Sunday, 27 July 2014

Desiran Bayu, Sri Rampai

Saw a banner at the traffic junction on Desarina Bayu in Sri Rampai.

It is a pretty high-end development for 3-storey terrace houses starting from about RM1.6 million up to RM2.5 million.

The interesting / good thing is that it is a Build-then-Sell project; hence absolutely no risk of the project being abandoned.

Only 70 units, so it must be a fairly small area.

Location wise is where it starts to get a bit unstuck.

It is adjacent to the Sri Rampai Business Park - which is quite a decent place, still new and has some decent Chinese eateries and a large car park area although that doesn't help if you are going to the shops on the other end of the centre.

The problem is, unfortunately, Sri Rampai as a whole. It is a rather densely populated garden that has a working class population. Next to it is Kampung Rejang, an even more populated area that is distinctly down at heel... during the election, a friend of mine who was volunteering there was shocked. OK, admittedly, he is from an aristocratic family (can't say which state though, secret). He was like, OMG this is a slum!

So back to Desiran Bayu - which piqued my interest because I was wondering if it was a good buy or not.

I'm quite torn between yes and no. The fact that it is fully built before being put on sale is totally appealing but the neighbourhood around it will probably mean that the value may not go up as much.

Another negative factor is that the "cheaper" model has a land size of 20 x 85, while very long, is rather too narrow. For the price of RM1.6 million, at the very least offer 22 ft or 24 ft length. Which you can get for the same price in Taman Melawati and even Taman Tun - not including renovations of course. In Tmn Melawati, you can get a 22 x 90 terrace for about RM900,000 - throw in a generous RM300,000 to extravagant RM500,000 to redo everything to your liking and you would have essentially a brand new house for RM1.2 to 1.4 million in a much more conducive environment - Melawati is middle-to-upper middle class.

I should make an appointment to go check Desiran Bayu out though... nonetheless, my thoughts on it so far is that it would probably appeal to original residents of Sri Rampai who have made it good and want to upgrade.

I don't see it as being a good speculative buy for short term big gain. Although I'm sure there will be buyers who will pick up units for exactly that purpose but I don't have that kind of capital, so this development is probably too rich for my blood! hahaha I'm sure can make money on it but it will take time and I don't have the stamina for it.

Alternatively, it is probably a good buy for, as I said, residents who are familiar with and like this area looking for an upgrade.

As an aside, nearby the completed semi-detached Dataran Wangsa "mini mansions" seem to be empty even though it looks like the developer had completed sometime last year.. these are posh units in a fairly decent neighbourhood. Wonder why? Actually the same goes for Casa Rimba, very high end units in Desa Melawati completed ages ago but no one seems to have moved in.

Well, that's a story for another day but suffice to say that there may be some speculative buying happening in all these posh mini-tamans and the owners can't offload them now thus leaving them empty because it was never meant to be lived in by the original purchaser.

So beware if you are thinking of flipping Desiran Bayu if even the units in posher areas are struggling to be sold.

Friday, 11 July 2014

OPR up 25 basis points

If you are cash rich, then your interest income from fixed deposits will go up.

If you are paying off loans, actually you won't feel much because your repayment amount stays the same but the interest portion is now slightly higher.

So what you should do, if you have some money in your EPF account 2, is to use that to pay down some of the principle of the loan to ensure your tenure is not extended unduly long.

From the human psychology perspective, the rate hike will make house buyers nervous for a while so sales will go down a bit. Eventually though, they will get over it.

This means that property prices will stabilise for a while then begin to pick up again because there will be housing pressure from a growing adult population.

I believe now is a good time to look for distressed sellers and pick up a good bargain. Some people were very aggressive in buying properties during the boom, with "no money down" using inflated sales agreements - well, think that is going to come back and haunt them very soon.

See, try and cheat?

Anyway, lets keep an eye out for good deals :)

Thursday, 3 July 2014

28 Boulevard in Pandan Perdana

Friend of mine who is a real estate agent sent me this - seems interesting..

Project Name : 28 Boulevard
Location : Pandan Perdana
Land area : 5.23 acres
Tenure : Leasehold
Components : Four 45 storey towers with Studios,1,2,3 and 4 bedroom units
Size (Sq ft): 450, 710, 904.
Pricing : from RM600 psf to RM650 psf
~Lakeside living
~Affordable pricing
~200,000 Sq ft of facilities
~Sky garden terraces
~Lakefront retail and alfresco dining
~Brought to you by the same people who developed Marc Residence KLCC by Best Boulevard Sdn Bhd

My take:

  1. High density - don't like.
  2. Leasehold - don't like
  3. Lower middle class area - well, usually the food choices are more and better :)
  4. Relatively affordable as it starts from under 300k - but for such a tiny unit.

Reckon it's a buy call if you have the cash to put down a large chunk and rent it out.

I wouldn't buy it for staying nor do I expect the value to appreciate much - oh it will, of course, just not at the level we have been seeing the past few years, that's all.

Still, it would be popular with the younger crowd or lower income earner because a 710sq ft unit is in the low 400Ks - that would translate to a 1,600+ repayment per month. So if a family where dad earns 3K and mum is at 1.8K - take home is 4K+, this is okay.

Working class can afford but don't know about the maintenance fee and the quality of maintenance in future...

Buyer beware, is all I'm saying.

I was just thinking, if one had about 300K+ and bought the smallest unit outright for rental,how much would you be able to charge?

If you are expecting at least 4% return, you'd have to charge a rent of almost RM1,000 a month. Seriously, in Pandan Perdana? That is unimaginable.

Then just a quick scan of an alternative - Dorchester Sri Hartamas has units sized at 410 sq feet for around RM350K.

Wouldn't you rather stay in Sri Hartamas even though at a slightly higher cost? Similarly, renters would be willing to pay to stay there.. hmm.. unless the developer is very bullish on the property market when the project is completed.

I dunno, my bet is still on "posher" areas... they've proven to be more resilient in hard times.. and they stay better maintained too.