Weakening demand for luxury condos, increasing prices for cheaper condos

Let me SMILE first. To many who have been reading kopiandproperty.com for some time, you would understand why. I have always said that I do not feel that property prices are too high for all categories. It’s just too high for some while for the secondary market there are still many good choices. Now, let’s look at what the real property gurus in Malaysia has to say. Reported in The Star on 27 August. Media reports said that local demand for high-end condominium will weaken primarily in the Kuala Lumpur City Centre (KLCC) area. Then, according to Jones Lang Wooton Executive Director Malathi Thevendren, there is a mismatch in the level of pricing of the high end luxury condos versus demand because of local affordability. In other words, the locals just could not afford these units.

Then, she said,’for affordable condominiums, demand will see steady growth with young couples and professionals continuing to drive the market.’ This is definitely supported by the current demographics in Malaysia. Just look at the baby section in all departmental stores, new malls. It is growing and the brands of baby diapers are now so many that I see a new one being launched nearly every time I go to the mall!

Other comments from her include the fact that landed is more preferred when compared to condo but affordability is now a serious issue. Market prices for low to medium end condominium in popular locations may even see some appreciation. If you look at some of the online property sites, you will see that there are still many secondary condos which are prices at RM400 psf or lower. Let me tell you something real. For new launches of any condo, based on the usual margin, land price and construction costs, no one would sell at RM400 psf or lower. In fact if it is RM450 psf or lower, majority of the developers would choose NOT to build. The risks far outweighs the risks.

Personally, whatever has been said thus far will always be the same. As majority of the richer people would be living in a landed property, the not so rich ones would want to be like them. Thus, they would want to get landed. Always remember this, the richer people are just using a small portion of their wealth for these landed ones. If you are like me, you would need to use a bigger chunk of your wealth, thus rendering you incapable of buying another property for investment. Think a little differently, the results would be different and within 10 years you may actually be already owning one and have two other properties with rental. Think objectively.

written on 27 Aug 2014

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The changing condo versus the loved landed. My views.

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A weaker Ringgit due to a stronger greenback (2019…)

Do you like a stronger Ringgit? I do. Especially because I love travelling. Well, bad news for us, at least for 2019. Bank Negara Malaysia (BNM) expects the ringgit to continue to depreciate against the US dollar next year, as the greenback continues to grow stronger and also due to other external uncertainties. Our BNM
Governor, Datuk Nor Shamsiah Mohd Yunus informed that the ringgit has depreciated by 2.5% against the US dollar in the third quarter of 2018. On a year-to-date basis, our ringgit has fallen 3.35% to the US dollar. She said,
“This is something that is not only unique to Malaysia, but all the other regional economies would be affected by the strong US dollar and that is where we do expect that the regional currencies, together with the ringgit, will continue to depreciate.”
This is the article in TheEdge Markets.

However, she added,
“Nevertheless, because of the deep financial market that we have and the big pool of strong domestic institutional investors, that will ensure orderly adjustments in both the foreign exchange market and in our currency.” In terms of comparison with other regional currencies,
Thai Baht and Singapore dollar have appreciated by 0.3% and 0.1% respectively against the US dollar this year, while the Indonesian rupiah and Philippines peso depreciated by 13.1% and 7.3% respectively. There is also that usual concern about the contagion risk from vulnerable emerging market economies.
“Emerging market risks increased following concerns on Turkey and Argentina, the escalation of the US-China trade war in September and the US Federal Reserve (Fed) rate hike expectation during the quarter, and the eventual Fed rate hike on Sept 27,” she said.
This is the article in TheEdge Markets.

I guess we just have to look at this from the positive side. Our exports are now cheaper and hopefully Malaysian companies can take this opportunity to get new markets too. By the way, let us always remember that currency is used for TRADE. This meant that countries with huge deficits should have a weaker currency and not stronger. As for travelling, please carry on. If we are in Hong Kong, eating after 230pm usually gets cheaper rates. (after the busy hours). If we are in Australia, many items are on discount after 6pm if I remember correctly because they do not like to eat ‘yesterday’ bread or muffin. Let’s not let 3.35 percent stop us from carrying out what we intend to do yeah. By the way, buying a property in KL is now cheaper too, for foreigners who are reading this article.

written on 19 Nov 2018

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Highest since October 2018. Positive for the ringgit probably?

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Wealth gap between richest and poorest is ever wider

It’s not easy for a salaried professional to become super-rich. However, as long as we use what we have to build more, we should be better than the national average. Perhaps that could be a good goal to have. A rat race, perhaps. Would it be easier if we are an entrepreneur instead? Actually, it really depends because many businesses fail and we often hear of just those which succeed.
Be careful with property investment today

There are also reports about how the richest few areaways getting richer while the poorest remain poorest. Just look at the salaries and bonuses for top management in many financial institutions and we would get the picture. Especially those from the advanced economies. The struggle for the highest pay and the lowest ones continue. One latest
report here.

Reported in many major medias was a revelation by Oxfam about the richest and the poorest. As per google, this is the description for Oxfam. (Oxfam is an international confederation of charitable organizations focused on the alleviation of global poverty) Oxfam shared that the wealth of just the 8 richest people is equally the poorest 50 percent population of the world. In actual number, that’s 8 person versus 3.6 BILLION people. Full
report is here.
 Last year, I reported about it too.
It’s impossible to keep up with the richest

The richest of them all? Microsoft founder Bill Gates is worth $426 billion (RM1,904 billion). Oxfam said that the reasons for this ever increasing divide are rising inequality on aggressive wage restraint, tax dodging and the squeezing of producers by companies, adding that businesses were too focused on delivering ever-higher returns to wealthy owners and top executives.

Yes, I wrote about this much earlier too:
When salary packages for CEOs become way too high

The World Economic Forum (WEF) was quoted as saying that this rising inequality will be the biggest risk to the global economy in 2017 and could result in rolling back of globalisation. Oxfam also said that between 1988 and 2011 the incomes of the poorest 10% increased by just $65 (RM291), while the incomes of the richest 1% grew by $11,800 (RM52,746) – 182 times as much.
One question, how much income did we increase for ourselves over the past 10 years?

Second question, did the increase helped us to save more or spend more? The answer helps us to look back at what has happened and what may happen in the future, for our future. Be reminded that the gap will always be getting wider. Happy following and taking actions.

written on 16 Jan 2017

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Starting young is better than starting later

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Wealth increase of 10 men is enough to buy vaccines for the world.

There are countries which have secured enough COVID-19 vaccinations for their people. There are those which are still trying to get enough. There are countries who are too poor to afford these vaccines and they will be assisted by the COVAX programme by World Health Organisation. Well, let’s be reminded that no one is safe until everyone is safe yeah. This is the reason why some countries are going to give vaccines to everyone in the country, regardless of whether they are citizen or even undocumented people.

I read an interesting title to an article in
Article in bbc.com
. It says that these 10 men’s wealth has increased a lot even during the COVID-19 pandemic. Most of the names would be familiar to everyone and articles about their wealth appears nearly daily these days. Do note that this wealth increase is talking about just the increase part yeah. It does not include the original wealth before the wealth increase. Let’s look at some details in the article.

Photo by jae park on
Pexels.com

Article in bbc.com
.
  World’s 10 richest men has seen their combined wealth rising to US$540 billion (RM2,183 billion) during the pandemic, according to Oxfam. The charity says that this amount is enough to prevent the world from falling into poverty because of COVID-19 and at the same time, to pay vaccines for all. This is why it is suggesting to governments to tax the super-rich.

Oxfam also claims that the billionaires’ fortunes rose due to rebounding stock markets and a “rigged economy”, causing rising inequality during the “worst economic downturn in a century”. The 10 richest people, whose fortunes rose by $540bn since March 2020, include Amazon founder Jeff Bezos, Tesla founder Elon Musk and Facebook founder Mark Zuckerberg. It’s a long article with lots more information. Do read it here:
Article in bbc.com

Nope, I would not suggest they give up their wealth to buy vaccines for the world

Truth is, the richest are usually getting richer because with their wealth, even a small increase in terms of percentage is way higher than most people who has a 20% increment every year for the next 10 years. However, I do think that when their businesses are not doing well, then they would also be suffering many times bigger losses than most people who are working too. This is why just taxing them when their business(es) are profitable does not seem that fair to me. There should be some mechanism on how they could help the poor countries for example but not a sudden and new tax.

What are your thoughts?

Do you think that it’s a fair request to just ‘force’ the super wealthy to pay more via taxes so that more people could enjoy some of their wealth too? Everyone is entitled to their opinions yeah. As we read all the comments in social media these days, those comments could be extremely far away from what we believe too. Or perhaps there are other ways to ensure a more equitable distribution of wealth instead? Thanks for thinking of a solution too.

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Ultra-wealthy families. Recession in 2020

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Singapore to Sydney properties? Buy, buy and buy.

With the current COVID-19 lockdown or partial lockdowns or even the slowly reopening, what happens if the buyers are super-wealthy ones? Where an extra property in Sydney and Melbourne is well, just an extra holiday home in another country?  Both Sydney and Melbourne are property destination for many wealthy people from the region. (Yes, I consider Australia to be closer to ASIA than Europe or the U.S.)  I just hope they think the same because we should think of how ASIA + Australia can prosper TOGETHER, yeah.

Article in straitstimes.com
 .  Wealthy buyers from China are buying top-end housing in anticipation of inflation and a weakening yuan.  Monika Ty, founder of Black Diamondz, an Australian company that caters to Chinese buyers of luxury real estate said, “It’s been flat-out.” Since March, Tu has sold A$85 million (RM244 million) of prime property with about half the sales to Chinese clients who were in Australia when the pandemic hit. The homes were priced between A$7.25 million (RM20.80 million) and A$19.5 million (RM55.9 million), are all in Sydney’s well-heeled, ocean-front suburbs such as Point Piper.

Meanwhile in Singapore, though partial lockdown is still in place, three Chinese clients bought 6 apartments worth a combined $20 million at Marina One Residences this month without any virtual tours. This was revealed by Clarence Foo, a property agent with APAC Realty Ltd.’s unit ERA. Christine Sun, the head of research and consultancy at OrangeTee & Tie in Singapore said, “Some buyers may want to divert their funds to other countries as the yuan may be devalued further to combat the weakening of their economy.” Please do refer here for the full and comprehensive article:
Article in straitstimes.com
 .

Sometimes we look at such decisions and we wonder if the right decision could be made without actual viewing has taken place. It may depend on 3 considerations.  First one is that this purchase is unlikely to bankrupt the buyer. In other words, buying this may just be using their spare money instead of over-stretching themselves with home loans.  Second one is that these buyers are experienced ones and may already understood the Australian / Singaporean market earlier and this is not the first time they come across the property market. Third is that they already are served by very experienced real estate agencies which would have served them or their friends prior to this. Thus the trusting relationship has been built earlier too.

Do not envy them too much yeah. These wealthy buyers are not even within the usual households within the top-20 percentile in any country. Learn from them that investment still happens even if there’s a crisis. Learn from them how to look at investments on a longer term that buy now and sell tomorrow kind of mentality. Last but not least, think of property as something which even the super-wealthy would buy as a hedge against fluctuations in the market. Happy understanding.

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Health is wealth. Go conquer Mount Kinabalu

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Web Design & Development

This is a post to showcase the upcoming changes that will impact the website before apply to all posts.

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Webinar with KC Lau: Discover the 4Ps to Success in Property Investment

Every time I meet KC (Founder of
kclau.com
), I always learn something new. KCLau.com is a premier personal finance site and this was started long time before people realised that blogs could become a powerful channel! In my last meeting with him just a few weeks ago, he asked if I would like to conduct a webinar for his followers.

Let me say this. It’s my honour to be invited by Malaysia’s most established personal finance site;
 kclau.com
  to conduct a webinar for the public for the second time. The first time was years ago. 😛  This time, the topic that I will cover is, “Discover the 4Ps to Success in Property Investment.” In brief, below are some of the areas that I will cover in the session:

Property Investment is not risky if we understand the 4Ps

– #1 People – Why is property investment still a safe investment

– #2 Price – Why property prices are still rising even in a slow market

– #3 Policy – Why sometimes a catalyst is all that’s needed to boost a property market

-#4 Preference – Will the rental generation come true? What should we do about it?

To register, just
click here and follow the steps:

Detail for the webinar as follows:

Date: 25th September 2018 (Tuesday)

Time: 12 noon (Malaysian time)

REGISTER HERE.

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Is a website still relevant today? Good question!  :)

Is a website still relevant today? Good question! 🙂

History of kopiandproperty.com

kopiandproperty.com was started in Nov 2013. I did everything by myself. Even learnt how to create the website from scratch. Spent a lot of time to tinker, change, edit and then doing everything again every other year. Else, the website will start looking jaded. Sometimes, it does not work as planned and I have to change it back to the earlier version which worked better. Today, kopiandproperty.com is considered a leading independent property blog in Malaysia and we have close to 20,000 visits per month.

Building a website and maintaining it

2 years ago, I decided to switch to a good friend who helped to redesign kopiandproperty.com and is also helping to maintain kopiandproperty.com nowadays. If you think kopiandproperty.com meets your expectations in terms of a functional website, feel free to engage my good friend yeah. No need to mention my name (I do not take any commission), just proceed to speak to him yeah.

About starweb.my

Since 2015

STAR WEB based in Penang, Malaysia, started in web development since 2015. We start with a simple goal of helping client create engaging digital experiences, mainly focus in create corporate website design, search engine optimization (SEO) & website maintenance.

Our recipe is simple

Our recipe is simple – to create a satisfying experience specially for you. And the ingredients? A plenty of dedication, a bundle of passion & a heap of efficiency. It is our greatest pleasure to help you boost your company revenue & customers base thru website.

Our clients are our friends

We listen to customers by truly understanding their goals and needs, so that we can collaborate more easily to find solutions that satisfy or exceed customers. We will take care of every single little, nitty-gritty detail so you may proceed with your focus peacefully.

Starweb’s services

Starweb’s pricing

For any business at all, a website is a basic requirement which is compulsory. It’s the identity of the company. Imagine a property developer launching a new project and it has NO website… Imagine someone selling you a product and when you google, you cannot find this product at all… Imagine a real estate agency telling you that they are very prominent, they help thousands of customers buy properties and yet you cannot find the website of the agency…

Many people tell me that youtube is more important than a website. They may be right.  Many people tell me Facebook is more important than a website.  They may also be right.  Just remember to ensure that the youtube channel is always updated and has all the information needed for people to make their decision.  Just need to also make sure the Facebook channel has probably a super big number of followers yeah.

Even after all these, website remains another important channel that businesses would need to have. Happy understanding.

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5 Must-Do steps for property investment.

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WEF: Malaysia is 18th out of 140 economies

Hey, I found another piece of news which many would either ignore or say this must be fabricated, somehow. How can a country so many said is turning into a failed state be ranked so high versus the world today? Malaysia is ranked 18
th
 in the latest world competitiveness report by the World Economic Forum. This is my country’s highest ranking since the influential report started in 2005. World Economic Forum measures and ranks 140 economies based on a total of 12 pillars. Nope, there is not a single benchmark based on ‘
perception among Facebook users
,” if you want to know. The full report can be read here:
WEF Competitiveness Report
.

Oh yeah, these are some of the information from the ranking. Malaysia is ranked top within the 20 economies under the transition stage from an efficiency-driven to innovation-driven economy. The report showed that Malaysia’s competitiveness lies in goods market efficiency and financial market development pillars in which Malaysia is ranked in the top ten at 6th and 9th positions respectively. Besides that, Malaysia has improved in most of the 12 pillars. In the macroeconomic stability, Malaysia improved nine places and is now 35th. One major reason, budget deficit has been reduced to the lowest in 6 years. Currently at 3.7 percent of GDP. In the Higher Education & Training, we are now 36th having improve 10 places. In Technology readiness, Malaysia is now at 47th, improving by 13 places. Full methodology on all the pillars are here:
GCI Methodology

There are some areas of concern in rising higher up the competitiveness ranking further and these include redundancy costs, women in labour force and gross secondary education enrolment. So, yes, there are definitely still lots of improvements needed but 18th out of 140 economies? I am not sure if ringgit should really be punished so much by all the savvy investors who continue to ‘anticipate’ instead of really looking at the numbers versus that particular economy who is rising despite still showing some vulnerabilities today. Happy investing in whatever you believe. Just do not say something but act otherwise yeah.

written on 30th Sept 2015

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I also hope US economy will show great numbers

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What a ‘BAD’ Malaysian economy.

Is the Malaysian economy in trouble? Statistically, no. Sentiment wise, we may really be. Every time anyone sees news about people losing their jobs because the company was closing down, it’s due to the economy. Whatsapp messages become viral and everyone is alarmed of the situation. Never mind that the total unemployment is still very low and so many companies are posting job advertisements.
Earlier article here.

When a new smartphone was launched at ever higher retail price, they say that’s due to the Ringgit and it has been down because the economy is bad. Never mind that most of the currencies are down versus that ONE currency which is still telling the world that they are the superpower and yet refused to compete fairly. Always through subsidies… We also forget that currency strength should not be based on speculation but based on trade.
Surplus means it strengthens and deficit means it should weaken
. Nothing of that sort is happening today.

When some new malls close down, they say the economy is bad. Many people are no longer buying. Never mind that some malls were doomed to fail in the first place due to inexperienced management. By the way,
Car sales are somehow up….
 Anyway, please drop by to the successful malls and see yeah. Image shows the queue just yesterday evening in Penang. Perhaps ONLY Penangites are still rich?

Let’s not forget the viral Whatsapp sharing every time there’s another prediction of a property bubble coming very soon. By the way, usually a bubble will only happen after many warning signs. Understand some of them here:
Understanding 3 property bubble signs and more
.  Happy understanding about the ‘BAD’ Malaysian economy of today. Hopefully the thought will never become a reality.

written on 9 Dec 2018

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Positive news for Malaysian economy. Sharelah.

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What a life! Well, I need to take care of them, I guess.

It was an hour before the
TTDI Toastmasters Club meeting. (Yes, they are an awesome club)
 I was having my dinner at Burger King and inside the whole restaurant were only 6 customers. 1 guy (that’s me), 2 guys at the same table (should be fresh grads) and 3 girls (should also be fresh grads who has just started working). I was seated extremely far away but I could still hear one of the girls said, ‘With my current lifestyle, I usually do light exercises. Otherwise it would be so boring sitting at home.’ Based on my understanding, I think two of the girls are working and they were telling that girl who was not working how tough their lives were. They said that their bosses are not good and knows only how to order people around. That stay at home girl was also telling them that she has her problems too. It’s too boring at home and thus she has to do light exercises. Of course I did not walk over and ask her why was she not working and only staying at home but she seems very happy staying at home.

My thoughts went to my daughter who’s now 5 years old. What may happen in another 18 years or so when she graduates? Oh yeah, I will provide for her until she graduates with a degree. We will decide later if she’s the academic type and wants to go all the way to PhD. My son who’s 3 years old would enjoy similar offer from me too. Haha. Remember yeah,
Education savings fund can be complemented by property too

I do not think my daughter would have such privilege; staying at home and doing nothing. I would be unkind to her if I do that. As I do not own a company, I could only guide her towards a career path which hopefully could sustain her lifestyle well. Yes, hopefully providing

her with lots of money sense as well.

She does not get to buy toys from Toys R Us. She gets to only play with the toys and I have just started to bring her for hiking. I think she likes it too.

One thing which may not be within my control would be when she starts to mix with her peers in school. Hopefully parents who are reading this would infuse the right values as well as skills and experience so that their kids would become good people. Providing

them the best smartphones will not help much.

Giving them lots of money is even worse. People always say the Gen-Y or the millennials are difficult people. That they are so different from the older generation. That

they do not want to buy homes even.

Well, I think they become the person they are today because of the parents. Okay, as for now, I think it’s important for me to make sure I could at least take care of them until the day they become a working professional like their father. Happy raising our kids!

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written on 26 March 2018

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Updated – More freedom but less money?

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What are REITs

REITs stand for Real Estate Investment Trust. In short, you buy a share in a company that manages and maximises returns from properties owned by them and sold to you via shares. The first REITs on Bursa was AXIS. It was listed in 2004. Returns to investors are in the form of capital appreciation if the price for the shares increases as well as the annual distributions of its income, predominantly, rental of malls, offices, hotels or industrial buildings. If you know about commercial rental, it’s pretty consistent. A lot of REITs pay out up to 90% of their taxable profits. Thus, you can see that the yield is actually double of FD or better most of the time.

Take just 1 hour to study about REITs, key in their names into google and search for its latest financial results and what’s the current yield if you buy and keep as a long term investment.

Do I have any REITs. At this point in time, no. I love stocks but for property, I prefer to actually spend time and view them. In fact, my wife and I love viewing properties as it allows you to learn more about the property and subsequently the property market. Nevertheless, for those who are saving money for their first property, nothing wrong with putting the money in REITs in the meantime. Thus far, I have not come across an REITs which suddenly lose half of its value. However, I do know of a recent fiasco in Singapore Stock Exchange where a few stocks lost 99% of its value within a short period of time.

Next suggested article:
Iskandar Property Digest – Nov/Dec 2013

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What are you doing at home during this COVID-19 period? Depends on your generation.

Wondering what’s the difference between a Gen-Z (born between 1997 – 2012), Millennials (born between 1981 – 1996), Gen -X (born between 1961 – 1981) and Baby Boomers (born between 1946 – 1964).  Well, for one even when we are being quarantined at home for the COVID-19 pandemic, what we do online is very different! Haha. By the way, we could see very clearly that there’s one generation who does not look as much on the internet for COVID-19 updates versus other generations. Please refer image below.

To pass time, Gen-Z listens to music. Baby boomers… well… there are not that many internet activities which they do. Haha. Anyway, coming back to something which I think is becoming so common that everyday I could see it happening. Webinars / FB Live session. Well, millennials are the group watching this the most! In fact nearly double or triple that of other generations. So, marketers, please take note yeah if you are trying to get this group of buyers to buy.  Image as below, please refer and understand.

Moving on, I am also very surprised that Podcasts ranked much higher than webinars! Fortunately for me, someone invited me to do a podcast the other day and this should be released this week. Yeah, it’s for my views with regards to the property market. However, done with a twist. I will share once it’s out okay. Do refer to the image for even more differences between the generations. Many more interesting things too.  Happy referring and remember to celebrate the differences and not being too critical about the OTHER generations yeah.

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Investing should be as exciting as watching the grass grow

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What happens when your rental unit is damaged by fire?

Many of us may have bought a place of a few hundred thousand ringgit and rented it out for a few thousand ringgit every month. Ever wondered what happens if the unit was damaged by fire?  I was also wondering about this topic when my good friend who’s a down-to-earth and knowledgeable lawyer Alfred Chong said he will write an easy to understand article for everyone’s benefit. There’s no need to have super high proficiency with English to understand his article below. Enjoy reading and learning!

What happens to your rental property damaged by fire?

Fire breakouts can occur unexpectedly due to many reasons including but not limited to spark, gas leakages, appliance or wiring failure, overloading electrical outlets/extension cords, faulty electrical outlets and devices.

The student hostel damaged by fire in Penang on 31 January 2018 and the fire outbreak at the Employees Provident Fund building along the Federal Highway at Petaling Jaya, Selangor on 14 February 2018 respectively were local incidents which were reported earlier this year.

Property owners may be overwhelmed after the fire and be unclear of the steps involved to restore the property damaged by fire and/or to reclaim their expenses and losses. Before any such of a fire breakout, the author have listed out an action plan below:-

i. Determine the cause of the fire.

After the breakout, it is necessary to have a frank and honest discussion with the tenant to determine the details leading to the fire and/or anything peculiar occurrence before the fire. After hearing the tenant’s version of the fire breakout, it is advisable to fact- check the same later with the fire department. The fire department will produce their own report after conducting an investigation for the cause of the fire breakout. It may be possible that the tenant deliberately withold or try to cover-up the cause of the fire breakout to escape liabilities later on.

ii. Inspect the extent of damages and destruction to the fire-damaged property

It is necessary to obtain clearance from the fire department to enter and inspect the property. If clearance is obtained, it is time to record the damages and destruction caused by the fire breakout through taking pictures and inventory for the structural damages to the property together with the fixtures and fittings damaged (especially if the property was partially or fully furnished before being let out). It is prudent to specify the makes and models of the appliances, equipment and other fixtures and fittings damaged by the fire breakout for insurance purpose and subsequent legal actions (if any).

iii. Restricting access to the fire-damaged property

Before the repair and restoration of the property, it may be necessary to board up or seal any point of access or entry to the fire-damaged property to prevent trespassers from entering the property and further damaging the property or end up being injured leading to legal claims by third party later on. If the property is landed, the owner may consider building up a temporary fence to restrict access.

iv. Make appointments for inspection of the fire-damaged property

it is important to get the property back to habitable condition immediately. As such, it is prudent to set up appointments with fire-restoration companies to get quotations for the costs of repair and restoration. Confirm whether the fire-restoration companies have

been approved by the insurance company at this stage for the purpose of the insurance claim. Damage caused by fire is different from normal property damage as it involves structural damage that affects the entire building. As such, it is advisable to engage a professional after a fire outbreak.

v. Proceed to apply for Insurance (if applicable)

The owner should contact the insurance agent immediately to start processing the claim with the insurance company which can take some time. The owner should provide as much details as possible and cooperate fully to shorten the insurance claim process.

The insurance companies will conduct their own investigation as to the cause of the fire and the extent of the damage and destruction to the Property. The costs of repairing and restoring the fire damaged property up to the insured amount would normally be approved by the insurance company provided that owner and/or its tenants have not done anything or failed to take certain actions which may result in the insurance against loss or damage by fire becoming void or voidable.

vi. Legal liabilities

During the period after the fire breakout, the property owner is responsible to restore and rebuild the property to habitable condition. After the discussion with the tenant and obtaining the fire department’s report, the cause of the fire will be determined. If the fire is caused by the tenant or a third party, the owner should consult a lawyer to advise on the following:- a. whether the tenant or party responsible is obligated to reimburse the owner for

the restoration of the property; b. whether the tenant or party responsible is obligated to pay for increase in the the

rates of premium payable by the owner to the insurance company; c. whether the subtenant and/or the tenant’s assignee caused the fire. If so, it is necessary to determine whether any clause in the tenancy agreement restrict the tenants from subletting and/or assigning their rights for the use of the fire damaged property (if any); d. whether the tenant is required to pay rental after the fire breakout and the time frame for the completion of the repair and restoration of the fire damaged property (if any). e. Whether the tenant have the rights to terminate the tenancy agreement upon the occurrence of a fire breakout and/or if the fire damaged property is not repaired and restored within a certain time frame.

Property owners also need to determine the following:-

i. Whether the property is still under mortgage. If so, the borrower is obligated to

notify and update the Bank of the occurrence of the fire breakout and the restoration steps taken to restore the property; ii. Whether the fire damaged property is rented out for residential and/or commercial purposes. If the tenant had used the property to do business outside the knowledge of the owner in breach of the tenancy agreement which subsequently led to the fire breakout, the landlord will be entitled to claim from the tenant; iii. Whether the tenant is liable for reimbursing the owner for the repairs and restoration if the tenant or its assignee or its sub-tenants or its workers or agents or permitted third party was directily or indirectly responsible for the fire breakout? iv. Whether there was any loss of life? This will also legal claims by third party as

well. v. Whether the fire spread to the neighbouring property or units. In such scenario,

there may arise a legal claim against the owner and the tenant depending on the cause of the fire.

vi. Commence repair and restoration work and obtain certification

It is important to begin repairing and restoring the property to habitable condition as soon as possible. Once done, it will take time to apply for certificate for purpose of fitness for occupancy from the relevant authorities

Dealing with the aftermath of rental property damaged by fire will take up a lot of your time, effort and expenses. The longer the property stay unrepaired, the longer the property is not making profit for you. Hopefully, no readers would require to use the aforesaid action plan.

Disclaimer : The views and opinions of the article above are those of the author, Alfred Chong from Messrs A. Chong & Co.,and does not neccesarily reflect the position and policy of the publisher.

Feel free to
engage him at his FB page here.
He speaks in property events too. Catch him one of these days and I am sure you will learn a lot!

— end of article —

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What if the stats are wrong? Look at actual signs then.

Dinner with a good view.

A very prominent and capable friend who has opportunity to buy properties all over the world shared this point with me this evening. Personally, I would have bought properties in all those places that I would need to stay for a while, say couple of months per year. He asked, “What if the stats provided by the authorities are wrong?” Interesting idea indeed. Actually how do we know if the numbers in some authoritarian (only one extremely strong dominant political party) or even military-rule country are correct? Or even accurate. Seriously, I have no idea because I am just a common Malaysian and has access to the same data as everyone. However, since he asked, I should provide a solution, right? Okay, this is just an assumption, yeah. What if the statistical numbers we have today are not really that accurate? Not reflective of the actual situation for example. Here are some ways to determine the truth.

Property Bubble? I have written before. It’s here.
Spotting signs of a property bubble, 3 points.

Okay, let me extend it a little. He shared about one particular mall that is near his home, that the mall is now very empty. This surely does not look that good for the economy. Actually, where malls are concerned, only the fittest would survive. Yes, I have written about it too.
Tough to do business these days, malls too many

 The rest would have to close because they have nothing special to offer. A prominent and real property expert predicted that 20 percent of all malls would be close.
Malls? 50 percent (tough), 20 percent (close) and some survivors
 Many developers could build malls but not many are actually mall operators. By the way, the only reason why so many developers built malls was because people love to buy on top of malls or right next to a mall for example. To them, that’s convenience.

Well, the outlets inside malls have to survive too right? These professionals living within a residential unit integrated to a mall are usually out of their home before the mall is open and home only when the mall is about to close. In other words, weekdays would be a huge struggle for the retail units as there are not many visitors. On weekends however, many of these professionals would prefer those bigger malls instead. Those huge malls would be a magnet to all their friends too. As for their own small mall below their home? Well, that can wait, they always reason. Too bad, after ‘waiting’ for a while, some shops start to close. People hate visiting malls where some of their shops are closed. That eerie feeling sometimes when there are just no shops open on some floors. These people then stop visiting and in the end, the malls close. Guess what, the
biggest and most established malls

continue to do well and the rental is increasing and definitely not reducing. This is already a great sign. There are not many businesses that I know which would continue to keep their shops open when they have no business. These shops would move elsewhere soonest possible! This is one major reason why sometimes, those national retail numbers are not really needed, for common Malaysians like us. It’s needed maybe for policy makers. For us, just drop by big malls, try to find a car park and try to get a seat in some famous restaurant during lunch time! That’s a much better sign than statistics..

Secondly, unsure of the property market because it is already too expensive for the average Malaysians. Well, frankly, there are already many countries all around us or even the advanced ones where the median income versus the
median property price are in double digits already.

Google for it, yeah. This is not a comparison site. 🙂  Unfortunately for those cheaper areas within the Greater KL, it’s not that popular, yet. Just need to key in RM400,000 and search in all major property sites (not kopiandproperty.com lah) and choices are still available. There are already countries where putting in 400,000 in the local currency to search would return zero results already. This includes even the poorer nations too, not just the advanced ones. As for affordable homes, let’s note that most of the SMSes or FB marketing messages I get these days are usually below RM400,000. Please do not hope for huge sizes, okay.

Actually, we discussed a lot of other issues. I think in my next meeting, I will buy him beer. Who knows, he may send me some property information when he travels in the future. Haha. As for buying a foreign property, well, I earn RM currently and travel only within Malaysia for my job, so there’s no such opportunities yet. Hopefully he would take advantage of his travels and get not just a property but properties. Happy travelling Mr. C. Cheers.

written on 12 Oct 2017

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What is a coffin home? 200,000 people staying in coffin homes.

What is a coffin home? Are there homes which are really that small?  21.5 sq ft is the size of such a home. If you like an estimation of the size, just walk 4 steps to the front, then turn left or right and walk 5 steps. That’s roughly the size of 21.5 sq ft. A small sized single bed is roughly 3 ft x 6 ft = 18 sq ft. Yeah, imagine everything you have must be kept within a space like a single bed and every night, you will be sleeping in that single bed which will have all your possessions too.

Photo by Andrea Piacquadio on
Pexels.com

Article in businessinsider.com
  Article quoted someone surnamed Wong staying in a 21.5 sq ft living space who said he spends his days in the park playing mahjong with friends and will only be returning at night to sleep.  However, with the return reported death of the first patient from coronavirus, he has since been staying indoors. He said, “I don’t go out anymore, there are no more gatherings.”

“As soon as I finish my tea and grocery shopping, I come home and become a recluse and just watch TV. I can’t do anything.”

Hong Kong has one of the world’s highest inequality rates, with more than a million of its population of nearly 7.4 million living below the poverty line. More than 200,000 people are housed in subdivided flats, commonly referred to as “coffin homes” because they are so small, government data show. Please do read the full report here:
Article in businessinsider.com

Homes are that connection to inequality rates

Imagine paying rental for 200 years… Would you? Well, this may be happening in some countries where generations after generations, poor families continue to pay rental and often the rental is paid to someone far richer who continue to get richer while these poor families continue to work very hard but because a huge part of their income goes to a never ending rental, they lose so much of their earnings every month, year after year and yes, it’s possible to reach 200 years or more.

Government intervention needed

Nope, when I said government intervention needed, this is NOT asking developers to keep building some RM300,000 homes in the middle of nowhere or at places where people just would not buy and more. What I meant is that the poorest must get a place to stay at a rate so low that they could still afford to save more of their pay and could then start saving for a place of their own in the future, hopefully also built under supervision of the government. To do this well, consult lah good people. Maybe a property blogger who is not from the developer, not a real estate agent and not from the banks? Haha.

This was the
earlier article about renting vs buying.
Renting is better than buying? Which is going up faster in Malaysia? Just remember that the debate about buying or renting a home ceases to be a matter of concern if we could earn far more than what is needed to live comfortably. However, for most of us, better understand that we are living longer than the 60s, 70s and even 80s. Today we may just be living to the 80s… That’s a huge issue because we retire in the 50s…  Let’s not have this kind of situation in Malaysia yeah.

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What is a V-shaped economic recovery?

Macroeconomics is a branch of economics that studies how an overall economy—the market systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as
inflation
, price levels, rate of
economic growth
, national income,
gross domestic product (GDP)
, and changes in
unemployment
.
This definition is a comprehensive one provided by investopedia.com (click any of the links to read)

Now that you know what is macroeconomics, today we look at economic growth and GDP. What is a V-shaped recovery? Based on some recent predictions, there’s this potential that after the COVID-19 pandemic is over, the GDP growth of Malaysia may rebound quite fast. Just as many predictions are for a negative growth for Malaysia in 2020, there are also many very positive forecasts for 2021 for Malaysia’s GDP growth.
Highest of these would be 9%. Click here to read yeah.

Let me explain this in an easy to understand manner. V-shaped recovery usually happens when an economy plunges quickly into a recession. With the current COVID-19 pandemic, most countries are under a lockdown. Whether it’s known as a Movement Control Order (MCO) or even a Circuit Breaker (CB), it’s still a a lockdown. With business premises closed there are no economic activities. Thus, the quarterly number can quickly become negative. This has happened even for China and will happen for the U.S. as well as most other countries you and I know all around the world.

With all these lockdowns, then how could an economy recover quickly? In a financial crisis like in 1997/1998, almost every business and every employee is affected. Non-Performing Loans (NPL) spike and the banks were all in trouble and was in no position to keep lending even to businesses who just needed the funds to keep themselves afloat and could quickly turnaround as soon as the economy recovers.

Briefly, at the time, Malaysia instituted capital control (for stability) as well as to force the merger of all banks (for consolidation) and also to take over all these NPLs from the banking sector via Danaharta. These measures helped the market get all the different boosts it needed. In 1998 Malaysian GDP declined by -7% and by 1999, the GDP recovered to a positive 6.14%. By 2000, the GDP growth improved further to positive 8.86 %. So, if we look at 1998 vs 1999 and 2000, our recovery was V-shaped as well.

So, what is on our (Malaysia) side this time? Well, this time, our banks are at position of strength. Most have good profit numbers for 2019 and low non-performing loans and while this is expected to rise, it’s forecasted to be just 1.8% for 2020.  (In 1998, it was double digits). Secondly, we have a Prihatin Stimulus plan which seeks to minimise business closures as much as possible and keep the most vulnerable with wage subsidy.

Most importantly, because the banks were at a position of strength, all of them were able to offer a moratorium of 6 months to all the loans. It means that if the person’s income is affected currently, he does not yet need to worry about loan repayments until October. The catch is, the job market has to start normalising before then so that everyone has a salary to start repaying again by October.

What this tells us is that if the MCO is over by end May and the economy slowly restarts by June onwards, people who lost their jobs have 3 months to get another job before they needed to star repaying the loans. At the same time, the businesses who managed to survive the MCO will now restart their engines. The employees who did not lose their jobs would now start to become positive again since they could now be speaking to customers, seeing more sales and manufacturing plants could even start producing goods and the services industry starts to serve customers again. I know, all these may not happen as per what was planned. However, if these happen as per what was planned, then GDP Malaysia may see a V-shaped recovery. V for victory against COVID-19 pandemic yeah.  Happy understanding.

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What is Base Rate and why is it replacing Base Lending Rate?

I remember long time ago, when I took my first home loan, it was BLR + 1%. Then, it became just BLR. Soon it became BLR – 1% and today we can find home loans which are BLR – 2.4%. Base Lending Rate was supposed to be what it’s name suggested, the base lending rate. The banks would then add a certain percentage on top of BLR indicating the cost of funds for that loan. However, these days, BLR no longer plays its part and BNM say it is no longer transparent.

By 2nd January 2015 next year, the new reference rate, called the Base Rate would be effective and it is touted to be more transparent and allows customers to easily identify financial institutions that are offering the best rates for loans. It will comprise of Base Rate and the ‘cost plus’ “Financial institutions would be given the flexibility to determine their respective benchmark rates,” said Bank Negara in a statement.

The Base Rate is determined by banks’ cost of funds and will differ marginally from one bank to another. In essence, it meant that banks which has access to cheaper funds such as long-term deposits will be able to offer a lower Base Rate compared to banks that depends on inter-bank market for funding. Suddenly you realise, hey, there are some banks which are offering special FD nowadays! Some advertised up to 4% instead of the usual 3% that you normally get. Yes, perhaps that’s one way they are gearing up for it. No bank would want to offer the highest Base Rate.

The “cost plus”, would be elements such as the financial institution’s over-heads and the credit risk profile of borrowers. Actually this is not such a huge difference from today because buyers who has a higher risk profile are also charged a higher rate anyway. However this rate would spur the banks to be even more efficient because if they have high overheads, it is not possible for them to offer competitive rates. Think more ONLINE instead of more bank branches and you may have an idea. Perhaps even fewer Branch Managers but more team leads for small kiosk type of branches in departmental stores or hypermarkets.

In fact, BNM is also trying to phase out bank cheques and favouring online transactions instead. If BLR is no longer relevant and every bank is not using it as a benchmark but instead using BLR minus up to 2.4%, then the Base Rate does make more sense. Personally I look forward to it.

written on 20 March 2014

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What is considered reasonable property price?

There are quite a lot of answers but typically, if the property price is 4-5 times of the typical annual income, then it is considered reasonable. For example, if you earn RM5,000 per month x 12 months = RM60,000. A reasonable property price to you would be RM300,000 at max. Many of my younger friends would then add that it is no longer applicable because these days, the prices of properties are way beyond the reach of middle income Malaysians. I looked at them and noticed that majority of them has yet to own a property. Perhaps it is because they are still single, still living with their parents, still saving money for the downpayment or even spent too much as everyone of them are carrying a smartphone of either iPhone or Samsung S4 or the latest craze, Note 3. If they use this for a few years, it is ok but they change the phones every year when a new model is launched. This is to ‘keep up with the rest or else I would look bad’.

If we do a search at
http://www.propertyguru.com.my
 and we look for sub RM250,000 properties in Greater KL, the truth would soon show that there are still a lot of secondary properties within that price range. However, the reasons would then be given such as, ‘that location no good’, ‘aiyo, so far away’, ‘there’s no shopping malls there’ and many more never ending reasons. A close friend of mine will soon start working in KL city and asked me on the properties he can buy. My answer was simple, ‘buy an affordable one’ which is within 1 hour of driving even with jam to reach office and must be less than 10 minutes away from the future MRT stations. He found one in Kepong (not so oomph area to many), for just RM250,000 and he has seen the place and likes it. This is definitely much cheaper compared to what one can buy from his hometown, Penang.

Today, when couples get married and perhaps have a baby, they would need to look for a new bigger property. If their combined income is RM8,000,  they should buy something within the reasonable range, say Rm500,000. If you run a search in any online property websites, there are lots of choices, even landed ones. After buying and staying in the same property for a few years, you would soon notice that your purchase is a good decision and if you had waited, the prices may have risen further. Remember, while car prices continue to depreciate, property prices will continue to go up over the long term. True, crisis may come but do you seriously want to wait for the crisis to come again to buy? Think about it, do you dare to commit during such times?

written on 25th dec 2013.

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Press Release: FindMeProp Aims to Change the Way Malaysians Experience Finding Property & Agents

Press Release by FindMeProp.

With the advent of Internet, the
scenario has changed. Now a major share of property and real estate
transactions takes place through websites that specialise in home listings. A
real estate agency or agent sells their properties by marketing them to
prospects. A website with properties listed is a good marketing tool for them
to promote and advertise their properties through the platform. Most of real
estate agencies and agents found it is a big opportunity for them to shine and
leads the industry.

For real estate agents, technology is
a double-edged sword that they could use it to their advantage or they may lose
out if they cannot deal with the competition. The main concern would be, one
would presume, that technology could easily cut off the services of an agent.
But don’t worry, FindMeProp existence will not cut off any of Malaysia property
agent services. While, our existence is to help Malaysia property agents to be
among the top property agents. There are many big players in property listing
business, and FindMeProp born out of the need for wider connections between
buyers and sellers of properties.

How can FindMeProp help me to find the best property agent in Malaysia?

If you find yourself wanting to look
at properties but are coming up short with options from your property agent or
your own research, then FindMeProp is the right match for you! FindMeProp will
help you get your Malaysia property. You are not only able to find property but
FindMeProp also help you find agent!

FindMeProp is a property search
engine and listing website that gives you access to properties in Malaysia and
it caters to all your search and listing needs for properties for FREE! How do
FindMeProp users do it?

All you have to do is earn points by searching or clicking on a property via FindMeProp. By earning points, you will be able to post properties on this website as well. If you are a property agent, this is the perfect deal for you! Just search and click on a property, earn and top up your points, and you can already post more properties for FREE!

Aside from having a wide array of
property listings, FindMeProp also leads and gives you access to other various
property listing platforms. So, if you think you need more options, you don’t
have to visit more than 1 website because FindMeProp does the task in one
search engine just for you.

With one click of your finger, get
access to thousands of properties through FindMeProp. Convenient, time saving,
and efficient — that’s FindMeProp for your property search and listing needs!

With FindMeProp, you can find your
reliable property agent for your home buying, selling, and rentals. You also
can do the searching by state, specialty, name, and agency to find real estate
agent in Malaysia.

Is it FindMeProp Malaysia Free Property Listing Website?

In FindMeProp, we provide property
listing and searching services for FREE. You read it right! All of the services
listed above are for FREE! All the users would have to do is to earn and
collect points in order to navigate through and use the services of FindMeProp.
But don’t fret because absolutely NO CENT will be spent in earning these
points!

Instead, sellers and buyers must use
FindMeProp to search and click on properties. Upon searching and clicking on
properties, they will already earn points. This is especially a great feature
for property agents who can now earn as many points as they can to post as many
properties as they need, too.

Here’s a quick rundown of the
features FindMeProp has offer:

Agent
searching
Property
listing
Agent
review
Agent
comments
Property
matching
Property
analytics
Property
searching Agent rating
Property
selection tips and best practices
Linking
to other property listing platforms
Information
on property discounts and great deals
Connect
yourself with professional property agents

FindMeProp is the fastest way to find
the best property and agents. Search for the best property to buy & rent in
Malaysia from the country’s top property agents.

What makes FindMeProp different?

FindMeProp, a real estate search
website which is comprehensive, detailed and featuring search filters beyond
pricing and home amenities. Our platform is designing as the latest trends and
the best for Buyers, Sellers and finding agents in Malaysia real estate.

Our feature rich website:

Search
— Our search process is functioning quickly and smoothly as can be. Just go to
our application, type in the property and agents that you are looking for and
hit the search button. Voila! It is the quickest way to find the best property
and agents.
Compare
— Now, this is something unique to FindMeProp. You can compare property in
Malaysia. We give you access to deals and reviews from real people to help you
decide on the properties you are eyeing. Not only is this very helpful, it also
saves your time and effort of going to the properties that you are choosing
from one by one by already sorting through the reviews.
Earning
Points — Earn points by searching and clicking on properties. Earning 10 points
will give you a chance to list one property on FindMeProp for free!
Property
Viewing — And if after searching and comparing, you find the property that best
suits your needs, styles, and comfort, book your date to visit the property
with an agent. No need to scrunch your schedule because we will follow your
convenient time.
Enjoy
our support — If you ever find yourself needing some guidance through our app,
our customer support is open from 9:30 AM to 9:30 PM. All working days!

With a comprehensive range of Malaysian property listings on FindMeProp, discovering the right property and agents can be overwhelming. This is now made simpler and faster with Similar Property and Agent listings.

For more information on FindMeProp,
you may connect with us by following our social media accounts:

Facebook:

https://www.facebook.com/FindMePropMY/
Instagram:

https://www.instagram.com/findmepropmy/
Twitter:

https://twitter.com/findmepropmy

And our official website:

http://www.findmeprop.my
http://www.findmeprop.com

— End of Press Release —

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What is flipping? Is it short term speculation?

A good friend commented the other day that I am a ‘safe’ investor. She said that I am not a flipper. (Also known as a short term speculator). Well, the conversation started with some Facebook campaigns which said that ‘flipping is the best strategy’ for primary market. After some thoughts, I think I am also a flipper. Just that I am not a short term flipper. I am a medium term flipper. Haha. Well, I buy a property, rent them out and sell when the price reaches a number I want and proceed to reinvest into new secondary properties, what should I call myself? An investor? Hmm…

Actually, my personal opinion about rental income is simple. Once we have built a portfolio big enough that the rental alone can cover our current pay, please do not change strategy. Just let it run continuously. However, in the progress towards this goal, if some of the properties have appreciated so much that when I sell, I can use it to buy two more rental properties, I would choose to sell one and buy two more instead. It meant that I have just added one additional property to my portfolio. Perhaps the rental income for these two new ones would not be as healthy as the one I sold. Maybe even a little negative every month! Truth is, I will start to enjoy potential capital appreciation for two properties now instead of one.

Remember, even if our property has appreciated in price, it is just paper gain and if we do not take advantage of this, then that appreciation remains just idle money doing nothing to enhance our portfolio. Relying on just the positive rental surplus of RM300 per month would give us only RM3,600 per year. Saving this amount for 10 years would still not be enough for another new high-rise rental property. Of course, this is applicable to those who still think their rental income is still not sufficient and they are still young enough, perhaps below 40? I think the advantage of doing this diminishes as we get older because we could no longer stretch that loan to as long as we wanted.

Yes, we can sleep well when we are debt free and the home that we stay has been totally paid but I think it’s a huge wastage if I am staying in a house worth RM700,000 that I have fully paid for! I prefer to sleep better, knowing that I am in progress towards financial independence instead of aiming at only debt-free. Please note that this is for me because my friend disagreed which I think is good because we should do whatever makes us sleep well at night. Thats why even before we buy unit trusts, a test is done to gauge how much risk that we can assume. As we all know, some may get a heart attack if the market suddenly fall even if they do not yet need the money.

So, I think flipper is not a term only for the short term speculators. For those, let’s just call them speculators instead. As I am nowhere near my retirement, I think I would still continue to be a medium term flipper. When I am closer to my retirement age, I do not think I would be that adventurous anymore. By then, capital preservation is much more important than risking it all. Happy doing what you are happy for. Do not mind too much what others are doing because many times, it may not be what you are comfortable with anyway.

written on 28 Sept 2015

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What’s in PENJANA? How does it HELP the property market?

Our Malaysian property market has not been performing well ever since the arrival of COVID-19 to Malaysia. No one could view, thus no one could decide. many who viewed dared not decide. Many who decided the documentation got stuck. That’s our property market. Just before COVID-19, it was considered as performing in 2019 since the total transactions for 2019 was higher than 2018. 2018 could be considered as the turning point since it showed a marginal increase versus 2017.

So, the government has to do something about it. This is when PENJANA was announced and within PENJANA, there are these 3 measures focused only on the property market.

#1 Home Ownership Campaign 2020 (HOC). This was a truly successful campaign in 2019 and this is now back.

New Property Incentives in 2020 for Malaysian Property under the Penjana Economic Package

#1 – Home Ownership Campaign 2020 (HOC)

This campaign is applicable for NEW residential properties purchased by Malaysians only. Sorry, foreigners you do not qualify. Sorry, secondary properties are also not applicable.
Developers who wants to offer their properties under HOC 2020 must provide a minimum of 10% discount and this must be registered with REHDA Malaysia (for Peninsular Malaysia) and SHEDA (Sarawak) and SHAREDA (Sabah)
All the property transactions under HOC 2020 will get stamp duty exemptions for instruments of transfer for properties priced from RM300,000 – RM2,500,000. The applicable stamp duty is up to RM1,000,000 only.
Full exemptions are granted for loan agreements signed between 1st June 2020 until 31st May 2021.

#2 – LTV of 70% for 3rd property onwards are now exempted.

Banks could now choose to approve up to 90% loan for the property loan even if the buyer is already buying his 3rd property.  Again, this approval is subject to the banks’ own internal risk assessments. **Latest info says that this LTV exemption is ONLY for new properties, not the secondary market.  Please ask your respective bankers to find out more.

#3 – Real Property Gains Tax (RPGT) exemption

Now, when owners (Malaysians) sell a property between 1st June 2020 to 31st December 2021, any gains arising from the disposal will be exempted from RPGT. This exemption is for UP TO 3 properties from the same owner only. (Okay, how many Malaysians have more than 3 properties to sell? Hands up please)

These are the three measures which worked very well previously. It is now back to do more good for the property market. If you ask me, I think the one which will spur the most number of transactions would be the HOC 2020. The developers would definitely take this opportunity to do their very best to clear all their current stocks. New launches can be later, whatever launched must be cleared first.

RPGT exemption would meanwhile cater more to the secondary market.  Sellers who were too concerned about paying the taxes may now be willing to sell because they could save quite a substantial amount of money. Even if the property is over 5 years, the 5% RPGT for a RM500,000 home bought at RM300,000 is still RM10,000. Calculation: (RM500,000 – RM300,000 ) X 5% = RM10,000.  Not many people willing to give this RM10,000 away…Happy understanding.

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Honestly, what is job security today?

Malaysia’s unemployment rate is still low compared to many countries. However, there has been many news about banks reducing their workforce, manufacturing plants moving to China and even some shutting down altogether. This brings us to the topic of job security. Honestly, what is job security in today’s world? Is it working for one company from the day we start until the day we retire and the company continue to give us increments year after year? Well, perhaps this is one aspect of job security. There are not many such companies today, by the way. Even the employees themselves may not be looking to stay beyond that few years before they change jobs for a better position or higher pay.

My term of job security is for us to continue to change for the better. In other words, every year, we are improving on what we do. We are taking up more responsibilities. We start to move uptake career ladder and we can do more, with less time. When we are improving faster than majority of those in the same profession as us, then we have job security. It may not be with the same company but as long as within the industry, we are well above the rest, it meant that should we resign or the company shuts down, we should be able to find another job easily. We determine our own job security. It is not with the same company. It is just us being good enough compared to the majority.

Moving one step further, the outcome from job security is the fact that we have enough money to spend, to take care of our family and to enjoy vacations on and off. When we focus on outcome basis, job security need not be the main priority. It is ensuring that we still have enough money to spend, take care of our family and vacations that should take centre stage. This is where savings come in, especially during the time when our company is paying us good salaries. From savings, it will turn into investments and from investments, it would soon turn into a ‘life security.’ This is actually the ultimate goal for job security.

Sure, many would laugh and say not everyone may be able to make it big in investment. I would then laugh back and tell them that not many would one day be Bill Gates. However, does it mean everyone should stop improving their lives? Should we believe the propaganda by many that it is already too expensive to buy, thus it’s better to rent? Think and then act accordingly. Job security is definitely more than just having one job till the day we say bye-bye. Happy looking for job security or ‘life security.’

written on 3 Nov 2015

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What is PN17? Do you own shares in these PN17 companies?

Info Source for PN17: klmanagement.com.my

PN17
 stands for Practice Note 17/2005 and is issued by Bursa Malaysia; relating to companies that are in financial distress. Companies that fall within the
definition of PN17
 will need to submit their proposal to the Approving Authority to restructure and revive the company in order to maintain the listing status.

Criteria for a listed company to be classified as a PN17 company are as follows:-

Shareholders’ fund is equal or less than 25% of the total issued and paid up capital of the listed company; or
Receivers and/or managers have been appointed to take control of at least 50% of the total assets employed of the listed company on a consolidated basis; or
Winding up of a subsidiary or associate company which makes up at least 50% of the total assets employed of the listed company on a consolidated basis; or
The auditors have expressed adverse or disclaimer opinion on the listed company’s latest audited accounts; or
For any default in payment, the listed company must announce its inability to provide a solvency declaration through
Practice Note 1/2001
 or
PN1
; or
The listed company has suspended or ceased all or a major part of its operations.

There are many reasons and circumstances for a listed company to fall under the classification of PN17. For example, some cases are classified as PN17 due to external factors such as currency fluctuation and economic forecasts.

PN17 – Regularizing & Change of Business Direction or Policy

When a company is announced as a PN17 company (
list of PN17 companies in Malaysia
), it has to undergo a few exercises to comply with the requirements of Bursa; in which failing to do so will result in suspension in trading list securities (5 market days from the day of notice, the next day) de-listed from the market or both.

Regularize its condition within 12 months
 (1 year) from the date it was announced a PN17 company.
Submit a regularization plan
to the Securities Commission of Malaysia to see if the
 regularization plan will result in a significant change in the business direction or policy
, or;
Submit a regularization plan to Bursa Malaysia to
obtain approval
 (and implement) the
 regularization plan
(that will not result in a significant change in the business direction or policy.)
Implement the plan according to the time stipulated by Bursa or Securities Commission; whichever is applicable.

No longer considered PN17 company

For a PN17 company to no longer be considered PN17, it has to first:

Complete the implementation of approved regularization plan.
Submit an application & necessary documents to Bursa to prove that it’s no longer a PN17 company.

Please do refer to this article for more information and reading.
Info Source for PN17: klmanagement.com.my

Here are the current companies under PN17 according to Bursa Malaysia Securities Berhad (Bursa Securities).
Info source: themalaysianreserve.com

List of companies under PN17:-
1. AIRASIA GROUP BERHAD
2. AIRASIA X BERHAD
3. ASIA MEDIA GROUP BERHAD
4. BARAKAH OFFSHORE PETROLEUM BERHAD
5. BERTAM ALLIANCE BERHAD
6. BRAHIM’S HOLDINGS BERHAD
7. CHINA AUTOMOBILE PARTS HOLDINGS LIMITED
8. COMINTEL CORPORATION BERHAD
9. DAYA MATERIALS BERHAD
10. DOLOMITE CORPORATION BERHAD
11. E.A.TECHNIQUE (M) BERHAD
12. FSBM HOLDINGS BERHAD
13. IQZAN HOLDING BERHAD (FORMERLY KNOWN AS IRE-TEX CORPORATION BERHAD)
14. IREKA CORPORATION BERHAD
15. JERASIA CAPITAL BERHAD
16. KHEE SAN BERHAD
17. KONSORTIUM TRANSNASIONAL BERHAD
18. MALAYSIA PACIFIC CORPORATION BERHAD
19. NATIONWIDE EXPRESS HOLDINGS BERHAD
20. PERAK CORPORATION BERHAD
21. SCOMI ENERGY SERVICES BHD
22. SCOMI GROUP BERHAD
23. SEACERA GROUP BERHAD
24. SERBA DINAMIK HOLDINGS BERHAD
25. SUMATEC RESOURCES BERHAD
26. TH HEAVY ENGINEERING BERHAD
27. TOP BUILDERS CAPITAL BERHAD

Info source: themalaysianreserve.com

Should I hold shares of PN17 companies?

I think the first question is always do I have a choice? It’s possible to sell and move the shares to another counter. It’s possible to sell and move the remaining amount to other investments too. Sometimes however, the stock price may have moved downwards and selling the share may not amount to much. If that’s the case, then the choice will be more limited and perhaps one would have to hope that the company could emerge from their PN17 status.

Sometimes, there may also be a white knight which may emerge to save that PN17 company too. Just be savvy that all these positive potential does not happen often. In 2007 I had shares in a PN17 counter called COMSA. I did not sell the shares because I chose to believe something positive could happen. This was a company in the chicken and eggs business. Surely everyone needs to consume chickens and eggs? It did recover though. So, I lost many thousands of ringgit.
Here are more details.

Happy understanding and deciding.

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What is T20, M40 and B40? Just do more.

Someone searched for this phrase, what is T20, M40 and B40 and they were redirected by google to kopiandproperty.com  Well, at least they were not redirected because someone searched for financial crisis. Haha.  So, what is T20, M40 and B40. There was an earlier article related to this:
Most wealthy Malaysians – the top 40

Well, I searched a bit on google and found the chart from Malaysian Institute of Economic Research. It shows the potential growth path for T20, M40 and B40 till 2022. By 2022, the T20 would have a mean household income of close to RM30,000. This would be the top 20 percent households in Malaysia. M40 would have a mean household income of around RM7,500. This would the middle class Malaysians as per many statistics. The B40 would have a household income of less than RM4,000 per month by 2022.
You may download their whole file here.

Yes, I do think all stakeholders including ourselves must do more. I learnt from a GRAB driver that working just on weekends, he could earn an additional RM1,500 per month. Perhaps this is one way to increase the potential income. Alternatively, it’s possible to
start a blog for nearly free
,

make it big and start earning money from it. kopiandproperty.com is far from the goal that I have set but hey, just from the WordPress banners alone, on a monthly basis, I have enough for a sumptuous dinner for my small family. This is without doing anything extra beyond just writing articles like what I am doing now. I have also learnt that a friend whose household income is already in the T20 will become a lecturer beginning November. She will teach just one day per week.

Many years ago, I used to lecture by part-time basis for a college and I was paid RM50 per hour. So, 3 hours per lesson x 2 times per week = RM300. Doing it for just 2 days per week (3 hours each time) means I could have an additional RM1,200 per month. I am sure the colleges pay more nowadays. A close friend who has been lecturing for the past 10 years by part-time is still teaching for a local private university until today. She said, the extra income is pretty good. She has stopped working a year ago to look after her growing daughter. I think what’s clear is that there are still opportunities to earn more income even if it is not through
 investing our hard earned money.

According to some studies, the total full-time professionals would continue to reduce as people start to be free-lancers for many professions. I certainly agree too because I really hope that I could become a part-time lecturer when I reach 50. Hopefully by then, my teenage daughter would still want me to watch movies with her occasionally. Do more, everyone. We could and can.

written on 1 Nov 2017

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What is uncertainty? These few things, maybe?

After I published this article:
Uncertainty is never good for any market yeah,
 someone asked me if there are any uncertainties in Malaysia. Frankly? Yes. Recently, I was at Dato’ Seri Gavin Tee’s Property Forecast Talk 2019 and someone (a property investor) I spoke to thought High Speed Rail (HSR) has been cancelled. I corrected him that it’s not cancelled but merely delayed for 5 years or more. (Sigh…). Then, we spoke about ECRL and he thought this has been cancelled too. In fact I think he thought everything has been cancelled, somehow. No wonder he was so negative about the property market!  In property investment, the 4Ps (People, Price, Policy and Preference) are very important. Uncertainty is usually due to the 3rd P (Policy). Since ECRL was mentioned, let’s look at recent statements just on ECRL.

24th Jan: Our PM, Tun Dr. Mahathir said, “I am not sure whether the contract has been ended or not. I am not aware [whether it has been terminated]. I just came back from overseas.”
(Article here)

26th Jan: Our Economic Affairs Minister Datuk Seri Azmin Ali said, “The Cabinet made the decision because the cost to develop ECRL is too high, and we do not have the financial capability at this moment. And if this project is not terminated, the interest that the government would have to pay reaches to nearly half a billion ringgit.
Article here.

26th Jan: Our Finance Minister Lim Guan Eng said he was shocked by the announcement by our Economic Affairs Minister. He said, “I am acting under the instruction of Tun [Prime Minister Tun Dr Mahathir Mohamad] and the cabinet.” He clarified that perhaps the Economic Affairs Minister was not privy to the decision made by Tun.”

28th Jan: Our Deputy Prime Minister Dr Wan Azizah Wan Ismail said, “I was abroad when the conflicting statements were issued. I will ask the Cabinet why this happened.”

Okay, the question of everyone’s mind is just these few as far as I am concerned. #1 Is ECRL cancelled?   #2 Whether Yes or No, what’s the actual reason behind the decision.   #3  If it is to proceed, please provide more details.   #4 Can everyone stop issuing statements if it’s not a decision by the Cabinet? (Since Cabinet is supposed to be making the decision jointly?)  I believe a final statement will be issued soon and hopefully ECRL status will now be finalised, whatever it may be for the benefit of all stakeholders.

Just in case everyone’s wondering about MRT3, it is also NOT cancelled, merely postponed until the country could afford it. This was shared by our
Transport Minister Anthony Loke. Article here.
  As for HSR, it is also NOT cancelled, merely postponed. This was shared by our Economic Affairs Minister earlier. Construction is
off until 2020. Article here.
 The connectivity catalyst for JB – SG which is RTS is also NOT cancelled. It may be delayed. Earlier article here:
RTS starting only 2024?

As an optimistic Malaysian, I am very sure all these uncertainties will become a certainty very soon. WHEN is a very good question to be answered because investments whether within Malaysia or Foreign Direct Investments always depend on future returns. We need to provide the certainty so that all of them could make a firm decision. This is like the latest RPGT for all transactions even after 5 years. Sellers and buyers may be affected but if this decision is firm, sooner or later it will become a norm and the buyers and sellers would come back to their senses. The property transactions will continue. However imagine if it’s on and then off and then on and then off? Happy understanding that investments are always for the long term. Decision to invest meanwhile depends on circumstances including uncertainties.

written on 28 Jan 2019

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Property market still in upbeat mood?

Note, I really do not share any enthusiasm for the property market currently. I love properties, that’s for sure. However, if I read any news saying that the expectations are that property prices are rising or even in the very near term, I would choose not to believe it until it happens. Nothing to rush anyway. Do I hope it happens? Of course. Do I think it will happen?
Erm… please look at this number before you decide.

Yes, I know our number of new cases here in Malaysia has dropped to double digits for the very first time in a long time and our recovery rate meant that active cases wise, Malaysia is going to drop out of even the top 50 by end of today, hopefully.  The whole world is still showing huge numbers yeah so the sentiment is not going to be positive. Come on, it’s not even possible for buyers to drop by and view the actual unit before buying… Well, following are what some analysts are saying.

Article in scmp.com
  John McGrath, founder and executive director of Australia-based McGrath Estate Agents says that stock markets have dived around the world but property values have remained relatively stable.  He said, “Property is a stable, long-term investment that requires time, above all other considerations, to grow in value. It’s the tortoise in the race.”

Alice Tan, senior director of research and consulting at Edmund Tie said new private homes have a premium of around 40 percent over resale units last year. She said, “With ample new supply coming on-stream and demand staying stable for 2020 in the light of low interest rates, it is anticipated that the price differential between the primary and resale non-landed markets will remain at 40 to 45 per cent.”

According to Georg Chmiel, Juwai IQI executive chairman, activity on Juwai’s property portal in February exceeded the six-month average. He said, “Buyers are still motivated, and it is just practical restraints on travel that are holding them back.”  It is a very comprehensive article with lots of details. Please read it here:
Article in scmp.com

One should not buy without looking at the actual unit okay. For all the properties I hold currently, I do not have any hope that it will sell for a higher price than before the Movement Control Order (MCO) in this year. Well, unless of course the neighbour needs my unit specifically for his parents…  However, this is really the best time to research, to view some online photos and even to secure some viewing appointments if the owner is willing to consider your offer price. Do not worry, at the moment, they would prefer to negotiate and not slamming down your phone.

Do not be too hopeful that they will simply accept any offer yeah. We are not in a financial crisis. We are in a pandemic where the sentiment is super negative currently. There’s a huge difference unless of course the economies start collapsing and leading to loss of jobs and eventually affecting the property market too. Let’s hope we hear of more good news about COVID-19 soon.
Earlier article on what happens when the property market crashes. (click to read)
 As for the property market, well just read all the news regardless of positive or negative ones. It’s up to what you believe yeah.

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What we want, What we need. Be real.

A close friend asked me the other day about two properties in Penang island. One is in Tanjung Tokong and another is in Jelutong. Both are high end condos and both are RM1,000 psf if not higher. In other words, RM1 million or higher. I told her, actually based on my needs I would not buy these two. I would buy Summer Place (RM750k) or even Regency Heights (RM650k) instead. The reason is because I need a good place to stay, with a nice swimming pool, 1,250sf at minimum and a nice overall environment. I feel these two places (Summer Place and Regency Heights) that I like already fulfils my needs and expectations.

Then she asked, what if money is not an issue, then which would I choose. Well, if money is not an issue, then I would skip all these four and go for those much more exclusive ones. Those which have perhaps less than 200 units? Or even lower? Including a sea view from both my master room and the living room balcony even if I do not really need it. A swimming pool which even if I do not swim and just look at it would make me feel good? A huge gym which I seldom use and every other facilities that everyone thinks are so important but in the end do not really use? If money is not an issue, I WANT to buy something which everyone WANTS but could not afford. There’s no Need for me to buy a project with over 600 units or 1,000 units for KL today and having to share with so many people, right? She understood my meaning. When we really think objectively the truth is, there are a lot of wants which can already be satisfied with what we actually needed. The wants come into play simply because we kept on trying to want something which we could not afford or even force ourselves to afford at a huge cost.

On a more serious note though, I think for those WANTS that I mentioned, money is still an issue but even when money is no longer an issue, I could not see myself buying something so exclusive. I think I may be a fool but my vision has never been to be high above the rest but more of ensuring I have enough to fulfil my needs and perhaps that tiny little extra. Enough money and time. I hope to be able to decide to buy a nice property which my wife approves within seconds instead of thinking about it for months like what I did when I bought my first condo many years ago. I thought about it for 2 months! I want to be able to decide to buy a new MPV within minutes because I wanted to drive just one car when my parents and my family is going out for breakfast. One day I hope to be able to just drop my stuffs, take leave and go for vacations with my family when they need me. Yes, these are all needs which if I work hard enough, I should be able to do. There’s no need to focus on wants because I could never fulfil the so called Wants no matter how much more I do. Happy deciding whether you
want to fulfil your needs
 or you
need to satisfy your wants.

written on 20 Feb 2015

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What you gonna do when they come for you. Bad boys.

I seriously hate people who skip paying their maintenance fees. They think it is their right, I think they ought to be taught what’s right. Someone from the authorities may be helping me to teach them what’s right now.
Here’s a report about it in TheStar.
 Using the Strata Management Act 2013 the authorities could seize your belongings and auction it off to pay for the outstanding if you are a condo owner who has not been paying your maintenance fees. First one has happened and I hope this is publicised as much as possible because there are owners who own an apartment or a condo and reasoned that since they were not staying there and
not enjoying the facilities, they do not need to pay the maintenance fees.

Imagine if MOST of the owners were not staying there, the whole development suffers and this is grossly unfair to owners who had to stay there and suffer in silence when their swimming pool is dirty, when there are no security and when their corridors are dusty.

If you like some points to look out for when buying high-rise, here’s a few.

This is what the Urban Wellbeing, Housing and Local Government Ministry urban service division senior principal assistant secretary Mohd Syaifulrizal Mohd Bakar said, “As long as the joint management body (JMB) or management corporation (MC) of a condo or apartment has served a written notice to demand payment from the unit owner, and it is unpaid after 14 days, enforcement can take place.” Ladies and gentlemen, it’s 14 days…. If you are part of a JMC, this is the time to get someone to enforce what you are trying to do which is to be fair to all those who were paying maintenance fees. Check this out, “there is no minimum amount of outstanding fees needed for such seizures to be conducted.”  Other sharing from The Act? It came into effect July 2015 and besides just seizing the items, JMB and MC can also file a summon in court against defaulters as well as filing a claim in the Strata Management Tribunal formed under the Act. According to Syaifulrizal, “The JMB or MC can serve a warrant to the defaulters with the help of the COB and ministry.”

I do hope everyone pays
what they should pay and stop giving excuses.
Actually not just maintenance fees but also that loan that you took which are depriving new students from a similar loan….  This is especially if they could still afford LED TVs, latest smartphones, drives a 250 hp car and even drinks Starbucks everyday. (Ionly drink Starbucks twice a month these days) Another very good article to read with regards to high-rise? Here’s one by
Bhag Singh in TheStar.
Well, I should end this article with a lyric from Inner Circle’s song Bad Boys. “Bad boys, bad boys, Whatcha gonna do, whatcha gonna do, When they come for you?” I say bad boys because this is not like treating the owners like a criminal but then they are definitely in the bad boys category. The ONE huge reason our neighbour down south is so successful is also because they are a FINE city. I love their enforcements. It is fast and swift. Happy paying.

written on 5 Sept 2017

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