Friday, February 17, 2012

Coming soon - How to control the hefty electricity bills when you've bought houses to rent rooms for investment?

Due to the mismanagement of fuel resources by this government, our electricity bill has risen rather sharply in this past couple of years (despite that, Independent Power Providers or IPP have been enjoying government subsidies on fuel they bought to supply electricity for profit).

Suddenly, we have seen electricity costs eating into our margins, often as much as 50% of the room rental. What do we do without increasing rent too high that people can't afford to rent from us anymore?

See the solution here.... soon ;)

Kampung Warisan Refurbishment 2

Earlier I blogged about Kampung Warisan being refurbished. The management council has been sending us quite exciting updates about the work being done. So, I decided to drop by to take a look and discovered some surprises.

There has been some visible changes and there are also those that are not so visible. The council has just begun to change the roof slates starting from the club house.

There has also been some extensive work on landscaping...

Walkways have been repaired...

And the road repaved and repainted... including road kerb. Under the road, underground pipes have been added so that future cabling and plumbing can be carried out without any digging.

The main rubbish dump affecting Melor Block has also been moved so that residents of that block won't be inconvenienced by the dump truck and the smell that accompanies it. I have also seen tender being issued for works to clean the water tanks and upgrading of the CCTV system.

I then ventured off my usual path up the hill where I saw sadly a part of Kampung Warisan that has been left to decay for years.

This is the jogging path where many people has sighted snakes, monkeys and squirrels.

Further up the hill, there are some exercise stations, flying fox...

And a camp site!

This beaten path has been long neglected. I am not sure if the council has the budget to repair it or not and whether it will be viable to do so. Not many of us city dwellers bother to look into this side of nature and risk being too close to wild animals and insects. But I am sure, if it is fixed, I will be one of the frequent users...

How has the refurbishment works affected the prices? Well, 2 years ago before all this started, a 3-bedroom unit in Kenanga Block would be selling at around RM650k. Now, the last transacted unit 4-5 months ago was t RM760k. Rental has also not seen a great leap from the previous asking prices, around RM4500/month for the 3-bedroom units. To be frank, this isn't a lot compared to other similar sized units in neighbouring Seri Maya and One Jelatek. The appreciation is not that steep considering the good work that has gone in and the costs. It remains to be seen... at this moment, there aren't many units for sale in the market. Rentals remain sluggish which is seen all over Kuala Lumpur, not just here. Hopefully, in more years to come this will change as Kampung Warisan becomes the more preferred place to live in compared to other neighbouring condos in this area.

Friday, February 10, 2012

Property market growth to taper off in 2012, says expert

By Lee Wei Lian February 10, 2012

KUALA LUMPUR, Feb 10 — The property market will still see growth this year but at a slower pace than 2011 due to dampened sentiment, said CH Williams Talhar & Wong.

The property consultancy said buyers were now more knowledgeable and picky, and were less inclined to follow the crowd. Also, sentiment among speculators would have been affected by measures such as mortgage value caps for third loans and more punitive real property gains taxes for early disposals.

“We will see further growth but at a very much lower pace,” said Foo Gee Jen, managing director of CH Williams Talhar & Wong, at a briefing on the outlook for the property sector this year.

Foo said that he saw the market growing at about 10 per cent in value overall this year, compared with an estimated 11 per cent last year, while transaction volume growth was likely to dip below 10 per cent.

The office and high-end condominium sectors, meanwhile, are expected to experience a glut situation.

Luxury condominiums are expected to see a huge influx of up to 50 per cent of existing supply — some 13,716 units — coming onto the market over the next five years, which would put pressure on yields.

Foo said occupancy rates and rentals for condos would see a downtrend in 2012.

“This year is a buyer’s market for condos,” he said. “Once the new supply is completed, the landlords will have to accept lower rentals or sell at lower prices.”

Foo added that yields for office rentals had decreased to 6.2 per cent last year and were likely to decline further, to six per cent or below this year.

“We see overall rent stability in 2012, but 2013 and 2014 will be challenging for landlords,” he said.

According to Foo, take-up for landed residential sectors was “generally healthy” last year, with the house price index for houses increasing 11.4 and 9.6 per cent for KL and Selangor, respectively.

The retail sector was also expected to grow more slowly, with six new developments to be completed in 2012 bringing another 2.7 million sq ft of retail space to the Klang Valley.

While popular malls in the city were experiencing full occupancy, the conditions were tougher for those outside.

Rental for ground floor retails shops in prime areas in central KL ranged from RM40 to RM55 per sq ft, and ranged from RM12 to RM32 per sq ft for those in outer areas.

Foo said the tightening measures on the property sector in China and Singapore was a good move for the region.

“It’s (the tightening measures) are healthy for whole region,” he said. “Because if a bubble bursts, there could be a domino effect in the region.”