New rules to contain potential property bubble in Penang

The new housing rules caught a lot by surprise. Perhaps even politically motivated. You can also say it stops genuine buyers from selling their home but if you are genuine buyers, why would you buy a medium cost house and try to sell it within 5 years? You suddenly become too rich and needed to upgrade to a bigger property? Let’s assume that some of the buyers really did suddenly become super rich. Should policies be set based on the minority interests then? A responsible state government cares for the long term and not the short term speculation.

In short, if you buy any low cost housing, you need to wait 10 years while medium low cost up to RM400,000 in island and RM250,000 meant that you need to wait 5 years. In terms of actual clamping down on overall price increase though, I think the effect is going to be little. This is because the price increase is a combination of many factors and not just because sellers want to sell high, thus buyers want to buy. It continues to be a demand and supply issue. If the state really does want a more orderly increase of the price over long term, then the affordable housing policy must be done right.

To look at Singapore, ‘just launch more and more of those HDB flats until prices stay the same or go down’. Fortunately for Penang, the state is small and thus would be much easier to control. I hate speculators and I hope more of these measures are implemented to stop as much speculation as possible. Especially for buyers who buy one whole floor or more than one unit. There are NO REASONS to do that beyond speculating. Yes, minority would say they are buying for their whole family. Yeah sure, I repeat, since when policies are done to help you, ‘lying speculators’?

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New group managing director for Sime Darby Property

Press Release by Sime Darby Property

DATO’ AZMIR MERICAN APPOINTED GROUP MANAGING DIRECTOR OF SIME DARBY PROPERTY

ARA DAMANSARA, 28 JANUARY 2020 –
Sime Darby Property Berhad today announced that its Board of Directors has appointed Dato’ Azmir Merican Azmi Merican as the Group Managing Director effective April 22, 2020.

Dato’ Azmir brings a wealth of experience from his background in financial advisory and as a senior business leader. He is currently the Managing Director/Chief Executive Officer of UEM Edgenta Berhad, one of the largest asset management and infrastructure solutions companies in Asia with operations in six countries.

Dato’ Azmir started his career as an investment analyst and later as a manager in the financial & corporate advisory arm of PricewaterhouseCoopers. He subsequently worked with CIMB Investment Bank and thereafter, joined AWC Berhad as its Group Chief Executive/Managing Director.

In 2012, Dato’ Azmir joined the UEM Group as the Group Chief Operating Officer, Business Units, before taking the helm at UEM Edgenta. At UEM Edgenta, Dato’ Azmir led its ongoing transformation into a technology-based company servicing the healthcare, property and infrastructure sectors.

“Dato’ Azmir’s appointment reinforces the Board’s commitment to ensuring Sime Darby Property’s leadership in the industry and towards creating sustainable, long term value for its stakeholders. We would like to welcome Dato’ Azmir to Sime Darby Property and look forward to working closely with him,” said Tan Sri Dr. Zeti Akhtar Aziz, Chairman of Sime Darby Property.

Dato’ Wan Hashimi Albakri will continue in his current role as Acting Group Chief Executive Officer until Dato’ Azmir’s effective appointment date. Subsequently, Dato’ Wan will resume the role of Chief Operating Officer, Township Development.

— end of press release–

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New Startups, here is RM100,000 for you to accelerate your growth. (Plus a mentor too!)

Media Release –
SUNWAY ILABS LAUNCHES NEW SUPER ACCELERATOR PROGRAMME

RM 100,000 in seed funding and assistance in follow-up funding, mentorship and market access assistance, for startups in key verticals include Smart Cities, Edutech, Digital Health, Food and Agritech and eCommerce

Sunway City Kuala Lumpur, 1 July 2020 –
Sunway Innovation Labs (Sunway iLabs) today launched the Super Accelerator programme.  The four-month programme is for early-stage start-ups, aimed at improving their chances to successfully commercialise their products and services in the market.

Supported by Sunway Group, SunSEA Capital and Gobi Partners, a regional Venture Capital firm, the programme will provide the start-ups with capital, mentorship and market access.

Led by Sunway Group chief innovation officer and Sunway iLabs director Matthijs Van Leeuwen, the Super Accelerator programme focuses on delivering value within five key verticals – Smart Cities, Edutech, Digital Health, Food and Agritech and eCommerce.

The programme will provide selected start-ups up to RM 100,000 of seed funding and assist them in getting a follow-up funding after graduation. Embracing and leading the new normal due to Covid-19, the programme will be mostly delivered virtually through iLabs Dojo – a newly developed online learning and training platform.

Interviews, pitching, mentoring and business meetings will be conducted via video conferencing.  Participating start-ups can also look forward to academic support from Sunway University in talent recruitment and research and development opportunities.

“The first month of the accelerator will see us filtering start-ups to find the right fit with our programme,” Van Leeuwen said.

“We will work closely with the founders and help set clear milestones as we are not looking for short-term investments with quick exits, but long-term collaborations with companies keen to grow together with us in our smart cities and ecosystem.”

“Unlike other programmes, we want to emphasise quality rather than quantity, to focus on nurturing start-ups within our areas of expertise, so together we can create robust and scalable businesses,” he added.

Evan Cheah, executive vice president of President’s Office, Sunway Group, said, “As Sunway iLabs is closely connected to the start-up ecosystem around the region, start-ups can gain direct access to our large network of investors, entrepreneurs and industry experts.”

“We have also established Sunway City as a living laboratory, meaning we connect entrepreneurs with decision makers across Sunway’s business divisions, able to help validate their business models and provide growth opportunities within our Sunway ecosystem.

“We believe the smart partnership among Sunway iLabs Accelerator, Sunway Group, SunSEA Capital and Gobi Partners will really benefit start-ups to scale up their businesses,” Cheah added.

In the post-Covid 19 period, according to Gobi Partners chairman and founding partner Thomas Tsao, “Gobi is helping early-stage Malaysian start-ups embrace innovation and compete in this new environment”.

“We look forward to supporting the Sunway iLabs Super Accelerator programme with mentorship and resources for local companies to go global,” Tsao said.

Jamaludin Bujang, Gobi Partners managing director, Malaysia, reckoned “it is important for start-ups to adopt a global mindset when building their businesses and we have the resources to help open doors for companies to enter new markets”.

“Gobi Partners will also support the subsequent financing through the Malaysia SuperSeed Fund II to give select start-ups the necessary funds they need to scale up after the Super Accelerator programme,” Jamaludin added.

More than 25 start-up companies graduated from Sunway iLabs in a previous accelerator batch, including Red Dino, Ezyspark, Jobworks and JomRun.

JomRun has since grown to become the largest running platform in Malaysia, having also expanded regionally into Indonesia, Cambodia and Singapore.

Its founder Chang Yi Hern, a graduate from Oxford University, was recently recognised as one of Malaysia’s top entrepreneurs by Forbes 30 Under 30 Asia in 2020.

Malaysian start-ups with a minimal viable product or market-ready products or services are strongly encouraged to apply for the programme.

— end of press release —

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New taxes to pay debts; small kitten back to Asian tiger?

GST has been zerorized. People seems to be happy and we could see that car sales hit record levels.
Earlier article here.

Some car companies had to work around the clock to fulfill some of these requirements. SST has already started for slightly over one month. Well, there are debts beyond just the difference of collection between these two taxes. Here’s what the government may be planning for the country in the near future. Remember, tax is the only thing that all Malaysians will not be able to escape from. Some are NOT paying their PTPTN loans but no one can refuse to pay taxes yeah.

Our Prime Minister Tun Dr Mahathir Mohamad said that the government will have to devise new taxes to pay off its debts. The reason for this is because the previous administration left many problems that have turned Malaysia from an Asian tiger into a small kitten. Another way out if not taxes would be to sell some of the government’s land to locals in order to raise new sources of funds. He said one one major problem which the government was currently facing was in finding the money needed to pay off the huge debts left behind by the previous administration. Some suggested new introduction of new taxes but he said this will not be popular.

Some assets that the government could consider selling would be land. He said that the previous government sold a lot of land to foreigners and he says the current government would not be doing the same. He said, “I don’t think that would be good for us, but we can still sell land to locals so that they can develop the housing projects and settlements that they believe will give them returns.” Beyond just land, the government may also sell some of its other valuable assets but he did not elaborate further on what are those. He was speaking in an event called ‘Malaysia: A New Dawn’ which was jointly organised by Malayan Banking Bhd, CIMB Group Holdings Bhd and RHB Banking Group. He said, “It is hoped that with forums like this, people can give ideas to the government and that the government can implement some of those ideas. I am sure that this country will again grow to become yet another tiger.”
The article in TheStar.com.my here.
 Happy following the news about taxes in Malaysia.

written on 9th Oct 2018

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Here’s why new townships represent super opportunities – A.H.A!

It’s easy to get carried away with the suggestion that properties are now way too expensive for Malaysians. No one could blame this thought because everyone would usually confine their property thoughts to just the few usual choices; hotspots within Kuala Lumpur for example. When informed about some further away choices, the reply is usually, ‘It’s too far.” When asked when would they buy a property within the hotspot they like, their reply is usually, “It’s too expensive.” Last but not least, if asked on what do they think about an upcoming well-planned township, their answer is, “It will take many more years. I can always buy later…” Well, let’s talk about why
new townships represent the A.H.A opportunities
.

Affordability
 – What’s affordable? It depends on the location and the type of property we are looking at as well as the household income today. If we try to equate this to any mature neighbourhoods, RM700,000 or even higher will usually be a high-rise of lower than 1,000 sq ft. These mature neighbourhoods or also known as hotspots would usually be RM700 per sq ft or usually, higher. The reason is because everyone wants to stay there, thus demand (current) is bigger than supply (new). There are not many empty pieces of land left within a mature neighbourhood. If there are, it’s going to be built as high as possible and priced at a level enough for the developer to make a decent profit.

How about if we think about a
LANDED property instead then?

Fortunately for us, we still could. Greater Kuala Lumpur is also connected to Malaysia Vision Valley and is also connected to KLIA Aeropolis. With the continuous economic growth as well as growing household incomes, the affordability will continue to change and that will continue to drive the property market. It’s about evaluation of the choices we did not yet think about yet.

Home
 sweet home is not about buying the most expensive home we could afford with our salary. It is about living comfortably and enjoying instead of worrying about the monthly mortgage every end of the month! For someone with a wife and two kids like me, I have accepted the fact that if someone in the family has to change his lifestyle so that all the others could enjoy, the person has to be me. I could wake up earlier everyday to drive to work but at the same time, I hope my wife could send my kids to the nursery nearby, drop by the nearby supermarket for some groceries and after picking up my kids in the late afternoon, all of them could go to the nearby park. My wife can chit-chat with some neighbours and my kids could run around (INSTEAD of looking at the smartphone screen the whole day if they have nowhere to burn their energy) Fortunately for Malaysia, the term ‘Home’ means a lot of choices currently. Expand our search and expand our available choices.
Perhaps Bandar Sri Sendayan can be one of those choices.

Appreciation –
 We could look at buying an affordable home (based on our income) and make it into one home sweet home but the reality is that we may NOT be staying in that home sweet home until we retire. One day, many years down the road, when our incomes have risen to a new level and we are thinking of an upgrade, it’s important to be able to sell our current home to another someone who will be able to enjoy it as their home sweet home. The property prices in Malaysia has been rising by an average of 6.75 percent for the periods from 1990 – 2016. If we take a conservative 4 percent price growth per year, a RM500,000 home today would still become RM608,000 at the end of 5 years. This appreciation is pretty good because how else would be able to save over RM100,000 in 5 years while still having a home sweet home to stay in? Additionally, the savings we get from just RM2k rental per month for 5 years is RM120,000!

I firmly believe that new townships, especially the well planned ones will provide this A.H.A opportunity. The only thing we need to remember is that even the prices of all these new townships will continue to rise over time. Just look at the prices 10 years ago, 5 years ago and today. It’s not rising too fast to become speculative but the continuous rise is a very good sign that demand is growing slowly and the buyers are usually families instead of speculatively. Happy evaluating.

Perhaps a look at a meticulously planned new township for the family?

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News about vaccine for COVID-19. Positive development.

Let’s face the fact. Any news about vaccine for COVID-19 will not have any firm delivery dates, not so soon. Logistics is the final part and before that, it would have to be manufactured first. Prior to manufacturing, it has to undergo trials and MUST pass all those trials with flying colours. Here are some of the latest and positive news about vaccine for COVID-19. I would suggest everyone read them and at least understand that things are really not as bad as it seems. Timing is currently the critical thing.

Photo by Edward Jenner on
Pexels.com

Article in bangkokpost.com
  Pfizer chairman and CEO Albert Bourla said in a statement. “The first set of results from our Phase 3 Covid-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent Covid-19.”

“We are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis. We are reaching this critical milestone in our vaccine development program at a time when the world needs it most.” Do read the full article here:
Article in bangkokpost.com

Article in theedgemarkets.com
   Australia commenced locally manufacturing a COVID-19 vaccine candidate developed by the University of Oxford this week Monday.  It was still undergoing clinical trials.

CSL’s Chief Scientific Officer Andrew Nash said, “We are undertaking these manufacturing activities at-risk and in parallel with the clinical trials and approvals processes in recognition of the significant urgency of the COVID-19 pandemic.” Do read the full article here:
Article in theedgemarkets.com

Article in bbc.com
 A critical part of COVID-19 vaccine is the need for a cold chain storing prior to administering it. Most of the Covid-19 vaccines under development, according to the World Health Organisation (WHO) needs to refrigerated at temperatures well below 0C.

There is now a potential Covid-19 vaccine that is heat tolerant. A group of Indian scientists are working on such a vaccine. The “warm” or a heat-stable vaccine, they claim, can be stored at 100C for 90 minutes, at 70C for about 16 hours, and at 37C for more than a month and more. Do read the full article here:
Article in bbc.com

News about vaccine. One says 90% effective rate, even if it’s still not yet completed all the trials. Another has already started manufacturing while the trials are ongoing because of the confidence that it will work as planned. Meanwhile, another one says that even the cold chain is not needed which meant that the logistics part is much easier. All these are positive news. Would the world suddenly become safe as soon as these vaccines complete their trials?

Not yet but the sentiment is likely to be a positive one because help is on the way. Let’s hope that all would become better in the next few months. We have nearly lost the whole of 2020. Let’s keep as much of our 2021 as possible. In the mean time, please stay safe and do not go out unless truly necessary. Thank you on behalf of all the vulnerable Malaysians. Yes, if there are further updates on news about vaccine, I will write.

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News Corp, The Wall Street Journal and iProperty are now related

Anyone who’s thinking about property investment or buying first home would have heard of iProperty. This is an online company in the real estate industry seeking to replace the traditional media which has been loved by developers for the longest of time. In Malaysia, when you think about searching for properties, typically you would only look at three major sites. iProperty, PropertyGuru and Propwall. After these few sites, you may then refer to a few leading real estate blogs. 🙂

Latest news in the industry is that News Corp which owns REA Group Ltd and publishes The Wall Street Journal (WSJ) has bought a 17.22% stake in iProperty. This stake was sold to them by Seloger.com SA which is a unit of German media group Axel Springer. The stake costs US$99.9 million (RM320 million). With this purchase, iProperty is valued at US$600 million, making it the most highly valued publicly traded internet company in ASEAN according to their official note.

If you do not know who is REA Group, then you may not have been to Australia before. It owns realestate.com.au which is the most dominant property site in Australia. The reason why REA Group bought iProperty? CEO of iProperty Patrick Grove said that “Southeast Asia offers tremendous potential for growth (with) its growing middle class, strong economy, and high internet and smartphone penetration,”. iProperty’s largest shareholder remains to be Catcha Group and some of Catcha Group’s portfolio companies are also owned by Star Media Group (Malaysia).

Until today, despite the popularity of mobile and online, the total marketing expenditure of developers are still with traditional media, including newspapers, billboards, buntings along the road etc. Thus, in terms of potential, it is huge. As for how fast and far can the online media grow to, it depends on the management teams of these companies. If their focus is on online, then they are on the right track. If their focus is on using online to fortify their traditional media business, I think this would not help the push into online. Just a personal view. Oh yeah, I do not own even a single share in every company mentioned in this article.

written on 1st August 2014

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Newspapers need to embrace online; fast.

Do we still read most of the property related news on hardcopy newspaper or online? This is a question every GM of Marketing working in property developers must answer. Assuming their answer is newspaper, that’s really good, for the newspaper. As at this year, I still subscribe to TheEdge on a weekly basis.
(They had an offer where I get a Samsung Note 8.0 for the same price as the market and I still get 3 years of TheEdge free)
 I stopped purchasing newspapers on a daily basis over 10 years ago. The news inside the newspapers can be accessed from the online version of the same newspaper. Instead of buying the whole copy for which I will most probably read 30-40 percent at max, I can save time browsing through what I want over more than a few newspapers.

Anyway, perhaps I am the minority since developers continue to think of newspaper as their MUST have and spend loads of money on them. Tiny reminder, even if you would like to advertise in newspaper, just make sure the newly launched property has its own website and the website address is printed in BOLD in their newspaper advertisements. Else, the marketing campaign has ended prematurely because there is little chance for anyone, whether Gen-X, Gen-Y or whoever to just look at that one page of black and white or even coloured and decide to buy immediately. Today, if they are interested, they would reach for their smartphone to know more about the project. Browsing through the actual galleries of photos for the project, the distance and what’s nearby by using Google map and even the many reviews for the particular developer from online forums and other online property news sites. Let’s be serious, who does not do this before they buy a RM500,000 property today?

In an article about newspapers in Business Times recently, it was reported that the global newspaper industry which is worth some US$179 billion (RM784 billion) is facing huge pressure, both from content generation and distribution. According to World Association of Newspapers and News Publishers (WAN-IFRA) chief operating officer, Thomas Jacob, “A lot of media companies all over the world are in the midst of a transformation. They are trying to find the right business model and the right way to monetise their content on various digital media platforms, such as social media, apps and online video.”

He said something important, that newspapers have higher credibility compared to the citizen journalism and other noises on the internet. Many online news are really quite questionable. However, I seriously think property advertisements do not need this ‘credibility’ and the developers would definitely have to manage the ‘noises’ online by having their own contents which is easily available to all. For the developers, it’s going to look bad if the only information found online about a certain property is only in forums which somehow can be used to say anything and everything!

His final parting sentence is extremely important. He said, “At the same time, I think journalists and newsroom editors and executives need to understand the change in technology so that they can embrace these changes, too.” This brings us to one fact. Many print media groups are still profitable. It’s really important for them to push towards the online and not simply selling their hardcopy and providing their online one for free. This destroys the value of their online portion and is the main reason why so many online media players have been growing so fast. Think long-term, act sooner and not later. Happy competing in the world where internet is really the only “international media” of today and beyond.

written on 4 Feb 2016

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Next crisis is looming – PM of 6th largest economy in the world

What if the Prime Minister of the 6th largest economy in the world tells the world that the next crisis will be coming soon? Yes, we are talking about United Kingdom’s Prime Minister, David Cameron. Would you believe it? He said the eurozone is possibly going into its third recession because of high unemployment, falling growth and the real risk of falling prices too. As for emerging markets which were the drivers of growth, they are slowing down. Emerging markets would of course include the world’s second largest economy, China as well. He also quoted the Ebola epidemic, Middle East conflict as well as Russia’s illegal actions in Ukraine as contributing further to ‘instability’ and ‘uncertainty.’ He also said his own country is doing well currently but may face headwinds when the world goes into recession. Of course, all his political opponents have claimed that he is just trying to divert everyone away from the economic problems at home. His reasons are pretty real and are based on all the current happenings.

While he did not say how long this new crisis would be but perhaps he is saying the same thing as an earlier prediction by a US company? Read here:
65% probability – recession by end 2015
 or an even earlier prediction? Read here:
Arturo Bris – Crisis Looming
 Surely when everyone is saying the same thing, it should be happening. Let’s assume the crisis really do come, just like the 2008 one which started in America. What should you do now? Well, if you own a property, perhaps you need to call your agent and start to sell your property now. This allows you to transfer your asset from property into cash and get ready for the potential price fall for you to buy back your property as lower prices. Even if you do not believe him, with regards to property investment strategy, this may be the time you become really careful. Stop buying properties which seems to be overpriced. If it’s for own stay, it’s ok. Thus far, crisis do not last forever and many countries have learnt to recover from crisis better these days unless they are the super poor ones.

In a discussion the other day with a group of friends, they were also talking about the potential crisis. Thus they were not thinking of buying any property today. I told them, there’s no right and wrong because no such as thing as anyone who is able to predict the crisis no matter how statistically proficient they are. However, if they seriously believe a crisis is coming, then perhaps they can think about buying a new launch by an established developer, especially within 2015. Of course, think about the price per sf for that development and its overall price because after crisis, the price psf and the overall price would recover higher, for those which were on the lower end. Yes, I think RM550psf and below to be on the lower end. The reason is because costs including land, material and labour are still going up, especially during good economic times. As for the usual 3 year completion period, the new property should be ready to handover the keys in 2018. By then, an usual crisis would have been over and as usual, you can make a quick sale to get profits and use it for your next purchase. If you only bought in 2016, you may miss out on the opportunity by one year. 🙂  Not a big issue but this can be a strategy if you really believe 2015 is a crisis year.

written on 17 Nov 2014

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When is the next financial crisis? 4 action steps to prepare in advance.

When is the next financial crisis coming? Try googling and you will have many predictions. Some of it may just come true. If the question is aimed at someone with a business degree and an MBA as well as 23 years of working experience, his answer is, “No idea.” Yes, that person is me. However, my answer is to be prepared. Better be focused on preparing for the next crisis instead which no one could predict with accuracy.

ASEAN Financial Crisis

When the ASEAN financial crisis arrived in 1997, the unemployment suddenly shot up from 2.45% in 1997 to 3.2% in 1998. This is still much lower than March 2021 unemployment which is 4.7%. Image for unemployment over the years as below.
Source: theglobaleconomy.com
 However, this was a sudden increase of 31% of people without a job! Are we ready if we happened to be within the statistics?

Before we face the possibility of losing our job, prepare for it with the 4 things we could do below.

#1 – Do we already have savings?

How long could we survive financially if we do not have salary when we do not have a job? Typical advice most personal finance people will give is that we should have at least 6 months of savings in our Fixed Deposit account.  This is just in case we lose jobs and we needed time to find the next one.  We have 6 months to do so and not fall into financial difficulty because even when salary stops, we still have bills to pay. So, do you already have 6 months saved under FD?

Once upon a time, I was down to my last RM50 and it was final 7 days before salary and I even needed to pump petrol for my car before then. I was feeling so unsafe!  Just get to know that when you lose your job and all the bills start coming in, the feeling is much worse.

#2 – Do we have side incomes currently?

Do we know of some job opportunities which we could do on a part-time and continuous basis? It does not matter if it gives much lower pay than our main job. Question is, do we have that option for some funds if we lost our job today. This could be tuition teacher 3 nights out of 7 days in a week.  This could be driving GRAB during the weekends. This could also be part-time accounting clerk with a few small SMEs who does not need full-time staffs. It could even be baking delicious cakes. Have we started? Are we starting soon? Or we still think that we will only start doing when the income stops?

#3 – Are we stretched too thin?
  Look at how much we are paying every month for everything. Start deciding what is not necessary. RM500 every month on online shopping may not be necessary. What could be lowered. Frankly, second-hand car works fine too and it does not need to be some new and fancy car. How much are we paying for our home? Do not buy a home where the repayment is so high that we face a possibility to miss it if we have any unforeseen expenses. If it’s a rented place, could we rent a cheaper place? Savings of RM200 per month is still a savings of RM2,400 per year. This will be handy when we are struggling to look for the next job.

#4 – Are we OVERPAID?
 This is a serious question yeah. Did we do the exact same thing as last year and yet being paid higher this year. Look around us. Are there junior people in the organisation who would be able to do what we do currently at a lower pay…? Look around the industry, is the company the only one paying much higher than industry because they are market leader? Please remember yeah, if competitors caught up, the next company will not pay the same salary as what we are getting from this current company which is overpaying us, actually.  Do an objective assessment and if we are, please upskill ourselves. No one knows when they time will come.

No one knows what tomorrow holds

It’s not easy but we still have to start somewhere. A journey of a thousand miles as they say will usually start with the first step. We cannot change the wind but we can adjust our sail. In Malay, it’s Hendak Seribu Daya, Tidak Seribu Dalih. The choice is yours. Happy choosing but more importantly, take the first action.

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5 reasons your next property buy can be further away too

Distance vs Size

Just a week ago, I wrote about property price when it comes to distance and size. I think it has above average clicks and I am sure many Malaysians are aware that they do not have unlimited funds and thus would have to choose between distance (further away) or size (much smaller sizes) Well, let’s also look into some advantages of buying a home in a neighbourhood further away from the city centre. Here are 5 reasons your next property buy can be further away too.

#1 Further means less demand currently.

This is why the prices that we buy will usually be lower priced (gross or price per sq ft) than if we were to buy somewhere already popular and wanted by everyone we know. It’s just a simple demand vs supply number. It’s true for both high-rise or landed. New townships will usually start with landed and high-rise will start to follow when the area’s popularity and population starts to rise.

The reason is also because by then, the parcels of undeveloped land are smaller in sizes and also more expensive too. Thus the property developers can only build, else the landed homes would be too expensive to sell.

#2 Appreciation is still applicable yeah whether they are popular or not so popular areas.

Just do not buy the totally-will-not-have-a-chance kind of area lah. Next to a permanent rubbish dumpsite for example… People often tell me that the hotspot they bought into appreciated RM200,000 within the past 3 years. If we are talking about investment, it’s also the % as well. Example, RM800,000 increasing by RM200,000 (is 25% up) is slightly slightly behind RM300,000 increasing by RM80,000 (is 26.7% up). Which one has a higher potential for such an increase? Both… actually.

#3 Further means bigger (size wise).

If the property developer buys a piece of land further away from the city centre, they could afford a larger piece for the same amount of money. Thus, they can be more generous with the use of it. Instead of 20 ft x 65 ft landed homes, they could afford to build 22 ft x 70 ft landed homes and still price it affordably. Instead of a typical 850 sq ft high-rise unit, they could choose to build a 1,100 sq ft high-rise instead.

A smaller piece of land in the middle of a mature neighbourhood would have to be fully maximised and this is why the built-up for landed would usually be smaller while if it’s a high-rise, it’s either higher density to be cheaper or super expensive and lower density. If it’s super expensive, then no one could buy. If it’s super high-density, many would not like. Land cost usually determines the gross development value. (GDV)

#4 Affordability is the key for future demand.

It’s true that prices for mature neighbourhoods are far higher than that of newer areas. The reason is not because of demand alone, it’s more of fixed supply. There’s just no new land to build new supply of homes in these mature neighbourhoods. Thus to buy into such areas, one has to be willing to fork out higher prices with every transaction Fewer supply versus higher demand means higher prices.

#5 Appreciation of the extras…

I remember a Cheras friend once told me that Cheras is the best. It’s close enough to the city centre and it’s mature and there’s continuous development. It’s everything great about Cheras. Guess what, a few years back, she bought a landed property in Semenyih and is now staying there a few days every week.

Why? Her home in Cheras did not have a club house and today she’s retired, so there’s no need to stay so close to the city centre. (Just note that Semenyih is really not that close to KL yeah) Anyway, her new place, it’s modern and it’s new. (emotion) It’s gated & guarded and the guards wear nice uniforms too! (safety)

It has parks after parks after parks and all her friends love her new place. That includes me too but not the location lah. I am more of northern side of KL person.

It’s not all good reasons yeah

There are a lot of cons in buying further too yeah but there’s already many of those articles written. Just google for them to read yeah.

Oh yeah, if money is not an issue for me and I have too much of it, I will choose to stay in hotels instead and with full concierge service. Not debate on whether buying closer to the city centre or buying further away. I also have no intention to stay at the same place every week too.

I will also NOT be choosing to stay in a luxury condo in the city centre and having to walk down the street or through a covered walkway to the nearest LRT / MRT  station. I will just GRAB. Then again, I am just another working professional like most Malaysians. We watch what we buy and we try to maximise what we get from what we buy. Happy thinking.

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Worried? The next stock market crash will strike in 2018.

Interesting piece of news in my Facebook page. Not from any friend but it’s a ‘suggested video.’ “The next stock market crash will strike in 2018.” I think the statement is quite worrying for some, perhaps. This is especially those who are not so used to many predictions every now and then. Some of which may come true. Just as those economists who somehow gave early warnings about the 2008 mortgage crisis, all these predictions may come true because they are usually backed by some analysis of available data. What goes up, must come down. In fact there are arguments whether or not the Dow Jones is on the brink of collapse or still has a long way to go. This one supports the former.
‘Let this be the final warning on US stocks’ overvaluation.’
 So, yes everything within the article points towards a collapse. In other words, better sell and wait to buy when it plunges. This one meanwhile supports the latter.
Why The Dow Jones Industrial Average Is Not Overvalued At 22,000
 It gave many strong reasons to tell you why it is not overvalued. In other words, can continue buying. Okay, most of us may not own any shares in Dow Jones. However, as all of us are aware, if Dow Jones are down, most of all the other bourses around the world would wobble and perhaps crumble too.

As someone who has gained slightly more than I have lost in the stock market, perhaps I offer my personal views about any stock market crash. I will share just 4 things.

1) Stocks are real companies with real businesses. Do you know what are we buying? If we do not really know what is the business that the companies we bought shares in are in, it’s best not to hold them too long, just in case that drop really do happen. If however we know the business that the company is doing and we could see evidence that it will continue to do well, even during a slowdown, it’s fine to hold on and not to panic.

2) What goes up must come down. Are we overstretched? As long as we do not suddenly need lots of money  invested in shares, riding out a downturn is always possible. In fact when we look at unit trusts, the fund managers are usually taking a much longer term view and do not sway here and there every day. If they do, we should be wary of the consequences. No one wins all the time from gambling. Not even Central banks anywhere in the world.

3) Positive predictions are worth worrying about. Negative predictions are really just opportunities if we are ready. You know when every piece of news we read are positive and every uncle and aunty are going into the stock market, it’s worth noting that at that time, the stocks are usually overvalued. Sentiment is just too bullish! In terms of a sudden drop, it presents opportunities to pick up good stocks which had just become undervalued. The window of opportunity is however a short one when we are talking about good companies. Very soon, some clever fund managers would start buying and the prices go back to normal numbers.

4) Do we follow and read all the predictions? When we read and we know what are all these people are saying, it gives us a better sense of direction of how to manoeuvre  the market. If however we read only one side, regardless of the side we believe in, we are surely going to be surprised one of these days. Many times, some arguments just do not make sense. The question should always be which one has more valid contentions and not so much of who can talk better. The one who can speak very well may not be a better President. The person just proved that he could get moe votes………

Happy believing yeah. Cheers.

written on 1 Sep 2017

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Press Release: Nexus Seremban 2: The New Center Of Attraction

Seremban 2 (S2) township, developed by IJM Land, has grown remarkably since 1995 garnering numerous prestigious awards. This growth has led to a surge in demand, not only for residential properties but also for commercial offerings within the self-contained township.

With a current residential occupancy rate of 62,000, the population at S2 is witnessing remarkable growth and is projected to exceed  100,000 upon completion in tandem with the growth trajectory of the surrounding developments.  The township’s expanding population and the influx of visitors provide a ready customer base, creating a vibrant market for commercial enterprises.

Nexus, aptly named to refer to a central and focal point, will be a highly sought-after commercial hub that offers freehold lifestyle shops, while serving as a gateway to connectivity, convenience, and commercial success.

To meet the needs of residents and visitors alike, it is crucial to have a diverse range of commercial constituents. In this regard, Nexus Seremban 2, strategically located at the heart of the township, holds immense potential to become a thriving commercial hub.

With its strategic position, it presents an excellent opportunity for businesses to establish a presence in this dynamic and growing community. By becoming a part of Nexus Seremban 2, businesses can tap into the existing infrastructure and amenities of the township. The area is well-equipped with modern facilities, including residential properties, educational institutions, healthcare centers, and recreational spaces that ensure a constant flow of potential customers.

In addition to its commercial appeal, Nexus Seremban 2 also offers opportunities for collaboration and networking. The presence of various businesses within the hub creates an environment where synergies can be explored. This collaborative atmosphere will contribute to the success of the businesses operating within Nexus Seremban 2.

The land on which Nexus is located will be divided into two phases, with one phase dedicated to lifestyle shop offices and the other designated as the central commercial land, which has the potential to be developed into a future retail space. Within this 21.42-acre plot, a total of 166 freehold shops will be constructed.

Phase 1 comprises  147 units of 2-storey lifestyle shop offices and 19 units of another  2-storey lifestyle shop offices that will come with a sub-basement car park. The gross built-up area ranges from 3,455 sf to 10,559 sf, with prices starting from RM1.39 million. It is projected that the Gross Development Value (GDV) for Nexus will be approximately RM300 million.

The architectural design of these shop offices combines retro vibes with a timeless facade, exuding a distinct character. With prominent frontages, large display windows, and modular interiors for easy renovations, these shops are perfectly suited for various businesses and lifestyle propositions catering to S2 residents and visitors.

The grand launch of Nexus is scheduled for Q3 of this year, promising an exciting debut of this highly anticipated project.

INHERENT VALUE

The commercial units at Nexus offer excellent value, presenting a promising opportunity for a potential stream of rental income and capital appreciation. Previous projects, such as IKON at Centrio and  The Plazo at S2 Heights have demonstrated a high take-up rate, indicating a similar sales trend anticipated for Nexus. This projection considers the investment potential and supply-demand dynamics, taking into account the steady growth trajectory of the township.

Furthermore, IJM Land is set to expand S2 with a dedicated 400-acre development known as S2 Heights Aman, conveniently located just a 10-minute drive away from Nexus. This comprehensive plan encompasses nine phases, featuring linked homes- and semi-detached homes, as well as versatile shop lots. With approximately 1,742 units scheduled for construction, the first launch is planned for Q3. For sheer exclusivity, there are also two new landed residential developments to look forward to in Q4 and also later in Q1 of 2024. All S2 neighbourhoods, both mature and emerging, will benefit from easy access to Nexus for their essential needs and lifestyle requirements.

The prospects for sustained growth and appreciation of both residential and commercial properties in the vicinity are significant. Combined with innovative development features and vibrant neighbourhoods, the demand for these properties is expected to remain robust in the foreseeable future.

“Commercial properties situated in prime locations, including Nexus, have consistently demonstrated their resilience,” explained Mr Chai Kian Soon, Senior General Manager of IJM Land. “Prudent investors can enjoy favourable returns and healthy recurring rental income throughout different property market dynamics.”

CENTRAL VERSATILITY

Commercial properties have long been regarded as a secure investment option. These tangible assets provide steady yields and hold significant value when strategically located. The Klang Valley has historically been a preferred choice for investors due to its proximity to the city center, familiarity, and limited availability of land. However, affordability constraints have made it challenging for homebuyers, upgraders, and investors to drive property prices up without substantial increases in income. Looking ahead, the market is expected to be supported by wage growth.

As a result, there is a noticeable shift in interest from the traditional core markets near the city center due to supply and the aforementioned affordability factors. Investors have recognised the prudence of exploring opportunities in areas slightly further out. As a result, satellite townships with excellent infrastructure, such as S2, have consistently enjoyed the benefit of this prevailing trend.

“Despite the changing market dynamics, there continues to be strong demand with new businesses identifying an affluent customer base at S2 as their target demographics,” explained Mr. Chai. “In addition, existing businesses that are doing well here are also looking to expand with new branches and outlets. This bodes well for investors who are non-business owners are able to command a steady stream of rental income yield from their investments. These factors are expected to drive prices higher and create favourable conditions for the commercial units at Nexus, which are supported by strong underlying fundamentals.”

OPEN FOR BUSINESS

Moving forward, the commercial components in Nexus present a promising asset class with substantial potential for capital value appreciation. The increasing demand from the surrounding areas will further fuel this growth. Additionally, each neighbourhood within Nexus offers its own private, community-friendly amenities, enhancing the overall living experience. The commercial components in Nexus perfectly complement these residential areas.

These include the breathtaking 15-acre City Park for residents to unwind and connect with nature with ample green spaces to roam around and explore in a carefree manner. Additionally, the 30-acre Hill Park offers a serene retreat with stunning views and tranquillity for all to enjoy. For an exclusive experience, residents have access to the prestigious S2 Clubhouse, which provides a range of upscale facilities and services.

Residents will find convenient access to a variety of shopping malls, retail hubs, and hypermarkets to meet their shopping needs. Aeon Mall, Mydin Mall, S2 Centrio, Uptown Avenue, NSK Trade City, Lotus’s Hypermarket, Seremban Gateway, Palm Mall, and more are within short driving distances. Other essential conveniences include proximity to medical centers, such as SEHAT Healthcare Centre, Columbia Asia Hospital, KPJ Seremban Specialist Hospital, and Klinik Kesihatan Seremban 2.

The availability of numerous public and international schools within close proximity in the township is a significant advantage. Educational institutions such as SK/SMK Seremban 2, SJK(C) Tung Hua, SJK (C) Ladang Hillside, Zenith International School, REAL Kids, SJK (T) Convent Seremban, attracts families with children, fostering a thriving community that can support and contribute to the growth of businesses in the area

The strategic location of S2 is undeniably geared towards facilitating business and commercial ventures, placing accessibility as a top priority. The existing connectivity infrastructure within the area ensures seamless access to key destinations. With the presence of toll plazas and gantries like Seremban, Ainsdale, and Port Dickson, commuting to major hubs such as Kuala Lumpur, KLIA, KLIA 2 airports, and other parts of the Peninsula becomes effortless and time-efficient.

“Reputable developers like IJM, renowned for their stellar track records and strategic choices like S2, greatly contribute towards creating products that are sound investments,” emphasised Mr. Chai. “Discerning investors recognise the immense potential of Nexus and our unwavering commitment to delivering exceptional quality. With meticulous attention to detail, we are dedicated to crafting functional spaces that offer an ideal environment for prosperous business ventures within our esteemed township.”

  -End-

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Nilai as a potential home?

I think if you are close to retirement age and has been working and staying nearby KL city centre, this is not something for serious consideration. However for those who have  started working for a few years and is now looking for a spacious home in an area which is already well connected? Note though that the driving duration may be an extra 30 minutes to reach KL city centre. Yes, extra 30 minutes because even if you stay somewhere nearer, you would still need to drive 10 minutes to reach KL city centre anyway.  There’s an article about
Nilai in NST.
 My first encounter with Nilai was way back in 1998 and a later my brother-in-law studied there for a few years. During his time, he had to eat nasi lemak nearly every other day because there were not many choices. In fact there were only students, students and students. According to the article, Nilai has the following today:

Road access:

1) North-South Highway

2) The Kajang-Seremban Highway

3) Maju Expressway

4) ELITE

5) Nilai KLIA Highway

6) Lebuhraya Damansara Puchong

7) South Klang Valley Expressway

What’s in Nilai now

Nilai Cancer Institute

Nilai University

INTI International University

Nilai Polytechnic

International Islamic University

Malaysia’s medical faculty

Manipal International University

Murni International Nursing College

Britain’s Epsom College

Nilai Springs Golf and country club

Nilai Springs Resort Hotel

Nilai Medical Centre

Nilai 3 Wholesale Centre

Giant hypermarket

Tesco hypermarket

The developers developing Nilai as per the article include Nilai Resources, Sime Darby Property and even PNB Development Sdn Bhd.
Sime Darby’s development is known as Nilai Impian
 and they have built the Nilai Impian interchange which provided the communities with better access to the township and adjacent areas. The new interchange was built as a joint initiative between Sime Darby Property, the Malaysian Highway Authority and PLUS at RM30 million. According to PNB Development chief executive officer Mohd Salem Kailany, the company is now selling townhouses and terraced units priced below RM600,000. To refer to the full article in
NST, click here.

written on 17 Feb 2017

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No. 218 bungalow in Macalister road torn down for 218 Macalister?

If you have been to Penang, you would note that there are many heritage buildings and areas which are well preserved. Of course, I would like to see the maintenance be continuous and there’s always much to improve but I would say I am happy enough when I cycle around Georgetown, taking photos and understanding history. I think many Penangites would agree with me. However, with the ever continuous development, would MPPP be able to keep up this conservation amidst the many new developments being proposed, approved and constructed? In News Straits Times, there was a report on one particular iconic bungalow building.

I do not know who is Dr. Lim Mah Hui but I think now many would know about him as he was reported in NST as someone who has criticised the lack of conservation efforts for historic buildings in Georgetown. In his capacity as a municipal councillor of Penang Island, he was unhappy with the tearing down of the iconic No. 218 bungalow in Jalan Macalister for a mixed development project. He urged the MPPP to start taking the conservation of heritage buildings seriously. The reason being Georgetown is a Unesco Heritage site and thus should be a role model for all others on what should be done to conserve heritage and beauty. Conservation should be the key word.

Personally however I think for the preservation efforts to continue, it takes more than just making sure the heritage building is not destroyed. It is also how the state would be able to derive sufficient income to build up reserves so that these preservation effort would not stop as soon as the state needs to cut expenditures. As all of us know, preservation of heritage buildings are definitely less important when compared to taking care of the well being of the people. Thus, let’s be objective, preservation must be done through careful development. Perhaps keeping the heritage building, maintaining it while a modern new development may be built surrounding it. One example, Paragon Shopping Mall in Penang. Another example, the Northam Building. Granted, due to one being old and another being new, it does not really blend well but sorry, without money, nothing happens and it is just not enough to charge entrance fee etc.

Last but not least, MPPP Heritage Building Department head Noorhanis Noordin said that MPPP would be updating the building conservation guidelines and ensure developers abide by them. May I ask that these guidelines be distributed and informed to as many people as possible? This will really ensure the developers abide by them. Otherwise, these guidelines would exist only on paper and sometimes, developers may not be aware of them. In my previous job, I have met with over one hundred developers, I think I have heard about conservation of heritage buildings only from a few of them.

written on 26 July 2014

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No Adjustments to Overnight Policy Rate, so many so happy

So many forums were discussing about the rate adjustments. So many experts views were sought. Some said, it will be adjusted upwards. Some said No. Some said maybe. I said, most probably adjust and potentially remain. I think I am right. No adjustments this time. Bank Negara (BNM) has kept the rates steady and a report in Reuters said that perhaps this was due to the slowing growth in China and a stagnating European economy. I prefer to believe the following, from BNM’s governor:  “The current stance of monetary policy remains supportive of growth. Further adjustment to the degree of monetary accommodation may be taken depending on how new information will affect the assessment on the balance of risks. This is to ensure the sustainability of the growth prospects of the Malaysian economy.”

I think this is great news for many who are paying for mortgages. As they say this adjustment will cause a huge hole in their pocket. Yet, somehow sales of smartphones especially that few expensive one are still so popular. I have at least 6 friends who would be buying Iphone6 and some of them had also said that this adjustment may jeopardise their life-balance. At the same time, more Starbucks are being opened and everyone of these are full to the brim even on weekdays. Just look at the queue during lunch time. Plus, do not forget the crowd in popular shopping centres or the queues at branded warehouse sales. Mind you, even after discount, these branded items are still four figure and higher. Yet, these people are worried of the 0.25% hike which will cause them to fall into the valley of debts.

Sorry for being a little sarcastic but if you are really so serious about this, then you would not be thinking of all the above things and really, you should not even be buying a home for which the approval from the bank is on the borderline. You should be buying a slightly smaller, cheaper home instead. Or, as usual you do not agree? Great. We can now wait for the next deliberation of the adjustment of rates and you can continue to write on your Facebook walls or forums that BNM should not adjust it higher because life is already so tough. Last but not least, if you change phones every year to look good in front of your friends, your personal internal interest rate has already been adjusted higher every year and surprisingly you are still paying for it.

written on 18th Sept 2014

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No blanket MCO. This is good news

Viral news? No blanket MCO.

We still could not travel between states currently. I think this is a good move. Some states remain more dangerous than others. However, perhaps having the WHOLE state under CMCO is also not that clever. We are after all having MySejahtera enforced to everyone, right? We should be able to know where would be the dangerous, less dangerous and even not dangerous, right?

Businesses may have more good news as Prime Minister Tan Sri Muhyiddin Yassin said that the government will implement a more targeted approach to control COVID-19 infectivity based on data and science. In other words, there should not be a need to enforce the movement control order any more.

Article in thestar.com.my
.
 Prime Minister Tan Sri Muhyiddin Yassin says that instead of enforcing MCO nationwide or on a state, it could be done based on affected localities or specific clusters instead. He said, “We will also ensure that compliance of standard operating procedures and tighter enforcement is in place to control infectivity of Covid-19, in line with the Emergency (Essential Powers) Ordinance 2021.”

More good news for the manufacturing companies include additional tax rebates and additional tax cuts for employers who send their workers for COVID-19 screening. He says that allocation for the National Covid-19 Immunisation Programme will be increased from RM3bil to RM5bil so that the herd immunity target can be achieved by December 2021 versus first quarter of 2022. Do read the full article here:
Article in thestar.com.my

I think we can wait for the details soon. After all, the announcement by the PM should mean that something is now being planned for deployment. As for the HOW to do it successfully, this may be that speed bump. Have a good dinner and see you for coffee soon. Haha. Especially to those who has prior appointments with me since last year?

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No Bulk Buys Please. Let the buyers own their first home.

My personal opinion is this. If buyers are buying for the first time in their life, support should be given to them. I am not so sure about how genuine they are in buying and staying in their first home but without one property, these people may continue to lag behind others because by the time they really wanted to buy one unit, they may no longer be able to afford one unit. Developers should not allow bulk buys. Except for the part where they can sell their properties faster, there’s just no reason. Of course, they may say it’s high risk if they are selling one by one but that’s a very lame excuse. If you know your property is not the most amazing one, why price it so high and get bulk buys so that it can be sold fast?

Recently in a news article, Malaysian Institute of Estate Agents and consumer groups urge the government to ban bulk property purchases as this could potentially inflate prices and deprive first time buyers from buying their first home.  Federation of Malaysian Consumers Association (Fomca) president Datuk Paul Selvaraj said bulk purchases of property should be banned as there was an urgent need for affordable housing, especially in the Klang Valley. To him, bulk buyers are ‘property speculators’.

National House Buyers Association secretary-general Chang Kim Loong said he is a link between cash strapped developers and investor clubs and this is ‘property insider trading’. How it works is that these clubs purchase the majority of available units before the developers sell the remainders at trumped up prices and later the club would release the units bit by bit.

Malaysian Institute of Estate Agents (MIEA) deputy president Erick Kho said bulk-buying has turned a need into a business and this created a fake scenario of demand and supply. The buyers of these bulk units would negotiate with the developers for a certain discount for bulk purchases. Most of the time, these buyers usually group together and targeted properties attractive to first time buyers within the popular RM300,000 – RM500,000 range which they can then inflate the prices from five percent all the way to 15 percent.

I think one significant point missing is on the regulation part. Truth is, the identity of all these bulk buyers area already known. Just follow them and if it is proven that they are doing bulk buy, stop them. Personally, I have thought of buying two units, combining them into one unit so that I have a bigger unit for a more comfortable stay and I want my brother and family to stay with my parents and myself too. However, I could not see the reason to buy 4 units other than to hold and sell for profits later, at the expense of genuine buyers. If you want to speculate, go to the share market.

written on 10th Sept 2014

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No change in Overnight Policy Rate. What and Why?

Two days ago, a good friend said that BNM may reduce the Overnight Policy Rate (OPR), so it will be good for the people with loans. I replied that if OPR is reduced, it also meant that BNM has expectations that the economy will deteriorate a lot and will need to be supported by a lower OPR. Thus, I said I hope BNM can maintain the rates unless we really need that boost from a lower OPR. Today, we have the latest announcement about the OPR rate from BNM. It’s maintained at 1.75%.

Media Release by Bank Negara Malaysia (BNM)

At its meeting today, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 1.75 percent.
The global economic recovery has strengthened further, supported by improvements in manufacturing and services activity. The pace of recovery, however, varies across countries. Economies making better progress in their vaccination programmes have been able to ease containment measures, enabling a swift recovery in domestic activity. In several advanced economies, sizeable fiscal and monetary measures are also supporting a stronger recovery momentum, although activities in some economies are disrupted by tighter containment measures to curb COVID-19 resurgences. Financial conditions remain supportive of growth. Overall, the balance of risks to the growth outlook remains tilted to the downside, due mainly to uncertainty over the path of the pandemic as well as potential risks of heightened financial market volatility.
For the Malaysian economy, better-than-expected economic activity in the first quarter of 2021 continued into April, as reflected by latest indicators, particularly on exports, retail spending and labour market conditions. The re-imposition of nation-wide containment measures to curb the resurgence in COVID-19 cases, however, will dampen the growth momentum. The degree of impact to the economy is highly dependent on the stringency and duration of containment measures. Nevertheless, continued allowances for essential economic sectors to operate, albeit at a reduced capacity, and higher adaptability to remote work, automation and digitalisation will partly mitigate the impact of restrictions. The various policy support packages will alleviate some of the financial burdens of households and businesses. Favourable external demand conditions will continue to provide a lift to growth. Going forward, the gradual relaxation of containment measures, alongside the rapid progress of the domestic vaccination programme and continued strength in external demand will provide support for the growth recovery into 2022. The growth outlook, however, remains subject to significant downside risks, due mainly to factors that could lead to a delay in the easing of containment measures or imposition of tighter containment measures, and a weaker-than-expected global growth recovery. The materialisation of these risks could undermine the growth recovery.
As expected, headline inflation spiked recently due mainly to the base effect from low fuel prices in the second quarter of last year. This spike is transitory and headline inflation is projected to moderate in the near term as this base effect dissipates. For 2021 as a whole, headline inflation is projected to average closer to the lower bound of the forecast range. Underlying inflation, as measured by core inflation, is expected to remain subdued, averaging between 0.5% and 1.5% for the year, amid continued spare capacity in the economy. The outlook, however, is subject to global commodity price developments.
The MPC considers the stance of monetary policy to be appropriate and accommodative. In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households and provide support to economic activity. Given the uncertainties surrounding the pandemic, the stance of monetary policy will continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth. The Bank remains committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.

Bank Negara Malaysia
08 Jul 2021

— end of media release —

BNM has actually shared that the economy was doing well until April, just before the imposition of a lockdown. It said that these helped in the economic growth; exports, retail spending and labour market conditions. Briefly, if the world is recovering and we could still manufacture, then the exports would go up. It also tells us that if majority of people continue to have a job, they will also have money to spend and this will help in the economic growth too. Suffice to say, BNM has decided that the current situation does not warrant another drastic reduction of the OPR.

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No compensation. Starting later need not be OPENING later…

First up is good news for the High Speed Rail KL – SG (HSR).
Article in Edgeprop.my

 This is what our Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said, “Malaysia will not need to compensate Singapore for the indefinite period that the Kuala Lumpur-Singapore High-Speed Rail (HSR) project is put on hold.  The project is on hold indefinitely. Singapore has agreed. We are confident our economy will improve … There is no need to pay compensation during this period.” However he added that should the project be cancelled, then a penalty would have to be paid. This wwas what was reported in The Straits Times quoting The Edge newspaperon 3 September. It quoted sources as saying the compromise was reached “in a spirit of good neighbourliness”, with Malaysia being spared from having to pay a RM500mil penalty for postponing the project. The deferment is until May 31, 2020. Initially, there were proposal for the HSR KL- SG project tobe scrapped.

This was what was reported in BusinessTimes.com.sg.
  The postponement of the Singapore-Kuala Lumpur High Speed Rail (HSR) project is expected to be formally announced this week. Last Thursday (Aug 30), Singapore’s Minister for Transport Khaw Boon Wan said on Facebook that he had met Malaysia’s Economic Affairs Minister Azmin Ali and they were “brainstorming ideas on how to further our bilateral relationship”. He added, “We should be able to announce our joint decisions on RTS and HSR soon.”  The source told The Edge that Singapore recognised the strain the project’s construction could have on Malaysia’s financial health.  Other details of the HSR: The rail link was expected to cut travel time between the two cities from four hours by car currently to 90 minutes. The line was to have eight stations: the Jurong East station in Singapore, and on the Malaysian side, Bandar Malaysia, Sepang-Putrajaya, Seremban, Melaka, Muar, Batu Pahat and Iskandar Puteri stations.

With this deferment, what will happen to the 2026 completion timeline? If we refer to all the reports thus far, it corresponds with what I believe. 2 years deferment does not mean the project will be completed only 2 years later in 2028. Initial plan was for the line to be operational by 2026. The reason is simple, the construction part could have been faster in future because of technological advances. In fact, there are many other non-construction things which could be carried out moving forward too. Remember, this is a deferment, it is not a cancellation. As for the thought of HSR KL – SG competing with the airlines, here’s an earlier article about it:
New Demand, not just existing. This is the beauty of the many stops.
 Oh yeah, no idea if the two ministers would be doing it from the same country or not. Happy waiting for the joint formal announcement yeah.

written on 3 Sept 2018

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No economy, no salary, no property

No economy, no salary, no property.

Imagine many people without a stable job. Would they think of buying a property? Would the banks approve their loan applications? I think if we do not have a stable salary, we will come back to reality. It’s definitely not property. To have a stable job, it has to be supported by the economy. By the way, how is the economy doing here in Malaysia? Bad? Take action. Good? Take action. Basic idea is a simple one. Find opportunities or miss them. Keeping the money idle without doing anything is a wrong move.

No economy, no salary, no property

Never get this fact wrong. Property prices cannot rise if people do not have stable jobs. Stable jobs cannot appear if the economy is unhealthy. This is why if people kept telling you how bad the economy is and then try to sell you property and say prices will rise, that person is definitely lying and has zero knowledge about how property and the economy will always be related. Now, let’s look at the economy of that largest economy in the world, today. It may be exceeded by another nation but it seems that for now, the U.S. economy is roaring back to life.

Here’s that news about how positive the economic growth in the U.S

Article here in
themalaysianreserve.com
  “US growth seen outpacing China’s for first time since 1976” This meant that the US economy will grow faster than China for the very first time since 1976. By the way, it also meant that since 1976, China’s economic growth has always been above that of the US. Sobering fact yeah and explains why China’s economy is now the second largest and second to just the US today. Here’s the full article:
themalaysianreserve.com

Despite this positive news, there’s also this gloomy news.

It’s about that potential for a recession in the U.S. too.
Cracks in US Economy Start to Show as Recession Warnings Mount
.  With the decades-high inflation and at the same time climbing interest rates, American households are taking on record amounts of debts to make ends meet. They are squeezed by higher prices for gasoline and food. Small firms are also struggling with rising business costs and difficulties in hiring or retaining workers. Here’s the full article:
Cracks in US Economy Start to Show as Recession Warnings Mount
.

What does this tell us?

There are always the other perspective which we may not see. You can see very clearly, some writers painting a rosy America and some writers painting a gloomy America. Both are just trying to get their points across. Read both and decide based on your own understanding yeah.

As bad as someone may paint the picture to us, as great as an opportunity it could be. A rising number of property transactions does not mean it’s good or bad. Who knows this rise is purely speculative in nature and we may be buying at the very highest peak? That would be disastrous yeah.

At the same time, a rising number of transactions may also mean that the market is now finally roaring back to life after being subdued by the many restrictions due to Covid-19 movement control orders. At the same time, a property market rising does not mean it lifts all properties, all areas and all cities or states in Malaysia.

Property demand and supply has never been total supply nationwide versus total demand nationwide.  The reason for price movements is because of SPECIFIC area demand and SPECIFIC area supply and this is why during good times, property prices rise higher in some areas and in bad times, property prices barely moved in some popular areas too.

My 2 sen advice?

No economy, no salary and no property. Malaysia is not in a financial crisis, that’s for sure. That’s why people could afford to buy and then keep complaining about prices rising. Continue to look for opportunities. Low price does not mean it’s an opportunity or it may be an opportunity. Haha.

Happy hunting for one.

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NO EVENTS. Please be serious yeah. Jail time up to 2 years if convicted.

It’s Movement Restriction currently. 18th to 31st March 2020.  This is not a curfew as announced by
 the Inspector-general of Police (read here)
  He said that movement restriction order was implemented for the sake of national security and public safety. “As such, the public should not spread unverified or fake news which can create uneasiness and worry that the movement control order was similar to a Curfew Order.”

This 14-day movement restriction is to help the authorities all those in need of Covid-19 treatment. Here’s that serious warning to everyone yeah.
Article in thestar.com.my
  Health Ministry says that wedding feasts, as well as gatherings for tahlil prayers and the deceased (kenduri arwah) are not allowed during the two-week restricted movement order period from March 18 to March 31.   It said, “The answer is, NOT allowed. This is because they are social gatherings.”

Provisions in Section 11(4) of the Prevention and Control of Infectious Diseases Act 1988, read together with Section 24(2) of the same Act, made such acts a criminal offence from March 18 to March 31, the statement said. The ministry said those who defied the government’s Movement Control Order could be sentenced to a prison term of up to two years, a fine or both, upon conviction.
Article in thestar.com.my

I think this is the time to be a good Malaysian. Since the nation is now facing a danger, just minimise the risks of potential for more COVID-19 cases. To those who are having fever, STOP thinking it’s nothing. Go get treatment and please stop socialising with more people. Happy staying safe.

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 Covid-19,potentially the cause of next recession

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No, houses cannot suddenly lose a LOT of their value

We all know the plans by our government to build 1 million affordable homes within 2 terms. Here’s an earlier article:
Manifesto on affordable homes for Malaysians. Let’s Do It

When this was announced, there were views for and against it. Earlier article here:
Malaysia’s affordable home mission by the government. Views.

With the current volatile share market, some have painted a bleak picture for the property market. A friend even claimed that very soon those over RM1 million home would become affordable enough for him. Me: “How much should it drop to be affordable?” My good friend: “My property industry friend say 30 percent drop is possible. Everyone is so desperate to sell.” I pointed out to him that if someone is selling his property at 30 percent discount today and it’s within a hotspot neighbourhood, the best person to buy may be the neighbour and not any one of us. IF the whole neighbourhood is selling, then it’s best to find out why instead of buying… savvy?

Second point, it’s NOT going to be IMMEDIATELY 30 percent because it will start with 10 percent and if it’s really within a hotspot then at maximum perhaps 15-20 percent and surely someone would have bought it. When we look at the data from
brickz.my,
 we may occasionally find some out of the ordinary transacted prices but on an overall basis, this does not happen all the time. Just look at auction of properties from the banks for some clues. As soon as one particularly attractive property is seen to be 15-20 percent below market price, the number of bidders would usually be more than one. The reason is simple. Imagine buying a RM450,000 property which is 15 percent below market price means that the buyer have RM80,000 to tinker around. As soon as he has touched it up, he could put it back into the market for 5-10 percent below market in a few months time. That’s why some property investors focus only in auction properties.

Third point, it’s NOT going to be HEALTHY for the overall market if prices really drop 30 percent yeah. This is because if the owner has a choice, he will not sell it lower than market and definitely not 30 percent below the market. Something negative must have happened. He may have lost his job for example and IF everyone is trying to sell, think what is really happening to the economy! It’s great to find a property which is below market price, go and view and if it’s all good, then buy. By the way, even the bank would not like it. Imagine them having lent to 10 other buyers at RM500,000 and suddenly one desperate buyer tries to sell at RM450,000 or lower? The bank have just ‘technically’ lost RM50,000 per home or RM500,000 of the combined house values of their loans… Anyway, I would still wish anyone the best in finding some properties way below its market value. Happy finding one.

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written on 10 June 2018

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No loan? No worry. I (developer) lend you.

Nope, the title is not a joke about the property market today. The housing developers may be issued with a money lending license to help non-bankable house buyers own a home. As per the Urban Wellbeing, Housing and Local Government Ministry, this proposal is being discussed. The main reason as per the Minister was that he wanted to help buyers to own a home. He said, “I am thus proposing that eligible housing developers, especially those with deep-pockets like Sunway Group, EcoWorld, Mah Sing and Glomac be issued a money lending licence. It will be restricted to only providing end-financing to
eligible house buyers

who face difficulty in securing loans from banks.” Full article
here
.

First of all, how many of those reading this piece of news is happy? Okay, first of all, the money lending license is definitely only for developers with deep pockets. I would think they should have surplus cash reserves and not developers who are themselves having huge debts. When we look at all the listed developers, not many fulfils this easily. Perhaps those names the Minister mentioned as well as a few more. Secondly, of course if they (developer) lends you the money, you must
buy their properties
! Haha. So, this is a question of whether their offering is what we are desiring. Last but not least, if the banks are not lending, would developers lend? How would they do the risk assessment of the buyer? The same way banks assess the loan applications?

Actually there are still questions which needs a bit more answer. However, as per the Minister, this proposal is a win-win situation. In fact he shared that “For the developers, this end-
financing facility
 offers a second profit centre after the sale of the houses.” He said that interested developers can start to submit an application for the money lending licence. This will be covered under the Money Lender Act (Revised 2011) or Act 400 under the purview of the ministry. The interest rate shouldn’t exceed 18 percent per annum. (YES!, this is a money lender… remember?)  Let’s just wait for the scheme to start. Anything to help first-time home buyers whether private or government is definitely welcomed.

written on 8 Sept 2016

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Buying homes for the first-time? Go for government schemes

We have often heard of the ever harder to obtain mortgage approvals. Seriously, is this due to the applicant or the bank?
Actually, not entirely true
 but assuming we could not get one from the private sector, we should goto the government. As per the advice from The Association of Banks in Malaysia (ABM), first-time home buyers should consider applying for government schemes such as My First Home Scheme (SRP) for assistance in property purchase. Reported in a few medias, it said “The buyers are advised to avoid obtaining more credit,
which may not be sustainable in the long term, and over-stretching themselves financially.”

It announced that 11 commercial banks and 11 Islamic financial institutions in Malaysia were participating in the scheme and the list could be obtained on the SRP website. In brief, ABM said home buyers need to be reminded that there are options for them. It said that before offering loans to applicants, they screen the applicants and approval is often based on many different factors. It said, “The business of commercial banks is in the main lending or extending credit while adhering to their respective risk appetites and/or the guidelines set by the regulators”

Besides that, ABM said it would be good for borrowers to also consider getting a pre-approved housing loan before even starting to look at purchasing a property. Potential buyers should work with their financiers to assess the
suitability and affordability
 so that their applications have a stronger approval rate. It shared, “In assessing one’s eligibility for a housing loan, monthly home loan installments and other long-term monetary commitments such as hire-purchase loans should not exceed more than 40% of gross monthly income.”

Actually, it’s clear that banks are also wary of being too lenient with granting of loan approvals. No banks would want their non-performing-loans (NPL) to increase substantially. Besides that, as everyone could see, the prices of properties today versus the years before 2009 has changed tremendously even though 2009 and today is only 7 years apart. Thus, it may be more prudent for the banks to slow the loans growth instead of causing a potentially big
property bubble to build up
. On a personal note, I think when the banking sector remains sound, then property investments would be too. Happy viewing and perhaps applying.

written on 13 Aug 2016

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SG bank: Sorry, no loans for London properties.

The Brexit story continues for
London properties
. As per a Reuters article, a top Singaporean bank, United Overseas Bank has suspended its loans programme for London properties due to the uncertainty generated by Brexit.  It was also quoted that other Singaporean banks have also advised their clients about risks such as currency losses. UOB is however the only bank to have suspended the loans for London properties. One statement from UOB’s spokesperson via email sums their decision best. “As the aftermath of the UK referendum is still unfolding and given the uncertainties, we need to ensure our customers are cautious with their London property investments.”

Of course, based on exchange rate alone, London properties are now cheaper as the Singaporean dollars have gained 10 percent against the British Pound since the referendum. However, the
risks for Singaporean banks
 have increased due to the slowdown in Asia as well as the rising bad-debts in energy-related industries. Moody’s Investors Service also revised the outlook of Singapore’s banks to negative from stable. Its Vice President and Senior Credit Officer Eugene Tarzimanov said, “This reflected the “weaker operating conditions” against the backdrop of softer regional economic and trade growth” In 2015, 90 percent of UOB’s loans were to customers in Singapore, Malaysia, Thailand Indonesia and Greater China.

Singapore’s biggest lender, DBS Group Holdings is still lending but is has started to advise its customers to be cautious. Some analysts said
Brexit could slow down the sale of UK properties
 in ASIA as buyers turn cautious. Well, I think buyers have turned cautious even within ASIA itself and I do think there are lots of opportunities within ASIA including Malaysia too. UOB did say that it would review the market regularly to determine the right timing for it to resume its property loan offering. Yes, I think the slowdown in interest for London properties may have started. Somehow, these actions from such a famous bank here in ASIA does not provide the confidence an investor needs. Happy following.

written on 1 July 2016

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No loss of jobs even with HSR KL – SG postponement; over 100 specialists on SG side

In case everyone wants to know the direction of the property market, please look at the job market. This is the reason why property prices in cities are increasing because everyone’s looking for jobs in the cities instead of staying in the small towns and villages after they have graduated. When more jobs are being created, the demand for property will increase correspondingly after these working people have saved enough money to get a home. Else, they still need to rent and there is still going to be demand for properties so that these owners could rent to them. However, if no new jobs are created or people are losing their jobs, then there is no future for the property market. Since we are clear on this part, ever wondered what would happen to those people who were hired for the HSR KL – SG project? That one which has been postponed two years from 2018 to 2020?

There are no loss of jobs for those hired for the HSR KL – SG project, at least for the Singapore side.
In an article in ChannelNewsAsia (click here to read)
  The article says that a team of more than 100 specialists will be offered alternative jobs within the government agency (Land Transport Authority). This is because all of them have ‘lost’ their jobs after the postponement of the HSR KL- SG from this year to 2020. The commencement has meanwhile been pushed back all the way to 2031. (Sigh. I will be near my mid 50s by then…). SG HSR said, “During the period of suspension, SG HSR staff will be offered alternative job roles in LTA. We are confident that they will continue to contribute effectively in the LTA family in the roles that we take up during this suspension period. Subsequently, SG HSR’s work is expected to be scaled down until the HSR project resumes.”
Reference to the article in channelnewsasia here.

I wonder what will happen to those professionals hired on the Malaysian side. Perhaps just need to wait for some announcements from our Transport Ministry or the Economic Affairs since the agreement was signed by Economic Affairs Minister Azmin Ali just yesterday. Earlier article here:
Pay RM45.1 million first. Delay 2 years but completion date now 2031

Hopefully these people would continue to have employment because it may not be easy to find employment in a similar capacity elsewhere. Even Land Public Transport Commission (SPAD)’s current staffs’ future are unclear. Here’s that report not too long ago. Many mega infrastructure projects are now delayed, postponed or cancelled.
Perhaps we need to wait a while more before some of these mega projects will continue;
 wait till the government sort out what’s really needed and what’s not. Happy waiting.

written on 6 Sept 2018

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No maintenance fee? No maintenance loh…

Sometimes back, I wrote about how maintenance is key to a condo’s long term value.
Here:
Maintenance is key to secondary high-rise properties

 In fact those owners of condos who did not pay the maintenance fees and think they can pay later when they sell their condos are VERY SELFISH and will be the ones causing their condos to lose its value, FAST.

A Singaporean colleague told me of his failed condo purchase. Nearly the whole development was bought by investors and nearly everyone of them chose NOT to pay maintenance fees because they were NOT staying there. Great way of killing that condo….This is why it is so important to know who are buying and also how to inspect these secondary / completed condos.
12 tips on inspecting condos

Before anyone suggests that high-rise is full of issues and that we are
better off buying landed
,
 well for owners who did not pay maintenance fees, the law is already updated sufficiently so that these defaulters could be brought to court.
‘How to make apartment owners cough up maintenance fees – FMT’
 According to the House Buyers Association (HBA) honorary secretary general Chang Kim Loong, under the Strata Management (Maintenance and Management) Regulations (SMR), the management can publish the details of defaulters on the building’s notice board, deactivate electromagnetic access cards and suspend a defaulter from using common facilities.

A good friend shared with me about a high-rise she bought many months back. In the beginning, she was very happy with the offer from the developer which helped her save a over RM5,000 ringgit. The savings came from ‘Free Maintenance Fee for 24 months.’  Today however she shared with me that the maintenance at her high-rise development was really bad. The common areas were dirty. Rubbish bins were not cleared. The gym was not properly equipped and she does not feel secure with the security.

I asked how long more before she starts paying maintenance fee. She said slightly over 1 year more. I told her that many times, the maintenance fee would allow the development to maintain itself. However, if buyers are exempted, that means the money must come from the developers. In this case, if all the units have been sold, the payment from the developer into the management fund may be delayed. 🙂

Perhaps she could highlight this to the developer and tell them that without any actions, she would publicise the matter. Hopefully the developer care enough to take some immediate actions. Perhaps in this case, the developer could be brought to court for NOT paying the maintenance fees on behalf of those whom they waived the maintenance fees? Any lawyers do comment yeah on how to go about this. As for those still refusing to pay their maintenance fees, hopefully you are not brought to court soon.

written on 23 Aug 2017

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