Ready For Orders : Meridian 101 Degrees

Earlier I posted some concerns about Meridian 101 Degrees. After seeing the booking form, I realized the developer has not yet received the Development Order (DO) from the authorities. Nevertheless, they have started to take orders. Apparently, a Japanese investor has blocked booked 100 units. So, now only 59 units are left for sale. We have 1st pick and it will be 1st come 1st served.

We now have a block of 20 buyers. However, the developer is reluctant to negotiate with us until they have seen this block committed with booking cheques. The cheques shall be issued in the name of their solicitor, "Messrs FL FOO  & Co" as Stakeholder. The selling price is now RM1,410psf with no early bird discount. Here is the deal:

1. We might be able to negotiate some percentage of discount from the developer once we have this block committed with cheques. However, the amount may not be huge, possibly around RM2k - RM5k. No promises

2. We will have 1st pick - only 19th, 22nd and 23rd floors open to us for picking

3. All units and all floors are the same price. However, for KLCC view, you must buy a car park! You can own the car park for 10 years only

Please also note that the developer is a new company, Meridian 101 Degrees Sdn Bhd with unknown track records. They have set up an office at Plaza 138, Jalan Ampang and it is really a very small set up. So, you need to take note that there are risks!

More Details of The Dang Wangi Project - The Meridian 101 Degrees

This Dang Wangi project we talked about earlier is the Meridian 101 Degrees KL. The website provides MOST of the details that you need to know about EXCEPT who is the actual developer. This is shrouded in mystery, similar to the Bangsar Trade Center launched a couple of years ago. Therefore, we should thread with slight caution.

Same as the Bangsar Trade Center, the Meridian 101 Degrees is linked to Best Western Hotel who will be providing a fantastic 10 year Guaranteed Rental Return:

Year 1 - 7: 6%
Year 8 - 10: 7%

But unlike the Bangsar Trade Center, the density of this project is relatively low - only 156 units of 400sf and 480sf rooms. They are essentially hotel rooms here because there is no kitchen, just bathroom, toilet and sleeping area.

The whole building is half car parks and half hotel rooms with the facilities at the roof top. The lower floors are retail but I think they will struggle to find any meaningful tenants in this part of town, especially with such low density and neighbourhood.

Each floor will just have 13 units served by 3 lifts.



The misinformation I received earlier is regarding the price. I was told the price range is between RM400k and RM500k. However, at a early bird price of RM1400sf, they are really between RM560k and RM680k. Well, it doesn't really matter since you are not paying anything for 10 years. At a GRR of 6% to 7%, that should well cover your interests payments as well as the RM0.50psf maintenance fees every month. The price is also apparently flat across all floors and units, no matter if you are facing KLCC or the other side which is Jalan Tuanku Abdul Rahman or SOGO. Car park is not provided. You may however, purchase a 10-year use of the car park for RM50,000!! I think this is not necessary....

For anyone who is still in doubt about the location, pay a visit to Yut Kee and behind the restaurant, look out for a row of abandoned shops with this distinctive window facade...

   

the actual buildings are these below...

But rather suspiciously, the development sign board erected here is for something else.

So I would say the developer integrity is really a big concern, especially since it is a new unknown and secretive entity.

Upcoming Project in Dang Wangi

How many of us actually know Yut Kee Restaurant along Jalan Dang Wangi? This is one of the very few old style and original coffee shop (KOPITIAM) still left in Kuala Lumpur. For a good taste of Hainanese fare, this is the place to go, even if it means queueing close to an hour during peak hours.

A few months ago, I have read in the news that Yut Kee is moving. But fortunately, they are not moving far. You can read more here in this link.

Yut Kee's location is actually really good. It's close to many office buildings and within 5 minutes off the Dang Wangi LRT station. The happening drinking and party hole, the Heritage Row is also steps away.

Those of us who frequently go to Yut Kee might notice that there is a row of dilapidated shop houses behind the restaurant. A developer has purchased this lot and there is a plan submitted to develop a serviced apartment. With such location, they are going to launch at no less than RM1000psf but the units will be smaller, around 400sf - therefore, average selling price will be about RM400k to RM500k.

If this is not exciting enough, I have heard that there will be DIBS packages thrown in plus a 10-year Guaranteed Rental Return!! No more details are available unfortunately.

There are few drawbacks... Besides the official secrecy about the whole project, Jalan Dang Wangi as well as the off-shoot, Jalan Kamunting are both one-way street. So the apartment can only be accessed by car one-way from Jalan Raja Abdullah. This is going to be a pain. Also, this is not yet a nice part of town. Not quite high class touristy place and at night there are many undesirables such as drug addicts hanging around. However, this will hopefully change with the development but as we can see with Capsquare adjacent to this plot is not particularly flying successfully....

Nevertheless, at the "affordable" price tag and nothing to pay for 10 years, you bet I am queueing up. Apparently, an investor has already blocked 100 units and I am wondering if we will be able to raise sufficient volume to negotiate a deal as well. If you are as crazy as me, get in touch at sinleongng@yahoo.com

The Manhattan at Jalan Raja Chulan

This is UEL, a Singaporean developer's 1st project in Malaysia. UEL being a reputable company back in Singapore will hopefully do it Right First Time to stamp their mark here. They have already got it right with the location. You can never beat this one. In the CBD fronting Jalan Raja Chulan with access from 2-way traffic. This is one up from St Mary Residences or direct competitor The Tribeca in Jalan Imbi which can only be accessed from a one-way lane/road or Idaman Residence or KLCC Parkview which are located inside some unknown small lane.

Having lived in St Mary, I can tell you how terrible it is when you only have a one-way access. I am not saying that it gets jammed or clogged up. Everywhere else, including in the suburbs get traffic jam during peak hours. But it's the non-peak slow moving traffic which gets at you when you need to make that frustrating long crawl around the block just to get home.

It has been over a year since I mentioned in this blog about an up-coming project on this plot of land. If I can recall, the land was sold at around RM150million in 2010. This is hearsay. But the figure seems about right for the location and size. It's really a very tiny plot, flanked by Wisma MPL, a Grade C office complex and a bigger car park which is awaiting development. At the back of it is a Chinese temple and Menara MPI.

I had a little scare a couple of months ago when there was news that the MUI group is selling Menara MPI to Mayland. That would have meant the building would be torn down and rebuilt completely blocking the KLCC views from my apartment in Seri Bukit Ceylon. But apparently, the plans was thrown out by DBKL... so, safe for now....

Surprisingly for such a location, despite the small plot of land, UEL has only packed in 139 units of mostly 2 bed-room units in the Manhattan. The 1-bedroom units are in the minority and the top floor consists of 900+sf duplexes. With a going price averaging RM1.4million per unit, the total development value assuming all units are sold out is just under RM200million. So, you may call it magnanimous or simply not greedy, UEL may just be trying to do it Right and Nice the 1st time. Or perhaps, DBKL was not allowing the project to be too dense... Anyway, every unit comes with a car-park and in fact, the bigger units, gets 2 car parks each. Not bad and certainly a good lesson for all those money-minded Chinaman developers in Malaysia who are stingy with car parks...

The pricing obviously reflects the low density. The cheapest units are just under a million. The best buy is the 588sf 1-bedroom corner units which has a really lovely layout and there were less than 10 of them. Needless to say, they were sold out, despite the RM200+psf premium i.e. RM900k and up. The deal is, early birds gets 8% discount and a further 5% rebate from the SPA price. All units are fully-furnished and if you buy a unit up to the 19th floor, you get a 5% guaranteed rental return over 2 years, which essentially is there to allow the developer to charge you more for the lower floors.

Picture Above: The 588sf 1-bedroom corner unit

Anyway, at this 5% rental return, that's implying that you are renting it out for RM3700per month. That's quite the going rate for 1-bedroom apartments in the CBD but not easy in the sluggish over-supply market these days. Even Singapore's Ascott has vacated their 110-unit inventory at Seri Bukit Ceylon. With the low density at the Manhattan, there will be hardly any internal competition but the challenge will be going against the more modern and established apartments in the CBD who have owners going-in at much lower investment such as SixCeylon, Verticas Residency, Fairlane Residence, One Ceylon, One Residency and Suasana Ceylon. That's where the Manhattan's location is so so very important. And that's why I think, the cheapest 1-bedroom units in terms of per square feet, the 603sf Type B2 are not going to make it. They are elongated intermediate units with the bedroom taking all the  windows leaving the living room and kitchens in the dark. No tenants in their right mind is going to sign a 1 year tenancy agreement to rent these for RM3700/month!

Pictured left: The 603sf Type B2

With the 588sf corner units sold out, the other 1-bedroom units worth considering is the Type B3. However, the cheapest unit is RM1.2million - after discount...

To me, if I am spending close to a million, I can never justify buying a 1-bedroom condo. For just about 15% more, I can get a 2-bedroom unit and most expat tenants tend to have a little more budget for 2-bedroom units. As a bench-mark, a 2-bedroom apartment at Seri Bukit Ceylon can fetch RM5000 - RM6000/month. Over at St Mary's, they start from RM8000/month (although an agent sent me an sms saying he has a client with a RM6500 budget and I wonder who would be that desperate...)

The 2-bedroom apartments at the Manhattan have quite nice layouts since most of them are corner units.  My only complain is the bedrooms being too cramped - especially the master-bedroom. There are mainly 4 variants about 1000sf with slightly different sizes due to the balcony being either an indoor-Lanai, a large balcony, a small balcony or no balcony altogether. The design with the Lanai is the most rediculously wasted space as there is a large post in the middle of it. I am rather surprised that the developer has chosen this design to be represented in their show room. Also, taking a close look at showroom, one can't help but notice that the quality of the furnishings especially the wardrobes are extremely poor. Now most showrooms you see in Malaysia, usually you don't quite get what you see - the delivered furnitures are normally low quality. So, if UEL is using low quality furnitures in their showroom, either they are being painfully honest or you might be getting something really terrible at the end.

The 2bedroom unit layout

With 7 floors of car parks, the 2-floor facilities deck lies on the 8th and 9th floor. The swimming pool is rather nice, designed like it's hanging over the 8th floor. The gym however, looks like it's going to be very small. E&O has made this big mistake with putting a small and ill-equipped gym in St Mary's. This has turned away many potential tenants, including all the British expats from my company. Most expats are very health conscious these days and they want a good gym to work out at when they're home.

Surprisingly, the maintenance fee is only RM0.40psf. I am not sure if this is sustainable for such a low density apartment. With 139 units, they're looking at a collection of about RM50k per month. I think this will hardly cover electricity costs and security, 2 of the main costs of running an apartment. It's freehold, but commercial-titled. So, the overall costs of maintenance may be higher than you think.

Advertising In This Blog

Of late we've been receiving a lot of requests to advertise or write about certain projects in this blog. So, please allow me to post a common response to address all such and future requests.

In fact, I do not see anything wrong with profiting from my blog. However, this is an independent blog about property investments (or collection). We maintain our integrity through this independence. Therefore, I regret that any advertising or blogging or even comments with the purpose to promote any particular project directly or indirectly is strictly prohibited.

In the past, I have advertised and sold some properties through this blog such as:

Endah Villa

Six Ceylon

Mutiara Villa

Some are my own properties or they are properties that I would have bought but do not have the funds to buy so I would like to share the opportunity with my blog readers. To maintain the integrity and reputation of my blog which I have been running since 2008, I would not recommend anything that is over-priced, over-valued or in my opinion, not worth to be invested in.

To be transparent to all blog readers, I do accept and receive finders-fees through such introductions like with any property or business transactions. However, I have also received requests from some friends and families to promote their properties which in my opinion are not attractive investments, some of which are priced too "opportunistically" - I do not advertise or blog about these!

I will also accept for a reasonable fee to advertise non-property advertisments though they may be related to property investments such as furnitures, financing, insurance etc as long as they are legitimate businesses. But if the fee is not reasonable, it is not worthwhile to do it.

So, I hope now everyone is clear about this. Thank you.

Middle-income trap makes owning homes near impossible

Can't say I agree or disagree. At the same time, developers are building smaller studio units for investment speculations which attracts a large number of middle income earners. These small studio apartments are even decked with low quality over-priced furnishing making an usually RM200k unit cost RM350k so that developers can price them along middle income speculators affordability.

Meanwhile, developers are still not building affordable family-sized 3-bedroom apartments in prime locations making demand exceeding supply hence driving up prices. Prime locations are reserved for speculative studio sized units only....

Middle-income trap makes owning homes near impossible

By Opalyn Mok and Ida Lim

January 29, 2013

File photo of houses for sale in Kuala Lumpur, most of which are beyond the means of middle-income wage earners.

GEORGE TOWN, Jan 29 — The poor have government-controlled low-cost housing, the rich can have their pick of whichever property they fancy but the middle-income wage earners are left to rent or make do with a remote location when it comes to getting a home of their own.

The latest Property Market Report 2012 has revealed property prices in major cities such as Kuala Lumpur, Penang, Johor Baru and Kota Kinabalu to be well above the affordability of any middle-income wage earner with a take-home pay of less than RM4,000, prompting the federal government to come up with several affordable housing schemes.

In Kuala Lumpur, a single-storey terrace house in Taman Tun Dr Ismail or Lucky Garden is priced above RM730,000 while a similar type of house in the nearby Petaling district is priced above RM378,000.

The solution, according to real estate agent and International Real Estate Federation (Fiabci) committee member Michael Geh, is for potential home buyers to look further away to the outskirts.

“What we have now is a middle-income trap for the average wage earner where they can’t qualify for low-cost housing and yet they can’t afford a comfortable home within city limits,” he said.

Property prices have been strong in recent years with many urban areas experiencing property price increases while newly launched homes are priced above the RM500,000 mark, according to the Property Market Report statistics.

If a house buyer wants to get a home that’s within his means, he will have to either look at locations further from the city centre or get a “partner” as only a combined income will allow for easier approvals of housing loans, said Geh.

“So, either you grab a spouse to apply for a loan based on a joint income or you look further out of the city for cheaper housing and commute to work everyday,” he said.

Geh said there was also a new trend where friends partnered up to jointly purchase properties.

“Many singles prefer to partner up with a friend to jointly buy a house where they stay together as housemates instead of renting,” he said.

But many singles also prefer to rent and live like nomads where they frequently move from one place to another especially when they change jobs, he added.

“This is especially true for fresh graduates who may not have enough income to sustain a housing loan,” he said.

Property auctioneer M. Shanmughananthan echoed Geh’s opinions that it was now very difficult for the middle-income earner to purchase properties, especially newly launched projects in the city.

“There is now a growing phenomenon of investors clubs and they are snapping up these new projects even before they are launched so genuine home buyers will not have a chance to get these properties at the launch price,” he said.

In recent years, the bullish property sector in the country has turned this industry into a commodity worth investing in, spurring the growth of investors clubs.

Property researcher and property book author Ho Chin Soon had said there are now many investors clubs, each with a few hundred members, that advise members on project launches and property investments.

Property prices, while on the increase in urban areas, still remain at an affordable range in the outskirts such as on the mainland side in Penang where property prices in the state are known to be phenomenally high.

A single-storey terrace house on the island may cost upwards of RM500,000 but over on the mainland, in Seberang Perai, it could cost as low as RM90,000.

“House buyers will need to move away from high demand urban areas and look towards the more rural areas such as Juru or other parts of the mainland where property prices are not as high yet,” said Shanmughananthan.

Geh agreed and pointed out that there are still double-storey terrace houses in Johor Baru that are priced below RM250,000. However, this is not so practical for house buyers who prefer to live near where they work.

For lecturer Sandra Chia, all she wanted was to get a place near where she works for easier commuting and convenience, such as apartments in

Tanjung Bungah, Penang, but prices there are above RM400,000 a unit.

Chia earns around RM4,000 but does not have much savings, leaving her unable to buy properties in that area. “I am still staying with my family now but it would be nice to get a place of my own,” she said.

The high prices of properties in Penang have left Chia worried if she will ever be able to afford one and finally move out of the family home.

“It doesn’t look like I’ll be leaving home soon due to the current inflated property prices,” she said.

File photo of condominiums in Bangsar, Kuala Lumpur, most of which are beyond the means of middle-income wage earners.

Another potential house buyer, insurance agent Fakhrul Hizan, could not even get a bank loan for a RM150,000 medium-cost flat in Section 7, Shah Alam, Selangor.

The 27-year-old earns RM5,000 monthly but his loan application was rejected as the bank had calculated his nett income by taking 60 per cent of his salary and subtracting it with his monthly financial commitments of RM1,500.

He said the monthly loan instalments of RM650 would have been manageable, so he was “quite disappointed” that his loan application was rejected.

The loan rejection was probably due to strict guidelines on housing loan applications put in place by Bank Negara since 2012.

While there was no shortage in housing loan packages by banks, bank officer Jordan Chong said the problem was for applicants to qualify for the loans.

Under the Bank Negara ruling, housing loan applicants need to borrow based on their nett income, not on their gross income.

For example, Chong explained, a house buyer may have a salary of RM4,000 but the amount of housing loan he is able to apply for will not be based on that figure.

“We will look at the take home pay, after EPF and tax deductions, and from there, look at his other financial commitments such as car loans, study loans, credit cards and other debts,” he said.

So, in short, a person with RM4,000 gross income could end up with only RM3,000 nett income after deducting his other financial commitments.

“Based on this, he is only allowed to borrow a sum where the debt ratio is up to 70 per cent of the nett income,” Chong said, pointing out that a house buyer with a nett income of RM3,000 can only borrow up to RM270,000 to buy a RM300,000 house and he will need to service the loan at RM1,300 per month for 30 years.

But Chong  said house buyers may now apply for longer loan tenure that stretches up to 35 years, not only limited to 20 or 30 years.

“So, a 35-year-old house buyer is able to take up a loan that he will need to service until he is 70 years old,” he said.

As for whether it was true that it was now tougher for house buyers to get loans, he said this was because of the nett income ruling.

“Some may have a lot of financial commitments so after deducting the other loans they are servicing each month, they may not have much nett income left to borrow against,” he said.

All new house buyers with no existing housing loans under their names are eligible to apply for 90 per cent loans for a new house while those with existing housing loans can only apply for 70 per cent loans.

Due to this, newlyweds, fresh graduates and middle-income wage earners may not only have a hard time looking for properties within their affordability range but they will also have a hard time getting loans to buy their homes.

As Geh puts it, middle-income wage earners are stuck in a trap and perhaps the only way to get a place to stay now was to rent one or try their luck with the recently introduced 1 Malaysia Housing Programme (PR1MA).

Both Geh and Shanmughananthan lauded the federal government’s move in introducing the PR1MA affordable housing for the middle-income group and the My First Home Scheme for young adults to get 100 per cent loan financing.

All individuals or couples with an income of between RM2,500 and RM7,500 can apply for a PR1MA house, which is priced below RM400,000 each unit.

Prime Minister Datuk Seri Najib Razak had announced late last year that 123,000 PR1MA houses will be built throughout the nation including in Seremban, Shah Alam, Kuantan, Johor and Penang.

As for the My First Home Scheme, as at October 2012 only 436 applicants were successful in obtaining financing under the scheme which was introduced in 2011.

Now, Property Investor Clubs... that's interesting...

I wonder if we have enough of this blog's readers to form such a club...

With promise of real estate boon, property investor clubs boom

By Opalyn Mok

January 02, 2013

The number of property investment collectives in Penang has grown by almost 300 per cent in recent years.—Picture by KE Ooi

GEORGE TOWN, Jan 2 ― Property investor clubs charging hundreds of ringgit in monthly membership are sprouting here as those on the hunt for higher yields are putting their money in Malaysia’s real estate market and spurring growth amid bleak economic reports, industry players say.
Property flipping ― a term coined to describe property bought at low prices and sold at a high profit ― appears to be the latest trend among investors, including foreigners, that is helping to lift blocks of buildings off the hands of developers and raise real estate prices.

Property expert Ho Chin Soon said such clubs are a new phenomenon due to rising interest in property investment amid uncertainty in the stock market.

He noted that previously there were only one or two of such clubs, but now there are five to six investors clubs in the country with a growing membership of between 400 and 600 members each.

“This could be due to investors’ perception that property is a legitimate and more stable investment to add to their portfolio,” the director of property information company Ho Chin Soon Research told The Malaysian Insider in a recent interview.

He agreed that, to a certain extent, these clubs could be one of many factors that is fuelling the property industry in the country.

The clubs work by buying properties en bloc from developers ahead of launches and then these offering to members at a discounted rate.

Potential property investors will fork out hundreds of ringgit monthly in membership fee just to get inside tips into the latest property projects pre-launch and opportunities to buy such properties with a bulk discount, said International Real Estate Federation (FIABCI) Malaysia committee member Michael Geh.

“These investors clubs are not only Malaysian-based ones as some are from Singapore,” he told The Malaysian Insider.

He warned that such clubs could create an artificial level of pricing for properties as genuine buyers would have little chance to buy units at the launch price and would have to purchase it from investors likely at an inflated price.

Geh and Ho, however, said the bulk-buying of properties by these investors would not create a property bubble that could burst in an economic downturn.

The duo said they felt the demand from genuine home buyers would be able to keep property prices afloat.

Jeffrey Lam, a partner in Smart Investors Club that boasts over a thousand members including from abroad, said the real estate market here is unlike those in Singapore, Hong Kong or China and still has room to expand with no danger of creating a bubble.

Lam said Malaysia’s property market growth was still in the single-digits and added that the Japanese, Chinese and Singaporeans were looking for opportunities to invest here.

“The demand for properties in Malaysia by home buyers, not only investors, is still strong and that is why more investors are getting into this,” he said.

He said an investor club member could stand to make a profit of a minimum RM25,000 up to RM100,000 for each investment into residential properties and up to millions for commercial properties.

“This is why more investors are going into property investment as the profit is good especially if they invest in the right type of properties,” he said.

Malaysia is seen as a budding real estate player, offering a stable market with good opportunities for opportunistic returns.

The national capital Kuala Lumpur was ranked fifth out of 22 cities with the best prospects in investment and development in the Asia-Pacific, according to the Emerging Trends In Real Estate Asia Pacific 2013 report by the US-based Urban Land Institute and PricewaterhouseCoopers (ULI-PwC), up 17th from last year.

KL gained favour for being “relatively stable but with good potential for opportunistic returns,” the report said.

The ULI-PwC report added: “The long-term prospects for the commercial property market are deemed by many to be strong, due to the success of the government’s Economic Transformation Programme in drawing foreign investment.”

But FIABCI’s Geh said not everyone that joins these clubs are guaranteed high returns. He added that property investment also comes with risks.

“These clubs will hold talks and seminars on property investments and then offer its members ‘special deals’ to buy into pre-launch projects but there are no guarantees that they could sell these investments later for a profit,” he said.

He advised those new to property investments to be cautious and not to put all their savings into the investment.

“Don’t forget, it can go either way just like any investment. If you put RM3 million into a property, you could stand to make a profit out of it later or you may just lose it all,” he said.

(Admin Comment: No-lah, while I agree can make a profit as well as risk a loss, I don't agree with Mr. Geh that you may lose it all... no matter how high you've bought your property, the property still retains some value for future sale even if it comes with a loss, you will never lose everything. Simple common sense...)  

Happy New Year 2013 - from Melbourne Australia

This is my 1st posting in 2013 and I am in Melbourne, Australia. I have been looking at extending my collection to Australia and Melbourne does seem like a good place to do it. Since 2008, I have been observing the market here and watching prices more than double and in some neighbourhoods, almost quadruple. There certainly were no regrets as back then, I don't really have the money anyway and the Aussie Dollar has been on a high over 3x our Malaysian Ringgit. RPGT in Australia is almost 50%, so any gains here would be off-set by tax and currency fluctuations. Nevertheless, Australia remains a good side to invest in for the future, considering the lifestyle, children's education, political stability and growth.

Landed properties, especially those in nice suburbs are particularly interesting and is now my main focus. Previously, I have been looking at apartments, a phenomena which is quite new to Australians and largely due to the influx of Asian immigration here. Just before the new year, Australian newspaper The Age reported that a glut is looming in the city. Here's for an interesting read and I would like to mention the Far East Consortium mentioned in the article below, a Hong Kong-based company that is owned by the owner of our ultra-dense expert, Mayland. It looks like they are exporting this concept to Australia...

City apartment 'frenzy'

December 31, 2012

Marika Dobbin, Jason Dowling

A ''FRENZY'' of apartment towers granted planning permission in one corner of Melbourne's CBD could squeeze thousands of new residents into four city blocks and change the character of the city.

The proposed concentration of developments - many of which include tiny one-bedroom apartments - could see Melbourne follow the lead of Asian cities such as Hong Kong for extreme density, according to a prominent planning academic.

Associate professor in environment and planning at RMIT, Michael Buxton, said: ''It's changing the character of the CBD that people love irrevocably and it's wrecking historic value.'' And property experts fear a glut of apartments could affect property values and rents.

Records from the Department of Planning show 7800 new apartments are proposed for a pocket to the city's west, bounded by La Trobe, William, Bourke and Spencer streets. The area is a microcosm of a citywide trend that began when the residential property market rebounded in 2010, on the back of strong population growth and government stimulus.

 

Within the Melbourne City Council area alone, about 52,000 new apartments in 201 residential developments are in the planning pipeline. However, researchers BIS Shrapnel, Charter Keck Cramer and ANZ have this year warned of an oversupply of apartments proposed in areas such as Southbank and the CBD that could cause property values and rents to fall.

The developments around King Street include Hong Kong developer Far East Consortium's Upper West Side project on the former power station site at 613-649 Lonsdale Street.

Construction has already begun on the first of four planned buildings of up to 176 metres that will have 2543 apartments, with ground-floor shops.

Another ''city within a city'' is planned across the road at the former Age site at 250 Spencer Street, which is being divided up between developers.

Almost 4000 apartments have been proposed for the site, with Southbank developer Central Equity already gaining planning approval for two towers.

Chinese developer Hengyi Australia has started construction of The William at 199 Little William Street, where 547 apartments are planned to be complete by early 2014.

While history shows many projects never get built, some experts predict the market will hit a record oversupply by 2014.

BIS Shrapnel senior manager Angie Zigomanis said it was ''the greatest concentration of new apartment development or potential for new apartment development'' recorded.

He said there would be a cascading effect through the market as CBD landlords find they have little to no capital growth for several years and have to discount rents to attract tenants.

Mr Zigomanis said this would dampen rents and property values in secondary locations, such as Northcote, Brunswick and Preston, which are also seeing an explosion in new apartments.
Professor Buxton, described the trend as a ''frenzy'' that threatened the viability of Melbourne's apartment market.

He said sizes of just 55 square metres for a one-bedroom apartment were common in overseas cities like Hong Kong, but new for Melbourne.

''The attitude of the approval authorities is, the more construction the better. It's a classic boom and bust mentality,'' Mr Buxton said.

''The government sees cranes on the skyline as indicators of progress, jobs and investment but there just is no oversighting of whether this is good for Melbourne, the danger it represents for small investors and the viability of the apartment market.''

Planning Minister Matthew Guy said Mr Buxton's comments were bordering on the offensive.
''The targeting of Chinese developers based on their ethnicity should be of concern to all Victorians,'' Mr Guy said. ''As usual, Mr Buxton's views are reflective of a zero-growth mentality.''
While many of the planned apartments around King Street will be marketed to offshore investors and financiers, some will never get the money to go ahead. Other landholders in the area will on-sell their sites with new permits, without any construction taking place, a common speculative industry strategy.

This will likely be the case for land behind a historic brick building at 640 Bourke Street, between King and Spencer streets. Australia Post, headed by former NAB chief Ahmed Fahour, has lodged an application that would include 560 apartments and just 249 car park bays.
It has tried to sell it four times, but would have more luck selling the site if it obtains a permit.



Read more: http://www.theage.com.au/victoria/city-apartment-frenzy-20121230-2c1hm.html#ixzz2GmN6jdDS

Of particular interests too, read 2500 apartments planned for former power station site

The development, dubbed Upper West Side by the Hong Kong-based Far East Consortium, would lead to 2500 apartments being built on the site of the old Lonsdale Street power station if approved.
Far East bought the site in 2008 and lodged plans with the state government last year to build four towers of between 31 and 50 storeys as well as a low-rise building of six storeys. An application to build a ''display home/marketing suite'' was issued by the City of Melbourne in February.

Read more: http://www.theage.com.au/victoria/2500-apartments-planned-for-former-power-station-site-20100427-tq3k.html#ixzz2GmQGCJ35

and Foreign buy-up flat out

FOREIGN developers have grabbed a 30 per cent share of Australia's apartment market, a trend not seen since the Japanese office and hotel development boom of the late 1980s.
Overseas investors are behind 13,000 apartments in 37 projects across the country. Based on the average number of apartments completed in 2011, that represents market share as high as 32 per cent, research from property group CBRE found

Read more: http://www.theage.com.au/business/property/foreign-buyup-flat-out-20111220-1p3x6.html#ixzz2GmQkHzzR

or Asian money pours into city apartments

Frasers Property, a major Singaporean investor in Sydney's Central Park project on the old CUB site in Chippendale, is one of the largest foreign investors, accounting for 2900 apartments.
The second-biggest investor is Hong Kong's Far East Consortium, which is building 2600 apartments in Melbourne's billion-dollar Upper West Side project on Lonsdale Street. Malaysian, Chinese, Korean and Indian developers are huge investors too.

Read re: http://theage.domain.com.au/real-estate-news/asian-money-pours-into-city-apartments-20111221-1p4in.html

Happy New Year 2013 - RealtyMalaysia Crosses 300,000 Page Views

Just before we hit the clock in 2013, we've had 300,000 page views. We're getting on average about 200 unique visitors per day and over 5,700 unique visitors per month.

Since we began google analytics tracking in mid-August 2012, we had 22,500 unique visitors.

Almost 40% are returning visitors. Thank you all for your support and for reading my babbling. We'll have more in 2013. Happy New Year!

Below RM200k, over 7.5% Rental Yield In Sentul

Nowadays property prices are so expensive and in many cases, in many opinions, over-inflated. So, when a property agent called me up that there is a 3-bedroom apartment in Sentul selling at RM190k, I jumped out of my chair immediately. 

Sentul is a very strategic location. Earlier I had an opportunity to purchase a medium cost apartment here which eventually ended in court. I have always wanted to get something in Sentul and this seems like a good deal.

Menara Orkid is one of the older apartments here very much sought after by the working class because of the affordable rental and having the LRT station close by. All new launches in Sentul, such as Bayu Sentul and all those over in nearby Jalan Ipoh have price tags well over half a million. Pangsapuri Mawar which is close to Orkid is another popular apartment. However, units in Mawar are being transacted now close to or over RM300k in 2012. Mawar is much better maintained, hence the higher price tag. Despite being leasehold, Mawar's prices continue to appreciate at least 10% year on year. 

There is a reason Orkid's prices are much lower than Mawar. It is in a very terrible condition... you feel it straight away as you enter through the very porous security gate.

The only facility here that works, the children's playground appears to be water-logged after last night's downpour...

Then as you enter the building, you find cables just hanging above you. The CCTV appears to be stolen...

And I wonder if the CCTV that still exist is actually working at all...

And many of the covered car park roof slates appear to be missing, probably gone with the winds...

 

Fortunately, as a bit of consolation, the unit I viewed was quite nice. It's a bright little corner unit. The sizes in Menara Orkid are all pretty standard, about 850sf each, 3 bedrooms and 2 bathrooms. 

In fact, one of the rooms is this hall which can be converted into a bedroom, utility or dining. The condition is however not fantastic. The bathroom appears to be leaking and a pretty common problem with apartments is the leaking from the unit above. This is usually a very shitty problem to solve because you'll have to get the owner of the unit above to fix it and many are reluctant especially with these low or medium cost units, they don't tend to have money to do anything about these things.

The basic condition of the unit means one can do whatever to suit ones taste. 

It also has quite a nice view. From the balcony, there is the KLCC twin towers view.

 

And from another corner, the Genting hills can be seen with the Sentul LRT station. This is however not the nearest LRT station. There is another one closer to this apartment.

A 3-bedroom unit here can fetch at least RM1,000 rental per month. Some with longer term tenants are renting much lower but that's because most of these are from 1st owners who probably bought them years ago for less than RM100k. Maintenance fees are cheap, below RM100/month for those who bothered to pay at all.

And just as I was walking away from the unit I just viewed, I spotted this one which looks like it was on fire only recently. 

But that did not discourage me. Just as I was going to make my offer, the idiot estate agent told me it is a Bumiputera unit! He seems to insist that there is no problem for me to purchase it but I am totally not convinced. What a waste of my time!

At best, this unit value is less than RM160k - to be transacted between Bumiputera's only. There are non-Bumi units being advertised in the classifieds today between RM200k to RM270k. On second thoughts, I wouldn't want to put my money where I will have to deal with so much frustrations with difficult neighbours, bad management and probably very challenging to collect rental from these type of tenants too.