us who are staying in condos below RM700,000 we can continue watching Astro. Haha. Nothing much happening. Let’s take note though that when sentiment improves and the luxury condo prices really do move up, the cheaper ones would move too. Happy anticipating.

written on 7Aug 2017

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Luxury? Property? Well, it can also be just a home-sweet-home for all of us.

What do we do when we are REALLY wealthy.

I mean, really, really rich and not the just buying the iPhoneX (by instalment) and showing off to the whole office that one could afford such an expensive phone or the driver of a Segment B Japanese car (paying instalments for the next 9 years) who’s showing off to all the other colleagues driving a Proton.

When we become one of these super-duper rich guy, I think we can choose to buy a property in one of the most expensive cities on our planet; Hong Kong. How about a HK$127 million (RM65 million) luxury 2,499 square foot DUPLEX. (A duplex seems to be in trend these days). I know, some would now gasp at the size. Huh? RM65 million for a 2,499 sf high-rise?
Here’s that development: yoo18 Bonham. The website’s very informative.

An international film star, Shu Qi has just bought a unit.
Here’s that article in mingtiandi.com

Price versus the perceived value?

As for the price versus the value of the unit, it seems that she is getting a good deal.
Here’s an article in South China Morning Post
 and this was one of the comments,
“She got a pretty good deal for a four-bedroom ocean view luxury flat in Mid-Levels West,” said Raymond Li at Centaline. “Higher prices are likely in the development’s later tender sale.”
A little more information about this project? The total units for this development is only 12 (twelve) units. In an article launching this project just end of 2017,
“yoo 18 Bonham is a low-density project, comprising three simplexes, eight duplexes and one triplex. The saleable area ranges from about 1,228 to 3,721 sq ft.”

Yes, the unit she bought is NOT yet the most expensive one yet. The whole development has seaview. (Which is one major reason why Hong Kong buyers I met in Penang always ask if the unit they were buying would have sea view or not. It’s how they relax because space is so limited that one hates to go home everyday (too cramped), unless one has a unit overlooking the sea.

Most of us would never be able to reach the level that Shu Qi has reached. 🙂  However, imagine this. A 2,500 sq ft condo in Penang island (just like Hong Kong, also an island), overlooking the sea with private lifts at a much cheaper price? Yes, doable lah. Keep working hard, continuing investing what we have to build more wealth and one day, perhaps we can buy a similar characteristics condo as what Shu Qi has bought.

One very important point to note is the statement of ‘home-sweet-home.’ Everyone wants to come home to relax. It does not need to be a luxurious one but it should be one that we feel comfortable with. One where we could just switch on the TV, open the fridge for a bottle of orange juice (or beer) and well just chill until the World Cup Finals start. My wish? France vs England lah… Happy buying, enjoying and investing.

written on 11 July 2018

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Luxury Homes? The number one is Sydney…

Luxury Homes? The number one is Sydney…

If you did not know which has more expensive homes between Sydney and Melbourne, then the answer is the former; Sydney. The median home price in Sydney is AUD10,060,000 (RM3,296,000). So
urce of info is realestate.com.au (click to go read)
 In fact, I vividly remember this conversation I had with the taxi driver who was driving my family and I to our hotel in Sydney 3 years ago from the airport.

In the conversation (Yes, I love speaking to taxi drivers), he told me that he’s earning an income which is comfortable for him in terms of food but he hoped that the property price could be more affordable. He was renting and he was not from Sydney. With the current median price, I suspect I may have the same kind of conversation again when I visit Sydney in the future.

As a property market for the world however, Sydney is very highly ranked. Let’s see that Knight Frank’s latest report Prime Global Forecast 2021 / 2022 has to say.

Article in domain.com.au
    Knight Frank’s latest report
Prime Global Forecast 2021/2022
 says that  the luxury residential market is tipped to rise 10 per cent this year, making it the world’s leading city for luxury property growth.

The report showed that wealthy Australians have been buying homes at home instead of abroad. There were 1429 prime sales recorded in the first quarter of 2021.

In Sydney’s $20 million-plus trophy home market, there have been more than 20 sales in the first half of this year and this does not count a number of settlements in that range at Crown’s Barangaroo tower. In 2020, there were just 17 trophy sales of more than $20 million in Sydney. The article is a very comprehensive one with examples too. Do read it here:
Article in domain.com.au

Luxury property market is really not the typical property market

When we speak about the property market, we do not lump the luxury homes with the common homes. The reason is because when we look at properties which are AUD5 million for example, the person buying it would most probably not be someone earning just enough income to qualify for the loan. It’s just too risky and if I am the bank, I would also do my best to hedge my risks too.

This is why even if the general market is negative, the luxury property market may still be buoyant. This is why even if the property price is under pressure, the owners of these luxury property homes may have the financial capability to ride out the storm.

This is also why property transactions for these luxury homes may continue to happen because the buyers may see value and they could actually afford it too. In fact during good times, the numbers would just shoot up suddenly and during not-so-good times, it may just hold.

By the way, there are certainly reasons why some people could afford these luxury homes yeah. Look up the reasons how they got to where they are and maybe follow them? Haha. Who knows, that next buyer of a luxury home in Sydney may just be you in approximately 638 days from today? 🙂  In the mean time, stay safe.

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The Marin @ Batu Ferringhi, your luxurious getaway

Everyone who has reached that certain level in life would undoubtedly have a couple of wanted demands. Well for one thing, they may want to wake up to enjoy a sea view from their luxurious condominium and later drive out for a nice breakfast with their loved one in a high-end car model. How about doing this in a small island where the manufacturing exports are in the billions and the tourist arrivals are in the millions every year because of food diversity, UNESCO Heritage City status and more? How about viewing a potential new luxury getaway or home sweet home and at the same time test drive one latest luxury car model? That sea-view luxurious condominium? The Marin @ Batu Ferringhi. The luxury car model is the Lexus ES 250.

Plenitude Bayu is organising a day of two luxuries on Malaysia Day (16th September). Beyond just celebrating the unique diversity in culture, drop by to understand why The Marin @ Batu Ferringhi might be that getaway that you have been dreaming about. It’s built on an area of over 4-acres of Prime Freehold Land overseeing the spectacular Andaman Sea. In conjunction with this event visitors may also test-drive a luxury Lexus ES250. This completes a day of two luxuries. Your visit would also gain you new knowledge. Two property-related talks have been arranged and they are as follows:

Prof Choo who will touch on Feng shui with his talk titled, ‘Enriching Your Life with The Power Of Feng Shui’.

Agnes from A&A who will share the best tips on interior designing based on The Marin show unit which was awarded with ‘My Favourite ID Residential 2015. Her talk titled ‘Adding Value to Your Investment- Hot Tips from the Expert’

Plenitude Bayu’s welcomes you and your family to celebrate this Malaysia Day with us, we are open from 10am – 5pm. Kindly contact us at 012- 430 5552  to RSVP and secure your seat as it is on a first come first serve basis. Email:
hayley.huan@plenitude.com.my
 Download brochure here:
The Marin

or visit
themarin.com.my

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Luxury, Mid-Lower Condo market in Klang Valley – oversupply or opportunity?

Condo has been a popular development favoured by many due due to location. Many wanted to stay close to where they work etc but landed has become too expensive and thus condo becomes a primary choice. Thus, more condos were launched, prices were continuously upped everytime a new condo is launched. Latest news, there are now too much supply versus demand in the market. According to C H Williams Talhar & Wong Sdn Bhd in
The Malaysian Insider
 today, the vacancy rate at luxurious condominiums in the country is expected to rise to an alarming 35% – 38% this year due to oversupply. The oversupply happened over the past three to four years where the growth was way too much and this will lead to lower occupancy and rents.

It’s managing director, Foo Gee Jen further elaborated that new supplies for this year would be concentrated on the few hotspots such as KLCC, Mont Kiara, Ampang Hilir and Bangsar. The continuous launch of new condos are due to the population in Klang Valley getting more affluent and thus this has resulted in the launch of more high-end condominiums, Foo further added. Overall, however, the vacancy rate for condo market including the lower and mid-segment market would see a vacancy rate of 20% for 2014.

If we look at the stats carefully, we can see that overall basis, for mid to lower end condominium, the occupancy remains very high, lesser than 20% are not occupied. Personally, I feel that luxury condominium is targeting a totally different market altogether. If I have just enough, I would not buy a luxury condo to stay. I would buy a mid to low end condo to stay and save more money for other investments or expenses. Urbanisation will continue in Klang Valley due to the various work opportunities. Many of these young executives shun away from flats but are acceptable to pay RM1,200 – RM,1500 on a sharing basis to stay in lower end condos. The only consideration would be the area that they chose because majority would also not want to be stuck in jams for hours just to get to and fro from office. Where are these lower end condo? Check online please.

written on 20 march 2014

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Luxury price but what if rubbish site nearby?

It’s not easy being a branded developer. Imagine trying to launch a new project with a new benchmark price per sf in an area not associated with high-end thus far. Press were invited. Advertisements everywhere. Special rebates for buyers who sign up on that few days are all ready. Caterer were told to ensure food and drinks are done right and it must not reflect ‘low class.’ Everyone came and something unexpected happened. Flies came in droves too. Yes, flies as in the flying little thing that all of us hate especially when we are eating our favourite meet goring mamak.

Perhaps it’s just not because of lacking in preparations. Perhaps it was just because of some new rubbish dumpsites nearby which were not cleared for the past few days. Perhaps the date was just not an auspicious one. Actually, I do not think anyone would have an answer. In fact I think someone would have ordered that something be done soonest so that these flies would at least be reduced tremendously the next day? As usual, fingers would now be pointed to whoever and whatever that could be blamed.

What can salvage this? Well, a branded developer helps tremendously. Especially one that everyone expects to do very well.  A really good layout design helps tremendously. A really attractive overall package would also help. A team of sales people, all trained to sell consultatively instead of hard push may also help a lot. I wish this kind of situation does not happen to any launching events for all developers. After all, whether a buyer buys or not buying should not be decided by the number of flies on the edge of the glass of mocktail that the buyer is holding as he listens to the sales presentation. Plain unlucky or just insufficient preparation or even sometimes certain areas may just not be conducive enough yet, no answers from me.

written on 30 May 2015

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Luxury properties KL? Rising up but much slower than average.

Prime Global Residential Cities Index Q3 2018 launched by Knight Frank showed that the price of luxury properties rose 2.7 percent on average across 43 cities. This represents the WEAKEST performance in annual terms for almost 6 years.
Article in NST here.
 Knight Frank Asia-Pacific head of research Nicholas Holt said: “Prime residential markets continued to slow in Asia-Pacific in the third quarter (Q3) of 2018, with 13 of 17 regional markets seeing growth decelerate on the previous quarter. Rising interest rates, cooling measures and worsening prospects for global growth are all contributing factors to this region’s prime market slowdown.”

Singapore’s at the top of everyone, with prime prices up 13 percent over the 12-month period (Q3 2017-Q3 2018). This was driven by the limited availability of prime properties and a strong market outlook in the first half of this year. This may not be the peak yet because analysts in Singapore are expecting a new peak in private home prices by year-end as developers put in the market new launches on land they have acquired at significantly higher prices.

Kuala Lumpur only managed to squeeze into the top 30 out of the 43 cities at 29th. Our prime prices are up 0.7 per cent over the 12-month period (Q3 2017-Q3 2018). Knight Frank expects to see improvements this year in the Kuala Lumpur luxury condominium market on the back of renewed confidence and improving market sentiment. Knight Frank says that Malaysia is expected to be on investors’ radar after the market stabilises with more clarity in the policies of the newly-elected government.
Article in NST here.

Actually, the prices mentioned here will not affect most Malaysians. However, it is still good news because the prices are only up 0.7 percent for the past 1 year. Yes, this percentage is also reflective of the Malaysian property market which could briefly be summed up in one word; SLOW. For those looking at upgrading into these luxury properties, this may be a window of opportunity. For the rest of us, perhaps a look at the Malaysian House Price Index may be a better gauge. Please refer to image. Happy looking for a home sweet home.

written on 22 Nov 2018

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lyf co-living property in Kuala Lumpur opening soon.

Wikipedia says this about co-living. “Co-living is
a residential community living model that accommodates three or more biologically unrelated people living in the same dwelling unit
. Generally coliving is a type of intentional community that provides shared housing for people with similar values or intentions.”

Briefly, many people with the same interest will share same living space, probably one whole building but each would have their own room where they could sleep. This does help to keep the cost of owning a property lower but everyone still gets to enjoy lots of community space. Is this becoming popular? I believe it will have to also depend on how quickly prices become ‘too expensive’ and co-living as a concept becomes even more attractive beyond just the concept but also the price push factor.

Article in nst.com.my
  CapitaLand’s wholly-owned lodging business company, The Ascott Ltd (Ascott), is set to open its first lyf-branded co-living property in Kuala Lumpur.  This is a 12-storey property with 104 units and is located along Jalan Raja Chulan.

lyf (pronounced life) is a hospitality concept that creates dynamic co-living spaces for digital nomads, technopreneurs, creatives, and self-starters.

According to a statement, Ascott will also open a lyf-branded property in Bangkok, Cebu, Melbourne, Shanghai, and Xi’an this year.

With the six new additions, Ascott will have 18 lyf properties with over 3,300 units in 14 cities across nine countries.

Please do read here for more information.
Article in nst.com.my

I am not yet a fan, probably I am not the target group as well

I love co-working offices. There are so many nice ones all over Kuala Lumpur. In fact I am open to having a space in a co-working office if I am a budding entrepreneur.  However, if you ask me about co-living spaces, I am not that open to sleep in a place full of people whom I do not know. I know, I am also not their target because if all these younger people sees that co-living space full of older generation people, I do not think it will look attractive to them anymore.

The younger ones prefer their own co-living space with their generation. The same thoughts, the same language, the same goals, the same interests. Somehow even the song I play will be quite alien to them. Yea, this is why these co-living space must be targeted at the right group and it should be able to do well enough to continue. Sometimes, it’s also how long before it becomes a strong trend. Happy owning one if you are a fan.

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Header image from nst.com.my (source)

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M40 and B40: EPF’s monthly contribution as a ‘home’ solution?

My personal opinion about our EPF money is to leave it for our retirement. The reason is because I could not afford to have something happening to it. I know, someone wants to tell me that ‘but if you leave it in EPF, you think it’s safe?’ Haha. Briefly, Yes. Unless Malaysia falls into some unforeseen circumstances where even the EPF has to be disbanded, else it is safer to leave it in EPF than any bank, even if it’s the largest bank in the world. Then, the second question, ‘You think EPF returns are better than outside meh?’ Briefly, should be. For the risks vs returns assessment, I would rate EPF as good even if not excellent but definitely not bad. However, the following is an interesting proposition.

Article in FreeMalaysiaToday.com here.
 Malaysian Institute of Professional Real Estate Agents and Consultants deputy president See Kok Loong said that the government’s 1 million homes in 10 years is not a solution for the
 B40 and the M40 groups.
See said that B40 and M40 groups were unable to own homes due to low real residual income. He cited a study by Khazanah Research Institute which showed that real residual income for those earning a household income of RM2,000 and below per month was only RM76. He said, “How can you pay instalments with RM76 per month? No bank would want to give you a loan.”

He proposed that EPF members be allowed to draw from their monthly contributions to pay for monthly instalments. This allows them to own a property and have higher real residual income without having to pay rental. He gave example of calculations.

“The B40 median household income is RM3,000 per month, so their monthly contribution to EPF is RM720. With the RM720 at an interest rate of 4.4% and a tenure of 25 years, the member is eligible for an RM135,000 loan.”

“For the M40, the median income is RM6,275 per month. Their contribution is RM1,443 per month and with an interest rate of 4.4% and tenure of 25 years, they will be eligible for a loan of RM270,000.”
Article in FreeMalaysiaToday.com here.

Thoughts fromkopiandproperty.com readers?  Actually, I would like to know about the properties which the EPF member could buy for RM135,000 and RM270,000 instead. If the options are really good; feature, size and location, this can be a consideration. The reason is because a good property will always be a good hedge against inflation. Usually, the capital appreciation will beat the inflation and the return on investment will be in the double digits too.
Earlier article here. Low risk = low returns?
 Using our money in the EPF is a big thing. Perhaps more discussion, consultations and negotiations are needed before any decision is made. If they invite me, I would love to join too. 😛 Happy following!

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

written on 27 Feb 2019

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Macau Scam. Be Aware and Beware.

Macau Scam. Be Aware and Beware.

A few minutes ago, I got a call telling me that I have just bought something with my credit card worth RM4,500. I am supposed to verify if I did purchased the item. It’s just one of those phishing calls. Some time back, my father received a call from a ‘police officer’ that my brother was involved in a crime. All of us are aware that we should just end the call and verify the situation. That’s the correct way versus continuing to provide information to the call / caller.

It’s super common these days

These days, these scam calls which are also Macau scam are becoming very common and it’s no longer someone trying to scam someone but it’s an organised operation. First caller who’s very persuasive will pass the call to the second caller who confirms what the first caller was saying and the conversation content also seems legit too! If they are actors / actresses, they are professionals! (for the wrong reason though).

This is how a Macau Scam usually looks like.

Someone calling you claiming they are from the court, the police or even some authorities. They will tell you that you are involved in some form of legal trouble / scam issues (yes they are saying you are trying to scam people!)  There has also been cases where they will say that someone close to you has been kidnapped! There are also elaborate ones too. For example, this one
concerning a durian seller. (read here)
 or this one involving
love / romance. (read here)

By the way, the phone number may also look like local numbers because they are using Voice Over Internet Protocol (VoIP). Once the victim is convinced, they will then usually be asked to transfer money to some accounts to settle the issue. Somehow we have victims who transfer the money because they wanted to settle the issue.

These are a small number of recent cases

The amount involved in all the cases are also substantial too. Some may be life savings. Now the person who was scammed may have to live in poverty for the remaining years.

Be Aware so that we can Beware

A long time ago, a friend told all of us that she will be going to the UK to further her study for a degree. She was promised to become a student tutor. In fact the she was also told that the particular programme will cover her tuition fees and she will even have some pocket money in return. As a UK graduate, I am not aware of such a programme. She was even “interviewed” in a 4-star hotel. In the end, more than 20 of these “students” ended up at the airport without any ticket to fly.

The administration fees she and all the others paid would have made the scammer very happy. These are very elaborate scams and it will continue to happen. Just be aware so that we can beware. Hopefully these cases will  be fewer in the future with more people aware of such scams.

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Macau scam: Cheated again and again. This time, RM256 million in total.

Somehow, the message is just not clear enough for Macau scam. People get cheated again and again. Please be aware of this important fact. There’s no such thing as super lucky person if that person is us and we actually do not have some multi-billionaire relative who loves us and only us and no one else. If we are just an ordinary person, no one would want to make us rich but they themselves did not go ahead and take that opportunity first. Get it?

If I know how to get rich super fast, I would keep it to myself. Very soon, I will be super rich. Unless of course in order for me to get rich, someone has to become poorer. Sigh…

Photo by Anna Tarazevich on
Pexels.com

Article in nst.com.my
 Within January and October of 2020, the Royal Malaysia Police (PDRM) recorded 5,218 Macau Scam cases nationwide. The losses are estimated to be over RM256 million. Bukit Aman Commercial Crime Investigation Department director, Datuk Zainuddin Yaacob, said from the total, 2,676 cases were solved by police and 1,420 cases charged in court.

He said, “The victims are mostly women, involving over 3,000 cases, and most of them are over 51-years-old. In general, the victims were placed under a lot of stress and afraid of being arrested and locked up, in addition to the fear of having their property seized.”

His advice, “Do not answer calls from unknown persons, and if you do answer and asked to transfer money to any government department account, do not do so as the government has never given any instructions to the public to transfer money from one account to another.”
Article in nst.com.my

What is Macau Scam?

Besides the above, it could also be a call where we are told that we have won a certain extremely lucrative lucky draw. However, in order to claim the gift, we need to transfer some administrative fee to a certain bank account. Usually, the amount we are asked to transfer is very small compared to the prize we won. So, many do think they are lucky and that they should quickly get it before someone else takes it first.

How much is RM256 million?

RM256 million is enough to buy 256 homes of RM1 million each or 512 homes of RM500,000 each. Perhaps can buy the whole project since some landed projects are only a few hundred units each. Do we get cheated because we were not careful and knowledgeable enough or that the scammers are now many times more sophisticated than previously? Actually there’s no need to keep debating. What every media must keep doing is to keep alerting ever more Malaysians who would otherwise get cheated again and again.

Just be alert and do not be greedy

The banks will never ask for your password unless they are scammers. The police will never ask you to transfer any money unless they are scammers. A stranger will never want to suddenly make you super rich because he likes your face. The list goes on but suffice to say that it’s better not to be greedy as well. Macau scam can be any scam and the scammed can be anyone who let their guards down.

As for ladies, go and join Toastmasters if you really like to know good people. Even my brother-in-law found his wife in a Toastmasters club. Happily married with two daughters today. Not everyone in Toastmasters would be good for husband but it’s WAY BETTER than a stranger whom you met online and suddenly wanted to marry you but you need to pay some fees for him to come and meet you. Happy understanding.

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How you can stay away from Macau scam

Macau Scam

It’s a sad story when one gets scammed. It could have been life savings of 30 years gone just like that. These days, scams are becoming very elaborate as well and would usually involve more than just one person. It may be a full team and everyone plays a different role in the whole process. I hope the below would again be a reminder how scammers may work and how we could stay away from being scammed. Let’s look at Macau scam but do note that there may be nothing Macau about it.

Target group

It could be anyone including you and me. However, one vulnerable group would be senior citizens because they are perceived to be a naïve segment of the population and would be more trusting in such situations and easily intimidated. Yes, even my parents have received such calls before and one of them was about how my brother was involved in an accident. Nothing happened fortunately.

How Macau scam works?

Photo by Tima Miroshnichenko on
Pexels.com

A phone call comes in and it appears to be from trusted officials either from the court or the police department. This is usually a common way and during this call, they will provide the name, identification card and bank account numbers of the victim and says that this person is connected to drug related crimes and money laundering activities. A Voice Over Internet Protocol (VoIP) is used to hide the actual number it is calling from and the number shown is usually a trusted local number instead. If they could, the victim would be asked to transfer a sum of money so that they would not be arrested.

One more trick would be from callers disguising themselves as bank officers and allege that the victim has failed to make credit card payments. They will then provide a number for victims to contact and this call will usually be answered by an official from Bank Negara Malaysia (fake one) and this other officer will not ask the victim to transfer money to avoid being blacklisted or having their accounts frozen. By the way, if you REALLY want to call Bank Negara, please use the number published on their website yeah. This one:
https://www.bnm.gov.my/contact-us

Another tactic is to trick the victims into believing that they have won a lucky draw and the victim has to pay some administration fee to get the lucky draw prizes. Another trick is to trick you about a kidnapping of your loved ones and asked you to pay a ransom. Usually, this involves making sure the person they ‘kidnapped’ is unreachable via mobile phone so that the victim may believe the threat and pay the ransom. If you do lose your phone, please disable the sim immediately yeah.

AVOID DOING THESE

The police have advised individuals not to panic or just blindly follow the instructions given by the scammers.  Do not call the numbers provided by anyone.  Just go online, find the right numbers and call the police or even the financial institution involved. I do think google.com algorithm is still able to show the right results for all these official institutions.

NEVER disclose any private information including bank account number, ATM card or even credit card number to any unindentified individuals. By the way, these scammers may sometimes have some of these details. Just do not provide them with more information which they do not have and looks like asking you for verification.

For even more readings:

Police asks everyone to be vigilant.

Bank Negara’s advice on what to do if you are a victim

Cyber Crime Alert Royal Malaysia Police FB page

Stay Safe, Tell more people

It’s always good to share with our loved ones, especially the seniors as they may be less knowledgeable about all these new scamming tricks. It will especially be good to always remind ourselves that if we have really committed any crime, the official channel of communication is not likely to be a call where we are asked to pay some amount of money. These days, even if we are asking to pay fines, it could be done through official APPs. It’s definitely not through a money transfer to some individual or even legitimate looking accounts. Stay safe everyone.

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Mah Sing’s RM5 billion Meridin East in Iskandar Malaysia

When I was in JB two weekends ago, I drove past a sign which said Meridin East. There was no time to take any photos as I was driving… Haha. Recently, I read about it online. I think billboards are important but the truth is only online allows us to know more. These days, the
gross development value (GDV) of integrated projects
for the bigger developers and even some mid-sized ones are under the “berbillion-billion” category. Another one has been announced and this is for Pasir Gudang, Johor. Mah Sing Group will be launching a 531.3 ha development called Meridin East in Johor.

This will be its

largest township development in the eastern zone of Iskandar Malaysia
.
 Total GDV is RM5bil and it’s focused in Kong Kong, Pasir Gudang, which falls under Flagship Zone D of Iskandar. Its Group senior chief operating officer James A. Bruyns said that since the western side of Iskandar has seen lots of developments, Mah Sing has decided to focus on the eastern side with Meridin East. The whole development of the township would be fully completed in 15 years.

He added, “With Pengerang and Desaru being developed for its tourism and oil and gas hub, we foresee a rise in the
demand for residential and commercial lots
,
 making this the right location to cater to those demand.” First phase which has commenced construction would be completed in the first quarter of 2018. This is less than 2 years away. Of course, no one should decide based on images or things we read online. If we have serious interest, take a drive. Understand the actual location. Know the advantages of other established developments nearby. Understand the limitations in terms of accessibility, conveniences and also other competing products nearby. Happy commenting if you have visited the actual site. I have not.

written on 29 July 2016

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Mah Sing: 70 percent of buyers are below 39.

Mah Sing is considered one of the few big names in the property development scene. Have you bought a property from them before? Personally, I have not, yet. Perhaps I am not their target market? 🙂 In an article in
thestar.com.my
 its current group managing director and chief executive Tan Sri Leong Hoy Kum said this, “In fact, 70% of our buyers are 39 years old and below. We utilise our social media and create unique content such as festive videos, online contests and more to garner leads and increase brand awareness.” Yes, I happen to be just after 39. Haha. Okay, this is just a humour. I have received SMSes for their events before some time back.

He also shared this in the article. Mah Sing will be unveiling a new vision and logo on February 25. He promised that it would better represent the property developer’s goals and image. He shared that 56 percent of Mah Sing’s sales are from the Gen-Y. Thus, they will make sure their new branding would cater to this group of buyers. He shared, “Our brand transformation started with having a new vision, namely to invent future living that enhances the quality of life.” I think a good brand tells a lot. If we are a well known brand, we can add a bit more premium compared to an unknown developer. This is why a certain brand of smartphone can still
sell at a premium pricing
 despite providing lower specs than many other brands. If I happen to be a developer and my development is right next to a major developer, my first option is to fight on price. The marketing spiel? ‘My property is right next to this XXXX developer and my quality is just as good. Yet, I am cheaper!’ Haha.

Beyond just about Mah Sing, he shared that on a long term basis, the demand for property in Malaysia will continue. The economy continue to be resilient with continuous gross domestic product (GDP) growth, young population, minimal speculative activities and shortage of homes for the past five years. He pointed out that there was an average supply of 80,000 new completed homes per annum but there are an average of 166,000 new households demand per annum. The LRT extensions and the starting to MRT Line 1 and all the other improvement in the local public transportation will improve the overall property market. Property is still one of the
best hedges against inflation
. When we buy for the longer term, it will be good for long-term rental income too. He also shared that Mah Sing focused on
digital marketing and innovative events and campaigns to attract first-time home buyers. Personally, I believe property investment is a must for everyone. Without at least one home, what will we leave behind for our loved ones when we say goodbye to this world? Happy investing.

written on 12 Feb 2017

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Mah Sing – Latest net profit above 12 percent

First of all, I have to declare that I still have 1,300 units of Mah Sing shares. I think its latest dividend declared is enough for me to treat my wife and two kids to a Sakae Sushi dinner. Haha. I think its latest results are pretty good especially with the extremely volatile 2015. Ringgit and GST was said to have affected the market so badly we are about to go into a crisis? 🙂  Read here:
Malaysia in a recession? Not in 2015
  Mah Sing announced that for FY15, its net profit rose to RM386.68 million from RM356.5 million a year earlier. Revenue climbed to RM3.11 billion from RM2.9 billion in FY14. Net margin is slightly above 12 percent. To be honest, on the lower end compared to some listed developers but is definitely still healthy.

Mah Sing has a net cash of RM1.4bil and net gearing of 0.04 times as at end of 2015. This is a very healthy set of numbers when compared to many other listed developers. Some of the better known names are much higher geared than Mah Sing. Of course, this may also meant others are much more aggressive too or perhaps it’s time that Mah Sing becomes more aggressive in buying lands and launching new projects. Mah Sing has declared a 6.50 sen per share. Based on its latest share price of RM1.30 this translates into a yield of 5 percent which is considered very good. Actually, when times are bad, the yield percentage may be even higher when share prices are battered.

Mah Sing hit RM2.3 billion sales in 2015 and will be aiming the same number for 2016. One major reason it has hit the target is because it’s pricing its products below RM1 mil and building homes mainly in the Klang Valley. Mah Sing said that for 2016, it will refocusing on end-user demand for BEGINNER homes. With this as their main focus, it would put Mah Sing as one of the top 3 leading listed developers for local property sales. As of Dec 31, 2015, Mah Sing had total unbilled sales of RM4.75bil and gross development value (GDV) of RM28.12bil. Unfilled sales is still close to 1.7 times the revenue recognised from the property division in 2015. This means continuous liquidity and steady stream of cash flow. Hopefully, I can get more than one dinner for its FY16 performance. Mah Sing said that within 2016, there’s an expected final stage billings on delivery of vacant possession of properties amounting to RM651 million.

I do not own any Mah Sing homes currently. Somehow, either the price or the size does not match what I have in mind. It’s okay. If there are any developer with potential, I do not mind holding a tiny little bit of their shares instead. In terms of Mah Sing target prices, take a look at some targets from the research houses. Happy buying, whether property or stock.

written on 28 Feb 2016

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Undervalued (price) vs net asset value. A stock to consider?

There are more investment options than just buying a property and wait for it to appreciate. If we insist on something property related, we can try
real estate investment trusts (REIT)
 or we can also buy the stock of the particular developer, as soon as we see that their launches are very successful. Remember to make sure it is really successful and not just ‘booked’ but in the end does not translate into actual sales. This same strategy is usable even when we buy other counters. For example, if we want to know about a certain retail brand, then go and visit some of their stores! If we see lots of people buying and queuing to pay, I think the counter can be a consideration. Then read some of the view from analysts to se if what you saw actually corresponds to what the analysts are forecasting. One such site to refer? Here:
klse.i3investor.com

Today, a property counter was mentioned in an article in
thestar.com.my here.
 RHB Institute said in a report, “While property sales have weakened, we believe Mah Sing’s strengthening balance sheet should support decent land-banking activities this year. We believe downside risks to property sales and hence earnings are priced in, and strategic land banking should help drive future earnings.” Mah Sing’s balance sheet is carrying only a 2percent net gearing. (This means it has lots of capacity to buy landbanks)  KAF-Seagroatt & Campbell Securities Mah Sing’s current net asset value is RM2.81. It maintained a “buy” recommendation on Mah Sing, with an unchanged target price of RM1.80.  Mah Sing recently cut its 2017 sales target to RM1.8bil from RM2.3bil previously. It sold RM1.78bil worth of properties in 2016.  KAF-Seagroatt also said that Mah Sing remained committed to delivering a dividend policy of at least 40% of earnings.

A higher dividend policy could either mean the company has lots of reserve funds and thus do not need to keep too much of its earnings and can thus distribute it to shareholders as dividends. This is good for shareholder holding Mah Sing’s stock for continuous dividend. Yes, I have 3,000 units of Mah Sing. Bought it some time back and is currently still below the price I bought. Whichever developer stock we like, take steps to study them a bit further. As long as it is a fundamentally stable company, the share price should reflect its business in the future. (Warren Buffett said this before). The image shows all the target prices from different analysts covering the stock. Not considered a huge upside potential. Only buy if you can hold or believe something great is about to happen. Happy following.

written on 2 Mar 2017

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Mah Sing and it’s RM1.2 Billion Penang projects

Mah Sing in Penang? The two famous sites would be in Batu Ferringhi or Batu Maung. Hey, both begins with BATU. Haha. Well, in my previous role, I visited its show office in Batu Maung a few times and I think the site offers good potential since it’s really a stone’s throw away from the second bridge. The other main advantage would be the industrial parks were many engineers are based, including my brother and his wife. Many close friends are also staying in Batu Maung landed homes or nearby because when they bought, the prices were considered affordable and not like the over RM1 million price tag of today. Well,there are more choices coming up if one is still thinking about island instead of mainland.

Mah Sing will be launching projects worth RM1.2 Billion in 2016. This includes the upcoming RM735 million Ferringhi Residence 2, the RM350 million Icon Residence at Lebuh Pykett and an unnamed RM150 million project in Southbay City, Batu Maung. All these are projects within the island itself and not on mainland. According to its senior general manager Daniel Law Wei Keong (Mah Sing North) said that Penang properties would contribute between 10 to 12 percent of the group’s total sales for the 2015 fiscal year.

He also revealed that Mah Sing still have RM2.8 billion worth in remaining gross development value (GDV) as well as RM300 million in unbilled sales in its 33-hectare land bank in Penang. In 2015, Mah Sing launched RM2 billion worth of housing projects nationwide and 84 percent of these were below RM1 million. Upcoming launch would be the Ferringhi Residence 2 project which would have built-ups from 1,208 sq ft to 2,910 sq ft and priced from RM775,265. Another mall can be expected for Penang as well. It will be a RM150 million shopping mall within Southbay City which is expected to start operations in mid-2016.

2015 has been a slow year where property transactions are concerned and many of my property industry friends have told me that even though there are potential buyers, the loans are not easy to obtain. A friend just told me about a colleague who has bought a landed secondary property within the island for RM1.4 million. She said, why is it so expensive in Penang? Well, for one thing, an island is still an island. Oh yeah, more reclamations are coming if all the reports are true about it being compensations for the RM26 billion
Penang Transport Master Plan
. As for those who love Penang for what it is, rest assured, buying today is not likely to be a wrong decision. Just think longer term. Happy loving Penang.

written on 20 Nov 2015

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Mah Sing scaling back, revising target downwards.

Mah Sing has decided to scale back its launches as well as setting a lower sales target for 2015. Instead of RM3.4 Billion worth of launches, it would only be focussing on RM2 Billion launches. Sales target is also revised downwards from RM3.4 Billion to just RM2.3 billion. I think I have to hold on to my 1,000 unit of Mah Sing shares for a better future. The reason I bought it was for the potential that it may give me a good dinner. I think now it may have to wait.

According to Mah Sing, the reason for this adjustment is because of a challenging short term environment. Do note that they said ‘short term.’ The sentiment has also been affected by the implementation of the goods and services tax and the recent weakening of the Ringgit which is now trading at a 17-year low versus the US$. The fundamental remain strong and I agree fully with their assessment of Malaysia having a young demographics. The favourable demand and supply in selected locations. (Increasing due to MRT stations). Healthy employment conditions. (Most important because no job, no need for a home in the city). Last but not least, all the ongoing infrastructure projects all over the country. (My Kota Kinabalu condo has been rented out fully furnished to a project manager of a construction project for many months now) Why fully furnished? Read here:
I only rent out, fully furnished

Anyway, my 1,000 unit of Mah Sing’s shares should be quite safe. Mah Sing’s revenue jumped to RM780.48 million for Q2 2015 compared to RM705.01 million in the same corresponding quarter a year ago. Note that I say ‘jump’ because this is indeed a challenging period and it has started slowing for over a year already. Thus, the results show good resilience. Net profit is up too. It is at RM189.38 million based on a revenue of RM1.56 billion.  This gives it a net margin of 12 percent. Not an awesome number but still double digits. Read another recent report on net margin here:
First six months, SP Setia’s net profit margin at 12.83%

 It currently has a cash pile of around RM1.54 billion. This is a very healthy number and should give it flexibility to pursue any attractive land acquisitions in the near future. Bad times are a great time to buy land. With its current landbank, it still has an estimated remaining gross development value of RM26.4 billion which gives it lots to do within the next six to eight years. Happy waiting, for me.

written on 29 Aug 2015

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Mah Sing and Seremban land buy? Cancelled.

One of Malaysia’s largest developers, Mah Sing has announced that it has cancelled its purchase for a piece of freehold land in Seremban. It has sent a letter to the vendors seeking for the refund of the 10% deposit paid earlier as the purchase consideration. It said that, “The SPA is void and/or rescinded, due to, amongst others, misrepresentation and/or the breach of terms and conditions of the agreement by the vendors and/or events that are unlawful have occurred.” It was to have been a project with a gross development value of RM7.5 billion. The land size is 960 acres and the price offered was RM359.55 million.

Just one week earlier, in a filing with Bursa Malaysia, Mah Sing had announced that its unit, Grand Prestige had been served with a writ and statement of claim made in the Seremban High Court. Seven people claimed that they were the undivided registered proprietors/beneficial owners to the land and thus they were seeking a declaration that the agreement to sell and acquire the land is invalid, among others. These legal tussles would usually take a long time and I think for a developer it may be best to step back and look at other opportunities instead. There’s nothing to stop it coming back to the negotiation table in the future when the caveat on the land has been lifted.

With this cancellation, I think we can expect Mah Sing to announce their next purchase in the near future. This is because it had already raised RM629.32 million from its rights issue with warrants. Yes, I own 1,000 units and I have also received the warrants. Haha. It was just a buy for me to keep up with Mah Sing’s progress. Money raised without any use meant little to developers. It said that this would not materially affect its business because the development of its existing landbanks would mitigate this ‘loss’ in potential new development. Besides, it may be acquiring new lands in the future. Happy reading.

written on 14 aug 2015

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Mah Sing: High targets supported by affordability and location

Mah Sing Group Bhd has set itself a sales target of RM3.43 billion for 2015 and it is confident of achieving this number. Their focus? AFFORDABLE homes with their focus primarily within the Klang Valley. As at April 22 2015, the total sales has hit RM761 million. Using this number as base, Mah Sing may not hit its target but Mah Sing said that the major reason they are confident is because of its product mix in the right locations and attractive pricing. 67 percent of sales would be contributed by the Greater KL and Klang Valley while Johor would contribute 20 percent followed by Penang at 11 percent  and Sabah at 2 percent.

Mah Sing’s founder and managing director, Tan Sri Leong Hoy Kum said that the current period of consolidation due to the Goods and Services tax would only be for a while. As soon as this adjustment period passes, the demand for properties would normalise. Currently, it is definitely harder to convert bookings into actual sales. Total expected gross development value (GDV) for Mah Sing as a group could be up to RM49 billion over a period of eight to ten years according to Mah Sing’s executive director Datuk Steven Ng Poh Seng. This is only the current number because Mah Sing plans to replenish its landbank in the Greater KL. He said that Mah Sing has no gearing and RM1.4 billion in cash. This meant it can go on an expansion plan.

What can we derive from this piece of news? Thus far, developers continue to be cautiously positive. This is especially for those who have switched their focus from their usual higher end to the current mass market.  Yes, they have to put up a brave front but for some of these listed companies, there is little need to be too confident because when the targets are not hit, the share prices would suffer. In other words, if their management dares to announce it, most probably it should be achievable. My advice remains the same for first time homebuyers. The prices cannot stay stagnant forever, not when land prices are increasing even during the current slow times. Buy objectively based on what you need. Yes, hopefully I can also get one soon from the secondary market. Happy buying property or even buy the stocks from some of these developers that you believe in.

written on 26 Apr 2015

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Slow? RM5.96b launchings in 2015

Thus far, many have said 2015 is going to be another slow year. In fact maybe worst than 2014 due to GST and the depreciating Ringgit. At the other end, Mah Sing disagrees which is a positive sign. It is launching new launches worth RM5.96b and its group managing director and chief executive Tan Sri Leong Hoy Kum said that Mah Sing is looking at better sales in 2015 versus 2014. 🙂  67% would in Klang Valley, 11% from Penang (obviously it’s Southbay), 20% from Johor and 2% Sabah. Sabah? Hmm.. I have interest. Haha. Projects include Southville@KL South, Lakeville, D’sara Sentral and MResidence 1 and 2, and Ferringhi Residence and Southbay City, while new projects in the pipepline for 2015 were Bandar Meridin East, MResidence 3, Icon Residence Georgetown and Star Residence.

For investors who have some Mah Sing stocks, a proposed renounceable rights issue with free warrants, followed by a one-for-every four share bonus issue to raise up to RM630mil has also been approved. In other words, more shares that you would be having soon. Value might be the same for now but if everything goes according to its plan? The next statement is totally expected. Mah Sing would be developing more affordable properties. This segment which has been overlooked by so many of the huge developers are now huge with all developers. Demand is always there for affordable properties. There’s way too many in fact as long as the price is right. I think if the projects that they are launching are slightly over RM500psf and around 1,000sf, it should be very easy to sell. Mah Sing said that 84% of all their projects for 2015 are below RM1 million.

Personally, anything above RM700,000 is going to be tough to sell currently in my opinion. This is true whether it’s Klang, Penang or even JB. The investors are wary of the many uncertainties while actual house buyers buying for their home is likely to be looking at lower priced properties. For those who are looking to upgrade, the number may be big but the action is likely to be small. After all, they still have a home today, why rush? Plus there are also choices in the secondary market. In fact today, I read in one online site that one Professor who’s an expert in real estate is asking all the first time home buyers to save money and do not buy in 2015 or 2016. This is because a lot of new completed units are coming into the market due to the boom in 2011 and 2012. The sellers are unlikely to be able to hold for very long and thus, first time home buyers can get properties at a heavy discount. While I believe there’s going to be huge incoming supply, I am not so sure about the huge discount. Anyway, with any prediction, the best proof is? Wait till then to see if it’s true. 🙂  let’s see if there are more of these feel-good news from the bigger developers continuously.

written on 8 Jan 2015

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Mainland Penang becoming more popular? Maybe.

Everytime we talk about Penang property market, the focus is always on island. The expensive island. Ken Lim the founder of Penangpropertytalk.com told me that hit rates rises whenever he posts any island related developments are always higher compared to mainland and this is still true today. Recently, with the completion of the second Penang Bridge, it has gained a little prominence, especially the Batu Kawan side. Then, came the announcement of IKEA and recently, the potential of it opening in 2018.

Another piece of news seems to reinforce the potential of mainland. GUH Holdings announced that with a replanning of its 18.6ha land in Simpang Ampat, the GDV will be increased from RM238 million to RM650 million. This is a growth of over 170%, using the same piece of land. The original plan was for a 322 units of landed residential units. The new plan is for commercial, high-rise and affordable housing. It would take up to 10 years to complete and GUH Holdings was confident of the project because of its strategic location at the South of Seberang Perai district as well as the ever increasing demand for affordable housing in Penang.

Seems like a good plan. Change the landed residential units for many more units which would definitely bring up the GDV. There’s just so many units you can build on land but if you stack it up, of course you get to build more. I think the first question is, how far is Simpang Ampat from the Bayan Lepas Industrial Area if they drive through the second bridge? Well, from Google Directions, the distance is around 30km and the duration is around 23 minutes. Frankly, it’s not that bad, especially when you consider the fact that even crossing the bridge alone would already be 24km!

Besides that, consider the fact that these engineers, if they wish to buy a condo within the island and they wanted a size of 1,000sf, I think it would set them back RM650,000 today, depending on the area they chose. So, yes, the mainland Penang is growing. If you need a roof over your head, its really worth a serious consideration today. If it’s landed, then Gated and Guarded please. For those who are still thinking about the distance, be reminded that today, even if you were to travel from Sungai Ara to town which is really half the distance, it would still take you much more than half an hour or more if Greenlane is slightly busier than usual. So, don’t look at distance only. Take a look at the duration which is a much better gauge moving forward.

written on 30 Sept 2014

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Mainland Penang rising, secondary choice to island ending.

If you stay in Penang, mainland is considered a secondary choice. Island is the main focus and majority would choose to stay in island over mainland. Well, one major reason would also be due to the employment opportunities in the island. Think of any foreign multinational paying higher than the usual salaries and you would understand why people like to stay in island. They have no need to face jams everyday when they cross the bridge. The jams are also getting worst. One hour is considered usual these days. Batu Kawan potential today is more seafood restaurant related.

This may change. investPenang director Datuk Lee Kah Choon said that there were 6,000 acres of land available for development in Batu Kawan and it is now accessible via the second bridge. Industrial development would comprise 1,500 acres which meant employment opportunities are likely to rise from today. Another 2,000 acres would be for mixed-development projects while residential and eco-tourism developments would take up 2,000 acres. What do you get when you have business, leisure and pleasure at the same place? Well, the boom starts and the price goes up. Fortunately, this summary is also backed up by details. Some confirmed ones include The Aspen Vision City (AVC) which is where IKEA is located, Penang International Technology Park (PITP), RM1bil Penang Designer Village, a golf course, a theme park as well as 12,000 new affordable high-rise units would also be built. The LARGEST shopping mall in the northern region would also be built there by the Belleview Group.

With all these, perhaps it is true that mainland’s price may just catch up with the island in the near future. Eco World said that their new launches in mainland would be priced similar to the island. Read here:
Buying Batu Kawan? Same price as island.

Anyway, the most important catalyst which is the connection between island and mainland is ready. Once all these planned starts to show progress, the mindset may change. Only then would mainland be secondary to island no more. Don’t buy for investment yet. Please proceed to buy for own stay. If you can truly like it, very soon many would too. Happy waiting.

written on 1 May 2015

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Bank Negara Malaysia has decided to maintain the OPR. Read their reasons here.

We have this earlier article where I say that the cut is unnecessary unless there is the expectation that the economy going to go worse versus today. The reason is simple. By not doing it too soon, we have more rooms to move if a cut is truly necessary in the future. In fact I would say that with more and more news about the vaccination progress, the sentiment would start to become even more positive. Below would be the full press release by
Bank Negara Malaysia (BNM) (click to read
)

Photo by Karolina Grabowska on
Pexels.com

— start of press release —

At its meeting today, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 1.75 percent.
The global economic recovery, while uneven, is gaining momentum, supported by steady improvements in manufacturing and trade activity. The ongoing roll-out of vaccination programmes in many economies, together with policy support, will further facilitate an improvement in private demand and labour market conditions. While financial markets have experienced bouts of volatility, financial conditions remain supportive of economic activity. Risks to the growth outlook have abated slightly, but remain tilted to the downside, primarily due to uncertainty over the path of the COVID-19 pandemic and effectiveness of the vaccination programmes.
For Malaysia, latest indicators point to improvements in external demand and continued consumer spending. While the re-imposition of containment measures will affect growth in the first quarter, the impact is expected to be less severe than that experienced in the second quarter of 2020. Going forward, growth is projected to improve from the second quarter onwards, driven by the recovery in global demand, increased public and private sector expenditure amid continued support from policy measures and more targeted containment measures. Growth will also be supported by higher production from existing and new manufacturing facilities, particularly in the E&E and primary-related sub-sectors, as well as oil and gas facilities. The roll-out of the domestic COVID-19 vaccine programme will also lift sentiments and economic activity. The growth outlook, however, remains subject to downside risks, stemming mainly from ongoing uncertainties in developments related to the pandemic, and potential challenges that might affect the roll-out of vaccines both globally and domestically.
Headline inflation in 2021 is projected to average higher, primarily due to higher global oil prices. In terms of trajectory, headline inflation is anticipated to temporarily spike in the second quarter of 2021 due to the lower base from the low domestic retail fuel prices in the corresponding quarter of 2020, before moderating thereafter. Underlying inflation is expected to remain subdued amid continued spare capacity in the economy. The outlook, however, is subject to global oil and commodity price developments.
The MPC considers the stance of monetary policy to be appropriate and accommodative. Given the uncertainties surrounding the pandemic, the stance of monetary policy going forward will continue to be determined by new data and information, and their implications on the overall outlook for inflation and domestic growth. The Bank remains committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.

Bank Negara Malaysia
04 Mar 2021

You could view their full press release here.

— end of press release —

What does BNM say from this decision?

If we read what they (BNM MPC) is anticipating, we could see that BNM is quite positive not just for Malaysia but also the recovery externally too. It is also projecting that growth will be better from Q2 2021 onwards. It does issue a warning that there remain uncertainties but generally the current OPR Is good enough and that it is already accommodative for the market.

Accommodative means that the OPR is already low enough that businesses or even people will proceed with their expansion or investments respectively. I also think anything lower will not affect the decision much already. I hope everyone can start feeling a little more positive because NOT adjusting the OPR is definitely a stamp of confidence on the economy.

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Maintenance fees and sinking fund a stumbling block to condo

A reader wrote in and asked this question if it’s worth buying a condo because he thinks maintenance fees and sinking fund is a huge stumbling block to buying a condo. First of all, for those who believe landed is by far a superior option compared to high-rise, you are most probably right. This is especially when we talk about the number of units availability or scarcity of landed versus high-rise. For these landed lovers however, it’s definitely worth considering a high-rise unit, even when taking the
 maintenance fee
 and the sinking fund into account. Allow me to provide three reasons why.

Reason 1. Affordability. I am not an economist but when we look at all the examples of more
advanced property market
, due to the fact that when prices go up, the only alternative is to build higher. These days, every small piece of land is being sold ever higher. Building landed properties would mean suicidally expensive prices. Increasing demand would ensure our investment in high-rise is quite safe.

Reason 2.
Location desirability
. Every friend who’s buying new landed properties are buying further away. Of course for these further away areas, high-rise may not be that desirable yet but landed homes with parks and lots of green space? If we love an area which is mature today, with lots of conveniences, choices would most probably be high-rise instead of landed. My aunty had just asked me about a condo nearby my mother’s home yesterday.

Reason 3.
Easier to rent out.
 A close friend just bought a 700 sq ft condo unit recently for RM1,000 per sq ft. It’s in a very established area which I love too. She said she is looking to rent it out as the condo is within walking distance to a MRT station. Thinking further, would we be able to buy any landed property nearby a MRT station and rent it out? Well, we could if we want to suffer HUGE negative every month.

Actually, there are many more reasons including my personal one which is for the facilities.
My kids use the facilities daily these days
 unless it’s raining. I could not imagine both of them just playing video games or watching cartoons or having just a very small place to run within the terrace home or even a bigger semi-detached home. Unfortunately, I couldn’t afford those super luxury landed homes with a club house yet. So, a well equipped and maintained condo remains my most feasible choice. Happy deciding.

written on 1 Aug 2016

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Property Investment? Maintenance fees are also forever…

There are reasons why people think staying in landed homes without any need to pay for maintenance fee is better than staying in condos where they have to pay maintenance fees. Ever since I bought my first apartment in Penang in 2003, I have been paying maintenance fees without fail since then until today. When I moved to my second home which was a condo, I continued paying maintenance fees.

This continued when I moved to my 3rd home, then my 4th home currently and it will continue even when I move to my 5th home in 1st quarter of 2023. Haha. So yea, I am quite qualified to write an article on maintenance fees since I have been paying it for the last 19 years.

#1 We cannot stop paying maintenance fees

Happy reading to understand.

Info source: propertyguru.com.my
  “If owner fails to pay the maintenance fees after a 14 days’ demand notice,
the management body can SUE the owners.

This can take place in either the Court or
Strata Management Tribunal (SMT)
 for recovery of the unpaid maintenance fees.

Besides that, the SMA also states that it’s a criminal offence if the owner (without reasonable excuse)
fails to comply with the 14 days’ demand notice.

Upon conviction, the owner can be fined not more than RM5,000 or jailed not more than 3 years, or BOTH!
 Info source: propertyguru.com.my

#2 The amount to be paid is forever…

Typical charges these days can easily be 30 sen per sq ft. So, for a 1,000 sq ft condo, one may have to pay around RM300 for monthly maintenance fees. That’s RM3,600 per year or RM36,000 every 10 years. By the time the home loan ends, the total maintenance fee paid is already RM300 x 12 (months) x 30 (years) = RM108,000.  6-figure number, even if you are not using the facilities.

Have you ever imagined paying RM108,000 just for a 1,000 sq ft condo? As long as you still own that condo, you still have to continue paying the maintenance fees yeah. Now imagine what happens to those who are paying RM400 per month… Not easy financially speaking. No wonder people say it’s super tough to afford a home. By the way, this is also why there is no need to buy a condo with the MOST number of facilities as well… (unless we are using them)

#3 It can continue moving upwards

There is no guarantee that the maintenance fee will be the same forever. Anyway, salaries go up, prices of parts go up and technically everything will face the wrath of inflation. So, the maintenance fee which used to be RM300 per month could inch upwards. Say 10% increase every 3-4 years? It has to be agreed by the owners during the Annual General Meeting (AGM). Can all owners reject this increase then?

Image by
PublicDomainPictures
 from
Pixabay

It can definitely be rejected but please remember that when the maintenance fee fails to keep up to the necessary funds needed, things will start to break down and when this happen, it will also be bad for all the existing owners over the long term. For example, from the usual 12 guards, this may be reduced to half the number… or from the usual 3 times pool cleaning, it may now be just once per week. Erm… it’s dirty yeah…

This is also why the maintenance fees for newer condos are higher in price per sq ft versus the older ones yeah.

#4 It is NOT whether you use or not use yeah

There are services which we pay when we use. Well, when it comes to maintenance fees, we pay for the convenience of using the facilities as and when we would use them. It’s not when we use them, then we pay yeah. This is also one reason many refuses to buy a condo because they say they never use the pool anyway, why pay?

Good points. Just remember yeah, it’s not just the pool but also the cleaning services… also the security guards… the security cameras… the continuous upkeep of all facilities, the electricity to switch on lights in the common area and even the repainting of the external walls every 10 years?

Maintenance fees is thus payable forever as long as you still own the unit and not whether you use the facilities every week or not.

Maintenance fees should still be affordable

I went to view a nice condo 3 years ago. I like it a lot. My wife too. The maintenance fee? RM950. Haha. That’s very hard to accept. Plus the fact that the facilities are no longer that new and the design is also not that contemporary too. Yeah, it’s one of those condos where the developer is cash-rich and has been keeping the condos and not selling the condos with a super heavy discount.

As a buyer, just remember this. When the maintenance fee is just too high, then it will be a major obstacle to sell that property in the future as well. So, sometimes, the property price is also affected because the potential buyer may prefer to use part of the maintenance fees for another small property to be rented out instead. Plus the fact that there are so many choices out there these days yeah.

All the best in choosing one with just enough facilities, quite affordable maintenance fees and not too low density or super high density. Cheers.

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Maintenance is key to secondary high-rise properties

I could not believe it when a close friend sent me a photo of the lift panel of a condo project. At least half of the buttons were malfunctioning and the ‘G’ was also not working! She tried to stop at Level 1 but when she tried to go down via the staircase, the door was locked on the ground floor. She could not leave the condo! She walked back up to Level 1, took another lift. There were four lifts, two were out of service and the other one she took fortunately had a working ‘G’ button. Thus, she was able to leave the condo after she had visited a common friend on 13th floor.

If you think this must be an old condo building, it is not. From the key handover until today, it’s just 3 years. The condo which I was staying had no such issues though I have stayed there for 6 years. The condo which I am staying today has not such issues and my current condo is already 9 years old. This brings us to a very important point when we are considering a
secondary high-rise unit.

Maintenance should be the key consideration. This is way before location, the size, the facilities and whatever other considerations in your head.

So, yes use the lift as the most key considerations. Are they working? Are the buttons working? Are there stickers over some buttons? Is it dirty? Is it smelly? If it is dirty or smelly, try visiting again the next day. Most of the time, you would be able to decide there and then whether to still buy that condo. Reminder, if you do not feel uncomfortable do not hope that the future buyer would. Plus, a bad maintenance just within first few years is likely to get much worse before some very committed committees could make it better after a few more years later. Oh yeah, there are cases where the maintenance went from bad to better and then to excellent! I have been to my colleague’s apartment in Penang. It was already over 15 years and it’s not even a condo but the maintenance is considered excellent!

This is a serious reminder. You want to stay in a good place. Unless you intend to volunteer to be the next committee chairman and you have experience in condo management, it may be better to skip these condos which have ‘awesome’ maintenance when you visited it for the first time and the second time. Yes, I always advise to give the condo a second chance if you really like everything else except the lift. Happy buying.

written on 1 May 2015

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