Category Archives: Property Development

Sharing #1. Why Invest in Property near urban public transportation system?

Sharing 1

 

Because public infrastructure cannot be easily duplicate in other property developments. The most valuable feature of a real estate is its LOCATION. Location does not simply mean “the house is located at Puchong, a booming area, so its location is good”. That thinking is just part of the meaning of location, the whole idea of location, is actually include the accessibility, transportations, and amenities.

For example, if the property is located on one way street. You may think that it is just minor issue, but in actual, it is very inconvenience as there is only one route to go back home every day, especially if that house is for your own stay.

You can easily find information regarding amenities surrounding real estate from other source, thus I will only highlight on public transportation, especially MRT, LRT, KTM & Monorail.

Why? If you go to any developer’s sales gallery, you would probably hear about terms like infinity swimming pool, Jacuzzi, sky garden, etc. If you make your decision to buy based on these, you are most probably not making the right decision, because all these facilities can be easily duplicate in other new property developments. Based on my observation, the most valuable feature of a real estate in Klang Valley is located within 500m walking distance to urban public transportation system.

Urban Public Transportation systems mean the existing Ampang Line LRT, Kelana Jaya Line LRT, KTM Komuter, Monorail, and the upcoming systems MRT Sungai Buloh – Kajang Line, Ampang Line LRT Extension, Kelana Jaya Line LRT Extension, and probably the Monorail Extension.

All these is Urban Public Transportation system that require a lot of money to build, need involvement of Federal Government and no developer can build it by themselves. Once you own a real estate near these transportation systems, you have great advantage compare with other real estate in terms of resale and attracting tenants. Not all real estate are equal, just open the Google Maps and you can see how wide is Klang Valley, there is so many houses, what is so special about them if not because close proximity to urban public transportation system?

If you are familiar with public transportation system in Malaysia, you would probably question why Bus is not in? and why KTM Komuter is in? Bus is a form of public transportation, but in Malaysia’s context, I think close proximity to a bus stop is not an important feature of a real estate, simply because bus is not reliable. To wait for a bus at bus station, it can easily take you 30min, to a maximum of “unknown”, as after 1 hour plus of waiting, you probably rather take a taxi and leave that bus station. KTM Komuter is in because in 2012, they change their EMU Train set to the new EMU Train built by CSR Zhuzhou, capacity increased and the on time reliability also increased. KTM Komuter is no longer the Komuter in our memory which is always pack and always late.

Why limit to 500m walking distance? Property developers know that located close to all these station is important, most probably you will hear them saying: our project is only 10min driving to xxx LRT Station. In city driving speed, say 40km/h, 10min distance mean 6.6km away. What is the different between 6.6km and 500m? Imagine a couple staying in the house, every morning the husband needs to drive to work at PJ, while the wife needs to take LRT to work at KLCC area. If the distance is 500m, the husband has the flexibility to drive to work at anytime, as the wife can just walk to the LRT station. If the distance is 6.6km, either the husband has to depart earlier, to send the wife to LRT station, or they need to buy a new car, so that the wife can drive to LRT Station. A completely different cost structure and convenience level, property located more than 500m walking distance to the stations is almost same as not close to any stations. Within 500m is most comfortable walking distance for weather in Malaysia.

Besides being unable to replicate by newer property developments so that the property can command higher resale value and easier to attract tenants, owning a property near urban public transportation system is also a form of hedge against increase in fuel price. Petroleum is becoming increasingly expensive due to limited supply, if one day driving becomes so expensive that people do not drive to work, being beside the stations give you an advantage, not mention the value of properties beside stations at that time.

Property Sector – Update

Mixed Mixed Mixed outlook from Maybank property conference

Maybank hosted a property conference last week (10 Feb 2014) and invited experts from different fields of the domestic property sector to give their views. The conference was well-attended by over 120 investors.

The speakers included: 1) Mr Christopher Boyd (executive chairman), Mr Allan Soo (managing director [MD]) and Mr Nabeel Hussain (associate director) from CBRE Malaysia, 2) Mr Shaun Di Gregorio (CEO) from iProperty Group, 3) Ms Tracy Pan (head of mortgages) from Maybank’s consumer finance, 4) Mr Elvin Fernandaz (MD) from Khong & Jaafar S/B and 5) Tan Sri Eddy Chen (MD) from MKH Bhd.

The speakers, comprising a banker, developer, researcher, surveyor and property consultants, gave a comprehensive update on the property sector from different angles. The key takeaways are as follows.

Maybank Property

Declining interest in Iskandar Malaysia
According to iProperty’s consumer sentiment survey, there is a slight dip in Singaporean buying interest in Iskandar Malaysia properties post-Budget 2014. We are not surprised by this as the new property cooling measures (higher RPGT and floor price for foreign ownership imposed by the federal government, and higher levy by the Johor state government) are to control excessive property speculative activities.
We remain cautious on the increasingly crowded developments at Iskandar Malaysia, especially in the mixed use and high-rise residential project spaces. Without synchronised planning and control by the authorities, the Iskandar property market could be deluged by massive supply of high-rise mixed development projects, inducing price volatility.

Consumer sentiment remains weak; affordable housing still in trend
Survey on consumer sentiment by iProperty shows that overall sentiment has been generally weak post-Budget 2014 and this is likely to lead to a slowdown in demand over the next six months as many potential buyers are still adopting a wait-and-see approach. Similar to the findings of our survey in July 2013, location and pricing remain as key considerations and most respondents of iProperty’s survey are looking for properties priced below MYR500,000/unit. This reinforces our view that affordable housing (especially landed properties) would continue to see strong demand.

Banks remain supportive; new financing packages introduced
Banks are still very supportive of the mortgage market with various new financing packages being introduced e.g. bridging loan for individuals and renovation financing. Most of the mortgages are still based on ‘true value’ (i.e. SPA price) and not ‘net pricing’ (net of discounts/rebates/incentives) of the properties and this will encourage developers to continue to offer attractive marketing incentives to property buyers.

Rising pressure on margins
The seemingly lack of clarity over the implementation of the new property cooling measures under Budget 2014 (transparent selling price and higher floor price for foreigner buyers) continue to create uncertainty in the property space. Also, the industry is facing serious labour shortage and stubbornly high land costs on top of the stricter property measures and increasing competition from the foreign developers.

Source: Maybank Kim Eng Research

Properties in KL, Penang, Iskandar will continue to attract foreign interest, says consultant

KUALA LUMPUR (Feb 17): Property investment consultant Datuk Seri Gavin Tee expects to see more interest from foreigners in Malaysia’s property sector, despite the Budget 2014 cooling measures.

In spite of the hike in real property gains tax (RPGT) and the higher minimum purchase price for foreigners, more foreign interest is expected, especially in the Greater Kuala Lumpur, Penang and Iskandar regions, he told an investment seminar.

“China, Macau, Hong Kong and Taiwan have even tougher tightening measures compared to Malaysia’s cooling measures which are relatively mild,” Tee said during the forecast talk yesterday.

He added property prices in some growth areas “have the potential to hit record highs”. “So, there are still lots of buying opportunities out there provided you know where to look,” said Tee.

He also said that there will be more choices for those purchasing property for

their own use, as prices are expected to correct slightly in residential and commercial areas.

Besides that, he expects the property market to be lifted up towards the end

of March, driven by investors and developers re-entering the market.

He said that large-scale projects by the government will be driving Malaysia’s growth in the next couple of years, adding that he is most optimistic of developments in Greater Kuala Lumpur and Melaka.

(The Edge Malaysia)

Common taboos that affect properties

Before they decide to buy a property – whether it is a house, condominium, apartment or shop – Malaysians tend to consider many factors that may be considered to be ‘non-scientific’ or even ‘superstitious’.

Within the Malaysian property context, factors like the property’s feng shui – its location at a ‘T’ junction, its location below the road level, and the unit number (address) of the property – are important enough for property buyers not to ignore.

These “non-scientific” factors are very real and you ignore them at your own peril when you want to sell the property later. You either will not be able to sell it or you will be forced to sell the property at a much-reduced price.

 

Let us go on a journey to find out how social taboos affect property prices particularly in Malaysia.

The Chinese Taboo on Number 4: To many Chinese, the number ‘4’ is tabooed. It sounds like death in Mandarin and in many other Chinese dialects. Be careful to avoid buying a property with the number 4 as part of its address, especially when the property is located in an area where a majority of the residents are Chinese. When the time comes for you to sell your property, you may encounter difficulties finding a buyer or if a buyer is found, he may want to discount the price on account of the tabooed No. 4.

The International Taboo on No. 13: If you were to enter some office buildings in Kuala Lumpur, you will likely find ‘Level 13’ or the ‘13thFloor’ missing in the lift buttons and on the Tenants Directory.

In place of ‘13’, you will often find ‘12A’. It looks like the number ‘13’ is tabooed in some places. As with No. 4, avoid buying a property with number 13 as part of its address. The taboo against number ‘13’ is not as strong as the taboo against No. 4.

All the same, when it comes to the time to sell your property, you may encounter difficulties finding a buyer or if a buyer is found, he may want to discount the price because of the tabooed number 13.

Property facing a “T” junction: All the three major communities in Malaysia – the Malays, Chinese and Indians – have a dislike for properties facing a ‘T’ junction.

They each have their own reasons for having an aversion to such properties. The Chinese believe that especially during the time of the hungry ghost festival when the gates of hell are open and spirits enter the earthly realm, houses facing ‘T’ junctions are at greater risk of being ‘invaded’ by these “hungry ghosts”.

Property below road level: All the three major communities in Malaysia – the Malays, Chinese and Indians – have a dislike for properties located below the road level. The Chinese believe that with your house located below road level, all the bad luck of residents in the entire neighbourhood that flow onto the road will eventually flow into your house. To the Chinese, this is unacceptable and they will at all costs avoid buying a property located below road level.

Property Sloping Downwards: The Chinese do not like to have a house built on land with a steep slope with the access road sloping down towards the frontage road. The Malay and Indian communities also dislike such houses.

While the Malay and Indian communities have their respective reasons for this aversion, the Chinese believe that the residents’ wealth, prosperity and luck will flow down the sloping road away to his neighbours below them.

Haunted Properties: When you are looking to buy a property, the above taboos are easy to identify because they have physical features that you can look out for. When it comes to making sure that the property is not haunted, it is much harder. How do you know if a house is haunted? You will have to extensively investigate the background and history of that property in question.

The seller will not tell you. The real estate agent will not tell you. What then should you do? My advice is: “If you are in doubt about whether that property is haunted, just give it a pass and move on to other similar properties”.

However, if you like that property very much and will not easily give it up, there are some steps to follow to get the information you want:

  • Check how frequently the tenants move in and out of this property.
  • Was the property vacant or unoccupied when the real estate agent introduced it to you?
  • If it was vacant, find out how long the last tenant stayed before they moved out.
  • Visit the property at night and observe from the outside if you can hear ‘funny noises’.

If, after all these investigations, you still have doubts, move on and give it a miss. However, if you are a fervent believer in the power of your God to help you get rid of the ”evil spirits” there, then by all means go ahead and negotiate for a ”give-away” price as you may be the only buyer the seller has.

Properties near high-tension towers: Properties that are built on land beside high-tension electric power lines are also shunned by all the communities in Malaysia including Malays, Chinese, Indians, Eurasians and the indigenous people of Sabah and Sarawak. They shun such properties for health reasons and not due to cultural taboos.

Studies by scientists have shown that high-tension electric power lines emit radioactive rays like gamma rays. It has also been shown by some scientists that prolonged exposure to radioactive rays like gamma rays, for example on those who live near high-tension electric power lines, can increase the risk of cancer.

When you buy a property from the secondary market, do be careful to make sure the property you are looking at is at least 500 meters from high-tension electric power lines in order to be absolutely sure that you are safe from exposure to gamma ray radiation.

If you are buying a property ‘off-plan’ from a developer, visit the development site and as best as you can, try to ascertain the location of the nearest high-tension electric power lines. If you are unable to find anything and you are still uneasy, engage the services of an electrical engineer to investigate. The electrical engineer knows how and from where to get the information. It is worth the professional fees you pay the electrical engineer.

If the electrical engineer reports that there is a possibility that high-tension electric power lines may be built near the property you intend to purchase – however remote that possibility may be – give it a miss and move on to other development projects. Your family’s health and safety should be above all other considerations.

Dr Ernest Y. Y. Cheong, 68 is a veteran chartered surveyor, registered valuer, auctioneer and arbitrator. He is the principal of Ernest Cheong PTL Chartered Surveyors and holds a Doctorate in Business Administration (DBA) as well as an MBA from Reading University, England. If you have any query about property and property related issues, e-mail Dr Cheong at enquiries@ecptl.com or visit www.ecptl.com. He also blogs at www.propertygandhi.blogspot.com.

Summary of Budget 2014 – Malaysia Property

1. Review Real Property Gains Tax (RPGT).
 For gains on properties disposed within the holding period of up to 3 years, RPGT rate
is increased to 30%, whereas for disposals within the holding period up to 4 and 5
years, the rates are increased to 20% and 15%, respectively. For disposals made in the
sixth and subsequent years, no RPGT is imposed on citizens, whereas companies are
taxed at 5%.
 For non-citizens, RPGT is imposed at 30% on the gains from properties disposed
within the holding period of up to 5 years and for disposals in the sixth and subsequent
years, RPGT is imposed at 5%.

2. Increase the minimum price of property that can be purchased by foreigners from
MYR500,000 to MYR1,000,000.

3. Increase transparency in property sales price, where property developers will have to
display detailed sales price including all benefits and incentives offered to buyers such as
exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.

4. Prohibit developers from implementing projects that have features of Developer Interest
Bearing Scheme (DIBS), to prevent developers from incorporating interest rates on loans
in house prices during the construction period. Therefore, financial institutions are
prohibited from providing final funding for projects involved in the DIBS scheme.

Property Hot Spots along Greater Kuala Lumpur’s Integrated Lines

Greater Kuala Lumpur’s integrated rail network is Malaysia’s largest infrastructure project and is designed to increase the city’s livability and connectivity.

It has also raised this city into an attractive investment area, giving rise to property hotspots along its integrated transportation lines.

mrt_map2

 

Series of Research Report by KVMRT Research

Free Trial – Klang Valley MRT Line
Free Trial – Transacted Report
Research Report – MRT Sg Buloh – Kajang Line Alignment Map @ RM99
Research Report – LRT Line & LRT Extension @ RM79
Research Report – Transacted Price – Klang Valley Property @ RM89

MKH Boulevard – Near MRT Kajang Station

Another upcoming property development near MRT Station.

Developer: MKH Berhad – Serba Sentosa Sdn Bhd
Development: 308 SoHo serviced apartments above the 30 three-to-six storey shops at the
podium block
Land: Leasehold, Expiry Oct 2111
Size Range: 575 sq.ft. – 1,094 sq.ft.
Price Range: RM201,000- RM395,000
Restriction in Interest: Yes (Tanah ini tidak boleh dipindah milik, dipajak atau digadai melainkan dengan kebenaran pihak berkuasa negeri
Completion Date: Nov 2016

mkh boulevard ads

 

Location Map

mkh boulevard maps

 

Google Maps

mkh boulevard google maps

 

View from Front

mkh boulevard photo 1

 

View from Top

mkh boulevard photo 2

 

Register Your Interest

Series of Research Report by KVMRT Research

Free Trial – Klang Valley MRT Line
Free Trial – Transacted Report
Research Report – MRT Sg Buloh – Kajang Line Alignment Map @ RM99
Research Report – LRT Line & LRT Extension @ RM79
Research Report – Transacted Price – Klang Valley Property @ RM89

D’Sara Sentral – Upcoming Development Near MRT

Advertisement on Sin Chew Daily Today.

dsara sentral

 

Our Post on 4th April 2013

Riding On The KVMRT

Mah Sing Group buys land near RRIM (Sungai Buloh)

It plan to develop a MYR800m mixed development project. Mah Sing is planning a mixed development project called D’sara Sentral for the site, to be launched by 4Q13. It will comprise serviced apartments (65% of GFA), retail space (15%) and SoVo (20%; from MYR650psf onwards). Total GDV of MYR800m or an ASP of MYR876psf (assuming an efficiency ratio of 80%) is attainable, in our view, as Dijaya’s Tropicana Gardens (MRTlinked property project) phase 2 is already selling at MYR1,000psf (net).

Man shing land

mah sing land1

Source: Maybank Research, Mah Sing