Too many affordable homes will cause property prices to drop?

There are announcements about many thousands of new affordable homes which will be built for the  buyers who needed them here in the Klang Valley. It’s a 3 bed room and 2 bathroom (3R2B) and it’s priced from just RM200k. Some people say that this price meant that it’s just a flat without facilities.

By the way, my opinion is that there is no need to have facilities which will require a lot of maintenance after a few years. Plus people seldom use them too and still have to pay for it every month without fail. Maybe a simple garden with some cement chairs which could last a long time and a proper guard house. These cement chairs, get sponsors for them. Their names can be painted at the back of those chairs. Win-Win for all.

Photo by Rachel Claire on
Pexels.com

These simple things to me are the most essential. The rest are not even optional. Then there is the question. What happens when the market is flooded with all these RM200k units? Will it then cause the property prices to drop? Let’s look at 4 important things.

#1  Are the target markets the same?

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

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

#2  Demand is by far higher than these 10,000 or 12,000 or even 20,000 units

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

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

#3  Property market is well supported… lah.

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

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

#4  Property prices will drop IF …

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

Conclusion

Just building more of these affordable units will benefit the needy. We somehow must help them so that they could stop making the owner rich. Property is already a cause for poverty in many advanced countries. In the old days, people continue to be poor for generations simple because they were not land owners. Today, people will remain poor when 30-40 % of their monthly salaries are given to the owner of the home they stay for years after years. What I hope is that these units are PLANNED based on available demand for that area and not simply building it when there are NO buyers! Thank you.

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7 reasons to drop that thought that property price is falling

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Affordable Homes – It is a real need for those in need of one.

Recently, kopiandproperty.com became
 a web media partner to PR Newswire.

So, now readers of kopiandproperty.com could also read a lot of other related news. I read an interesting one about ‘Creative Home Ownership Post Budget 2018’ which was interesting because included into the event was a dialogue with a number of prominent real estate people.
Here’s that full article.
Do read about the Malaysia Property Press Awards (MPPA) but these are the comments within the article which is important to note. It was a discussion about the issue of inclusive ownership. For example, question of
affordability for the younger generation
,
importance of housing for improving productivity and more.

The Roundtable discussion was moderated by
Nordin Abdullah
, Founding Chairman of MGBF. The panellists included thought leaders and stakeholders in the property and communications spheres: Gunaprasath; Prof Datuk Dr Raduan Che Rose, CEO of MPN; Chang Kim Loong AMN, Honorary Secretary-General of National House Buyers Association; Dr
Danielle Gambero
, CEO of REI Group of Companies; Hj Abi Sofian Abdul Hamid; Executive Director of CILT Venture;
Shanthi Thiruchelvam
, Executive Director and Principal Consultant of Perception Management; and Prof Dato’ Dr Alias Abdullah, Head of Cluster of Engineering, Technology & Built Environment, MPN.

Prof Datuk Dr Raduan started the event saying that affordable housing is an ongoing discussion not just for Budget 2018, but also for a long time. “I am still not comfortable with the correct definition of affordable homes. The price factor, eligibility or entitlement is not in sync and doesn’t allow people to afford homes,” he said.
(I think this is an issue which will continue because this is still an issue even in countries where the government is controlling more than half of what is being built for the people. As for the definition, perhaps it should be categorised under B40 affordability, M40 affordability and T20 affordability for much easier assistance to each group. Yes, even the T20 may still need help because they may still be looking at something too expansive even for them)

Mr. Chang Kim Loong said, “Property prices are very high at the moment and have been escalating for the past four to five years. There have been good initiatives by the government as well as the banks, but these aren’t good enough. We should explore further. Utility companies should absorb their capital cost. We echoed this some five years ago. Those days, electricity was government owned and it was called Lembaga Letrik Malaysia (LLN). But today LLN has been corporatised to become Tenaga Nasional Berhad (TNB) with their last announcement stating a profit of
RM2 billion
. My question is, why is it that the setting up of a sub-station or reservoirs has now become the burden of a developer? By doing this, developers have no choice but to factor these costs into the property sale price, hence becoming one of the reasons why property prices have increased. Another area that needs immediate attention is the fact that property prices should be capped where developer profits are controlled.”
(It would be good to indicate the possible drop in property price if the setting up of sub-station or reservoir is absorbed by TNB. Else, this discussion is not going anywhere. As for capping the developers profits, I think this is against the spirit of business lah. The market and supply should be the ‘control mechanism’ instead.  Just look at the newer launches, they are now becoming much more affordable, even if sizes are now smaller)

My good friend, Daniele Gambero said, “I agree with Chang that property prices should be capped for those that are
RM200,000
 and below. We should adopt the model of HDB flats in
Singapore
, where HDB controls the price of low-cost housing in the country. We cannot block the free market for properties beyond this threshold.”
(Yes, in fact this is similar to what I mentioned above.The B40 affordability. These must be made available. However, if these are made available and capped, then the prices must be controlled too so that it would always be catering to the B40 and not continue to spiral out of control that we need fully new units  to be built every few years. it will be a losing batter)

Recent Ruman Selangorku property fair

Shanthi said, “I strongly feel that the government should have a well-coordinated housing policy to ensure that affordable housing reaches the right target market. A single authority should be established to ensure a more efficient provision is in place. The government should engage with the property industry to streamline the eligibility criteria and conduct a perception audit to gauge the perception with relevant stakeholders. This will help narrow some of the perception gaps and ensure the right strategies and key messages are in place.” (An earlier article of mine which is similar to her message is here.
National Database Needed)

Please do read the full article for more of other comments.
Here’s that full article.
Happy following and hopefully everyone realises that we must help everyone in need of an affordable home if we are to avoid a national home crisis.

written on 18 Nov 2017

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Affordable homes just got cheaper, if this comes true.

Reported in The Malaysian Reserve today (15 Aug) was a very interesting piece of news. Would you be interested if the total cost of construction for new properties can come down 40%? Before you think about RM500,000 homes becoming RM300,000, do note that the 40% is on cost of construction. So, translated into gross amount, I think perhaps 20% down in cost of construction. This meant that a RM500,000 property can still be sold at RM400,000 and the developer is still getting the same profit margin. Not bad for both the developers as well as the buyers right?

The few partners who will be making this happen would be the The Construction Industry Development Board (CIDB) and Bayer Co (M) Sdn Bhd. Two prototype houses would be built in CIDB’s Industrialised Building Show Village site in Kuala Lumpur. The great news is, it will be ready by October 2014. The model houses will be built using a lightweight polyurethane composite panels developed by Bayer and they are both cost effective and easy to assemble. In other words, labour costs are minimised tremendously. This will greatly assist the Malaysian government’s target to build one million affordable and comfortable housing for the needy. The technology would be provided by Bayer’s high-tech materials subgroup, Bayer MaterialScience. The main business activities for this subgroup would be on the manufacturing of high-tech polymer materials.

Remember just weeks ago I wrote about how new homes may need just months to construct instead of years? Read it here:
New home in few months and not few years. Interested?
 Today, suddenly the announcement is that it can be built within days? Personally I am not sure how this would affect the property industry because if all developers adopt this, then the new homes supply can suddenly be increased tremendously and the prices would go down accordingly? Also, what’s the quality really like? Can it be used for building of a 40 storey building? If it is really so easily adaptable, why are the more developed nations not using it to cool down their property markets? No worries, the most important thing right now is for everyone who is interested to visit their show unit once its ready in October 2014. Thats just 2 months away.

written on 15 Aug 2014

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Affordable homes: Quota and prices to be streamlined

First of all, I always think that simplicity is the best. If there are 14 states with
affordable homes programmes
 and each are having their own administration, I think that’s a waste of resources as well as making everything complicated when it comes to reporting or transparency. However, I would disagree that centralisation of all these should be done for the sake of doing it. I think it’s important to have a very clear plan on how to ensure those who need them really do get it. Second, it would be good to make sure all these so called policies are standardised even if prices may differ. Agree?

Following would be an article in
thestar.com.my
 on the streamlining of all the quotas and prices of affordable homes throughout Malaysia. According to Deputy Minister of Urban Wellbeing, Housing and Local Government, Datuk Halimah Mohamed Sadie, a working paper for this purpose will be presented to the National Housing Council. She added that this is necessary because some states are taking this matter lightly. She also mentioned that even the Mentris Besar, Chief Ministers were aware of the situation and had also suggested that the quota and prices be streamlined.

For those who are thinking about these affordable homes do note that even for these affordable projects, the
banks are still going to lend
 based on their usual lending policies. It would also be good to search and view a few potential secondary ones for more potential choices. It would be a foolish reason to say that the new affordable homes projects are not in places you want and yet ignore the
secondary market totally
. Many times, buying earlier meant that the upgrade can also be done earlier in future. Buying later meant the next upgrade would only happen even later. Happy knowing what’s available and all the best.

written on 1 Nov 2016

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The waiting game is best played after we own something

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Affordable homes? Measures to help the rakyat own a home of their own.

Affordable homes? Ceiling property price may be coming soon and more.

It’s very important for everyone to realise that renting is not a great way to have a roof over one’s head. Staying under the bridge is also not. Some argue that mortgage is more expensive than paying rental every month but mortgage has an end.

Perhaps it’s 35, 30 or even 35 years but there is an end. Once it reaches the end, the property is now an asset which could be turned into cash if needed. Meanwhile rental is lower versus monthly mortgage but this is forever and it will continue for generations. So, measures to assist first-time home buyers is always welcomed.

Article in theedgeprop.my
 Property price for affordable homes especially in urban areas will soon have a ceiling price. This is to control the price of these affordable homes so that it remains accessible to the selected target groups. This was reported by MalaysiaKini.

Under the 12MP, it was stated that “A comprehensive database of affordable homeowners will be established to monitor homeownership while the existing housing financing schemes will be improved to assist the B40 and M40 households to own houses.”

Beyond just the price control, the government will continue to prioritise providing better access to affordable housing to the rakyat by increasing access to house financing as well while existing housing financing schemes will be improved to assist the B40 and M40 households to own houses.

Rent-to-own programme will be expanded to cover houses priced up to RM500,000. For first house purchases, the Fund for Affordable Homes and Youth Housing Scheme will continue to be provided for financing. The full article is here:
Article in theedgeprop.my

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Affordable housing to worsen the unsold units?

Can unsold units get worse? Well, it seems to be nearing the bottom,some say.
Worst over for the property market? Or getting worse?

Well, here’s another Interesting
article in EdgeProp.my “Affordable housing influx may worsen overhang situation.”
 As reported by The Edge weekly – A growing supply of affordable housing – variously defined as priced below RM500,000 to below RM200,000 by different authorities and consultancies – by public and private entities threatens to keep overhang units undigested.  It quoted an unnamed analyst saying this, “You’ve got an increasing overhang and a growing number of launches, but demand is relatively flat, and now the market is being flooded with affordable housing products. So, what will happen to the unsold inventories?” The analyst ended with this conclusion, “So, a potential question down the road is whether there is a need to regulate affordable housing supply. Right now, there is no control on supply.”

Personally, let me ask this question. If the property was in a bad location and it was not sold last year and nothing has changed, should it be sold this year? Secondly, if the property is seen to be too expensive for its quality and size and was unsold last year, should it be sold this year? We assume everything else remains the same. Third, the design of the property was bad, it was not practical at all and yet priced slightly above the market price for similar properties in the same location and it was not sold last year. Should this property suddenly become attractive this year? I think the answer is a firm NO, unless circumstances changed. For case 1, a new interchange connecting some secluded projects for example. For case 2, perhaps the developer offered a very comprehensive renovation package which meant huge savings even if price remains the same. For case 3, the developer used interior design to revitalise that ‘ugly’ project. Well, if circumstances changes, then there’s a chance for the property to be sold. IT IS NOT because of some new launches of affordable properties which will cause those problematic properties to be unsold.

By the way, it’s important to note that I have no idea if demand is flat ( I do not know majority of potential buyers) or low but I only know that attractive new launches at great pricing continues to achieve high take ups and usually they were sold out within the first few hours. Recent ones?

100 percent sold out terraced homes

or even this one
which is in a location considered far by many.

I also know that statistically speaking, Malaysia needs more homes and not less. This is just based on the current population growth and the current launches.

About the unsold units? We still need more units, actually

We have yet to count all the son-in-laws who were forced by their father-in-law to buy a property before getting married… New launches have to be really attractively priced. Offering rebates after launching at a high price is no longer attractive because many buyers are already comparing different projects today and everyone knows that banks may not lend up to 90 percent for homes which they (banks) deemed to be overpriced. There is little need to push the blame to new affordable home launches. If those are not attractive enough, they would also become unsold units for an ever longer time. Malaysia’s not in a crisis. Thus, only bad and unwanted new launches would add to the unsold units total.  Happy viewing and buying.

written on 24 April 2018

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Still true, “property prices too high.”

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RM28,888 is an affordable increase. This is why.

What is an affordable increase? Actually this happens daily for all products we buy. The seller is always trying to maximise the profits by slowly increasing the price over the years. My personal term for it is affordable increase.

These days, affordable property is the rage. Transactions for properties continue to happen and that’s because people could afford them. This is despite the fact that total transactions are lower than pre-COVID period. In fact more and more of these affordable units would be built even in 2021 and private developers realise that they need to go for higher number of sales with a lower margin versus fewer sales but higher margins previously. In other words, everyone is working harder than previously just to fulfil the need for a home.

In the future, what are the chances than the home we bought today could have an affordable increase in price? Speaking of affordability, my personal thought is that for the next couple of years, RM400,000 would continue to be that ceiling for affordable home. Perhaps we look at an increase of RM28,888 every year? Let’s look at some calculations then.

Could we save RM113 every month if needed?

Think about it. 30 days in a month. RM113 divided by 30 days is RM3.77 per day. If we used to spend RM25 for a latte and a slice of cheesecake every week and we chose NOT to spend this RM25, then we have saved RM3.57 per day. Actually very close to the need to save RM3.77

For my friend who’s smoking, if he stopped smoking, then he could definitely save RM3.77 per day too.

For someone who had decided to buy that RM1,588 smartphone versus a RM3,000 phone, he would have saved RM1,412 and this comes to RM117.67 per month.

In other words, all these scenarios would have enabled us to save RM113 per month, if not more. Now, let’s look into why we are so focused on RM113 per month.

RM400,000 home, 10 percent downpayment, 30 years and interest rate of 3.2%

If we had bought this home (as per image above), the monthly repayment would come to RM1,556.88 per month. After paying for it for one whole year, what is the chance that we could sell this for RM28,888 higher than the price we paid? Well, if we love the home for the right reasons, there are definitely others who would love it for all the same reasons too. This person may be willing to pay you a higher price for it. Specifically RM28,888 higher.  Let’s look at what this new buyer would pay you.

RM428,888 home, 10% downpayment, 30 years and interest rate of 3.2%

The total repayment is now RM1,669.32 per month and this is RM113 higher than what you were paying. In other words, the buyer who will be buying from you would have to fork out an additional RM113 and somehow save this amount of money from the scenarios we spoke about OR his salary increment was higher than this, so he could use some of it for this home. Meanwhile, for the owner, that’s you, you will get an extra RM28,888 for the home.

This is why RM28,888 increase in property price could still be affordable to that next buyer. The payment is stretched over 30 years for the buyer. This is also the reason why if we look at property price on a longer term basis, this is how the graph looks like, even in slow times. (Image below) Property prices would just slowly inch up. Do note that that anything above zero do mean that property prices are strill increasing every year yeah.

Image source: tradingeconomics.com

DO NOT buy homes for this RM28,888 price increase yeah. Please buy a home because you want to stay in it and many years later, you could be pleasantly surprised by the price which the next buyer is willing to pay for you. Actually it’s the same for you. When you are ready to upgrade, you will also think an extra RM28,888 looks affordable too. It’s just an extra RM113 per month.

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Need a place to stay in KL? Affordable ones won’t ‘kill’ you

A year ago, I wrote an article about how ‘experts’ are not telling the truth when they said everything is now unaffordable. In fact using the average property prices are definitely not accurate as well. Read here:
Experts said, ‘affordable properties’ NO MORE (nonsense)

 Let’s say you are working in KL and needs place to stay. All your friends and majority of every report tells you that you better buy as soon as possible as the affordable ones would be gone soon. You are worried yet when you look at the new launches, those available are either priced too high or just too small for your liking. I define too small as those small units of less than 500 sq ft. These units would mostly have just one room and these days, there are even the sub 400 sq ft ones.

So, if you REALLY need an affordable place and does not want to wait, do you really still have a choice? Clearly, secondary should be a serious consideration. To be very direct, understand that these units are definitely not looking the best. They would also be in areas which are most probably not a hotspot. Many times, your favourite malls are also not next to them. However, you have three things in your favour. Affordability when compared to the new launches. Get to stay quickly instead of waiting for many more years for new ones to complete. Start enjoying potential appreciation or at least start gaining instead of losing when you rent.

Take a look at some options available that I found in property guru.com.my just for you. Note, I am not an agent and I gain nothing whether you buy these or start to search for more in the few major property portals today. Truth is, choices are aplenty even today. One reason why these properties are still affordable is only because many did not consider them. Would they be affordable forever? I have no idea. However, even if we base the price increase on just 2%, that’s still RM6,000 up every 12 months for a RM300,000 home. I have not known of any friend whose company paid them RM6,000 in salary increments yet. Happy working, buying and progressing in your property investment journey.

written on 16 Dec 2015

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To be affordable, KL homes must be RM280,000

In one latest study released just days ago in local media, Khazanah Research Institute (KRI) said that for homes in Kuala Lumpur to be affordable, it has to be RM280,000 or lower. This is based on the median household income in Kuala Lumpur today, according to KRI managing director Datuk Charon Mokhzani. Of course, he mentioned also that Penang joins KL as two of the cities under the ‘severely unaffordable’ category. With the continuous urbanisation and a population growth of 2% per year plus households getting smaller, it meant that the current supply may not be enough and this may push prices higher. Read latest here:
2015: Birth-rate dropped to 1.9 for Malaysia

The current median multiple  for Kuala Lumpur and Penang is 5.4 times and 5.2 times respectively. In other words, you take the median income per year ad you times 5.4 or 5.2 respectively. In brief, it meant you will take MUCH longer to repay in full plus the monthly mortgage is also a risk too because one may be overstretched when buying properties which are way too unaffordable even if still reachable. One way to solve this is to make sure every household earns more. Secondly, make the prices affordable. Build higher density perhaps or other assistance from the state and federal governments.

On a positive note for me personally, 72.5% of Malaysian population owned a home. Of course this number includes informal housing or ‘TOL’ (temporary occupation license). Perhaps a better indication which tells even clearer picture of the actual demand is that KL has a home ownership of 53.5%. Yes, ONLY half actually own their own home in KL. Charon also said that high housing prices are not caused by higher land and construction costs but the willingness of developers to pay ever higher land prices which translated into ever higher property prices when they launch new ones.

A picture tells a thousand words but numbers show you a million possibilities. RM280,000 is definitely not an easy goal but beyond this RM280,000 should be better build quality, maintenance as well as on-time completion. There is really no point in offering such units when the ceiling height is made shorter to accommodate more units with the same height. With the typical bad maintenance and mindset of the owners of many of the low costs units, it is likely to cause these affordable projects to lose its value in future. This will not help the owners because instead of buying and staying while waiting for price appreciation, the owner may be paying and paying and later having to sell lower! Can the developers do it? Seriously, the location may have to be further away, perhaps connected by those final few stops of the MRT lines coming up. Happy searching and buying.

written on 26 Aug 2015

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Press Release: Affordable and neighbouring Desa Park City.

Press Release by Trive Property Group

Trive Property Group signs MoU with Tenaga Meriah for SPNB Affordable Housing in KL with GDV of RM1.1 billion

Kuala Lumpur, October 20, 2017
 – Trive Property Sdn Bhd (“TPSB”), has inked an Memorandum of Understanding (“MoU”) with Tenaga Meriah Sdn Bhd (“TMSB”), to formalize the understanding for its appointment as the Turnkey Contractor (Design, Built & Completion Handover) for an SPNB affordable housing development project in Kuala Lumpur with Gross Development Value of RM1.1 billion.

TPSB is a wholly-owned subsidiary of Trive Property Group Bhd (“TPGB”- Stock Code: 0118), which is listed on the Main Market of Bursa Malaysia.

TMSB, has secured a Letter of Intent from SPNB Aspirasi Sdn Bhd (“SPNB Aspirasi”) to form a Joint Venture company (“JVCo”). TMSB will hold a substantial shareholding in the said JVCo.

The affordable housing development will comprise of residential condominium/apartments towers (1,775 units) and a retail/commercial (50 units) central parking podium, strategically located in KL, neighbouring high-end reputable and matured communities of Desa Park City, Country Heights Damansara, Mont Kiara and Taman Tun Dr Ismail, just to name a few, with multiple accessibility including via Spint Highway (Sungai Penchala) and Desa Park City.

Kua Khai Shyuan, the Executive Director of Trive Property Group Berhad said that the mixed development of SPNB affordable homes bring timely good news to all, especially house prices in Malaysia has increased tremendously since 2012, affecting many house buyers.

“We are proud that we have the possibility to support the government’s initiative in making homes affordable for the Rakyat (people) as at the same time to receive the opportunity to be able to maximise the shareholders value of Trive Property Group Berhad,” Kua said.

SPNB Aspirasi, is a wholly owned subsidiary of Syarikat Perumahan Negara Berhad (“SPNB
”)
, a Ministry of Finance Incorporated owned company under the supervision of Ministry of Finance. SPNB was recently awarded the Best Affordable Housing Developer in the recent Prestigious Developer Awards 2016 by Property Insight.

— end of press release —

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Affordable Penang Properties – where are they?

Many people have interest in buying affordable properties. If I have just started working not too long ago, I would definitely register myself. After all, if there are affordable properties which are good enough for stay, why not? Property is a compulsory item in my list and I would not want to rent unless the property prices are really beyond my reach. As of now, Penang rental however is nowhere near the S$700 for the smallest room in a HDB flat in Singapore. For RM700, you can easily rent an apartment in Penang, furnished some more. There has also been complaints that Penang has very few affordable properties. I do not agree but today, the article is just to tell you where the future affordable properties are. Please refer to the chart below by NAPIC and compiled and presented by Mr. Michael Geh, Senior Partner of Raine & Horne.

The confirmed ones are in Jalan SP Chelliah (most famous and talked about). In Bandar Cassia, Batu Kawan. (with the second bridge, I think this may yet be a good choice). The last one is in Teluk Kumbar. Some may now say that it’s too high density, it’s not in an area I like etc. Allow me to remind you that it is never easy to build an affordable home. Reason being, if YOU are the owner of a piece of land in an amazing location, would YOU sell that piece of land to the state government so that they can build homes for the poor? Yes, YOU should answer.

Secondly would be the construction costs. If YOU are the contractor, would you choose to build for the state government’s project which will give you small margin or would you build for a developer who is building a condominium project and will give you higher margins? Note that there are always unlimited wants but limited resources. It is very tough to decide right?

However, there is one thing in Penang’s favour. The state is a small state, thus, even Teluk Kumbar is not at all far especially if you are working in Bayan Lepas, Bayan Baru or even up till Georgetown. Secondly, when more and more people move into the newer areas, more infrastructure, more schools and even bigger departmental stores would be built, thus ensuring the area would become more vibrant in the future. It would not take too long and anyone buying affordable properties would have to hold on to the property for a minimum of 10 years anyway.

Do buy one, stay there and work hard to upgrade to an even bigger property in the future. If Penangites can be like Singaporeans, even flats can be clean and pleasant to stay. Just visit your friends in Singapore who most probably would be staying in a HDB flat. There are greenery and very little rubbish strewn everywhere.

written on 15 Jan 2014

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Alternatively read about other Penang Property Articles

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Affordable units now available to all, but buyers pay extra

Penang’s State Housing Committee chairman Jagdeep Singh announced recently that even those who do not qualify for a unit in an all-affordable housing project can buy these units from the open market. The total units made available for these buyers would be 30% of the total project. These buyers can buy without needing any state government’s approval. The only catch? This 30% open units would be priced 10 percent higher while those in the Northeast District (Georgetown) will be 20 percent extra. These ‘extra’ on top the affordable prices would be returned to the state to help future affordable projects or the rent-to-own scheme.

Penang state government has two all-affordable housing projects which the private sector has nine such projects with a total unit of 8,375. Currently, the low cost units are price-controlled with options from RM42,000 for low-cost units, RM72,500 and RM150,000 for low-medium cost units. Affordable units would be priced at RM200,000, RM300,000 and RM400,000 with minimum sized amenities requirements. When we look at the numbers, I think it’s safe to say that the total number is pretty huge. Is it enough for those who need them?

Well, if the demand is far greater than the numbers that are being built, I am not sure if it is smart to allocate 30 percent of these units to those who do not qualify for them. Perhaps the stigma of owning such affordable units are stopping some of those who qualify from buying a unit? Or are these buyers all having a wait-and-see attitude since the market is slow today?

Another possibility which I think the state government must be very transparent would be, were there any mismatch between the type of units being built versus the type of units being demanded? For example, too many low cost units being built while the demand is more for the affordable ones? If this is happening, the best action would be to change it to follow demand. I am very sure they can learn from the Singaporean government on their HDB projects. They build more when demand is high and drop the numbers being built in slow times.

Last reason may be what I wrote before. Read here:
If affordability = low quality
 What if the buyers are just too worried that these affordable units are of low quality? I think everyone who has been to low cost flats in Malaysia would understand what I meant. If this is the reason, it’s time to quickly finish the first one, show the world that these units are cheaper but just as good. Otherwise, I think the units being planned today are basically going to be empty units. Let’s hope the major reason is due to the slowdown and not the mismatch or the perception. Happy buying your first home.

written on 4th Dec 2015

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Mah Sing focussed on offering affordable options

My first apartment in Penang was under the affordable category, at RM123k. For the past couple of years, Penang state government classifies the affordable category as properties which are below RM400,000. I agree with their assessment as I think for KL I would rate anything below RM500,000 to be affordable. In fact when we look closely, there are lots of launches these days below RM500,000 in KL but of course, the compromise would have to be the size. Gone are the days when RM500,000 could easily buy you 1,000 sf or higher. Yes, some would now argue that ‘Last Time,’ even PJ landed properties used to be below RM500,000. No comment. Read here:
I prefer today, not yesterday

As per a news in NST, one of the largest developers in Malaysia by gross development value, Mah Sing is eyeing more affordibale projects. They will partner either the government or private land owners.  This is to strengthen their offerings in the
mass affordable housing segment
. It’s group managing director, Tan Sri Leong Hoy Kum said the way forward for the group is in the mass affordable market. Currently, Mah Sing has just ONE (1) project, the Kota Kinabalu Convention Centre (KKCC) which is a tie-up with the government. The KKCC is an integrated mixed development spanning 8.4 acres in the northern edge of Kota Kinabalu and holds an estimated gross development value (GDV) of RM1.4 billion.

Leong shared that
Mah Sing has 2,522 hectares of existing
 land bank which is enough to keep the company busy for the next 9 years. He said, “So right now, we are just shopping around to further enlarge that while ensuring that we have the best deal possible in order to continue our commitment to a pay a minimum 40 per cent of net profit as dividend to our shareholders.” It’s current sales target for 2016 is RM2.3 billion. Current achievement as at end April is RM536 million. The projects contributing to the sales include Southville City@KL South in Bangi, Lakeville Residences on Taman Wahyu, D’Sara Sentral in Sg Buloh, M Residences 2 in Rawang and Ferringhi Residences in Batu Ferringhi, Penang.

I think for the
bigger developers
, they have more options than the smaller ones. However, no one can escape from the
current market sentiment
 and everyone who could still afford to buy are somehow not yet buying. For those who stretched themselves too thin, their loans are rejected. That’s why when there are any projects launched for which the price is deemed to be extremely attractive, it would get huge response. Economy wise, we are not in a crisis but the mind is currently doing lots of analysis. Let’s keep looking externally for more positive signs. Happy looking.

written on 17 June2016

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After 4 years of BULL, this year is BEAR (for how long?)

Affin Investment Bank Bhd said that Malaysia’s property market is heading towards a cyclical slowdown after 4 years of property bull cycle. It expects developers to have lower take up rates and weaker margins due to the higher competition as well as tough government property cooling measures. Some of the measures implemented by the developers to mitigate the slowdown include launching new projects across different property hotspots to diversify geographical risk and tap into a new pool of buyers.

Nevertheless, Affin Research expects developers’ earnings for 2014 and 2015 to be resilient due to high unbilled sales from previously. For the six developers under their coverage, they expected them to achieve 15% earnings growth in 2014 and going down to a growth of just 5% in 2015, driven especially by overseas earnings from heavyweights like IOI Properties and SP Setia.

Well, this is indeed a positive news amidst all the negative news from some agents who said that the secondary market is still not going up despite some expectations that demand would move over to the secondary market after the primary market has slowed down. I think this may still be due to the pessimism on the actual direction that the property market is actually heading. Once this clears up, we may see some cheers in the secondary market.

written on 26 March 2014

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AFTER general election, the property market transactions to increase

We should always leave the predictions to property experts. So, who are the experts? Actually, most of us are property experts in our small way, especially those who stay in some not so popular areas. Haha. You would know exactly about new shop openings in your area. In fact when McDonald’s and a new bank branch opens, it will tell you that the population for the neighbourhood has grown to a good number. By the way, when many shops start to open one after another every few weeks or even months, you have bought at a really good potential area. Hold on to your unit and enjoy… By the way, when you see shops closing one after another and even the local bank branch is closing, it may also mean that they are not having sufficient support from the local population. May not be positive. 🙂  Oh yeah, coming back to our topic for the day; general election and the property market.

Reported in
TheMalaysianReserve, Property consultancy firm
Savills (M) Sdn Bhd

executive chairman Datuk Christopher Boyd said,
“We have seen a lack of confidence in the market. I think there is an issue of affordability in the residential market, which has been overplayed.
I feel very sure that once the general election is over, whatever the outcome would be, there will be increase in demand for the overall property market.”  (Positive statement)
Boyd went on to share that even when the market starts to pick up, the current excess unsold units in the market would prevent prices from suddenly explode. He said that developers would have to clear quite a number of units before any major price corrections could take place.

In the same article in TMR,
Axis Real Estate Investment Trust Managers Bhd head of investment Siva Shanker says something similar. He said,
“Everything is on track, but it looks a little bit quiet now because everyone is worried about the election.
Barring something really unfortunate, I think as soon as the election is over, the economy will kick-start and the sector will move along nicely. So, 2018 should see the start of a small recovery in the property sector.”  In terms of the future for the office market, Boyd shared that the demand for co-working spaces would mean a reposition of the supply and demand in the market. He said,
“As time passes, co-working spaces will definitely spread out to the suburban areas, satellite offices, as well as other cities such as Penang, Johor Baru and Kuantan driven by the flexibility and lifestyle amenities, which would meet the youths’ current wants and needs.”
Full article here for reference.

I also think the
property transactions should normalise
 (means growing slowly again) after the general election. Yes, just an hour ago, a friend said he is sure it will be end April 2018 or latest first week of May. I love his confidence. These few weeks, the actions from potential buyers have really reduced in intensity. In one bank property auction just last week, instead of the usual 20-30 bidders / guests like usual there were just 6 people in the auction hall. Actually, this may present an
opportunity to all potential bidders in property

auctions because every property may have just one bidder! So, one may get to buy the property at the reserve price which sometimes may already be 20 percent below market. Happy anticipating the actual election date announcement yeah. Yes, should be pretty soon.

written on 27 March 2018

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Age-friendly city for the children and in future for the elderly too.

I was looking through some articles and found this term ‘age-friendly’ city. We have heard of Most Liveable and Best Retirement cities but age-friendly is the first time I have seen such as word.
Article in Edgeprop.my here: Malaysia plans age-friendly cities
The Women, Family and Community Development Ministry together with UN Development Programme is planning an age-friendly city to encourage more public transportation to be more child-, elderly- and disabled-friendly. Its minister Dr Wan Azizah said, “This concept envisions a town or community where the voice, needs, interests and rights of a child will be of the utmost priority in developing policies and programmes at the local government level. Our cities have to be age-, child- and gender-friendly as we prepare ourselves for this change in social profile.”

She added that 77% of Malaysia’s population currently resides in urban areas and it’s expected to rise to 80% by 2030, meaning challenges such as traffic congestion, pollution and limited water resources would increase. Due to this it is important to have efficient management, partnerships, transparency and accountability so that a city will become more attractive in attracting investments, leading to a healthy economic growth. Liveability was also a core component of competitiveness. Therefore, cities must have basic facilities and amenities, infrastructure, public transportation, secure neighbourhoods and a clean environment.
Article in Edgeprop.my here: Malaysia plans age-friendly cities

When we look at the demographics of Malaysia, we could see that the lower portion is much larger than the top. Image on the left. In other words, the focus on cities become age-friendly may be pretty accurate. What’s very important in my opinion is to ensure the connectivity within the city as the size of cities will continue to grow wider and further with expansion in people due to continuous urbanisation. The best part of age-friendly city is this: When we can let a child get from home to school quickly, safely and cheaply. Kids should be allowed to become more independent. I hope I have some supporters in my personal opinion on ‘age-friendly’ city. By the way, when Malaysia becomes an
ageing nation by 2040,
 the elderly should also have access to the same. Please do not ask them to return to stay in small towns or villages. Let them be part of a growing and vibrant community too, if they choose to.

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

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Why a declining population will be scary? Starts with ageing nation.

One of the earliest sign of a declining population is when the nation becomes an ageing nation. World Health Organisation (WHO) is making 2021 – 2030 the Decade of Healthy Ageing. When it concerns even the WHO, we get an idea how serious the situation has become. Anyway, let’s look at all these issues and why a declining population may be scary.

Photo by Aleksandar Pasaric on
Pexels.com

What is Healthy Ageing?

If we are between the age of 56 to 65 this year, then the World Health Organisation (WHO) has something planned for you yeah.  “The United Nations has proclaimed 2021–2030 the Decade of Healthy Ageing, with WHO leading international action to improve the lives of older people, their families and communities.” Click here for that declaration and what it meant for the ageing population. In fact WHO is really concerned for this group especially with the current COVID-19 pandemic.

What is an ageing nation?

An ageing nation is when 7% of its population are 64 years old and above. Malaysia may soon enter the ageing nation status by 2030 and this meant we are joining an ever bigger group nf ageing nations. Definition wise, ageing nation is just the beginning. Moving on, an Aged Nation would be when the nation has 15% of its population at 64 years old and above. Singapore is one such example of an aged nation. Meanwhile a Super Aged nation is when 20% of its population is above 64 years old. Japan and Germany are two such nations.

How does a country become an ageing nation?

This happens when the number of new babies is below 2.2 per couple. Imagine a couple with just one baby. When this couple both reach 65 years old, the nation would have two persons at 65 years old and just one person perhaps in 40s… Reversing this is likely to be tough because if we have a much smaller number of younger population paying taxes to support the much larger group of older and less productive population. When they are more stressed, having more babies is not usually within the topmost priority…

What does it mean for the nation?

Declining population means a declining workforce. This will start to drain more of the government’s resources and that meant that it’s going to be ever harder for the government to care for the huge population of the elderly. Just look at what happened to the pension scheme in Greece and we would understand the implication. Governments may want to do more but it’s highly unlikely that it will ever be enough.

Why is a declining population a scary thought?

This is what’s happening to the Japan population. From wikipedia:
Japan’s population
 began to
decline
 in 2011. In 2014,
Japan’s population
 was estimated at 127 million; this figure is expected to shrink to 107 million (16%) by 2040 and to 97 million (24%) by 2050 should the current demographic trend continue.
Full article here in wikipedia here.
 Briefly, it is a scary thought yeah. Imagine all those homes which were built to house a much bigger population and it’s now EMPTY….

“There are also approximately 3.5 million unoccupied residences – more than the
entire housing stock of Hong Kong
 Full article here in South China Morning Post.
“
 Imagine that housing area we stay in with 50 percent empty homes… In Japan, there are even villages where most of the homes are now empty. This is why when the population is declining, it will soon look scary when it comes to properties or homes.

What about Malaysia then
?
Are we becoming an ageing nation soon?

Malaysia is projected to become an ageing nation by 2030. Not too faraway in the future actually. If you would also like to know where the top 20 nations where the population is dropping the most, please read a
Business Insider article here. Japan is nowhere near the top in rankings.
Will keep updating everyone yeah. If you find this interesting, please feel free to share too yeah.

Till the next update.

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The ageing Singaporean population equation and Iskandar

Many countries, especially the more developed ones are facing an ageing population. Thus, many are trying their best to attract talents from overseas. One country which is certainly extremely aggressive in attracting overseas talents is our neighbour, Singapore. Honestly, if they do not succeed in attracting more new talents, it may face a bleak future. According to an article by Ryan Khoo in The Edge Property dated 22 December, the old age support ratio (OASR) was 6:1 in 2014. This meant that there are 6 working adults for every retiree. Well, within 14 years plus, by 2030, this would fall to just 2:1 If this happens, the pressure on the government is going to be huge! Statistically, every 3 persons whom you meet in Singapore by 2030, one is a retiree!

Of course Malaysia is not too far away in terms of an ageing population. Read here:
2015: Fertility rate dropped to 1.9 for Malaysia

It was mentioned in the article that by 2030, there would be a total of at least 900,000 residents aged 65 or higher. I hope these senior citizens get to enjoy their life and not continue to work in the food courts as dish-washers as what I could see every time I am in Singapore. One thing which the proactive Singaporean government is focusing on is to increase the population from current 5.4 million to 6.9 million by 2030. Most of these would have to come via immigration. These new population would be increasing the pressure for housing. HDBs are controlled by the government and yet the prices of the secondary ones are already considered high today.

Throwing in another 1.5 million new population and a ratio of 1 HDB flat to 3 meant that another 500,000 units are needed. Well, total units to be launched by HDB in 2016 is 18,000 units as per reported recently. Assuming a 20,000 units per year meant that within the next 14 years, the HDB would only be building 280,000 units. Yes, majority of these talents may just come from Malaysia and in this case may choose to work in Singapore but stay in JB. Thus, not as many units are needed, perhaps. However, IF these HDB units are really in shortage and housing must be found, the only choice would be Iskandar. This does not mean that the property prices in Iskandar would hit the moon. It meant however that the total number of units being built that everyone is saying as way too many may just be sufficient if nothing huge happens in Iskandar from now till 2030.

To know what will happen actually, I would have to wait another 14 years. To take advantage of what may happen? If you are a Malaysian working in Singapore today, it may be best to buy a unit in JB instead of renting a room in Singapore. To ignore whatever is happening and focus on saving more S$ and buy somewhere else in Malaysia to retire in future? That’s a good plan too. Just make sure you really save instead of using the stronger currency to go for Happy Hours in Singapore or even movie tickets every week. You see just one pint of beer and a movie ticket per week would meant that we have spent S$30 and one year, that’s RM5,000 per year! (conservatively, without including on and off two pints or two movie tickets since your girlfriend may be watching with you….)  Happy working, saving and investing. It’s our future.

written on 10 Jan 2016

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Sad tale or a potential happening in future?

When we were young, our parents look after us. When they are old, should we not look after them? For some Singaporean, it’s a yes and no. Yes, the young would take care of the old by paying for their stay in nursing homes in Johor Bahru. Yes, they would visit their old folks a few times in a year. Yes, they would pay for their stay there. No, it is not possible for the old folks to be in Singapore because the cost to take care of them in Singaporean facilities are too high. Staying at home with a maid may also be too expensive and their HDB flat may not be big enough. One maid may also not be enough for their parents and it’s impossible to have up to three maids for their parents and kid. In case everyone wonder what happened to the S$ which is so many times bigger than Ringgit, well, truth is, when you earn and spend in the same country, it may not necessarily be sufficient.

The fortunate thing is, Johor Bahru presents an opportunity for a win-win situation. Instead of everyone in the whole family suffering from the high costs and reduced lifestyle just to be able to cater to the old, the young and income earners, the nursing home in Johor Bahru has lessened their burden. Some of these nursing homes have up to 40% Singaporeans! Of course, these nursing homes are not the dark, paint peeling ones. These are proper ones with some offering even own private rooms, shower facilities and gardens for them to take a stroll in, safely.

Many of these old folks home are also run by Singaporean companies. One example, Econ Healthcare Group runs eight nursing homes in Johor Bahru. Some other may be jointly owned by both Singaporean-Malaysian owners such as Spring Valley Homecare. This is said to be the largest nursing home operator and operates 210 beds. It is expanding with a purchase of a 8,000sq ft piece of land in Johor Bahru recently. Frankie Ker, director of Spring Valley said, “If you are poor, the Government will look after you. If you are rich, you can afford three maids to look after you 24 hours. If you’re middle-class, it’s tough” Of course, this is also true for Malaysians. The only difference is that perhaps we have a hometown to go home to which may be cheaper than if we were to continue staying in cities.

There may be a day in the future that we may also have to consider such situations here in Malaysia. Before that day comes, financial planning and investment must quickly be followed through seriously.

written on 16 Mar 2015

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Vote for your favourite. Agents Advertising Awards 2017.

I am someone who engages a real estate negotiator every time I needed to rent out my condo or sell a property. My reasoning is clear. I needed professional help and I do not wish to waste my time, effort just because I wanted to save a bit more. I also like it when my negotiator is able to provide to me some professional advice of what are my best options. By helping me get the best deal, they would enjoy repeat businesses from me and even my referrals. I also think the difference between a really good real estate agency versus a not-so-good one would be their professionalism in whatever they do. Do they train their negotiators well? Do they provide mentoring so that their negotiators are motivated and perform better? Do they look at this as a long-term business instead of a hit-and-run? Let’s celebrate those who have done really well by providing them with our support. Vote for them in
iProperty.com’s Agents Advertising Awards 2017
. Details as below:

A brief overview of the Agents Advertising Awards 2017:

The iProperty.com Malaysia Agents Advertising Awards (AAA) 2017 is the most outstanding real estate awards for property agents and agencies. The much-anticipated event has 14 categories this year with the award categories divided into three areas – real estate agencies and individual professionals representing residential and/or commercial properties. Various award categories are judged by a team of highly experienced professionals who cover a whole range of property disciplines as well as consumer votes.

Winning the
iProperty.com AAA 2017
 resembles a highly valuable endorsement for agencies and/or individuals. Winners will receive critical acclaim, greater online exposure, media coverage and recognition by real estate professionals for their achievement, leadership and innovation. Such recognition increases their status and brand awareness, creating further valuable market differentiation among consumers and members of the industry.

Vote and Win Attractive Prizes Worth Over RM30,000 for the iProperty.com Malaysia Agents Advertising Awards 2017!

The iProperty.com Malaysia’s highly coveted Agents Advertising Awards is back for the third consecutive year. The awards reward the best advertising practices and outstanding performances by agencies and professionals within the real estate industry.

This year, there are 5 award categories which are:

Agency Categories:

Agency of the Year – Titanium/Platinum/Gold

Exemplary Agency Culture

Individual Categories:

Breakthrough Agent / Negotiator of the Year (Residential/Commercial)

Star Agent / Negotiator of the Year – Area (Residential/Commecial)

The Extra Mile

Winners of these 5 award categories will be partly determined by consumers’ votes.

By voting for your preferred agents and agencies, consumers will stand a chance to win attractive prizes worth over RM30,000!

Prizes:

1) 2x 2 Day 1 Night Stay at Hilton KL for 2 Persons worth RM800 each

2) 300x Grab Promo Codes

3) 10x GINTELL G-Beetle foot massager

4) 10x GINTELL G-Mobile EZ Portable Massage Cushion

5) 1x 26,000 AirAsiaBIG Points

6) 1x Sharp 32” LED TV

7) 2x Apple iPod Touch 16GB

8) 1x Samsung Galaxy Tab A 8.0″ 4G LTE 16GB

and many more!

How to Vote:

Step 1 – Go to
https://www.iproperty.com.my/AgentsAwards

Step 2 – Go to the Vote Now tab
https://www.iproperty.com.my/AgentsAwards/vote-now

Step 3 – Fill and Submit Your Details

Step 4 – Start Voting

Step 5 – Review and submit your votes.

The voting period ends at 11.59pm on 30th June 2017. Winners of the campaign will be announced on iProperty.com Malaysia’s social media channels –
Facebook
,
Google+,

Twitter
 &
Instagram
 by early August 2017. Do stay tuned for the announcement.

Start voting now! –
https://www.iproperty.com.my/AgentsAwards/vote-now

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Huge developer, big intention, starting with Mont Kiara.

When the Chinese (China) developers descended upon Iskandar some time back, it awed many. A launching of a few thousand units was unheard of until Country Garden started it. Remember? Read here:
Testing water with 9,000 units? No Malaysian developers can do that, yet.

Malaysia is fast becoming a new ‘playground’ for them. Perhaps due to the need to diversify their risk or even due to the slowing growth at home but I think major reason is also because Malaysia’s property market has reached a stage which is attracting world attention.

Latest one to announce their intention to be a leading developer in Malaysia within 5 years is Agile Real Estate Development (M) Sdn Bhd, wholly owned by Agile Property Holdings Limited (3383:HKSE). This is another giant where property development is concerned. It has a track record of over 90 projects and more than 600,000 houses built and managed in various districts of Mainland China. It’s first project is Agile Mont Kiara, scheduled for launch in Q3 2015. Yes, July is already the beginning of Q3 2015. 🙂  Agile Real Estate Development (M) Sdn Bhd’s Chief Executive Office (CEO) Wilson Ren said, “We are very excited to be a part of the Malaysian property landscape as there is huge potential here. Stability in various key aspects such as politics, economy, environment, social security, market and price points – especially here in KL, make Malaysia a new frontier for property development in Asia”

The current two developments that they are planning include one in Mont Kiara and another in Bukit Bintang and within 6 years, total number of jobs which it will create is expected to be 1,000 or higher. I personally believe that these new foreign developers show that the Malaysian property market has reached a new level of sophistication. Just less than 10 years ago, there were not many mention of Malaysian property market on the world stage but fast forward to 2015, the number of foreign developers showed that the interest is now much higher. The traditionally popular property markets such as those of London, Australia, Hong Kong and Singapore remain strong even if there are hiccups and worry about sustainability. Newer markets are also opening up with the relaxation of foreign property ownerships in Thailand, Vietnam and Indonesia. This meant that the focus has now reached the region and no longer just Malaysia or earlier, Singapore.

If we look at this on a big picture basis, it’s clear that if we are thinking about investment, property must occupy an important spot. No, I am not talking about buying those super expensive ones and wait for foreigners to buy from us. I am talking about the continuous growth of the property market and it’s best to have something to our name instead of blaming the world for the price increase which will continue to happen unless Malaysia stops all and goes back into a cocoon. Affordability today may refer to RM400,000 and below but a few years down the road, the affordability ceiling is unlikely to be going down. Just bear that in mind. In the mean time, get ready for even more Chinese developers from China coming into Klang Valley instead of just Iskandar. Take a look at one of their project in Guangzhou, China. (Image above)

written on 6 July 2015

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AIIB: US$10 bil – US$15 bil lending per year.

I hope you read my earlier article about Asian Infrastructure Investment Bank (AIIB) which is supposed to be as big as Asian Development Bank and is objected by the largest economy of the world as potentially not being managed as professionally as some of the western based financial institutions. Read here:
AIIB: Great initiative and poised to ‘grow’ infrastructure ASIA

Perhaps a much better question to ask would be how AIIB would benefit ASIA. Well, first of all, this IS an ASIAN initiative led by China which has the largest foreign reserves in the world. In fact, China’s renminbi has also been announced as another world reserve currency too. Read here:
China’s renminbi is now IMF’s reserve currency

Technically, renminbi is on par as US$ or Yen or Euro where IMF is concerned.

Well, as per a few articles online past few days, the president-elect of AIIB, Jin Liqun said that he expects the bank to start operations in second quarter of 2016 and it will lend between US$10bil-US$15bil (RM42.3bil-RM63.5bil) a year for the first five or six years. The US$ will be the operatin currency of the bank but IF there are requests from the borrower countries, it will consider other currencies including the Chinese Yuan. (renminbi) Jin said AIIB is also talking to other instituions including the World Bank and the Asian Development Bank, on co-financing. This would allow it to quickly start. Another 30 countries are waiting in line for membership which meant the total capital would be increased further.

The speed in which AIIB was set up is unprecedented. It was only proposed by China’s President Xi Jinping less than two years ago. Yes, there were many murmurs and even a strong opposition from the US but when membership started, nearly ALL of the usual US supporters including Australia, Britain, German, Italy, the Philippines and South Korea joined. Nowadays the argument is that AIIB is a tool of Beijing to increase its influence. I think this argument is flawed because I am not too sure if countries like Australia, Britain or Germany likes to be ‘controlled’ by China? Get real, these are still western developed economies and none would be too happy to be dominated by any ASIAN country, even if it’s China. Happy reading and following AIIB’s progress.

written on 2 Dec 2015

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AIIB: Great initiative and poised to ‘grow’ infrastructure ASIA

This is an initiative I love and support a lot. The Asian Infrastructure Investment Bank with an authorised capital of US$100 billion is progressing well. 57 prospective founding members are expected to sign the Articles of Agreement for the formation of AIIB by year end. Malaysia is one of the member nations and it includes even the staunchest US supporter, Britain and Australia. The speed which this has moved is unprecented. Mooted by China’s President Xi Jin Ping just last October, it will be a real entity by 2015. Now we see the real meaning of, when there’s a will, there’s a way. “When there’s no will, everything stays still.”

I think ASIA should be the new attention for the world. Southeast Asia (SEA) may need a more formal grouping but I guess being grouped within ASIA is okay, still. On the other side, Europe remains in one piece even with the current Greece default but is no longer growing very fast. The US economy kept having continuous positive and negative signs on a monthly basis and the likelihood for interest rates to rise continue to be pushed back. For a region which is still growing feverishly, infrastructure is a key element. Domestic banks may not be enough to support such growth. AIIB is a bank by mostly ASIAN nations for ASIA.

Current world lenders include International Monetary Fund (IMF), World Bank and ADB (Asian Development Bank). One controlled by the US, one by Europe and another by Japan, which is a very strong US ally due to historical and defence reasons. The US is not a member and is not likely to be a member as it opposes the AIIB. It has also tried to pressure its allies not to join but guess what, both Britain and Australia have joined. Maybe because both economies know that the world growth would come from this part of the world and it’s great to be part of the positive story. Kudos AIIB and welcome to the world stage.

written on 3 July 2015

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US$100 Billion new Asian Infrastructure Investment Bank

I wrote about this a few weeks back. I like this new initiative from the second largest economy in the world as well as the country with the highest level of currency reserves in the world, China. Read here:
Asian Infrastructure Investment Bank
: (AIIB) Sorry, I do not like just a few of these ‘last resort’ institutions such as IMF or World Bank or to a smaller extent, the Asian Development Bank. Actually, all these institutions are controlled by just a few countries and it’s sad when a country has to ask for help. The conditions are likely to be very harsh BUT the same conditions may not be applicable for the countries which are controlling them.

This new initiative would have up to US$100 billion in funds. Most of it to be contributed by China. It will assist in funding projects throughout ASIA. Note: ASIA. Instead of being just a purely development institution, it will function more like a commercial bank instead. In other words, to benefit the member countries. Member countries contribute their share based on the size of their economy. One major surprise was Australia applying to be a member despite United States against it. Of course other major and developed countries potentially joining include the UK, Germany, Italy and France. That ‘order’ may have been broken for this to happen and it is a good thing to see that countries can be objective enough when it comes to potentially benefitting from AIIB as there are lots of projects within Asia which is in dire need of funding but Asian Development Bank just could not lend enough.

Countries within the AIIB? 21 Asian nations, including China. Another 21 other countries have also applied to join. Russia has applied too. Nevertheless, according to Chinese media, not all of these applications may be approved. Currently, it is just 30 out of 42. Founding members include: China, Bangladesh, Brunei, Cambodia, India, Indonesia, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Qatar, Singapore, Sri Lanka, Tajikistan, Thailand, Uzbekistan, Vietnam. A few nations are not part of AIIB currently. They include The United States, Japan and Canada. US said, AIIB may not have sufficient transparency and governance standards. I am very sure they have done their homework to say this.

In IMF or World Bank, despite US not having majority votes but it wields enormous ‘persuasive’ power. Of course the rest of the institutions need not worry. AIIB is still much smaller than the European Development Bank, the World Bank and even the Asian Development Bank.

Personally, I support any initiative which can help ASIA to really move forward. I seriously think AIIB will help to fasten the whole process, especially where infrastructure is concerned. Come on, every region in the world has their economic groupings for the longest of times. There’s nothing wrong to have another vehicle which is well supported by a country which should be the largest economy in the future.

written on 3 Apr 2015

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Malaysia subscribing up to US$109.5 million in AIIB

I like the
Asian Infrastructure Investment Bank (AIIB)
 which is definitely more ASIA centric. In fact due to its potential, many countries who signed up to be founding members are not even ASIAN nations. There are a total of 56 founding members. Yes, this is definitely a wow, right. Here’s some of them: China, India, Malaysia, Indonesia, Singapore, Saudi Arabia, Brunei, Myanmar, the Philippines, Pakistan, Britain, Australia, Brazil, France, Germany and Spain. With this list plus China, I think it’s best countries which are outside try to be a member. Nothing wrong to have access to more infrastructure funds for the country, really.

ASIA is where the growth would be. Hey, I am also in Asia. Just a small report in Bernama but I think it’s worth noting this down so that I have some reference points in future. Second Finance Minister, Datuk Johari Abdul Ghani is tabling a Bill in the parliament which will enable Malaysia to submit the ratification instruments and then to pay the subscription which was a precondition to become a full AIIB member. He said, “Malaysia has expressed its commitment to subscribe for a total of 1,095 units worth US$109.5mil (RM459.6mil). Malaysia will pay US$21.9mil, or 20% of the stake, in five installments over a period of five years.”

Also related to AIIB news which was reported by many other medias is that our
Former Bank Negara Malaysia (BNM) governor Zeti Akhtar Aziz
 has been appointed as a member of the Asian Infrastructure Investment Bank (AIIB)’s international advisory panel. She was ranked the world’s best central bank chief in 2009 by Global Finance magazine. She retired just a few months ago, in April after leading BNM for 16 years. Zeti would be joining 10 other key personal on the advisory panel including former prime minister of Pakistan Shaukat Aziz, former finance minister of Sweden Anders Borg, former prime minister of Japan Yukio Hatoyama as well as secretary-general of the Global Foundation Steve Howard. Happy joining AIIB Malaysia.

written on 20th Oct 2016

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Frankly, are we aiming to own only one property? (TODAY?)

How many of us here believe we just need to own one property on the day we retire? There’s nothing wrong with this thought! 🙂  The reason is because there would always be many who may not own a property or
thinks owning a property is far more expensive than renting forever.

Let’s be objective, even in advanced nations and advanced property markets, not everyone owns a property. So, here in not-so-advanced Malaysia which some say about to go bankrupt, should we even think of owning more than one property? Well, if we truly believe the country is going bankrupt, then better not buy lah. Keep the money in the bank. Anyway, for those who think otherwise, perhaps that first one can be an affordable one from either the state, federal or even the secondary market?
Since the secondary market is often overlooked?

Let me share a potentially common story yeah. The life from Single (easy life) – Couple (Future planning)  – Kids (Responsibility) – Retire (ENJOY).  We could have been single and needs just a room. Well, renting one is fine! When we get married, usually the in-laws would tell us to at least get a small unit somewhere. This is positive pressure actually! So, we started with a small unit, perhaps an apartment. Then comes the good news, we are going to have our very first baby!

Okay, perhaps that unit is still okay but what if

both the husband and wife could afford a bigger

and better unit? It’s upgrade time. Then, one day the husband came across one integrated development which happens to also be a Transit Oriented Development and the MRT station actually stops right in front of his office! The wife saw the project and loved it. So, they bought it. Oh yeah, what happened to the earlier properties? Well, it could have been rented out since there are so many people looking to rent… right?  Fast-forward to the future.

The couple has retired, their kids are already working. They do not actually need such a huge home anymore. Perhaps they want to move
i
nto some developments for retirees instead.

Perhaps even staying with their kids? Yes, all the homes they have owned earlier could even be sold and the money channeled into their retirement funds. By the way, Malaysians are expected to live to a median age of around 75 currently. If we retired at 55, that’s an additional 20 more years to go. The question is, do we want to also spend some of those retirement funds at that time for travelling the world or do we aspire to start our day at the coffee shop nearby and then watch TV at home until lunch time, take a nap after lunch, then go out for a short-walk in the nearby garden, followed by dinner and then watch tv. Sleep and repeat?

Haha. Frankly, even if we have just 3 properties and all three are just RM400,000 each (very conservative at that time), that’s still RM1,200,000 by the time we retire. Assuming we sell it off and do not need to provide much for our kids, we have a monthly ‘income’ of RM4,000 just from the fixed deposit based on 4 percent. Alternatively, selling just one would give us RM400,000 to spend. It’s already the time to enjoy. We have worked so hard for so long, why still want to worry about the 20 sen increase in the cup of coffee at the time? By the way, we deserve to treat ourselves better yeah.

Yes, it’s definitely possible to just work, save, work, save and invest in somewhere else but if we work, buy, work, buy then we should have rich parents yeah. Sometimes, when we think back, many Malaysians really do have richer parents today. Weekly allowances are much easier to obtain and somehow, the parents do not even know what the money was spent on! For those who are reading this until this point, I think the answer is clear. Let’s not aim to own just one property until the day we retire. Reminder, property is not the only investment we can make yeah. Cheers.

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written on 18 April 2018

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Stretch your financial capability for a home sweet home slightly farther away

562 acres for an integrated development is considered an extremely big one. After conversion it’s 24,480,720 sq ft. The development we are about to take a closer look is not within Kuala Lumpur city. It is a carefully designed neighbourhood with the concept of a gated community development. This makes up
Bandar Ainsdale
providing a variety of quality home choices to most middle-income households. Using Google Map, it’s either 43 minutes away from KLCC by driving or 60km in distance. I do not normally use toll booth to toll booth distance because I feel it’s still not conservative enough. Thus, I use KLCC as an end destination to measure the distance and the driving duration for any area that I would be considering to buy.

If we have just started working for a few years within Kuala Lumpur, we should have noted some recent land deals for small plots of lands nearby or within hotspots within Kuala Lumpur. The numbers show that the prices for these are reaching the clouds. Soon, it may reach the stars. Due to these prices, the number of units (density) has to be increased and the prices elevated to levels out of reach of the majority. Some articles would point out that only the ‘elites’ would be able to afford them.

Some would then point out that prices in further areas are still ‘manageable.’ Well, the only issue with these ‘manageable’ prices would be that it is still not within the reach of the majority, especially those with a family and needs much more than just a small roof over their heads. They need space which is an expensive luxury within the KL city itself. A newly married couple needing more than just an apartment bigger than the usual 800 sq ft would find it tough to get a unit within the typical affordability. The latest average price for properties in
Kuala Lumpur is RM714,000 (NAPIC data Q1 2015)

Bandar Ainsdale
 and is built by a prominent developer,
Sime Darby Property
.
 It’s a mixed development offering a mix of residential homes and shop offices to suit the needs of mass communities. It includes
2-storey link homes, apartments and an array of shop offices
.
It comes complete with a world of amenities, all set within nature’s embrace. Briefly, it meant that this is like a small town within our very own development.

All the homes would come pre-equipped with high-speed broadband services with speeds up to 22MBps. It is activated ONLY on the day you move in and it will be free for the first two years. When we do a calculation, this is considered huge savings, especially for the middle-income households who must ensure they can get more services with less money.

Within
Bandar Ainsdale
, there would be a lush green park surrounding a massive 7-acre lake. I certainly hope that in the future, perhaps an annual fishing contest could be held there. It is accessible directly from the North-South Expressway via the Bandar Ainsdale Interchange. Besides driving, there is also a future transportation hub just 1km away. It will have a new KTM Komuter station. Time to know more? Visit
here

written on 5 May 2016

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Air Asia X. KL – Sydney flights restarting 14th Feb 2022

KL – Sydney flights restarting 14th Feb 2022

What is so significant about this flight restarting? Not about Valentine’s Day lah. Actually it carries a lot of meaning. This is a flight between two countries which are still doing their best to contain the Omicron which has been terrorizing the world for many months. In other words, the direction for both sides is towards normalisation; going back to norm versus full lockdowns as adopted by all countries previously.

Here are the details of the flight frequency and the flight ticket prices.

Article in themalaysianreserve.com
  AirAsia X (AAX) is resuming its commercial service post pandemic between Kuala Lumpur and Sydney from February 14. As a start, there would be flights on Mondays from Kuala Lumpur to Sydney and returning on Tuesdays starting 14 February 2022 to 22 March 2022.

Fares will start from RM1,399 one way all-inclusive* on Economy or guests can choose to experience our Premium Flatbed from RM3,999. From Sydney to Kuala Lumpur, fares start from AUD399 and AUD1,299 one way all-inclusive* respectively. For more details do visit the full article here:
Article in themalaysianreserve.com

What’s next after this?

Would the number of flights be increased a few weeks after restarting? Would it be full in the first flight? Who’s thinking of going on a vacation now? Or perhaps the flights are targeted at people wishing to visit their loved ones instead? All these are just secondary questions in my opinion.

What’s most important is that the air link between two countries is now reestablished and certainly more would follow. Whether it’s going to be Air Asia X or even other airlines too. I do wish we would have more of these announcements in the very near future too. Remember, Omicron is still around but so are the resilience of people. Norm may just be living with Covid-19 cases under control versus zero cases which may not happen. Happy New 2022.

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“I would really like to have an air bubble with Malaysia.” This was mentioned by Singapore’s Transport Minister Ong Ye Kung during an exclusive interview with The Straits Times’ news editor Karamjit Kaur.
Article in nst.com.my
  He also said, “But as of now, the cases in Malaysia are quite high, so I think we will have to wait and see … We do know and our healthcare officials’ assessment is that Malaysia takes the virus control very seriously. So I certainly hope they will succeed in suppressing this current round of spikes. When the time is right, I’m sure I will propose (an air travel bubble) to them.”  Do read the full
Article in nst.com.my

What is an air / travel bubble?

Briefly, air / travel bubble meant that flights can restart within the countries with these air bubble arrangements. If Australia has air bubble with Malaysia, flights between both countries could restart. Of course there will be precautions for COVID-19 but without an air bubble, no one could travel between countries. Countries are wary of the potential for COVID-19 infections to rise if people from high COVID-19 cases countries travel to countries which have gotten COVID-19 under control.

Photo by Andrea Piacquadio on
Pexels.com

What are countries with air bubbles?

Which are the countries which has air bubble with Malaysia? None. Which are countries with travel bubble with Singapore? None signed but has agreed in principle with Hong Kong.  However, Singapore has decided to reopen its border to Australia and China visitors starting from 6th November 2020. There is no need for a 14-day quarantine for these visitors in Singapore but there are other requirements such as a polymerase chain reaction (PCR) test upon arrival at the airport in Singapore and the result has to be negative.
Read more here in businesstimes.com.sg

Why is travelling between countries so important?

In 2019, over 26 million international tourists visited Malaysia. They spent RM86.14 billion in our country.
 Article in thestar.com.my here.
 Without these, our tourism industry is collapsing. Many hotels have closed down. Shopping in malls have reduced. Many employees in tourism may have lost their job. Many could not find a new one within the industry. All these will bring multiplier effects whether negative or positive and this is also one reason why the GDP growth for 2020 will be negative.

Photo by Alexandra Maria on
Pexels.com

Would countries want to have travel bubble with Malaysia?

With new cases still ahead of recovered cases here in Malaysia (though the infectivity rate is on a downtrend and many of these cases are confined), maybe it will need more time for countries to consider and agree to such an arrangement. For now, I think it is best not to travel unnecessarily. Buy what we need from nearby stores and help to stop the spread of more COVID-19 cases, then we have a chance for the travel bubble to happen in the near future. As Singapore Transport Minister Ong Ye Kung said, “When the time is right, I’m sure I will propose (an air travel bubble) to them.”

I miss travelling. I do. Supposed to have been to two places this year with the kids. Probably next year then.

Happy staying safe and watch more travelling videos in the mean time since no travelling could happen currently.
Here is an interesting one. Not so common destination for Malaysians.

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The famous home rental company may build homes too.

When a company achieves a huge scale and needs further growth, they have to somehow find something else to do. Just as McDonald’s is also a super huge toy company, IKEA is super big with its restaurants too. Now we have another potential. AirBnB is already a familiar name to the world for home rental. Most of the time, happy users will tell of how much cheaper the daily rates are when compared to traditional hotel rooms. Now these users may even BUY AirBnB’s future produce. 🙂 AirBnB may now be building homes too. In brief, a DEVELOPER.
Article from Cnet.com here.

Airbnb introduced a new product on Thursday called “Backyard.” The idea is to
provide people with prototypes
 of different styles of pre-fabricated homes. These buildings could be set up in people’s backyards or be freestanding houses, according to
Fast Company
. In their construction, these homes are meant to minimize waste and maximize eco-friendly building. AirBnB co-founder Joe Gebbia said in a statement, “With Backyard, we’re using the same lens through which Airbnb was envisioned — the potential of space — and applying it more broadly to architecture and construction.”  Gebbia also summarised why AirBnB is getting into this new venture. “In order to meet the demands of the future, whether it be climate displacement or rural-urban migration, the home needs to evolve.” He added, “For us, this goes beyond a business opportunity. It’s a social responsibility.”
Article from Cnet.com here.

I think pre-fabricated homes will be the future. It’s also known as Industrialised Building System (IBS). This is where super huge factories build the homes in blocks. Then, it’s transported over to the site and assembled. Construction will take much shorter time and costs are said to be much cheaper. As for the use of manual labour, it will actually be lesser too. Besides, the quality control can probably be better too since it’s now centralised. The construction site would have to supervise on the assembly instead and this is going to be much easier too. Let’s all await what Backyard by AirBnB will be showing the world in the near future. By the way, the target for AirBnB for this is actual homes. They did not mention anything about high-rise yet. Happy following.

written on 30 Nov 2018

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Airbnb Malaysia: Restart your engine and it’s 60 percent millennials. Cool!

It’s not been an easy time for anyone who’s doing short-term rental. Demand does exist but no one could travel for vacation means not many needed accommodation. Thus, it may now be the time that everyone involved in the short-term rental could heave a sigh of relief. More demand will be coming very soon. This is where hosts for Airbnb can ‘restart their engine(s).’

Who do you think are hosts for these Airbnb rooms?

Article in nst.com.my
 Airbnb says that millennials between the ages of 25 and 40 accounted for more than 60 per cent of new hosts in the first half (1H) of 2021. The top five states where these new hosts were based are Selangor, Kuala Lumpur, Johor, Sabah and Penang.

Airbnb Southeast Asia, India, Hong Kong and Taiwan general manager Amanpreet Bajaj said, “2021 has undoubtedly proved challenging as the pandemic continues to impact Malaysian livelihoods, businesses and the broader economy. However, hosting has offered many an additional source of income during a time of financial strain, providing economic empowerment for these new hosts.” Please do refer to the full article here:
Article in nst.com.my

If you are a millennial too, time to join them?

Owning a property for short-term rental can be financially rewarding. Some of these Airbnb operators including a number of my friends (yes, they are millennials) were able to earn double or more of what their typical mortgages per month during good times.

We just need to note that short-term rental does have its risks too. For example, no one could have foreseen the Covid-19 forcing so many countries into extensive lockdowns which lasted for such a long time.

One is able to do some research on popular properties for rental in Airbnb and then proceed to invest into one if you have the means. You may become one of the millennials who are getting good and continuous income too. At present I only have one property under short-term rental. It has been a lot of ‘holding on.’ Let’s hope all will be good soon. Happy thinking about it too yeah.

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