Sunday, September 30, 2012

Nadayu 28 at Bandar Sunway

Another one in the series of Nadayu properties, developer Nadayu has launched this project adjoining Sunway College and the iconic Sunway Pyramid mall. Despite these neighbours, unfortunately, the location is not quite in the posh part of Bandar Sunway to lend its boast to Nadayu 28's "Exquisite semi-furnished luxury condominiums". In fact, it is located at the factory area of Jalan PJS11/7 and the entrance faces a row of car workshops. Also, right next to it is a row of low cost apartments and Sunway College's student dorms...

picture above: The Nadayu site with the car workshops in the background

picture above: low cost flats beside the site

picture above: the Sunway College dorms

This project consists of 400 odd units, housed in 3 blocks. There are 3 designs... the 1650sf, 1850sf and the popular 990sf 2 bedroom units. At the time of my visit today, the 990sf were almost sold out leaving 3 units while the rest are almost 80% sold.

Although the developer is marketing these condominiums as luxurious family units, it is pretty obvious the design is targeting the lucrative student market here... For example, the 1850sf and the 1650sf are 4 and 3 bedroom units respectively. Every one of the bedrooms are of almost equal size, including the master bedroom and all of them are en-suite.

While viewing these units, it was a struggle for me to identify which room was actually the master bedroom. All the en-suite bathrooms also appear to be almost equal size and they are pretty small as family bathrooms....

So if I leave you the honour, would you be able to tell me which bathroom above belongs to a master bedroom?

And perhaps the biggest flaw of the design is the extremely small kitchen, with no wet kitchen. The sales people told me that their target is young couples who rarely cook and eat at home... but why would young couples buy into a large 4-bedroom condo in the 1st place?

But indeed the student market in Sunway is extremely lucrative, even for high quality expensive ones. We reviewed one recently, the Sunway Palmville. Rent here is around RM3500/month which means a student bedroom without en-suite facilities can fetch as high as RM750 to RM1000/month. Apparently, I've been told, Indonesian students tend to pay their rent up to 6 months in advance to secure their rooms. Palmville however is not as popular as Lagoonview pictured below... Here I heard, rooms get snapped up as soon as they become vacant and the rent is even higher than Palmville.

So, it's not a coincidence that Nadayu28's design is leaning towards this market.

Student market or not, I feel the architect should have done better with the layout. There is quite a lot of wasted space, especially at the main entrance. They could have done away with the maid room/bathroom and the powder room to enlarge the kitchen.

picture above: The main entrance corridor with powder room on the right

picture above: The maid room

With a quick calculation, the 1850sf is going for about RM1.2million.... they are offering a 10% + 5% discount, which means you can land one for just over RM1million. Assuming these super luxurious student rooms can be rented out at RM1200/month per room, that will bring you about 5% returns after costs. With that in mind, the 990sf units at about RM700k is not really that worthwhile because there are only 2 rooms. 

With these 3 "powerful" colleges in the vicinity - Sunway, Monash and Taylors, there is no doubt it is the investment strategy. So Nadayu should quit "fooling" us that we're buying into a luxurious family condominium project. 

Budget 2013: RPGT hike too small, says House Buyers Association

September 29, 2012

KUALA LUMPUR, Sept 29 — The increase in real property gains tax (RPGT) in Budget 2013 is too “feeble” and will not be able to reign in surging house prices, says the House Buyers Association (HBA).
HBA secretary-general Chang Kim Loong noted that speculators who buy newly launched properties typically sell them after construction is completed two years later by which time they escape from having to pay the highest tax bracket of 15 per cent under the revised RPGT.
The RPGT was revised from 10 to 15 per cent for properties sold within two years and from five to 10 per cent for properties sold between two and five years. 
“With attractive financing packages, very often these speculators just pay 10 per cent downpayment and walk away with lucrative gains at the end of the construction period,” Chang told The Malaysian Insider.
He said the HBA proposed for RPGT to be revised to 30 per cent for properties sold within two years for the first two properties and up to 30 per cent for third properties and above that are sold within the first 10 years.
“The majority of investors who purchase houses for their own stay or for long-term investments would not be affected by this proposal,” said Chang. “
Chang said affordable homes are even more crucial than some of the price-controlled items. — File pic
He added it was puzzling that the government was serious about controlling the prices of essential items such as cooking oil, sugar, chicken and a host of other essential items but yet on the subject of house price, it has allowed the situation to remain “laissez faire”. 
“We believe that affordable houses are even more crucial than some of the price-controlled items because one can always find alternatives or reduce the intake of some of those items,” he said. “But the alternatives for a roof over one’s family are the squatter areas, the shelters under our highway flyovers or the five-foot paths in front of shophouses!”
Developers however were relieved that the RPGT hike was smaller than feared.
Real Estate and Housing Developers Association (REHDA) patron and past president Datuk Eddy Chen said the association was glad that a “drastic increase” did not materialise.
He said that this showed that the government recognised surges in prices were less about speculation than about rising cost of materials as well as labour and compliance costs.
“We would not like to have had an increase in RPGT but we can live with this one,” he said.
Chen said the RM1.9 billion fund to build affordable housing was a positive development, lauding the RM500 million Housing Facilitation Fund for the government to build houses in collaboration with private housing developers.
The veteran developer said however that the government should review the impact of the incentives for the Tun Razak Exchange (TRX) which aims to attract financial firms to a site to be master developed by government agency 1MDB.
Chen said the incentives would create an imbalance in the property market in the capital city as other developers who owned land in the city would be at a disadvantage.
“We view TRX with great concern because of the incentives for the project,” he said. “The government should relook the project to create a level playing field and avoid a two-tier real estate market.”
Veerinderjeet Singh, chairman of tax advisory firm Taxand Malaysia, said the hike in RPGT was good as it sent a warning signal to speculators.
He also said that a hike in RPGT to 30 per cent would have been too much as it could have led to a shock to the property market.
“The government took a middle path of gradually moving up RPGT,” he said.

For Singapore expats, Johor homes a steal as Malaysians in housing pinch

September 30, 2012

KUALA LUMPUR, Sept 30 — More expatriates are opting to live on this side of the Causeway, drawn by cheaper and bigger homes in Johor, a Singapore paper reported today while Malaysians are grappling to find affordable housing. 
While Singapore’s expatriates eye the relatively cheaper houses in Malaysia, Malaysians especially those who have just joined the workforce complain that they cannot afford to buy houses. The Singapore dollar is worth about 2.5 times more than the Malaysian ringgit. 
“Malaysia offered an affordable alternative,” the Australian wife of a Dutch national, Geert Hulst, working in the island republic, told Singapore’s Sunday Times, in an article published today. 
The Hulsts had bought a five-bedroom mansion in Ledang Heights, Johor which they said is five times bigger than their Singapore condo and are part of a 100-strong expatriate community there which is growing. Their two children are also studying in Johor’s Marlborough College after it opened in August, the weekend edition of the Singapore Straits Times (ST) reported. 
The shift from Singapore to Johor by expatriates looking for “affordable” housing solutions started about five years ago, developers and property agents told Singapore’s Sunday Times
They are increasingly moving to the Nusajaya township, which is part of Johor’s Iskandar Malaysia economic zone that was set up in 2006. 
ST reported that the housing projects of Horizon Hills, Leisure Farm Resort, and Ledang Heights in Nusajaya enjoy warm receptions. 
The houses chalk up a monthly rental between RM8,000 and RM20,000 while bungalows are valued in the range of RM2 million and RM7 million. 
Property agent Jerry Lim commented on the housing trend, saying that “there has been no looking back” since the opening of schools in the Iskandar Educity. 
About half of UEM Land’s properties are sold to non-locals including Singaporeans, the main developer for Nusajaya’s housing projects told ST
“With projects such as Marlborough College, Legoland, Pinewood Studios, and hospitals and universities completed or nearing completion, there is not the same level of risk associated with investing,” said David Bochsler, director of sales and marketing of Exhale, a firm that builds houses in Nusajaya. 
Bochsler, who stays in Johor with his family but works in Singapore, was referring to the various new developments that made the Iskandar Malaysia region more attractive to homebuyers. 
An expatriate from Holland, Geert Hulst, travels 45 minutes daily to work in Singapore, while his two children now study in Johor’s Marlborough College after it opened in August. 
His wife points to the growing expatriate community in Ledang Heights, saying that: “When we first moved in, we were the 10th expat family from Singapore in the estate. Now there are easily more than 100 expat families in the area.” 
Many Malaysians staying in Johor also choose to travel to Singapore daily for work, taking advantage of the strength of the Singaporean dollar. 
Recently, the federal government promised that it will not collect tolls from users of the Eastern Dispersal Link (EDL) expressway in Johor after a proposed take over from the Malaysian Resources Corporation Berhad (MRCB). 
The proposed move would benefit both Malaysians and expatriates living in Johor and crossing the bridge daily to work in Singapore. 
The EDL bridge reportedly has a daily traffic volume of more than 50,000 vehicles. 

Thursday, September 27, 2012

Security for Multi-Tenant Properties

In this blog, I've talked a lot about student accommodations. I think it gives the highest most steady returns but it has to be done ethically.  However, this kind of investment comes with issues and problems. One of them is security.

A couple of years ago, one of my apartments got robbed. In fact, during that period, a few apartments in the area got robbed and only laptops were stolen. This was revealed by the police when we went to make a report. The strangest thing was, there was no signs of break-in. In fact one of the tenants was asleep in her room while the thief went inside to remove both her laptops! 

One of my theory is the keys have been duplicated. Manual keys are easily duplicated. With 4 tenants to a house, it's hard to pin-point the culprit. Students tend to give their keys to friends and they make a copy and then their friends' friends make copies and by the end of the semester, the whole college has the keys to your apartment. 

So, I installed a key card access system. It works well because nobody can duplicate the key card unless they know my password. And I can control the number of key cards, disable and enable them as I need to. However, the system depends on electricity supply. If the thief cuts off your electric supply or if there is a power failure, the door will be unlocked. What comes with the system is a battery pack which keeps the door locked for at least another 4 hours. So when the tenants go off for the weekend they should also back up with a manual padlock.

The wiring of the system is not too complex but there are a few sections. You have to wire the access controller, to the power source, to the battery and also the push-button inside the house. So, altogether there are at least 4 to 5 sections.

I would highly recommend multi-tenant properties to have such a system. But I would never recommend my supplier... in fact, I would tell everyone not to use my supplier. Typically the basic system costs about RM500 for each door, including installation. So, at that time I found a supplier who advertised extensively in the newspaper called SECUROF. They were at least RM100 cheaper than their competitors. But what I didn't realize was the maintenance costs. Typically access controllers don't fail. It is a very simple logic board with buttons. However, this supplier used very low quality cables. Just after the initial 1-year warranty ended, the system failed. We couldn't lock our doors. This happened to all the 4 properties that I installed this system although they failed a few weeks apart from each other.

SECUROF charges a very high on-site visit rate which is RM150. Each time you call them, they will charge you RM150. So, the 1st round they came and the technician showed me the metal inside cable practically disintegrated. It has become powder! I got charged to replace the cable. But that's not the end of it..... Throughout the next 1 year, I had to call them out a few more times because each part of the 4 to 5 sections of cable began to fail. 1st it was the main source, then it was the push button, the battery pack etc etc... So, the cost of a RM500 system suddenly became almost RM1000! And I can tell you every single one that I installed had the same problem. SECUROF blamed their installation contractor but I told them they should not charge me the visit fees because all it seems to me, that's how they make their money.

I don't think I have defamed SECUROF in this case as I am just relating to all of you my exact experience. As a consumer, in Malaysia we have little rights, the only thing I can do is to warn others to be more careful. If you choose other suppliers, ask them lots of questions about the cables that they use and also cost of the spare parts after warranty.

Tuesday, September 25, 2012

How Many People Visit RealtyMalaysia

Since records in Google Analytics started about a month ago, we've had 8000 visitors of which just over 5000 are unique visitors. Thank you for reading my blog and let me know what you like about RealtyMalaysia so I can be a bit more focused...

Friday, September 7, 2012

Selling Owners List... Is it Ethical?

Since about a month before vacant possession in July 2012, I have been receiving text messages and phone calls from estate agents asking me if I would like to sell or rent out my unit at St Mary Residences. In August, the frequency of such intrusions increased to almost 1 to 2 calls a day. I accept that many people would like to have exposure for the properties they invested in so these approaches from estate agents should be very welcome. But by now in September, I must admit that it has started to become really annoying. 

I had wondered how they got my number. It could be through the E&O sales office, the lawyers or even from TNB since I filled up their form with my contact details to register for electricity supply. 

Two days ago, I needed to get my contractor to install electrical fittings. So I had to go to the management office, fill up a form and pay a RM5000 deposit (yes, RM5k!!!). They asked for an alternative number so I gave them my mum's number. The very next day, my mum received a phone call from an estate agent asking her if she would like to rent or sell. And she got another one today. So now, we know the management office is one of the source.

How much is the owners list worth?

According to a friend who works in a developer office, they could well pay from RM5 up to RM10 per contact. Or it could be by commission or success basis but that's harder to monitor. Whatever it is, if you're one of them, please stop it. I already have my own panel of agents... Thank you...

Tuesday, September 4, 2012

Rental Down?

The notice board at Seri Bukit Ceylon which shares the same building as Ascott's Somerset is plastered with rental notices. Rent for a 1000sf 2bedroom unit has come down to RM4200/month from high of RM6500 and 640sf 1bedroom units are now going for RM3000/month, down from RM3500. That's more than a 10% drop.

What is happening? Is it oversupply or the older property is not attractive anymore? Or is this just isolated cases of desperate owners in for a hard time?

Rehda denies foreigners behind high property prices

Apparently, the highest property appreciation has not been in the Klang Valley and Penang. We've been targeting the wrong states guys!!
September 04, 2012

KUALA LUMPUR, Sept 4 — The Real Estate and Housing Developers’ Association (Rehda) Malaysia has dismissed speculation that foreign buyers are responsible for escalating property prices despite transactions of properties by non-Malaysians running at 25 per cent last year.
Rehda Malaysia president Datuk Seri Michael Yam said that the percentage of foreign ownership, which is at 11.5 per cent and 25 per cent in Kuala Lumpur and Johor respectively for properties worth above RM1 million, does not reflect the whole scenario.
Speaking at a Rehda media briefing today, he said that the overall figure for foreign ownership in Malaysia is just two per cent, and is very low and not alarming.
He said that Malaysia imposed restrictions, such as a limit of 50 per cent on the total units in a project that can be sold to foreigners and a 30 per cent quota for Bumiputera units.
“We don’t build for the foreign market, we build for locals,” said Yam.
He added that foreign buyers were very selective and there were only a few targeted hot spots.
According to the general manager of Malaysia Property Incorporated (MPI) Veena Loh, the highest property price appreciation is not in the states that have a high number of foreign purchases.
Loh said that a 10-year average shows the steepest price hike occurred in states, such as Sabah, Terengganu, Perlis and Pahang, and not the states with high foreign ownership.
She said that in Johor and Kuala Lumpur, prices only have appreciated by 0.6 per cent and 5.5 per cent respectively over the last 10 years.
Loh said that people might feel prices were high in the Klang Valley but they had ignored the fact that most of the launches were for high-end properties.

Property market cools amid debate over affordable housing
September 04, 2012

KUALA LUMPUR, Sept 4 — The property market is showing signs of cooling even as developers and homebuyers take sides over the critical issue of housing affordability and the government mulls further steps to make it easier for Malaysians to own a home ahead of a crucial general election.
The home loan approval rate has dipped nearly seven percentage points in the first half of the year to 46.8 per cent from 50.1 per cent during the same period last year.
The trend is indicative of the residential market cooling following tightening measures by Bank Negara, Malaysia Property Inc, a government agency in charge of marketing Malaysian property abroad, said today.
Despite official statistics pointing to flattish growth in property prices since last year, many Malaysians are feeling fed-up over what they feel are continued unreasonable surges in house prices driven by market greed and warn of social consequences and even a potential backlash at the polls.
While property prices have not been used as an election issue in the past, they became a lightning rod of discontent across the Causeway where the opposition used it to garner popular support in last year’s Singapore general election.
It was also the number one issue identified by the prime minister’s Budget 2013 online feedback gathering platform, which ran from July 16-29, receiving almost 3,000 separate forms of feedback on the topic.
There are indications that the government is poised to take more fiscal measures to tackle affordability following previous tightening measures, such as a slight increase in real property gains tax, a cap on the loan-to-value ratio and efforts to curb household debt such as basing loans on net income rather than gross income.
Housing and Local Government Minister Datuk Seri Chor Chee Heung said in a property forum late last month that the public perception was that the government had not done enough to control property speculation and that he would be recommending that fiscal policies affecting property be reviewed in Budget 2013 that will be presented on the 28th of this month.
The issue of affordability was also the main topic at several property conferences and forums organised in the past month at which developers acknowledged the public concern but warned that any move to increase affordability by dampening property market sentiment could have adverse effects on economic growth and potentially disrupt future supply.
House price growth nationally does not appear high but in key urban markets, such as Kuala Lumpur and Penang, prices have spiked dramatically giving rise to much discontent, especially among the younger generation, who say they have been priced out of the market as incomes have not kept pace.
Many industry observers say the problem lies with excessive speculation as word of attractive profits by buying and selling houses, or “flipping” spreads, entices speculative investors looking for high returns to pile into the market, crowding out prospective homeowners and genuine investors.
One developer based in Kajang acknowledged in a property forum last month that high returns in some of his projects — which roughly doubled in value over the space of the last two to three years — were causing a lot of speculative interest among investors.
Rehda president Datuk Seri Michael Yam said in a press conference today that while putting the brakes on speculation was alright, developers were wary of measures being taken too far.
“Nipping the bud of excessive speculation is ok but if tightening is too tough, it will have ramifications,” he said.
Yam also said that he was against any hike in the RPGT — which many potential homeowners say should be increased to cut down speculation — as it would make things more uncertain for investors and further the government’s flip-flop image.
Developers, meanwhile, say that affordability can be increased by releasing more government land for medium-cost homes; implementing an auto-release mechanism for unsold Bumiputera quota units, which currently represent a high holding cost; making utilities pay for their own infrastructure; and introducing steeper discounts on stamp duty for first-time homeowners.
While medium-cost properties have continued to rise in cost, figures provided by MPI show that the high-end of the market has seen prices actually fall following the imposition of the cap in loan-to-value ratios and increase in RPGT from five to 10 per cent.
For homes costing above RM500,000, they had depreciated by 3.16 per cent in 2011 as compared to 2004.