Asset Bubble

Last couples of week, we noticed that newspaper put up "asset bubble" to be another timeboom. Previously, some statement is posted that the asset bubble risk is growing.

How this asset bubble form?
When government pump in money into the market through stimulus package. The intention is to improve the liquidity of the market which badly hit by the credit crunch.

The interest rate has been gone to the historical low level. It encourages consumer to take loan and indirectly stimulate the economy by consumer spending. Due to the low interest rate, those who disqualified for loan suddenly to become “arithmetically” qualify. The throng rush to bank and apply for loan, during crisis, people always think it is the best time to buy property with low interest rate and cheap property.

Problem begin from here.

In the foreseeable future, government will withdraw their stimulus by adjusting the cost of fund. It is to anticipate and cure the potential inflation risk in country. Increase the interest rate is one of the monetary tools that commonly used by central bank.

Those loan borrower will face the repayment difficulty with the interest rate increase because most of them do not price in the risk of rate increment as the margin of repayment is at the minimal level.

It will cause another property crisis and many fire sales or auction of property by default repayment will happen if the situation is not managed properly.

First, banker shall lower their loan percentage to 75% or 80% of property price instead of 90% or 95%.
Second, banker is to reduce the age limit instead of 70 years old to 60 years old.

The above is to provide a buffer for the bank in the event of default by the borrower in loan repayment. The bank can review and adjust the repayment by prolonging the repayment period.

Ultimately, the heat need to be gradually cool down before it becomes a second wave of crisis to the economy. Do not simply pulling 1 leg out from a swamp by deepening another leg in.

Housing Loan Saving??

Scheme to help lower-income group cope with housing loans

I was so surprise that government is annoucing the possibility to extend the bank loan as acclaimed below,

For example, a person who has managed to repay half the amount of his 20-year loan of RM300,000 within 10 years might be given 20 years instead of 10 to repay the rest of the loan.

The monthly loan repayment would thus be reduced, giving the buyer additional disposable income, he added.

I believe most of the banks are very happy with such proposed sheme as it can prolong its loan tenure and collect more interest. Mortgage interest is always a stable income to banks.

There are few points I would like to raise here,

First,
Loan amount is usually justified with the proportional of total income, averagely, it is 1/3 of the total income. or some bank is offering 40% of total income.

RM 300,00 loan with 20 years repayment is about monthly repayment of RM 2,300 to RM 2,500.

If it is 1/3 of the income, means that the person income of RM 6,900 to RM 7,500. WIth such income, still under lower-income group ?

Second,
Prolong the loan tenure, mean the borrower need to pay more interest. In short term, it is good to have more disposable money on monthly basis. who will be benefit at this extension, i believe it is bank but not the borrower.

Third,
Study this proposal and forecast it in the farther sight. The US subprime mortgage issue was initiated with such idea at the beginning i suppose. Refinance and refinance, until one day the inflation and loan repayment cannot come in balance.. Then the market slump.. it wont happen now. US takes a few decade for the property bubble to burst. Let see how long Malaysia can stand with it.

Must analyse your own capability before take a move to join the so-called best scheme. Move wisely, Otherwise, Don't Move!

Dis-Integrity of Architect

Chinese Version
針對繪測師不誠實的問題，可以據情向繪測師公會投訴，該公會的地址與電話如下：
Pertubuhan Arkitek Malaysia4&6 Jalan Tangsi50480 Kuala Lumpur
電話：03-2693 4182


English Version
If found any dis-integrity of the Architect in his professional role, you can report the case to the following address,

Pertubuhan Arkitek Malaysia4&6 Jalan Tangsi50480 Kuala Lumpur
Telephone：03-2693 4182

Car Park In Condominium

Let's start a puzzle... Can you see where goes wrong at this car park?

See carefully, there is a door behind. There is a FIRE ESCAPE DOOR. By right, the escape route shall be clear from all obstruction. Why the developer or Architect or even local Authority who approve the plan, is so careless? They shall be punished for this silly mistakes. Is it a mistakes or purpose-made error to save cost?

Secondly, after car is driven in and parked nicely. It looks so fit....Maybe just too "fit"..

Too "fit" until the driver can not come out from the car. The dimension is not being consider and think. Then, the Architect simply plot it on the plan.

That's why there is a need to engage the RIGHT PERSON do the RIGHT THING... This is of
excellent" job, You can only find it with Peluang Mutiara S/B as a unscrupulous developer for this development.

I would say stupid and darn STUPID!

Building Architect Complaint Channel

Any fault on building design which found against Uniform Building By Law (UBBL) in Malaysia can seek advice or assistance from the below address.

If found that the Architect doesn't act professionally, consumer can always file complaint, because most of the time, Architect is engaged by developer. It may they tends to bias or sided to developer.

I do hope they can hold firm on their ethic duty and act fairly to all parties.

Pertubuhan Arkitek Malaysia
4&6 Jalan Tangsi
50480 Kuala Lumpur
Tel:03-2693 4182

Penang - Ideal Landed Property

Property heat is getting higher and higher, especially in Penang. We can see residential development is mushrooming in the island or butterworth.

One of the landed property that has been spotted is Richmont Residence. This development is allocated in Jelutong Penang Island.

The very first impression given on this development is on its location, Jelutong. This is a 10 minutes distance to Penang town center or to Penang Bridge. As a golden rules for a property selection, Location, Location and Location. So save you from cracking head to find one, this is the ONE..

Strategy location is already made it stands as a Strong Selling point. It is connected to Jelutong Express way which takes a couple of minutes to travel down to southern part of island.

Furthermore, it is a landed property in Island. Scarcity of land has made the landed property becomes more valuable. Plus surprisingly, it is a freehold property. How can we resist this kind of offer?

Needless to mention about its spacious design and gated community for security enhancement, in term of selling price ( in $/Sq ft) this is unbeatable in town and it also implements Build and Sell concept to assure the buyer on guarantee delivery.

No turning back.. grab it while you can...

Buy or Sell

Booming of property sector has caused the construction cost increase and , no doubt, the cost is being transfer to the consumer.

Property price is growing uptrend, there is a BUY call to pick up the property now rather than later. Buying a property now before its price soars up to ceiling height and always a right move.

Despite a heavy BUY call, for existing property owners, may also think of selling off their property as they can revamp a great profit from it.

BUY and SELL which one is the right move shall refer to the demand and supply of the market.
Besides, demand and supply shall also correlate to property location as it is a golden rule of thumb for property investment- location, location and location.

Buy in for investment shall forecast the demand lest to over committed. Sell off a property also need to evaluate where the property has reach its peak and give minimal growth.

Most important point is never rush on buy or sell. We shall scrutinize the situation and market carefully but not blindly follow the trend..

No Balcony - Clothes Hanging

When i walked by a residential building, i notice there are some pipes come down the window, uniformly protrude out from wall. Wondering what is the purpose of such pipe.


Few steps forward, the answer reveal right in front of me.

This is for clothes hanging purpose. Surprisingly, this is the method of resident to hang their clothes under the sun. There is no balcony for such apartment to hang their clothes. all space has been fully utilized. Maximize the usage area and make a cantilever stick form to extend their spaces. But the appearance of building , in term of aesthetic is completely spoilt. Yes, apartment is selling in a few hundred per sq ft. This is not an encouraging method of cost saving by reduce balcony and display your rainbow clothing externally.


Other than "rainbow decoration", the major problem of such hanger is No overhead protection at the walkway. Water may dripping down to the pedestrians. Some clothes or underwear,etc. may "flying" down and landed on your head if the resident does not secure properly.


The possible is definitely high as there is a high rise residential building. What if an old folk who accidentally slip the stick/ or wooden stick from his hand while hanging the clothes. What is going to happen for those who walk underneath?

For sure, I wont walk underneath here. How about you?

Shall architect take a look to balance the cost and aesthetic, of course including safety of pedestrian? i urge at least a yard is required to replace balcony if balcony is omitted.

Homebuyer Complaint Channel

Home buyers always face problem in dealing with a developer, especially after handover the long waited house. There is the developer obligation to deliver a good quality house to the buyer. There is a clause stated the developer must repair the defect within the defect liability period, normally is 18 months, at his own cost. If the developer refuse to do so, the buyer can refer to the following address to file a case in Tribunal,

Tribunal for Homebuyer Claims
Ministry of Housing & Local Government
Level2, Block B South, Pusat Bandar Damansara,
50782 Kuala Lumpur
Tel : 03-2092 8389 / 8482
Fax : 03- 2093 4776
Email : tribunal@kpkt.gov.my

In the certain condition, the buyer can proceed to repair and claim back from the developer through its final retention sum and certain condition need to be complied.

the following related links may also useful.
1. www.kpkt.gov.my
2. www.hba.org.my

Property Boom -Do Not Follow Blindly

Flip through the newspaper, most of the analyst are praising on the government policy to boost the property sector. Everyone is very excited to see the property sector start moving up. Property counters at the share market already be the indicators to show the potential growth in future earning.

Time is of paramount crucial factor to determine the success of the property development. The result will not be seen in short term. Most developers start launching new projects, including residential , commercial, etc. The side effect is the construction material cost increase in tremendous rate and the cost will be eventually borne by end purchaser. End users have to bite the bullet to take up the over price property.

On the other hand, to be competitive, developer may reduce the cost by cutting down its quality or award the project to the lowest tender, which may be the main cause of poor workmanship and shoddy work. Then, subsequent defect will eventually repair cost more than construction.

Come to the end, the development is not properly managed, its sale will not achieved the target and the project become abundant. Once project abundant, the one who suffer it is still the buyer.

Government shall put in more effort to monitor such possible outcome and being a smart buyer, a careful selection of property is important and do not follow blindly to the trend.

Speculation of Property

On property investment income streams are usually come from property value appreciation or rental income. Notice, that most of the investors are preferably on the latter. it is obviously due to the immediate cash income rather than stagnant a big sum of money and wait for its appreciation. The rental income result can give an immediate result and permit investor to take necessary action cut down losses if the result goes adversely.

For rental streams, most investors are aiming on ready unit of residential properties such as apartments, condominiums and serviced apartments are always a preferable favorite. However, prices swing significantly depending on the location, tenure, size and design.

The number of projects mushrooming in the Klang Valley, however, has not affected the value of properties on the market as it provides wider choices. Despite the abundance of new offerings, investors are still interested in completed units because they can be let out easily. Another option would be offers that come with tenancy,

But forecast that three years down the line, there will be an oversupply situation. When the current projects under construction are handed over, there will be ample supply on the market. Developers are now building larger sizes of above 2,000 sq ft and targeting the higher-end market. But will there be enough expatriates or high-income earners to lease them out to? This is the question to be asked. For local average working class folk would seek out projects in the suburban areas — either for their own use or investment.

Now with the abolition of the real property gains tax will see more speculative sales in the marketplace as it gives higher liquidity. The transaction of property is foreseen to be more active as once buyers get a good offer, they will let the property go to make a fast buck. Those who cannot secure a tenant or pay the bank loan will also let it go.

In long term wise, the impact of this change to current property market is still in doubt. Let's see how the changes take place.

ZEHN

ZEHN....

Bukit Pantai Condominium.. another high end condominium project at Bangsar area... selling at Rm 1.3M up..It consists of two tower block with 25 story and low density - only 187 units.

The sales is selling like hot cake. Wondering where are those potential buyer come from? The adjacent condominium penthouse unit is renting at RM 19k.. Friend.. it is RM 19,000 per month. no wonder this Bukit Pantai is so hot. The market rental can be easily found from the existing renting unit.

New Low Cost Selling Scheme.

Normal Low Cost unit price is fix at RM 42,000 only.

Recently, a friend of mine called up to inform me a new low cost at Cheras, somewhere nearby Damai Perdana is releasing and the location is quite good. so i decided to take a day off to visit that low cost flat.

In fact, there is selling at max. RM 70,000. It sells in a packages RM42,000 unit price plus renovation cost of RM 28,000. Total is RM 70,000. It is almost double of the regulated selling price.

In view of the unit condition and location, it has a potential of renting and good accessibility as soon-to-be-opened access road from MRR2 to the end of the Damai Perdana..

Try to think about it.. and for sure, a great applause shall be given to this creative developer to come out with such scheme to attract buyer cum maximise their profit on this suppose to lose money project..

Build Your Strong Base

“I think new property investors should focus on growing their property investment portfolio to a size where they meet their short and mid-term goals.

They have to reach a stage where their investment capital is sufficiently large before they can shorten the timeframe needed to attain their long-term goals.” quoted from Renesial Leong.

I agree with her. Beginning is always tough and difficult! Face it, reap the sweet result at the end when you grow bigger.

My Home

Real Life Experience..!..!

My home.. S & P is signed at the end of 2004. Currently, this is the status of the construction progress. Once i refresh my mind, it recalls me that the motive to buy this unit is mainly come from an influential of a good friend of mine. I am so lucky to have this friend in guiding me on the first purchase of my ofirst home!

Target completion is at the end of 2007, 36 months from the signing of SPA. Hope everything will be going smooth. I like this location as it is only walking distance to LRT station.

One thing I realise that if possible, try to purchase a completed property even though the price is slightly higher compare to the launching price. i think it is worthy as to offset the risk of delivery and immediate move in condition can save up your monthly rental, if you are currently renting a house.

Try to consider completed property. as i have learned a lesson from here.. You save a step from me..

Notes on Buying a Property for Beginners

Seven simple steps to a beginner.

step 1: Getting the down payment
Own Saving (FD), EPF, borrow from relative, parent, silbings, etc. , or look for low down payment developer. Of coures, i don't ask you to borrow from Ah Long (private finance with no gurantee, no deposit, fast approval). Again, get it from right channel.

step 2: How much you can borrow
Check with banks or financial institution, some can offer from 100% - 80% depend on type of property and banks. Friend, some of even offer 110% loan package come under the developer advertising strategy..rules of thumb here is the installment is about 1/3 of your monthly income and currently it increases the lending power up to 1/2 of your monthly income. Again, final reminder, Not Borrow from Ah Long ( they are not called Sharks for nothing..)

step 3: Factor in the many costs (including hidden)
Simply name few of the costs that you may not be aware, of course, you may not strange to MRTA/MLTA, how about those like stamping duty, legal fees, inspection fee, land title search, transfer fees, valuation fees, processing fees, etc. These are all dollar and cent. Get the quotation out from Banker / Lawyer firm and make a comparison, it can help you to estimate more accurate on budget.

step 4: Check out the different loans and terms
This one even more easier. Flip over the newspaper or switch on ur radio, you can always hear Bank A or Bank B or/ even Bank C offering unbelievable home loan.. Give them a call, tell them about your property, location, purchase price, they are very helpful to serve you and offer you the best loan package. Then, you can ask them about the term and condition of the loan agreement as it may vary from one to another. Normal information that you need to know is, of course, how much the installment, loan tenure, bonding period, penalties imposed for defaults, other facilites involve, etc.

step 5: Shortlisting of locations and/or type of properties.
Location and type of property are always justified the price of the property. It helps you to understand the limit and affordability of individual. For instance, you can't take Rawang property compare to Subang property. Then, list out the amenities you are looking for or all requisite for dwelling purpose. Property price can be easily obtain from the classified or any property agent.

step 6: Return of investment or just in case
If you aim for appreciation return will be landed property, rental income will be high rise condo/apartment, etc. After that, pay a visit to site to check out the actual condition and the surrounding environment. Then, classified section in newspaper also is also very informative to understand the market value in demand and supply ratio.

step 7: Do a comparison chart and be patient
Always No Hurry on buying property! Hurry will be misleading your decision. Outline all the collected information, in term of pricing range, location, affordability, loan interest or packages available and total cost involved. Plot a chart and make a comparison, the more systematic approach you do in comparison, like tabulation or chart, the clearer picture you get on the Intended-to-buy- Property!

At the end, wish you good luck in getting your Dream Home!

Without Strata Title

Notice some of the high-rise building have not obtain their strata title under the stipulated time. Actually, the developer/landowner must submit the strata title application within six months after the CF was issued, or six months after the SPA if the agreement was signed after the CF was issued.

Failing which, developer/landowner is subject to fine btw RM10,000 - RM100,000 under Section 8 (5) of the Strata Title Act 1985. Besides that, daily fine of Rm100 or RM 1,000 could be imposed for the each day of the offences.

However, slow processing of the National Land Council causes most of the delay of issuance of strata title.

Bear in mind, Without strata title there would be problems related to the selling and buying of the property, transfer of titles, mortgage and estate distribution.

I would say don’t buy property without title as to avoid unnecessary headache.

Complaint Channel to Developer

Usually, once you obtain your key during vacant possession to inspect the house defect, then, you will pass the list of defect to developer to carry the repair within 18 months time. The problem raise from here, What if developer reclutant or refuse to carry out the repair, you can go ahead and make the repairs and recover the cost from the developer. This is provided you have informed the developer of the cost of repairs and given him an opportunity to carry out the works himself. (Served an advance notice to developer as proof)

If the developer refuse to pay you back later, ok, fine.. the below is the contact for you to seek for legal advice from local authority to file a case to them.

The Secretary
Tribunal for Homebuyer Claims
Ministry of Housing & Local Government
Level 2, Block B South
Pusat Bandar Damansara
50782 Kuala Lumpur
(03) 2092 4488 or
(03) 2099 8389/8402 (Hotline)
Fax: (03) 2093 4776
E-mel: tribunal@kpkt.gov.my

Besides that, some term and condition are applied. You can also seek their advice before hand as to push the developer to carry out their duty accordingly.

To avoid this kind of messy steps, prevention is always better than cure, so nowadays, buyers always seek for Good Reputation Developer as to prevent the above incident happen on their loving house, even though sometimes it is slightly more expensive than market price, it is still worthy and its produce is definitely value for your money.

Guidance in Buying & Selling a Property

Purchasers are required to identify the following,
1. Whether a land search on the property has been done?
2. Is the property subject to developer's consent?
3. Is the property subject to state authority's consent?
4. Is the property subject to a charge /assignment in favour of a bank/financial Institution?
5. Will i be subject to pay Interest for late payment of the balance purchase price (BPP)?

What should be take note as a Vendors,
1. Does the vendor's bank have the right to Consolidate?
2. Is the vendor subject to Penalty Interests for early repayment?
3. Is the sale of the property subject to any real property gain tax RPGT?
4. What will happen if the purchaser and the vendor default in their obligation?

Spare some time do find out the answer for the above status, it could help to minimise the possibility that your hard earned money will not be drain off into the river as it may cause a big sum to lose if fail to scrunitise it seriously. Always remember the more detail you know about the property, the lower the risk of losing money. It is always worthy to spend some effort on it.

Comparison of Freehold and Leashold

Attached herewith a comparison table on Freehold and Leasehold for

better understanding.