Unsold units are up further 16k units. Now at 146k.

Never stop your decision to buy if you have found a good property. There are not that many lying around waiting for you. That’s the reason why unsold units remain unsold. Remember, when the prices are just too high versus the quality or the location, after one year it will still be expensive. These days, developers handing over the keys and still continue selling is quite common. There are now ‘buy and move in packages’ available where the home is renovated sufficiently for buyers to just buy and move in with very minimal renovations. Air-con units are very often offered in the mix too because this usually takes times and lots of cleaning up after the installation. Are the units moving faster? Well, when we look at the total unsold units, this is not the case.
An article about the rise in unsold units in TheMalaysianReserve here.

As at Q1 2017, the total unsold units in
Malaysia was highest in a decade at over 130k units.
Well, latest number as at Q2 2017 showed that the number is still increasing. As per Bank Negara Malaysia (BNM), the level of total unsold residential properties in Malaysia stood at a decade-high of 146,497 units as at the second quarter (2Q) of 2017. This is an increase of 16k from a quarter earlier. BNM also shared that 82 percent of all unsoldunits in Q2 2017 were priced above RM250,000. This is a critical issue because BNM estimated the maximum affordable house price in the country to be RM282,000 based on the housing cost burden approach. In brief, there are lots of new homes being built but the prices were not affordable enough for the masses. (Hopefully the current slowdown would push prices down with a different approach from developers and in the mean time, the income growth can catch up with the property price)

BNM also shared this about home loans. It said that financing continued to be available for purchases of houses for eligible borrowers, with more than 70 per cent of housing loans accorded to first-time buyers and close to two-thirds of new housing loans channelled to the purchase of houses costing below RM500,000. The central bank also outlined five strategies to overcome the issue, including centralising affordable housing initiatives and setting up an integrated housing database and an applicant registry for planning and allocating affordable housing. An earlier policy options from BNM.
Bank Negara’s 6 policy options. I like them all

The three major reasons for this unsold units include: mismatch between supply and demand for housing, new launches skewed towards the unaffordable range, and growth in house prices outpacing that of household income. BNM said, “Since 2012, new housing supply has consistently fallen short of the increase in demand by households.”
Full article in TheMalaysMail here.

Happy following the news but
don’t stop viewing yeah. Opportunities

come but are usually grabbed by the most prepared few and not the rest. Cheers.

written on 21 Feb 2018

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Unsustainable spending will bring next financial crisis

There’s a long but
good article in thestar.
It was an interview with someone known as “Warren Buffett of Asia.” He is the HONG Kong-based Value Partners Group chairman and co-chief investment officer Datuk Seri Cheah Cheng Hye. He said many positive things about Malaysia from investment perspective. Whether we agree with his assessment or not, there are lots of information to be gained from the article. For me, this specific sentence is something I think I have been writing about. He said, “My personal theory is that the unsustainable spending and the populist politics in many of the developed countries will bring about the next global financial crisis. Maybe one even worse than 2008. The non-stop printing of money, the very low interest rates kept for far too long, and a political system that is based on trying to make everyone as happy as possible all the time to secure re-election – well all this creates a society or system that is increasingly unsustainable.”

Beyond just the government of the day which will affect the country, we can look at our personal financial standings too. We create our own financial crisis when we start unsustainable spending ourselves. A good friend who’s a marketing manager with a continental automotive brand told me that he has personally seen way too many people buying cars they could barely afford. They would drive the car for a few years and as soon as they have just enough funds, they would buy their next dream car. This sinks them deeper into the debt hole which is definitely going to be a financial crisis for them.
82,383 bankrupt Malaysians from 2013 – 2016

No prizes for guessing. Car loans are one major reason why people go bankrupt here in Malaysia.

He also mentioned about the non-stop printing of money which I think is referring to that huge economy whose currency kept going up despite having trade deficits every year. On a personal basis, it is also possible for us to spend MORE than what we have. Yes, through that credit card that we own. Beyond just spending our salary which is limited, we are tapping into additional FUTURE funds which we do not have yet.  For example, the top 20 percent income earners in Malaysia may earn RM8k per month and this would easily qualify him for a
credit card with a credit limit of 4-5 times
 his salary. Assuming it’s 4 times, he would have extra RM32,000 in his hand suddenly. Without control, we can already see the perils he would be in once he starts spending future money and paying the minimum amount every month.

Where are we today? It’s good to know if we remain in the black which will ensure we remain in firm footing when the next crisis comes or are we already a few feet inside the debt hole. By the way, I do not consider having only funds in the
fixed deposit as awesome.
 Perhaps it’s considered safe by many but inflation will eat up a lot of it over a long period of time. Build up more of what we have by investing the small pile of what we have. “Sikit-sikit, lama-lama jadi bukit….. juga”  Happy weekend everyone!

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written on 1 April 2017

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Press Release: Unveiling Uptown Square As The Rising Star Of Rimbayu

IJM Land sets its next jewel in Bandar Rimbayu to flourish businesses

IJM Land has proved time and time again to have the touch of the Midas when it comes to developing not only residential homes but also highly-coveted commercial hubs out of nothing. Bandar Rimbayu’s comprehensive and self-sustainable integrated township stands as a testimony to its prowess.

Following the overwhelming response to their vibrant and happening developments like Starling, Robin, and Uptown @ Rimbayu, Bandar Rimbayu is set for prominence with the launch of Uptown Square. Bustling with visitors and residents, the township makes a lively yet busy scene.

Synonymous to many of IJM Land’s development concepts, Uptown Square is characterised by well-planned placemaking that emphasises high street level vibrancy, as seen in their site plan, consisting of a multi-purpose space and oasis pocket park. The courtyard and oasis park offer the neighbourhood a wide array of options to utilise the public spaces. That may consist of functioning as a sporting venue for sports like basketball, doubling as a flea/night market, exhibition space or a site for festive celebrations.

Given its vicinity to the commercial and residential focal points of Shah Alam and Kota Kemuning, the township has become a local hot spot clamouring with visitors and residents alike. Bandar Rimbayu’s strategic location also means having access to four major entry and exit points, including Lebuhraya Shah Alam (KESAS), Lebuhraya Kemuning – Shah Alam (LKSA), Expressway Lingkaran Tengah (ELITE), the South Klang Valley Expressway (SKVE) and the West Coast Expressway (WCE), which will be completed in 2024.

Uptown Square is part of Rimbayu Business Hub and has a GDV of RM308 million. There are 119 units in total, with sizes ranging from 3,300 to 7,539  sq ft. The units are divided into two- and three-storey plans, each with a practical layout. The development has multiple entry points featuring a rare but desirable five access and exits points with smartly distributed parking lots. The commercial layout, particularly units with a verandah, offers a more spacious area for a nice business setup.

Rimbayu Business Hub was designed with the greater population in mind and is set to become a well-esteemed business hub featuring an assortment of establishments such as food & beverages, hotels & institutions, residential malls, sports centres, showrooms and corporate offices.

With huge potential as a commercial centre and lifestyle hub, the estimated population of 100,000 in the next five years is expected to create a vibrant community and a bustling lifestyle in Bandar Rimbayu, making it a perfect site for investments in the forthcoming years. Business Owners can be assured that the chance of high return on investments and capital appreciation given their proximity to existing commercial establishments with high footfalls.

The success of Bandar Rimbayu is apparent with the entry of J&T’s Logistic and Distribution Centre, measuring 30 acres with a proposed investment of RM600 million. Along with J&T, the proposed hypermarket and 3S Centre will bring in a workforce of 4,000, which will benefit businesses such as flea markets, restaurants, and others in Uptown Square. The dynamic and highly advantageous commercial units will likewise provide a life of comfort and convenience to the families and guests who live and visit Bandar Rimbayu.

Uptown Square also made it a point to stress sustainable living by incorporating green-centric elements that encourage the usage of renewable energy sources. In that regard, business owners can also play an active role in reducing carbon footprint while benefiting from much lower electricity billing. The solar PV installations also work efficiently in adding value to the property.

Bandar Rimbayu: A booming township

With a GDV of RM11 billion, the 1879-acre award-winning town of Bandar Rimbayu has progressively blossomed into a state of the art township that has become a highly-coveted location southwest of Klang Valley. Following its inception in 2013, Bandar Rimbayu has tremendously transformed into a mature, vibrant and comprehensive township that encourages commercial growth in various components. Through IJM Land’s efforts, Bandar Rimbayu is home to the highly-esteemed Oasis International School, The Arc and The Club, which offer a wide range of top-of-the-range facilities.

Bandar Rimbayu’s proximity to commercial and residential focal points of Shah Alam and Kota Kemuning has subsequently changed the district into a high catchment region. The township boasts a wide selection of lifestyle conveniences, including a drive-through Starbucks, Mcdonald’s and Kenny Rogers. In addition to that, residents and visitors can also enjoy daily activities like grocery shopping in Jaya Grocer or visit lifestyle stores like Mr DIY or Harvey Norman at Quayside Mall.

“The investors and business owners are not buying the shops alone, but the whole businesses’ ecosystem that will enable them to succeed and prosper,” said Mr Chai Kian Soon, Senior General Manager of Bandar Rimbayu.

Following the purchase of a 2-acre land adjacent to the township to develop a corporate office tower, Bandar Rimbayu’s commercial sector awaits robust development, a growing population, and an expansion in buying power as the drive that will lead to the town’s true potential. With the addition of the soon-to-be developed Uptown Square, Bandar Rimbayu is well on its way to realising its dream as a self-sufficient township and getaway for trade. The future has never looked brighter.

For more information, log on to
 www.rimbayu.com
.

-End-

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Yes, still going up, even though already extremely unaffordable.

Can home prices go up by double digit per year? If it seems unlikely, then let’s look at it from the number perspective. Briefly, a RM400,000 home becoming RM450,000? This is already an increase of 12.5percent. So, in number, it’s actually possible because people do not think too much about an extra RM50,000 divided over 30 years because the final total is only RM200 plus extra. (Same number of years, same interest rate and same 10 percent downpayment) Then, we add in the fact that demand is far higher than supply for some areas. These transactions would push up the median prices and as usual, will also help other cheaper areas to also move up. In Hong Kong, the home price was up 16.7 percent for the whole of 2017 from the already extremely high median prices in 2016.
Full article in TheStar here.

Source:
https://www.macrobusiness.com.au/2017/01/2017-demographia-housing-affordability-survey/

Home prices would usually push up rentals even if the effect is not immediate. According
to the same article,
rents are also up andfor the whole of 2017, it rose 7.89 percent. According to analysts, the property prices would continue to rise another 5 to 20 percent in 2018 because of HIGH LIQUIDITY and a severe supply-demand imbalance. This was an earlier article quoting the HIGH LIQUIDITY.
Why prices in HK still up

Currently, Hong Kong has already one of the most expensive property markets in the world. It has an average of HK$12,100 (RM6,036) cost per square foot, according to property agency Midland Realty. On the prime Hong Kong Island, the average cost is about HK$16,200 per square foot.
This is the full article again.
There are definitely cheaper homes, for example for the same price but for a bigger size, think further away from the island. As long as one is willing to spend 1.5 hours travelling daily, the choices would open up further even if prices wise, it is still not considered as affordable.

HIGH LIQUIDITY is quite bad. It creates a lot of demand simply because people could afford to outbid others who could not. This is the reason why cooling measures can help slow down the increase but at the same time, that imbalance of demand vs supply needs much more work. It’s not just building ever more homes unless these homes are acceptable to the people needing one. Accessibility, for example.

Acceptability is another.

Well, hopefully the Hong Kong government could solve this sooner rather than later because without access to homes, the youths would suffer high rentals which will make it even more unlikely for them to save enough to buy. As for the older folks, growing old without a proper roof over their heads is going to be many years of demeaning lives. The richest few could do something about it perhaps.  Happy following.

written on 1 Feb 2018

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Up in Sydney and Melbourne, Down for Perth

Thinking of Australia as your future country of residence? Specifically Perth? Good news perhaps. As per CoreLogic RP Data, the Perth property index eased 0.4 percent in June and annually has dipped nearly 1 percent. This is despite the fact that more established property markets like Melbourne and Sydney continue to rise up by 2.8 percent. This brought Sydney’s numbers to be up by 16.2 percent annually while that of Melbourne has reached double digit. Perth is not the only city to show a decrease. Darwin too showed a continuous drop. The east coast capitals continue to boom while mining-dependent cities showed the effects from a slowing world economy.

My personal thoughts about Perth? Read here:
Perth – city with parks or actually parks with a city

As per CoreLogic RP Data’s senior research analyst Cameron Kusher about these less favourable markets currently, “We’re seeing rental rates fall, we’re seeing the time it takes to sell a property increase, we’re seeing sales trending lower and we’re seeing a lot more stock on the market than at the same time last year.” What she is saying may meant opportunities has started to appear for Perth when compared to the major cities. Investors should still think on a longer term because the probability that the prices would fall further is definitely there. This is in view of the continuous lagging growth even in China and European countries. Just the issue of Greece alone would be weighing on Asia or Australia even if it is not directly related.

Another point to note was that of Australia’s Treasury secretary John Fraser. Last month, he said that there was “unequivocally” a property bubble in Sydney and parts of Melbourne. The word “unequivocally” here means “definitely”. Another comment from Reserve Bank governor Glenn Stevens may show an even significant worry. Sydney property market was described as “crazy”. Of course one major reason was also because the Sydney market has not stopped growing in prices for more than three years.

My personal worry for any continuous property price growth would be the rental rates. When we buy, are we still able to ensure a healthy rental rate? Even if it’s a low number, are we still seeing the rental above the mortgage? If the answer is no, it’s time to be really cautious. There are many other options and it may not make sense to keep jumping into a market that everyone is too bullish about. Recently, Australian banks have been asked to tighten their lending standards. I think this is to ensure the growth is more orderly. As for whether bubble exists or not, do note the following:
Be reminded, median price is AUD690,000 today

Take calculated risks, after all, it’s supposed to be long-term investment and not one time wonder.

written on 8 July 2015

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Up to 40% discount to threshold price. Penang bids to clear RM2.6 billion overhang

Overhang is not unsold properties yeah. Overhang are properties where the keys have been handed over but the unit remains unsold for the next 9 months. If we bought a new property in 2016 and it needs 36 months to complete, it meant that we will have the keys in 2019. On that day, any unsold unit by the developer will be called unsold units. 9 months later, then these units become overhang units. Get the idea now?

If the overhang numbers kept going up, it may mean two things. One is that supply has been coming in furiously fast. Way faster than demand can keep up. Secondly, those properties may not be what the people want, thus there were no takers. How do we solve such an issue then? Well, we could continue to put in up for sale in the market and continue to reduce the supply and hope that somehow someone would want to buy the property.

Well, here are some views from prominent personalities about the discounts from state governments so that the properties become more attractive to foreigners.
Article in thedgemarkets.com
 .  Penang has reduced its price threshold for foreigners by up to 40% in a bid to clear RM2.6 billion worth of overhang units in the state. The revised pricing is now RM1.8 million for landed properties and this was RM3 million previously. It is only for a period of one day or until June 10th 2021.

If the foreigners prefer a stratified property instead, then the ceiling price is now RM800,000 from RM1 million in the island while it is now RM400,000 on the mainland. it used to be RM500,000 threshold for foreigners if they like to buy properties in the mainland.
 Please do read the article in theedgemarkets in full. It has views from many prominent personalities too.

I do think that Malaysia has a lot to offer when it comes to properties. The only issue I believe is what could we offer beyond just lower property price. Assuming I am a foreigner today, I will not be buying a property in Penang just because it’s cheaper than some other countries. I may buy into Penang if I understand that the cost of living and the quality of living here is comparable to some other countries I may also be evaluating.

I may also buy into Penang if I know that I continue to have accessibility to anywhere I want to go through the 3rd busiest international airport in Malaysia. I may also buy into Penang if I know that I could get a visa which allows me to stay for a long time without the need to leave the country every month just to renew my visa… By the way there are a lot more but you get the idea. State governments need to present this as a package right from the start. This is not just about who is cheaper or cheapest. There are things which many other countries could not provide. As for price, well, let’s understand that RM800,000 is not actually cheap when compared to that country up north… where they offer exotic beaches too… 😛

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Update about the ‘worst’ currency in the world

If you are an investor, do you want higher interest rate or lower interest rate?

Do take a look at how fast and furious was the rise of the interest rate in the US and do understand that if you are an investor, you are not that clever if you do not take advantage when the interest rates keep on rising every quarter.  Would you still want to put your money in a place where the FD rate is much lower? This is the LATEST OPR for Malaysia.
OPR is maintained at 3% (read here)
. By the way, the higher the rates, the worst it would become for the people servicing loans yeah. If these people pushes up the bad debts, it will not benefit anyone.

Meanwhile this is the exchange rate of the USD vs Ringgit (No wonder… right?)

Oh yeah, we have even more news of coming interest rate hike in the US too.  Take a look. Google for the news if you like to read more.

Is the trend of USD vs Ringgit above the same for all other major currencies?

For Euro, not really. It has been fluctuating. If we count current times as not so positive, then there was a period of 5 years where it was really bad for the Euro too.

For Pound, not really. It has been fluctuating. These days, with Britain out of EU, it does not get easier for Pound yeah. We can see clearly the chart for Pound vs Ringgit is not like the USD vs Ringgit at all.

For Yen, not really. It has been fluctuating. We can see clearly the chart for ringgit vs Yen and there’s always up and down and it is not like the USD vs Ringgit at all.

For AUD, not really. It has been fluctuating. We can see clearly that AUD used to be as strong as AUD1 to higher than RM3.40.  That was also the time when everyone was selling AU properties but to the ones who bought then, it also meant that their investments may not have not given them the promised returns.

Stay focused yeah. Ringgit cannot be rising against that major currency unless you really want us to follow the interest rise of that country. Every time it goes up, we follow. Imagine this. If it’s announced that our OPR will become 5 percent in the near future, rest assured that many investors would want to take advantage of this yeah. However… what will happen to all the ones who are serving monthly repayments yeah. Anyone ready to pay an extra 2.5% interest on top of our current payment? That’s a lot of money. Happy wishing for whatever you want in your mind. No one can stop you.

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Upward pressure on house prices are due to structural factors – BNM

In a report from Bank Negara Malaysia today (24 June), reported in The Star, it said that most of the house price increase can be explained by structural factors. Until to date, ‘demand continues to outpace new supply of houses by a large margin, particularly in the low to medium-priced segments and in major employment centres’  Let me tell you that this is very true. My article about a medium priced condo in Penang garnered a few thousand views within hours of publishing it just last month.

Besides that, Malaysia’s demographic of a relatively young population and labour force, the never ending urbanisation as well as the fact that owning a house is considered a good plus point meant that strong demand is sustainable and definitely will continue to outstrip supply. Nevertheless, mismatch has happened because developers tend to like to build units of higher price as this gives them higher margins. If you intend to blame the developers, be reminded that every single business in this world exist because they want to maximise the profit they can get from a certain segment that they compete in.

Fortunately for some of these buyers, there has been an increase in the supply of and access to financing for the purchase of affordable housing via PR1MA, MyHome and My First Home schemes. There are also many affordable housing from state governments too. An important point to note is that the government’s earlier measures to reduce the credit-fuelled speculative purchases has pushed down the number of borrowers with three of more outstanding housing loans to only 3%. This was previously 15.8%!  It means only 3% of all housing loan borrowers are having three of more outstanding housing loans today.

BNM said the proportion of outstanding housing loans with loan-to-value (LTV) ratio above 70% has also gone down slightly to 46.6% from 50.1% in 2012. As usual, with the direction from Bank Negara, it has become harder to get loans and the assessment now covers the level of development in a specific location, population density, status of overhang, existing and potential demand, and the number and value of turnover of properties within the surrounding areas.

In one sentence, statistically it seems everything is okay and where property loans are concern, the sector does seem to be resilient in the even of any sudden decrease in pricing. Advice remains, if you are buying for your own home today, do not wait. In fact there is no need to wait for new launches, try secondary ones too.

written on 24 June 2014

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Urban migration and sustainable cities of the world – FIABCI

Do you know that by the next generation, seven out of ten people on earth will live in the cities exerting pressures that may trigger a monumental crisis if not managed well. This topic will be deliberated in a
 world gathering of 1,000 delegates of FIABCI, the French acronym for the International Real Estate Federation. The answers to how sustainable cities can cope with the stress of urban living would be shared to all the delegates by many distinguished speakers.

They include
Malaysia-born Maha Sinnathamby, chairman of a successful developer Springfield Corporation in Australia will share interesting insights building sustainable cities Down Under.
Another speaker Belinda Yuen, a senior research fellow from the Lee Kuan Yew Centre for Innovative Cities at Singapore’s University of Technology and Design, will talk about smart urban development.
Jason Hu, the former Mayor of Taichung City in Taiwan is another eminent speaker who will share on how he he had helped to transform Taichung into a model sustainable city.

These talks at the three -day 66th FIABCI World Congress scheduled from May 29 promise to draw international attention. Eminent speakers and delegates from 48 countries will meet on this year’s theme focused on: “Urbanization: Perils or Prosperity.
In welcoming the delegates, FIABCI World President Robyn Waters said there is much to learn from Malaysia which is undergoing rapid real estate growth.

“As the most populous city in Malaysia, Kuala Lumpur is the fastest growing metropolitan city in the country. “Malaysia offers FIABCI World Congress attendees a unique opportunity to learn first-hand about urbanization and dynamic real estate markets and how they handle this growth,” she explained. For the second time in a decade, Malaysia has the honour to host the world congress after 2002 at the One World Hotel here. FIABCI Malaysia president Tengku Abdul Aziz Tengku Mahmud said the annual world congress would not be a “talk shop” but a gathering of experts concerned about the future of real estate development.

“FIABCI is recognised as a NGO for expert views on real estate by the United Nations,” he said, adding that this year’s theme is most appropriated especially for a developing nation like Malaysia which is experiencing rapid urbanisation. Tengku Abdul Aziz said, according to the United Nations’ World Urbanisation report, more than half of the global population currently live in townships and is projected to reach 70% by 2050.“Hence, urbanisation is an important and crucial issue to be discussed,” he added.

Tengku Abdul Aziz said apart from the public forums and conferences during the congress, another highlight is FIABCI World Prix d’Excellence Awards whose gala nite will be held on May 30. The award ceremony organising committee chairman Yeow Thit Sang said among the world property award winners were many Malaysian developers which showed that Malaysian property developments were acknowledged for its high quality and design aside from being eco-friendly.“These world property awards are held in high esteem in the international arena and is similar to “Hollywood’s own version of its Oscar,” he said.

Malaysian developers have excelled in building quality residential property developments and to date, have bagged 52 world awards since 1975.

At the prestigious FIABCI World Prix d’Excellence Award Gala Nite, Yang di-Pertuan Besar of Negri Sembilan Tuanku Muhriz Tuanku Munawir will present the various categories of awards to over 20 winners.

FIABCI Malaysian chapter secretary-general Dr Yu Kee Su said the grand winners of the FIABCI World Prix d’Excellence Awards are also encouraged to share their recipe for success.

FIABCI Malaysia has grown since 1975 with an objective to foster goodwill and understanding with international organisations.

It is an excellent platform for interaction among developers, architects, contractors, consultants, professional estate agents, interior designers and investors.

Most importantly under FIABCI’s flagship, the organisation strives to constantly improve the industry’s standard in making it par excellence.

On the sidelines, the foreign delegates can take part in organised study tours, city tours, and exhibitions including networking sessions and golfing while enjoying our warm tropical climate.

posted in support of my good friend in FIABCI, Sr. Michael Geh, Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd.  Geh is also the Vice President of FIABCI Malaysian Chapter and A International Board Member.

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US$, China, buying properties, what has it got to do with me?

I remember telling a few of my close friends on few separate occasions about US$ which is not aligned to its actual value. They asked me why i said so, I explained briefly with a few questions. When the economy is doing well, should your currency be appreciating or depreciating? When your country suffers a crisis and you need to borrow lots of money from external party, say IMF or World Bank or China or Japan etc, should your currency be depreciating or appreciating? When the government of the day continue to print even more money, should the currency depreciate or appreciate? The answer is simple, depreciate. Yet, the value of US$ seemed unchanged for many years and if compared to 1997 crisis days, the US$ is still ‘strongly’ valued today. Even the subprime mortgage crisis did nothing to US, nearly and they printed even more money to bail out the important companies in US which were about to go bankrupt due to inefficiencies.

In fact, where ratings are concerned, US$ rating was only down one tiny notch in 2011. From the highest ever AAA, it went down to…… AA+. Haha. This is explanation for rating of AA+: “equivalent to
Moody’s
 Aa1 (high quality, with very low credit risk, but susceptibility to long-term risks appears somewhat greater)”  With the highest reserves in the world today and a country which US borrows a lot from, China gets only AA-.  Haha. Imagine someone who lends you lots of money being rated lower than you by a top rating agency in the world.

In a recent session of Pemandu’s Global Malaysia Series in collaboration with BFM radio at the Securities Commission, Tan Sri Francis Yeoh said that there is a high potential for a global bubble bust within the next two to four years, due to the governments which are blowing up the bubble by printing ever more money. In the past, private sectors were the ones creating these bubbles but today, the situation has been reversed. Governments are printing money without increase in productivity.

Dear everyone, investing requires good understanding of a lot of things, especially how the world’s largest few economies move because when they suffer from a ‘flu’, many other countries would suffer a ‘cold’. Do not buy properties which everyone said, ‘sure go up’ but in your heart, you are thinking, ‘but this is RM1,500 psf, still SURE GO UP’? Better safe than sorry. Even when you buy unit trusts, if you trust your unit trust agent wholeheartedly because you know next to nothing about it, then do not blame the unit trust agent later on. My friend said just the other day, unit trusts typically give an average of 6-7% returns. Be reminded that 6-7% means there are funds which over-performed and there are funds which under performed. Some give NEGATIVE returns. This is the same like property price, in Penang, the average property price is only RM400,000 but tell me, can you find any condo priced at that level, at all? Yeah, you would shout ‘MAINLAND PENANG’. Great, I let you win.

written on 4 June 2014

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I also hope US economy will show great numbers.

The anticipation is ‘killing’ many smaller economies for which currencies are not considered on an equal basis with the US Dollar. When there are uncertainties, all the ‘savvy’ investors would flock to hold US Dollar whether or not the US economy is actually doing better or worse compared to the smaller economies. Well, the current major uncertainty besides the oil price or even the political dramas is the question of when would the Federal Reserve of the US adjust their rates upwards. With the current uncertainty on the actual date, many are buying ahead in anticipation of it.

Well, this is my little wish. I wish the US economy would have everything good happening to it. I wish their unemployment rate continue to fall from current 5.5% in May 2015.
(Malaysia’s unemployment rate is 3.1%)
. I wish their GDP growth would be faster than the latest 3.7% in Q2 2015.
(Malaysia’s GDP for Q2 2015 was 4.9%)
. I wish that their trade deficit would be narrowed and soon become positive. As everyone knows, with trade deficits, it meant that the country is not able to build up its reserves and may have to continue to borrow.
(Malaysia has been enjoying a trade surplus continuously since 1998. In June 2015, the trade surplus has even widened to RM6.9 billion).

Oh yeah, Bank Negara Malaysia (BNM) governor, Zeti commented, “A rate increase in the US reflects a positive development that the economy there is having a sustainable and stronger recovery. That is positive for us because they are the major market for our exports and therefore, it will be positive for the Malaysian economy.” I hope my wish and her positive assessment of US economy comes true. As for The World Bank Group senior financial economist, finance and markets global practice Dr Jose De Luna Martinez, he said, “Malaysia is a success story in terms of its financial system’s, its financial system development plan and carving itself to specialised in Islamic Finance.”

Fundamentally, with a lower reserves number Malaysia is definitely weakened. With uncertainty in the world, especially with China, it would be tough to maintain growth numbers of 2014 too. However, to fully attribute the ringgit’s fall to just the economic indicators is not accurate too. Recession is not going to start with Malaysia unless many other ‘stronger’ economies fall first. Happy reading about US economy and the “negative” Malaysian economy as reported by many today.

written on 30 Aug 2015

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Whatever happens in that largest economy may also happen here too.

This is the title of the
Article in washingtonpost.com
.  “U.S. economy deteriorating faster than anticipated as 80 million Americans are forced to stay at home.” The sub-title, “Already it is clear that the initial economic decline will be sharper and more painful than during the 2008 financial crisis.”  Perhaps the writer is using the title to attract readers? Perhaps the situation is not as dire? Then, I realise that if our current Movement Control Order (MCO) does not work, it may also turn as bad. Just as many SMEs in the U.S. may not survive a prolonged shutdown, the same can be said of the SMEs in Malaysia too.

Anyway, coming back to the
Article in washingtonpost.com
, some points included that roughly 3 million Americans have filed first-time claims for unemployment assistance and this is 4 times higher than the depths of the 1982 recession according to Bank of America Merrill Lynch. Meanwhile a JPMorgan Chase economist told clients on a conference call Friday that the jobless rate may spike from 3.5 percent to 20 percent. There is a possibility that the economy will shrink over the next three months at an annual rate of 30 percent. Many examples of employees living from paycheck to paycheck were also presented in the article showing how tough it would be for these employees once the economy stalls. Please do read the full
Article in washingtonpost.com
 for more details.

The U.S. may need a
recovery package of up to US$2 trillion to save its companies and its economy. Earlier article here.
 Meanwhile Bank Negara Malaysia has already reduced the Overnight Policy Rates twice this year and it’s just March currently.  Earlier article:
Rates are cut again. Nearly lowest in 10 years
. It has also dropped the Statutory Reserve Requirement from 3% to just 2% and this has helped to release more funds to the banks.
Article with my views in focusmalaysia.my here.

As for the government, this
was the earlier announced stimulus which the new Finance Minister will have to follow through
very closely and perhaps even deciding if the current stimulus is just not deep enough. Meanwhile the MCO has not even reached the halfway point. Let’s just hope everything is under control and that the number of infections could soon reach the peak. Let’s also wish that some of these people who did not think objectively about the MCO will now repent and stay at home instead. Happy following.

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US$ fell. Mixed Outlook, Employment issues and ‘too bullish previously.’

US$ fell today. Since US$ fell, Ringgit rose. Trump has yet to make his mark, so why did US$ retreated? The reasons according to an article in Wall Street Journal is as follows: ‘Investors grew cautious of U.S. economic outlook.’ (Huh, just within weeks can suddenly grew cautious??) Another comment: “This is a realization that the market got ahead of itself.” (This simply meant that the expectations by investors were too bullish previously.) Last would be the hiring data. “
Disappointing private-sector hiring data
 cast some doubt on the health of the U.S. labor market.” (Yes, this comment simply meant the jobs are not being created fast enough and that potentially more people may be losing their jobs)  Want to read the article in full? It’s here:
full article.

Actually, when the numbers do not look good, why would the US$ be falling? They have always been having trade deficits anyway and yet the currency continued to appreciate. Well, when the numbers do not look good, the Federal Reserve
(Fed) may NOT raise rates.
 If the Fed does not raise rates, then there’s no incentive to buy ever more US$ and wait. It’s like buying a property. If you know that property is not going to increase in price, would you still be buying it and wait for the price to appreciate? However, we are still buying property because we know the prices are still moving up, right? Exact same situation with US$. So, bad news does not immediately mean US$ going down. It meant Fed may take NO actions and that would meant lower demand for the US$.

Before anyone rushes to buy ringgit or even just any stock from BURSA, let’s just note that nothing fundamental has changed. Not just for the U.S economy but also Malaysia’s. To understand the direction, it’s best to look at the U.S after
 Trump has assumed Presidency formally.
 That’s just 14 days more. Will ringgit still weaken? Wrong question. Will US$ appreciate or depreciate? That’s the correct question which will determine the direction of the ringgit. Recently, US$ hit 14-year high. Naturally, majority of every currency hit new lows. What else would I pin my hope on? There’s the mighty
China’s Yuan policy.
 That will also help to bolster emerging market currencies too. Follow that closely yeah. Happy following.

written on 6 Jan 2017

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I hate it when US economy has bad news.

Just read this in The Edge Malaysia. I hate it when there are bad news for the US economy. Come on, grow and maintain the growth! Latest jobs data for September showed that the numbers are far short of expectations and with this comes the potential delay of an interest rate hike. Federal Reserve is unlikely to risk raising rates and putting a stop to the current fragile growth. I seriously hope every month, they would report very good numbers for the US economy and the rates are increased on schedule in the soonest possible time. Read here for my wish for the US economy:
I also hope US economy will show great numbers
  Otherwise, lots more volatility and uncertainty for all the smaller economies which unfortunately includes Malaysia.

In brief, when economy is growing, the rates can be increased. This gives the central bank, in this case the Federal Reserve to have more flexibility to deal with any other shocks. Imagine if your interest rate is already zero. What else can you do when you want to simulate the economic growth? Nothing. Perhaps the government can continue to borrow ever more money and pump into the economy? Well, it may not work. Japan’s current government debt to GDP is already 230% as at Dec 2014. The country which defaulted recently, Greece is at 177% while US is at 102.8%. Oh yeah, our country Malaysia? It’s at 52.8%. Remember Zeti said that our rates are currently accommodative? Yeah, we can still use interest rate as a ‘weapon’ to help in GDP growth. Many countries could not because their rates are already zero or close to zero.

Last week, the Fed Chair Janet Yellen’s said that the US economy was strong enough to withstand a rate hike this year. Economists say that the United States should be put on a path of higher interest rates because this may give the Fed more ammunition to deal with any future recession. Interest rates should be too high but the current rates in US is only 0.25 percent. Now do you understand why everyone is so excited with the interest rate movement in US? The only way is UP. That’s why majority of everyone is definitely going to hold more US$. It’s considered safe since the rates in US has been mentioned countless times as “most likely” to go up since some time back. All the best US. Grow!

written on 2 Sept 2015

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US$1 to RM4 soon, rate hike by US Federal Reserve

Over 1 month ago, a frequent commenter for kopiandproperty.com said that Bank Negara Malaysia should do something to prevent Ringgit from dropping further. I replied to his comment in Facebook that there is nothing much that Bank Negara can do because Ringgit is an internationally traded currency and Malaysia is a huge trading nation. It would not be in our best benefit to prop up the Ringgit. This is especially when sentiments are negative. Any actions to prevent Ringgit from falling further is likely to be short-lived and thus, better not try at all. Remember the days of 1998 when all the central banks in South East Asia tried to defend their currencies but all of them failed? Some borrowed from IMF and Malaysia instituted capital control to snuff out all actions on the Ringgit? It may be better to just focus on how best to make use of current situation instead, especially those who are exporting their stuffs and costs are in Ringgit.

Then, slightly over 2 weeks ago, a colleague said he may have to stop buying things online as Ringgit has dropped a lot. He buys a lot of stuffs from Aliexpress. I told him that he may have to wait very long as US Federal Reserve is likely to increase their interest rate with the healthy US economic growth. With this increase, majority of all currencies would drop versus US$ and this would include Ringgit. He asked if Ringgit may fall to a worse level than US$1 to RM3.80  I told him that I do not know but Ringgit is likely to continue falling until Federal Reserve’s decision and may continue falling if the decision is indeed as per what the market wanted. TODAY (21 March), a news article in a local English daily quoted John Hopkins University’s Eni Professor of international economics Michael Plummer as saying that it is possible that the rate of US$1 to RM4 may be reached within the next six months. US$ will be exceptionally strong and it is also supported by healthy numbers in terms of growth from the world’s largest economy.

Macquarie Research’s ASEAN economic PK Basu shares a similar view. He said US$1 to RM3.95 is possible by September before it strengthens again to US$1 to RM3.82 level by year-end. He also expects Bank Negara to cut the benchmark overnight policy rate (OPR) in May or July and keep this level till end of 2016. I think both of them are right. Haha. The reason is because I have also said the same thing to my colleague though it is impossible for me to simply give a number to my colleague. (Note: I do not have an Economics Degree) What’s the effect of such a depreciation? Would the economy be crippled? Remember when Ringgit was fixed at US$1 to RM3.80? Did the country went bankrupt? If we did not go bankrupt then, we would not be going bankrupt this time even if the exchange rate goes to US$1 to RM4. Our reserves today are many times higher than our reserves then. Yes, I remain positive and I will take actions to support what I believe. This includes continuously beefing up my stock purchase as well as one secondary property in 2015. Yes, I also hope I am right.

written on 21 Mar 2015

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US$124 Billion is now OPEN to all nations, take or not?

As soon as I completed my final year papers way back in 1998, I went for a short tour of Europe. Actually, I went to just 6 countries. The awesome thing was I needed to buy just the Euro Rail Pass in the UK and I could use it to travel across all the 6 countries I was visiting. (No idea if
Brexit would change
 this but hopefully not) The not so awesome thing? Well, Malaysian passport holders travelling from the UK will NOT get additional immigration stamps. Haha. Anyway, the rail pass was usable because the whole Europe was connected via rail lines. Okay, it does not cover the privately operated lines but I did not spend a single extra cent after I had that Rail Pass. This is something we lack here in Asia. Without ONE link between all countries, any integration will be slow because NOT everyone can afford to fly. Besides, it is only by rail that all the towns and cities along the whole route will benefit. Flights would only benefit two points every time.

So, I am very supportive of One Belt One Road (new Silk Road) by the “near future largest economy” in the world, China. Yes, I know they are still number 2 currently. Hopefully within the next 10 years, China will be number one. By the way, if India has a stable and progressive government, it would be the second largest and the U.S will only be 3rd… There’s one article in
TheStar here

about the new Silk Road. Chinese President Xi Jinping says that for the new Silk Road plan, China is pledging a total of US$124 billion fund by China and open for all. He says that this will be a way to boost global development. He shared, “We should build an open platform of cooperation and uphold and grow an open world economy.” (I think he should re-emphasize this to President Trump) He added, “Trade is the important engine of economic development.” (I think this is the only part where Asia is considered weak when compared to the more advanced groupings in the world today. This is especially true when compared to those formal economic groupings from the world.). Do read the full article in
TheStar here.

Malaysia remains a small nation when compared to many bigger Asian countries. However, trade numbers wise, we are projected to continue to remain within the
top 25 largest in the world by PWC
, even until 2050. It is thus seriously important that we do not fall behind any Asian nation in attracting new trade deals. Embrace this new Silk Road yeah. I can safely conclude that this new Silk Road will benefit China tremendously but no one can tell me how economic integration can be made faster without one single link between most if not all Asian nations. Oh yeah, infrastructure wise, China is also leading with the
Asian Infrastructure Investment Bank
 (
AIIB
)

which Malaysia is already a member and its members include even Britain and Australia. (Yes, both are known as strong supporters of the U.S who is not a member of AIIB) Happy following and all the best to ASIA.

written on 14 May 2017

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US$2 billion (RM8 billion) from CREC into Bandar Malaysia

Many months back, when I was driving past the Bandar Malaysia site together with a few friends, they asked ‘will this happen or not? 1MDB is in so much issues.’ (Actual words are more crude but the message is something like that). Let’s focus on
Bandar Malaysia
 this time. Well, according to a news report from Xinhua online news, China Railway Group (CREC) has announced it plans to open a US$2 billion regional centre in Kuala Lumpur. This new regional centre is expected to give it an edge over rivals over the high speed rail (HSR) between Kuala Lumpur and Singapore. Bandar Malaysia is the terminus station for HSR. A bit about HSR, read here:
Singapore Transport Ministry about HSR

This new RM8 billion development would be for its regional headquarters for which CREC general manager added, “Our regional centre is here, not our competitors. We find resources together with our local developer in infrastructure…I cannot find (anyone) who can match us.” This plan tolocate its regional hub came about just three months after CREC, together with its local partner Iskandar Waterfront Holdings acquired a 60 percent stake in Bandar Malaysia from 1MCB for RM7.41 billion. Its rivals for the HSR project includes parties from Japan, Europe and South Korea. They stated their ambitions clearly too. Cai said, “We are an infrastructure contractor. We are interested. We are waiting for the governments of Malaysia and Singapore to call for tender.”

I think I wrote about this earlier. I would prefer an Asian company winning this tender instead. I think it’s time ASIA thinks a little more as ASIA since these economic groupings in many parts of the world has always been extremely strong. In case anyone is still wondering why I say so, well, if a relative is competing with an outsider for the same job and both were able to perform at the same levels, which one would you choose? Please do not answer me, everyone has their own personal opinions. The party able to provide the most benefits, economically should be chosen. Efficiency is everything and this is why when times are bad, companies have to restructure.
Changing trends not necessarily bad, we must change with them
 At the same time, do google and read about what the Australian government is doing in choosing the best party to build their new submarines and you would get the idea.

According to the report, the open tender is expected to happen at the end of 2016. Yes, I think it’s very clear that getting it ready to run for the first time is thus at least 5 years later. CREC was 71 last year in the US business magazine Fortune 500 world’s largest companies in terms of turnover. Long time ago, I mean when I first started working, there were hardly any FDIs from China into Malaysia. They were still building up internally. Today, China is by itself bigger than the European Union when it comes to Malaysia’s largest few trading partners. In fact according to one line from Malaysia’s PM Najib, China’s investment in the manufacturing sector grew from $47 million in 2009 to $1.4 billion in 2014. This new CREC initiative will easily top that. Happy investing.

written on 23 Mar 2016

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USA: 99.2% of COVID-related deaths in June involved unvaccinated people.

USA: 99.2% of COVID-related deaths in June 2021 involved unvaccinated people. This means the vaccinated people accounted for just 0.8% of deaths.

In terms of new cases (image below) , we could see that with increasing vaccinations, there has also been a decrease in the number of new cases too. Recently, it has started to show an increase because of the Delta variant but the number remains low in comparison to the worst days.

In terms of deaths (image below), with the lower number of cases, the number of deaths have also been decreasing and if we compare both charts, we should also notice that while infections show an increasing trend, the total death continues to show a downtrend.  This tells us also that vaccination DOES NOT stop infections totally but vaccinations really do reduce the need for hospitalisation and the number of deaths.

In fact we have Sydney, Australia which announced just days ago that none of the patients hospitalised for Covid-19 were people with full vaccinations. Read here:
No fully vaccinated people have required hospital care

I seriously hope the title, charts and even Sydney’s recent learning is good enough to tell all the ones who still think vaccination is some kind of a scam?

In fact, the SOPs in the U.S. is already quite relaxed where for some places, there is no longer the need to wear a mask. This article just a few days ago.
Click here to read in full.
What has happened is that USA has already relaxed their rules (also known as SOPs) and decided that if you are fully vaccinated, you no longer need to wear a mask. It adds that when one is travelling to some places where vaccinations are low, then one is encouraged to wear mask.

Erm… how do I know which place has low vaccinations and who was vaccinated. In fact, how would I even know the person speaking to me without a mask has actually gotten two doses of Covid-19?! Okay, maybe it’s different in developed countries. maybe with just one look, they know. So, if they are speaking to someone who’s not wearing a mask, it must be safe.
Do read the article in full if you like to know more on their SOPs

By the way, the only reason why some countries could relax their rules is because of vaccinations. In the case of the U.S, the total vaccinated has already reached 50%. So, let’s hope that Malaysia would reach this number soonest possible. Thank you for registering and doing your small part as well.

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USA: 48% of banks lower lending standards

This is a very important piece of news. Reported in LA Times, the largest of US banks have lowered their lending standards and the level is approaching the levels of 2008 financial crisis! As per the Office of the Comptroller (OCC), the largest US banks are going after profits and have been loosening their underwriting standards. In short, taking on higher risks for more profits. The few areas of concern would be the lending to large corporate loans, consumer loans and in leveraged lending. Leveraged lending is the risky financing often used to fund corporate buyouts. More often than not, the corporate buyouts would involve a higher valuation and then a reorganisation with an eye for improvements in performance. This does not always happen. When it happens, the funds get huge returns. When it does not, everyone takes a ‘haircut’.

Fortunately, for now, this is the only negative part. It also said that the quality of the mortgages have improved along with the better economic condition. In short, we can say people who borrow generally can pay back easily. Defaults are on a downtrend thus far. This survey from OCC looked at 91 of the largest banks with loan portfolios of about US$4.9 billion of 94% of loans in the federal banking system. I repeat. Lending standards are lowered for 94% of total loans. Yes, now you can see the risks. OCC reported that the credit risk will continue to increase in 2015. So, would the recession really happen end of 2015 as predicted? Read here:
65% probability – recession by end 2015
. Only time would tell because no economist or analyst can tell you the exact day that the crisis will unfold.

Oh yeah, dissecting the numbers further, OCC said that 48% of all the banks that lend for commercial products showed the MOST loosening of standard. Remember some of the adverts in Malaysia which says, ‘blacklisted also can apply?’. Okay, it’s not this bad but loosening of standards are not a good thing. There are reasons why those standards were set in the first place. While it is fortunate that the lending guidelines in Malaysia is stricter and it’s much harder to get a loan these days. Rejection are higher than 50% of the time for the new mortgage applications. Ask any developer and they would tell you this sad case. Their buyers booked but had to cancel as their loan applications were rejected. However, do be reminded that IF the financial crisis happens again in the world’s largest economy, it will affect everyone. Just look at the current currency volatility and you should know. The extent? It depends on our exposure thus far. Over-exposure may just ‘kill’ us. Happy managing our risks.

written on 18 Dec 2014

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When Real Estate Negotiator (REN) are just NOT good enough, what happens?

kopiandproperty.com is a real estate negotiator (REN) friendly site. We help new RENs to quickly understand property market and investment. We help refresh the experienced ones with updates on property market.

We also believe it’s important that any buying / selling should be done professionally and we should stop having all these hanky-panky going on in the property market. I have worked with many real estate negotiators (RENs). Exceptional ones, good ones and not up to par ones.

Exceptional RENs?

Exceptional ones include the one who managed to convince me that buying a property in Kelana Jaya despite still being based in Penang is definitely possible and a good choice too. She connected me to an opportunity.

Another one was someone who ‘forced’ me to repaint my home so that I can sell it at a higher price. He helped me get an extra RM30,000 and sold the property faster too after spending an extra RM3,500. Both were awesome Real Estate Negotiators.

Not up to par RENs?

Many instances yeah. Example, ‘what’s the size of this unit?’  REN: Oh, the size is xxxxxx. Wait, let me recheck. Oh it’s xxxxx.   Me: “how many feel extra do I have for the backyeard?”   REN: Oh, I do not know, let me go measure now.”  OMG… Are you really the appointed REN for this property developer or you have too many appointments and this particular one is just not your cup of tea?

Second instance. I arrived at the viewing unit and the REN arrived 5 minutes after me. Then, the REN said sorry because he has FORGOTTEN to bring the keys to the unit. OMG… you have wasted a few hours of my time. Plus, why did you not arrive earlier, go into the unit, see if things are not in order, switch on the fans etc? You want to earn professional fees as a REN right? It’s not just opening the door…

Let’s be professional, else do something else

Actually RENs are supposed to be professionals in their own field. That’s the reason why they get agent fee for successful transaction(s). This fee is called professional fee. Many people buying for the first time would deal with a REN for the very first time in their life. Help them well because they would soon be a second-time buyer too.

Many who are buying for the second time may call back their REN who had served them before and ask for opinions. Many seasoned investors team up with a few RENs who helps them to monitor the market for good deals. So, what makes a good REN? Personally, they should have the four criteria below.

Work with a licensed agency.
 RENs must be RENs. Work under a licensed agency please. No brokers please. Get serious. A good agency typically have trainings for their RENs too. This allows the RENs to learn how to serve their customers well and the agency to reap the benefits from hiring and training these RENs.

Typically the base pay for RENs (if any) are not enough to sustain them but with the right training, the REN would be able to reap the benefits of closing more deals and faster too. It also shows a lot if the REN tells the customer that they have been in the industry for many years.

Be prepared and knowledgeable.
 I hate it when I ask the agent, ‘Is this leasehold?’ and the agent answers, ‘I don’t know’. Or I ask, ‘Is this the best time to buy?’ and the agent answers, ‘Of course’ and nothing else. As a buyer, I would definitely want to know more about the property that I am buying.

RENs should read more. RENs should do enough homework. It is ok to specialize in certain areas like what a lot of RENs do. This way you know about the area well and are able to assist the buyers when needed. Some RENs I know can tell their customers the price per sq ft for nearby developments too.

Always Diligent.
Beyond just hardworking, the agent should do more, meet more, view more and do everything more than others. It’s not rocket science. Practise makes perfect. If I would like to view a property, even on Saturday, why not?

Remember, everything starts from somewhere and whether you sell a house or not is all about probability. The more you do, the higher the chances, that’s all. Just need to note that if most RENs start work at 11am, then the ones starting at 9am has a 2 hour head start. Early bird catches the worm. Simple fact.

Strong network.
Be a buddy to the first-time buyer. They know very little. Help them know more. Be helpful even to first time buyer who were only buying a RM123,000 home. This buyer may eventually have properties in 6 cities / towns in Malaysia. This poor first-time buyer may recommend his friend who may buy a RM1.2 million property from you.

Get to know bankers. Get to know prominent property gurus. Get to know anyone and everyone and make a good impression. Give them a name card, jot down their name and ask them, what kind of property they love and if they would like to know if you found such properties. Chances are they would say yes and your network grows once they start recommending you.

Tough Life but if it’s easy, then the rewards would be thin

It’s tough life in the first year as a REN, normally. Within the first 3-6 months, many would have quit. However, there is also a group who could suddenly do very well within 3-6 months too. The commission is unlimited (based on effort) once you get started to get sustained results. Just remember that when the goings get tough, the tough gets going.

Once the deals start and you put in even more efforts, then your confidence grows and you can do more with less especially with your expanded network. There are definitely many more reasons but if the RENs could focus on these, they should be fine.

Remember, when everyone can do well, the industry grows and not many buyers / sellers will not want to use illegal brokers.

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Usually the most significant, even for ministers.

Here is an interesting article in
NST.com.my Title:[EXCLUSIVE] Declaration of assets: Ministers’ worth revealed to public
 It shows the assets declaration of three of our newly minted ministers. One is already nearly a multi-millionaire. His debts are also the highest. Another does not even own a car while another owns RM230,000 worth of car(s). Are there anything in common? We just need to look closely and we can see one similarity. Property is the largest chunk for all of them. While it does not say if the properties are fully paid for yet but if we look at the property value currently and add in those small percentages until they retire, the final amount is still pretty decent. At an incremental of 3 percent per year, the property price will double before one retires at the age of 60 even if they bought the property when they were 30.Yes, property is compulsory when we look at investment diversification.

Yes, there is no doubt that unless some unforeseen circumstances happen, the other non-millionaire ministers at this point in time would become a millionaire due to the capital appreciation from their properties. Based on the salaries and allowances, as long as they keep their job for 2 terms, every minister has the potential to be a millionaire, if they are financially savvy. Their responsibilities? Perhaps it’s to help more Malaysians to achieve high-income status even earlier. Seriously, one of the foundation that every citizen should be entitled to? A home. Not many can be disciplined enough to save so much that they become a millionaire. Just make sure they have a property so that the property can be their leverage instead. Plus, if everyone has a home, there’s no need to look for another home elsewhere, right? 🙂  Or even stay at someone else’s home instead! Haha.

Oh yeah, when we look at their declarations again, we can see that all of them have sufficient cash to last a couple of months at minimum. This is pretty important because we may not know if we need some cash when we lose our main source of income for example. Besides, cash is a very important component because it is liquid. Property is not. It takes like ‘forever’ to sell one’s property. I hope the state governments improve on this part. Efficiency is one main key to making the market more vibrant. By the way, cash will always be a foundation but other forms of investments would be the ‘tower’ on top of the foundation. How high should we build the tower? Perhaps a better question is how high COULD we build it. Except for those with rich parents, majority of us are starting from the same block yeah. Happy investing! (follow the ministers..)

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written on 11 June 2018

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UTAR research: It’s time to start buying your home.

We have often heard of property experts’ predictions on the recovery of the Malaysian property market. Here’s one of them.
Property market 2018: Crisis or Recovery

Most of the time, it’s based on their estimation based on some sets of numbers, perhaps experience and sometimes their belief based on their on the ground interactions. Another one here:
Property Malaysia: Slight price drop and rental market growth for 2017

How about another research, based on numbers and conducted by academics? I think in this case, it should be most neutral. I read an article in
theedgeproperty
 today about University Tunku Abdul Rahman’s (UTAR) research about the property market of Malaysia. It was funded by the Higher Education Ministry’s Fundamental Research Grant Scheme.

In brief, we learnt from their research that property prices are still dropping. However, recovery is expected to start in Q12018. These are some of their findings. Current property market downturn is considered tame in comparison to two decades ago. Housing market is on a “gradual down slide.” This is a signal to buy because no one has a method to pinpoint when the market would rise again. When backlog starts to clear, the sudden supply squeeze would push prices up. The number one push would be when the economy starts going into full steam. Two positive developments recently include oil prices rising and China’s investments into Malaysia. It concluded by saying, “As the impact of these development projects on the economy starts to kick in, and barring changes in the local political scene, we expect market confidence and sentiment to start improving by the first quarter of 2018.”

If we believe the research, I think the window to buy a secondary property is within the next 9 months. This is because we still need time to view, negotiate and start the process. For leasehold properties, it might take up easily 3-4 months. Surely, we are not waiting for prices to
start rising before we start chasing?
 Haha. I think this will be the usual situation. When nobody buys, I am scared to buy. When everyone starts buying, I will buy even if I needed to pay a premium. True for property market and true for shares. As for primary market, I think the prices cannot suddenly increase in Q1 2018. In fact, the current negative sentiment persisting in the market needs to change before
developers dare to launch more aggressively
 or more expensive properties. As at currently, affordability remains key to better sales and nothing else. Not buying is perfectly fine! Just don’t spend the money……… Happy believing and taking appropriate actions.

written on 13 Jan 2017

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Will this lead to lower property prices in the near future?

One of the causes always mentioned as contributing to high property prices is the compliance cost. This cost includes the building of facilities by developers for utility companies. Developers say that if the compliance costs are reduced, the property prices would go down too since they would no longer be passing the costs to buyers. They have a reprieve as per the National Housing Policy (NHP2.0) as announced by Housing and Local Government minister Zuraida Kamaruddin Click here for
Article in Edgeprop.my here.

This will be applicable for developer of affordable houses for the B40 group. To
know who is B40, here’s an earlier article.
 For these projects, the utility companies will have to pay for their respective facilities such as water, electricity and telecommunications.  She added, “We do this in order to give more opportunities to build lower-cost houses so that our people, especially the B40 group can have access to homeownership.” In fact this new NHP 2.0 has already been approved by the Cabinet and the launching is soon.

Within NHP 2.0, there are 5 key areas that it will be focused on, namely housing accessibility, together with home quality, facilities, financial accessibility and laws and regulations. For example, size wise, the space should be 900 sq ft or BIGGER. At the moment, 750 sq ft is the standard and this is uncomfortable for a family. She also explained, “Community empowerment is very important in this policy. We want the community to be responsible for their property and avoid vandalism. We want to make them understand that if you take care of your property well, the value of your property will definitely rise, thus giving you a good selling price if you sell the property.” Click here for
Article in Edgeprop.my here.

I think the 5 points in the NHP is extremely important. Home quality must be good enough to attract first-time home buyers who may have the wrong perception about affordable homes today.  Facilities I would like to point out that this will have to be complemented with maintenance plans. Else, better NOT build them. Financial accessibility wise, I prefer to be more cautious and please only lend to those who could actually repay them. Last but not least, we must have very strict enforcement because these homes are usually built with subsidy. This is for Malaysians, thus please make it work. Happy anticipating and buying that affordable home soon.

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written on 11 Dec 2018

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V-shaped recovery for ASEAN + 3. Good news, right?

Everyone knows we are going to have negative GDP this year. Will there be a V-shaped recovery for ASEAN then?

We could not yet shake off COVID-19. It is still around and in some countries, it has gotten worse. In fact some are fearing the the winter months will bring an even higher number of cases as COVID-19 is ‘helped’ by the flu season which comes every year. The consolation is that vaccines for COVID-19, if it comes to an emergency is said to be ready from both China and Russia. As for all other countries, probably it should be almost ready by year end? Let’s look at some economy news for ASEAN.

Press Release by Asean Macroeconomic Research Office (AMRO).

The ASEAN+3 Macroeconomic Research Office (AMRO) just released our revised forecast for ASEAN+3 economies.

The region has been severely affected by containment measures, and growth is forecast to decline by 0.3 percent in 2020. Nine of our 14 members are expected to contract this year, some very significantly.

We are projecting a strong V-shaped recovery in GDP growth in 2021, particularly for the Plus-3. The region as a whole is projected to expand at 6.7 percent, with all economies forecast to return to positive growth—predicated on the effective containment of the pandemic, both regionally and globally, and on the assumption that exits from policy measures proceed smoothly.

Please see below our revised projections for 2020 and 2021. For updates and new research about the impact of the pandemic on regional economies, please visit our webpage
COVID-19 in Focus
.

— end of press release —

Briefly, AMRO is predicting that the U-shaped recovery they predicted earlier is now becoming a V-shaped recovery for ASEAN. This is definitely a good news to have. Someone asked me if we will go back to Movement Control Order if the number of cases continue to spike. I could not speak on behalf of the Health Ministry but I do know that if the clusters are identified, then they will be contained on site instead of closing all businesses and plunging the whole nation into an economic crisis.

Just my 2 cents yeah. As a Malaysian, of course I would be happy to cheer for a V-shaped recovery for ASEAN. Cheers.

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Alarmed? Vacancy Tax will crash the property market?

Thoughts? Vacancy Tax will crash the property market?

What is a vacancy tax? Well, this is a tax levied to developers who were unable to sell their properties upon completion of the project. Okay, one may wonder, if they have not fully sold the whole development, why did they fully complete those properties in the first place? Well, sometimes it may due to the ever changing market situation too. There were also occasions where they were over-bullish.

Photo by Pixabay on
Pexels.com

FOMO time

If we remember, those periods from 2009 till 2012? At that time, developers were all having that FOMO (fear of missing out) feeling and they definitely were rushing to launch everything they could into the market. Of course, it may also be because of a mismatch in what was built versus what was needed. Reasons include type of property, price of property and even location where the properties are. This is why it is important not to look at the situation and just come up with a generalised solution which seems easy to implement.

Article in theedgemarkets.com – Imposing a tax on unsold and vacant properties will be a disaster
.  It shared that the only country with an unsold property tax is Singapore. The government imposes an ABSD (additional buyer’s stamp duty) of 30% (5% non-remittable upon stamping) on unsold properties after five years from the date of acquisition of the land. This is not all. There’s also a QC (qualifying certificate) tax of 8% on foreign developers. Basic idea is that the development must be completed in five years and all units to be fully sold within two years of completion.

The article also shared the possibility that the tax will cause an avalanche of falling residential property prices across the board. Though the aim was the 30,000 unsold homes, when developers are forced to lower their prices aggresively, this will also impact the existing stock of 6 million homes in Malaysia. As most Malaysians are homeowners and their properties are mortgaged, this may mean that we are going to be paying our mortgages for a property which price is lower than what we are paying!  The article is a comprehensive one. Do read it here.
Article in theedgemarkets.com

Why would prices be falling across the market?

A newly completed development has 10% of its units unsold. The 90% of the units were sold at RM500,000 4 years ago and the owners are all paying their mortgages based on this value. Now, we assume that the vacancy tax is 10% for every unsold unit. It meant that the developer has to sell the unsold units quickly or they will be levied RM50,000 per unsold unit.

Developer’s Action?

Guess what will happen? Of course the developer will choose to provide 10% discount to quickly sell off the property. Else, the taxes they pay will be even higher with every passing year! Assuming there are buyers in the market, do we think they will buy from the owners or from the developer who’s now selling at RM450,000? What happens to owners who needed to sell as they needed the money? Now, if they sell, they will lose even their 10% downpayment since the price they could sell is definitely not at RM500,000 anymore but at RM450,000.

Never Ending Story

This does not stop here. It will also affect other properties within the neighbourhood. When this happens to all the 30,000 unsold units, assuming it affects just 1 extra unit, that means another 30,000 home owners would most probably lose money from selling their units which they paid full price previously. By the way, this will be a never ending story yeah.

Frankly, I think we need a more comprehensive solution yeah. Pushing the developers to “DUMP” their unsold properties into the property market and potentially affecting other home owners is not a good choice. Definitely not at this point in time too. There are many more issues in order for a more orderly reduction of the unsold units as well as the increase of needed units for Malaysians.

Okay, I do not think vacancy tax will crash the property market. It does not crash so easily. Perhaps we need a wider consultation yeah. Perhaps kopiandproperty.com should also be invited since we are pretty neutral and does not represent the developer or the real estate agencies or even the banks. 🙂

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Vacant Possession should come with flowing water and running electricity

If you bought a new property and you are about to get the keys, then do note that when you take the keys, the property must already have water flowing and electricity running. Just bring a If this was not provided by the property developer, then the developer will be considered irresponsible. It is just not enough that the sub-stations are commissioned. Yes, buyers are protected by the Housing Development (Control and Licensing) Act 1966 (HDA 1966) for the Delivery of Vacant Possession (VP) Please do read many cases cited as below article.

Article in edgeprop.my

Actual Supply of Water and Electricity must be available

In the recent case, Bandar Eco-Setia Sdn Bhd v.  Tribunal Tuntutan Pembeli Rumah & 2 Ors  [2020] 1 LNS 778 at the Shah Alam High Court, the issue on “ready for connection” was eloquently and articulately expressed by Justice Wong Kian Kheong.

A literal interpretation of such relevant clauses was sufficient to convince the Court of Law that actual supply of water and electricity was an integral part of delivery of VP and therefore it is incumbent on the housing developer to ensure that these actual supplies are provided to the property. The presiding judge averred the following reasons for his decision:

“Simply put: It means when the purchasers entered the house upon delivery of vacant possession and turned on the lights it will be illuminated when he affixes a bulb to it. I cannot comprehend it to mean electricity supply only to a sub-station in the housing estate where the house is erected, be that terminal near or far”

       … Justice James Foong in Lew Yoke Leng & others v Sykt Kar King Sdn Bhd (2000) 4 CLJ 184

“It is not sufficient for the developer to just lay the pipes and cables for electricity and water to connect the building to the substation or water mains. The developer must ensure, at the time of delivery of vacant possession of the said building, that there is supply of water and electricity ready for tapping into the building” Please do read the long and comprehensive article here:
Article in edgeprop.my

Switch it on… when you have the house keys for the first time

Frankly, property developers should just complete all the necessary. As a buyer, this is definitely I would expect since the developer would have gained tens of hundreds of millions depending on the gross development value of the development.

It’s win-win, right? Buyers are happy, tells everyone about the professional developer who completed everything and the developer gets goodwill and perhaps more buyers in the future. I am happy to read that buyers do have a right to flowing water and running electricity. How about you?

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Stay Home. Positive sign today. Vaccinate Faster Please.

Latest Covid-19 Update.

29th May 2021, we hit 9,020 new Covid-19 cases per day. 9 days later after this peak, we are currently at 5,271 cases. In fact today is the first day where the number of recovered has exceeded the number of new cases. Briefly, active cases actually dropped 2,359 today. The number of cases seem to have stabilised but we can only know for sure if this trend continues for at least 2 weeks. Let’s hope the numbers continue it downtrend and the number of recovered patients continue to exceed the number of new cases. This sill continue to lessen the pressure on our hospitals.

The below is an image from
thestar.com.my

Total covid-19 vaccine doses coming in June / July is bigger than the total registered for Covid-19

We have a total of 16 million doses coming in
 June and July as announced by National Covid-19 Immunisation Programme’s coordinating Minister Khairy Jamaluddin (click to read)
.  As long there are no delays, this is above the total registration of people wanting to get jabbed which is only close to 13 million.  In other words, we are now faced with a good problem. We need to vaccinate, vaccinate and vaccinate. Do whatever it takes to finish every dose which is arriving. We are expected to hit 150,000 vaccinations per day within June. It is then expected to reach 200,000 per day in July.

Total Vaccinations to-date? Please refer to the image as at 6th June 2021.
Image source from JKJAV FB page.

Vaccination Speed is a key issue.

This is NOT fast enough. This meant that we could not finish the 16 million doses even by end the end of July. 150,000 x 30 days (June) = 4.5 million doses. 200,000 x 31 (July) = 6.2 million doses. This is only 10.7 million doses leaving another 5.3 million doses unutilised as at end of July. Perhaps we need to aim at 250,000 vaccinations soon so that every month we could hit 7.5 million vaccinations per month latest by August? Since we are going to receive more vaccines especially now that the U.S. has decided to share some of their extra stockpile of vaccine with the world. Good decision by US President Biden.

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Vaccination and Economy. Wow, they are related!

Actually, I have written about the importance of looking at the
right numbers versus the wrong ones. (Earlier article here)
We need to so that we can live with Covid-19 and not trying to stay away which no country has been able to until today, not even the ones who seemed to have it under control and today is struggling to contain it. Worse still, they were not prepared and vaccination numbers remain very low. Now, these countries are scrambling to get the doses.

Coming back to today’s topic. When you are vaccinated, your economy grows faster. International Monetary Fund (IMF) did not use these exact words but this was the conclusion I get from IMF’s latest economic forecast.

Do refer to the full article in thewallstreetjournal.com here.
 IMF says that the economic outlook for economies depends largely on how well they are rolling out Covid-19 vaccinations. Economic prospects are improving for advanced economies, where nearly 40% of the population has been vaccinated, despite challenges from new variants of the coronavirus.

However, at the same time, far lower vaccination rates have left emerging and developing economies more vulnerable to additional waves of the pandemic and the associated economic fallout. It said, “Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs.” Please do read the
 full article in thewallstreetjournal.com here.

Why vaccination is the key?

Singapore announced that they will treat Covid-19 not as a pandemic but as endemic and they are taking pro-active steps.
Read about it here in StraitsTimes.
Briefly, it meant that the Singapore government already knows that Covid-19 will be around for much longer time than what we ever anticipated. Thus, it’s important to take steps to live with it and not staying away from it.

Pandemic of the unvaccinated

Over 99% of all deaths in the US in June 2021 from patients with Covid-19 infections were those without any Covid-19 vaccination. Majority of everyone admitted into hospitals for Covid-19 across different countries are for people who were not vaccinated. In fact, even ONE dose out of two would provide many times higher protection versus the ones unvaccinated. Two doses would mean the threat of hospitalisation has been reduced to a minimum. Just google for many articles on this yeah.
 One of it is here.

Living with it and moving forward

Once vaccinations cover the majority of populations, even when people re infected, the number of the ones needing hospitalisation drops tremendously, the number of deaths too. In other words, we can continue to reopen all sectors because it’s under control versus hospitals being stretched to its limits and number of deaths kept increasing in tandem with the number of new infections. Just look at the below latest numbers and you can see why I say so. Cases remain high but for countries with high vaccinations, death numbers have reduced tremendously.

Image source:
https://www.worldometers.info/coronavirus/

I do think IMF’s assessment is correct. At the same time, I think it’s time all these richer nations do more for the world. Frankly, why do you need to keep so much COVID-19 stocks in your country? Donate them and do it earlier please. Thank you.

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Vaccination for children aged 5-11 starts. Have you registered?

Overview of what’s happened thus far

I have lost count of countries which have started vaccinations for children aged 5-11. America, Australia, China, the UK, many European nations, New Zealand, Singapore and more. However, no need to look too far for some statistics after the vaccinations. Singapore started in December 2021. This was what was reported as at January 19th 2022.

Full article in CNA here.
 Health Sciences Authority (HSA) said, “No serious adverse events have been reported in children AGED 5-11 who have taken their COVID-19 vaccine as of end-December last year. The COVID-19 vaccination programme was rolled out to children aged five to 11 on Dec 2021.

Six reports of “non-serious” reactions to the Pfizer-BioNTech/Comirnaty vaccine representing 0.03 per cent of the 20,327 doses that were administered. Of the six cases, three were allergic reactions such as hives and swelling of the eyelids, face and lips, while there was one report each of dizziness, fever and fast breathing, HSA said in an update
Full article in CNA here.

Here in Malaysia, starting from this week.

Article in freemalaysiatoday.com
  Health Minister Khairy Jamaluddin said that a total of 517,107 children aged five to 11 have been registered for the Pfizer Covid-19 vaccine by their parents up to Tuesday (1st Feb 2022)

He tweeted that this is about 15% of the total number of 3.6 million. He said, “Good start and @KKMPutrajaya (health ministry) will continue to communicate the benefits of getting vaxxed.” His hope is to have half of all the chidren in Malaysia to be vaccinated by end of February 2022. Selangor had the highest number of requests for the vaccines up to yesterday, with 131,500 registered under the immunisation programme for children (PICKids). Read the full article here:
Article in freemalaysiatoday.com

Overview of my personal decision

My daughter and son, aged 7 and 9 respectively has been registered and the vaccination date is on 11th February 2022. I personally think it’s best that they are fully protected even if vaccination does not guarantee that they will not be infected.
Studies in Singapore has shown that after first dose, the antibody level is at 64% and after 2 doses, antibody rises to 96% (similar to adults). Read here for the article.

Anyway, it’s the same as when Astra Zeneca vaccine (AZ) was introduced in Malaysia and everyone says NO after some ‘sxxxxd’ viral sharing. They were too scared. As the first batch, I was able to register my wife and I within minutes. So, I was one of the earliest to get jabbed with AZ. My rationale was a very simple one, majority of everyone in the UK at that time was already vaccinated with AZ… Simple fact right?

Last but least in this overview is one latest news about Covid-19’s death for 5-11 year olds here in Malaysia.
Article in nst.com.my
 “26 Covid-19 deaths involving 5 to 12-year-olds in last 6 months.” Over the past six-months, 147,282 unvaccinated children were infected with Covid-19.
Article in nst.com.my

Remember, it’s your decision since young kids cannot decide for themselves

By the way, not a single line in this whole article says that as a parent you should bring your kids aged 5-11 for vaccination. My sharing is just information I read and all are from official media. Last but not least, remember, everyone has their rights, not just those who refused to be vaccinated. As someone vaccinated, my right is to be around fully vaccinated people like me. It’s your right not to be vaccinated. Happy deciding.

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