Recession Malaysia to be a reality in 2023?

What is a recession?

This is the definition for recession. A recession is a significant, pervasive, and persistent decline in
 economic activity. (Investopedia)
  Briefly, it meant that people spend less than last year. Imagine getting the same salary this year as last year. However, because of sentiment, you decided to spend less and save the money into the savings account instead. Now imagine another 100,000 people who has the same thoughts all doing the same. Suddenly, the number of people spending in malls are reduced.

Due to this, some of the retailers in the malls could not earn enough money and has to close the shop and retrench the people. These people who got retrenched would then have even lesser money to spend. This cycle will continue unless of course more people have jobs and they start to spend more money again.

At the moment, people are still spending a lot contributing to inflation

When people are spending too much, investing too much, it will push up prices; inflation. For example, when demand increases, supply will take time to catch up. This is why many central banks are increasing the interest rate so that people would be tempted to put their money in banks instead of spending it. By the way, if things are this easy, then everything could be easily controlled. Now, there are people saying that increasing interest rates too fast may just be the cause of recession next year. Oops…

What are some of the latest recession news then?

Stock markets have been volatile but it did rally a bit lately. Well, it seems that this rally may soon have to face the recession reality. Do read about what experts have to say. Experts means those who are in the industry and have access to a lot of data to make the statements.
Article in cnbc.com
  The global stock market rally could be about to meet recession reality.

Meanwhile, the U.S. economy (largest in the world) may be able to escape recession in 2023. This is what Morgan Stanley says about the U.S. economy.
Article in wionews.com

Europe is not in such a great shape yeah. IMF says that Europe has to do more. It is being plagued by a Toxic Mix of High Inflation and Flagging Growth.
Article in imf.org

Closer to home, Deutsche Bank is predicting a recession for Australia in 2023. Here’s that article:
news.com.au  –  Grim prediction by investment bank

Singapore will still be growing and will not be suffering from any recession for 2023. This is what the Monetary Authority of Singapore is predicting.
 Article in cnbc.com

Hey, will Malaysia be in a recession then?

Our Bank Negara Malaysia says Malaysia will not be in a recession. However, many Malaysians (not including me) prefer to listen to some external sources, so let’s read and quote some of them here.

IMF predicts Malaysia will grow by 4.4% in 2023.
Article in nst.com.my here.

World Bank says Malaysia will grow its GDP by 4.2% in 2023.
Article in thesundaily.my

Fitch Solutions says that Malaysia will grow its GDP by 4% for 2023.
Article in theedgemarkets.com

S&P Global says that the loans growth for banks in Malaysia will be 5-6% in 2023. (By the way, this also meant they are not thinking about recession for Malaysia.)
Article in nst.com.my here.

Happy believing what you want to believe. Just remember to take appropriate actions to protect your investments or be ready for investments.

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

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

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

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Recipe for success: Below RM500psf, reputable developer, informative website.

Recently, within one weekend, YTL sold 80% of its Midfields 2. I remembered my colleague on my right asked, ‘worth buying or not? Starting from Rm450 psf’.’ I said, huh? RM450 psf? I think you better queue there one week before. She said, but the location is not the best. I said, ‘don’t regret’ and I laughed. My colleague on my left said that RM500psf is not possible, supposed to be more expensive than that. I said, but I think for that particular area plus the fact that it’s not really that low density, cannot be priced too high. In the end, all three of us did not buy. For me, I just do not have sufficient downpayment for 30% for these half a million ringgit condos. I need more of those which are half of half a million condos for rental.

Thus, brings to the recipe of success for 2014. As long as you price it below RM500psf and you are not any ‘Tim, Dick and Harry’ developer, I think it should be ok. Is this all? Well, YTL created a very informative website as well. Here:
http://www.midfields.com.my/overview.html
   You get to know practically anything in your mind, even though I think YTL already expected it to sell easily. For developers who do not even have a working website or a very poorly designed website TODAY, sorry, if someone were to ask me, I would just tell them, don’t buy. This is 2014, online companies rule the world and everyone is on smartphones and you cannot even launch a new project with a proper website with sufficient information for me to decide whether I should go view or not? You want me to brave the traffic to go there and then decided that I do not like the property?

Someone would now ask me, but what about location, why not location? Let me explain very briefly. If location is very bad, it would not be below RM500psf, it will be below RM400psf. You already know where. If location is very bad, even if reputable developer, would you buy? If location is bad, but it has the best website ever, with even 3D image gallery, would you buy? Nevertheless, I think my term of ‘bad location’ is very different from majority of everyone. To me, a bad location is one where the whole area, there are hundreds of developers. Roads are narrow because left side is developer A and right side is developer B and right in front is developer C. No one bothered to plan because every developer owns just a small piece of land there. That’s a bad location to me. Other than that, as long as it is within 15km from KL city centre, I put that as very good location. Within 25km, I rate as ok.

Please do not ask me, what about those less than 5km away? I have no interest, no matter what kind of descriptive words that the developers use to describe its location. Remember, today, for now, below Rm500psf and you are a good developer who tells the world everything via a very informative website, I will support you and I will definitely ask my friends to at least take a look or be at your launching before deciding whether to buy or not to buy.

written on 17 May 2014

Next suggested article:
Property Investment Slowing, Land Buying Increasing

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Reclaiming an area 3% of Singapore.

Yes, this is as per what the title says. Country Garden Holdings Co Ltd, with Kumpulan Prasarana Rakyat Johor (PRJ) have planned a development of over 5,000 acres of reclaimed land. This is 3% the size of Singapore today!

Remember Country Garden? The developer which launched 9,000 units of condo in one go and announced that they have already sold 5,000 units? What about the rumour that it offered steep discounts as well as a buy one get one free offer? Even when I was with my former company, I do not believe such a case because unless the gross margin is so huge that it allows the developer to do so. Most of the time, the margin would not even allow for a heavy discount. Just look at the net profit for listed developers and you would see why.

This project is so huge that it is envisioned that it will take over 30 years to fully develop it. The project even includes a man made island which will be near the second link in Johor. The island is for luxury homes. The man made island has started work and recently raised some concerns about its environmental concerns. There has been a slight delay in the announcement of the project when MH370 went missing. Country Garden is a top 10 developer in China with over 20 years of experience in township development.

Today, my colleague said, what will happen to Iskandar. All these new developments, every developer is there and everyone is building. Would there not be a bubble? Truth is, before any developer builds, they have no choice but to do a study about the potential of the area. It is very improbable that any developer would just rush into a new place and develop without first understanding what it is getting itself into. Country Garden has certainly come into Malaysia in a big way and Iskandar is not its only development. It is also in the Klang Valley too. If we believe what their internal analysts say, perhaps Iskandar is just beginning to show its potential. No matter what, buy with the right objective in mind and you should be ok.

written on 16 June 2014

Next suggested article:
Iskandar Malaysia – medium term prospects concern

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Financing, constructing and behaviour changing. Three different things really.

I am a supporter of Penang’s Transport Master Plan (PTMP). No one is going to like to invest into Penang if they face traffic jams on a daily basis as soon as they step into Penang. Much earlier article here:
PTMP is needed for Penang
  As for whether the current model is the best, that is up for debate. Latest news is this. Penang Chief Minister Chow Kon Yeow says that IF the state’s current proposal for the PTMP is rejected, then the federal government will be responsible to come out with an alternative model. (Not sure if he meant this for our Finance Minister Lim Guan Eng to respond). Chow said, “The Federal Government is responsible regardless of whether it accepts or rejects the state’s recommendation. If they accept, they will have to find the funds to support the project, and if they reject, they will have to suggest an alternative model to alleviate the traffic congestion in Penang.”
The full article in TheStar here.

In another article, Chow said that Penang will consider abandoning its present plan to reclaim land off Bayan lepas if the federal government is willing to help fund the project. The issue is about the financing for the Penang Transport Master Plan. He shared that Penang urgently needs a proper traffic dispersal system to address the highly congested roads and this will only be worsening in the future since most people will continue to drive. (Yes, I am one of them even if there’s that LRT plan. Perhaps on weekdays and for work, LRT would work perfectly fine. On weekends, it’s not going to be popular in the beginning. People need time to adjust. Just look at the MRT. Its popularity is only slowly building up) Chow asked for the go-ahead on the PAN Island Link 1 highway (PAN 1) which is a core ingredient of the comprehensive master plan. Besides that, there is also the proposed RM6 billion cross-channel undersea tunnel and the light rail transit system which connects George Town to the international airport in Bayan Lepas. Here’s the earlier article:
PIL in Penang will enhance connectivity

By the way, beyond just whether or not the plans will go ahead, the government needs to have the right policies to support the switch from driving to taking public transport. I remember a few years ago I asked 10 Penang friends if they would take the public transport if they needed to walk around 200-400 metres. The answer from the majority is an overwhelming NO. Right policies include
Unlimited Monthly Passes
, INCREASE the parking rates at places where there are public transports, put up even more tolls and perhaps taking away the fuel subsidy or limiting it to a certain amount per month. Not all of these will be popular but do we really have other choices to persuade gently? Haha. This is Malaysia yeah. Even in Singapore, it’s not possible to persuade gently. Usually, it’s by government policies. For the benefit of the nation anyway. Happy anticipating the future.

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

written on 12 Aug 2018

Next suggested article:
IKEA Penang opening in 9 months, a new catalyst?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Reclamation done with less sand and lower upfront construction costs

Singapore has always been ‘growing’, literally.  Reclamation through the use of sand, huge quantities of them from two of its neighbouring nations. According to this news article in
Straits Times
, it will now be growing by using less sand!  Reclamation will now use less sand and yet could be done faster. This will help to create an extension of Pulau Tekong and the size that the Housing Development Board (HDB) is looking at is 810 hectares (2,001 acre). As a comparison,
Seri Tanjung Pinang 2
 (STP2) by Eastern & Oriental in Penang is 740 acres. Looking at all the advantages as below, perhaps it’s time every reclamation project should do the same? Well, for Malaysia’s case, maybe not that critical as sand is much more easily available. I do not think Penang would need to buy land from Thailand for this purpose.

Let’s look at it briefly. This is a method used by the Dutch (Holland). It is called the polder development method. Instead of just sand, the new method involves the development of a polder, which is a low-lying tract of land that has been reclaimed from the sea. A wall or dike is constructed to prevent seawater from entering the polder, while water levels within the polder are controlled by a network of drains and pumps. By doing it this way, the The Ministry of National Development (MND) and HDB said that it has two distinct advantages; lesser amount of sand and lower upfront construction costs. Singapore said that safety wise, it will be depending on the Netherlands’ experience as they have the highest standards of dike safety in the world. Images from Straits Times help to explain better, graphically.

Many Malaysians I know would always say that for Malaysia, it’s best to use the more traditional reclamation methods. Trying to maintain a dike’s safety is much harder to do! To be honest, as long as we (Malaysia) have a choice, I think the usual method may be better because whether maintenance is of highest standards or not, the risks are always there. As for Singapore, I would still love for them to use this method. We can then learn and perhaps for Penang or even Langkawi, this may just be a method to be used when the costs are really much lower. Happy following.

written on 18 Nov 2016

Next suggested article:
PTMP: Reclamation alone is RM7 – 8 billion

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Press Release: REconnect, REvitalise, REside: CELEBRATING RAYA AT BANDAR ALAM SURIA

Rediscovering the Joy of Festivity and Community Bonding

in Puncak Alam’s Vibrant Neighborhood

Hari Raya Aidilfitri, also known as Eid al-Fitr, is a significant time for reflection and celebration in the Muslim calendar. At its core, it is “the feast of the breaking of the fast” and marks the end of the holy month of Ramadan.

During this festive season, the foundation of Hari Raya Aidilfitri is to strengthen familial bonds, count one’s blessings, and celebrate after a month of self-restraint. These values align with the three RE mantras of REside, REvitalise, and REconnect embodied in the township of Bandar Alam Suria.

Located on over 1,163 acres of prime land, Bandar Alam Suria (formerly Shah Alam 2) is quickly becoming known as the ideal place to enjoy a peaceful and reinvigorating pace of life. With over 28,000 residents and counting, the locale of Puncak Alam is experiencing a significant surge in growth, and Bandar Alam Suria is expected to continue to attract new incoming residents with each new launch.

REVISITING TRADITION

During the festive season of Hari Raya Aidilfitri, it is common for Muslim residents of Bandar Alam Suria to host open houses, inviting large groups of friends to join in the celebrations. The warm spirit of kinship is extended to non-Muslim neighbours and friends, creating a close-knit community.

In the same spirit, IJM Land recently hosted an open house with Era, a Malay language radio station, which was met with much fanfare and well-received by the public. The event, held on May 13 from 11am to 3pm, featured Era announcers Haniff, Munaabella, and Ray, who entertained guests with their witty banter, camaraderie, and festive mini-games, with prizes awarded to lucky winners..

“We definitely had a blast at this year’s open house,” said Mr Chai, the Senior General Manager of IJM Land. “Often, we are quite insular when living in urban areas, and this is not what we wish to see here at Bandar Alam Suria. It’s our utmost wish that the vibrant neighbourly interactions are ongoing throughout the year, and not just doing festive occasions.”

SOULFUL RECONNECTION

The IJM open house was a feast for the senses, with guests decked out in traditional Raya outfits, and ketupat-shaped ornaments and decorations adding a festive flair. Celebrity appearances from the likes of Zizi Kirana, Alif Satar and The Locos, and Faizal Tahir were highly anticipated and greatly enlivened the proceedings. The overwhelmingly positive response on various social media platforms  was a testament to the success of the event.

For the younger guests, there were sculpture balloons giveaway by clown, free popcorn, cotton candy floss, and giant inflatable bubbles, adding to the fun and excitement. The
 Jamuan Raya
 feast prepared grilled lamb,
lemang
with
 rendang
, satay with peanut sauce, and
Nasi Briyani
 with variety dishes making it the perfect opportunity to indulge during the month of
Shawwal
.

Bandar Alam Suria’s breezy surroundings, along with its 450,000 sq ft of greenery and 11-acre Central Park, provide residents with avenues to relax, reset, and cultivate a healthy and active lifestyle. Such community-building initiatives by IJM are a primary reason why the township has been a resounding success.

REWORK LIVING

The living experience in spacious landed residential units within the embrace of nature at Bandar Alam Suria aids in attaining a restful state of mind and well-being. The residents can enjoy nature as their backdrop while having access to all necessary amenities without compromising on connectivity, convenience, and safety.

“Bandar Alam Suria offers the best of both worlds, where residents can enjoy the peaceful embrace of nature while having easy access to all the necessary amenities for work and raising families. It’s a perfect balance that ensures both restful living and convenience. We are proud to offer such a desirable lifestyle to our residents,” explained Chai.

Additionally, the event featured an early preview of the upcoming Daffodil Residence, a new residential project set to launch in Q3 2023. The project will be located next to the Suria Square commercial hub, on a 7.88-acre prime land, and consist of 354 apartment units with floor area of 850 sq.ft.. It is situated just opposite Central Park, making it an excellent addition to the Bandar Alam Suria.

The event was a perfect embodiment of spiritual renewal after a month of fasting and consistent with the “Bringing it all Together” tagline that the township has been proudly proclaiming since its inception. Both Muslim and non-Muslim residents had a great time during the Raya holidays, reconnecting with their neighbours, friends, and colleagues during this year’s iteration of Bandar Alam Suria’s Raya open house.

“We believe that this event achieved our goal of bringing the community together, and it marks a celebratory milestone of what is possible when we come together as a community,” added Chai.

For more information, visit

www.alamsuria.com.my
 or the sales gallery at Bandar Alam Suria.

-End-

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

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

Next suggested article:
IJM Land’s Sierra Hijauan Sees Strong Take-UH

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Reconsideration of MMC-Gamuda termination for MRT Line 2

The decision to terminate MMC-Gamuda for the Mass Rail Transit Line 2 will reconsidered. This is the decision of our Prime Minister Tun Dr Mahathir Mohamad. His
announcement was published in an article in TheStar.
   This is two days after Finance Minister has announced termination of MMC-Gamuda for the underground works for MRT Line 2.
Read here for earlier article.
  The portion ofwork was supposed to have been retendered out through an international open tender process. The reason our PM said that the decision will be re-evaluated was because of the possibility of mass unemployment as a result of the retendering exercise. This was what was reported a day later, including the
announcement by MMC-Gamuda on the loss of 20,000 jobs.

Earlier, Lim said that 20,000 employees involved in the MRT2 projects would not be out of jobs as they would be re-employed upon commencement of the project. He said,
“They (employees) can also be from Gamuda or other companies (for the MRT2 underground project).
We are not cancelling it (MRT2 underground project), but we want to get a better price.
We got a better price with RM5.2bil savings for the above-ground portion.
The government believes it can get higher savings for the underground project through an open tender,” he added.” Beyond just the full-time employees,
those under the Tunnelling Training Academy that was established by MMC-Gamuda to train local talent to carry out highly skilled construction work were also affected. One affected full-time employee said,
“Imagine if we are not the main contractor, will all their previous hard work be wasted?.”
Full article in TheStar here.

It’s always the best to be very transparent for all things. This is the new Malaysia after all. International re-tendering aside, may we have the possibility of the potential savings from this? The reason many are asking is because MMC-Gamuda has also offered discounts for the underground works portion too. If the discount offered was truly far behind, it’s really important for us to understand the reasons why. Let’s understand that this is advanced engineering kind of construction work. If the price is too low, we also need to understand why and not just simply accept. Happy following.

written on 10th Oct 2018

Next suggested article:
Yes, I want the MRT Line 3. Better late than never

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Record year for property market Penang, transactions wise. (which year?)

After my graduation, I worked in Penang for 15 years. During those years, I have stayed in Georgetown, Tanjung Bungah, Relau and the area before I move to Kuala Lumpur was Sungai Ara. Where transactions are concerned, Penang property market has been lacklustre for many years. However, it seems that the situation is changing, especially for the residential property market.

Article in edgemarkets.com
   Raine & Horne International Zaki + Partners Sdn Bhd senior partner Michael Geh says that the total transactions for residential properties in Penang are expected to reach 12,936 valued at RM5.5 billion for 2019 and this is HIGHEST since 2016.

Last year, the total units transacted was 12,551 valued at RM5.47 billion. Thus 2019’s numbers are showing a growth of an extra 405 units or 3.23 percent higher where transactions are concerned.

Geh said, “Increases are noted in both the primary and secondary residential property markets. A total of 984 transactions valued at RM480 million are expected in the primary market, while 11,952 transactions valued at RM5.02 billion are expected in the secondary market for 2019.”

He added, “The estimated increase is due to the many positive policies introduced by the Ministry of Housing and Local Government and the Ministry of Finance, such as the Home Ownership Campaign. Moving forward, the lowering of threshold prices for foreign purchasers will continue to spur the residential property market.” Do read the report by Geh in full here:
Article in edgemarkets.com

Ready to re-enter the Penang property market? Penang will always be a great place when it comes to sun, sea and job opportunities. While financial centres may not be in Penang, it has many industry parks which housing MNCs from all over the world. In other words, it continues to attract many engineering graduates to be based in Penang. Their salaries are usually higher than majority of other qualifications. Thus demand for homes willcontinue to rise.

Penang is also an extremely popular destination for medical tourists. It has an international airport which is 3rd busiest in Malaysia and it has enough good food to make anyone forego their diet plans too. Yes, that’s the reason why I still have properties in Penang. Without a super attractive offer, I will hold. So, if you are like me; someone who still love Penang for its future potential, join me in owning a property in Penang. Happy considering yeah.

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

Next suggested article:
15 years no increase. Now it increases, assessment rate in Penang

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


V-shaped recovery in property transactions. Happy news.

Recovery in property transactions, is this news for real? Charts to follow yeah.

As they say, a picture paints a thousand words. Many times, a debate can only be settled with actual facts and figures and even then, the losing party may still not be satisfied and may even bring you to the court to dispute the facts. By the way, kopiandproperty.com is not part of any property developer, not having even a REN tag and does not do any selling of mortgage packages yeah.  We just share as per what we think will benefit potential home buyers. We hope that everyone would at least own a roof over their head. Simple. Easy. Compulsory.

Photo by Zukiman Mohamad on
Pexels.com

Just two slides from my good friend, Sr. Michael Geh Senior Partner of Raine & Horne and Immediate Past President of FIABCI (Malaysian chapter) to show what’s REALLY happening versus some responses which you get from some random friends. On an overall basis, the total property transactions has shown a V-shaped rebound.

In fact, if we look at the transaction, it’s higher than even Q4 2019 which was the quarter before any COVID-19 effects started here in Malaysia and even the world.  Before we run out of our house and towards the nearest property sales gallery, please note that this number may also be due to the pent-up demand from Q2 2020 yeah.

Next chart shows ONLY Residential Property Transactions in Malaysia. The trend is an obvious V-shape and this is super important because it reflects the demand for a home remain very strong. Of course, we need to also note that Q2 2020 was a very low quarter and some of the transactions during this quarter happened in Q3 2020 instead. Thus, it would be good to look at one more quarter to see if the number normalised versus typical quarters.

More charts to come but at least we now see that the activities in the property market in Malaysia is really a positive one. Yes, this is good news to property owners as you may not be forced to lower your prices too much just to find a buyer. As for the buyers, there are still many potential good buys if we understand and do enough due diligence. Happy referring and will be showing you more charts soon.

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

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

Next suggested article:
Buy a property. Get a new home as long as you own the property

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Recovery? RM21.83 Billion office tower in HK sold to Chinese state company

Image Source: Straits Times article, from
http://www.discoverhongkong.com

This is so huge that even my good friend who is not that interested with property investment sent me this morning. She said, “WOW.” Based on the price for the transaction, this is really a wow. A Hong Kong office tower was sold at a record HK$40.2 billion (RM21.83 billion) to a consortium led by a Chinese state company. China Energy Reserve and Chemicals Group was the lead in a consortium which purchased The Center, a 73-storey landmark skyscraper. It is the fifth tallest tower in Hong Kong. There are many articles online about this.
One of it is here, by South China Morning Post.
Another one is here, which is pointing more towards a potential relaxation of the capital control instituted by China earlier.
“Bloomberg: Turning the Money Tap On.”
 (I think if the relaxation story is true, this is applicable only to Hong Kong which is part of China. Support towards Hong Kong is an internal matter and this is different from allowing Chinese companies to buy non-China related assets, especially property in many advanced countries)

Many more comments from prominent property people from the
Bloomberg article as follows:
“The The controls are still there, but right after the 19th congress all these large deals seem to be surfacing,” said Antonio Wu, deputy managing director of capital markets and investment services at Colliers International Group Inc. in Hong Kong. Another one by Bocom International Analyst Alfred Lau who said, The Center transaction bodes well for Champion REIT and Link REIT, which have properties for sale.” According to Raymond Cheng, director of Hong Kong and China property research at CIMB Securities, “Capital controls still have some impact, and capital flows have slowed down a little bit, but demand from mainland investors is still quite strong.” He added, “I expect as time passes gradually things will become less strict.” Raymond concluded by sharing that mainland companies like Grade-A commercial property in Hong Kong’s Central and Admiralty districts, preferably with a sea view and naming rights.
Here is another article in Reuters for this.

Suddenly, things seem to be positive here in Asia? Well, if China is now relaxing the capital control, many countries would benefit, especially those property markets that Chinese love. That country with many cities which
a
re the most liveable in the world? Australia.

It may also benefit our neighbour too, properties in Sentosa Island for example.
Properties in London remains a favourite too for Chinese buyers.
 Last but not least of course it would also trickle down to a small property market called Malaysia. 🙂  Well, it’s going to be even more positive if a few more of such huge deals are announced in the near future, whether it’s for Hong Kong or elsewhere. Who knows, after President Trump’s visit to China in a few days time, even more changes are coming? Happy reading and following.

written on 3 Nov 2017

Next suggested article:
Stable sentiment in property market Malaysia. Positive?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Red alert for inflation it seems

Red alert for inflation it seems

Is a financial crisis on the way?

I have just finished a conversation with a good friend. A successful entrepreneur who’s now taking a break to take care of her baby in Penang. She mentioned that she heard that a financial crisis is on its way. She said the financial crisis will strike first so that the Malaysian economy can recover later after the crisis. My advice to her is a simple one. When it comes to predictions about financial crisis, one thing which will come true is that one day the prediction will come true. People just need to keep predicting it year after year. Surely one day it will come.

Meanwhile, I told her to continue to look for opportunities, if the financial crisis really did arrive, then that’s another round of opportunities. However, we must not wait and wait and wait until the crisis really come before looking for opportunities yeah. Then again, when we advice someone who already has everything and could afford not to work, then it’s a diferent story. She has a lot of time to ponder.

Here’s that latest article about the war between the
interest rate and the inflation. Both are showing how high they could be!

The Global Inflation Outlook

Below are the projected annual inflation by country in 2022. Blue colour represents 5 percent and below. The darker the red, the higher the inflation. I think you have noticed too, red is everywhere. Inflation can be crippling to the economy and that’s perhaps one reason why central banks would do best to manage inflation before inflation managed to cripple the economy.

Image source:
https://www.statista.com/chart/27480/projected-annual-inflation-by-country/

Malaysia’s inflation is still under control but…

Compared to the scary numbers in the image, it seems that we are doing fine. Just need to remember that if the whole world is facing an inflationary pressure, Malaysia would also feel it too because we needed to import goods and services too. One fortunate thing is that we have trade surplus; exports much higher than imports. However, the prices would still rise if there are no government intervention through subsidies.

Chicken is one major issue now

Currently, the major issue is with regards to chicken prices. I really do not understand why we still allow chicken to be exported if the shortage in the market is causing prices to increase. I am still wondering. Let’s hope this issue is resolved very soon and we can continue to eat our fried chicken with our nasi lemak again.

At the same time, start looking for more ways to increase our wealth. A good friend said this in my FB post the other day. “Property investment hedges against inflation. We could invest into properties or start a business or even find someone rich to marry.” All the best in doing something about it.

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

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

Next suggested article:
WAR between the interest rate and inflation

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


What types of Mortgages are people are getting? (SG market)

Article written by Redbrick Mortgage Advisory of Singapore.

What types of Mortgages are people are getting ?

1. Mortgage type acquired

Of the four types of mortgage types available, Fixed Deposit Mortgages has been found to be the most popular, taking up 74.5% of the pie. Interest rates of these mortgages are pegged to a bank’s fixed deposit interest rates. As opposed to the conventional 6 to 12 months fixed deposit rates, 18, 36, 48-month rates are used instead. UOB, DBS, OCBC, Maybank and Standard Chartered Bank are some banks that offer this mortgage type.

Fixed mortgages follows after at 19.5%. Such mortgages still remain widely popular as they offer stability and ease of mind to mortgage applicants. Reason being, the interest rates for this type of mortgage are fixed during the loan’s lock-in period (which varies between 1 to 5 years, depending on the mortgagee).

Unlike a few years back where SIBOR/SOR mortgages were highly popular, the trend seems to have been reversed, as these mortgages now see the lowest take up rates. SIBOR and SOR mortgages take up 3.2% and 2.8% of the pie respectively. One reason could be that these mortgages have floating interest rates which are subjected to foreign exchange rates (such as the USD) or the bank’s rates, thus affecting the confidence of the applicants.

2. Proportion of applicants with existing properties at the point of application

Contrary to popular belief where most mortgage applicants are assumed to be seasoned property investors and acquirers, 63.7% of applicants analyzed were first-time homebuyers or homeowners who have/intend to decouple (in order to avoid paying
ABSD
 when purchasing more than one properties). This is because cooling measures such as ABSD may have detrimental effects on potential earnings from investments.

In fact, only 15% of applicants who did own property at the point of application, owned more than 1 property.

3. Age of applicants

Majority of the mortgage applicants analyzed fell within 31-50 years of age, making up 64.6% of the total number of applicants. Most applicants within this age range were found to be home upgraders. As these applicants have stronger financial positions, they usually seek to obtain bank loans despite the higher cash upfront as such loans offer highly attractive interest rates. On the other hand, first time homebuyers are likely to obtain HDB loans as opposed to bank loans, as the former requires lesser cash upfront, among other advantages.

Since the age of an applicant is taken into consideration when loan tenure is calculated, this may be the reason for the lower proportion of applicants between the age of 51 to 60 (25.2%) and above the age of 60 (2%).

4. Gender ratio of applicants

Women make up only 43.2% of the mortgage applicants. This could be because women tend to be more conservative investors compared to men and have lower spending powers. Men, with bigger appetites and financial capabilities for investments, make up the remaining 56.8%. Nonetheless, this trend may be reversed in the near future!

5. Purpose for obtaining mortgages

While several clients seek our help in finding the best mortgage structure for property purchases, refinancing (switching from an existing loan to another with lower a lower interest rate) saw a greater number of clients. A quantitative analysis revealed an increase in the proportion of people refinancing loans, from 58% in 2016 to 60.9% this year.

Changes in the macro environment, such as the rise in the
US Fed rate
, could have been the cause of the surge.

6. Type of property mortgage is taken for

Homebuyers that are looking to get HDB flats often opt for HDB concessionary loans hence, majority of our clients are those who seek mortgages for private condominiums. Non-landed private housing makes up 71.1% of the total mortgages applied for, while landed private housing only accounts for 6.6%. Nevertheless, overall private home sales have seen an increase this year with demand for new property looking buoyant.

7. Preferred banks

Due to the attractive mortgage bundles offered by Standard Chartered Bank (SCB), they managed to attain 28% of the pie in terms of banks of applicants’ choice. Such bundles include the 1% interest rate for the first year of Fixed Deposit mortgage as well as their MortgageONE SIBOR or MortgageONE Fixed Deposit Rate scheme which are solely for private properties. This unique scheme operates as an interest off-set account where monthly interest on mortgage is reduced by off-setting it with interest from your deposits. Additionally, any excess interest earned is used to reduce your outstanding loan principal.

Despite offering appealing bundles, SCB still falls short of clinching the most market share. Singapore’s local banks – DBS, OCBC and UOB, still remains the top 3 preferred banks. You can also check out a detailed list of
mortgage interest rates
.

Other relatively popular banks include Maybank (MB), Bank of China (BoC), Citibank and HSBC.

The team at
Redbrick Mortgage Advisory
 has more than 60 years of banking experience and is proficient in structuring and sourcing for the best financing terms for both residential and commercial real estate in Singapore, Malaysia, USA, UK, Japan, Thailand and Australia.

— end of article —

This will be more applicable to Singapore’s property mortgage choices. Many times, what we think may not be what it true. In fact, there are different advantages of each type of mortgages. When there are more uncertainties or if the currency shows more swings back and forth, fixed rates are usually the most sought after. This situation happen to all countries and not just Singapore. Happy reading and learning from Redbrick.
Contact them for further consultation yeah.
 If you mention kopiandproperty.com introduced you, perhaps you can get a free cup of coffee at their office, hopefully.  Cheers.

Next suggested article:
Safety in times of turbulence, Singapore real estate

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


PLEASE be more lenient in development charges – REHDA Penang.

A sobering piece of news about the state of property transactions in Penang. During a press conference, the Real Estate and Housing Developers Association (Rehda) Penang chapter chairman Datuk Jerry Chan said that 2014’s overall property transactions were 20% lower than 2013. Nevertheless any Penangite friend you have would tell you that the prices did not really move downwards. He further said that “The cooling measures put in place by the state government to discourage speculation were effective in reducing property transactions, but these did not affect property prices due to rising costs.’ Major reason is because of the development charges levied by the local authorities, land costs and other charges, materials and labour costs have continued to rise. Thus he is asking the state government to be more lenient in the development charges. Market is slowing and this is no longer the time to be even more stringent.

In Penang, the Malaysia Property Exhibition (Mapex) 2015 would be held from February 21 to 23 at G Hotel. Yes, that’s just one week later, during the Chinese New Year period. Sometimes you may think why are they holding property fairs during such holiday periods. Well, this is the time when family members from all over the country and even out of the country comes back for a reunion dinner and during such times they may find that their current parent’s home has become too small due to their growing family. They can thus drop by the property fair together and make a quick decision. Good for the developers who are participating, right? Well, it depends on what they are offering of course.

Datuk Jerry Chan also said something which is not just true today but will always be true for a long time especially for Malaysia. He said “Property prices have stabilised, so now is a good time to invest in properties.”  The key word would be ‘stabilised’. He did not say prices softening. In fact, in certain markets if transactions fall 20%, prices are sure to soften. I checked the price of a condo I sold in Penang just few months ago. The price range has not changed and has even shown an upward bias because the size is close to 1,300sf. There are not a lot of these properties compared to those of 1,000sf and below. In fact moving forward, to make it affordable, a lot of new condos are sized at 1,00sf or lower. Want to know what is really happening? Well, head on to the MAPEX Penang show in G Hotel from 21st to 23rd February 2015.

written on 14 Feb 2015

Next suggested article:
Come on, give first time home buyers a break says REHDA Penang.

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


4 MISTAKES to avoid in property investment

I read an interesting piece of news today in NST. Taiwan has mistakenly fired a ‘carrier killer’ missile towards China. Fortunately, this missile flew only 75km and dropped into the sea off Penghu which is still within Taiwan’s waters. As per reported, it was a human error. Unless we believe machines are about to gain artificial intelligence, I think it will still be human error for a very long time. I think it will take some time for Taiwan to explain this incident to China. Fortunately it did not reach anything Chinese.
Full article here.

I think this kind of error always happen to property investors too. Many times, that first property that we bought may have set us back many years as we struggle to get back on our feet. Let me share 4 mistakes that will be costly to make.

Follow ‘them’:
  An ex colleague swore that he would never ever buy any more property because he lost over RM300,000 in his first purchase which went totally wrong. It was never completed in full. His reason for buying? All other friends were buying, so he thought nothing could go wrong. Always note that when you ask them, they will tell you the same thing. They were buying because they were following YOU!

Background check
: Unless the developer happens to be our father, a further check is always necessary. First time developer is definitely okay but be very careful when we feel that the developer was trying to hide something from us. If we do not feel confident, go buy something else. Seriously, there are lots of new developments as well as
 secondary choices
. Why give up the forest simply for one tree? Of course, to manage this better, ask them about their past projects and do visit their past projects as well. We are about to buy the most expensive thing in our lives, due diligence is needed!

Extremely good offer.
 I believe in paying a slight premium for good quality. When a developer is giving discounts / rebates and offers which is OUT OF THIS WORLD, then it’s time to be think OUT OF THE BOX. Was it because the launching price was simply too high? Was it because after trying to sell for the past 24 months, the
developer is now desperate?
 Buyers today are by far savvier and more knowledgeable than buyers of yesterday. When the majority chose not to buy, perhaps they have some good reasons….

I don’t like it.
We can laugh all we want because this is the exact reason that a few friends told me. I asked, “Would you stay there?” Their answer is NO. They were buying to sell to others. Great reason right? One man’s poison is another’s meat. Haha. To
manage our risks
, buy one which if we could not sell, at least we could stay. In that case, we do not lose everything. By the way, if you do not like it for whatever reason, why would others like it?

Well, anything and everything could happen in the
property investment journey.
 Sometimes, we may get a good deal and sometimes we get lemons. I am still learning more new stories and just this afternoon a lady CEO who is a finance expert told me that property investment is not a must for everyone. It’s too illiquid. Everyone should just diversify. I told her that I agree. However, having one fully paid home by the time we retire is a plus. At that time, we could sell it and rent instead. Happy investing.

written on 1 July 2016

Next suggested article:
The more cafes in the neighbourhood, the higher the property price?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


The Home Refinancing Essential: The Whys and the Hows

Do you have any home refinancing questions which you like to get answers to?

In conjunction with PropertyGuru’s Asia Virtual Property Expo, they have invited many speakers to share to all the visitors. Miichael and I have been invited and we have decided to speak about a sought after topic by many home owners, especially during this COVID-19 pandemic period. We will share all the reasons to go for refinancing, the reasons NOT to go for refinancing as well as how do we do it successfully.

I am representing the home owners side while Miichael will be sharing his expertise as a mortgage expert. Yes, this session will be a very interactive one.
Do click into the PropertyGuru Virtual Property Expo and sign up by clicking the ‘Auditorium’ button yeah. Miichael and my session will be on 29th November from 10am – 1045am.

Click here to register and listen.

Home Refinancing Questions

Hope to see all of you. If somehow you miss this, I will get the video and share in a future article too. In the meantime, enjoy your weekend and take care yeah. Thank you.

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

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

Next suggested article:
Debt management is key to better financial success

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA: “Get a good deal now.”

After my property investment sharing session around 2 months ago in a company function, one colleague identified the area which met her expectations, started viewing and signed the Sale and Purchase agreement last week. She said she does not know
when is the best time

to buy but the she managed to get a good discount from the buyer. She said maybe it’s because of the current situation; slowdown. I told her that’s for sure because during good times, as soon as we ask for discounts, the seller would close their door. The best time to buy would normally be a bad time to sell. She bought a secondary high-rise unit of 800 sq ft for RM380,000 in Bandar Permaisuri.
The unit was renovated which is a plus.
My good friend, the general manager of
propsocial.my
 just shared with me that her friend who told her that she wants to buy 5 years ago is still waiting to buy. Haha. So, what do the experts say?

During PropertyGuru’s 2017 Market Outlook, Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Seri Fateh Iskandar Mohamed Mansor said prospective housebuyers cannot count on property prices falling significantly despite a softer property market. He shared, “A lot of people have asked me ‘So when is it going to fall? When can I get a good deal?’ I’m telling you now is when you are getting a good deal.” He then shared something which I usually remind my friends. We should look at what we could afford, understand what we really need and proceed to buy.
The waiting game is best played after we own something, not before.
He also shared that developers looking to sell may not be offering lower prices but they are throwing in a free cabinet or air-con units etc. These days, the developers are better funded than the days of 1998 or 1999.

The drop in transaction numbers did not only happen this year. In fact it has started dropping from 2013. Assuming someone bought a new unit towards the end of 2012, the unit should already be completed this year. Since there were so many who bought for investment, surely they would need to sell their units. The question is, did we view and negotiate for a better price? As for developers, the focus is pretty easy. Smaller units with lower prices. This is what the mass-market could afford. It’s no longer about wants. We should note, there were times when condos of 1,000 sq ft were only RM200,000 or RM250,000. For those prices, it could have easily doubled. Main reason? People could afford the price, even after it doubled. Today, when we buy at RM450,000 let’s not have the mindset that it will double and become RM900,000. How many Malaysians can afford them? Happy deciding.

written on 6 Dec 2016

Next suggested article:
I prefer today, not yesterday

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA: Increase in legal fees will burden the property buyers

No one likes price increase except the one who’s increasing it

I think this is a common thing right. We love that bowl of noodle X but we did not like it when the price is increased, again. We may stop eating it for a while but after a while we may accept it and continue eating it again unless if there’s a cheaper alternative. If there’s a cheaper alternative Y which is just as good, we would now continue that new alternative and will forget this expensive bowl of noodle X, right? Well, what happens if there’s no alternative then? Just one choice and the choice is compulsory? Yeah, that’s when acceptance is a given.

Recently, it was reported by the media that the conveyancing legal fees will increase because it has not been increased for a number of years.
Read here: Property Investment 101: Be ready for higher legal fees
.  Now, we have one association in the property world who has given their views on this increase and their view is that this should not happen.

Article in nst.com.my
    Real Estate and Housing Developers’ Association Malaysia (Rehda).Rehda president Datuk NK Tong Said, “The average citizens, who are still grappling with the aftermath of Covid-19, will undoubtedly feel the impact of the increase in legal fees. At this time, industry players should strive to find ways to reduce the cost of purchasing a house in order to fulfill the housing agenda proposed by the government. Rehda will continue its duty to provide quality and affordable homes within the appropriate timeframe for the progress of the country and its people.”

The Malaysia Competition Commission (MyCC) previously opposed the increase in convenyancing legal fees involving property transfers while the people were still struggling with the rising cost of living.

Do read the article in full here:
Article in nst.com.my

Would I stop buying a property when cost of buying increases?

Personally, I think it would not stop me from buying a property in the future. However, it may delay the decision definitely since the cost of buying a property has increased. If we ask the ones who are not buying a property and has given many reasons whey they would not want to buy a property, then this increase in conveyancing legal fee would just be another reason for them not to buy a property. In other words, I do not think the situation between the ones who are buying and the ones who are not buying will change.

In actual fact, first time buyers who did not know about this increase may just say, ‘wah… legal fees quite high for this property transaction.”  By the way, first time buyer would have said the same with the old legal fee structure too.

I do not think the Bar Council will be reversing their decision for this increase. Let’s see what happens if indeed the property transaction slows down. Then, it may be a reason for a second thought. Else, it’s just another all talk and no action. I guess the media will move on to the election related topics for a while first.

Property News Malaysia?
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).

Alternatively, Follow me on
 Telegram here
.

Please LIKE
kopiandproperty.com FB page
 to get daily updates about the property market beyond kopiandproperty.com articles.

Else,
follow me on Twitter here.

Next suggested article:
When rates rise, property transactions drop, right?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Property market will have to depend on economy. How’s the economy?

A positive sentiment is important for the property market. However, demand comes only when the people have jobs and for people to have jobs, the economy must continue to grow. So, how’s the economy? Every time I tell people that the Malaysian economy’s doing okay (based on articles I read and my personal opinion from observations), they would give me those looks. “Who am I?” It’s okay, let me show just two slides from the first speaker in REHDA Institute’s CEO Series 2018. The speaker is Prof. Dr. Yeah Kim Leng (Professor of Economics, Sunway University Business School) and the title of his presentation is Restructuring of Malaysia’s Economy Post Ge14: International Factors and Perspectives Impacting Malaysia’s 2019 Economic Outlook.

The slide shows the few reasons why the Malaysian economy is still growing. First of all is the fact that Malaysians continue to have jobs. Number of jobs being created is aplenty but the only issue is that the people may not be ready because of the changing trends. Manual workers may face issues to acquire new skills; IT for example.  Second reason is because of rising income even if wages are still depressed. What this tells us is simple; shortage in skills meant that some are earning exceptional incomes but when the skill is something available everywhere, the salary is no longer moving up. Next one is due to the increased wealth from higher asset prices. Remember the times when people bought condos for RM250,000? For example, in 2007, 2008 periods? When people sell these condos today, they have more money to spend / invest. Dr. Yeah also mentioned many other factors which are also helping to push the growth too.

It’s not all smooth though. The world economic growth can push us up but there are also many instances when the world growth itself may be derailed. First up is the current US – China trade war. In brief, if China’s exports drop, it meant that their imports would drop too. This will affect many countries which are exporting to China. As the US’s policy is to ensure Americans have jobs, it meant that most smaller nations would not be able to compete; no way they can invest so much to build factories in the US and then export to the world. Recently, we start to see some volatility in the financial market. Funds are being pulled out of emerging markets simply because another emerging market was seen to be sliding into a crisis. Last but not least would be the aggressive policy tightening in many governments around the world. All these may slow down the world growth which will in turn affect Malaysia’s economy too. As I learn more, I will share more too. Next few articles in the next few days.

written on 24 Sept 2018

Next suggested article:
REHDA Penang has reduced property prices between 6-10%

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA – Negative and Neutral on property market

I read in The Star that REHDA members are either negative or neutral about the property market. In fact, in a survey done, 87% said so for first half of 2014. This would then drop to 75% for H2 2014. This leaves only the minority feeling positive? The reason? Cooling measures by the government in Budget 2014. It’s president, Datuk Seri
Michael Yam
 said that all the many measures implemented has started to show its effect on the property market.

Besides that, the number of launches for 2nd half of 2013 was also correspondingly lower than the year before. While it does not say what will happen in the first half of 2014 but nearly every opinion in the market is that the first half would be a very quiet period when compared to years before. It further stated that unreleased bumiputera units was the number one reason for unsold units during the period.

From friends in the industry, it is easy to know that slowing down is not just a myth but has been a reality since last year, especially for properties which are deemed above affordability or above RM500,000. Generally, the response for anything below RM500,000 is still ok even if no longer like previously where buying properties was like buying vegetable in the market. Just this morning, an ex colleague told me that one developer who said, ‘I have no issues in selling at a premium’ has started offering a special discount to their buyers. I think this may be a precursor to them launching their 2nd block at a price which is lower than the launching price for first block. The developer has been selling the units since last year and very soon, it should be one year. Needless to say, the price per unit for this particular project is at minimum of Rm750,000 or higher. Let me be frank, when the market slows, you better be selling affordable properties because demand is there but the appetite for RM750,000 units? Muted.

However, not all are negative. When I was playing badminton yesterday night, a friend said that she was trying to buy a landed property in Sri Damansara and the owner had wanted to sell it at RM950,000 just few months ago and now he wanted RM1.02 million instead. Most probably my friend would be buying the unit. She asked if the market is that good. I said, for certain units, the bank valuation has not caught up. Thus it is willing buyer and seller basis. She said, you are right! ‘Hong Leong is only valuing the property at RM880,000!’

Stick to your objective. Buy for stay and can afford? Please proceed. Other than that, perhaps the time has come for you to really evaluate thoroughly before committing. Waiting for 20% drop? The wait continues…

written on 10 March 2014.

Next suggested article:
Penang property prices still going up – REHDA Penang

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Manifesto on affordable homes for Malaysians. Let’s Do It!

Malaysia should have 1 million affordable homes built within 2 terms. That’s our new government’s promise in its manifesto. My belief is the same regardless of the government but I think with the federal government in control of many state governments, it should be easier to work as a team. Remember, this is for Malaysians and not whether they are ‘our’ state or ‘their’ state yeah.
3 years ago, I wrote this: Poor should own their own home, period.

My views remain the same. The below would be all the rest, as
reported in Edgeprop.my

Below are Pakatan’s promises: (my comments as a normal working professional in bracket)

To build one million affordable homes across Malaysia within two terms of the Pakatan government.
(SUPER, must make sure sufficient research is done in terms of
type, price and location. It is not clever to increase the unsold unit numbers
)

To create a special housing loan scheme tailored for youths who want to buy their first property. (My opinion remains the same. Simply lending to everyone who says they want to borrow for a home is not a good solution yeah. Please read:
Lending to everyone is not that wise
)

To take over maintenance costs in low-cost housing areas in order to lower the burden of residents. (Very good idea. Please appoint good property managers transparently yeah. This is for Malaysia and not the political party)

Work with state governments to convert land status if developers want to build affordable houses. The quota for affordable houses will be increased. (
Please read: A single agency will be much better. Current model does not work well actually
.)

Tax incentives will be given to companies that focus on affordable housing, especially to encourage them to use the latest cheaper technologies such as the industrialised building system (IBS) so that cost to buyers can be reduced. (This is in progress but definitely can be made faster! During the recent INSPEN 2018, it was also shared that the cost of production is actually going down)

Widen the rent-to-own scheme nationally through cooperation with commercial banks by enabling such a scheme to be introduced in primary and secondary markets. (This is very useful for immediate assistance to people needing a home instead of starting to build only today. There are many unsold units and even from the secondary market too)

Enable those who are currently renting to have the opportunities to migrate to a rent-to-own scheme if they qualify. (Good idea, single agency to handle this please… Copy that neighbour down south who’s doing it very well today)

Prevent landbank hoarding activity through setting a time limit for companies to complete their construction so no corporate giants can hoard land without developing them. (This allows even smaller developers to compete better because else, deeper pocket developers could just buy and keep those land parcels for some time)

Incentives will be given to the smaller bumiputera and non-bumiputera developers so that they can compete with others on a level playing field.  (Good idea. Remember yeah, meritocracy is about everyone competing with the same foundation / resource. Having the same requirement to the established developers versus a newcomer is NOT meritocracy. A student from a village without the same access to resources will never be able to beat a student whose parents could buy the best equipments and hire the best tuition teachers ok…)

Reform the PR1MA programme so that there is no more exploitation by crony developers who obtain government land at discounted prices but then reap high profits by building just a small number of affordable houses. (As long as all programmes are managed more efficiently by a single agency, I think it’s going to be great)

To increase bumiputera homeownership, simplify the processes to build affordable houses on land owned by state Islamic authorities including Waqf land. Incentive will be given to encourage Islamic authorities to work with private developers.

Set up a National Affordable Housing Council, chaired by the prime minister, to bring together the work of the various agencies under one roof. This council will be tasked with overseeing affordable homes construction matters, coordinating a unified and open database on unsold affordable homes and organise a rent-to-own scheme for the B40 and M40 groups. (This is good. This must be implemented but after some time, it does not need to be chaired by the PM all the timelah. Perhaps a minister from the PM’s department would be better)

Allocate part of the dividends derived from Felda investments and Felda subsidiaries will be used to build new Felda townships and houses for the second-generation settlers. (Good idea. Remember to do it in such a way that even the developers building these homes would be from Felda too. Profits ploughed back to do more)

Ensuring that state housing agencies provide assistance to Indian families who are in need, especially former farm workers and those in the B40 category. They should be given an opportunity to have a quality home at a reasonable price, and a loan repayment mechanism that is based on their ability to repay such as a hire purchase scheme. (Already stated earlier. Perhaps this is more of Rent-To-Own RTO basis)

Instructing local authorities (PBTs) and state governments to place conditions on housing developers so that in areas where there are former Indian plantation workers, the developers must build affordable homes for them. (I think this is fair to the former Indian plantation workers)

written on 12 May 2018

Next suggested article:
Wondering why property prices are not going down?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA Penang has reduced property prices by 6-10 percent. Hooray!

Sales and Service Tax (SST) has started. There has been a few car models including BMW which has announced lower prices with the SST compared to previously. The good news are now extended to the property market.
According to an article in NST,
 Finance Minister Lim Guan Eng has praised the Real Estate and Housing Developers Association (REHDA) of Penang because it has reduced the prices of houses in the between 6 and 10 percent. This is in line with the government’s initiative to provide SST exemption for the construction sector, as announced previously. He said all housing developers nationwide should follow the example set by Penang REHDA and adopt the same measure. If they do this, it will enable more people to buy their own homes. He said, “This is a positive step by REHDA in the state. We hope that they can advise other members nationwide to follow in their footsteps.”

He added, “Penang REHDA has also shown that they are a socially responsible corporation as they have not taken advantage of the tax relief, and instead channeled it back to the people.” According to Penang REHDA chairman Datuk Toh Chin Leong, the prices of homes in Penang costing RM300,000 and above would be reduced by 10 per cent.For properties costing below RM300,000 the reduction will be six percent. This applies to both the existing and new projects. He said that this reduction was possible because housing developers are now able absorb the cost as they have been exempted from the SST. This, he said, was previously taxable under the previous Goods and Services Tax (GST). He added, “We also welcome the implementation of the SST because under the GST, developers had to shoulder additional costs, some of which were transferred to the consumer. But through the SST, several components of the tax related to construction have been exempted, thus enabling us to reduce the price of houses.”

Reduction in property prices is always a good news to Malaysians who has yet to buy a property. The question is always, will these first-timers be persuaded enough to buy a property? Frankly, 6-10 percent is a good reduction and I do not think SST is the only reason. The current soft market must have also provided a push as well. It’s also extremely important to objectively decide because a good property will still be a good property even if it’s priced at 10 percent higher. The wrong property, even if it’s priced between 6-10 percent lower is still a bad property yeah. Perhaps we will start to see advertisements from developers about this change? Put their current price, draw an X and put the new price instead? I guess if they are not doing this, it’s not going to be convincing enough that they have actually reduced their property prices with this SST’s implementation versus the GST earlier. Happy Penangites…

written on 11 Sept 2018

Next suggested article:
Penang LRT not the best choice

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA: Price hikes in building materials and lesser new launches…

Transactions are up, that’s good news

Recently, the National Property Information Centre (NAPIC) published statistics showing that there were a total of 188,000 property transactions worth RM84.4 billion within the H1 2022 alone. For many years, the total transactions in the second half was higher. If we have the same trend for 2022, then it means that the total transactions would be more than just a double of the H1 2022 number.

Here’s that article in nst.com.my
   From the total transactions, the residential property sector recorded 116,178 transactions worth RM45.62 billion in the review period, an increase of 26.3 per cent in volume and 32.2 per cent in value year-on-year.

Penang, Kuala Lumpur, Johor and Selangor remained as the four major states, accounting for 47 per cent of the total national residential volume.

Selangor contributed the highest volume and value to the national market share with 26.5 per cent in volume (4,025 transactions), and 33.5 per cent in value (RM4.70 billion).

Here’s the full article here:
Here’s that article in nst.com.my

Total launches are down and it’s a lot lower than H1 2021

According to NAPIC, there was a drop of 66.7% in new launches for H1 2022 when the new launches were compared with H1 2021. As for the sold numbers, it was almost the same, at around 20%. It was 20.3% for H1 2022 and 20.6% for H1 2021.

Real Estate and Housing Debvelopers’ Association Malaysia (REHDA) said that the industry is affected by prices hikes in building materials and also labour shortage.This has severely affected the productivity in both property and construction sectors. REHDA said, “REHDA has called upon the government to address these issues swiftly, as the current situation will be detrimental on various levels, including to purchasers. Should these issues be addressed, we believe that H2 2023 will paint a better picture for the industry and the nation as a whole.” Read the full article here:

Here’s that article in nst.com.my

Less launches, hike in building material prices means…?

Sorry yeah. If you think because of this, the supply would be lower and thus the demand would push prices up? Plus the pressure from cost of materials? Do look at the total transactions yeah. New property transactions are probably 15-20% of total transaction numbers yeah. So, whether prices go up or not does not depend on new properties alone. It depends on the total transactions and thus the power struggle between the seller and the buyer. I heard from some people that buyers have the upperhand. I have no idea but as an owner who wanted to sell a property in Penang, I only know that I have rejected many ‘amazing’ offers. No idea if this meant I have more power or the buyer has more power… 🙂

Always… view more. Always know more… Always benchmark before buying. Happy investing!

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

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

Next suggested article:
How low can property prices go?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA says, ‘Waive stamp duty’ to support property market

Recently, we read about the view of South East Asia’s largest developer that Singapore government is unlikely to lift cooling measures for at least one more year. Read here:

Cooling measures in Singapore – Capitaland Ltd
  Remember, the main reason for cooling measure is to stop property prices from rising indiscriminately due to speculative activities. Thus, if this pressure is off, should the cooling measures be slowly lifted? Well one thing is sure, the number of transactions have dropped. The total value of transactions have also dropped. Read here:
Property transactions and price, both dropping

Should the cooling measures be lifted then?  The following would be the view of Real Estate Housing (REHDA). The full article here:
REHDA asks government to rejuvenate property sector

It’s national treasurer and REHDA Institute Trustee Datuk Mustaza Mohamad proposed that government should waive the stamp duty because there is already GST for commercial properties. Property prices should be made cheaper. He also shared, “We want the government to increase infrastructure projects too.” He also said that it is important to safeguard the health of the property sector in the country. The reason is because despite the property market being quite small but this sector would be affecting (some) 200 related economic sectors including the construction sector, manufacturing sector, services sectors (lawyers, engineers, financial services, insurance and etc.).
Full article here.

I personally think the transactions continue to reflect the market demands with a pessimistic view. I have many friends who are still telling me that they want to buy. In all the property events that I go to, the crowd is still huge and many seems to be taking down notes. However, it’s not easy for them to escape the market view that ‘worse may yet to come’ or even ‘property prices may still fall further.’ This is a recent article about
 unsold residential units in the market
which has actually increased a lot. If we only waive the stamp duty as a measure, we may not be attracting only those who need a home to buy. Perhaps a more comprehensive proposal can be proposed whereby whatever is done would be tweaked towards those who REALLY need a home instead. I am an investor too but I wish for the market to be filled with more genuine buyers and not just the speculators. Happy getting ready if the stamp duty is really waived in the near future.

written on 28 Feb 2017

Next suggested article:
Simply buying? Or only think of popular areas?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA: Rising cost of construction will deter new developments

Home development cost versus selling price equation

If the price of land moves up, cost of construction materials move up and the salary of skilled workers move up then the price of the property will have to move up too. What happens if the price is already very high and cannot be moved upwards anymore? The developer may stop building or they buy cheaper land, they reduce the quality of materials or they try to reduce the cost from workers through automation. They could also get approval to build more homes; higher density so that the price is lowered as there are more units within the same piece of land.

Real Estate and Housing Developers’ Association (Rehda) Malaysia on the cost of construction

Article in nst.com.my
 President of REHDA (Malaysia) said that the additional costs in the real estate sector brought on by sharp increases in building materials, labour costs, and redundant policies imposed on the industry may be too punitive for development projects to become economically viable. He shared that the Rehda Property Industry Study for the second half of 2022 revealed an average annual increase in building expenses of 17 per cent as well as a more than 20 per cent increase in the average price of cement, steel, aluminium, and bricks.

He said, “I am sure developers would agree with me that undertaking development in Malaysia is not as straightforward as the industry is highly regulated by over 50 laws.”  Tong also said that the private sector housing development in Malaysia was not limited to the mere provision of building houses, but covered a wide range of criteria, including the supply of infrastructure and amenities, effective maintenance and management, particularly for strata schemes, a priority on safety, and the promotion of communal life.
Please read the full article in nst here.

Location, Distance, Size and Price

When home price moved up faster than salary growth, it has to be controlled. Else, no property developer would build because they would not be able to sell them. What happens next is the decision to buy land parcels further away from popular areas. These land parcels would be cheaper as the distance is further away from established neighbourhoods.

Second thing which will happen is the size reduction. By building smaller units, the property developer could build more units. The cost per unit is reduced and the price could be lowered too. For example, instead of 1,200 sq ft high-rise unit, if developers were to build 850 sq ft ones the total price would be lower.

For landed properties, instead of 22 x 75 lots, if they build 18 x 75 lots instead, then developer would be able to build more landed units. 22 ft width x 20 units = 440 ft. With the same width of 440 ft, if it’s a 18ft unit, then total units which could be built would be 24 units. This is why the price could then be lowered.

Conclusion

Buyers would have to manage their expectation. Given a choice, everyone would definitely prefer to buy within the city centre or next to a mall or even nearby a MRT station. However, when these become too expensive due to demand, they would have to be willing to fork out more or they could choose other cheaper properties instead. Else, they could also choose to rent first while waiting for prices to stabilise. It’s hard to say for sure which is right or wrong in the short term. In the longer term, it’s still best to own a unit versus helping owners to pay for their property via rental.

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

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

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

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REHDA’s appeal to DBKL’s gazetting decision

Every major city must have a city development plan to guide it.For example, Singapore has their Urban Redevelopment Authority which has actually shown a very good example how to best maximise the usage of space in the tiny city state. Recently, DBKL decided to gazette plot ratios in KL so that it follows the Kuala Lumpur City Plan (KLCP2020). Earlier article here:
Fresh approvals for above permissible plot ratios
 Briefly, this meant that even for plots where approval was given earlier, they will have to reapply for a new approval, unless of course work has commenced earlier. We now have a response from Real Estate Housing Developers Association of Kuala Lumpur (REHDA KL).

Article in edgeprop.my here.
 Rehda KL chairman Datuk Wan Hashimi Albakri Wan Ahmad Amin Jaffri said DBKL’s move to gazette the plot ratio is unfair to those who have invested in land with approved high density or plot ratio. He said, “We appeal to the authorities to consider putting back the earlier approved plot ratios in the new KL City Plan 2040. This will help restore investor confidence in the city’s administration.”

He added, “Most developers are unlikely to resubmit plans that satisfy the gazetted lower density and plot ratio as that would mean losses. Developments in KL will be stifled by (the) lower plot ratio. They should be more compact and vertical as land is getting scarce.”  He also said that this cap will cause property prices to rise in KL.

“Developments should be built with density that would be supportive of productivity. Plot ratios should not be so low that they cause sprawling effects and pollution. With the MRT, transit-oriented developments should be given higher plot ratios for greater productivity. Plot ratios should not be capped so low that they hinder KL’s growth as a global city,” Wan Hashimi explained.
Article in edgeprop.my here.

I personally do not think property prices rise or fall simply because of development density. However, I do think plot ratios must depend on whether or not the development is connected to the public transport. If it is, I think we should look at Hong Kong and Singapore to know that when people walk instead of drive, it does not cause jams within the city centre but we are able to build more homes for more people within the city centre for them. I would think by building more units, the prices MUST be lower.

A very good example? Let’s say we have a development of 2,000 units but it’s connected to a MRT station versus another one which is 1,000 unit but the residents need to drive to the nearest MRT station instead. Imagine 2,000 people walking out from the development within an hour versus 1,000 cars driving out from the development within an hour. The former meant everything is still smooth while the latter meant traffic queues. No prizes to guess which project should get the go-ahead for higher number of units to allow for lower prices. Perhaps there will be some different circumstances case by case basis for all those earlier approved plans. Happy understanding.

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

Article written and edited by Charles. News article summarised by Dina Batrisyia.
written on 26 Feb 2019

Next suggested article:
RUMAWIP no more. It’s Residensi Wilayah. Changes?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REIT as real estate investment? This one returns a positive RM144 million in 2Q 2021.

When a REIT returns a positive RM144 million in 2Q 2021. Real Estate Investment Trust (REIT) is one of those ways where we could invest into a commercial property we think highly of, for example Petronas Twin Towers and yet we do not need to worry about managing it. We can just invest an amount we are comfortable with as well.

In 2Q 2021, KLCC REIT achieved higher net profit when compared to the 2Q 2020. Just need to also note that 2Q 2020 was also the weakest quarter for many companies because that was the start of our lockdown due to Covid-19. It started on 18th March and lasted till 3rd May 2020.  However, what this tells us is that there are brands who wants a premium space and they do not close down just because of lockdowns.

Article in nst.com.my
   KLCC Real Estate Investment Trust’s (REIT) net profit rose to RM144.01 million in the second quarter ended June 30, 2021 (Q2 2021) from RM140.46 million in the same quarter a year ago.

The better Q2 performance came from the retail segment and improved hotel performance in April prior to the resurgence of COVID-19 cases in May and the subsequent full movement control order (FMCO) which started on June 1, 2021.

The office segment, comprising Petronas Twin Towers, Menara 3 Petronas, Menara ExxonMobil, and Menara Dayabumi is backed by its locked-in, long-term tenancies and the triple net lease (TNL) on Petronas Twin Towers and Menara 3 Petronas.  Suria KLCC has continued to revitalise its offerings by bringing in eight new tenants, which included Sandro, Maje, Duboyo, and Empire Sushi. Please read the full article here:
Article in nst.com.my

Office Space is definitely going to be needed

There are companies where branding remains very important. It is definitely not true when people say that after this pandemic, everyone would work from home and demand for office space will reduce. In fact, there’s every possibility that demand for office will increase because of the need for social distancing and even the possibility of having two separate offices nearby versus the whole company all operating from the same office.

We will see. Here’s an earlier article about some happenings in more advanced countries.
Work from home? Lower pay, maybe. (click to read)

Retail is also a therapy, not just to sell things

Many says that shopping in malls will be replaced by online shopping. As someone who shopped online so much until Shopee gave me an extra RM3,000 to spend now and pay later (I did not use by the way), I disagree with this assessment.

Imagine buying a luxury brand for the very first time, would you pay thousands if you have only seen the brand online? Without feeling the luxurious environment in the real shop, being served by a retail staff dressed very nicely and also having that feeling that the cashier knows you are rich?

Imagine buying a facial cream which says it is the best in the world, online. Would you buy this, versus actually going to the shop, test it, smell it, feel it and knowing that if something were to happen, you do have a shop to complain to? It’s your face… by the way.

Online shopping will be complemented by actual retail shops. It has happened in all advanced countries where the online shopping has already evolved into buy now, arrive in one hour. Malaysia is not going to be the first country where everyone buys online and all the malls would close shop. We are not that special yeah.

Last but not least, shopping in a mall is also a therapy. After a couple of hours of going from shop to shop, buying things we may not need (haha), we may just want to sit down, enjoy a slice of cake and a latte with a friend. Yeah, that wefie of us with the food and our friend(s), that can only happen in a nice mall too. Happy knowing and happy shopping again in the near future in a real mall.

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

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

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

Next suggested article:
Will MCO spell the end of malls?

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REITs ‘can’ buy vacant land and develop it. Positive.

I consider this a positive news for the
Real Estate Investment Trusts (REITs)

and also for the real estate industry. Okay, perhaps more for the Klang Valley property market since most REITs are focused here. Reported in many media, the Securities Commission Malaysia’s (SC) has proposed to allow (REITs) to acquire vacant land and undertake property development. This is at proposal stage since July 14 and it’s at the public feedback stage currently. Comments are due by 13 Sept 2016. SC wants to further liberalise and grow the maturing REIT market.

The proposal is to allow REITs to acquire vacant land and undertake property development up to a 15% cap based on total asset value. In other words, still within manageable risks from these new developments. The development, once completed would have to be retained by the REIT for a minimum of 2 years. The proposal include also enhancements to the level of disclosure and reporting to unit holders. For those thinking of REITs currently, the second enhancement is good news for you. As for the permission to acquire land and build,well it depends.

As per reported, REITs with strong sponsors and experience will benefit more than smaller REITs or those without experience. The reason is simple, for smaller REITs, a cap of 15 percent would severely limit what they could do. Too huge, they could not do it and too small would not be worth the hassle. As per reported, according to an analyst who was not named, he said that while this proposal may provide greater risks to REITs but it would also bring with it greater returns. (I agree with him). He shared further that industrial REITs can easily buy land and build a warehouse but for retail REITs, it is harder for them to build malls from scratch. Perhaps extending existing malls may be more feasible.

As at today, I hold zero units of REITs. However, I still think REITs are good, especially for those who firmly believe in real estate but is worried to enter alone. Occasionally, I will share REIT news. Recent one:
Dividend yield for REIT? Sunway REIT’s at 5.5 percent

Here is also another good resource for everyone to see at a glance on the results and type of assets for all REITs in Malaysia. Click:
http://mreit.reitdata.com

Their August data as per image. In fact, it’s easy to note that some of the REITs, based on their current share price meant that the dividend yield is indeed very healthy for a ‘pretty safe’ kind of real estate investment. Please, read further on what are the assets owned by these REITs before deciding whether to buy. Looking at just numbers may not be enough. Cheers.

written on 16 Aug 2016

Next suggested article:
Good notes for stock investing from an investment guru

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


Our Investment Resources: REITs, dividends, personal finance and bitcoins

A few weeks ago, I met three people who write better than me. Okay, to be honest, it’s not that hard to write better than me but please visit their sites to understand why I say so. For now, let me introduce you to the rose among thorns that evening. She is
someone who loves bitcoin
and has even been featured in the mass media for her expert opinions. The title of her latest article is,
“8 rules to when you should splurge and when you should skimp.”
She is able to keep track of all her expenses (something I fail to do even though I tried) and her personal finance motto is a simple ‘save aggressively, live frugally and minimally.’ She has been car-free since 2014.  She shares all her
personal finance tips on a regular basis
 and has even articles teaching us how not to spend more than RM1,000 for a trip to Ho Chi Minh city. The best thing about her articles is that it’s very close to us. It’s like reading what a good friend is telling us over at mamak. Personal finance tips for free? Visit this site often.
ringgitohringgit.com
Keep up the great job Suraya.

Second one is by far younger than me. Sigh, I used to be as young as him MANY years ago; over 10. This is someone who’s very focused on earning enough dividends from stocks and he tells us his story thus far. He has written a
comprehensive article on REITs in Malaysia.

Learn what are REITS to How to invest in one. He shares how we can focus on just earning
dividends as an income too
. This is definitely a long-term kind of guy. Let share this very important information. He shares what shares he has bought and his aim is to inspire and help out fellow Malaysians to achieve Financial Independence. He is currently helping a few clients with their finances as well as investments. His passive income
ONLY from dividends alone is RM11,429.55 per annum.
Within 2013 to 2016, he grew his portfolio from RM10,000 to RM345,955.92 Better start following his blog here:
dividendmagic.com.my

Awesome sharing Leigh, thanks!

The third gentleman is actually already a very famous writer / blogger. I consider him as my writing idol because his articles have been published even in
Huffington Post!
Besides this famous site, he has also been featured in many other local sites too. For his career, he is currently working with young people to prepare them for what lies ahead. His latest article is a very relevant article for millennials.
“How Should Young Graduates Manage Their Money.”

He has also been featured in kopiandproperty.com’s

Expert Series.

He writes on a regular basis on categories ranging from relationships to time, career and money. Sorry, my writing skills could not do justice to how well he could actually write. Please read on here:
mr-stingy.com
  Thank you Aaron for showing how a good article should be written.

I personally recommend anyone who’s into personal finance to read from more sources. There are many awesome writers even within Malaysia by Malaysians. These are some of those who has been practising what they preach and results are there for all to see. From understanding where has the money gone to (awesome tracking) to earning ever more dividends (no joke) as well as lots of great personal finance tips (famous writer, ok), these are another three new resources that I would be reading too. Fortunately for me, all three of them are not writing much about property currently. Happy following them.

written on 2 April 2017

Next suggested article:
Some resources we have access to for our investments

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...


REITs – unexciting? Well, it usually is anyway. Stability is key.

There’s an article about how REITs in Malaysia will face a tough time moving forward. The full article in TheStar here:
Tough Times for REITs
  Some points within the article on why it’s becoming tougher is because there are many malls which will be struggling to sustain their tenants. The top tier malls would continue to do well but the secondary ones would suffer. The article also shared that 11 out of 18 REITs have showed a growth in terms of returns of 2% and 10%. Two Office REITs have been top gainers at 6.66 percent and 5.83 percent respectively. IGB REIT leads in the retail segment with a 7.62 percent gain. As per data from Bloomberg, yields remain within a decent range of between 5% and 7% for most retail and office oriented REITs. (To understand REITs before we buy, look at what are the properties that the REITs are holding. Then visit all its properties during the weekday for offices and during the weekends for retail. If what we saw is encouraging, it’s time to buy more of the same counter and then continue to wait for dividends…)  Full article here:
Tough Time for REITs

Since we now know that REITs are not likely to be exciting, what happens next? Well, my personal view is this. If we want to invest in something exciting, where the price can go up on a daily basis, there’s the Bursa Malaysia. Sometimes, we may just get lucky with the stock that we buy and it goes up especially when many people have the same idea as us. As usual, the stock price may also be dropping and that’s not a great news.  There’s another option, less exciting but definitely more stable where the dividends are concerned. These are the Real Estate Investment Trusts. My friend, Leigh has a good write up about it. Read it here:
DividendMagic.com.my

They are designed in such a way that anyone who wants to own a mall for example can now buy a small piece of the mall’s potential. As long as the mall does well, the rental for the retailers can rise on a yearly basis and the dividends declared would become better over the years. If we prefer an office building instead, then buy a REIT which is focusing on office rentals. Buy REITs for the reasons why REITs came about. It’s definitely not going to suddenly rise up to reach the moon…….. 😛

Of course, during good times, there’s also the potential that from all the profits gained, the REIT fund manager may use it to buy another property and this would generate higher profits over a longer period of time. Note though that these take time and this is the reason why REITs will not be as exciting as the usual stock counters. Besides during good times, the
 availability of good new assets
 which are undervalued would also be lower too. Happy investing and waiting for dividends from REITs. Else, for exciting times, let’s rely on something else. In fact despite taking much more time, property investment may just yield more excitement where returns are concerned. Cheers.

written on 22 April 2017

Next suggested article:
Our Investment Resources: REITs, dividends, personal finance and Bitcoins

Share this:
Tweet
Telegram
WhatsApp
Like this:
Like

Loading...