Given a choice, would you prefer to get a loan to buy an item that depreciates over a short period which is deemed as “bad debt” or commit on a “good debt”, which is to purchase a house or asset that will appreciate in the long term?
A car used to be a symbol of freedom and ease of mobility. I could understand the dilemma of having to choose between a house and a car a decade ago.
Even then, we should still have chosen a car within our means to manage our financial position.
Today, with public transportation and the availability of ride-sharing services such as Grab Car, we can now really have the option of buying a house first. This gives us both shelter and value appreciation.
This choice has just been made easier with Budget 2019 and the recent announcement by the Finance Ministry.
The government has rolled out several measures to assist homebuyers, including stamp duty exemptions.
Homebuyers will get a stamp duty waiver for memorandum of transfer (MoT) for the purchase of houses priced up to RM1mil, during the six-month Home Ownership Campaign (HOC) from January to June 2019. In addition, the stamp duty on loan documentation is fully waived up to RM2.5mil.
Besides that, the Real Estate and Housing Developers Association (Rehda) has also agreed to cut the prices of its completed and incoming units by at least 10%.
When I talk to potential homebuyers, they always ask about the right time to own property.
There is no perfect time to buy a house on foresight. If the price is within your means, and you plan to buy it for own stay or as a long-term investment, then anytime is a good time.
However, with the property market at the bottom half of the cycle now, this could be a good time to commit to a house with the attractive tax incentives rolled out by the government.
Homebuyers can grab the “duty-free” opportunity now to explore the property market. Those living in the Klang Valley will be able to find their dream home during the Homeownership Campaign Expo at the KLCC Convention Centre from March 1-3.
The campaign is jointly organised by Rehda and the Housing and Local Government Ministry. Besides having all developers under one roof, the ministry will also be featuring homes under RM300,000 by PR1MA, SPNB, PNB and others.
The Homeownership Campaign was first held in 1998 to lessen the burden of homebuyers and to encourage homeownership. It is re-introduced after two decades now with the same objective.
For homebuyers who don’t like the risk of buying a house under construction, there are plenty of completed units for sale in the campaign.
Buying a house can be emotional and uncertain for many homebuyers. However, in the long run, we can rest assured that we are buying an asset that will appreciate.
For homebuyers, always buy within your means as you can upgrade your house in the later stage of your life.
In this auspicious Chinese New Year, I hope you decide to prioritise a new house over a new car. Gong Xi Fa Cai!
By Alan Tong . . . Food for Thought
Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email bkp@bukitkiara.com
While young adults all over the world are renting homes, successful
Malaysians and Singaporeans prefer to own homes instead of cars, as soon
as they get their first pay cheque.
Instead of blowing their cash on pricey gadgets, young Malaysians are saving up for their first home.
Mahathir’s planned crackdown taps into nationalist rhetoric
Housing affordability has driven restrictions around the world
Hanging a ‘foreigners not welcome’ sign on a giant real estate development, Malaysia’s prime minister this week appeared to add to housing curbs around the world fueled by soaring home prices and populist politics.
Describing the Chinese-backed $100 billion Forest City as “built for foreigners” and beyond the reach of ordinary Malaysians, Mahathir Mohamad tapped into the nationalist rhetoric that helped secure him an election victory -- and global angst over housing affordability. Around the world, post-financial crisis property booms driven by low interest rates have left locals struggling to buy homes.
“The tension around foreign investment is always going to be much more acute when affordability is getting worse,” said Brendan Coates, a researcher in Melbourne at the Grattan Institute think tank. When locals get “priced out of the market,” foreign buyers may be blamed even when their effect is small, he said, commenting on the global picture.
Hanging a ‘foreigners not welcome’ sign on a giant real estate development, Malaysia’s prime minister this week appeared to add to housing curbs around the world fueled by soaring home prices and populist politics.
Describing the Chinese-backed $100 billion Forest City as “built for foreigners” and beyond the reach of ordinary Malaysians, Mahathir Mohamad tapped into the nationalist rhetoric that helped secure him an election victory -- and global angst over housing affordability. Around the world, post-financial crisis property booms driven by low interest rates have left locals struggling to buy homes.
“The tension around foreign investment is always going to be much more acute when affordability is getting worse,” said Brendan Coates, a researcher in Melbourne at the Grattan Institute think tank. When locals get “priced out of the market,” foreign buyers may be blamed even when their effect is small, he said, commenting on the global picture.
A wave of restrictions or taxes on foreign purchases already stretches from Sydney to Hong Kong to Vancouver. Measures targeting foreign home buyers have included stamp duties, restrictions on property pre-sales to non-residents and limits on the types of homes that can be purchased.
‘New Colonialism’
New Zealand is banning foreigners from buying existing residential properties after Prime Minister Jacinda Ardern campaigned in last year’s election on pledges including affordable housing. Canada and Australia have rolled out one restriction after another, and Singapore just ramped up a tax on overseas buyers. Denmark and Switzerland have restrictions, a Grattan report shows.
The 93-year-old Mahathir’s comments came at a late stage of the game. Globally, property shows signs of cooling from the post-crisis boom. His concern seems to be sparked not by property market overheating but, rather, foreign investments that don’t benefit Malaysia and what he terms the risk of “a new version of colonialism.”
Late Tuesday, a statement from Mahathir’s office said the nation welcomes all tourists, including from China, as well as foreign direct investment that “contributes to the transfer of technology, provides employment for locals and the setting up of industries.” It didn’t refer to Forest City.
“Mahathir has never liked the idea of Forest City or the idea of many foreigners buying up property in Malaysia,” said Ryan Khoo, co-founder of Alpha Marketing Pte Ltd., a Singapore-based real estate consultancy.
Foreigners will be blocked from buying units at the project, on artificial islands in Johor, and refused visas to live there, Mahathir said at a press briefing on Monday. That left analysts and local officials parsing his words to guess at how bans might work. The Chinese developer, Country Garden Holdings Co., said his comments clashed with past assurances. The project’s targeted buyers have included people in mainland China.
With a wall of Chinese money blamed for pushing up prices around the world, local lawmakers, media and the public can
struggle to disentangle xenophobia from legitimate efforts to constrain inflows of capital. In Australia, “populist reporting” exaggerated the role of Chinese investors, according to Hans Hendrischke, a professor of Chinese business and management at the University of Sydney.
Chinese
buyers had the “bad luck” of becoming overly visible in markets around
the globe, said Carrie Law, chief executive officer of Juwai.com, a
Chinese international property website.
Foreign buyers get blamed
for soaring home costs even when the evidence is minimal. More than 60
percent of Sydney residents cite foreign investment for price increases,
according to a survey from University of Sydney academic Dallas Rogers.
That’s despite research by Australia’s Treasury showing only a marginal
impact. Likewise, data suggest foreign buyers play only a small role in
New Zealand’s housing market.
(Updates with Mahathir statement in seventh paragraph, chart on global restrictions.)
Construction works going on normally at the mammoth Forest City project in Gelang Patah in Johor
PERPLEXED, wounded, indignant or still optimistic. The Chinese developer Country Garden Holdings Co can put any spin it wants on its Forest City project, a US$100bil Malaysian township whose fate suddenly has been thrown into doubt after Tun Dr Mahathir Mohamad’s pointed refusal to let foreigners buy apartments or live in them long term.
One thing is clear, though: The prime minister is not acting impulsively. The project claims to be a “new global cluster of commerce and culture,” and a “dream paradise for all mankind.” However, in Malaysian political discourse, Forest City is just a gigantic Chinatown of 700,000 residents.
Taking on the developer is part of Mahathir’s broader plan to redefine Malaysia’s relationship with Beijing, pulling Kuala Lumpur away from the client-state mindset introduced by his predecessor.
Already, the 93-year-old leader has cancelled the Chinese-funded East Coast Rail Link, dealing a blow to China Communications Construction Co, which was building the US$20bil belt-and-road route. Datuk Seri Najib Tun Razak, ousted in May, claimed the link would bring prosperity to eastern Malaysia.
But Dr Mahathir, who spoke bluntly in Beijing this month against “a new version of colonialism,” took a very different view of the railway, which would have connected areas near the Thai border along the South China Sea to busy port cities on Malaysia’s western coast, near the Strait of Malacca.
He also shelved a natural-gas pipeline in Sabah, a Malaysian state on the island of Borneo. Dr Mahathir justified the cancellations on the grounds that they were too expensive.
However, the abrupt message to Country Garden, which is neither linked to the Chinese state nor would add a dollar to Malaysia’s national debt, shows that sovereignty – and Malaysia’s racial politics – are Mahathir’s real concerns.
Two-thirds of the homebuyers in Forest City are from China. Last year, as a trenchant critic of Najib’s policies, Dr Mahathir flagged the risk that anybody living in Malaysia for 12 years would be able to vote.
Country Garden should have seen the political risk in marketing the flats to mainland Chinese, who were separately lapping up long-stay visas under Najib’s Malaysia My Second Home programme. Najib’s generosity toward the mainland wasn’t the natural state of affairs. In 1965, the country expelled Singapore from the Malaysian federation out of fear that the peninsula’s majority Muslim Malays could lose their political dominance to the island’s ethnic Chinese.
If Country Garden misread the political tea leaves, it’s also wrong to bark up the legal tree after Dr Mahathir’s outburst. So what if Malaysia’s national land code permits foreign ownership? Approval of global investors may not matter all that much to a politician who has, in his previous innings, trapped their money at the height of a financial crisis.
The new prime minister isn’t as reliant on Beijing as his predecessor. If anything, he has to reward local businessmen and contractors for switching their allegiance from Barisan Nasional, the erstwhile ruling coalition that suffered its first loss of power in six decades.
It’s a given then that Malaysia under Dr Mahathir will have little appetite either for One Belt, One Road – or, for that matter, three- and four-bedroom apartments that could create a new political constituency.
Forest City could still be salvaged, but as a predominantly local project. If Donald Trump can unilaterally change the rules of game for China and Chinese businesses, so can, in his limited sphere, Dr Mahathir. As far as Country Garden is concerned, he just has.
History will remember the Belt and Road initiative as one
of the most significant chapters in China's history and a great
milestone in the development of human civilization.
History will remember the Belt and Road Initiative as one
of the most significant chapters in China's history, and a great
milestone in the development of human civilization.
Rehda Penang chairman Jerry Chan (right) says developers do not foresee an increase in property volume in the state in the near future. – The Malaysian Insider pic, February 12, 2015.
Developers want review as Penang property rules curb sales instead of prices
The Real Estate and Housing Developers Association (Rehda) Penang chapter wants the state government to ease cooling measures meant to curb property speculation as they have only reduced the number of sales but not brought down prices.
Rehda Penang chairman Datuk Jerry Chan said the state's cooling measures, which included levies on property sold within a certain period of time, were meant to discourage property speculation that made homes expensive in the state.
However, he said the measures reduced transactions by 20% last year compared with 2013, instead of having an impact on property prices.
"They have been effective in reducing property transactions but they have not affected property prices.
"Prices are still up due to rising costs faced by developers," he said in a press conference at Penang Rehda's office in George Town today.
Chan said while transactions were down, other costs like charges levied by the local authorities, land, materials and labour had continued to increase.
"If you expect developers to cut property prices, it is not happening because the costs are going up."
Even for homes in the secondary market, prices remained up although they were expected to fall, Chan said.
"So we do not expect all property prices to soften. Prices now are quite stable and we don't foresee an increase in property volume too," he said.
The Penang government announced in its 2014 state budget several new housing rules to protect the state from being affected by a property bubble and to ensure that public and affordable housing were bought by genuine and qualified buyers from the lower and middle-income groups.
Among the rules, which took effect in March last year, was a levy of 2% on property sold within three years from the date of the sale and purchase agreement (SPA), and a moratorium on the re-sale of “affordable” housing within five years of their acquisition, and 10 years for low-cost homes.
Owners of low- and low-medium cost homes must get state approval if they intend to sell their properties within a 10-year time period from the date of signing of the SPA.
They are also only allowed to sell their units to “listed buyers” who are registered with the state’s housing department and certified under the low-income group.
For affordable homes, classified as houses worth up to RM400,000 on the island and up to RM250,000 on the mainland, owners who signed the SPA after March 1 are not allowed to sell their property within a five-year period.
The owners must also obtain state approval and are only allowed to sell to listed buyers in the middle-income group registered with the state housing department.
Under the new rules, foreign property buyers pay a 3% levy on the units they purchase in the state.
Chan said Penang Rehda had appealed to the state government through housing exco Jagdeep Singh Deo, to be more lenient in its development charges and to give developers some leeway.
Chan also suggested that the state government ease the cooling measures for certain projects rather than make them compulsory for all projects.
"We told them when the market is slowing down, they have to ease up on all these measures and controls," he said.
Chan said property prices would not become cheaper but developers themselves would be more realistic when setting prices for their units.
He also said now was the time to invest given that property prices had stabilised. – February 12, 2015.
By LOOI SUE-CHERN - The Malaysian Insiders Property prices not expected to go down, says Rehda
GEORGE TOWN: Property prices are not expected to trend downwards despite the recent slump in oil prices and a just announced electricity tariff cut.
Real Estate and Housing Developers Association (Rehda) Penang chairman Datuk Jerry Chan said compliance and labour costs were not going down.
He pointed out developers were dependent on foreign labour but the country was facing difficulty in getting a consistent supply of manpower.
"The shortage of manpower will not make things easy," he said, but however remained upbeat over real estate activity as developers were now more realistic with pricing.
"This is a good time to get into the market," he said at a press conference today to announce that the annual Malaysian Property Exposition (Mapex) will be held in Penang for three days from Feb 23.
He said a wide range of properties were available ranging from affordable housing units to high-end condominiums.
House buyers, learn your rights
House buyers, learn your rights. I RECENTLY moved into our new
house in Sungai Ramal Dalam. I bought the property back in 2012 and we
received t
I RECENTLY moved into our new house in Sungai Ramal Dalam. I bought the property back in 2012 and we received the vacant possession in January this year.
The journey towards moving into this property has not been a smooth one and I thought I should share some of the lessons.
When I first visited the site in 2012, only the show house was available for viewing. All the other units were blocked off because they were still under construction.
So the purchase was under the “sell-then-build” scheme. The developer sells a property that is not yet built, and the buyer pays for something depicted by the show unit, but in reality you don’t really know what you will get. The developer advertised it as a gated and guarded community of just 26 houses, and the show unit was quite decent.
We liked the concept and decided to go ahead anyway, despite a friend expressing doubts about the reliability of the developer because they are just a small company.
Skip forward to January this year: a letter arrived saying that the time had come for me to take the keys, or in jargon-speak, to take over the vacant possession. When I went to the developer’s office in Hulu Kelang, I was told to sign a letter confirming that I agreed to accept the property.
They also told me that the Certificate of Completion and Compliance (formerly called the CF) should be ready within two weeks and I should not do any renovation or move in before receiving it.
It was soon after this that problems started to occur. When I inspected the property more thoroughly, I discovered that the property was not yet satisfactorily completed.
Taps and doorknobs were missing. Some tiles were not properly fitted. The window frames were of different shades. Electrical sockets were not installed. The back garden slopes with a gradient that renders the area more or less unusable.
And the developer has not even applied for permission to build a gated and guarded community, despite advertising it in their sales brochure.
To make matters worse, the CCC did not arrive within the promised two weeks. I only received it last June. Throughout all this, I sent notice after notice to the developer asking them to rectify the defects.
They were extremely slow to respond. It was only then that I realised I should not have accepted the vacant possession without the CCC.
I then found the National House Buyers Association, and met with their secretary-general Chang Kim Loong who happens to be a fellow columnist in this newspaper. I learnt a tremendous amount from him and let me share some of the lessons here. If you are planning to buy a property and you don’t want to face the problems that I am having now, I suggest you read on.
Firstly when you buy a property, you should get the Sale and Purchase Agreement (S&P) checked by someone with proper knowledge, or appoint your own lawyer.
The two lawyers you deal with at the early stages represent your bank and the developer. They don’t represent you and they don’t have your interest at heart. You need your own lawyer.
Secondly, read the S&P yourself, carefully. With the benefit of hindsight, I am amazed at how I simply signed on the dotted line without reading the papers carefully first.
The document contains important information about your rights. And you should read it in greater detail if the developer says to you that the S&P is “just a formality”.
Thirdly, learn your rights as well as the procedures in the purchase.
If only I had taken some time to learn the ropes, I would have known that I should be extremely worried if a developer hands over vacant possession without a CCC (and promises you he will get it done within two weeks). Even more so when they start saying things like “we are all Malays and we should help each other”. Fourth, the sell-then-build scheme benefits mainly the developers and not necessarily the consumers. You are being asked to pay for something that is not even built yet and you never really know what you will eventually get. If the developer is rogue, then what you pay for is not necessarily what you will get.
In my case, the show unit has a concrete wall in the backyard, but my unit has just wire fencing. When I asked the developer, he responded that the S&P does not compel him to build a unit that is exactly the same as the show unit. Since it was a sell-then-build scheme, there is not much that I can do.
Recently Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan announced that he wants to allow developers to choose between sell-then-build and build-then-sell. He is effectively doing a U-turn because the previous minister wanted to make build-then-sell compulsory.
Of course, developers love the sell-then-build scheme because they get the cash in advance. Risks are transferred to buyers.
Fifth, despite the U-turn policy, the Housing Ministry is actually quite effective in dealing with consumer complaints. I have had a very good experience in dealing with the National Housing Department and the Tribunal for Homebuyer’s Claims (TTPR). The processes to submit a claim through the TTPR are simple enough to understand even for a layperson like me. The TTPR is also very transparent.
My case hearing was conducted in public and if you go to the tribunal’s website, you can find information about the claim that I filed. This transparency allows everyone to learn from the experience of others.
Let me end by saying that buying a house is probably the most expensive purchase you will ever make. You really should learn your rights.
If you find yourself dealing with a situation like I am in now, then you must not let the developer off the hook. Get advice from the brilliant team at the National House Buyers’ Association. Take the developer to the TTPR. And report them to the National Housing Department.
You should not despair because there are mechanisms to help protect you, including those instituted by the Government, as long as you are willing to take the initiative.
Think Liberally by Wan Saiful Wan Jan
Wan Saiful Wan Jan is chief executive of the Institute for Democracy and Economic Affairs (www.ideas.org.my). The views expressed here are entirely the writer’s own.
KUALA LUMPUR: You must have an average household income of RM14,580 a
month to afford a home in the Klang Valley, according to a recent
study.
The study – spearheaded by Sime Darby Property Bhd in collaboration
with the Faculty of Built Environment of Universiti Malaya – takes into
account the current household spending trend, price of homes and
mortgage rates.
It found that certain groups of buyers interested in strategic areas
can have access to houses that are priced at 56 times their household
income.
The study also found that this same group can afford to spend up to
26% of their monthly household income to service a mortgage.
It identified strategic areas in the Klang Valley that are
considered not only accessible but have the potential to appreciate in
value. They include Nilai, Denai Alam, Bukit Jelutong and Bukit Subang.
A report of the study said that houses in selected areas in the
Klang Valley remain accessible to homeowners who may be looking to
invest in a second home.
The Housing-Income Index which was launched here yesterday by Urban
Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman
Dahlan, who said the survey results would be useful for potential house
buyers.
“The Index and its key findings had been reviewed by the ministry,
and we find that the information is valuable as it can help policy
makers and developers work hand-in-hand to build more houses that are
not only accessible. but which can appreciate in value,” he said.
Abdul Rahman hoped that other property developers and the academia can carry out similar surveys in the country.
Based on the findings, Sime Darby said that 68% ofplanned housing schemes in the Klang Valley were in the accessible range.
“We intend to utilise the results to develop innovative, high
quality products that are accessible and meet market needs,” said Sime
darby Property managing director Datuk Seri Abd Wahab Maskan.
The Housing-Income Index was developed to gain a better
understanding of home-owner profiles, specifically household incomes and
spending patterns in relation to owning a home.
The study covered 1,529 respondents, of whom 1,183 were home owners
at 12 locations: Bukit Jelutong, Denai Alam, Bukit Subang, Bandar Bukit
Raja, Subang Jaya, USJ, Putra Heights, Ara Damansara, Mont Kiara,
Melawati, Kajang and Nilai.
Purchasers want affordable homes but in safe neighbourhoods - However, Cheaper areas but few buyers
PETALING JAYA: Affordable homes are still available in the Klang
Valley but many areas with houses priced around RM400,000 and below are
not preferable to buyers.
Real-estate agent Michael Edward said areas such as Taman Sentosa
and Taman Seri Andalas in Klang are examples where the houses are
affordable but there are few pickers because it lacked security
facilities and gated community features.
“Buyers want affordable pricing, safety and location when they buy a
house. But most affordable houses that are available are usually under
the older projects and may have a high crime rate. This puts off
potential buyers,” said the Klang-based agent with Rina Properties.
Responding to recently-released Sime Darby Housing-Income Index,
which said that one must have an average income of RM14,580 a month to
afford a home in the Klang Valley, Edward said the survey probably
interviewed respondents who owned properties in Sime Darby’s housing
projects where prices were much higher compared to other areas.
“If other housing projects besides Sime Darby’s are taken under the
survey, the average household income should be lower,” he added.
Describing the survey as “putting the bar too high”, real estate
agent Jeremy Jones said the average household income of RM14,580 per
month in the Klang Valley could be applicable to properties valued at
RM950,000 to RM1.3mil in strategic locations.
“This is probably to purchase a double-storey house in areas such as
Ara Damansara, USJ Heights and Glenmarie, Shah Alam where Sime Darby
has developed its housing projects,” said Jones, who is attached to
Ramdar Properties.
On whether selected areas in the Klang Valley remain accessible to
potential house buyers, Jones said although there was affordable housing
in various pockets within the Klang Valley, new buyers tended to look
for a new environment and preferred to have their home within a
gated-community.
“Therefore, choices for such housing become available to affluent buyers only,” he said.
On Monday, Sime Darby Property Bhd in collaboration with the Faculty
of Built Environment of Universiti Malaya released the finding of a
study that indicated that house buyers must have an average household
income of RM14,580 a month to afford a home in the Klang Valley.
The study was conducted on 1,529 respondents aged between 21 and 60.
Ninety-four per cent of them were married and 59% of them worked in the
private sector.
Contributed by G. Surach The Star/Asian News Network
