When rental units become a norm in the future

I think most buyers today are
spoilt for choice when it comes to properties.

Every advertisement I see these days would have the T inside; LRT, MRT and KTM…

In fact the units are attractively priced too. Attractive to those who have been saving for the past 5 years and has accumulated enough downpayment for an affordable unit. RM600 per month x 12 (months) x 5 (years) is equal to RM36,000. Already more than 10 percent for any property below RM350,000. Well, if they happen to be a couple, then the total saved would have hit RM72,000.  What happens when the buyers are ‘not’ able. I fear they are not able because the temptations are non-stop. Smartphone marketers are getting ever smarter. If you do not have the money, you can do 12-month instalments and these days, there are already 24-month instalments. There are also way too many handbags on offer for 50-70 percent lesser. The only issue is, after the discounts, the price to be paid remain to be in the thousands. Worry not, credit card to the rescue. Okay, many more reasons why even when the earnings are over RM4,000 it is never enough.

For everyone’s information, my junior colleague (only a few years younger) who earns less than RM4,000 per month has just bought her second property this year. (after listening to my talk. Haha)  She usually brings packed food and despite earning below RM4,000 she could save NEARLY thousands per month. Nope, nothing to do with crazy. She’s just not following the majority. Since she is not the majority and the majority would need help with downpayment, what will happen? Well, the banks are not likely to give you 100 percent loan (they better NOT) and the government is definitely not rich enough to give 10 percent to everyone, else as usual even Malaysians who do not qualify for such benefits would also apply. One way to get around this no downpayment? Rental units. How do we cater to the market? Build lots and lots of rental units. Well, at least until the single becomes married and could then combine their income for a small unit elsewhere instead of renting.

In China, the central government is already asking for help from developers in developing a long-term rental market. Well, in China, things happen really fast. Country Garden, a Guangdong-based Chinese property development company is responding to the government’s call and has launched its BIG+ apartment project. Country Garden’s president, Mo Bin said that the company aims to develop one million apartments for long-term renting in major and second-tier cities by the end of 2020. 1 million units within 2 years.
(That is 500,000 units per year and this is just ONE developer.)
Full article in atimes.com here.

When we look a little deeper and further, it is plain to see that
perhaps this is the future.

The norm in the future is for most of everyone to just rent a unit. Maybe a small unit but to rent until they needed a bigger unit and that’s when they would need their partner to share half the cost. Perhaps that is why my two close HK ex-colleagues told me that buying without marrying is tough. To afford a unit, the salaries have to be combined. Buying would be
limited to only those who somehow managed
 to save or happened to have super rich parents. Okay, do not be alarmed yet. This rental trend is not yet strongly established in many advanced property markets yet. Not even in those markets where the median prices are under the severely unaffordable category yet. What we can do today is to keep following these news and if these built for rental units become the majority of all units built, then it will start in Malaysia. Happy believing yeah.

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written on 24 Dec 2017

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Rental units up, Rental rates down. Double whammy, really.

This was the title of the iProperty.com’s latest report about the rental market of Malaysia.
“Double whammy of rental units piling up & rental rates declining”
 Yes, this is like a bolt of pessimism into the property market and many property owners who are still trying to rent out their units would now be feeling even more stressed.
This is the report in full (click to download).

Demand is not spread out across all areas whether up or down

Please do read carefully and we need to now realise that the demand remain strong for some areas and weak for some areas and if we look at the current situation, then we need to realise that the current weak demand is also caused by the circumstances too. Students unable to go back to their universities meant that the demand for rental units will not happen. With the many restrictions, many potential movements such as moving out, moving up, moving away could not happen and thus demand stays stagnant too. Image below from iProperty.com explains it clearly. Demand is still up for some and down for the rest.

Below image is for Selangor.

Job market growth is vital. How’s it doing now?

With the job market still on a low mode, the hiring of new people have also slowed down and this meant that the migration of many of these graduates from smaller towns and cities have also slowed down too. The current employment rate? Higher than the many years before the arrival of COVID-19. Image shows the number.

Tourists’ demand for accommodation is vital

This is not all, remember Malaysia used to attract over 26 million international tourists per year? That’s over 2 million every month! Imagine how much rooms / homes these tourists would need to rent. (They cannot be sleeping on the streets yeah) With international travel now closed, this piece of huge demand has dropped tremendously too. In fact, even local travels do not happen because travelling between states remain BANNED under the CMCO 2.0.  This has been extended to mid April 2021 too.

Okay, enough of bad news. Unfortunately for home owners who has yet to rent out their units, this will be a testing time. Renting out the home with a lower rental rate may be a survival mode. With this survival mode, it is highly likely that the rental rates will go lower. Cutting the losses is more important than having full losses.

What’s next?

It will get a little better when travelling between states are allowed, institutions are back to physical classes and with more vaccinations, perhaps some travel bubble could be established and this will be where demand really bounces back. That is unfortunately some months away, conservatively. In the mean time, please tell everyone around us to sign up for the vaccinations. The earlier the country is vaccinated, the earlier that everything could have a chance to go back to normal. Happy doing our best.

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Growing, good. Slowing, bad. Which is which for office rental?

If I tell you that the property prices for the past 27 years had been rising by 6.4% per year BUT it is now rising by just 1.3% in the latest quarter, would you say that the number is bad or good? Bearing in mind that the current market condition is at best, slow. At its worst, some are saying that the demand is already lower than the supply that’s available as well as the new ones coming into the market. Please do refer to the image below for the Malaysian House Price Index (MHPI) from
Bank Negara’s website: housingwatch.my

Article in malaymail.com
 Knight Frank’s Asia Pacific Prime Office Rental Index has shown that the rental yields for office space here grew by just 2.1 per cent in the third quarter of 2019. This growth was 0.4 percent lower than previous quarter. As for the reason why it has risen marginally, the property consultant said that this was due to the opening of two new towers in the TRX Financial district; The Exchange 106 and Menara Prudential.

It said, “However, with Kuala Lumpur city’s overall office market still under pressure and landlords continuing to offer attractive lease packages to retain or attract tenants. The sector is expected to remain challenged in the short to medium term.”  Meanwhile, prime office locations in Hong Kong has seen rental plummeting by 5.6% due to the current protests in the city.  Singapore’s absolute rental yields have declined by 0.6% even though this is better than the previous quarter.
Article in malaymail.com

I hope everyone understands that we continue to have more reports about the number of new offices here in Kuala Lumpur. However, at the same time, the prices continue to hold up well. This is because moving offices could not be done suddenly. Plus, for many MNCs, it’s super important to be at a location which show some class.

Sincerely speaking, if I am a working professional and the MNC who’s hiring me is operating from an old building where there’s not even a proper lobby… I will think thrice before joining. This is the reason why the numbers continue to show positive yields versus going down simply because there are more offices coming up and making the overall number swell.

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Rental yields versus Property price appreciation

During lunch few days ago, my colleague said she got to know that Australia homes does not have good rental yields. I explained briefly why. Typically, rental yield would be low when the property prices increase much faster than the rental rate. Assume you bought a condo few years ago and rented it out. Today, the market price for your condo has increased. Let’s say it has increased 20% or about 6% per year. Would your rental has increased so much if you were still renting to the same tenant? Chances are no. Even if you found a new tenant, would the new tenant be willing to pay 20% higher rental so that you can maintain your yield? Of course, the fortunate thing is, you bought it much earlier, so your yield is much higher compared to those who are buying the same apartment today.

In Australia, the typical median price for a landed property in Melbourne as at end 2013 is AUD643,000. Look at the median housing price in Melbourne and you can see that the price increase from 2005 onwards has been rather steep. There were just no way that rental can keep up with the price increase. Thus, rental yield would continue to be low.

Nevertheless, these days you can see in newspapers that there are opportunities to enjoy good rental yields and the property price of perhaps just half of the median home price in Melbourne. How could this be? Well, look at the actual size of the home being sold. Chances are, the sizes are now becoming ever smaller and it’s typically nearby Universities. Thus, the rental yield can still be maintained because there are a lot of foreign students studying in Australia.

What is ‘rental yield is always good’? If rental yield is always good, it only tells you that there has not been huge capital appreciation. 🙂  Come on, choose one. Do not be like a friend of mine whom when I asked, what is her main priority for buying a condo in Puchong. She said I want good rental and good capital appreciation. Good rental and good capital appreciation would typically find it hard to sleep on the same bed. Choose one. The plus point though is that after a while, capital appreciation does happen at least due to inflation.

written on 29 Jan 2014

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Alternatively read about ‘
Penang Property
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Property rentals @ Singapore dropping. Malaysia?

According to an online news report in todayonline.com, November rental numbers for the property market in Singapore is in the negative territory. As everyone would have been reading, the Singapore property market has been declining in both transactions and prices in 2014. This has affected the rental market too and it has been falling for the 10
th
 consecutive months. It’s pretty amazing with the statistics available for the Singapore property market. Everything is so transparent! Compared to same period last year, rent has decreased 5.3%. The expectation is for this to continue as supply growth of private homes for rental is increasing faster than demand. As usual, larger units are finding it harder to rent out. Thus, for those who wants to rent out faster, prices would have to go down. This would mean more weakness moving forward. This has also extended to the HDB market too where compared to the same period last year, rents have dropped 2.2 percent.

While many statistics continue to say that supply is much higher compared to demand, I think the main issue is that during periods of negative sentiments, many are not willing to spend too much extra compared to what they need. Based on the planning, I think the supply has always exceeded demand. If it did not, then where would those people who needs to rent a roof over their head stayed? I mean, seriously if demand has always been very strong, then the rental ads would not have been that many in the online portals, right? Unless many of these units for rent were done ‘under-table’? Anyway, during good times, if I am renting a room or a home, I would not mind to pay more. Perhaps 5-10% more to secure a unit that I really like. During slower times though, I may think the next few months may be more uncertain, thus I would definitely negotiate for a lower rent or even rent in another cheaper area. I sincerely believe this would be one major reason why rental is coming down. Statistically, I have no doubts about the numbers but emotionally, I think it explains better.

I have yet to see it happening in Kuala Lumpur, at least not on such a scale like Singapore. However, one friend confided in me that she found it hard to rent out her unit in Penang island. The demand is there, people are still viewing but the decision has been very slow. Perhaps some of these people wanted much cheaper rental but if they tell such numbers, my friend may scold them. I am not sure but I can safely conclude that even for Penang, the demand is still there but people are now much more cautious, much more calculative. Thus, when decisions are slower, it would depend on who can wait longer. If a buyer could not afford to pay the mortgage continuously without any rental income, the prices would also be coming down very soon here in Malaysia. My friend’s final statement? ‘I think I am open to renting it out even if it does not meet my mortgage. Minor negative is better than zero income’. I agree with her and I would also look forward to continuous moderation of prices for the really overpriced ones. Happy renting.

written on 11 Dec 2014

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It’s renter’s market, that’s why best to buy

Reported in The Star recently. An interesting property market thought by Siva Shanker, the immediate past president of the Malaysian Institute of Estate Agents (MIEA). He said that due to the oversupply of condos, the rental charged is likely to drop 20 percent to 40 percent. Many buyers are finding it hard to sell their units for a good price and are now being forced to rent them out for much cheaper than usual. Thus, he is very sure that the winners for the next two to three years would be those who are renting. Major reason is because in 2012, 2013 and 2014, many of these properties were bought on speculation and many of these buyers wanted to flip them as soon as they are completed.

Fast forward to today and everyone would know how hard it is to sell, especially for a good price worth flipping for. These properties have started to flood the market from 2015, 2016 and even till 2017. He said many of these flippers took out a 100 percent housing loan and also the Developer Interest Bearing Scheme (DIBS). In other words nearly zero money down.
(No matter what happens, I do not agree to any property bought with no money down. Imagine if the whole market does this. Malaysia would be the next US mortgage crisis example)

He also said that many of these buyers would have bought based on the advice of some property guru and more often than not, they are part of investors clubs. These buyers are told that if they buy that RM600,000 unit now, as soon as it’s ready, they can sell it at RM900,000 for a RM300,000 profit. When the keys are handed over and the housing loan starts, the buyer would have to start paying for it. He may resort to selling but there are few buyers today and it’s also much harder to obtain loans. He may have to drop his price but this would still not guarantee that there would be ready buyers. Of course, this is not happening to the entire housing sector but only in some speculative sectors.

He gave examples of some of these properties which include those RM500,000 to RM800,000 condos, the high-end residential condos and shoebox units like SoHo, SoVo and SoFo. All these have been built by the dozens. He however does not think that the current situation is like the 1997-98 financial crisis. He reckons that even if the rental could not cover the mortgage, at least if it covers half, the seller would just top up the other half. His personal prediction is that by Q1 2016, some interest would be back and Q2 2016 would start to see the property market recovery. He predicts there will be a bit of interest coming back in the first quarter of 2016 and that in the second quarter, the market will be just about ready to recover.

Personally? I think if we are willing to rent high, it’s better to try and find some desperate sellers, offer them a price we can afford and see if they are wiling to let go. If we have to view many different units, just do it now and keep offering. Of course, if the offer is below what the seller bought, we are wasting our time. Offer something which gives them some profits and I think in this way, we gain tremendously. The seller has less pressure from their mortgage and we own a property which we bought at a big discount compared to the current launching prices. This gives us a ready place to stay and to ride out the current slowdown. Happy deciding and taking action.

written on 5 Nov 2015

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Renting a home in metaverse. Possible?

Renting a home in metaverse. Possible?

Do you know that people are also buying virtual land these days using the money they have in their bank? Based on the article below, this was quoted too. “someone recently paid US$450,000 to be Snoop Dogg’s neighbour in a virtual world called the Sandbox.”

US$450,000 (RM1.91 million) is not a small amount of money yeah. Not even in US$ term or versus the typical salaries of Americans.  For everyone’s information. “The average annual wage in 2019 in the US was $51,916.27, and the median annual wage was
$34,248.45
.”  In other words, typical median salary per month is US$2,854. The one who paid such a price to stay next to Snoop Dogg virtually is not a typical American.

Article in cnbc.com

Real estate in virtual worlds — sometimes called the metaverse — is going for millions of dollars in some cases.
The most expensive spots are near where lots of users congregate — for instance, someone recently paid $450,000 to be Snoop Dogg’s neighbor in a virtual world called the Sandbox.
But even proponents are warning would-be investors that this is risky business.

In the metaverse world, major artists including Justin Bieber, Ariana Grande and DJ Marshmello are performing as their own avatars. Janine Yorio’s virtual reat estate development company, Republic Realm spent a record US$4.3 million for a parcel of virtual land. She shared that her company sold 100 virtual islands for US$15,000 each last yeah and this yeah, they are selling for about US$300,000 each….

Mark Stapp, professor and director for real estate theory and practice at Arizona State University, agrees. “I would not put money into this that I didn’t care about losing. I certainly wouldn’t,” Stapp says. “If it continues the way it’s going, it is most likely going to be a bubble. You’re buying something that isn’t tied to reality.”  Please read here for the full
Article in cnbc.com

What if you still want to be staying next to a celebrity then?

It’s inevitable that most of the homes next to some celebrities who’s also in the virtual world would already be occupied by someone who’s willing to pay a premium to stay next door right? Well, what happens if we still want to stay next to the celebrity then? Perhaps we can find that person who bought the home next to the celebrity and we offer to pay them rental, right? Sign a tenancy agreement perhaps?

What would be the rental be then? It may just reflect the real world scenario. Demand vs Supply. If many people wanted and there’s just one home which is right next to the celebrity’s home, then the rental is likely to be high.

I have no idea how advanced and how fast real estate in the metaverse would become. What I am sure however if that people are willing to pay ever higher for such an opportunity to stay next to the celebrity, it also meant that in the future, some would be willing to pay rental too? Sometimes, it’s cheaper and still possible to do because it may not be possible to buy a home next to the celebrity in real life. What a REAL estate world.

I do not own any virtual property and have no intention to buy a home and stay next to any celebrity no matter how much I idolise the celebrity. Cheers.

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Renting is better than buying? Which is going up faster in Malaysia?

Are you currently renting the place you stay (and making the owner a happy man) or are you currently paying monthly mortgages (maybe making yourself suffering) for it? Well, when I started my first job after my degree, I rented for a full 4 years before actually buying a place jointly with my girlfriend who later upgraded her status to become wife and today is a housewife taking care of my two mischievous kids. My owner got the following rental from me.

RM550 per month x 12 months x 4 years = RM26,400. At the time, I bought a second-hand fridge for RM400 and when i moved out, I sold it to the owner for RM200. 😛 Well, those were the days. I guess it’s okay because the owner was a very friendly couple. We were good tenants too, kept the place clean enough and hey, that rented home was where I proposed to my wife! However, we still need to understand that RM26,400 is not a small amount and at the time (2002), this amount is already 20% downpayment for the apartment of RM123,000…

What about other Malaysian households then? I think we are on the right track. Between 2016 to 2019, the number of households staying in quarters have reduced from 4.1% to 3.3%. Households purchasing a home for own stay increased from 76.3% to 76.9%. This shows that many have stable income and is able to proceed to actually start paying for a home. Households who are renting has also increased slightly from 19.6% to 19.8%.  Perhaps some got married and needed to move out of the quarters but may not yet have down payment to buy their own home yet.

Image:
https://www.dosm.gov.my/

Below shows the current overview of stats for Malaysians in general. We have reached nearly 33 million and we have 8.2 million households. Urbanisation is at 76.7% and as the country continues to move towards a developed nation, this number will continue to increase. This explains why some cities are deserted during holidays and some small towns are deserted on most days except holidays. Just need to understand that this is also why the demand for properties in bigger cities would continue to increase. Developers just have to build the right properties yeah.

Image source:
https://www.mycensus.gov.my/

Happy learning and continue to get updated. Every time I write, I am also updating myself too.

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Renting is fine, make plans to get your own

One day, many years back, someone I knew SMSed me. “Charles, I intend to move out from the place I am renting in 2 months time. I have bought a new place in Batu Maung.’ This friend of mine has been renting the same 730 sq ft apartment for the past 4.5 years. I was very happy because it meant that he believes property is a must-have for him. Okay, I did speak to him on numerous occasions as he was still young and thus all the
advantages to get one as early as possible.

Oh yeah, Batu Maung is in a less popular area in Penang many years back. Today, it’s growing with many new developments too.

The advice is simple. Renting is fine but always make plans to get your own property.
Read here to understand why renting too high is not advisable.

In this case, my friend has managed to save enough to buy that landed terrace and due to his age, he was even able to buy the place by himself. Oh yeah, I still remembered his old Iswara which he was driving and he switched to a Honda City only after a few years of working. I always think we must exercise delayed gratification but always be
savvy about our own safety.
 It’s always better to change to a newer car because older cars tend to have more issues including the safety related ones.

The above has shown three very important points. One, always have a plan in mind even if we were renting. Second, always save and exercise
delayed gratification.
 Third, your age is your advantage. Use it while you still have it. As for me, I am already too old to be able to do too much about it. Oh yeah, that landed property he bought many years back? Due to it being within the Penang island, it should have easily doubled. He told me that he bought it at RM450,000 many years back, I think it was 2009. Today’s check in propertyguru.com.my revealed the following prices. (As per image). Still renting? Better start thinking and saving.

written on 27 Aug 2016

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Renting is not the end of the world, it may be a good option

Bank Negara Malaysia (BNM) organised a workshop with the theme of “The Housing Market: Issues and Policy Options.”
Article here.
 BNM shared the following: Households should be given access to credit so that they can buy their own home but it is not in their interest if they have to incur an unsustainable level of debt just to own that first home.  Thus all policies with regards to credit access must include the protection of homebuyers which may givers to financial hardship and subsequently foreclosure or poorer welfare. In brief, this was what our former BNM governor Zeti shared which is for buyers to buy
within their affordability levels.

The BNM workshop also stated that broader alternatives for homeownership is developed, including a well-functioning rental market. Of course, what this meant is that the government has a stake in it, for example building homes and renting them out instead of only building homes and trying to sell them when the buyers themselves
could not get loan approvals for them
. It further stated that these measures may provide a viable route to help low income and early career individuals onto a path towards eventual home ownership. Better enforcement is also critical to prevent the abuse of schemes intended to assist specific household segments to own or rent homes.”

Personally, I also hope people are more understanding of themselves and the debt they want to carry for a very long time. Sometimes we have to wonder whether the property prices were simply too high
( I don’t think so)

or people just refused to settle for something lesser. I managed to upgrade to a bigger high-rise only after 8 years of working experience and many more years of savings. Coming back to the question of renting for life, this may be a viable option if the
house prices is indeed beyond the reach of the majority.
 In fact there are many studies which we can read online which shows why rental may just be a better option compared to buying. Happy deciding.

written on 11 Oct 2016

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Renting News: The decision of whom to rent to is with the landlord

Ir was
published in smartinvestor.com

Let me share a real story

A potential tenant, a husband and wife came to view my 730 sq ft apartment with a real estate negotiator (REN). After they have viewed the whole unit, the husband said to me. “I think your unit is okay. You know, most of the units I have viewed are asking for RM500 – RM550 rental per month.”

“Okay” is not the word I am too happy to hear. Benchmarking a fully-furnished unit (because I moved out) versus some empty units around the area is also not something logical to me. My reply to them in front of the REN is something like this. “Actually if most of the units you viewed are already at RM500 – RM550, I would suggest that you choose one of those units. If I am you, I would not come and view this RM650 unit.”

What happened next?

They did not rent. I was also happy that they did not. Starting on the wrong foot may make the whole thing complicated in the future. The next tenant who came to view told me he really loved my unit as it was super fully furnished and asked if there are any chance that I could consider a lower rental as he was just a new engineer starting in Penang. He was a Malaysian Indian, driving a Proton Iswara. Immedictaly, I agreed with a lower rental. He rented from me until he moved up in his work and bought a landed property in Penang a few years later. Rental was always on time. Starting right is so important.

The Lesson for me? Know your unit’s worth (get help and research)

The lesson here for me as an owner is that there is NO NEED to follow the neighbours if I know that my unit has distinct  advantages. In this case the information is not hard to get whether or not my unit is more special than others. Just ask your friendly neighourhood REN yeah. If your friendly REN could not give you an answer, find another one. This REN is not worth the time you spend to tell him about your unit.

The Lesson for potential tenants? Communicate better to potential owner because the decision is his / hers, usually not yours to make.

The lesson for potential tenant is how you communicate would determine if the owner rents to you or rents to the next one at a lower rate but not to you. Occasionally, the owner may be desperate and accepts everything you say. That’s considered lucky for the tenant and is not necessarily the norm. It is not wise to agitate the owner because they may not like it and decided you are not the one. By the way, there is a reason why any owner quoted a rental which is much higher then others yeah. I would propose for potential tenants to skip units which is above what they are willing to pay. It’s a simple decision to do.

30 years later, it’s either an asset or a never-ending payment

My tenant, the one who drove an Iswara and later on bought a landed property is a financially savvy person. He knew he must not overspend on his rental. Thus he rented my place versus the many better condominiums or even some place which is just 10 minutes away from his office. My place was in a neighbourhood which was around 35-40 minutes away. He could easily saved RM250 per month at least. His Iswara was definitely a second-hand unit. he saved at least a few hundred ringgit every month from driving this second-hand unit.

At the end of the day, he just needed 5 years to save enough downpayment for a home and he did just that.

RM250 x 12 months from rental savings.   RM500 x 12 months from car instalment savings.  That’s RM750 x 12 = RM9,000 per year.  In 5 years, he has RM45,000 just from these two savings, not including his usual monthly savings from his earnings. This was why he could have enough for a 10% downpayment for a landed property in Penang. It’s not in Greenlane lah. Be realistic.

30 years later, he would have completely paid for his newly purchased landed home. Most probably driving a way better car and most probably going for good holidays too. For some who did not do what he did, the monthly rental will be a never-ending payment.

Not an easy decision or thing to do but happy choosing.

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Renting to students works too. Let’s try.

I was at The Capital TV the other day for the shooting of Kanta Residensi. I will be featured in Episode 10. With me on the same day was a famous personality in the real estate world, Abang Ensem. He has been featured in many other TV channels. He has a blog with huge following too.
Here
. Of course we must keep learning from people who has more experience than us, right? Especially with buying apartments to rent out to students. He shared a few tips as below. Writing down so that I would also be able to refer again in future.

Where to buy – Buy somewhere we are familiar. As he is familiar with Shah Alam, he chose to focus within Shah Alam and has been renting out successfully without any major hiccups for a great many years. Of course, the place we buy should also be near to institutions of higher learning. A popular one would be very useful.

What to provide – These are just students, there’s no need to give the world! He provides ONLY washing machine, fridge and stove. Not even bed frames! I think this is a good idea so that the maintenance of these items can be kept to a minimum. Replacing the items are also cheap too.

How to rent out – He will deal with one house leader and he would insist on meeting the parents of this student. He said it’s not so much to chase for rental but to keep these students in check. For example, some of these students may damage the home or even bring their boyfriends or girl friends home. This is when he would inform the parents. Good idea.

Why students – This is a market which will always be available. In fact it can be considered to be even more reliable than the office workers that I usually rent to. It’s nearly hassle free because not many students love to rent and then move out halfway. They are definitely more innocent too comparatively.

He also shared one last advice on how to buy so that he can rent out for higher profits. He said we should focus on ‘busuk’ (Foul) and ‘buruk’ (Bad). In other words, properties which many people normally overlook. I wrote something related here:
Buy what others did nothing, see, view yet

I told him that until today, I have only rented to students once. It was for a period of 8 months to Petronas University students who were doing their internship in Penang. I think one main reason is because I rented out fully furnished. Hopefully everyone has learnt something. I told him that I would definitely consider buying something exclusively to rent to students. Will keep in touch with him for even more tips on renting out to students. Happy learning.

written on 19 May 2016

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Rents are falling a lot in Hong Kong. Now just RM17.80 per sq ft as at Q1 2021.

Rents are falling a lot in Hong Kong it seems. Now it’s just HK$33.60 (RM17.80) per sq ft.
As per this article in bloomberg.com
 Putting this into perspective, a 1,000 sq ft condo will be RM17.80 x 1000 = RM17,800 rental per month. I know, everyone wants to tell me that Hong Kong working people earn way higher than Malaysians. The below shows the average salary of Hong Kong working people. HK$16,884 = RM8,945 This is 2.8 times higher than Malaysian working people’s salary. They earn nearly 3 times higher pay than us. The image showing the numbers for Malaysia is right below Hong Kong’s. However, RM17,800 rental?

Property ownership is not just important for Hong Kong

This is why property ownership is so important because for Hong Kong, anyone renting will forever be under lots of financial pressure. This pressure will be forever because rental does not stop even when people stop working. This is why it’s uncommon for a Hong Kong couple to rent a 1,000 sq ft condo. Most of the time, a smaller place, say 300 sq ft would be a more affordable option. 300 sq ft x RM17.80 = RM5,340. Earning RM17,800 and a rental of RM5,340 = 30% of the salary. Looks much more logital and probable.

Now let’s look at an article about Hong Kong’s renters in bloomberg.com

Article in bloomberg.com
  Rents in one of the world’s most expensive real estate markets dropped to HK$33.60 ($4.33) per square foot in the first quarter, the lowest since the end of 2016, data from Centaline Property Agency Ltd. show. So a typical two-bedroom apartment in Soho now rents for about $3,500 a month, down from $4,200 two years ago, according to Spacious.hk online rentals.

The reasons for this include the following. Exodus of expatriates following anti-government protests, combined with a declining population and higher unemployment rate have led to sluggish rental demand in the Asian financial hub, even as purchase prices hold steady. Please do read the full article here:
Article in bloomberg.com

We have two important things to take note from this falling rent

First is that even at the latest new rental rates, it’s plain to see that usually the more powerful side are the owners. Especially for owners who bought that unit many, many years ago. Current falling rental will not be enough to cause a loss. If we like a sign showing that it’s a huge loss to the owners, then look at the property price transactions trend. If it is also falling, then the owners may be suffering losses and is wiling to sell instead of holding. However, if property prices remain almost the same, then the owner continues to have holding power.

Second important thing to note is that property will always be one huge cause for poverty. It’s not just Hong Kong but in any major cities in the world, there will be a group which owns properties and another group which rents. The tenant group will continue to work very hard to pay rental and the the owners group will continue to take the rental and build wealth because of their decision earlier; to invest into properties. If we have learnt from Hong Kong’s experience, it’s time to act. Happy viewing. If you like to have steps to start, read below.

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Reopening is restarting. Also known as normalising.

I think this should be good news for theme park operators. They will be allowed to reopen beginning 1st July 2020. Yes, that’s today. A friend said that “so what if they reopen? You think they will get lots of people visiting it?” Actually, reopening is just restarting. This is also known as normalising. Any car which has not been driven for a couple of weeks, when you restart, it’s best to let it run for a while before driving it out and later on getting back to the highway speed of 110km per hour.

This is the same for any patient who has been lying on the bed for a few days. That first time he steps onto the floor, he will start by walking slowly instead of jumping down and start running. Now, let’s imagine if that car which has not been driven will NOT be restarted unless the owner wants to immediately use it to race. Or that patient is given a warning that if he were to come down from the bed, he must start running, else he should just stay on the bed… Hopefully we understand what is normalising. This is still not normal… but it’s progress.

Article in malaymail.com

I welcome progress. Just as I think travel bubble or even travelling to other ‘safe’ countries are okay. Covid-19 vaccines are only at human trial stage at best and there is still no guarantee that it will gain approval. Further to approval would be the need to manufacture on a large scale and in the very beginning, there may also be teething issues. We have yet to understand which countries would get it first.

Let’s also understand that even logistics wise, it will take some time for delivery and everything would depend on which country / which company has the vaccine first. Of course, the best part is to have MANY successful researchers with a COVID-19 vaccine. Else, if just one… it’s going to be tough for a small nation to get hold of it earlier than a super powerful nation. Happy understanding that this is how the world works unless there are a lot more choices available.

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Reopening Malaysia: More tourists, more jobs but not enough people

Today, I was speaking in the Commercial Property Conference 2021 and I was telling all the participants that in 2019, Malaysia was visited by 25 million tourists. That’s over 2 million people every month. Imagine the demand for hotels then. Beyond just hotels, many of those operating short-term rental were also earning a lot of money too. Well, nowadays, it’s mostly local tourists.

In 2020, the number of tourists went down to just 4 million. Malaysia was closed to international travellers. Now, there are news that we may reopen to international tourists again. Take a look at the news article below. Click to read the article yeah.
Article is by CNN.com

Reopening Malaysia: Hotels now face a new problem

Article in themalaysianreserve.com
   The Malaysian Association of Hotels (MAH) CEO Yap Lip Seng said that hotel industry needs manpower as Malaysia may reopen to international visitors from 1st January 2022.

He said, “Former employees are reluctant to return and most have ventured into other industries deemed as more stable like manufacturing. Some even went into the gig economy for more freedom and independence.”

He also said, “Even banks have classified the industry as a ‘high risk’ industry.”

He also shared that hotels have also redeployed back-office staff and executives to cleaning jobs to cope with the uncertainties with demands.  Please read the full article here:
Article in themalaysianreserve.com

When there are better options outside

A good friend of mine suffered a lot when the tourism industry went into hibernation when lockdown started. She changed industry and is today a successful sales manager for industrial products. However, she says that if tourism will make a comeback, she too will make a comeback. Her heart remains with the tourism industry. I do think there are people like her.

However, for many people who switched to another industry after such a bad experience with the hotel industry, they will take a much longer wait-and-see versus jumping back into the hotel industry as soon as their former employers are hiring. I think what the hotel industry are also asking is for the flexibility to hire more foreign workers. Just need to remember that the current recovery via reopening is not just limited to Malaysia. Everyone is hiring and they do not necessarily need to come to Malaysia.

Hopefully, everything will start to go back to the norm with this reopening Malaysia and the hotels would be full again. Perhaps by then, they may be able to offer something to attract people to venture into the hotel industry. Happy hiring and yes, when I travel with my two kids, I prefer to stay in a hotel.

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“REPEAT buyers” will still buy, yes very true.

I think it is very important to understand why buyers buy and not just the so-called negative sentiment which everyone is talking about today. This is especially true for the ‘repeat buyers.’ Most of the time, the reason why they continue to buy is because they have learnt about the benefits of buying the right property.  They may also be buying because they had just sold off one of their properties for a good profit and wanted to reinvest. Last but not least, they are buying because there
are now more opportunities
. No queues from the buyers. The queues are coming from the many launches instead. Look at the newly launched ones, the prices are definitely more attractive today compared to 2 years ago. Back then, it was reaching for the sky.

Reported in a local English daily. Regardless of the current negative sentiment affecting the market, Andaman Property Management Sdn Bhd Managing Director Datuk Seri Dr Vincent Tiew said that investors and first-time buyers are still continuing to buy. The property market demand remain stable. This demand is not coming from just the rich but also the mass market.  The only thing holding them back would be the
50-50 chance for loan approval

as well as the type of property available.

Someone wrote in to me, asking if it’s appropriate for her to buy a property for own-stay, a condo of 1,000sf at around RM450,000 which comes with 2 car parks. The only thing is that the property is in an area prone to jam nearly all the time. The whole development is also a
high-density one.

Actually high-density or low density, this kind of price vs the location and price is going to be hard to find 4 years down the road when the condo is completed. She is ALSO a repeat buyer. She will either rent out her existing apartment or sell it later.

Coming back to the first-time buyers today. Truth is, potential demand far outstrips whatever incoming  and available supply there is today. Take a look at the Malaysian population demographics to understand why. The only issue would always be affordability vs location and price. Hotspots are too expensive. Cheap ones are too far away.
Affordable ones often have a few reasons which needs some serious consideration.

Slower periods represent opportunities but not many dared to buy when everyone they know are saying otherwise. That’s the reason why first-time buyers need a longer time to decide compared to REPEAT buyers. During the hotter times, I lost out in buying a unit I wanted by a mere few minutes. A friend lost out in buying her unit of choice by seconds! She lost out to my sister and brother. All three were at the same launching event.

Read more. Understand what’s the typical prices. Drive around even in areas you are not familiar with. Get to know your options. Know what you can afford and then buy one. Unless Malaysia suffers same fate as Greece in the near future, a few years down the road would reveal that the decision to buy was better than to do nothing and spent much of the money on something ‘useless’ instead. Yes, the repeat buyers would continue to buy. That’s why first-time buyers MUST buy too.

written on 15 July 2015

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REPS series in Penang: Going Forward in 2019.

It will be my first sharing session in Penang for 2019 sharing the day with my two real estate expert friends whom I am trying my best to keep pace. Ms. Elane, the lady has unlimited enthusiasm and it’s going to be a great gain to listen to her sharing. For the upcoming Real Estate Professional Seminar (REPS), she will share on “How to fund your first property using insurance?” I remember someone told me that he does not have enough money for both property and insurance and will have to choose just one. Well, here’s that sharing on how to have both. Join Elane’s talk.

The other speaker is Miichael Yeoh, my ‘old’ friend. Of course he is still young. This is one guy who can talk the whole day when it comes to mortgage stories. This time, he will share on “Property Crowdfunding.What is this?” Remember the viral message just not too long ago? About buying a property but without the need for bank loans? Learn the tips and tricks to manoeuvre this property crowdfunding route.

The final stretch will be covered by me about a topic which is on the news everyday. I will cover “Budget 2019’s Impact on properties and the strategies moving forward.” My sharing will however not be limited to just whatever our Finance Minister said. It will also go into the 4Ps of Property Investment 101 so that all Real Estate Agents could also then share with their RENs. We should always understand that the market is slow but it is not because everyone is out of job. It is more sentiment driven. Thus, the focus is to educate rather than to sell. When people understand fully what they are buying, they will buy because they still have a job and could pay for it.
Register via MIEA’s link here.
Details as per above flyer or you can just refer below too. I am excited with property market in 2019. See you!

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Reselling of affordable homes allocated? Sigh.

In Malaysia, today, the federal and the state governments have started to build affordable homes. Many schemes were introduced and many have applied I believe. In Penang, the state government does not allow reselling within 10 years. Johor state government announced that all affordable homes cannot be resold within 5 years. I seriously think the reselling should be allowed but the profit which they get from reselling the home should be used to subsidise the next purchase. Be reminded, these affordable homes were already subsidised in the first place. No one should be profiting from them. Of course, some would say what about the interest rates paid etc? Sure, minus them off and whatever profits left are given back to the state government for the subsidy of the next affordable home.

There are still friends who told me that all these allocations are hard to get and if you want them, you need to find ‘ways’. Yet, these are the same friends who said that they want more transparency from the government. To me, it’s simple. You qualify, you apply, you are allocated when your time comes and you buy. Then, you stay for many years before you are allowed to upgrade. Come on, not many suddenly got rich after they were allocated an affordable unit, right? Publish all the applicants online, publish all those who were allocated online, publish those who SOLD their units too. This should be easy to do because all the owners of these affordable units should have applied before to a central database, whether at federal or state level. Can we do it?

There are also friends who said, I wanted units in X area but they gave me Y area. It’s far away from my home. When asked how far, he said, additional 30 minutes. Then, he said it is thus very inconvenient. I seriously think this friend does not need the affordable unit. If you are not desperate, you do not need it yet. Just wait in the queue for the next one or the next one or until you have enough to buy one yourself without any subsidy. Once all these people who really do not need one are taken out from the list, guess what it becomes much easier to identify and allocate the units to the right people.

There are already existing programmes. Use them correctly and make sure those who needs it benefit from it. Affordable units are not for profits. Affordable units are not for those who do not need it yet. Affordable units are paid for in terms of tax by those who can afford some other more expensive units. Buyers of condos in Penang would have already paid some ‘subsidy’ for the affordable units. It’s best that these units really do go to the needy and not the greedy.

written on 21 Sept 2014

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Affordable plus condo facilities, nearby MRT and starts from RM450,800.

Announcement for an upcoming property event by MKLand

Fancy an affordable high-rise with full condo facilities and just a few hundred metres away from a MRT station (Line 2)? There’s one potential one which offers two car parks and starts from RM450,800 and above. It’s called
Residensi Suasana @ Damai
. It is also just 4km away from the MRT Sungai Buloh station. The area is Damansara Damai. It is located within Petaling Jaya Utara, next to Sri Damansara and is connected to city centre via the following links:

1) Jalan Kepong – Sg Buloh

2) North-South Highway

3) Lebuhraya Damansara Puchong (LDP)

4) MRR2 Kepong – KL

My usual favourite weekend mall is 1 Utama and it is within 10km away. There are more than enough shops to last me one full day. Besides 1 Utama there are also IKEA, E-Curve, Kelab Rahman Putra etc. Yes, occasionally I would drop by Desa Parkcity (Waterfront) which is just 6km away. Image from google map as attached. Oh yeah, Parkcity Medical Centre is 7km away. For those who prefers the Sungai Buloh side, there’s the Sungai Buloh hospital. To those who love sports stores and wants one with choice and value for money, Decathlon is just 5km or 7 minutes away. I have been there a few times and still loves it.

The facilities provided are comprehensive and should serve even families with young kids easily. It is suitable for young couples looking for their first comfortable home sweet home. For families, the parent can relax by the pool while the kids play by themselves, all within the condo. For a list of all facilities, do refer below:

Barbeque Area

Sauna

Surau

Cafeteria Space

Kiosk Room

Laundry Room

Nursery Room

Childrens’ Playground

Tadika Room

Multipurpose Room

Meeting Room

Gymnasium Room

Swimming Pool

Childrens’ Pool

Half Basketball Court

Volleyball Court

Current time-limited sales package is as follows:

Special Rebate RM5,000 for type
B3 ONLY

For those who prefer not to drive, the following may be some choices, depending on where you work.

Bus Terminal for Rapid, Metro buses services / Taxi Services

KTM Commuter Train (1km at Sg Buloh KTM Station)

Future MRT Station (Line2)

MRT Station Sungai Buloh (just 4km away)

Grocery shopping can be satisfied by the following, including the HERO Market which had just opened two weeks ago.

Mini Markets / Night Markets (Friday)

Retail Shops

Econsave Hypermarket

End financiers include Public Bank, BSN, Bank Rakyat, Bank Islam, MBSB, Bank Muamalat (Joint Income Group minimum RM5,000 per month).

There are also two petrol stations within Damansara Damai and they include Petronas and Shell. For those who wants fast food, choices already include all the major brands including Mc Donald’s, KFC and even Pizza Hut. Besides these choices, one can also get delicious nasi lemak in the morning at just RM1.20 and the rice portion is considered huge for the price. (Opposite Shell station). For bank choices, there are also the following: Public Bank (4.4km) away in Sri Damansara and Hong Leong Bank (4km) away in Kepong.

The upcoming event on 23rd October 2016 features Dr. Azizul and Chris Tan, both experts in their own fields who will share on “Owning a Home Made Easy.’ Address for the sales gallery as follows:  1 Jalan PJU 10/2b, Petaling Jaya 47830, Selangor.

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Residential  property transactions sees a slight drop nationwide in first quarter of 2015

Article sent to kopiandproperty.com for publishing. All charts were provided by Michael Geh , Senior Partner of Raine & Horne and also the Vice-President of FIABCI Malaysian Chapter with numbers from NAPIC.

GEORGE TOWN – The number of residential property transactions nationwide saw a slight drop from 60,760 transactions last quarter to 59,626 transactions for the first quarter of this year.

If compared with the same period last year, there were a total 58,767 transactions in the first quarter of 2014 which means the number of transactions for the same period this year has increased. These are the latest figures released by National Property Information Centre (Napic).

It is noted that the number of transactions for properties in three states – Penang, Selangor and Wilayah Persekutuan – have also seen drops when compared to the last quarter of 2014.

Over in Penang, the number of transactions had dropped from 5,193 units in the fourth quarter of 2014 to 3,834 units in the first quarter of this year. The number of transactions in Selangor for the first quarter of this year is 14,744 units, a slight drop from 15,613 transactions in the previous quarter.

Meanwhile, in Wilayah Persekutuan, there is also a slight drop from 4,127 transactions in the previous quarter to 3,250 units this quarter. Interestingly, the number of transactions for properties priced under RM100,000 nationwide have increased to 16,733 units the first quarter this year as compared to 12,723 units the previous quarter.

All four quarters of last year saw the number of transactions for properties below RM100,000 hovering between 12,000 and 13,000 units per quarter. The total of below RM100,000 properties transacted nationwide last year was only 51,140 units. The transactions for properties priced below RM100,000 has been falling nationwide since 2012.

From a total 90,081 transactions in 2010, the number of transactions increased to 100,589 in 2011 before it dipped in 2012 to 97,259. By 2013, the numbers have fallen drastically to 63,528 transactions in 2013 and almost half from 2011, to 51,140 transactions in 2014.

It is even more noticeable in Penang where the fluctuations in transactions for this range of properties is more dramatic. In 2010, a total 5,674 transactions were recorded before almost doubling to 10,436 transactions in 2011. However, the number of transactions began to drop in 2012 to 7,217 before falling drastically to 3,529 transactions in 2013 and 3,460 in 2014.

The trend seems to continue in the first quarter of 2015 with Penang recording only 764 transactions for properties priced below RM100,000 as compared to 1,062 units in the previous quarter. The transactions for properties this range hovered between 700 and 800 in the first three quarter last year before peaking in the final quarter at slightly above 1,000 transactions.

In comparison, Wilayah Persekutuan recorded 3,772 transactions in 2010 to increase to 4,926 in 2011. There was a slight drop to 4,189 transactions in 2012 before it too dropped drastically to 1,602 transactions in 2013 and 1,404 in 2014.

Meanwhile, in Selangor, the number of transactions for residential properties below RM100,000 also decreased but it was a gradual drop. There were a total 16,633 transactions in 2010 before increasing to 17,673 in 2011. The number of transactions saw a slight drop to 17,099 in 2012 before it drops to 11,403 in 2013 and 10,449 in 2014.

Noting the drop in transactions nationwide, property researcher Ho Chin Soon said it could be due to tightening measures on housing loans. As for the increasing trend for properties priced above RM100,000 nationwide, Ho said inflation and upward price adjustments could play a role in the general overall increase across the board.

Raine & Horne International Zaki + Partners Sdn Bhd Senior Partner Michael Geh believed that the drop in transactions for properties below RM100,000 in Penang could be due to lesser number of such properties being built in recent years.

“More of these units must and should be build because there is a lack of supply despite strong demands for such units,” he said, adding that there is also a lower rate of bank approvals for applicants in the lower income group.

He called on banks to relax lending rules to allow more homebuyers to be eligible for housing loans to purchase these homes.

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Press Release: iProperty.com.my reveals Malaysia’s residential high rise properties with the biggest Capital Growth in 2020

KUALA LUMPUR, 25 JUNE 2021
— iProperty.com.my, Malaysia’s No. 1 Property Site, has revealed eight high-rise residential properties in Malaysia with the highest year-on-year capital growth in 2020. The list  comprises condominiums and serviced residences and the findings are based on the latest transaction data from brickz.my. To highlight how well each property fared relative to its area’s overall performance, the median capital appreciation of all the condominiums and serviced residences in that specific location are also provided. The properties are ranked in descending order and the capital growth is displayed in terms of percentages (%).

1. Residensi 22, Mont Kiara, Kuala Lumpur

Capital Growth
:
 7.28%

2020 Median PSF
: RM914.03
2019 Median PSF
: RM859.70
Number of transactions
: 11
Mont Kiara’s Capital Growth
: -7.82%

(2020 Median PSF: RM625)

Residensi 22 is a high-end condominium located in Mont Kiara, an area with a high population of  expatriates in Kuala Lumpur. Completed in 2018, the strata residential building is fairly new and boasts a low-density setting. Four towers housing 543 units with sizes ranging from 1,900 sq ft to 3,043 sq ft are spread out across 6.66 acres of land.

Besides the standard swimming pool and gym, Residensi 22 provides premium facilities including a dining pavilion, sculpture garden, relaxation lounge, sunbathing deck, 50-metre lap pool, and a meditation lawn. In addition, the condominium provides good security and facilities maintenance.

The condominium is easily accessible with two entry and exit points via Jalan Kiara 3 and Jalan Kiara 4. It is also within walking distance to various amenities including the Garden International School, Mont Kiara International School, Arcoris Mont Kiara, and Plaza Mont Kiara. Other nearby hotspots include 1 Mont Kiara Mall, GDM Specialist Centre, and Kiara Medical Centre.

 2. Seringin Residences, Old Klang Road, Kuala Lumpur

Capital Growth
:
5.70%

2020 Median PSF
: RM610.90
2019 Median PSF
: RM577.99
Number of transactions
: 15
Old Klang Road’s Capital Growth
: -4.56%

(2020 Median PSF: RM395)

Seringin Residences is a freehold condominium located in Happy Garden, and just off Old Klang Road, consisting of 542 housing units within two 24-storey residential towers. Completed in 2013, it offers built-up sizes ranging from 1,707 sq ft – 6,760 sq ft targeted to wealthier urbanites and families. The condominium features an extensive array of facilities including a 50-metre pool, floating gym, lifestyle pavilion and a 1km bicycle track.

The condominium also provides eco-friendly facilities for its residents with the adjoining Sustainable Application of Green Energy (SAGE) building as the main highlight. It is a green recreational centre housing a function room, a herb garden and an eco-discovery centre with lounge areas, a library with a study room, as well as various eco-attractions such as picnic grounds, ponds and composting grounds. In addition, solar panels are installed on top of the S.A.G.E building, of which the harnessed power provides an estimated 50% of utility usage for the residence.

In terms of surrounding amenities, Seringin Residences is located within 2 km from commercial areas,  Kuchai Business Park and Kuchai Entrepreneurs Park, where a wide selection of restaurants and local eateries, saloons, clinics, mini markets, and boutiques are located. Other nearby amenities include Assunta Hospital, SJK (C) La Salle, and NSK Hypermarket.

3. Mutiara Condominium, Bukit Mertajam, Penang

Capital Growth
:
 5.49%

2020 Median PSF
: RM257.14
2019 Median PSF
: RM243.76
Number of transactions
: 26
Bukit Mertajam’s Capital Growth
: 2.72%

(2020 Median PSF: RM264)

Mutiara Condominium is a low-cost condominium located in Bandar Baru Perda, Bukit Mertajam, Penang. It is a freehold property that offers 24-hours security, a swimming pool and a clubhouse. Although the units are smaller than average, 700 or 800 sq ft units with three bedrooms, the condominium is located on a generous plot of land, covering 3.26 acres.

Mutiara Condominium’s appeal lies in its low price points, purchasers are able to own a three bedroom unit for as low as RM165,000. In addition, numerous affordable eateries, mini-marts and banks are within a few minutes’ drive, providing convenience to its residents. Amenities located within a 10 km radius include Mydin Mall Bukit Mertajam, Auto-City, Sunway Carnival Mall, KPJ Penang Specialist Hospital and SK and SMK Bandar Baru Perda. In addition, the Penang Bridge is 10 minutes away for quick access to the Penang island.

4. Villa Wangsamas Condominium, Wangsa Maju, Kuala Lumpur

Capital Growth: 4.57%

2020 Median PSF
: RM370.52
2019 Median PSF
: RM354.33
Number of transactions
: 20
Wangsa Maju’s Capital Growth
: 4.18%

(2020 Median PSF: RM399)

Villa Wangsamas is a high-density condominium consisting of 1,300 units across nine residential towers.  It offers 3 types of built-up – a standard sized unit at 1,267 sq ft (3+1 bedrooms), 1,834 sq ft (4+1 bedrooms) and 2,562 sq ft (5+1 bedrooms). Completed in 2010, the condominium features 24-hours security, a swimming pool, cafeteria, gymnasium, playground, jogging track, squash court and a business centre. Although the condominium is quite concentrated, Villa Wangsamas is surrounded by greenery as it is built on elevated land.

In terms of connectivity, Villa Wangsamas is located 850 metres away from the Sri Rampai LRT station and is serviced by Jalan Jelatek and highways such as DUKE, MRR2, and AKLEH. Various shopping malls are located within 10 minutes including Aeon Big Wangsa Maju, Wangsa Walk, Setapak Central Mall and Melawati Mall.

5. The Z Residence, Bukit Jalil, Kuala Lumpur

Capital Growth: 2.81%

2020 Median PSF
: RM502.42
2019 Median PSF
: RM488.69
Number of transactions
: 17
Bukit Jalil’s Capital Growth
: -9.46%

(2020 Median PSF: RM450)

Z Residence is a freehold condominium consisting of 1,136 units across four residential blocks completed in 2014. Located in a strategic area that is Bukit Jalil, Kuala Lumpur, the condominium offers generous-sized units including a 1,236 sq ft unit with three bedrooms from as low as RM590,000 whereas the asking rent for the same partially-furnished unit is RM1,500.

Z Residence provides a comprehensive list of facilities for its residents with a commitment to green living — 50% of the condominium is dedicated to greenery with trees and lush landscaping. Besides a swimming pool and gymnasium, residents have access to a sky lounge, reflexology path, Tai Chi lawn, sauna, BBQ pit, gazebo, kindergarten, launderette, and mini market.

In terms of connectivity,  Z Residence can be easily accessed via the network of highways servicing Bukit Jalil including KESAS, LDP, MEX, NPE and Old Klang Road. Amenities located less than 10 minutes away include Pavilion Bukit Jalil, Bukit Jalil Recreation Park, International Medical University (IMU) and Tzu Chi International School.

6. OUG Parklane, Old Klang Road, Kuala Lumpur

Capital Growth: 2.70%

2020 Median PSF
: RM400.00
2019 Median PSF
: RM389.47
Number of transactions
: 37
Old Klang Road’s Capital Growth
: 5.63%

(2020 Median PSF: RM507)

Similar to the Z Residence, OUG Parklane is another high-density development with fair prices, a 950 sq  ft unit with three bedrooms ranges from RM310,000 to RM400,000. Strategically located in Old Klang Road, the serviced apartment offers 4,225 units across 11 blocks and 204 commercial units located on the ground floor of each block.

Due to its massive scale and the variety of retail units available including eateries, launderettes, 24-hours clinics and minimarts, OUG Parklane can be considered a mini township of its own. Facilities at the development are standard with a swimming pool, wading pool, children playground and landscaped garden.

In addition, popular suburbs and business centres such as Kuchai Entrepreneurs Park, Sri Petaling, Bukit Jalil, Mid Valley City and Bandar Sunway are within 15 minutes away. Traffic can be a problem in the area but OUG Parklane is well connected as Jalan Puchong directly links to the Shah Alam Expressway, connecting residents to the NPE and MRR2.

7. Mutiara Ville Serviced Residences , Cyberjaya, Selangor

Capital Growth
:
1.64%

2020 Median PSF
: RM477.44
2019 Median PSF
: RM469.74
Number of transactions
: 17
Cyberjaya’s Capital Growth
: -7.17%

(2020 Median PSF: RM488)

Mutiara Ville is a mixed development comprising seven residential towers, a business centre and a 4-storey retail complex, Gem In Mall. It offers 500 sq ft studio units, 1,000 or 1,100 sq ft units with three bedrooms and 1,280 sq ft units with four bedrooms. Completed in 2017, its facilities include a cafeteria, mini market, gym, swimming pool, jogging track, squash court, sky lounge, nursery, and playground. The condominium’s main highlight is its strategic location nearby various hotspots in Cyberjaya including Cyberjaya Lake Garden, DPulze Mall and Shaftsbury Square.

In addition, Mutiara Ville is located in Cyberjaya’s educational hub – Cyberjaya University of Medical Sciences (CUCMS) is located nearby with a free shuttle service while Multimedia University (MMU), Kirkby College, University of Cyberjaya and LimKokWing University are all within a 7km radius. This would make Mutiara Ville a top choice for student accommodation, making it an attractive option for property investors.

8. Westside Three, Desa ParkCity, Kuala Lumpur

Capital Growth: 1.07%

2020 Median PSF
: RM881.52
2019 Median PSF
: RM872.18
Number of transactions
: 13
Desa ParkCity’s Capital Growth
: 1.41%

(2020 Median PSF: RM862)

Completed in 2019, Westside 3 is the latest development in the popular Desa ParkCity condominium series. Located right next to Westside 2, the 47-storey high-end freehold condominium consists of 469 units with built-up sizes ranging from 1,077 sq ft to 1,927 sq ft. Each unit comes with high quality interiors and fully-furnished kitchens. For added security, each unit at Westside 3 is connected directly to the guardhouse via an intercom.

The facilities are spread out across two levels with some of them include a sun deck, tennis court, jogging track, jet pool, jacuzzi and barbeque area. There are a few child-friendly facilities including a water amusement park, adventure playground, kids’ fun zone, and a secret garden.

Desa ParkCity is an upscale self-contained suburb in Kuala Lumpur that is popular with families and couples in the higher income bracket. It has several landscaped parks, a neighbourhood mall, an international school, its own medical centre, a state of the art clubhouse, community centre and a business centre, Plaza Arkadia.

Shylendra Nathan, General Manager of iProperty.com Malaysia Sdn Bhd, said, “As a reputable proptech company in Malaysia, iProperty.com.my has the data that allow us to determine key local property market trends and provide up-to-date market insights. Based on current market sentiments, we want to make sure that these data-driven findings are made available so that it benefits property investors and homebuyers, be it for the investment purposes or own stay. The capital growth data on these selected properties should give homebuyers the investment insights into the high-rise residential property market and make the right purchasing decision.”

FOOTNOTES

1)
 Capital growth is calculated as = Median PSF in 2020 – Median PSF in 2019 / Median PSF in 2019. Median Per Square Foot (PSF) is used to calculate capital growth due to various built-up sizes being transacted.

2)
 Only properties that have more than 10 transactions in 2019 and 2020 were selected to negate the effect of any spikes.

3)
 The data system from JPPH officially records a property transaction in Malaysia once the stamp duty for the Sales and Purchase Agreement is paid. Analytics is based on the data available at the date of publication and may be subject to revision as and when more data becomes available.

DISCLAIMER

The opinions stated in the article is not in any form an endorsement or recommendation by iProperty.com.my. Readers are encouraged to seek independent advice prior to making any investment. Brickz.my is an independent property website. It is not a valuer, and cannot give direct property valuation. The content on
http://www.brickz.my
 is provided “as is” for general information purposes only. You should not rely on any of this content without first seeking financial advice from a professionally qualified expert
.

— End Of Press Release —

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Residential Property Market in Penang 2015

Penang’s property market is slightly different from the overall Malaysian property market. Instead of hitting the peak in Q2 2011, the Penang property market reached its peak only in Q4 2011. Perhaps this is due to the lag factor? Maybe it’s just because Penang market is more resilient? Well, the peak was 9,667 units but by Q2 2015, it is only 3,909 units! Average price per transactions is RM407,753. Read a more in-depth report below. Thanks to the chart from Raine&Horne and statistics from National Property Information Centre (NAPIC).

In Penang, the residential property market had contracted by almost half since the market hit its peak in 2011.  The market recorded total transactions of 9,667 in the last quarter of 2011 which is the highest number of transactions in the past four years before it saw a drastic drop of about 48.47%  in the first quarter of 2012 to only 4,981 transactions. The corresponding value of transactions also dropped from RM2.27 billion in the fourth quarter of 2011 to RM1.5 million in the first quarter of 2012.

The market saw fluctuations in 2012. In the second quarter, the transactions increased by about 38.68% to 6,908 transactions valued at RM1.92 billion in the second quarter. It dropped slightly to 6,398 transactions in the third quarter. The market plunged again by 22.17% or to 4,979 transactions in the last quarter.

The market continued to contract in 2013 where transactions dropped slightly by 786 transactions to 4,193 transactions (with a total value of RM1.55 billion) in the first quarter and it remained stable with slight increases throughout the year bringing the total transactions to 17,700 units with a total value of RM7.1 billion for the year.

In 2014, the transactions dropped slightly by about 8.66% from 4,598 transactions in the last quarter of 2013 to 4,291 transactions in the first quarter of 2014. The second quarter saw an increase of about  10.27% to 4,732 transactions valued at RM1.89 billion.

The transactions dropped in the third quarter by 538 transactions to 4,194 units (with a value worth RM1.75 billion) and then by the fourth quarter, it increased by 23.82% to 5,193 transactions with a value of RM2.06 billion.

By 2015, the market contracted again by about 26.17% to 3,834 transactions worth a total RM1.55 billion compared to the last quarter of 2014. If compared to the same quarter of last year, the market also saw a contraction of about 10.65% or a by 457 transactions.

In the second quarter of this year, the market improved slightly from the first quarter by only 75 transactions to 3,909 units with a value of only RM1.59 billion. When compared to the second quarter of 2014, the market contracted by 17.39% or by 823 transactions.

Geh also believed that the contraction in the market in Penang could also be due to the strict loan requirements with lesser loan approvals.

He added the long delay in the issuance of advertising permit and developers license (APDL) had also taken a toll on the Penang residential property market.

“I believe the demand for projects in the pipeline in Penang is good but the sales process cannot commence due to the delay in the APDL,” he said.

Developers must obtain the APDL from the Housing Ministry before the sale process and the signing of the sales and purchase agreement for any development project.

The issuance of the APDL in Penang for many projects by local developers have been delayed for more than a year.

published on 1st Nov 2015

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Residential property outlook? Developers are switching…

In the recent MIEA Press Conference, Kelvin Yip, Associate Director of Frank Knight Malaysia Sdn Bhd presented the “Residential Property Market Outlook.” These are some of the points he presented. Since 2016, Malaysia’s GDP has been on a downtrend but in 2017, it has rebounded and in 2018, forecasts from most analysts show that the 2018 number would be almost similar to the 2017 numbers; positive.  Inflation has continue to inch downwards but in 2017, it has also rebounded. In fact, close to 100 percent increase! Okay, except for countries in turmoil, increasing inflation rate is still considered a positive sign. I do hope no one thinks Malaysia is in some sort of turmoil? Unemployment rate has actually inched upwards. Does not seem that great but then again anything below 4 percent is considered good. I only know that if one is a computer science graduate and is good in programming, the starting pay may just be RM3,500 if not higher. I have more than a few friends below 30 who’s already within T20 percent earning bracket in Malaysia.

By the way, for those people working in the growing industries, the bonus should be pretty good. Already 2 friends whose companies are in the export business told me that their bonus would be 4 months. Another in the services line said anything less than 2 months, many in the company would resign. I was like, ‘WHAT?’ Anyway, I hope of them would save some of the bonus payout for investment purposes.  You can see that the GDP is driven by growth in exports, services and manufacturing as well as private investments. 🙂   On an overall basis, I rate these numbers as good for the property market. As long as they are okay to buy a unit within their means yeah.  Trying to stretch will not mean much because banks are unlikely to take too much risks these days. Here’s the full presentation from Kelvin.
Download it here.
One of his conclusions? More developers are going to build in established fringe locations and upcoming areas along the rail transportation lines with affordable housing products. Definitely a buyers market but are buyers in the mood to buy? That’s a question for you.

In conclusion for 2018?  Well, since 2014, we have a slow property market. Everyone knows that. If the question is ‘What is the Malaysian property market outlook for 2018?’ and it’s asked to me, my answer is, it will be a great one for everyone who bought a good property. 😛   Sorry yeah, I am an optimist but of course we must still look back at the fundamentals. Without a supportive economy, there’s no need to talk about the property market. We better talk about the job market instead. As at today however, the number of teenagers enjoying a RM17.50 cup of customised latte in most of the cafes I go to remained MANY. I do not think they earned it from doing part-time jobs and I do not believe their parents are under the low income household. Either way, these teenagers are not likely to see their allowances get cut unless their parents have financial difficulties. I hope everyone continues to earn good incomes.  Happy viewing!
Here’s that report from Knight Frank here.

written on 8 Feb 2018

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Worried? Residential property overhang. Positive or Negative? Up by 3.3% only?

Residential property overhang is always a concern. Somehow because of the high number versus years before, people postpone their property buying decision. Actually, I do not understand because if you are buying based on your needs, overhang has nothing to do with it. In fact overhang will help to make the property market to be more negative and this should actually help with better price and more freebies too.

So how positive or negative is the situation? H1 2020 saw an increase of 3.3% in the residential property overhang numbers. Look closely and we must note that within the whole H1 2020, perhaps only 2.5 months would be considered as months where property transactions could happen. January and February 2020 was okay.

March until May 2020 would be quite bad yeah. We can only count June as a half month since if we saw a property we love in beginning of June, we still need up to 2 weeks for the loan application. If you saw the property towards end of the month, it is highly likely that the transaction will only be completed in July…  Thanks for contributing to H2 2020 transaction numbers yeah.
Image below is from JPPH.

Residential property overhang numbers increased by 3.3% and total is now 31,661 units. 32% of these are priced below RM300k. Meanwhile Johor and Selangor would contribute 20% and 16% respectively to that overhang number. Fortunately both of these states are among the top three when it comes to property transactions versus all other 12 states.

In other words, there’s a chance that they (Johor and Selangor) could clear their respective residential property overhang numbers if the market were to recover. For Johor, the catalyst would always be how connected JB to SG is. Without the Rail Transit System (RTS), then the property market is likely to be muted.

Serviced apartment is a real worry. State governments better be very vigilant with approvals. There are currently 21,683 units in the overhang category and this has increased by 26.5% within H1 2020! 62% are priced above RM700k! By the way, just looking at the price could roughly tell us that these units are in more mature and popular locations. If it is not, then the unit size would have to be super huge yeah. This is highly unlikely yeah if you understand the reasons for serviced apartments.

The state where most of these serviced apartment overhang units are is in Johor as well. I do believe if you were to drive to JB, you would know where these over RM700k units are.

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Nearly 200,000 residential property transactions in 2021

Did you buy any property in 2021? If you did, your number is inside the property transaction numbers for 2021. My residential property purchase was end of 2020. So I think it should be inside the 2020 total property transaction numbers. In 2021, I bought properties but did not buy any residential properties. As announced recently by NAPIC’s data, there were nearly 200,000 residential property transactions in 2021.

Article in theedgemarkets.com
  Residential properties transactions in property market Malaysia was 198,812 transactions worth RM76.9 billion in 2021. This was as per data from National Property Information Centre (NAPIC)

The residential sub-sector also showed increase in transactions for the following states: Kuala Lumpur (4.9%), Selangor (10.7%), Pulau Pinang (16.3%) and Perak (3.2%).” In Selangor there were a total of 48,755 transactions. Kuala Lumpur recorded 11,129 transactions.

Demand for properties priced RM300,000 and below accounted for 55.9% of the total, followed by those priced between RM300,001 to RM500,000 (24.6%), RM501,000 to RM1 million (14.8%), and those priced more than RM1 million (4.8%).

Meanwhile house prices wise, he Malaysian House Price Index (MHPI) stood at 201.5 points in 2021. This is a marginal increase of 0.6% growth. Please do refer to the full and comprehensive article here:
Article in theedgemarkets.com

Property market Malaysia in your opinion?

What is your thought about property market Malaysia? Has it been affected by the many comments in your social media account from all your friends? Maybe it’s all doom and gloom? Or maybe it’s all fine and dandy? Are you in any decision stage for any property? Or you are part of the group who would only buy when the property market has collapsed and you could pick up great undervalued buys?

What is certain is that we have close to 200,000 residential property transactions in 2021 despite the many closures and lockdowns. Let’s hope that with the current move towards endemicity, the number of property transactions would also rise in tandem. If the number rises, it could also be considered as a move towards normalisation as well. Exciting times ahead I feel. As for property prices, I still wish it would just move slowly. No rush, it’s okay.

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Top 3 states with most residential property transactions? KL and Penang are not within

Want to know which are the top three states in Malaysia with the most residential property transactions in 1H 2020? If your thoughts include KL and Penang, you have guessed incorrectly. The top three states with the highest number of residential property transactions are (in this order): Selangor, Johor and Perak. Yes, my home state is 3rd in ranking when it comes to people looking to buy and actually buying a property.

In fact just these three states added up together would already be 1% shy of 50% for the whole Malaysia! I mean 1H 2020 transactions lah. Please refer to the image below.

Image source: Napic

Which types are the most popular?

We know the states with the most residential property transactions. In terms of type, landed has beaten high-rise easily in 1H 2020. Just terrace homes alone is close to 3 times that of high-rise units.  Close to 31,000 units of terraces homes were transacted within 1H 2020 versus just 11,045 units for high-rise. Actually, this tells us that when it comes to family needing a home, landed homes will still be very popular. During slow times, property investment may become secondary while looking for upgrade homes or even buying that family home becomes primary.

Recently, I have been sharing with many people about my experience with sales galleries in Rawang and the results have always been positive! Yes, I visited like 6 galleries just a few weeks back. Rawang is not even considered a major choice in terms of location for most buyers.

Source: Napic

Demand vs Supply by Type

We know that the demand for landed homes are much greater than high-rise in 1H 2020. if we look at the existing supply of those types, we could see that terraced homes remain almost two times larger than high-rise.  Please do not think that this is the case in big cities yeah. The fact remains that when it comes to properties in less developed states, landed properties remain the most popular choice. So much land, why buy high-rise?!  This is why total supply of landed is higher than high-rise.

Now if we move a little further down the road, we will understand that with urbanisation, it meant that more Malaysians will be moving to bigger cities. These bigger cities however may not have the supply of cheap and affordable landed homes like their hometowns. Thus, when they come to the city to work, their choice would usually be high-rise units. This is why we could see that high-rise units under ‘future supply’ has already beaten that of landed terrace homes. Do refer to the image below for understanding.

Source: Napic

Secondary vs Primary property market

Around 80% of all residential property transactions are because of secondary property market. This comes from the 5.78 million existing supply. This is the reason why I have been telling first-time home buyers that it does not always need to be new homes. There are lots of reasons for secondary properties too and it includes choices, attractive price and the important what you see is what you get.

Sometimes, buying new does not guarantee anything which you saw in the sales gallery, okay?  Yes, I have personally bought from both the primary market and the secondary and I feel both have their benefits and advantages too. Just need to pick the one most suited to our preference. Happy viewing.

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Disallow my Facebook access? I resign.

I read something interesting when I was on board a plane to Bangkok. It’s in the image beside this article. 39% of employees would resign if their current employer forbids them from using Facebook. While some would point out that these people are just plain foolish, I think it’s important to look at it from another perspective. Perhaps these people are confident  about their prospects. They are not afraid to leave because they believe they can find another job easily.

Nearly 17 years ago, when I started working, my father told me to work hard. Show capability and I would be promoted. Few years ago, I told my brother that if the work does not give value, look for a better one. I think in the future, I may want to advise my daughter and my son to do whatever they like and just be good at it. Truth is when we are great in what we do, that’s already a career. Plus invest so that we can continue to have the choice to do what we love to do. One day all of us would be old. Perhaps old enough that employment is hard to come by or we just want to relax after working for over thirty years. Seriously how many of us love working for over thirty years?  I don’t. I love my current job and I work hard but I love my family more. I know all the time I work would be the time I lost from not seeing them grow. All the time I spent travelling for work would be the time lost for vacations with them.

I would not resign because of Facebook access rights, that’s for sure. However I would leave if my current employer no longer treats me respectfully for what I do. That’s the confidence that all of us should have. Be good in what we do. Work hard. Keep learning. Most importantly,  invest for more financial flexibility to keep our independence in selecting what we want to do. Oh yeah, our current employer does not owe anyone a living. Happy learning.

Written on a plane, 23 July 2015

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Property market Malaysia resilient? Fundamentally, why?

If we ask some of our friends who are in the real estate industry, they may just tell you that times are hard. Buyers are taking their own sweet time in deciding. Developers are meanwhile trying to do a lot of different events to attract more crowd and thus increasing the probability of someone buying their properties.
(By the way, if you are a developer and you are seeing this, you can also engage kopiandproperty.com for a guaranteed exposure too. It starts from just a few cents per impression)

Article in
nst.com.my
  Naza TTDI Sdn Bhd deputy executive chairman and group managing director SM Faliq SM Nasimuddin opined that while the government has taken a few initiatives to boost the market, buyers continue to adopt a wait-and-see attitude when it comes to property buying decisions. He said, “They will do this to ensure that they secure the best deal for their property.”

Knight Frank Malaysia managing director Sarkunan Subramaniam said that despite market uncertainty, transit-oriented developments (TOD) will continue to do well. He said, “Wrong location and overly priced properties are the products which are currently hanging.” For 2020, Subramaniam have this advice for the developers. “They should do more market study to ensure the products are priced right so they can have better sales. As far as land is concerned, the cost has gone up which is why house prices are going up” Please do read the full Article in
nst.com.my

My 2 cents opinion yeah. One major reason why the property market can remain resilient will be due to the job market yeah. If people have jobs, they could continue paying their mortgages. This will help to stabilise the property price instead of having it weakening when the owners face financial difficulties. This is why it’s very important to look at the job numbers. When the unemployment rate starts to rise, that’s when we should be worried.

Secondly, another reason why property market is still doing just fine was because many years ago, many flippers / speculators were forced to exit the market when lending requirements were enforced strictly as well as the clamping down of Developer Interest Bearing Schemes (DIBS) which was extremely popular then. These two are already very good reasons why our property market has largely remain stable despite transactions number having slowed down from
2013 till 2017. Transactions for 2018 2019? (Read here)
 Happy understanding.

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