Malaysia Money Matters

I created a simulator based on price, loan paydown, market value, profit on sale (including RPGT) and compared against using the same cash outlay into FD or investments. Running the 2 investment options against each other, while property wins in the long run, the returns actually flatten out over a long period of time because a cash investment (e.g. even at the safest asset class which is FD) gives an ever growing rate of return while a property's value growth slows after 8 to 9 years! That explains why mortgage portfolios price their rates on an 8-year longevity. Here is the final result of the simulation with the RPGT in place means that while you are better off holding in FD for 5 years, your maximum return is within the 7-9 year window before the property value growth begins to flatten: So you would break even at year 5 and have to hold for a few more years - up to 10 or 11 if you want to cash out more but that's up to you. update: Some anonymous reader ...

A new development that is on the site of the old Century Paradise Country Club (more recently known as KK Club) in Taman Melawati. I noticed it this morning as I drove past, not having been in the area for some time - so naturally, checked out their website. The design and concept of this development is rather interesting - they have a range of sizes from 450 sf up to 2,000 sf - and 10 different layouts. What I like about the layout designs is that there are duplex options / iterations - i.e. the 450 sf studio is the basic unit, then you'd have a duplex design which follows the studio layout but doubling it. It's a personal bias of mine, I do like duplexes because it gives you the feeling like you're living in a house. AND I believe - looking at the floor plan - that the living room ceiling will be double the height in the duplexes; thus creating a very spacious feel that is missing in the standard 1-floor condo unit in Malaysia. Price is starting from RM684 per...

Recently, I got to know that an acquaintance of mine is now a hot shot property investor - well, he has been doing so for the past number of years so I'm not surprised. And he's still quite young too, in his mid 30's and said to have accumulated more than RM10 million worth of property. Kudos to him and he's also now giving talks on how to do so... Now this is where the ethics part comes in - he's still working for a financial institution. The rules are that you can still have a second job or a direct interest in a business outside of banking provided you declare it and it doesn't affect your work nor should there be a conflict of interest. E.g. you can be a TV ad model / actor - not an issue However, seems that he's giving talks on how to get bank loans easily to buy lots of property in a short time. Now, I can guess how it can be done but I can't bring myself to do it - simply because it is not particularly ethical. So anyway, dear reader...

I wrote about Nadayu 62 earlier. Lately, the banners and billboards for Nadayu 63 have come up. 296 service apartment units (small-ish), ranging from 500+ sf up to 1,100 sf at around 800+ per square foot. There are also 42 retail units starting from RM3.2 million each - so basically, there's going to be a mini mall within Nadayu, so they won't even need to venture the 2km distance to the upcoming Melawati Mall. Completion date estimated in 2017 and leasehold. Very interesting - it looks like Nadayu is trying to create a self- contained village by having enough critical mass of younger people who can afford the smaller units to ensure that the mall is self-sustaining to benefit the low dense bungalow dwellers. So do we like this? Well, the location is lovely - very quiet, an annex or appendix of Melawati. The con is that it is a leasehold and maintenance is likely to be pricey - because you're paying for the exclusivity (although, I don't think 296 units in a...

SURE OR NOT? Wah, I got this sms, and I quote: "New-Launch@beside Paradigm Mall Kelana Jaya  - 33.2% disc  - Cash back RM160k  - 90% loan  - P/Furnish  - LDP & NKVE  - shuttle bus to LRT  - 2year CF " This makes me wonder - is the RM160K the 33.2% discount or are they 2 separate things altogether? The whole thing sounds too good to be true and even if it were true, then it begs the question - if you could give away such a Hefty discount of 33.2% (not knowing what the actual price is, mind you) then surely you must have really overpriced it in the first place. Then the RM160k, if you can afford to give it back then why ask for it in the first place? Anyway, all this is fine, whatever, marketing gimmicks and what have you - if it makes the sale, fine. But seriously, it just means that you're taking the buyers for a ride, isn't it?

Browsing through the PR write-up for Sunway Velocity, one of the points brought up was that the surrounding area of Jln Pudu and Jln Peel (Peel Road - I have fond memories as my mum used to teach at the Peel Road Convent and I used to hang out there, playing on the grounds while she finished up marking books before we went home) was a little 'run down' as it were and the developer said that the project would revitalise the whole area. So that got me thinking - is that true? First equivalent that comes to mind is the Kenanga Mall - sad to say, the surrounding area has not gentrified in any way or form. However, it must be said that the mall itself acts more like a wholesaler's mall - so the traffic there is made up of retailers going there to buy stock. It's purely business, so they are not going to hang around and spend on other stuff in the area. Next, Ampang Point - the shop lots around the complex were built first, and the area was dead for a long time until th...

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 goi...

There is some word, unpublicised as far as I know, that Bank Negara is looking seriously into the valuation practices of local banks. Mainly the way in which loan sales offices shop around valuers to get the valuation for the loan because it could be one of the factors driving up property prices. Well, in a way, yes it is a contributing factor but the margin of difference at which they are valuing is not really that large - based on observation, it is a fluctuation of about 5% to 7% in "hot areas" but true enough also that in low transacted areas, they can undervalue as much as 25% of the asking price. Which begs the question of is the market pricing too high or are valuers judging at too low / judging too high in hot areas in order to get the deal to do the final valuation report? After all, if they keep giving low verbal valuations, they will not get the business. If they give high values all the time, then it is an advantage to the seller and doesn't take into ...

Update: 27 August - got the invitation card to the official opening: 6th and 7th September at the site Jln 26/26 Seksyen 10, Wangsa Maju Per the card - 3 rooms at 770 sq ft and 3+1 room at 850 sq ft Price starting from RM374,490 (Bumi price naturally :p ) Updated - go to Part 2 here The developer of the Damaisari semi-Ds and shoplots of Dataran Wangsa have put up a billboard advertising a condo called Seasons Garden, also in Wangsa Maju. Scant details - only a website inviting registration. Trawling through the chatter on Lowyatt, there is some mention of an indicative price of RM500 per square foot. Maybe based on the theme of this developer of doing fairly high end properties in Wangsa Maju - well, technically Wangsa Melawati. So where is it going to be? I have 2 guesses on a likely site: The corner of Jln Wangsa Perdana 1 and Jln Wangsa (a.k.a Jln 6/27A) - this used to be an oxidation pond but has been filled in some years ago. The funny thing is that there used...

Avenue K is coming back to life again. As the renovations are finally done, the new tenants are starting to move in. It looks that the mall management has got a clear strategy that works: Have mass market appeal retailers like H&M, Starbucks, FOS, Popular Bookshop, Cotton On, G2000 and so on. Have NON-HALAL food & beverage outlets to act as an alternative to KLCC's fully halal F&B landscape The newly opened Food Atrium (think yesterday was the soft opening) looks like it has potential. The prices are more expensive than both the KLCC foodcourts - a quick glance at the menu boards yesterday looks like a range of at least 10 bucks a meal up to 20 bucks. I had the Vietnamese noodles that was RM17.90 - fairly generous with portion and meat, so no argument there. I think it will definitely be the choice to eat for Chinese shoppers at KLCC - after all, KLCC's food choices are totally halal (as if the 45% of non-Muslims in this country don't matter a...

Well, the shoe has finally dropped - the expected RPGT has been increased to 30% for sales within the first 3 years of property ownership, dropping to 20% in year 4, then 15% in year 5 and then back to 0% from year 6 onwards for Malaysian citizens - the 30% applies for the full 5 years for foreign owned properties. A flat 5% will still be imposed for property gains made by businesses after the 5th year. Means that those who only just bought properties to flip within the past 2 years or so (given the lead time to sell a property) would be affected immediately - unless the gain itself is large enough to compensate. But of course, human nature being what it is, the 30% will be a dampener for sure as sellers would want to maximise their returns. Only thing is pity those who may be in a desperate position, maybe they need money for something else and have to sell a property - then they'll be hit quite badly with this. Moving forward, would this ease speculative buying? I don...

It started with what seemed to be a fairly innocent news piece about an announcement on a large development in Pahang, specifically in Gambang that would cover 250 acres. The purpose was to build a huge multi-faith complex ( excluding Islam of course, because... err .. well.. lets not go there ) that would house retail, function halls, a resort and most importantly, a final resting place ( ashes only, I think! ) for your dearly beloved and/or yourself of course. Going through their website , the stated intention is noble enough. Creating jobs, attracting tourists and so on. No doubt, it will help the local economy there which is about 30km away from Kuantan or a 3 hour drive from KL. However, look a bit further into their business model and it starts to look very much like an MLM where the product being sold are the columbarium niches at about USD700 a pop. Which is cheap now and what they are promising would be that each niche will triple in value or more in time - so it's e...

So Avenue K is being refurbished... again. I actually quite like the place but somehow, I think it suffers from *something* but I don't know what. Location is good, right next to KLCC and connected to the LRT but it just cannot seem to make it big. I reckon it has something to do with the management - I used to have season parking there and if the car park management is any indication of the total mall management.. well.. hmm! Not a good experience. One of my fantasies is to take over that place, turn it into a Services & Senses Mall.. yeah baby, it's all about sight, smell, sound, taste and feel. Meaning, focus on F&B, services like spa, massage, beauty and so on. Don't bother fighting for retail because that's what Suria KLCC is all about, you can't win. Anyway, looks like they are positioning themselves as a fashion retail space. *shakes head* Pavilion has just opened its Fashion Avenue - don't think Avenue K can compete. Anyway, walking along J...