Rejoice or Despair? Rates are cut to lowest in 10 years. (almost)

I should be happy with another rate cut from our Bank Negara Malaysia (BNM). Another cut of 25 basis points or 0.25%. Home owners should be happy. 25 basis point for a RM500,000 loan is a reduction (savings) of RM67 for that home owner. The higher the loan, the higher the savings. The lower the loan, the savings will be lower than RM67. That’s still RM804 per year and we have hundreds of thousands of home owners who would be smiling now. Images show the difference.

A RM500k loan with 4% interest.

A RM500,000 loan with a reduced rate. Now at 3.75%

Before everyone starts to think BNM is over-reacting, here’s what Federal Reserve of the US have done. They have just cut their rates by 50 basis points. The reason is the same. It is to cut the effects from the COVID-19.
(They still called it coronavirus in the report in cnbc.com)  Please click to read.

Article in thesundaily.my
  BNM issued a statement after the Monetary Policy Committee (MPC) meeting today. It has dediced to cut the Overnight Policy Rate (OPR) by another 25 basis points to 2.5% as the Covid-19 has hit our economy. “The ceiling and floor rates of the corridor of the OPR are correspondingly reduced to 2.75% and 2.25%, respectively.”

BNM said, “Although domestic growth is expected to gradually improve in the second half of the year, there are key downside risks, mainly stemming from the evolving nature and prolonged impact of the COVID-19 outbreak, and continued weakness in commodity-related sectors.”  The cut is to provide an accommodative monetary environment to support the projected improvement in economic growth and price stability. Please refer to the full
Article in thesundaily.my

I have written about this earlier:
Maybe even lower home loan and FD rates this year
  It has happened way earlier than I thought. Then again every other country hitby COVID-19 is doing something, our BNM could not just do nothing. Now, we talk about those who will be affected by this cut of 25 basis points. If we have a RM500,000 fixed deposit savings in the bank and it’s due to be renewed next week, then we would have ‘lost’ RM,1250 per year. Every month, we have just ‘lost’ over RM100. For some retirees, this meant they have to reduce their spending by RM3.50 every day moving forward.

Granted, it’s not a lot but as some Chinese would say, “You think RM100 is not money ah?” As they say, we could not have the best of both worlds. One important point that we need to understand that if we do not start to support the economy earlier, then later may just be too late. Yes, I agree with this pre-emptive cut in view of the current effects from COVID-19. Take appropriate actions yeah.

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BNM’s list of unauthorised companies and websites

Announcement by Bank Negara Malaysia:

— start of announcement —

Financial Consumer Alert: List of unauthorised companies and websites has been updated.

The Bank has updated the Financial Consumer Alert list. The list consists of companies and websites which are neither authorised nor approved under the relevant laws and regulations administered by BNM. Please take note that the list is not exhaustive and only serves as a guide to members of the public based on information and queries received by BNM. The latest list consists of 316 companies. The following companies were added to the list:

1. Ahmad Zulkhairi Associates PLT ( LLP0009065)

2. Ethtrade Limited

3. Ethtrade Malaysia

4. Kilauan Padu Services Sdn Bhd (KPSSB) (657711-X)

5. O2 Only One

6. OG1 Asean

7. Only One International Sdn Bhd (1195288W)

8. Proficiency Management and Services (002532706X)

9. Smart Trade Entrepreneur (002459702D )

10. Smart Trade Resources Sdn Bhd (1180992A)

11. TF International Group

12. TF International Group (MY)

13. TF International W1212 KL Team

14. ZEMC Sdn Bhd (1216874-A)

The list will be updated regularly for public’s reference. To view the updated list, click on
this
 link.

Get the list handy on your smart phones using MyBNM mobile app. Learn more about our mobile apps at the following link:
http://www.bnm.gov.my/index.php?lang=en&ch=en_mobileapps

— end of announcement —

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International Reserves – RM390.4 billion as at 30th June 2016

Hope everyone is at least aware that sudden financial crisis most probably would not start with Malaysia, based on the reserves numbers. Do google for the reserve numbers of some of the other more developed countries to understand my meaning.
1998 vs today?

Actual statement from Bank Negara Malaysia’s press statement on 5th July 2016. For even more official news, please refer
Bank Negara Malaysia (BNM)

International Reserves of Bank Negara Malaysia as at 30 June 2016

The international reserves of Bank Negara Malaysia amounted to RM390.4 billion (equivalent to USD97.2 billion) as at 30 June 2016. The decline in reserves level in USD terms as at 30 June 2016 was mainly due to the quarterly adjustment for foreign exchange revaluation changes. The reserves position is sufficient to finance 8.1 months of retained imports and is 1.2 times the short-term external debt[1].

[1] Refers to the redefined short-term external debt, which includes short-term offshore borrowing, non-resident holdings of short-term ringgit debt securities, non-resident deposits with the banking system and other short-term debt. For more information, please refer to the box article titled ‘The Redefinition of External Debt’ in the Quarterly Bulletin on Economic and Financial Developments in the Malaysian Economy in the First Quarter of 2014

– end of report –

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BNM: Risk of oversupply is real within the next 2 years

I believe there is an oversupply of new malls. In fact within the Klang Valley alone,  there are more malls than what I could visit in a year, even if I visit a different mall every weekend! Read here:
Seriously, when there are just too many malls

Of course, this has nothing to do with more bankruptcies like one article I read from a writer who hates shopping in malls. Yes, I think he meant his article to be a humour in light of current overload of negative news. Read here:

Malls, household debts and bankruptcy
  Let’s listen to an authoritative view from Bank Negara Malaysia (BNM) then.

Reported recently in themalaymailonline. BNM said that there is a potential for oversupply of commercial space within the next two years, we should take note. This is an expert view from an institution second to none in the world today. BNM’s deputy governor Dr Sukhdave Singh said, “By 2018, we might have an oversupply in the commercial space.” He pointed out a report by Jones Lang Wootton which estimated an average of 4.9 million square feet of new office space being added to the market each year over the next three years. This 4.9 million is considered high because the historical average has only been 2.8 million sq ft of new office space annually between 2001 – 2015.

Such a huge oversupply has caused complications in other countries and his next statement sounded like a warning. He said, “If we look at other countries, it is such [oversupply] that precipitated an economic downturn.” He said that BNM could see signs of oversupply for the retail segment particularly in Penang, Johor and the Klang Valley even if vacancy rates in some of these areas have been improving in recent years. More new malls would mean increased competition for tenants, resulting in higher vacancy rates, lower rentals and increased risk of dilapidation.

Okay, many local medias reported about PNB118 recently. The new tower which will be taller than Petronas Twin Towers. With its completion, oversupply of office space will happen in 2019. Read here:
2019 should have “cheap rental” for office space in KL?

Perhaps some organisation should do a study to show how fast should demand be growing per year in order to ensure this oversupply is minimised. When we have that number, then the right agencies can then focus on increasing that demand. Let’s keep reading and waiting.

written on 26 Mar 2016

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BNM takes the lead, now we should have a gentler October.

There’s always that feeling that come October, there will be casualties all over among the SMEs which will struggle to start repaying their loans. This is because their businesses which had been affected by the COVID-19 has yet to recover or for some not yet fully recovered. This is despite the reopening of the economy. The moratorium by Bank Negara Malaysia (BNM) will end by end September and though the banks have said that they are ready to accommodate those needing further extensions but it seems that the speed of this happening is slow. BNM has decided that they needed to help both the banks and the borrowers.

Article in edgemarkets.com
 . BNM has held a closed-door meeting with trade groups and the Association of Banks in Malaysia (ABM) and one key topic discussed was how the banks could help affected businesses with loan repayment restructuring. BNM is worried that many SMEs will struggle to repay their loans. Meanwhile, banks have also tried to reach out to businesses. At least one bank is said to have called out to a few hundred thousand clients on financial health and post-moratorium outlook.

SME Association of Malaysia president Datuk Michael Kang Hua Keong said, “I would suggest that Bank Negara instruct the banking industry to contact all their business customers about conducting R&R, provide a report to the regulator and subsequently make that report public.” Kang says that without a more robust outreach from the banking sector, there is a possibility of a larger than anticipated loan impairment and non-performing loans (NPLs) post moratorium. It’s a long and
comprehensive article in theedgemarkets.com (click to read)

This is why I think we need to maintain and enforce all the SOPs we have for COVID-19 strictly and keep the economy open versus going back into a lockdown unless truly necessary. Seriously, the banks could not do this forever yeah even if they are at a strong position before COVID-19 strike and thus they could agree to the moratorium of 6 months across the board.

As for COVID-19, it’s not likely to be eradicated so soon as even the vaccines are not ready and if they are ready, then which are the countries which will get it first? It’s a world of ‘I save myself first’ at the moment when it comes to the availability of such vaccines in the near future. This is why the base of it all, whether it’s for the economy or for the SMEs, is to wear masks and follow the SOPs strictly. Happy buying and supporting the local economy.

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Good news? BNM to cut OPR in November?

BNM to cut OPR in November? This is a question which was on everyone’s mind for September but it did not happen then. Should BNM cut OPR in November then?

By the way, cutting Overnight Policy Rate is not considered a good news yeah, even if everyone seem to think that this is a positive thing. For the economy, if the OPR is cut, it meant that our Bank Negara (BNM) is expecting the economy to weaken further and thus will need that extra support via the interest rate. Lower rates would push more people to pull out their money and invest it into something else. This is part of the monetary policy which involves interest rate.

Fiscal policy would involve infrastructure, for example public transportation projects like the MRT. Both policies seek to help the economy to grow. Latest expectations from Standard Chartered Bank is that because of the rising COVID-19 cases, BNM may cut interest rates again during the November meeting.

Photo by Adil Alimbetov on
Pexels.com

Article in nst.com.my
 . Standard Chartered said that there is a possibility for Bank Negara Malaysia (BNM) to cut interest rates again. This is because of the rising COVID-19 cases and the stalling of the economy. It also said that the Conditional Movement Control Order (CMCO) may shave 0.4% off Malaysia’s 2020 GDP growth.

It said, “Bank Negara may be less neutral now and we see a risk of the central bank cutting rates again in November. Nevertheless, we maintain our call for unchanged policy rates.” Standard Chartered said that because the rates are already at a historical low, further cuts may only have limited marginal impact and reduce future policy space.

It added, “The key will be the effect on consumer and business sentiment, but this will depend on the developing local infection situation. Further broadening or extension of the CMCO may result in a more pre-emptive decision by the central bank.” Do read the full article here:
Article in nst.com.my

Do read the article carefully yeah. Standard Chartered said that current rates are already at historic low and any further reduction will not impact the growth too much. In fact it added that the low number may also reduce the flexibility of BNM for further action. By the way, I agree with the assessment. I also think we should not keep reducing the rates unless the economy is really looking real bad within the next 6-12 months.

Anyway, what’s the difference for an extra cut of 0.25%?    Do refer below for a typical loan of RM500,000. The difference is RM60 per month. Actually, not a lot unless one is owning like many units. Then again, any savings are still savings.

Source: calculator.com.my

If you ask me as a home owner, of course I would love the rates to be as low as possible. However, I also would want the BNM to be sending the right signal to the market as well. If it’s really needed, then let’s do it. Else, let’s just watch and see. Sentiment need not be just because of interest rate alone yeah. It can also come from many other market signs as well. November is just a week ago, so just wait for the results then. So this remains a question. BNM to cut OPR in November?

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BNM’s 2nd Banknote Auction 29th March 2015 – Do not miss this

In Malaysia, banknote auction is still very new especially when compared to established banknote auctions in Singapore, Hong Kong or even London. This meant that the investment opportunity remain to be huge as it become more popular and one day becomes as popular as those of developed banknote auction markets.  However, since the first event organised by
Bank Negara Malaysia’s official banknote auctioneer
,
MNP Auctioneers (Central) Sdn Bhd
 last year, banknote auction is fast gaining traction as a form of alternative investment. In that first event, the results were beyond expectations and bidders from all over Malaysia and even out of Malaysia flew in just for the event. MNP Auctioneers said that their email box was full of new inquiries every day until after the event!

The second Bank Negara Malaysia (BNM) Malaysian Banknotes Auction is BACK. It will be held on the 29th March 2015 at its state-of-the-art money museum, Sasana Kijang, Kuala Lumpur! This exclusive event is once again organised by BNM’s official auctioneer, MNP Auctioneers (Central) Sdn. Bhd. This time total lots on auction is 178, with indicative price ranging from RM20 to RM1,500. Yes, you read it right, starting from RM20. Please do not think too much on what’s the probability that you may win. Think a little further about how your investment may give you huge returns many years down the road.

This time BNM will launch 17 lots
(do download the pdf file here)

specially-framed with a serial number certificate. MNP Auctioneers’s managing director Stephen Soon believes that these lots will receive the hottest bids of the day! They expect many new collectors (newcomers) will join in to bid for the banknotes with special serial number which was reserved by BNM to be auctioned off as auction is an open platform. The ultimate purpose is to give the public an opportunity to own a piece of these one and only banknotes in the world. This second auction has also some improvement especially the authentication part. As there is no public viewing on the banknotes to be auctioned, MNP Auctioneers has prepared a
detailed description
 for the banknotes to give bidders a bit more information and idea about the quality of the banknotes that they are bidding. Download it here:
MNP Booklet (Second Auction)

The special serial number banknotes to be auctioned for this time includes the 4th series that has been circulated since the year 2012. MNP has organised an open day on 21st March in support of this upcoming event. Interested bidders are advised to register early before the auction day to prevent any inconveniences that may arise during peak registration hour.
During auction day, registration will open at 8.30am and closes strictly at 10am (first session commences at 10.30am). Registration will re-open at 10.45am and closes at 1pm (second session commences at 1.30pm).

What happened in the first auction last year? Some basic statistics for the inaugural auction dated 27.9.2014:

Details for the event:

Date: 29th March 2015 (Sunday)

Venue: Sasana Kijang, Kuala Lumpur (Within Bank Negara Malaysia)

MNP Auctioneers (Central) Sdn Bhd
 is the Official Auctioneer for Bank Negara Malaysia. It is also certified to ISO 9001:2008 QMS.

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Bank of England: Financial stability a challenge because of Trump and Brexit

First of all, I am NOT a supporter of Brexit. I believe that Britain and the European Union (EU) as partners are better than both separated; economically. On a longer term, depending on how well the European Union could leverage on other stronger economies within the EU, perhaps Britain would face more challenges because it would have lost one huge market. (Do read about the comments from Germany and France to understand a bit more.) One good friend says that Britain will do better than to remain tied to the EU ‘baggage.’ Well since we are both here in Malaysia, we would just have to see a few years downtime road. Kopiandproperty.com shall be a witness. 🙂

In a
widely reported comment
, the Bank of England (BOE) has said that the U.K. financial systems remains broadly resilient but the outlook is threatened by potential risks from Brexit vote and Donald Trump’s victory to become the next U.S. president. BOE Gov. Mark Carney basically said that the threat to the U.K. economy would come from external instead of domestic. With the anticipation of fiscal stimulus, money is now rushing back to the U.S and this meant pressure on emerging markets. Should British banks suffer huge losses due to this, it will affect the U.K. financial stability. He also shared this, “It is important to recognize the U.K. is effectively the investment banker for Europe. It is absolutely in the interests of the EU that there is an orderly transition and there is continual access to those services.”

I think it’s better for the new British Prime Minister to think and act courageously instead of really applying to start the ‘divorce’ process within the next few months. It is definitely in the interest of all the other EU members too. Many have offered economic rhetorics but the real underlying reason for all these chest thumping is also because it showed Britain is a very important member. To be direct, another smaller EU member would have attracted by far lower attention than the current one given to Brexit. Yes, this is the reality that everyone has to put on the table for consideration. All the best yeah, leaders of Britain and the EU. Happy following.

written on 30 Nov 2016

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Frankly, is ‘boiling’ a positive word for the property market?

The number of COVID-19 cases have now increased to over 3,000 everyday. How’s the impact to the property market?

Worrying sign if COVID-19 cases continue to increase

It’s worrying and if this number does not start to reduce, we would soon be reaching the maximum number of available beds and people would again be asked to do self-quarantine at home. It’s not a good feeling and it  seems that the positive sentiment did not even have a proper start and we are sliding back into negative sentiment again. Could we do something about it? The answer is yes.

UK was affected badly by COVID-19 but what a turnaround it has been. Vaccinations are expected to reach everyone by July 2021. (At least one dose).
Read here for the article in bbc.com
 Meanwhile, this has happened to it’s proper

Article in bbc.com
  UK house prices rose by 7.1% compared with a year ago. Lucy Pendleton, from independent estate agents James Pendleton, said: “This market is on the boil. Silly season might be just around the corner. That’s when a seller’s market becomes entrenched against a backdrop of very high demand and you start to see open houses for properties that are nothing special and a return of gazumping.”

Nationwide chief economist Robert Gardner said that price growth was also likely to accelerate as demand is expected to exceed the supply of homes on the market. Mr. Gardner also said, “The fact that around a third of first time buyers in England in 2018-19 said that friends or family helped them to raise a deposit through a loan or gift suggests that the recent surge in savings will help some, but that the impact won’t be spread evenly.” Do read the full article here:
Article in bbc.com

When demand rises fast, supply definitely will need time

When the demand for smartphones suddenly increase, production could be increased and delivered in a matter of weeks. Delivery has to be by air but it’s doable. However, when it comes to demand for homes, sudden new demand cannot see a sudden increase in supply. Construction of homes need time. This is why occasionally when demand suddenly rises due to positive sentiment, prices will be pushed upwards because supply has not yet arrived.

However, this may also lead to a lot of supply being planned and then built and then delivered and we see a sudden surge in supply a few years down the road. If demand did not keep up, then of course we would soon face price pressure and the number of overhang units may also rise too. This is how the market works and it’s really not possible to have the exact demand and supply equation. For now, there seems to be a much higher demand versus supply for the UK property market.

Not a similar situation here in Malaysia

At the moment, I do not think something similar is happening in Malaysia. Let’s stay focused on vaccinations first. Sentiment should turn positive only when cases show a downward trend and the vaccination number shows a quick uptrend. Hope everyone around me will start showing the ‘I have been vaccinated’ sign in the near future. Until then, stay safe and PLEASE follow the SOPs. Mask on, distance adhered.

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Bond market is not necessary safe, potential huge loss by Swiber

Just 3 weeks ago, Colleague C was asking what would be a good and safe investment. Colleague E replied that he prefers bond when the market is in messy mode. Reported in Straits Times was about bondholders starting at huge losses due to troubles at Swiber Holdings. It has just filed a winding-up application, and its directors have resigned to pursue their own interests. This was unexpected because Swiber has been active the bond market and has launched 20 bond issues since 2008. Earlier, two other bond issuers; Trikomsel Oke and Pacific Andes Resources Development had also failed to make payments on their notes.

According to Mr Terence Lin, assistant director of bonds and portfolio management at fund researcher iFast, Swiber’s bonds were a risky bet. This was an issuers who was one of the heaviest borrowers in the offshore and marine industry. This industry is in a bad shape currently due to weak oil prices. The following are the banks who managed Swiber’s 20 issues. DBS has managed 12, along with banks such as ANZ, RHB, Citibank, HSBC, ICBC and OCBC. These bonds, which come with a minimum investment of around $250,000, are typically placed to institutional and sophisticated investors, including insurance firms, asset managers, corporates and high net-worth individuals.

It was also reported in the article also that bankers’ commission for the issues can be as high as 1 percent. With 4 – 6 percent yields, it is extremely attractive when compared to the current low deposit interest rates. Currently, Swiber has four outstanding Singdollar-denominated and one yuan-denominated bonds.Total amount for these amounted to $551.8 million. I have been investing in funds for the past 15 years. I seldom see bond funds as attractive and there were just one or two occasions that my fund manager changed my equity funds into bond funds. Moving forward perhaps even for bond funds we should find out where are these funds invested in and that potential for big losses, especially with
extremely attractive returns
 when compared to the fixed deposit rates. Full article in
straitstimes here.

written on 7 Aug 2016

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Bonus coming within months. Are you ready?

I am working full time today. Working very hard too. I think majority of kopiandproperty.com readers are working professionals like me. GAMBATE to all of us. Well, for many of us, the season for bonus is about to arrive. So, have we done well enough to deserve at least a token of appreciation or for some of the top performers, perhaps a bumper year for you if the company has also been performing well? Some time ago, I posted this
article about bonus
 and someone commented that in Malaysia, the employers do not reward the employees enough. Therefore, it’s better to seek better jobs than to wait. Perhaps this is true for many? Actually, it is true all over the world. It was also true even long time ago, just that the number of available jobs were not as plenty as today. For many countries today, it is still true and people do not change job or even take MCs for fear of losing their jobs.

Just a few days ago, a young friend who’s in the journalism line said that she hope the private sector would just give all employees a huge raise and a big bonus so that everyone can enjoy because of the high cost of living nowadays. I replied that if I am the owner of the business, it is not my preference to give every employee the same increment and the same bonus. It is my preference to give a 50 percent higher salary to my top 20 percent staffs while the rest of the staffs, I will give a standard market salary. I need to keep the best people from being poached by others. Plus, with my 50 percent extra pay, I could also easily poach the top talents from other organisations. She laughed and said, I know what you mean. Okay, it’s better to be top performers. If I give everyone the same salary increment and bonus, very soon, my company would have only the non-performers remaining while all the top performers would leave because they could.

Hopefully, for the past 11 months plus, we have shown our company that we are worth the extra pay raise and bonus yeah. Some advice from a 40-year old, me. It’s never about how bad the company is. The reason is simple. If the company mistreated us and we could not find another company that could appreciate us, there is really nothing wrong with the company! If we complain that our bonus is so low compared to all our friends, yet we are still in the same company year after year, there’s nothing wrong with our friends too. If we are a senior manager and still hoping for big fat bonus so that we can buy a new smartphone, we are in trouble today. My 23-year old staff has just bought his first property. Assuming, he could only buy one every 10 years, he would have 4 by the time he retire. Definitely a better bet than hoping for a 2-month bonus. To everyone who’s getting a bonus, invest it lah. 🙂    (Can also call me out for a teh tarik session too. Haha)

written on 23 Nov 2017

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  (yeah.. crazy but true…)courses / seminars to enhance your knowledge. The right investment would yield us many more times than the usual bonus or increment. It’s very important to work hard and climb the corporate ladder but it’s even more important that you think of what lifestyle you really need in future when you retire. Relying on just the salary alone is no longer sufficient in the materialistic world of today. In fact even if you say I do not wish to be materialistic, please be reminded that as the market continues to expand, the prices would also be increasing too. First thing? Save. Second thing? Invest in something you have knowledge about. Third thing? Repeat. Haha.

Thus, do not be overly sad about your bonus or increment. Take some portion, enjoy it and the rest, think about your future. Then, act accordingly.

written on 9 Feb 2015

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Anyone here getting 16 months bonus?

Every employee , after working hard for the past one year would be looking forward to the announcement of bonus from their company. Are you waiting for bonus too? Are you confident that you will get something this year? For the ones in the tourism industry, it is in a tough situation currently. Many malls are also struggling too. It may not an easy time for many companies currently especially because of the COVID-19 but there are definitely exceptions yeah.

Photo by Breakingpic on
Pexels.com

For example, logistics company. The things we bought online needs to be delivered. Another example would be glove companies. Here’s another company which is doing very well and has even announced bonuses of up to 16 months! Hopefully more companies who are also doing well would follow yeah. Do not just reward the top management. The frontliners deserve a lot more attention too.

Article in straitstimes.com
.
  Eligible Sheng Siong staff will receive total bonuses of up to 16 months, inclusive of the annual wage supplement (AWS) for 2020, with the supermarket operator having raised the variable bonus to 20 per cent of the company’s profits before tax, Today reported.

The bumper bonus was to recognise that the company had “performed extremely well as compared to previous years”.  Total bonusses for staff ranged from 4.68 months for eligible part-time staff and 15.72 months for those ranked as assistant managers and above. Do read the full news here yeah.
Article in straitstimes.com

Significance of 16 months bonus?

This is like working for 12 months and getting a total of 28 months pay! In fact this will be a good news for the economy too. All these staffs would definitely be spending a lot of these newly gotten wealth. Imagine a typical salary of S$5000 (RM15,221) x 16 months and we will get S$243,536 for just one assistant manager. Assume this one person spends just 30% of this and that’s S$72,000. With a multiplier effect of 4, this is a contribution of close to S$300,000 to the economy.

Significance of money going to the ones needing it more?

This is why it’s very important to understand that when the richest get ever richer, the money does not flow into the economy. When the money flows to the ones who need it more, they will spend and the economy will benefit. This is why I kept writing about why it’s very inappropriate for startups to kept getting ever higher valuations and making the founders ever richer but when something goes wrong, the ones losing their jobs would be the frontliners.

My wish
?

Everyone would get paid fairly for what they do. Companies which are earning good profits should distribute more of these profits to their people who have worked so hard for the company. If you know of any such good companies paying such a huge bonus to their employees, please let me know yeah. Let’s keep motivating them and reminding all other companies to do the same.

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Property Investment 101: You don’t pay, you open the boom gate yourself

Boom Gate and Security Guards for security

For some housing areas, some residents may prefer to increase the security and thus perhaps a boom gate may be built and security guards would be hired to manage it. Yes, boom gates are allowed if the city council approves it. Meanwhile, it’s not easy to get every resident within the housing area to pay for the boom gates operation yeah. Now, perhaps it could get slightly easier? A court has just decided that if one does not pay, no one will help to open the boom gate yeah.

Article in freemalaysiatoday.com
   A registered residents’ association within the Petaling Jaya City Council (MBPJ) can impose conditions on members who do not contribute towards security and maintenance, the Court of Appeal has ruled.

A three-member bench chaired by Justice Has Zanah Mehat said a condition set by the Parkville residents’ association requiring non-paying members to operate the boom gates themselves is reasonable.

Has Zanah, who sat with Justices Che Ruzima Ghazali and See Mee Chun, said it would be unreasonable for non-paying residents to enjoy the benefits of a security system without having to contribute towards it. Please do read the full
Article in freemalaysiatoday.com

Pay or no pay is still a decision by the resident

By the way, the ruling above simply are saying that non-paying residents should not enjoy the same benefits are paying residents. It does not say that residents must pay for the boom gate or the hiring of security guards. In other words, pay or no pay is still a decision by the residents and not something compelled by the courts. This is different from a stratified development. By the way, stratified development is not just for high-rise yeah. Strata landed properties are governed by the Strata Management Act 2013 (SMA) and Strata Titles Act 1985 (STA)

What about stratified developments then? Is it different?

In a stratified development, maintenance fees are compulsory and there are many actions which could be taken legally against anyone who refuses to pay the maintenance fees on time. Section 12(5) of the Strata Management Act 2013 states this. As a unit purchaser, you will have to pay the management within 14 days of receiving a notice from them. If you fail to do so, you will be legally defined as a defaulter. This is as stated in the Strata Management (Maintenance and Management) Regulations 2015 (SMR 2015).

Under Regulation 6(2) of SMR 2015, the management is also allowed to charge you interest on the amount owed, starting from the end of the 14 days until the date you pay up, at 10% per annum or any rate that the management decides.

Blacklisting is NOT the only option yeah

These may happen if one does NOT pay the maintenance fees.  You may be sued in the court or the Strata Management Tribunal if you fail to pay the outstanding charges within 14 days of being served with a written notice by the JMB. The management can also take the following actions.
(Source of info: iproperty.com.my)

The management can take the following actions:

They can forcibly enter your unit (within 14 days of receiving the written notice).

They can also seize movable properties. The items will be
auctioned
 off to settle the outstanding charges. Items that are usually seized from raids include electronic items like smartphones, televisions and other electrical appliances.

The management body can display your name in a list of defaulters together with your unit number and amount owed.

Your access card to your residential complex will be deactivated without prior notice. You will be charged a maximum of RM 50 to reactivate the card.

You are required to sign in when entering the building if your card is deactivated. A
security
 guard will have to follow a defaulter to the unit every time he enters the compound.

Your access to common facilities will be suspended. That includes car park lots that have been assigned to you.

Your name will be blacklisted in
CTOS and CCRIS
 which may negatively affect any future bank loans. You might not want to mess with this.

There could be fines and imprisonment as well. Strata owners who fail to keep up with their maintenance fees could be committing a criminal offence. They may be liable to a fine not exceeding RM 5,000 or imprisonment for a maximum of three years, or both. In case of a continuous offence, a further fine not exceeding RM 50 per day could be imposed.

Happy understanding and please do pay the relevant fees or proceed to stay at some place without the need to pay any fees at all.

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Property prices up because of the Prime Minister effect? Wow.

Let’s understand a bit before starting this article. Boris Johnson is the current UK Prime Minister (PM). He has been the PM since 24 July 2019. That’s about 6 months now. Halifax is a division of Bank of Scotland. Bank of Scotland is part of Llyods Banking Group. Llyods banking group is meanwhile a top 23 largest banking group in
the world with over US$1 trillion in assets
. As a comparison,
 the largest bank in Singapore, DBS Bank has assets of US$372 billion. (as per wiki)
  Now, let’s start looking at one latest news about how a new Prime Minister’s actions are also helping to push up property prices. WOW…

Article in mansionglobal.com
  Halifax’s report says that the U.K. property prices are continuing to climb amid the so-called “Boris Bounce.”  Prices in January were 4.1% higher than they were at the same time in 2019, the highest level of annual growth since October 2017, and the second consecutive month of price growth of at least 4%, according to the bank and mortgage provider.

The reason for this seems to be the catalyst from December’s general election and the U.K.’s official departure from the EU on Jan. 31.  This effect of uncertainty-busting policitical double whammy are being dubbed the Boris Bounce, after the Prime Minister Boris Johnson.   Marc von Grundherr, director of estate agencyBenham and Reeves said, “It would seem that the Boris Bounce in market activity that followed December’s election has blown market expectations out of the water where the rate of annual house price growth is concerned and has catapulted a once weary market back to previous form.”  Please do read the full article with even more numbers from the
Article in mansionglobal.com

I know what you are thinking. What about Malaysia then? I personally do not think a Prime Minister should be a major criteria of the property price yeah. Better rely on fundamental numbers instead. The image below shows the house price index since 2018.

The House Price Index basically reflects the current sentiment in the market; unsold unit numbers, uncertainties with the world economies as well as perhaps the ‘Trump’ effects more than any other world leaders. Happy understanding yeah.

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Borrow less, stop price appreciation and economy becomes stronger

I agree with the following statement tremendously.
“My judgement is that in the current environment, the resilience of our economy would be enhanced by an extended period in which housing prices and debt outstanding increased no faster than our incomes” It’s a comment by Reserve Bank governor Philip Lowe. (Australia’s Reserve Bank)  If you want to read the full article, it’s here:
 ‘Borrow less to keep economy strong’
It’s not just Australia but even the U.S mortgage crisis could have been averted if the authorities did not let everyone borrow as much as they want and the prices of properties spiralled out of control into total “unaffordability” (my term) and then ‘kaboom’
Here’s an article about ‘kaboom.’
 Of course, it’s quite hard to imagine Australia facing the same situation because as at today, the sovereign rating for Australia is still perfect. Fitch, Moody’s and Standard & Poor has assigned it AAA. Higher than even the U.S and
China. China’s rating has been cut recently because its economy has slowed down.

Before we start to say but if we borrow less, then the economy would slow down, well that’s not true. How about if we borrow to set up new businesses. Borrow to expand our businesses. Just do not borrow and keep pushing house prices ever higher. Definitely do not borrow to invest in such ‘sure get rich very quic’ schemes. Warning here:
Just got cheated? Well, no end in sight

 Where properties are concerned, there are still choiceslah. Not as good looking, not as nearby to that favourite mall etc etc etc. Not everyone needs to stay in those few hotspots. Not everyone should borrow till they reach the maximum they could borrow. Remember, risks are high when debts are very close to what we earn. This was what our former BNM governor Zeti said which I think will always be true.

Stay safe, buy within affordability and stop bubble building

The only reason why prices would keep rising for some properties is because people keep queuing up to buy those same properties. These days however, banks have their own valuation and that loan that we want may no longer be 90 percent but may be lower, even if it’s our first property. Actually, when banks lend us less money, they earn lesser interest payments. Thus, it does not make sense for them to lend us less money UNLESS they feel that the price that we are okay is actually not okay to them. If they feel it’s risky, should we not take heed? Anyway, as at recent months, banks are still earning good profits. This meant that they are still lending more and borrowers are still borrowing. Recently, a few more banks have also announced better profits. Earlier article here:
Cheap money, pessimism and banks’ profits – let’s learn
 Bear in mind, regardless of country, when prices of ALL properties becoming unaffordable to the masses, the huge drop is coming. Happy deciding before buying.

written on 31 May 2017

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When borrowers need not even qualify for it, better be fearful!

Remember
subprime-mortgage crisis in 2008?

In brief, the banks were lending to borrowers who SHOULD NOT have gotten the loan in the first place. Then, everything collapsed when the borrowers really could not pay. This is the reason why I would not want the banks to lower their lending standards here in Malaysia. Buyers just have to buy something cheaper so that they get approved, that’s all. There is little need to stretch the Debt Service Ratio (DSR) to the limit and then get a rejection for the loan application from the bank. How does this DSR affect us?

According to my good friend
Mr. Miichael Yeoh
, conservatively, for working people with an monthly income below RM5,000 the Debt Service Ratio for some banks may be around 40-50%. In other words, banks may approve loans as long as the repayment for all loans do not exceed 50 percent of the monthly income. For those with a monthly income of RM8,000 or higher, the DSR can go up to 85 percent. Note, this is dependent on banks and does not mean every bank has the same set of criteria. Now, imagine if the banks lends even when the buyers actually no longer qualify for the loan based on DSR. Yeah, we start to have a market with a certain percentage of risky owners. When this group becomes big enough, next mortgage crisis will happen sometime in the future.

Some signs yeah.

According to a report in CNBC,

some lenders are expanding their loans to borrowers with”less-than-perfect credit.” For example,
California-based Carrington Mortgage Services. However, this is what
Rick Sharga, executive vice president of Carrington Mortgage Holdings says, “We’re not going back to the bad old days of ninja lending, when people with no jobs, no income, and no assets were getting loans.”  Basically, Carrington will assess individual risks but will allow borrowers to have FICO credit scores as low as 500. The typical average for agency-backed mortgages is in the mid-700s.
This is FICO score in the U.S.
The higher the score, the lower the risk.  Besides Carrington, another lender Angel Oak began offering and securitizing nonprime mortgages two years ago and has done six nonprime securitizations so far. Recently, it finalized its biggest securitization yet — $329 million and slightly over 80 percent are under nonprime.

Lending standards are also being relaxed. Fannie Mae said last summer that it would relax its lending standards for prime loans, allowing borrowers with higher debt and lower credit scores to obtain loans without additional risk overlays, such as large down payments and a year’s worth of cash reserves. The report also says that there are many borrowers who wanted to become homeowners but are currently frozen out of the mortgage market. It says that m
illennials, the largest home buying group today have much higher levels of student debt than previous generations.
Please do read the article in CNBC in full here.
This is not the only article about subprime mortgage market.
Here’s another one from Financial Times.
 And another one from CNBC about how banks are also
moving back into the subprime market.

As of now, I did not find any article giving an estimated date as to when the next mortgage crisis may happen. However, I personally do not support banks lending to borrowers who do not qualify. I support the state and federal government doing MORE to ensure affordable homes are there for homebuyers. Let’s hope everything is under control yeah. For Malaysia, it’s not that easy to get a loan but as everyone noted, another mortgage crisis would still dent confidence all over the world and not just affect the housing market in one country. Happy borrowing.

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written on 15 April 2018

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Borrowing costs remain at 3.25%

Today (28th Jan 2015), Bank Negara Malaysia has announced that it will maintain the borrowing costs at 3.25%; unchanged. This was widely expected even though an adjustment upwards would have lent some support to the weakened Ringgit. It said that the current monetary policy i accommodative and appropriate given the current financial and monetary conditions. In fact despite that volatility in the international financial markets, there’s a lot of liquidity in the domestic financial system. In brief, healthy lending environment thus far. Oh yeah, please read about all other currencies and not just Ringgit and you would understand the world instead of thinking Ringgit is the only currency fluctuating or depreciating.

Bank Negara also said that currently, the prospects for Malaysian economy is on a steady growth path. Reminder, ‘STEADY GROWTH PATH’. Please stop painting a ‘crisis’ picture because there are no numbers pointing otherwise and even international rating agencies still rate Malaysia under the investment grade and is in fact higher than some other ‘nearby’ countries that people are so proud about. Some of these countries are already rated below investment grade for some time. No one (country) is expected to go into crisis but comparison wise, Malaysia remain stronger than the rest. In fact the current capital outflow for past 6 months, if it had happened in 1998 meant that Malaysia would have gone bankrupt. Yet, today it is just another piece of news. Is it on a negative outlook then? Your guess is as good as mine. My personal answer? No.

One piece of good news but has not really trickled down to the consumers would be that the inflation rate is expected to be lower than anticipated mainly due to the lower energy and commodity prices. If you recall, there would be no electricity tariff adjustment this year. With the much lower petrol prices, it also meant that the drivers have more savings and thus money to spend. It’s pretty significant. As an example, 35 cents savings per litre meant if you used to drive 2,000km per month, you have just saved RM70. I think the retail sales market may be better than expected even though the current expectations would be that it would be slowing down. Yes, my personal opinion is that it is still safe to buy properties provided you are either buying for own stay or buying a secondary undervalued property for which rental can cover your mortgage. Look around, these are still available. Happy searching.

written on 28 January 2015

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Both sides are in ‘sync’ for HSR KL – SG. Now for the year end meeting.

If you are still thinking about the cost of High Speed Rail KL- SG and that the ticket revenue will not be able to cover the cost until 40 years later and therefore we should not build the HSR KL- SG, please skip this article yeah. There are a lot of other articles which support your view.

If you are someone who understood that companies could continue to grow in SG and employ workers who could stay in JB and both sides continue to prosper and that 300,000 people uses the link between JB and SG daily… then please read on yeah. By the way, HSR KL- SG is NOT just to benefit two points between KL and SG. It will benefit the many stations in between as well. Please always remember that only 5% or around that number of all Singaporeans actually own a car… And they cannot always visit just JB every weekend… Happy thinking.

So, an update that both sides sort of synced already.

This was the statement in Singapore’s Transport Ministry on 31st May 2020 when the HSR was suspended FURTHER.

The website link is here. Statement is below.

“In response to media queries about the KL-SG HSR project, we confirm that the Government of Malaysia has informed Singapore that it would like to propose some changes to the HSR project, and has requested a seven-month extension to allow both sides to discuss Malaysia’s proposal.

“Singapore continues to believe that the HSR project is a mutually beneficial project that will strengthen the connectivity and people-to-people ties between our two countries. In the spirit of bilateral cooperation, Singapore has agreed to a final extension of the HSR project suspension by seven months to Dec 31, 2020. We look forward to receiving Malaysia’s formal proposal on the changes to the HSR project soon, so that both sides can begin discussion immediately,” the ministry said.

— end of the statement —

A few days earlier, we have a statement from Prime Minister Tan Sri Muhyiddin Yassin. (click here for it:
Article in theedgemarkets.com

I do think it sounded positive. Like a good friend who wanted to accommodate his good friend who was facing some internal issues. At the same time, it explained very briefly the benefits of having this project because this will strengthen connectivity and people-to-people ties between both countries!  Last but not least, it mentioned that this is a FINAL extension and I think this should be the final one because just a few days ago, this was what Prime Minister Tan Sri Muhyiddin Yassin said.

He hopes that the discussion at Ministerial level for the High-Speed Rail (HSR) project would be held soon. He said, “For the 10th Annual Leaders’ Retreat (ALR) session which should be hosted by Singapore this year, I have told officers of the two countries to discuss and continue to propose a suitable approach to hold the ALR session or put up other proposals.”  That full article about what he said and more is here.
Article in theedgemarkets.com

I think both sides are in sync. Hopefully they will meet sooner than the year end retreat. Yes, I do think it could be fast-tracked and we really do NOT need to wait until 2030 or beyond in order to start going to Singapore daily via the HSR. Before we think it’s not a possibility, please do take a look at Japan’s shinkansen (bullet train) It’s just too expensive to stay within Tokyo. Many working people stay in another city which could be easily over 100km away. Earn good pay in Tokyo, pay lower rental in another city much further away. They then travel to work every morning. To and fro, they may have travelled over 400km. DAILY. Promote connectivities because this will promote business activity. Happy meeting…

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Press Release: Boustead Properties’ Balau Homes Phases 1A1 And 1A2 In New Smart  Township Mutiara Hills Successfully Hit 90% & 80% Take-up Rates

PRESS RELEASE: BOUSTEAD PROPERTIES’ BALAU HOMES PHASES 1A1 AND 1A2 IN NEW SMART TOWNSHIP MUTIARA HILLS SUCCESSFULLY HIT 90% & 80% TAKE-UP RATES

PETALING JAYA, 25 February, 2022
 – Award-winning master developer Boustead Properties Berhad’s (Boustead Properties) Balau Homes in its smart township development Mutiara Hills in Semenyih became a hit with 90% take-up rate for its Phase 1A1 and 80% for Phase 1A2. Phase 1A1 was launched during the second quarter of last year, while Phase 1A2 was soft-launched in January 2022.

Balau Homes comprising a total of 230 units of landed residential property is located in the Northern Precinct of Mutiara Hills. Phase 1A1 comprises 74 double-storey linked units and is targeted for completion in 2023, while the 66 units in Phase 1A2 are targeted for completion in 2024. With six phases in total, Balau Homes has a gross development value of RM220 million.

Boustead Properties Berhad Chief Operating Officer Eason Phan elaborated: “Mutiara Hills is the ultimate goal in smart township master planning and is perhaps one of Boustead Properties’ most comprehensive undertakings thus far in bringing to life our vision to reimagine township planning and real estate development.

“It is an evolving liveable masterpiece creatively crafted through inspiration from respecting nature, promoting mobility, and nurturing community engagement. An extensive group of diverse stakeholders, ranging from local and international practitioners and governmental agencies to homeowners have been involved in this meaningful project.

“We are building sustainable spaces as homes by contributing to the larger context that promotes the continued growth of every component of an integrated liveable township. We see Semenyih developing over time in a similar way as Mutiara Damansara and Mutiara Rini, evolving from neighbourhoods to become thriving, sustainable suburban cities. We are also utilising the most relevant features and technologies to cultivate an ecosystem that allows us to create value for all our stakeholders. These eco-friendly aspects are standard features in Balau Homes.

“At prices starting from RM469,650, the built-up area of Balau Homes Phase 1A1 ranges from 1,512 sq. ft to 2,158 sq., this ‘once-in-a-lifetime’ entry level pricing provides first-time home buyers with options in selecting homes to suit a wide range of needs and preferences. Qualified purchasers can also opt for attractive financing support from major financial institutions,” he said.

Located closer to the scenic man-made lake in the township, Phase 1A2’s double-storey linked houses see a starting price of RM481,275. The latest phase in Balau Homes features the same spacious, minimalist modern design and layout options as the earlier Phase 1A1 that homebuyers loved.

According to Eason, Balau Homes’ price point hits the sweet spot given the spaciousness and affordability of the homes. “We have focused our efforts on designing homes that are attainable and we take pride in delivering value and quality to discerning homeowners who know what to expect when it comes to a Boustead Properties home,” he added.

Set against the scenic backdrop of Titiwangsa Range and Broga Hill, Mutiara Hills is approximately 40 minutes away from both the Kuala Lumpur City Centre (KLCC) and Kuala Lumpur International Airport (KLIA). It is a stone’s throw away from the mature town centre of EcoHills and is adjacent to the prestigious University of Nottingham, UK (Malaysia Campus) and other educational institutions like Tenby International School and Kolej Tuanku Jaafar.

Mutiara Hills will also be a testament to how Boustead Properties implements ESG (environment, social and governance) principles in creating a sustainable real estate development. The township received its provisional GreenRE certification in 2021 and will continue to explore and harness various sources of renewable energy to achieve a near zero carbon development, with smart mobility, efficient water management system and other environment-friendly features to promote liveability.

There will be significant emphasis on positive social impact elements such as public spaces, offices, educational and medical support facilities to enable communities to thrive, while the company upholds good governance practices. Additionally, Boustead Properties will ensure its township meets the 17 elements of United Nations Sustainable Development Goals (UNSDG).

The township is easily accessible via LEKAS, Cheras-Kajang Highway, and Sungai Besi Expressway which provides direct free flow traffic expressways to thriving towns like Kajang, Bangi, Putrajaya, Cyberjaya, Seri Kembangan, Bukit Jalil, and Puchong.

Boustead Properties recently introduced a revitalised corporate identity that will see the developer moving forward with a new vision, ‘Creating Smart Spaces Now’ and tagline ‘Spaces, Inspired.’ The ongoing reinvention journey is expected to cushion the impact of the pandemic through innovation and technology, to improve performance and fulfil the ever-evolving needs of the real estate industry.

— End —

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BOVAEA: Even more illegal brokers in Malaysia

What’s really happening to the real estate negotiators in Malaysia? Well, they seem to be facing threats after threats. Slowing market meant that potential sales has gone down. More efforts needed but lower closures. Many have changed their full time job as Real Estate Negotiators (REN) to a part time one and taking up another full time or part time work. According to The Board of Valuers, Appraisers and Estate Agents (Malaysia) (BOVEVEA), there are today even MORE illegal brokers! If it’s so tough then why are there even more illegal brokers? Well, according to them, these new illegal brokers include individuals, investors, business entities and companies and they are cashing in on new projects development opportunities. It said that recently, it was discovered that one public listed company has even started a property portal to promote developer’s product. Basically, these groups are disregarding the law.

These new threats were discovered during a six-month campaign called C.A.M.P which seeks to educate the public on the various methods used to con unsuspecting property sellers, buyers, landlords and tenants. These methods include Cheating, Absconding, Misinterpretation and Profiteering. It was during this campaign that BOVAEA discovered individuals and companies using new age media to market properties illegally. In fact there is a web page applications (app) urging landlords not to use services of Real Estate Agents. BOVAEA said that landlords who use their service would have no protection under existing legal authority.

President of the Board of Valuers, Appraisers & Estate Agents, Tuan Haji Faizan Bin Abdul Rahman said that these are happening more because of the continuous demand for properties and a challenging market. Faizan who is also the Director General of Valuation and Property Services, further added that ”If you engage a registered real estate agent or certified negotiator, then BOVAEA can take action should there be a dispute. When using an illegal broker or firms not registered with the Board, there is little we can do to help the parties concerned. Hence, we continue to urge the public to be prudent when they appoint an agent and please check their legality.”

His warning is simple. The Board is working together with the police and the AG chambers office to take action. Those found guilty under Section 30 of the Act is liable to a fine not exceeding RM 300,000 or imprisonment for a term not exceeding three years or both.

Truth is, this has to work on both ends. Those offering such services and those who sought them. It may be good to identify some of the real causes for these to happen. Is it simply because of education or ignorance? Or is this a case of “win-win” cooperation as these illegal brokers are offering lower fees and were still able to sell the properties concerned? Is it also because there are RENs who are just not serious enough and are only working half-heartedly? Perhaps this is because not many have been caught and punished yet? Actually, I think it’s a combination of everything. It’s really a time for tough actions against the illegal brokers but the legal ones must also up their services and efforts. Yes, I personally do engage licensed RENs for my property transactions.

written on 21 Jan 2016

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Branded developer and Classifieds Advertisement

This article is aimed at any branded developer’s marketing team who thinks that selling can be done via Classifieds and that this is a great strategy. This is from a potential buyer to your future project. Let me share with you a few reasons why a branded developer using Classifieds advert to sell property is foolish and should not be used or repeated at all.

Are you selling a low cost flat? If the answer is yes, then the cost must be kept extremely low. The buyers surely do not expect a booklet explaining the details of the project. Surely a one page leaflet with very small words explaining everything is enough. Based on today’s context, surely just advertising the price is enough to attract huge attention. When I published an article of a RM299,000 condo in Penang, within hours, I received 14,000 hits.

You have no budget? IF you are selling a condo and you want to tell people about ‘lifestyle,’ about ‘experience,’ about ‘luxury’ and every other usually associated words, then you have destroyed everything with Classifieds. Come on, to sell a project with a GDV of a few hundred million Ringgit, your budget is only enough for Classifieds? You have the budget, use it wisely. Selling is good but building that brand for future is also important. Ever wondered why certain branded developers are “followed” by their loyal supporters? You think their loyal supporters follow them because they are “cheapskate”?

One time and that’s it? If you are only going to do one project, sell, get profit and close shop, sure, use ANY media you want. If you are in this for the long term, please act like you are in this for the long term. To begin with, a fully functioning property site with sufficient information. People should feel confident of your brand. As a buyer today, I would not even visit any showroom for developers who does not have even a proper website. There are today hundreds of developers, the one who should worry is the developer and not the buyer.

Yes, I am just a nobody and you may be the ‘expert’ marketing team of a branded developer. So you are free to use Classifieds again and again since it can sell for you. I wish you all the best. Be reminded, selling is not just about finishing the units. It’s also about the right branding so that in future, your brand can carry premium and not be seen as the ‘cheap Classifieds’ brand all the time. Oh yeah, I would also NOT visit any developer who dares to post black and white advertisements in newspapers for their condominium projects. Happy selling.

written on 5 July 2015

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Branding is the edge. Actions follow recognition.

I have many favourite brands. Of course not just for shoes, clothing and smartphones but it includes supermarket brands, electronic goods and even properties. Ever wondered why certain developers are able to command a premium over others? Branding lah. Of course, they could also be using better materials etc but when the price is just 10% extra, it is not so much of those better tiles etc. It is who you believe that matters. MRT Sungai Buloh – Kajang would be fully operational on 17th July. Within these stations, there are four stations which will be ‘owned’ by those who were willing to pay for it. They are The Damansara Town Centre station will carry the name
Pavilion Damansara Heights – Pusat Bandar Damansara
 (licensee: Jendela Mayang Sdn Bhd), and the Semantan station will have the name
Manulife – Semantan
 (licensee: Manulifge Insurance Bhd).  The Bukit Bintang station, meanwhile, will be known as
Pavilion Kuala Lumpur – Bukit Bintang
 (licensee: Kuala Lumpur Pavilion Sdn Bhd) and the Maluri one will be named
Aeon – Maluri
 (licensee: Aeon Co (M) Bhd).
Full article in TheStar here.

How much are they paying for this privilege? According to
MRT Corp director of commercial and land management Datuk Haris Fadzilah Hassan, successful licensees were chosen based on the highest bids with licensing fees for stations starting at RM1.5mil per year for a minimum of three years, or RM1.2mil per year for at least five years. (Yes, it is in the millions…)  What the winners get would be a right for
its name, logo or product brand to be associated with a particular station on the SBK Line by having it prefixed to the station’s name. The licensing duration would range from 3 to 10 years. (MRT fares will never be able to cover all costs. MRT Corp must think of even more ways to cover more of their costs. Hong Kong’s MTR would be a very good model to follow). An earlier article here:
MRT and rental starts at the same time. Good
 Haris further shared that these four stations are just the first batch. There would be more stations being open up for renaming in the future. MRT Corp also shared that the ridership of the SBK Line was estimated to reach 400,000 users per day.
Full article in TheStar here.

Branding gives any brand an edge over its competitors. It ensures that the brand recognition is high and the brand is always top of mind. I think it’s good to start and in fact when we look at the potential earnings from just these new stations, the potential earning is already easily RM50 million a year! If we assume all stations would average around RM1 million per station per year. Besides, these brands would help to wrap the stations to look more interesting than just a coat of white paint for example. I told my wife a few days ago that when the new MRT SBK starts, I will ride it to office. At least for a few days. When I do, will report. Asfor now, I think MRT Corp has done the right thing. Keep earning more. As for the rest of us, please ditch our cars whenever possible and start a new public transportation revolution. Cheers.

written on 13 July 2017

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Brexit: Good or bad for London property market?

You know, with experts, there’s always two sides, at least. Many times, multiple sides which explains why even for properties or cars, there are no such thing as the ‘perfect’ one. I am against Brexit. Remember Brexit? Yeah, the exit of Britain from European Union (EU). I think it will be bad for London because many of the roles it play could be replaced by other EU nations. Germany, France and even Holland could be the few countries which could benefit I think. Anyway, my ex-boss (higher authority than me) says he thinks Britain has made the right decision. Fortunately, we are still great pals today. Let’s run through the views about London’s property market due to Brexit shall we? First one is a positive one.

Gulfnews.com has this article: London realty remains red hot even with Brexit cloud.
It says that when it comes to commercial property transactions. “turnover for London was approximately £17 billion, the third highest on record” in 2017, according to Chris Brett, Head of International Capital Markets at the consultancy CBRE. The (overall) UK turnover (for commercial) was in excess of £50 billion (Dh250 billion). For residential, the year was mixed — an ongoing under supply of housing continues to be the case and the PRS (private rented sector) market and BTR (build-to-rent) gather momentum all the time.” It also points out that the investors from the Middle East continue to keep the London property market flame burning brightly. It gave many examples and a prominent one would be Apple’s 500,000 sq ft UK campus which will start operating in 2021. (I think what he wanted to imply is that Apple would be huge catalyst to the area that it was moving into. According to some reports, there would be a total of 1,400 staffs in Apple Campus. Assuming half of them wants to stay nearby, that would translate to new demand for homes.)

Next one is a negative one.
theguardian.com has this news: London property prices fall as much as 15percent as Brexit effect deepens.
 it quotes numbers from
Your Move
 which is one of the UK’s largest estate agency shows that prices have dropped as much as 15 percent or £100,000 in value within the past 12 months. This is for an area known as Wandsworth. However in another area, Blackburn’s prices are up by 16.4 percent over the past 12 months. It gave many other examples to back up these claims but says that for many of the areas with fall in prices, it is also due to some huge speculative property developments too. It concluded the article with
figures from Halifax
 which highlighted that the annual rate of house price growth has fallen to 1.8%, its lowest level for almost five years. Official data shows that
earnings growth averaging 2.5%
and this meant that salaries are now rising faster than house price.
Full article here.

I am interested to know what happens when the negotiation between the British Prime Minister and the EU really starts to become serious. As of now, it’s all unclear and well, opportunistic for many sides. Some reports point out that the two beneficiaries if London’s financial market is affected would be New York and our neighbour, Singapore.
Here’s that article.
I suppose if it’s really Singapore, then some of these super-high income earners may buy vacation homes in Iskandar as well? Happy following Brexit news in relation to the property market.

written on 16 March 2018

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Brexit, London properties and Malaysian developers

London is an international financial hub. There are many analysts who said London has been facing property shortages for many years, thus the price increase. However there are also many who are now not so sure after the Brexit decision. I read an article in NST today which said that Malaysian developers with exposure to London include SP Setia Bhd, Sime Darby Bhd, Eco World Development Group Bhd, Eco World International Bhd, Eastern & Oriental Bhd (E&O) and YTL Corp Bhd. The most famous one should be the one by SP Setia and Sime Darby;
Battersea Power Station in London’s Nine Elms.
 There is nothing to worry about currently. According to Sime Darby Property managing director Datuk Jauhari Hamidi, the medium to longer term impact of Brexit on the Battersea development in London was anticipated to be minimal. He said, “The results from the referendum will not impact the viability of the Battersea Power Station project. We are confident the iconic development will continue to generate interest in the longer term”
Full report in NST here.

Some additional information about The Battersea project. It is owned by SP Setia, Sime Darby Bhd and EPF on a (40:40:20) basis.Total gross development value for the project is £10 billion (RM55.5 billion). When it is completed in 8 years time (2025), the site will house 25,000 and will be creating over 20,000 jobs. Apple has agreed to lease a 500,000 sq ft office there. The report quoted real estate consultancy Knight Frank which released a report last week saying that the office take-up rate in Central London for Q4 2016 totalled 3.5 million sq ft and this is the highest since the third quarter of 2015. Knight Frank head of central London offices Stephen Clifton said: “We see London’s long-term growth story unchanged with the decision to leave the EU. He also shared that the fundamentals of the London office market are strong while in the investment market, overseas investors are showing a strong appetite for London offices.

I personally think the benefits of staying within the EU is higher than leaving. However, I agree that London will remain a top destination for investors, especially overseas ones. If you were to ask me to choose between London vs Australian cities, then London wins hands down. Yes, this is my personal opinion, biased because I am a UK graduate? Haha.
 This is my view about one Australian city, Perth.

 Anyway, the other reason is because its status as a financial hub could not be lost suddenly simply because some banks have indicated that they would have to relocate to other countries. International students would continue to further their studies in the UK. Even tourists would find London a metropolitan with lots more to see than just that “My father went to London and got me this lousy T-shirt.” Oh yeah, this is what the UK Prime Minister said recently, ”
Theresa May: It will not be ‘half in, half out.’

I think they are ready to face this. The effects would be known only after both sides have started the negotiation for the exit. Cheers.

written on 29 Feb 2017

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Brexit and Malaysian developer’s views

Nope, the dust has not settled. Just look at all the RED coloured screens for the stock market and the currency. In fact it was reported in many medias that the fear of Brexit wiped US$2 trillion worth of value from world markets. This is what I thought about
Brexit vs Bremain.

 The Pound dropped the most within the past 30 years. I think all the rational people must now start analysing facts and sharing objective views. This is not the time to pour even more negative comments. Below are the views from Malaysian developers with projects in the UK. I think their points are valid as of now because there has been no significant changes yet. Let’s look at some of them, published in The Star just one day after
Brexit referendum completed
.

Eco World International

executive vice-chairman Tan Sri Liew Kee Sin said, “Britain is still a hugely important economy in Europe with highly principled, professional and competent leaders.” In other words, it is confident of its London’s projects to continue to do well. They include London City Island (Phase 2) in East London, Embassy Gardens (Phase 2) in Nine Elms and Wardian London facing Canary Wharf. In fact a weaker pound may be pounced upon by Eco World’s Malaysian, Singaporean, China and Hong-Kong as it is now cheaper to buy.

Liew said the few key reasons why people love London properties remain unchanged. They include transparency of laws, security, ease of ownership and London’s attraction as a global educational, cultural, and tourism hub were still intact. I think I have to agree because with or without Brexit, if my daughter is a university student today, Britain remains my top choice.

SimeDarby

issued a press statement as follows:  “We are confident the iconic development will continue to generate interest in the longer term, and London will continue to remain a key investment destination and financial centre”

Eastern & Oriental Bhd (E&O) managing director Datuk Seri Terry Tham said “Our UK projects are underway and are expected to progress as planned.” Its projects include Prince House along Kingsway, comprising private residential apartments, service apartments and retail, as well as ESCA House, a small-scale conversion project of offices into 26 private apartments. Others are Thames Tower and Landmark House at Hammersmith, which it acquired in 2015 and still going through planning process.

Property consultant Knight Frank Malaysia managing director Sarkunan Subramaniam said that he is confident that once all the news have been digested, stability would return to the market. I think he is absolutely right. As soon as people realise that whatever happens need a lot more time than just 48 hours,
they can react more rationally
. Currently, many are still extremely uncertain as there are conflicting reports all overt the internet. So, do I believe the developers’ views? I choose to say, I do. Happy reading more of all these conflicting views and then have a view please.

written on 26 June 2016

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Brexit: Now even the army is needed to ensure there’s petrol for everyone?

No man is an island. This is applicable to countries as well. This is especially true when it comes to economy and trade. No trade, no economic growth lah. No economic growth, stop talking about more jobs and later on, more demand for goods and after that, properties and more.

When it comes to economic grouping, the European Union (EU) is extremely powerful and when they do trade negotiations, they do as a group. ASEAN is a loose coalition of countries and we could be even more powerful if we could negotiate with any other country or groupings as an economic bloc versus individually like what is happening today.

Anyway, ASEAN can do more but for now let’s look at this country where even the access to petrol to drive their cars is threatened simply because they do not have enough truck drivers now that no EU citizens could work in the UK without lots of bureaucracy. The UK decided for Brexit and now they start to feel even more effects from it. Latest one is this.

Article in nst.com.my
  Department for Business, Energy & Industrial Strategy said in a statement issued late on Monday that the army is on standby to help with ongoing fuel crisis due to tanker driver shortages which led to panic buying and causing many of the country’s pumps dry.

The Petrol Retailers Association said almost half of the UK’s 8,000 fuel pumps had run out of petrol on Sunday, blaming “panic-buying, pure and simple” for the issue.

The government has already made a drastic U-turn on tighter post-Brexit immigration policy, offering short-term visa waivers to foreign truckers to help plug the shortfall.

Critics blame government inaction on tackling shortages of lorry drivers after Britain’s departure from the European Union in January and the pandemic, which saw many foreign truckers leave the country. There are a lot more details on how potentially bad the situation could become. Read it here:
Article in nst.com.my

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Brexit transition starts. What are the changes?

kopiandproperty.com does not only write about property yeah. The Executive Editor has a business degree majoring in marketing as well as a Master of Business Administration (MBA). He takes interest in many issues and Brexit is one of them too. Well, it has finally come to that day when Brexit shall start its transition stage. If you have never heard of the word Brexit, please proceed to skip this article yeah. Nothing much will change for us here in Malaysia because the UK is not even within the top 15 trading partners of Malaysia today…

From wikipedia.  Brexit
 is the withdrawal of the United Kingdom from the European Union. Following a June 2016 referendum, in which 51.9% voted to leave, the UK government formally announced the country’s withdrawal in March 2017, triggering the beginning of the Brexit process. This is a brief but comprehensively covered about the changes once BREXIT starts going into transition stage
 from 1st February 2020. Article in bbc.com

Some interesting ones include:

UK can now decide how much fish they want to fish from their waters…
  #2 – This is because UK Prime Minister Boris Johnson will have to be specially invited if he wants to join other leaders at EU Council summits in the future. British ministers will also no longer attend regular EU meetings that decide things such as fishing limits.

#3 The UK will be able to start talking to countries around the world about setting new rules for buying and selling goods and services.
The MINOR issue is this. Out of the top 10 trading partners for the UK currently, 8 are from European Union members…

click here to see who are those. Some transition period will be necessary even if they could replace most of the 8.

# Travel.  When it comes to passport control, during the transition period, UK nationals will still be allowed to queue in the areas reserved for EU arrivals only.
After this period, the UK nationals may queue up next to us when we enter any European countries from the UK. Definitely a small thing I guess.

# 4. Living and Working in the EU.  Freedom of movement will continue to apply during the transition, so UK nationals will still be able to live and work in the EU as they currently do. The same applies for EU nationals wanting to live and work in the UK.
After this period, UK nationals cannot just want to work in the EU and vice-versa. If we are a multi-national operating within Europe for example, guess where would we most probably be locating our HQ? I did not say it’s not London, ok. I am asking…

To read more, please do read the full article in bbc.com
I think it’s brief and yet covered most of everything.
 By the way, that thinking about the economic costs as per my view is not just my view alone. Someone actually did some calculations and came up with this number. Happy reading to understand yeah.
Brexit deal will leave the UK £70bn worse off than if it had remained in the EU

My opinion remains the same. Between staying and exiting for the UK, I would have preferred for the UK to remain. Yes, I am definitely on the UK’s side yeah. However, I think if the majority wants Brexit, then yeah, just have to follow what the majority have decided right. All the best yeah and of course I would love to visit the UK again in the very near future. A reference from XE.com for the latest exchange rate between Ringgit and Pound.

Source: ex.com dated 31st January 2020

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BREXIT and UK property market – Wall Street Journal

This is about BREXIT. Britain will be deciding on whether or not to leave European Union. In a report in Wall Street Journal, it has been predicted that should Britons vote to leave the European Union on Thursday, real-estate prices—from homes to London office towers will drop. The potential positive for the real estate sector would be if Sterling depreciates as widely expected, then this may be the start of property buying by many who have retreated. If this happens, the market best positioned would be London which has been a favourite for many international investors.
Yes, even for Malaysian investors and developers too.

According to Faisal Durrani, head of research at broker Cluttons LLP, buying opportunities will rise with the fall in sterling’s value. He was referring in particular to
high-end homes in central London
 for which is considered by overseas buyers as a safe-haven investment. Within the past one year however, the demand for Prime Central London homes has dropped because of reasons fromlow oil price, slowing global economic growth and stock market shocks. Beyond just transactions,
prices are also falling.
 Mr. Durrani further shared that nearly half of home buyers in prime London are foreign and Mideast and Asian investors account for 35 – 40 percent of all deals.

Some other predictions include that from the U.K. Treasury Chief George Osborne who warned that U.K. house prices would fall up to 18 percent if BREXIT happens. According to Standard & Poor’s Corp, commercial property prices will likely fall is Britons vote to leave. David Hutchings, head of EMEA Investment Strategy at broker Cushman & Wakefield said that if sterling drops,
long-term investors will enter the market
. In fact there has been many recent discussions between pension funds, sovereign-wealth funds and high-net-worth individuals, Mr. Hutchings said. I do not think I can qualify as a London property buyer yet. However, I have a feeling that BREXIT will happen because the vote is like an ‘independence’ type of vote. Let’s hope for the best whether or not it happens because Malaysian investors have a lot at stake in London too. Happy following.

written on 21 June 2016

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Press Release: Brezza One Residency is an Architectural Marvel by the Mountains of Ampang

By subconscious association, the basic human instinct dictates that being in or living close to nature is good for the mind and body. Despite the harmonious differences in culture and tradition, one aspect of living that all Malaysians can agree to is that nature is looked to as a place for healing and personal growth.

Some experts hypothesised that humans are instinctively drawn to beautiful natural spaces because they fulfill our basic needs by providing food, shelter and comfort. From an evolutionary point of view, this explains why we prefer nature to be a big part of our lives, and even architecture.

The Best of Both Worlds

Fulfilling the natural inclination towards living close to nature, but also being able to enjoy urban amenities, Brezza One Residency by Setia Awan is built to encapsulate a peaceful and harmonious lifestyle.

Located at Bukit Ampang Permai, the 4.56-acre condominium development offers residents a unique and serene home concept. With proximity to the nature forest reserve on one side, and a mature city lifestyle on the other, Brezza One Residency’s strategic location nearby the Ampang Lookout Point also offers panoramic views of the Kuala Lumpur city skyline from an elevation of over 280 metres above sea level.

Strengthened by Nature’s Creations

Everyday life at Brezza One Residency is a healthy dose of tranquillity and serenity — the adjacent forests of Bukit Ampang and Hulu Langat Forest Reserve are known for their organic beauty and recreational activities offered.

Unlike any other conventional city building, developing a sizable condominium near natural terrains brings forth a unique set of challenges. Situated midway along the mountain range, the major challenge of Brezza One Residency’s design is to balance the natural environment with the man-made structure that houses 660 condominium units. Furthermore, the site encompasses a panoramic structure by the hills that offer captivating views.

Opportunity presented itself with a strategic adaptation of the multi-level formations, which allowed for an elevated floating deck over the valley floor. With this, the development is directly accessible from a higher terrain, while freeing the land of the valley for landscaping and recreation at the same time.

In maximising the breathtaking view offered by the vicinity, the four blocks of the condominium on top of the deck are carefully placed and spaced away. This also allows maximum sunlight to penetrate down the deck to create lushly landscaped grounds that complements the lower deck’s rugged theme.

A Life of Convenience and Ease

First launched in Q4 2019 and with an estimated completion date in Q2 2024, Brezza One Residency has 4 building blocks housing 660 home units that range from 1073 to 1953 sq ft. With its selling price that starts from RM 654,800, the condominium has witnessed encouraging take-up rates for its 4 blocks. Blocks A and B, which were launched in Q4 2019 are 100% taken up, and Block C as well as D which were made available in Q1 2021 have take-up rates of 60% and 80% respectively.

With a GDV of RM527 million, Brezza One Residency not only offers a perfect union between nature and urban lifestyles, but also the convenience of getting to different hotspots in the Klang Valley with the upcoming SUKE highway, which is only 5 minutes away, that further links residents to 14 other interchanges.

Additionally, the condominium is only 10 km away from the KL city centre and in close proximity to other conveniences, including primary and secondary schools, universities, hypermarkets, golf clubs, public transportation and also shopping malls that are easily accessible within 5 km.

A Haven for the Mind and Soul

To optimise the benefits of living right next to wondrous nature, Brezza One Residency is also strategically designed to incorporate over 30 internal facilities and amenities for all ages. With the prominence of staying at home due to the post-pandemic lifestyle, these conveniences are poised to play bigger roles in encouraging physical activities, reducing stress and relieving depression, among other benefits.

At Brezza One Residency, residents can enjoy the spacious 4.56-acre Brezza Park, which is built based on a theme park concept, designed to cater to a multitude of activities through its facilities such as rock-climbing spot, kid’s outdoor gym and hopscotch, reflexology path, seating cabana, yoga/taichi deck, hanging bridge, water fountain and many others.

More than the Brezza Park, the Ground Floor Podium offers more sports and recreational options like pools, jacuzzi cove, squash court, games room, sunken/floating deck and other facilities, while the Sky Garden is where residents can find the viewing deck, sky lounge and hammock garden.

“Brezza Hill is built with a vision to offer an everyday escape from the hustle of city life. The urbanites move fast and hard, which cultivates a lifestyle that might not be suitable for those who prefer more peace and quiet, without sacrificing the convenience of city life. Therefore, Brezza Hill which is surrounded by green natural pockets while still being near to the city centre is a gem,” said James Bruyns, Chief Operating Officer, Setia Awan Group Central Region.

For more information on Brezza Hill Residency, kindly visit
www.BrezzaHill.com.my

-End-

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Press Release: Are You Game to Own A Home? #BringMyraHome Is Here to Make Sure of It

The journey to find the love of your life may be a bumpy one, but that doesn’t have to be the same when you’re looking for your dream home. All you have to do is reach out to Myra and trust her guidance. Understanding the struggles that homebuyers face when it comes to homeownership, developer Myra launches the #BringMyraHome campaign to help make your homebuying decision-making journey as pleasing as it can be.

Myra’s main intention is to remind you that she cares and it will be her priority to make your homeownership journey exciting yet hassle-free, especially for first-time homebuyers. Through the #BringMyraHome campaign, homebuyers can expect a multitude of online resources as well as proper online guidance from friendly and well-trained property consultants.

“More than addressing doubts regarding homebuying, along with the challenges that come with the process since COVID-19 came into the picture, we hope this campaign can help young homebuyers conquer these hurdles and provide them with more access to affordable homes.

On top of innovative and practical spaces that address contemporary lifestyle and needs, we are motivated to further educate homebuyers through the initiatives under #BringMyraHome campaign and to build houses that last for generations” said Wendy Lim, General Manager of Myra.

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Britain’s banks may face a financial crisis

If Britain suffers a banking financial crisis, what would the effects be for Malaysia? I think it’s best if The Bank of England can ensure any potential crisis does not happen. According to Kevin Dowd, a professor of finance and economics in Durham University, the current Bank of England’s stress tests of the UK’s banks have a series of”fatal flaws” and that the tests has portrayed the banking system as strong even though it is currently weak. Professor Dowd also said that the eurozone banking system is not too far away from another crisis and this will affect UK’s major banks. He said, “Once contagion spreads from Italy to Germany and then to the UK, we will have a new banking crisis but on a much grander scale than 2007-08.”

He elaborated further that the flaws in the tests include the fact that the tests rely on analytical “risk weights” for banks’ assets and this may be potentially underplaying the true riskiness of various assets such as mortgages and sovereign debt. He said in comparison of the Federal Reserve of the US, the current tests are less rigorous. In fact, using the same standards as Federal Reserve meant that the UK banks would fail. To be frank, I am not sure how awesome Federal Reserve is because even until now, I do not see them as being sure with their direction. It’s mostly wait, gather information and hopefully a decision could be made.

Besides Professor Dowd’s assessment, The European Banking Authority (EBA) has also published the results of its own latest stress test exercise for 51 or the continent’s largest banks last Friday, including the Royal Bank of Scotland, Barclays, HSBC and Lloyds. The stress test revealed that even under the most adverse scenario, all three banks including HSBC, RBS and Barclays would still have a capital cushion of 8.7 per cent, 8 per cent and 7.3 per cent respectively. In other words, all three would still not be pressured to raise more equity. Before we heave a sigh of relief, the two previous EBA stress tests in 2011 and 2014 which gave the eurozone lenders clean bill of health was wrong and the lenders had to be rescued. Let’s hope nothing bad happens and that Britain’s new Prime Minister would be able to get a good deal from her counterparts Germany who’s also lady. Happy following.

written on 3 Aug 2016

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