Thursday, October 23, 2014

Settling My Home Loan

I just wanted to find out what are the costs I have to pay the bank to settle my loan early. They cannot tell me this information at the counter and their loan officer on the phone tries his best to twist and turn the information.

All I need to know is, how much is the balance of my loan and what are the bank charges? They want me to pay RM50 to get this information in a so-called redemption statement. I don't do this often but as I remembered when I settled some of my previous loans there were legal fees and other redemption fees etc etc... lots of hidden charges.

OCBC Bank is one such bank and I am so unfortunate I have 2 housing loans here. Their service up to date has been excellent. The personal bankers are pretty, smiles all the time, very polite and so lovely. But the minute you say you want to settle your loan everything changes. I asked her this simple question, can you please tell me ROUGHLY how much I need to pay to settle... she goes wishy washy and when pressed, she quoted an amount from her screen which was my outstanding balance.... and then she blurted out, this is just rough figure.. you need to pay RM50 to see all the hidden charges in the redemption statement...!!!!

Tuesday, October 21, 2014

Rehda: GST will push up home prices by 2.6%

Tuesday, 21 October 2014

PETALING JAYA: Home prices will rise by about 2.6% once the goods and services tax (GST) comes into play, said the Real Estate and Housing Developers’ Association Malaysia (Rehda).
The chairman of the association’s task force on accounting and taxation, Datuk Ng Seing Liong, said that the calculation was based on its consultations with industry experts and member developers.
Rehda’s 2.6% estimate differs from that of the Customs Department, which expects the GST to have an impact of between 0.5% and 2% on house prices, assuming there’s no change in supply and demand conditions.
Ng said the association was in full support of the GST and concurred with Customs GST director Datuk Subromaniam Tholasy, who had said that land did not incur the 6% GST rate.
However, he said land was by no means the largest cost component in property development.
“As our calculation clearly spells out, the construction cost, which constitutes 46% of the total development, is not only the largest component but also the component which will attract the GST of 6%,” he said in a letter to StarBiz.
He said the GST on this component would inevitably lead to an increase in house prices.
Appending calculations for a housing unit originally priced at RM400,000, Ng said the price post-GST would be around RM410,560.
Under the 46% construction component, costs were broken down into non-service taxable and service taxable segments, representing 44%, or RM176,000, and 2%, or RM8,000, respectively.
Under the non-service taxable segment comes items such as cement/concrete, steel, bricks and sand, while the service taxable segment includes tiles and fittings/sanitary. Under the existing sales and service tax, no tax is imposed on the non-service taxable category, while the service taxable category has a tax of up to 10% imposed on it.
Post-GST, Rehda’s calculations showed that the non-service taxable cost had gone up to RM186,560, while the service taxable cost remained at RM8,000.
It maintained the same cost estimates for other items, including land (15% or RM60,000), infrastructure and pre-development works (10% or RM40,000), professional fees and marketing costs (6% or RM24,000), finance costs (6% or RM24,000) and profit (17% or RM68,000).
Ng said Rehda also disagreed with Subromaniam, who had said that developers could easily absorb cost increases as their margins were around 30%.
He said it was currently impossible for developers to earn up to a 30% profit, as most development costs were on the rise, along with various capital contributions and charges imposed on developers.
“On average, as tabulated in the calculation, developers, most of which are public-listed companies, are only making around 17% at best,” he said.
However, Ng said it was still too early to determine the actual house price increases post-GST, as Rehda was still in discussions with the Government and there appeared to be many more issues to be ironed out.

Saturday, October 4, 2014

Too Much Excitement over Iskandar

Earlier I voiced my reservations about investing in Iskandar real estate. The recent spat with Singapore over the Causeway toll and the VEP charges seems to reinforce this. The Johore state government is way too unpredictable to offer any stability and assurance to investors.

Today, the Malaysian Insider also reported an oversupply -

“There seems to be a demand and supply mismatch… It takes such a short time to introduce all this supply, but the population is not there yet. Looking at the pricing, the units are not geared towards the local market, they are geared towards the overseas market. Maybe developers are very optimistic about the prospects of Iskandar, but there may be too much supply too soon,” todayonline quoted Khalil Adis, the founder of property firm Khalil Adis Consultancy - See more at: