Area Focus
Wangsa Maju
Datum Jelatek:
Bridging of Urban Living
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CONTENTS ISSUE 70
20
ISSUE
06 Ί
Post Moratorium: The Next Revival of Property Industry
AREA FOCUS
10 Ί 24
Steady growth in Wangsa Maju
PROJECT OF THE MONTH
20 Ί
Datum Jelatek: Bridging of Urban Living
DEVELOPMENT OF THE MONTH
24 Ί 46
Bandar Sri Sendayan: A Self-sustained Township
FEATURED PROPERY
40 Ί
Setia Eco Templer: Homes to quality living
STRATEGY
50 Ί
Pros and Cons of Subsale House
EDITORIAL
EDITORIAL Editor-In-Chief Dato’ KK Chua kkchua@propertyinsight.com.my
Time flies and it is already December. This means we only have merely a month to close the chapter of 2020.
Writer Nasuha Badrul Huzaini Amy Wong CY Lim Farah Waheeda Md Amin
Undoubtedly, with Covid-19 around, we are still facing uncertainties in the market and industry be it locally or globally.
CREATIVE
Many industries are slowly recovering after being badly hit with the pandemic although the process may take up some time before everything can be back to normal again, suffice to say, only when the vaccine is discovered.
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BUSINESS DEVELOPMENT Sales & marketing enquiries support@propertyinsight.com.my +6012 3788 683
Recently, Bank Negara has announced the second quarter Growth Domestic Product (GDP) which saw a contraction of 17.1 percent because of the Covid-19 Movement Control Order (MCO) imposed through the three-month period. The implication can be seen immediately with the number of unemployment rates increased, companies stop hiring to save money and many employees being laid-off.
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However, there is a bright side of a story in property market. The property market is seen to be coming back following the spillover from the stock market. Currently, there are a lot of liquidities happening in the market, so be wise and grab the chance whenever you can. 2021 will definitely to be a better year.
DATO’ KK CHUA EDITOR-IN-CHIEF MANAGING DIRECTOR
ON THE COVER
HOMEVEST CAPITAL INNOVATING HOME OWNERSHIP FOR EMPLOYEES
Although every reasonable care has been taken to ensure the accuracy of the information contained in this publication, neither the publisher, editors, writers nor employees or agents can be held liable for any errors, inaccuracies and/or omissions. The contents of this publication do not constitute investment advice. It is intended only to inform and illustrate. No reader should act on any information contained in this publication without first seeking appropriate professional advice that takes into account their personal circumstances. We shall not be responsible for any loss or damage, whether directly or indirectly, incidentally or consequently arising from or in connection with the contents of this publication and shall not accept any liability in relation thereto. The views by our contributors expressed here are their personal opinions and do not necessarily reflect Property Insight’s views. The publisher does not endorse any company, organisation, person, investment strategy or technique mentioned in this publication unless expressedly stated otherwise. The publisher does not endorse any advertisements or special advertising features in this publication, nor does the publisher endorse any advertiser(s) or their products/services unless expressedly stated to the contrary. All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying and imaging without the prior written permission of the publisher.
| DECEMBER 2020
3
NEWS
VACANCY TAX...
YAY OR NAY? BY NASUHA BADRUL HUZAINI
M
alaysia has been facing a property glut with regards to unsold units for quite some time and according to data from The Valuation and Property Services Department (JPPH Malaysia) in 2019, there were 30,664 overhang units worth RM18.82 billion recorded in the country. This situation has prompted the government to impose Vacancy Tax to the developers in a move to curb the unsold properties problem. Housing and Local Government Minister, Zuraida Kamaruddin recently told the Dewan Rakyat that the country was facing a property glut because the properties were priced beyond the affordability of most Malaysians. Hence, the idea of implementing Vacancy Tax came about and she told that the proposed tax to be imposed on developers was for properties priced over RM500,000. The formula of how the tax will be imposed is still unclear as there is no definite decision on the matters yet.
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However, many industry players are against the proposal for various reasons. Malaysian Institute of Professional Estate Agents and Consultants (MIPEAC) deemed such legislation as ineffective to solve the overhang issue and due to its untimely implementation, when the property market is weak and impacted by the Covid-19 pandemic, the move will further erode the property market and the economy. MIPEAC president, Francis Loh said the Vacancy Tax as proposed by Zuraida is to be imposed on unsold units by developers. “While generally, Vacancy Tax in other countries refers to levy on units that have been sold by developers and owned by the public, unoccupied. In Canada, Australia, China, France and Singapore, Vacancy Tax was implemented with the objective to make more housing available to the public and to curb speculation. “But we in Malaysia do not have the same problems. Malaysia needs more foreign
investment, so a Vacancy Tax will be counterproductive,” he said in a statement to the media. Meanwhile, Chris Tan, Managing Partner Chur Associates opined that he was not sure if the Vacancy Tax is the right solution to address the affordability issue. Tan said the tax will have a long-term impact on the general property value moving forward. “As we understand from the Minister’s statement, it is only intended to levy on “unsold properties” of property developer after a certain holding period from completion, and not on landlord with vacant properties. This could just be an exercise to just pass on the “hot potatoes” to avoid taxes. “It is only considered as a good move if it is to address both the “unsold properties” and “vacant properties” and that its application must be prospective to allow the Property Developer and the Property Investors to plan ahead. “Selective execution on unsold properties and
MIPEAC president, Francis Loh
Managing Partner Chur Associates ,Chris Tan
retrospectively would be wrong move. There is an unanswered and lingering question on the utilization of the tax collected, it should be channeled back into addressing the housing need of the country. “With the tax targeted to the developers, somehow it is possible to expect that certain amount will be passed on to the buyers and causing the property price gets higher. “Property Development is generally a
private business venture motivated by profit and influenced by supply and demand,” he told Property Insight. Chief Operating Officer of Sharefer, Nick Tan shared his view on the proposal, and he said the tax will not help to solve the unsold properties issue but instead raised prices. “Actually, the government can control the unsold properties issue by not approving so many project applications and justify the property
prices before giving approval to the developers. “The issue does not only happen because of the developers but also the authority who approved the project in their locality or municipal itself. They should evaluate the project and write granting approval to the developers,” Nick said. Given the objections from the property industry players, the Government is advised to find a better solution that is more suitable to address the unsold properties issue.
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ISSUE
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| DECEMBER 2020
POST MORATORIUM: Next
THE REVIVAL OF PROPERTY INDUSTRY BY NASUHA BADRUL HUZAINI
T
he government via Bank Negara Malaysia (BNM) has imposed an automatic moratorium back in March amidst Covid-19 to offer relief to those who are likely to be affected by the global pandemic. The efforts by banking institutions were aimed to assist individuals, small and medium-sized entreprises (SME) and corporations to manage the impact of the Covid-19 outbreak. By imposing the automatic moratorium, banking institutions will offer a deferment of all loan and financing repayments for a period of six months with effect from 1 April. While the move has been applauded upon and being regarded as one of the best decisions made by the government to the people, most of them still baffles on their financial flow and the ability to repay their loans after the automatic moratorium ends on 30 September 2020. Their worries should not be neglected as the country is still fighting Covid-19 and we are still far from winning the battle. Noting the hardships that will likely happen, recently, the Prime Minister, Tan Sri Muhyiddin Yassin has announced the measures to provide a targeted extension of the moratorium and repayment flexibility to individuals and SMEs who continue to be affected by Covid-19. The three months targeted extension will take effect starting from October 2020 till December 2020.
Group Managing Director of CBRE|WTW, Foo Gee Jen said the government and BNM have rightfully stepped in by granting an extension of moratorium which he regarded as ‘sensible and necessary’ announcement. Group Managing “The announcement unveils a Director of CBRE|WTW, Foo Gee Jen moratorium extension targeted at individuals who lost their job amidst the pandemic “Meanwhile, individuals who suffered a pay cut amidst the pandemic will entitle a rebate in their instalments in correspondence to the amount of salary loss. For hire purchase, banks are encouraged to allow for renegotiation of longer repayment term. Besides that, to help keeping SMEs afloat, they will be offered the options of interest servicing and restructuring of repayment term. “Coupled with the downward revisions of OPR, the moratorium extension to individuals will inject the much-needed stability to the housing market as it essentially downplays the risk of default. This will mitigate forced or panic selling that could further distress the property market and restore certainty in terms of value for both the secondary market and the value of property in general. “In a nutshell, the targeted extension of moratorium provides the breathing space for individuals who hold assets and cost of doing | DECEMBER 2020
7
ISSUE
Dr Victor Gan
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business for SMEs. Together with fiscal stimulation, this is a step in the right direction to revitalise consumption and investment activities which will ultimately keep the economy rolling,” he said. A seasoned property investor, Dr Victor Gan opined that from a real estate investor and businessman standpoint, the extended moratorium is certainly welcomed as it will provide temporary relief to the borrowers and provides the much-needed liquidity crunch for his businesses. “Based on the sentiments on the ground, most businesses have resumed some normalcy in business operations. Thus, I feel that most of the loan borrowers will be able to service their loan this coming October. “Nevertheless, there will be a group, especially those in tourism and airline sector who will find themselves in a quandary. “As to how it will impact the property sector, there will be a tsunami of properties force into the auction market in the last quarter of this year. People who have over-leverage will be at most vulnerable once the loan moratorium ends. | DECEMBER 2020
“If you are an investor, you can expect to be able to pick up good deals beginning this last quarter of this year,” he told Property Insight in a recent interview. When asked about the growing possibility of properties being auctioned after the moratorium ends, Dr Victor said the occurrence is possible. “The auction market is already heating up and once moratorium ends, it will be very interesting to see “value buys” flooding the market. Just recently I saw a 1,936sf non-bumi unit in Sfera Residence being auctioned for only RM472,000. I expect to see more interesting auction properties in months to come,” he said. Delving further into the topic, he said if the condition persists, certain property buyers will be badly affected. “For property buyers who have over-leveraged, it is hard for me to say this but probably, they are going to lose everything. The flooding of properties in the auction market will result in the devaluation of the development if too many properties from a single development is found on the auction market. “In short, this perceptible devaluation will be localized to only developments with massive amounts of units in the auction market. Hence, in general, the real estate market in Malaysia will still be stable,” he said. Meanwhile, Chief Executive Officer Smart Financing, Gary Chua commented that there will be an increase on the number of properties
being auctioned depending on how soon and well businesses and the job market rebound. “I foresee there will be an increase in nonperforming loans that will lead to more properties to be put up for auction in the near future. However, the impact will not be instant as it takes nearly 1 year for the bank to process legal action towards the defaulters. “This might result banks to be more selective in approving home loan applications in the future due to decrease in people earning fixed income,” he said. Commenting further on the local property market, he said that even before the pandemic, the property market sentiment is already weak with oversupply and tight lending guidelines by the banks. “Although the overhang properties have reduced, it still persists, weaken the industry. However, the PENJANA stimulus package worth RM35 billion (HOC & RGPT waiver) announced by the Prime Minister, has helped to boost up our local property market. “On top of that, some developers have started to give more offers and incentives such as cashback, discounts, or rebates, instalment payment plans, and free furniture and electronics to attract the buyers. “However, we have yet to see the effect of the
government plans as of now. If these plans failed to address, there are expected to worsen the property market with cheaper property may be available for qualified buyers due to price drop and increase of auctioned properties after the loan moratorium period ends. “Furthermore, according to Real Estate and Housing Developers Association, economy may be badly hit as property development drives the economy of a country and is a major contributor to growth and source of wealth creation,” he said. To sum it up, Gary said that the property sector provides significant contribution to a country’s gross domestic product (GDP) and growth. “If the local economy continues to weaken, many people will start losing homes or even announce bankruptcy, resulting in various social problem such as increase in poverty, homeless people, beggars, or crime rate. “Nevertheless, the government has also given great help to the people on top of the stimulus packages mentioned above. They have initiated the automatic loan moratorium for 6 months and this initiative has definitely helped everyone especially those who are affected as they could have lesser burden during the said period. “All in all, I would say that the local property market will, rebound and grow further. More activity is expected due to the re-introduction of
Chief Executive Officer Smart Financing, Gary Chua
the Home Ownership Campaign and incentives provided to stimulate the market,” according to Gary.
Automatic Moratorium
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AREA FOCUS
STEADY GROWTH IN
WANGSA MAJU W
angsa Maju is a location I frequented a lot when I was in my early 20-s because my friend lived there and we always went on a food hunt especially at the Sri Rampai night market, looking for its famous ‘apam balik coklat’. I vividly remember when I was introduced to the area, I was stunned by its close distance from the city centre and during non-rush hour drive, we can easily reach the city centre within 15 to 20 minutes. Based on a search via Google Maps, it shows that the distance from Wangsa Maju to Kuala Lumpur city centre is approximately in the range of 7.6 kilometres to 10.5 kilometres, depending on which route we choose. In this edition, Focus Area will zoom in to Wangsa Maju to know more about the area which currently is welcoming major on-going
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developments that contribute to enhancing the socio-economy aspects for its residents. Wangsa Maju is surrounded by Setapak, Taman Melati and Gombak districts in Selangor and it has becoming one of the largest townships in Kuala Lumpur. It is one of the constituencies under Federal Territory of Kuala Lumpur and the local authority is governed by Dewan Bandaraya Kuala Lumpur (DBKL). The township also consists of many sections namely Section 1; Section 2; Section 4; Section 5; Section 6 and Section 10.
PRESENT DEVELOPMENTS Over the years, this piece of land has witnessed major developments within the area with various investments made by prominent developers such as Sunway Property; Beverly Group and Beneton
Properties Sdn Bhd. The presence of the said developers can be attributed with the cognizance they had on the potential of future value appreciation that lies in Wangsa Maju. According to Propertyguru.com.my, the latest development that is happening in the township is Sunway Avila, which also marks Sunway Property’s maiden foray into Wangsa Maju and it sits on 4.34 acres of freehold land. The two-towers mixed development comprises of 810 serviced residences and 30 stratified retail shop is slated for completion in 2023. Other than that, a joint development between Beverly Group, Maple Tree and Lai Sun known as Henna Residences is also under construction. The development was launched in 2018 and encompasses four towers of 39-storey condominiums with 653 units
altogether. It is slated for completion in 2021. Property Insight reached out to Kit Au-Yong, a registered Valuer, Appraisers, Estate Agent and Property Manager with the Board of Valuers, Appraisers, Estate Agents and Property Managers Malaysia to get his view on Wangsa Maju. According to Au Yong, in terms of residential market, Wangsa Maju is a mid-range neighbourhood community with many terraced houses, apartments and condominiums sprouting up for the last 10 years. “Average price of a terraced house was transacted at the range of RM650,000 up to RM1 million while nearby semi-detached house in the periphery area in Ukay was transacted at RM1.5 million to RM2 million. “As for high-rise condominiums and apartments, sizes varied with a condominium presented with slightly above 1,000 sq ft unit with
“
Prices of landed houses such as terraced houses grew about 80 percent to 100 percent range - Kit Au-Yong
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AREA FOCUS
prices at RM300 to RM400 per sq ft whilst the apartments with sizes range from below 1,000 sq ft was sold at RM239 to up to RM350 per sq ft, depending on the location,” he elaborates. Delving further into the topic, Au Yong says, the prices for properties within the perimeter had seen steady growth over the last 10 years. “Prices of landed houses such as terraced houses grew about 80 percent to 100 percent range. As for high-rise segment, the apartments have recorded an increase of about 100 percent, most probably attributed by the rapid development in the area with the additional number of population and better infrastructures that subsequently generate better demand for the location. “In general, with mid-range market segment demand, market players tend to be positive to this area due to better infrastructures built up and this encompasses Light Rapid Transit (LRT) connection and large size of student populations. “With the presence of the students, it helps to create continuous demand and interest of young adults for their first property purchase,” says Au Yong. Based on a search from the internet, there are many educational institutions in Wangsa Maju and Setapak area such as Tunku Abdul Rahman University College, Institute of Childhood Education-Studies & Community Education, 12
| DECEMBER 2020
VTAR Institute, Malaysian Institute of Art, Daesin Academy of Art and AlDiwan International Centre for Teaching Arabic. Apart from that, Wangsa Maju also boasts its comprehensive education facilities including various primary and secondary government schools as well as the establishment of international school such as Fairview International School. According to Au Yong, although Wangsa Maju is known for its maturity, the area still have a room for more potential in the longer term with some pocket land development and redevelopment. “We can expect more ‘repositioning’ of the location or address with more malls coming up and this may drive in more than the affordable market which has been always associated with Wangsa Maju Area as it was traditionally perceived as a mid-range location,” says Au Yong who is now heading a boutique property consultancy firm known as Asiacap Valuers & Property Consultants Sdn Bhd.
MORE PARKING SPACES SHOULD BE PROVIDED Property Insight also managed to get the Chairman of Section 10 Residents Assiociation, Mohamed Salehudin bin Saidon to tell more about the area and what are the issues they had as
well as what they hope to achieve in the area. According to Mohamed Salehudin, Section 10 area started to welcome its early residents in 1987 with the construction of 34 blocks of 5-storey lowcost flat. “It is estimated that today, the population grew to more than 30,000 residents and we have seen significant changes in terms of the development in the area. Back then, the view was only about lowcost houses and wide area of greeneries, but that period has passed because now, Section 10 hosted thousands of modern new houses and some to the extent of luxurious residences in the skyline of Wangsa Maju. “Other than the residence’s development, the area also is now equipped with array of highway such as Duta Ulu-Kelang Expressway (DUKE). In terms of traffic flow, just like any other parts in the city, the traffic is bad in the morning because of the movement where everyone headed out to the city for work,” he says. “With the increased number of total residents, various issues arise with the main issue that we are facing now is the lack of parking spaces in Section 10. With the completion of newly constructed high-rise condominiums, the issue is getting worst. Some of the residents are taking the easy way out and just park their cars by the main roadside. We also have severe cases where they intruded
an area which was allocated for the residents of low-cost house. “Therefore, as someone who is selected to represent the residents in Section 10, I would like to urge the developers to think of this matter seriously as it is not something that can be taken lightly. We noticed that the number of accidents happened between a motorcyclist and car driver has also increased in the recent years. One of the reasons was because of the car which was parked along the road shoulder had blocked other driver’s view. There was also incident like a bus cannot passed through a junction because the car’s owner irresponsibly parked their car as they like. “By hook or by crook, they are responsible to provide an ample parking space to its residents. For every unit they build, they should provide at least two car parks. It is very illogical for them to provide only one car park space in this modern age,” he tells Property Insight.
PUBLIC AND PRIVATE FACILITIES SURROUNDING WANGSA MAJU 1) SHOPPING MALL • Setapak Centrel Mall • Aeon Alpha Angle • Melawati Mall • Aeon Big • Wangsa Walk Mall
2) MEDICAL AND HEALTHCARE FACILITIES • Hospital Wanita Dan Kanak-Kanak Naluri • Hospital Angkatan Tentera Tuanku Mizan • Rampai Puteri Medical Centre Klinik Kesihatan Sri Rampai • Damai Service Hospital • Columbia Asia Hospital
3) GOVERNMENT SERVICES • Jabatan Pendaftaran Negara (National Registration Department)
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COVER STORY
Home Ownership Program for Employees
H appy Employees. O utstanding Performance. P roductive Culture. E nhanced Loyalty.
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UNLOCKING VALUE FOR PARTNERS & HOMEOWNERS BY NASUHA BADRUL HUZAINI
A
progressive and innovative company, Homevest Capital has already made significant impact in the marketplace through its businesses revolving around property investment & management. Yet it is just the beginning. They are now venturing into development to further pursue their mission of making home ownership available and accessible to everyone. Through different offerings, they offer convenient and easy solutions for first time buyers to own their own homes as they seek to go the extra mile to empower every homeowner and tenant. The visionary and ambitious traits of Homevest Capital founder and Chief Executive Officer (CEO), KY Lim has prompted him to expand his venture in the local property market. Taking a walk down memory lane in an exclusive interview with Property Insight, KY shared that previously, KYY Empire was focusing on property investment and management solutions and just like any other new start-ups, they also had a humble start with only 10 investors, four years ago. “We have gone through a rebranding exercise in 2020, from what it was formerly known, KYY Empire in 2016. The decision for a rebranding exercise came about as we wanted to diversify our business portfolio, from investment and management into development. This rebrand allows us to accurately captures who we are and what we want to do as a company. As we grow bigger, we are expanding our target audience from Business to Consumer (B2C) to Business to Business (B2B) to help empowering the big
Homevest Capital believed that Homeownership is the ultimate employee recognition hence we offer very convenient and easy solutions for first time home buyers to own their home - KY Lim
corporations and Small Medium Entrepreneur (SME) to reward their employees.” They believe that this expansion will allow Homevest Capital to seek for more innovative business models and out-of-the-box solutions which can deliver outstanding value to their
partners and customers. “Currently, we are managing projects in Klang Valley and Johor Bahru and we aim to emerge as a trustworthy and innovative property investment, management and development brand in the country.” THE BEST PROPERTY MANAGEMENT IN KLANG VALLEY Property Insight was made aware that besides Homevest Capital as the main company, the duo also established their own property management arm under Homevest Living. As we speak more on the business, the co-founder and Managing Director, Marcus Low explained that the subsidiary company has been recognized as the recipient of Best Property Management Award from Property Insight Prestigious Developer Award
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COVER STORY (PIPDA 2020). “Getting yourself a home to rent can be quite hassle because usually, as a tenant, you will be clouded by uncertainties on whether you can find a good landlord, a house equipped with good amenities and most importantly, a good housemate. “Hence, Homevest Living is here to create a co-community living experience to our clients. We have implemented multiple ways to rebrand our properties and one of them was to segmentize it to short stay like AirBnb or for a long stay such as rent-out unit. However, in the previous years, we noticed there was a new trend in the market and that was how the idea of community living came about. “We realised that back in the years, a lot of fresh graduates and young professionals could not even afford the deposit payment for an entire unit rental and these peoples need a place to stay. Therefore, this was the reason why we came out with the concept of room to room rental to solve their problem because we want to make rental becomes more affordable especially to our clients. Adding on to that, Marcus said, other than making the rental affordable within a range of RM450-RM900 per month, Homevest Living also offers various services which are essentials to their tenants, such as Wi-Fi and cleaning services. “We provides free Wi-fi and free utilities for our clients to enjoy and since this is a coliving concept, usually no one will really take charge of the hygiene and cleanliness of the space, hence we provided our own weekly housekeeping services for free. All of these will be handled by our professional team. On top of that, all our units are fully furnished with a touch of a professional designer, to make sure that our tenants will not feel alone staying away from home,” Marcus explained. Furthermore, Marcus said they have also created a unique programme to help first time home buyers’ transition from renting to owning a home. “This allows our tenants to convert their rental amount into downpayment after 1 year of renting with us. They may use this as ‘Homevest Living Credit’ to purchase their property of choice through us. This way, renting with us is like a guaranteed savings scheme which helps them to secure their first home with the help of Homevest Capital,” he said. Noting the hardships that many of us are
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facing in this pandemic time, Marcus said that Homevest Living has introduced new featured for any potential tenants who wish to rent their unit. “These tenants can check-in to our unit with zero deposit and no additional clause and cost will be incurred on them. This is the time we are giving back to society as we noticed that the demands for room rental are getting higher these days, presumably because people cannot afford to pay for a home rental. The new benefit was created to help the market during this pandemic,” Marcus explained.
H.O.P.E: EMPOWERING EMPLOYEES TO OWN HOMES Homevest Capital is the first one stop property solutions company in Malaysia to offer corporations and SMEs Employee Home Ownership Programme, known as H.O.P.E (Home Ownership Program for Employees). This program enables employers to empower their valuable employees to own their own homes. According to Marcus, the program has created huge success for the company
as H.O.P.E is regarded as property welfare for the employees. “We did our study to a few renowned companies in China such as Alibaba, Huawei and they were taking an approach where they bought properties in bulk to reward their best performing employees. We realized that this is a very powerful tools as it is not only to help the employees achieve their dreams of owning a house but also it can be helpful to the employers to retain their good staffs. “By rewarding them a chance to be the house owner, it will help to attract more talents as well because you are giving values to more people. And for us here, we are not limiting this exemplary program to our circle only, but we do expand it to other third-party employers. “Homevest Capital knew that this service may be quite costly and time-consuming, hence we take this opportunity to offer them this program,” said Marcus. Through the program, no cost will be incurred by the employees up to three years from Vacant Possession (VP). The employees can have their peace of mind as they don’t have to pay any downpayment; the progressive interest during construction period; installment for the first 3 years from VP; SPA legal fees and disbursement, Memorandum of Transfer fee and also maintenance fee. A NEW UPRISING DEVELOPER FOCUSED ON COMMUNITY LIVING Homevest Capital is confident in pursuing their plan to venture into property development segment from a property management company despite the tough times that we are currently in. To this, KY told that the company has put various strategies in their planning, therefore they can differentiate themselves with the existing industry players in the market. Delving further, he shared that one of their property development criteria must be in a strategic location with great accessibilities and equipped with public transportations. “We have the vision to develop a dynamic, innovative and smart community lifestyle spaces for young professionals and first-time home buyers. We will ensure the houses that we develop fall under the range of affordable price thus fulfilling our quest to cater to the first-time home buyers’ market. Supported by comforting prospects, KY opined that this is the perfect time for Homevest Capital to source out for a
strategic piece of land for their first property development project. “With the current market condition, many major developers are slowing down their pace and carefully launch their new projects to sustain the cash flow. Some may go to the extent of liquidating or letting go certain development projects which belong to them. “I think this is timely for us to enter the market as we are able to negotiate for a more competitive price. We are glad that our properties are not located in the highend areas which are mostly rented by the expats. Our properties are conveniently located in business districts and working-class neighbourhood, and as long as people are going to work, they will need to rent a home. “Furthermore, the next five year is said to be the buyer’s market, and this would encourage more home ownership among the first-time buyers. We also believe that the proposed full stamp duty exemption for the Memorandum of Transfer and loan agreement worth up to
RM500,000 in Budget 2021 would also further stimulate both primary and secondary property markets in the country. “Affordable home is going to be critical in years to come and in our quest to ace the segment, we need to be aware of the upcoming supply and the current status of overhang units. Malaysia is considered as a young nation, and the millennials will be one of the most important demographics that needs to be catered. Hence, we need to pay attention on their needs,” explained KY. He added that they also foresee the way people work is slowly innovating whereby currently, most of us are working from home, at any time, due to the Covid-19 pandemic. Homevest Capital also decided to execute the concept of Co-Living Space and Co-Working Space in our development projects. “The purpose of Co-Living space is to allow a vibrant environment between people from diverse background, culture and experience to exchange ideas while the Co-Working
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COVER STORY Space enables people to work together in a common area to create strong communities and adding greater value to everyone within the community,” he said. When asked about the target buyers that Homevest Capital will be focusing on, KY said that their prospect audience would be mainly from first-time home buyers. “Most of the individuals in this category are young working adults and we aim to help them owning their first home with a minimal investment. Subsequently, we will manage and rent out these properties to
generate higher rental yield,” he explained. UNLOCKING VALUE THROUGH INNOVATION The year 2020 is deemed as a bleak year due to Covid-19 pandemic and most of us could relate the obstacle and hardships which befell many industries not only in the local market but also globally. Despite the slowdown of the economy and sluggish property market, I am curious to know what drove these young leaders to take such a bold step in such a challenging time? To this, KY answered that they have a sustainable business model which works well in spite of tough economic situation.
Being an Entrepreneur with a y oung team, I know that many young adults work tremendously hard to own a home. Yet being a Property Market veteran, I know that owning a home comes with it s own set of challenges - high costs, documentation, management and many more. Homevest addresses both of these issues by enabling employers to empower their staff to own their first home, and at the same time makes the process simple and profitable for them.
Dato’ KK Chua
Founder of Entrepreneur Insights and Editor-In-Chief of Property Insights
These thoughts go through my mind everyday - How can I give my employees a bright future? How can I empower to them to raise their quality of life? H.O.P.E program answered those questions by allowing me to provide m y employees good staff welfare and a stable future. My s taff felt valued, appreciated and proud as we brought them to select their property.
Shane Mun
Founder & CEO of Vimigo
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“Firstly, everyone still needs a home, and we have a specific target market which is to tackle the young working adult category. Those who fall under this category need to have a house by either renting it for short stay or living in for long stay purposes. Hence, Homevest Capital property management division is still operating at above par of occupancy rate. “Secondly, most of our properties are located close to business districts, therefore the properties are getting occupied very quickly. “Other than that, again, we are very confident in our H.O.P.E program which we believe will be able to ensure the sustainability of our business, mainly contributed by the values that we provide to both the employers and employees,” KY said. In terms of daily operation, Homevest Capital did not encounter any difficulties to carry on their usual working routine as the company had implemented automation and digitalization process even before the Covid-19 outbreak. “We use digital documents, and our employees can easily access their documents at any time from our server. This has been a great help especially during the Movement Control Order (MCO) period where it enables many of us to work from home, conveniently. “For business operation, we are actively working with various partners and many others to increase the visibility of our operation. Apart from that, all of our property viewing is conducted through online so that we can limit the physical contact between the potential customers and our employees,” he concluded. Undoubtedly, for many of us, one of the dreams that we have in our lives is to own a house despite all sorts of challenges that we must go through. Home ownership also comes with sound financial as well as job security. If the combination of these two aspects can be secured, home ownership process can be of less hassle and we can hold to the mid and long-term game plan. Eventually, we can see the big chunks of value appreciation in the near future.
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PROJECT OF THE MONTH
"Artist's Impression"
DATUM JELATEK THE EPITOME OF URBAN LIVING 20
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"Artist's Impression"
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atum Jelatek, with a gross development value of RM1.2 billion, is a integrated development that comprises 712 luxury residential units, a 3-storey retail mall and direct access to the LRT.
1ST SKY RING BRIDGE Presenting the first sky-ring bridge in Malaysia, Datum Jelatek presents the epitome of urban living where connectivity is paramount and lifestyle options are just within an arm’s reach. In addition, it is directly connected to Jelatek LRT Station with 35 meters link bridge, which enables the residents to commute without much hassle.
STRATEGIC LOCATION Standing tall amidst the hustle and bustle neighbourhood of Jelatek, this iconic development is well connected to major highways and roads such as Ampang-Kuala Lumpur Elevated Highway (AKLEH) , Middle Ring Road 2 (MRR2), DUKE and the upcoming Setiawangsa Expressway (SPE), Sungai Besi-Ulu Kelang Expressway (SUKE), Jalan Ampang and the main nerve of Jalan Tun Razak. Datum Jelatek is the ideal place to savour city living. Surround by a host of conveniences, the development is just a stone’s throw from various reputable private and government medical amenities such as Gleneagles Medical Centre, HSC Medical Centre, Prince Court Medical Centre, Twin Towers Medical Centre, KPJ
Ampang Puteri Medical Centre and Hospital Kuala Lumpur. Apart from that, other amenities include numerous well-known international schools which located within 5 kilometres away from Datum Jelatek. That include Fairview International School, Sayfol International School, the International School of Kuala Lumpur, Mutiara International School, and Eaton House International School. Sits strategically in the heart of city centre, Datum Jelatek is also surrounded by various shopping hotspots such as Great Eastern Mall, Ampang Point Shopping Centre, Suria KLCC, Avenue K, The Intermark, AEON AU2, Pavilion Shopping Mall, and Wangsa Walk Mall, among others.
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PROJECT OF THE MONTH Conveniently, recreational and leisure parks within close distance are The Royal Selangor Golf Club, Darul Ehsan Golf Course, KLCC Park and National Zoo. Datum Jelatek also shares an excellent location within prestigious Embassy Row, enjoying the superb surrounding neighbourhood, MNCs, and the upcoming KL City largest financial hub TRX. SPACIOUS PRACTICAL LAYOUT Experience the urban splendour at Datum Jelatek, the elegant residences with built-up sizes ranging from 550 sq. ft. to 1,660 sq. ft., comprises of studio, 1 bedroom, 2 bedrooms and 3 bedrooms layouts. Datum Jelatek's extraordinary spacious and long balcony design brings you the experience of practical living with the fascinating view from the comfort of your own home. Experience the luxury lifestyle complimented
"Artist's Impression"
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with stylish and quality interior fittings. A striking façade in the middle of the bustling city of Kuala Lumpur. Be a part of Kuala Lumpur’s skyline while enjoying the finer things of life. PREMIUM FURNISHING Each individual unit is equipped with partial premium furnishing, which makes it easier for the residents to complete the unit with only loose furniture and interior decor. Premium furnishing listing includes full top & bottom kitchen cabinet, cooker hob & hood, 2-in 1 microwave oven, refrigerator, 2-in 1 washer dryer, air-conditioning for all rooms, wardrobe for all bedrooms, hot water storage for all bathrooms and Smart Home Community Apps ready. This development is secured with 24 hours 6 tiers security surveillance, where each home also comes with an exclusive Digital Door
Lock at the main entrance with 3-in-1 features. ADMIRING 360-DEGREE VIEW Designed to provide wholesome urban living, Datum Jelatek offers a host of exciting and modern high-end facilities at Level 11, Level 27 & Rooftop of which Malaysia's first sky ring bridge at level 27 which would be the prime spot of the residents to kick back and enjoy the magnificent view of mountain greeneries and Kuala Lumpur city center without obstruction. To name some of the facilities available at level 11 are Olympic length swimming and wading pool, Half basketball court, Synchronized Water Fountain, Zen Reflexology, Climbing wall, Putting Green, Parcourse, Zen Nodes, Collection of Aromatherapy plants, Collection of Ornamental plants, Collection of Ecological plants, Children’s
"Artist's Impression"
"Artist's Impression"
playground, Gymnasium, BBQ Area, Retreat Pavilion, Water Cascade, cabanas and so on. The fascinating facilities at level 27 are the symbolic 360° Sky Ring Bridge, Aerobics Studio, Outdoor Dance Studio, Outdoor Exercise Deck, Theatrette, Outdoor Chess Game, Pebble wash path, Private Alfresco Lounge, Reading Alcove, Library, Interactive Games Lounge and etc. Individual cabana and additional BBQ area is similarly available at the rooftop of each tower to facilitate the residence. AWARDS & ACCOLADES The development was honoured with several award and of these prestigious accolades is the Silver Green Building Index (GBI) rating, granted for the many ways of green living that was incorporated into the design. In year 2016, Datum Jelatek was awarded Best Mixed-Use Development and Best Mixed Used Architecture Malaysia Award as well as Best Residential Renovation/Redevelopment Malaysia in year 2013 by Asia Pacific Property Awards (APPA) and Most Iconic Design of the Year by Malaysian Reserve Editors Choice Property Award 2012 which makes the development a must own property choice. According to property experts, the buyers are encouraged to buy a property now as it is the best time to do so. This is due to the facts that many
developers would want to remain competitive by offering the best of the best deals to the buyers and in the same time, they also see higher demand to purchase a property during the pandemic but the challenge are more on securing the loans. For property investors, Datum Jelatek can be one of the best choices when it comes to their investment as it posed potential rental yields of around 3-4 percent given its excellent location in the heart of Kuala Lumpur. On top of that, the buyers will also be entitled to Home Ownership Campaign which was introduced by the government to stimulate property buying process. The buyers will be able to enjoy financial incentives by both government and developers to make their property dreams come true.
Along with that, Datum Jelatek is also offering various seasonal promotions with giveaways, hence potential buyers are encouraged to visit the sales gallery to know more on the price and sales packages. Datum Jelatek is expected to be fully completed in the third quarter of 2021. For further info regarding this project, check out their website at https://datumjelatek.com.my ABOUT THE COMPANY The development of Datum Jelatek is one signature development by Datumcorp International Sdn Bhd, a boutique developer, fully owned by Perbadanan Kemajuan Negeri Selangor (PKNS).
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SPECIAL ADVERTISING
BANDAR SRI SENDAYAN: NURTURING ENVIRONMENTS, ENRICHING LIVES BY NASUHA BADRUL HUZAINI
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Nurturing Environments, Enriching Lives
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ocated at the west of Seremban, lies Bandar Sri Sendayan, a 6000-acre freehold self-sustaining township developed by Matrix Concepts Holdings Bhd (MATRIX) which is known for its strong track record in local and overseas property development project. As at end FY2019, MATRIX has successfully completed and delivered more than 10,224 residential and commercial properties in Malaysia and Australia and the Group’s combined on-going and future GDV is approximately RM15 billion until 2027. The development of Bandar Sri Sendayan first began in 2006 and it was envisioned to be a township that epitomizes sanctuary of tranquil tropical living supported by a self-sustaining city comprising residential, commercial, industrial, leisure and institutional properties. With estimated GDV of RM8.13 billion, Bandar Sri Sendayan sits within Malaysia Vision Valley Growth Area and it is expected to house approximately 120,000 population upon its full completion slated in 2027. The long-term development project is made up of various components which are already completed namely the residential parcels,
commercial precincts, its very own Matrix Global Schools, d’Tempat Country Club, 26-acre Sendayan Green Park, X Park (extreme sports leisure park) and its d’Sora Boutique Hotel. The clubhouse is intended to cater for sporting and recreational needs of the residents as well as people living and working in neighbouring Bandar Sri Sendayan. The exhilarating part is that residents can enjoy an extensive choice of facilities while living in a landed residential compound. Among the facilities offered includes an Olympic-size swimming pool, aqua gym, gymnasium, indoor tennis courts, indoor badminton courts, snooker room, 10-lane bowling alley, children’s playroom, reading room, spa, banquet hall, meeting rooms and F&B outlets. Currently, there are 8,000 residential units and 97 shop units are being constructed and Bandar Sri Sendayan is planning for future launches of Merchant Square Neighbourhood Mall, Residential and shop offices as well as semi-detached factories in their pipeline. This extensive township development comprises various types of homes among which includes single & double-storey linked homes, Semi-detaches and there are also plans for resort bungalow launches in the future. Each parcel is distinctly unique with its own attentive layout planning, that sees to emphasis on all practicality aspects. Other than that, the flexible layouts are designed to prevent the hassle on further renovations or extensions in the future. One normal practice implied in this residential parcel is that it includes a fully extended dry and wet kitchen; a guest room which accommodates a queen-sized bed; L-shape staircase for a better space planning; high ceiling; four bedrooms that is ensuite with bathrooms. As safety and security remains the utmost concern, Bandar Sri Sendayan provides state-of-the-art security features and process such as background checks on security staff, CCTV monitoring, on-patrol guards mainly to ensure the residents safety whenever they are in the compound. Rest assured that you are in safe hands once you set foot in Bandar Sri Sendayan.
Aerial view of d’Tempat Country Club
Matrix Global Schools
26-acre Sendayan Green Park
A scenic view of Sendayan Green Park
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SPECIAL ADVERTISING
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CONTRIBUTOR
SHOULD YOU GO FOR RENTAL YIELD OR CAPITAL APPRECIATION?
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he argument is an old one: which is better - capital appreciation or rental yield? One gives you increasing value over a long period, while the other gives you dollars in your pocket right now. Both have their advantages but deciding which is right for you will come down to your personal circumstances.
BUYING FOR THE FUTUIRE Dr Victor Gan
Properties with good capital growth are found in areas where demand exceeds supply. Prices are driven up as buyers compete for the limited properties available. This usually happens in areas like these: • • • •
Close to work opportunities Good amenities Public transport and infrastructure Good locations that people want to live in
Over time, as demand continues to outstrip supply, the properties continue to increase in value, hence the growth on your initial capital investment. However, because properties in these areas cost more to purchase, rental yields may not cover the expenses of owning and keeping the property, in which case the owner will have to cough up additional funds to meet costs. This is not always the case, but generally, properties in good capital growth areas may initially offer less by way of rental yield, simply because the properties cost more to purchase, and hence to hold.
CASH ON HAND - RENTAL YIELD A rental yield strategy, however, is almost the opposite. A property with good rental yield is one
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which is positively geared, meaning the rental income is greater than the costs of owning and keeping the property, and therefore the owner ends up with cash in the hand. Properties with good rental yield also tend to be less expensive to buy than those in areas that promise good long-term capital growth. Good rental yield areas can be found anywhere but are typically in regional areas where there is a high demand for rentals but only limited properties available. This can happen suddenly in areas where new amenities and services are announced, such as a new shopping centre or upgraded transport, or in areas that have transient populations such as students or tourists.
SO WHICH TO CHOOSE? As with any investment decision, it comes down to personal circumstances. First-time buyers may be more interested in a rental yield strategy to stay in the market: there may be lower up-front costs, and a positively geared property will help deal with expenses. For investors looking for a property that will weather market changes with more stability and offer a better long-term investment, purchasing somewhere with good capital growth may be more beneficial. Of course, there are other costs to consider, including property maintenance and repairs. These costs can come as a surprise to some investors, so it is worth considering how these could affect your rental yield. Either way, it is up to each investor to decide whether they are looking for something that provides cash flow now or an investment for the future.
GROWING CONFIDENCE TO INVEST AMIDST COVID-19 UNCERTAINTIES
Dato' KK Chua is the founder and CEO of Armani Media and he is also a seasoned property investor
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t goes without saying that COVID-19 has had an unprecedented and far reaching effect on the Malaysia economy. With record unemployment and job uncertainty being a reality for many, it can be tough to find the silver lining. However, it is important to remember that in times of fear and uncertainty, there is also opportunity. Though Malaysia property sales are currently down, there have already been signs that the COVID-19 situation may lead to even higher confidence in real estate investing. The main question to ask is how we lower our risk when investing. I’ve always said that when times are good you make money on equity, and when times are bad you make money on financing. At the end of 2020, there is a possibility for both. House prices are still holding relatively steady in the suburbs and financing costs are at all time low, which is an almost unheard-of situation. Keep in mind, though, that this can, and likely will, change. People have been hesitant to sell during the pandemic especially during the moratorium period and, as a result, inventory in matured suburbs has been low, which has kept prices relatively steady. As government subsidies run by the year, and
more Malaysian are expected to be pressed financially, there is a strong possibility we will see an increase in available inventory, and this could also see prices decrease especially by first half of next year. Only time will tell but, personally, I intend to take advantage of the current opportunities— money is cheap (provided your financial standing still strong and you have job security), meaning there’s been almost no better time in history to use leverage as an opportunity to invest. While I believe that now is most definitely a good time to invest in real estate, a word of caution: don’t get overly ambitious in a volatile time like this. Try to acquire property that are close to you, in an established suburb and can provide cash flow before taking on any other investment. No matter what type of investment property you decide on, make sure that you are working with professionals who can guide you during these uncertain times and not those property guru’s wannabe out there. No matter how much research you do,
you cannot replace the expertise of an experienced and knowledgeable real estate agent. I have a network of trusted property negotiators whom I turn to any time I am considering acquiring a property, and now more than ever I am looking to these experts for guidance. Remember that real estate is not a getrich-quick game. Anyone who invests should be thinking long-term. Things are changing every day and none of us know how, or even if, this will completely resolve. As a result, short-term risk takers have the most to lose. But long-term real estate investors have much to gain. While this situation is unlike anything we have seen in our lifetime, history has shown that real estate is like a yo-yo on an escalator. It goes up and down, all the way up. So if you are not planning on cashing in on your portfolio within the next several years, you have the potential to make significant gains. Those who should move forward, but be safe, and proceed with caution.
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PROJECT INSIGHT
LEGASI KAMPUNG BHARU IDEAL RESIDENCE WITH MODERN LIFESTYLE
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ampung Baru is well known as a traditional food haven destination and often attracts visitors who are looking for their favourite food there. Amidst the hustle and bustle of a city, Kampung Baru holds a special place in the hearts of the Malays, especially in view of the status of the area which were gazetted as Malay reserve areas. Taking advantage of the highly potential area, Uda Holdings Bhd is now actively promoting its development project there which is known as Legasi Kampung Bharu. The completed project is located only about one kilometer or 15 minutes-walk from the Petronas Twin Towers (KLCC) and it is surrounded by various transport facilities such as LRT Kampung Baru, Kuala Lumpur Hospital, National Heart Institute, sports complex and university. What makes it more interesting, Legasi Kampung Bharu is located directly opposite the Saloma Link which now appears as the latest attraction in the heart of the city centre. With the covered link, it can shorten the walking distance from Kampung Baru to KLCC. Passersby also do not have to worry about security aspects because the link is also equipped with closed circuit television (CCTV) facilities to monitor the safety of users. Legasi Kampung Bharu is a freehold project built on a site of 2.85 acres. It includes three main components, namely 639 units of resident blocks, 83 units of office blocks (Menara Legasi) and 43 units of shop lots (Jajaran Niaga). For its resident units, with the sale prices start from RM716,200, Legasi Kampung Bharu offers several types of units including units with three rooms ranging in size from 950 square feet to 1,907square feet. Among the types of residents offered include type A1 (33 units); A2 (33 units); A3, A4 and A5 (units) as well as type B (364 units) and type C (206 units). In addition, the 29-storey Menara Legasi was developed with Islamic architectural features that describe the development as a 'gem' in Kampung Baru. In accordance with a shiny modern design, the tower reflects the image of unity among the Muslim Malays exceptional and strong stability. This office space also provides a stunning workspace environment with magnificient views of the capital city of Kuala Lumpur as well as overlooking the historic landmarks of Kampung Baru. Apart from basic facilities such as playground, childcare centre, convenience store, sauna, barbecue room, surau and multipurpose hall, the most special amenities is none other than its 245 square foot swimming pool with KLCC and Kuala Lumpur Tower views. Legasi Kampung Bharu provides you the opportunity to enjoy daily panoramic view of Kuala Lumpur skyline at a lower price compared to other development project around the area, hence, wait no more and visit http://www.udalegasi.com/kb/ for more info.
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CONTRIBUTOR
SINKING
FUND
WHAT IS THE FUND FOR?
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trata property owners are often unaware on the existence of Sinking Fund and some of them might be confused and mistakenly thought the funds as part of their maintenance fees. What is Sinking Fund and why do we need to have a separate fund which can be quite ‘burdensome’ to the property owner? According to a law firm, Darlingtons Solicitors LLP via its website, www.darlingtons.com, a property Sinking Fund is an amount of money which is set aside to cover any major work which is needed on a property in the future. Property Sinking Fund is quite common with leasehold properties and the fund is usually part of the service charge that is payable by each leaseholder. Property Insight reached out to Honorary Secretary General of National House Buyer Association (NHBA), Dato’ Chang Kim Loong to get his view on this matter. Chang says, he has heard enough grouses from strata property owners who are not satisfied with the way their developers, Joint Management Body (JMB) and Management Corporation (MC) are handling the
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Sinking Fund. “There are some pertinent issues on the fund that should be highlighted. Sinking Fund is not to be taken literally to mean that it is a fund that will sink, sank, sunk and disappear! “However, in some stratified development areas, it is found that their Sinking Funds literally sink, sank, sunk and totally disappeared due to misappropriations of monies by either the illegal management company or kleptomaniac office bearers and/or members of the joint management committee or management committee. “Here, I provide three real cases happened to house owners which made them came to us (NHBA) to file complaints. First case is about Hisham and after living in his condominium for eight years, he is suddenly informed that he must pay a Sinking Fund contribution. “According to his documents, the contribution is supposed to come from the maintenance fees that he has been paying promptly and now he is confused. “Second case is about Param and he told us that his developer has been collecting sinking fund contributions previously, yet the
swimming pool, gymnasium, security system and common areas are in a neglected state of repairs. “Another group of buyers is upset that the Sinking Fund has been used to offset ‘current liabilities’ by their JMB. “The third case we received from John Cheah and he told us that his sinking fund is ‘zero’ and it seems that MC has utilized it for a certain purpose that he is not aware of, and another group of owners.
Rationale of Sinking Fund Chang further explained on the rationale of having Sinking Fund and why it is important to educate the home buyers to ‘religiously’ pay for the fund when it is due. “Sinking Fund contribution is separate and shall be equivalent to ten percent of the Charges (i.e. general maintenance charges) under the management period by the developer or equivalent to at least ten percent of the Charges under the management period by the JMB or MC. “Sinking Fund Account is a mandatory account
to be opened and maintained by a developer, JMB or MC under the law. “In other words, it is a provision for a capital expenditure fund to meet all actual or expected capital expenses in the common property such
building repainting, installation of main water filter system, replacement of water tanks and pumps, upgrading of building surveillance system, replacement of gymnasium equipment, etc. “With wear and tear from use, major items will deteriorate and need to be replaced so that the property market value can be maintained, sustained or enhanced based on the safety, security and aesthetic qualities of the building and its common property including the facilities therein. “Hence, the importance of the Sinking Fund. Owners paying monthly Sinking Fund contributions to the Sinking Fund Account is similar in concept to owners paying regular health insurance premiums so that there will be money for capital expenses such as hospitalization or surgery in the later years as they age and grow old. “The collection of a Sinking Fund, however, should not be confused with the Charges meant for the general maintenance and management of the common property. “To illustrate the difference, monthly maintenance charges can be likened to the regular maintenance costs of your car, such as for car wash and periodic servicing involving changing of motor oil, filter and spark plugs. “Whereas the changing of your car’s carburettor or car engine or the re-spraying of your car will be a capital expenditure akin to sinking fund,” he elaborates. Unfortunately, according to Chang, the present
SINKING FUND STRUCTURE • During the management period by the developer, it is easy to establish the amount of the Sinking Fund contribution as the law provides that such contribution is equivalent to 10 percent of the Charges. • After the management period by the developer, the law provides that the JMB or MC shall determine its Sinking Fund contribution that shall be equivalent to at least 10 percent of the Charges. This means that the Sinking Fund contribution can be at a higher rate at 15 percent or 20 percent or 25 percent or 30 percent of the Charges depending on the type of building and its common property therein. • In a simple nutshell, the amount of sinking fund contributions is computed from the amortization of the estimated periodic building repainting cost and the estimated replacement costs of all major building parts and components over their life spans with inflation factor considered. • As the above computation of sinking fund contributions will be difficult for a layman to establish, it is best that the JMB or MC seek out the expertise of registered property managers to establish the appropriate amount of sinking fund contributions to be imposed on owners.
legislation does not provide enough transparency and accountability of the fund leading to frequent grouses by strata property owners. “When the laws are unclear, additional bylaws could be formulated to reflect its strict usage. HBA believes that we must be guided by its intent and that we must pursue equity and fairness with a sinking fund that is transparent and accountable to its contributors and entrusted to the stakeholders. “Developers and JMBs, who are managing strata developments pending the issuance of strata titles, and MC, after strata titles are available, should start by having regular meetings to communicate with owners. “For example, when repainting works are required, open tenders should be invited, and owners should be consulted for their consent via an extraordinary general meeting. “To have a good corporate governance and transparency, the joint management committee or MC should form a procurement and tender committee that is independent of the office bearers. At least three tenders must be submitted; comparisons must be made to ensure that the most suitable contractor is selected for the job with regards to experience, competency, track record, product specification, product quality, manpower, completion period, liquidated and ascertained damages (LAD) and warranty period. “There should be no room for favoritism, cronyism and persons having vested interest. Corruption should be eradicated at all cost otherwise there will forever be a stigma of mistrust amongst fellow owners,” he insists. He adds that the Sinking Fund Account is in fact a trust fund entrusted to a trustee playing the role of a ‘stakeholder’ who should provide owners with a copy of the audited annual account every year. “Such funds not used for a reasonable period should be placed in an interest-bearing account. Those stakeholders who unilaterally dig into the fund without proper authorization should be held responsible and accountable. “They should be held fully responsible and liable. Misappropriation of the fund equals to criminal breach of trust (CBT) and is punishable by imprisonment,” Chang further explained. With a very thorough explanation on Sinking Fund and how the structure works, it is clear now that as a home buyer (with strata title), one has to be prepared for this extra costs but they have
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CONTRIBUTOR ‘SINKING FUND’ CURRENT LEGISLATIONS • Housing Development (Control & Licensing) Regulations, 1989 (amended 2015) Under the new Schedule H and Schedule J: Sale & Purchase Agreement (since June 1, 2015) of the HD Regulations, stipulated in Clause 19 that: a. From the date the Purchaser takes vacant possession of the said Parcel, the Purchaser shall pay to the Developer the charges, and the contribution to the sinking fund for the maintenance and management of the building or land intended for subdivision into parcels and the common property in accordance with the Strata Management Act, 2013 b. The Purchaser shall pay the charges, and the contribution to the sinking fund for the first four (4) months in advance and any payment thereafter shall be payable monthly in advance.
• Strata Management Act, 2013 (Act 757) and permitted uses of the Sinking Fund Section 11(1) A developer shall open one sinking fund account in respect of each development area with a bank or financial institution – a. if vacant possession of a parcel was delivered before the commencement of this Act, on the date of commencement of this Act (ie 1.6.2015) or b. if vacant possession of a parcel is delivered after the commencement of this Act, at any time before the delivery of vacant possession, but in any case, before the contribution to the sinking fund is collected from the purchaser of any parcel in the development area. • Section 11(4) Notwithstanding any other written law to the contrary, all moneys in the sinking fund account shall – a. not form part of the property of the developer; b. be held in trust for the purchasers; and c. be used by the developer solely for the purpose of meeting the actual or expected capital expenditure necessary in respect of the following matters: i. the painting or repainting of any part of the common property; ii. the acquisition of any movable property for use in relation to the common property; or iii.the renewal or replacement of any fixture or fitting comprised in any common property After the JMB is formed and has inherited from the developer, Section 24(2) applies. • Section 24(2) The sinking fund account shall be used solely for the purposes of meeting the actual or expected capital expenditure in respect of the following maters: a. the painting or repainting of any part of the common property; b. the acquisition of any movable property for use in relation to the common property; c. the renewal or replacement of any fixture or fitting comprised in any common property; d. the upgrading and refurbishment of the common property; or e. any other capital expenditure as the JMB deems necessary • Section 51(2) applies after the MC has been established and the permitted uses are the following: a. the painting or repainting of any part of the common property; b. the acquisition of any movable property for use in relation to the common property; c. the renewal or replacement of any fixture or fitting comprised in any common property and any movable property vested in the MC; d. the upgrading and refurbishment of the common property; or e. any other capital expenditure as the MC deems necessary
to understand that this fund is beneficial to help preserving the beauty and functionality of the buildings they are living in. It takes two to tango and this means, home buyers need to maintain good communication with JMB or MC of their buildings so that everyone will be satisfied on how the fund is being managed and most importantly, the money that are collected for the fund is being put to good use.
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YBhg Datuk Chang Kim Loong DSPN AMN Hon. Secretary-General, National House Buyers Association (HBA)
FEATURED PROPERTY
ERVINA: REACHING CALMNESS IN HIGH GROUND BY NASUHA BADRUL HUZAINI
A
ra Sendayan, a 194 acres freehold hilltop development in Bandar Sri Sendayan is a residential development presented with subtle elegance and contemporary style. The project developed by Matrix Concepts Holdings Berhad (MATRIX) features a refreshing and tranquil environment with a total of 1,272 units low-density houses. With excellent connectivity and accessibility through North-South Expressway (NSE);
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Seremban-Port Dickson Highway as well as KLIA Linkage, Ara Sendayan has easy access to various amenities such as Sendayan City, Sendayan Merchant Square, petrol stations, AEON Mall, Matrix Global School, SMK Bandar Sri Sendayan and SJK(C) Bandar Sri Sendayan. The township has unveiled its last parcel of exclusive residential project known as Ervina. Nestled upon higher ground above sea level, Ervina is the one & only hilltop semi-d residence within Ara Sendayan’s development.
With exquisite 46 freehold units to be owned, Ervina offers a variety of layouts ranging from built-ups of 3,960 sf. to 5,120 sf and with a selling price which starts from RM1.3 million. One of the many factors that makes Ervina stand out from the rest is that it offers an extensive space designed for the house. The smallest unit (Type A) with a land size of 45’ x 85’ boasts not only four bedrooms but it has an additional Powder Room and two other Utility Rooms. As For the largest unit (Type C2), it consists
of five Bedrooms, two Powder Rooms as well as three other Utility Rooms. With the extensive offer of many bedrooms, it is clearly shown that Ervina is targeted to larger scale families and children will get to seize the opportunity on selecting their dream room. Apart from that, the project is well equipped with perimeter fencing to ensure safety measures, whilst also ensuring CCTV and alarm systems are installed within the vicinity. Judging from the workmanship aspects, Ervina provides a premium finishing with solid timber flooring on the first floor and staircase area. Not forgetting, Solar water heater systems are being installed all for the better and convenience of the homeowner. On top of that, Ervina is a neighbourhood project that does not neglect any modern aspects while also emphasising the environmental aspects. This is proven by the number of facilities featured in the project such as an outdoor gym, a reflexology pathway, a barbeque pit, an amphitheatre area as well as a children’s playground. Residents will get to find pleasure and luxuriate in the various outdoor facilities offered whilst enjoying the natural view surrounding the township. In addition to the modern facilities, Ervina is built in such a way where certain units are overlooking a beautiful lake park which renders serenity to its lucky owners. Its esteemed development is also built around good feng shui. Undoubtedly, Ervina by MATRIX is not just any other ordinary development, as it boasts
an element that is not widely applied to other projects, which is its high ground of a platform. As a trusted developer, MATRIX ensures that all their projects will live up to its tagline of “Nurturing Environments, Enriching Lives” by being a caring and community developer. MATRIX was incorporated in 1996 and was listed on the main board of Bursa Malaysia Securities Berhad on May 28, 2013. The principal business activities focus on four (4) main pillars, Property development, Construction, Education and Hospitality.
| DECEMBER 2020
37
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FEATURED PROPERTY
S
itting snuggly in the sub-urban environment within the Rawang district, Setia Eco Templer is a township developed by the renowned property developer, S P Setia. The 194-acre township lies in an expanse of green amidst the majestic Bukit Takun , Templer Park and Kanching Rainforest Reserves, Setia Eco Templer is surrounded by various flora, fauna, animals and birds. The township is inspired by the journey of Sir Gerald Templer to Malaya and it was first launched in June 2016. It encompasses two main components namely the gated and guarded residential homes and a commercial hub. The township has a strategic location and it is not far from the city centre, merely 25 kilometres away from Kuala Lumpur and it can be easily accessible with approximately 30 minutes’ drive.S P Setia has also taken an initiative to build an interchange with direct access to the township from Rawang and Kuala Lumpur. The interchange can deliver better connectivity and save more traveling time of the community in Setia Eco Templer upon its completion. Setia Eco Templer is connected to major highways such as North South Expressway (NSE); Lebuhraya Koridor Guthrie (Guthrie) and Lebuhraya Kuala Lumpur-Kuala Selangor (LATAR). Given the easy access lingers around the township, they had scored the golden point. Apart from that, Setia Eco Templer also sits in close proximity to various shopping centres and hypermarkets such as AEON Rawang, Tesco Rawang, Selayang Mall, NSK Hypermarket, Tesco Extra Selayang, Giant Batu Caves, and Aeon Kepong. Therefore, residents will have many options to choose from on getting their household necessities as these amenities are conveniently located within travel distance. In terms of medical facilities, Selayang Hospital and KPJ Rawang have situated nearby the township, and the interesting part is it is just a matter of choosing which hospital to go, either a public hospital or a private medical centre. Moving on to the education facilities, there are many primary and secondary schools around the area and that includes vernacular and national school, SJK (C) Selayang Baru; SK Taman Selayang 1&2; SJK (C) San Yuk and SK Bandar Baru Selayang, respectively. As for secondary education, there are government schools such as SMK Selayang Baru; SMK Rawang Batu 16; SMK Seri Garing and SMK
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SETIA ECO TEMPLER:
HOMES TO QUALITY LIVING BY NASUHA BADRUL HUZAINI
Hillcrest. For those who wanted to have more education option beyond local syllabus, they can opt for several international schools for instance, Garden International School and Mont’ Kiara International School which are situated nearby the township. With a gross development value of RM2 billion, Setia Eco Templer is a long-term project that will take around seven to 10 years to be fully developed. The township is offering variety of houses in its residential component, rightly to cater to different preferences including bungalows, semi-detached homes, link villas. For the residential component, Setia Eco
Templer has launched its three phases which are Essex Gardens, Peranakan Straits and Amantara. Meanwhile, the commercial hub, known as The Grove @Templer consists of 40 exclusive 2-storey and 3-storey shop lot with main road frontage which further elevates the potential for businesses to get noticed. The construction of The Grove has already completed this year. As of the current, the township has completed its first phase of gated and guarded homes known as Essex Gardens and is now opening its door to the second phase of the township, Peranakan Straits and Amantara. As the name goes, Peranakan Straits emphasised
on the influence of Baba Nyonya cultural heritage and unique cultural diversity of the Peranakan era. With a take-up rate of 80 percent after its launch, one will understand why the phase is selling well by just having a glance at the façade. Peranakan Straits consists of 168 units of semi-ds and link villas with a minimum builtup of 2,292 sf and prices from RM888,000 to RM1,507,000. It is slated for full completion by the last quarter of 2020. The neighbourhood’s concept was inspired by Malay Archipelago with a gated and guarded feature to give peace of mind on the safety and security aspect. It is also equipped with patrolling guards, round the clock CCTV surveillance and AntiClimb Fencing with Fibre Optic Sensors. As the safety issues remain as the utmost concern, all houses have an Individual Home Alarm System
NEARBY AMENITIES Recreational • Kanching Waterfall • Bukit Lagong Forest Reserve • Metropolitan Park Selayang • Taman Rimba Komanwel • Selayang Hot Spring Public transport • Rawang KTM Station (14 km) • Batu Caves KTM Station (12.6 km) • Setara Jaya (Pudu to Rawang) – SJ 150 • KL Sentral (24.4 km) • Subang Skypark Terminal (35 km) • Show Village Operating Hours: Monday – Friday : 9.00am – 6.00pm Saturday/Sunday & Public Holidays : 10.00am – 6.00pm Call 603-6092 2288/ 6012-517 486
installed to ensure a safe environment to live in. Built on a 23.9-acre land parcel, Peranakan Straits is all about spacious homes. The uniquely designed homes boasted spacious bedrooms with Ensuite bathrooms to offer more privacy and intimacy. Furthermore, having balconies leading out from the bedrooms render a moment to enjoy a spectacular view of the surrounding natural landscape. For those who prioritise serenity living after a chaotic and busy day, Setia Eco Templer is the right choice. The combination of various elements and thoughtful features make these resort-themed homes relevant to today’s modern living. Apart from that, the neighbourhood is also equipped with other facilities including a clubhouse with a gym, Olympic-sized swimming pool and jogging tracks. Built concurrently with Peranakan
Straits is another neighbourhood for Phase 2B, known as Amantara. The neighbourhood is inspired from Balinese concept which can be seen clearly on the house design. It is also a gated and guarded development and selected units come with a private pool with a feature wall displayed with subtlety and serves as the perfect place to relax and unwind. Setia Eco Templer was also conferred the Design Excellence Award at the Malaysian Institute of Planners Planning Excellence Award 2016 in recognition “of a master plan that has or will have a positive impact on the physical or environmental quality of a place or the economic or social well-being of a community”. Some said, ‘good times don’t last forever’, so, do not miss the opportunity to own your dream home here at Setia Eco Templer because only limited units are available. | DECEMBER 2020
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FEATURED PROPERTY
Embique Condotel: The best of a condo and hotel
H
aving a unit of a condominium which will be operated as a hotel room? Why not? The idea may not be in everyone’s mind but those who aim to diversify their portfolio in property investment will be passionate about this. A real estate company that creates exciting and sustainable business opportunities, HLT Land Sdn Bhd has unveiled its latest venture known as Embique Condotel. Standing tall in the prime location city center at Jalan Parameswara, Malacca, Embique Condotel is a low-density freehold development project with only 152 units available to the market. The unique development will be managed by a renowned property management company and hospitality operator, MyKey Global. With a vision to provide warm and luxurious accommodation experience to their property occupants, MyKey helps their property investors to achieve higher rental yield than market rate. Embique Condotel offers six types of units which varies in terms of the built-up area and prices. For the smallest unit, the built-up area starts from 460 sqft with the starting price of RM345,000 and the biggest unit boasts the builtup area of 1,139 sqft with the price starting from RM854,000. Wouldn’t you be tempted to own a unit with a potential ‘hotel brand’ given that the price is considered affordable to the mass? It is said to be around 20 percent to 30 percent lower than market rate and what makes it even more interesting is all the units will be fully equipped with furnishing and electrical appliances. Even if you are not local, you still stand a chance to be part of the development as Embique Condotel can be purchased by foreigners. They are eligible to purchase above RM500,000 per unit and subject to application and approval of State’s Foreigner Consent. Embique Condotel is currently under construction and it is slated to full completion in the last quarter of 2023. The commencement
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m l t e y A d d s
t l t . a d n n y r
s d a f m
h s d r e d
a e y r f
r n t
of operation is expected to be in the third quarter of 2023. Surrounded by aplenty of tourist attractions, restaurants, shopping and word-class educational institutions, Embique Hotel is poised to offer potential higher return during Malacca’s peak season which falls in January, February, June, September and December. As a condotel, Embique Condotel has all the amenities that every visitors or tourists are looking for during their stay including a welcoming open concept main lobby, swimming pool, fitness gym, restaurants dining with a swimmping pool skylight, coworking live space, dazzling bar lounge and the first automated basement parking system in Malacca. The dropoff area is at the lobby and the visitor’s car will be parked by the in-house jockeys. Besides, the condotel provides meeting room and event space. To those who wanted to have their meetings and gathering while enjoying the city center and sea view.
Another good news to the unit’s owner, apart from getting their own return from their dedicated unit, there is also an additional revenue sharing which comes from the rental of rentable common spaces. The spaces include event room and meeting room, restaurant and bar lounge. Now, will you grab the chance to own a unit of Embique Condotel? You really should!
| DECEMBER 2020
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ADVERTORIAL
D
DK Impian’s facade
DK IMPIAN: DESIGNED TO ANSWER URBAN LIVING NEEDS
BBQ Pit Area and Picnic Table
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| DECEMBER 2020
Show Unit
edroom
- Master b
K Impian @ Damansara West is a SoHo property development under the property development arm of DK Group, an eye-catching gem located in Seksyen U5, Shah Alam. Motivated by the need of privacy and flexibility, DK Impian is designed to answer all urban living needs. DK Impian is strategically located fronting Persiaran Galaksi which is an arterial road connecting Guthrie Corridor Expressway, Damansara-Shah Alam Elevated Expressway (DASH), Subang Bestari and Sg Buloh MRT Depot. The project is situated in a core of a prime location, with complete communities and township around, such as Elmina City and Kwasa Land. The area consists of various matured amenities for the community to enjoy and utilize, with a mixture of restaurants, cafes, shops, schools. DK Impian is also located nearby Star Avenue Lifestyle Mall, Citta Mall and international schools such as HELP University. Apart from that, Monterez Golf and Country Club, Ramsay Sime Darby Health Care and Sultan Abdul Aziz Shah Airport are also within reach. DK Impian @ Damansara West is a mixeddevelopment project. Standing 14-stories tall and sitting on 2.4 acres of land, the building holds a total of 658 SoHo units and 5 shop units. The project comprises three different types of unit namely dual-key units, two-bedroom units with living hall, and three-bedroom units with living hall. The size of the various units ranges from 592 sq ft to 893 sq ft with the selling price ranges from RM300,000 onwards. DK Impian @ Damansara West also provides an array of on-site facilities including an infinity swimming pool, a jacuzzi, a community hall, a sky garden, a BBQ pit area, a sunken link bridge, and many other amenities. Taking advantage of the high-rise building, there will be a sky viewing deck as part of the facilities. There will also be a par course area to promote outdoor activities, accompanied by an outdoor sport track. The hammock garden is also a plus for residents who wish to have a relaxing evening close to home. For all these facilities and more, residents only need to pay RM0.30 per sq ft. The central convenience and high chance of return combined with quality construction creates a property of exceptional value. Great ideas and memorable moments await at DK Impian @ Damansara West, as it provides nothing short of an enjoyable way of life. For more enquiries, please contact 03- 7734 6866 or visit www.dkimpian.com DK IMPIAN SALES GALLERY
| DECEMBER 2020
45
STRATEGY
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| DECEMBER 2020
FEATURE STORY
W
hen a new residential development project is launched, it has been every developer’s wish to have it sells out as fast as they could, or at least they should achieve more than 70 per cent take-up rate, to begin with. For the past two to three years, developers in the country were slowly taking cautious approaches in launching their projects given the sluggish property market that seems like it is not recovering anytime soon. This includes postponing their new projects and giving out more rebates and incentives to the potential home buyers, just to attract their interests. Although various efforts had been done from the developer’s end, the country still recorded relatively high number of unsold residential property units across all states in Malaysia, with majorities are from developed states like Johor, Penang and Selangor. According to the latest data issued by National Property Information Centre (NAPIC), as of the third quarter for 2019, Residential Overhang Status stood at 31,092 units or RM18,770.47 million in value. From the figure, Johor recorded the highest unsold units with 5,740 units followed by Perak with 5,126 units and Selangor in the third position with 4,872 units. From the same data, it stated that since 2015 to 2019, the number of unsold residential property units are increasing over the years and this trend is somewhat worrying as this may sparks debates not only from the developer’s side but also to the government and home buyers on how to solve or what is the best way to tackle this problem. Before we delved further into the topic, an unsold residential property unit refers to a unit of property which has been completed with Certificate of Completion and Compliance and a unit which is still under construction. Property Insight reached out to Chief Operating Officer, Agency and Project Marketing Henry Butcher Malaysia, Tang Chee Meng and he opined that the government should provide more accurate and updated data on supply and demand of unsold residential property units so that developers are able to make better decisions on whether to launch new projects and the type of units that they should launch in order to meet market demand and preferences. “The authorities should ensure that developers embarking on new projects have enough capital to carry out and complete their projects and not abandon them in the face of sluggish sales.
PROPERTY OVERHANG
HOW WILL IT END?
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47
FEATURE STORY “Furthermore, the government should continue helping those of the lower income group who are buying their first home, for instance, by offering stamp duty savings, government loan guarantees and financial assistance on down-payments. “Meanwhile, for developers, they should be conservative and carry out independent market and feasibility studies to advise them on whether they should proceed with the planned project and what type of properties and pricing they should be aiming for if they want the units to be taken-up,” he said. Now, to the next questions that left us wonders why and what makes these properties cannot be sold? Is it something to do with the pricing, locations or maybe the size of the property? To this, Chee Meng said, the units which were added onto the unsold residential property from the third quarter 2017 to the second quarter of 2018 would have probably been launched over the period 2014 to 2015. “That was the time when the property market started to slow down due to the cooling measures introduced by the government, particularly more stringent loan approval criteria adopted by banks. Some of the projects may also be in locations which are not favoured by or deemed suitable for the targeted buyers e.g. lack of amenities such as schools, market, shops et cetera. “Some projects may be considered unaffordable by these buyers due to the lower income levels of the people in these areas. Some projects may also have been launched in areas where there is already an over-supply of such properties, for example, in Johor. “In Johor, the foreign-controlled developers were launching projects with more units in each phase than what had usually been launched in the past and the local market which is already saturated cannot absorb the units quickly enough, hence when the demand was less than what they expected, the stock of unsold residential property units built up significantly. “The unsold residential property units comprise of both landed and high rise but in terms of numbers, high rise segment contributed the most to the problem. Along with that, the segment with the highest number of unsold residential property units is within the price of RM300,001-RM500,000 followed by the RM200,001-RM300,000 segment and the segment below RM200,000. “Nevertheless, although considered to be more affordable, properties priced in these segments may not be deemed to be within the financial
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buying capacity of the targeted buyers who are of the lower-income groups and who may not have sufficient cash reserves to pay the down-payment,” he continued. Meanwhile, Ahyat Ishak who is the Chief Executive Officer (CEO) of Greater Synergy Group which specializes in empowering young investors and new investors in property investments also shares his view on this issue. He said a property unit is considered unsold after no taker in the period of nine months of its completion. “In the property market, there are many opinions being voiced out regarding this issue and some of the property gurus may have said that this is not a problem at all, probably because they believed eventually the units will be sold. “But for me, unsold units are amongst the biggest headache that hit the market nowadays and the trend will likely go on for a few more years ahead. This is supported by official figures released from the government and proactive measures need to be done to curb this trend from growing. “When addressing this issue, I would say everyone is at fault. This includes the developer; the government; the consultant; the industry player and the buyer. No finger-pointing, no blame game. No one is spared. “I ‘d say that developers were not cautious enough that they kept launching new projects, but they are not the only one responsible for this issue. The new launches have to be done for the sake of its survival and how their business model works and
on the government’s side, they did not have much to say than to approve all of these projects because that is one of the avenues for getting revenues for the country. “Back to the unsold residential property units, in my humble opinion, it takes the entire system to fail for this to happen,” he affirms. He then further commented that property projects have exceeded demands, especially in high-rise segment. “This is aligned with current data titled “Property Market Review 2019/2020’ which was released by Rahim & Co recently. From the data, current unsold property specifically residential and serviced apartment and SOHO units are now at 50,008 units with an accumulative value of RM34 billion. “The value is huge and high-rise segment recorded the most unsold unit and this attributes to factors such as wrong products for the wrong target market. “In the property market, there are three cores that we should never mess with, namely location of the property, a right product at the right location; and a right product at the right location with a right price. “If a developer manages to fulfil these three cores, the issue of an unsold unit may subside. How? Eventually, the developers get the sales, property agents get to include transactions, property investors get to have the right investment and the genuine buyers will get to have their own dream house,” he said. Ahyat also advises the buyers to be more
Dato KK Chua
discerning and to ensure they are not being influenced by anyone who has their own agenda. Indeed, it is worrying to see the number of unsold residential property units keep increasing as it will trigger more chain reactions such as putting bank lending at risk and tens of thousands of unoccupied spaces. Other than that, it will be hard for the appointed Joint Management Body (JMB) to maintain the buildings due to insufficient sinking fund and this problem will eventually hit back the genuine buyer who bought the house for their own stay. Therefore, we hope there will be a way out to at least lower down the number and every party involved must work hand-in-hand to solve this issue. We cannot force the developers to stop planning and launching new projects, but we do hope they will provide more products that goes well with the market demands and caters to mass market, not only niche market. Furthermore, Dato’ KK Chua, the founder and CEO of Armani Media told Property Insight that one of the most important things that must be done prior to launching any new development is to do enough due diligence. “Gone were the days where the development surrounding the area launched their development at RM700 per sq ft and when a new development coming in, they want to sell it at RM750 per sq ft. I hope, the government via the Ministry of Housing and Local Government or the National Property Information Centre (NAPIC) can provide more thorough and details data on the specific area of development.
“This includes the overall inventories comprises high-rise and landed developments hence the developers can make a more prudent feasibility study. At the end of the day, the property is all about demand and supply. “If the demands are high, whatever supply that the developers come out with, the digestion period might be prolonged and this will lead to the overhang,” he concluded. Tang Chee Meng
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STRATEGY
5
REASONS TO BUY AND NOT TO BUY A SUBSALE HOUSE
O
wning a house has always been a dream to most of us and often regarded as an achievement in life let alone if it was done in our 20-s, we will always be applauded and congratulated upon. Many would think it is nearly impossible to own a house in young age as the housing prices for new developments in this country are beyond what most of us earned every month. Then, here comes the bigger picture. Who said owning a house can only be done with newly launched projects? People tend to overlook on subsale house or secondary market whereas this market provides aplenty of houses to be chosen from. There are pros and cons in subsale house, and
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it depends on the potential buyer whether they can cope for what’s needed in the whole process or not. In this article, Property Insight reached out to Lim Boon Ping, the President of Malaysian Institute of Estate Agents (MIEA) to get his opinion on the pros of a subsale house and Dato’ KK Chua, a seasoned property investor to share his insights on the cons of a subsale house.
PROS:
1.
Lower price
Lim Boon Ping
Somehow, this point is subjective depending on the location, built-up area and the size of the house. But on the average, subsale house is usually sold at lower prices than new houses because the current condition of the house may contain
few defects that require rectification works to be done. One of the perks of purchasing subsale house is the potential buyer has a privilege to negotiate prices with the present owner. Lim said, usually subsale house is 20 per cent to 30 per cent lower than new launches in the same locality.
gold, and that includes subsale house as well. Subsale house also has its own disadvantages and that is factual, you have to accept it whether you like or not.
2.
Lesser uncertainties
As the projects are completed, buyers get to know what kind of community living there, the condition of the management of the buildings, blocked or unblocked views from the completed units and so on. We should never compromise on security aspects, hence when buying subsale house, the potential buyers has the advantage to wander around and explore the location themselves before deciding to purchase the house or not. This helps a lot in making wise decision as we can get first-hand experience on security aspect in the area.
CONS:
3.
1.
Existing renovation
For a house buyer who want to skip the tedious process of handling renovation works, they can be thankful for the subsale market.
4.
Matured neighbourhood
This is a huge advantage to any buyers who are too busy to explore a new township or areas on their own. Obviously, a renowned location like Taman Connaught in Cheras need no explanation as compared to Alam Perdana in Puncak Alam. People can simply relate the first as more vibrant and busy location with all amenities and facilities within close vicinity while little is known about the latter because the location is still undergoing major developments. House buyers will still be able to own a home in matured neighbourhood with an affordable price.
5.
Shorter waiting period
Three year, a lot can happen during stipulated time and not many are willing to wait that long before they can finally move into their dream house. As a solution, potential buyers would opt for subsale house as the waiting period is shorter than the project under construction. This is quite understandable given that buyers don’t want to burden themselves by paying double commitments namely rental and progressive payment, hence subsale house is the way to go! As mentioned earlier, all the glitters are not
3.
Refurbishment cost
Lim said, buyer may need to set aside extra money to repair the house if the building is very old or dilapidated. Here is the tricky part. If you are lucky, you can get a subsale house with a very good price, affordable and sometimes below market value but usually, the condition of the house needs major refurbishment which means, another round of splurging your hard-earned money to make sure the house is comfortable enough for you to live in.
4.
No warranty
Dato KK Chua
Not a brand-new unit
Buyers have their own preferences and the trend among younger generations these days, they prefer to buy brand-new unit, probably because of modern design and better facilities that is equipped together with the house. Subsale house usually comes with an old-school façade but this is up to the buyer’s preference. The final say is always on the buyer’s side, so think and decide wisely.
2.
More initial down-payments are needed
If you want to own a house, you must be prepared for the all the costs that bundled up together with it. Suffice to say, you must have money. For a house under construction, usually the developer involved is generous enough to provide the buyers with lots of incentives and rebates so that the process of owning a house is not too burdensome. But the scenario might be different when you choose to buy a subsale house. This segment requires the buyer to pay 10 per cent of down payment (and sometimes up to 30 per cent depending on their loan eligibility) followed by legal fees, agent fees (if they are using agent’s service), Sales and Purchase Agreement, stamp duty, just to name a few.
Unlike new house, subsale house has no warranty. Meaning that, all defects found within the house need or must be borne by the buyer whenever the handover process is complete. However, buyers can still negotiate with former owner if they can get the rectification works done first before they let go of the house, just out of courtesy because it is always better to handover the house in good shape.
5.
Stringent loan approval
Applying for housing loan can be quite challenging as most of the banks require detailed documentation on your affordability of paying back. For subsale house, the challenge goes doubled because the banks will be very selective on approving the loans and various aspects are being taken into consideration including the status of the house, specifically individual strata title or master title. If the house is still under master title, buyers won’t have many options because only selected banks are willing to entertain this process. And for houses under RM100,000, good luck in getting the loans!
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FEATURE STORY
SOFT PROPERTY MARKET FOR 1H 2020,
BUT ECONOMIC RECOVERY EXPECTED
BY MAK KUM SHI
T
he Malaysian property market experienced a sharp decline in 1H 2020, due to the total closure of most businesses and economic activities in 2Q 2020, but the national economy is expected to improve progressively. According to the Ministry of Finance Malaysia's Valuation and Property Services Department, the property market performance recorded a sharp decline in the first half of 2020 (H1 2020) compared to the same period last year (H1 2019). The property sector recorded 115,476 transactions worth RM46.94 billion in H1 2020, a decrease by 27.9% in volume and 31.5% in value compared to H1 2019, which recorded 160,165 transactions worth RM68.53 billion. The residential sub-sector led the overall property market with 65.2% contribution, followed by the agriculture subsector with 20.1% share. In terms of value, residential took the lead with 54.6% share, followed by commercial (18.1%).
RESIDENTIAL PROPERTY SUB-SECTOR There were 75,318 transactions worth RM25.61 billion recorded in H1 2020, declining 24.6% in volume and 26.1% in value compared to H1 2019. Performance across the states was less than encouraging as all states recorded declines in market activity. Selangor contributed the highest volume and value to the national market share, with 22.8% in volume (17,178 transactions) and 32.9% in value (RM8.44billion). In the primary market, the number of new launches in H1 2020 were far behind those recorded in H1 2019. A total of 13,294 units were launched, down by 43.6% against 23,591 units in H1 2019. Against the preceding half year, the launches were lower by 31.6% (H2 2019: 19,444 units). Sales performance was poor at 3.3%,
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FEATURE STORY
considerably lower compared to H1 2019 (30.9%) and H2 2019 (28.4%). The lower new launches and poor sales performance was probably due to the total closure of almost all business and economic activities during the Movement Control Order (MCO) period, which was imposed since 18 March 2020.
COMMERCIAL PROPERTY SUB-SECTOR There were 8,118 transactions worth RM8.51 billion recorded, declining by 37.4% in volume and 33.2% in value (H1 2019: 12,962 transactions worth RM12.75 billion). Performance across the states slumped as all states recorded significant declines in market activity. Selangor contributed the highest volume and value to the national market share, with 23.0% in volume (1,870 transactions) and 28.2% in value (RM2.4 billion), while WP Kuala Lumpur came in second in terms of value, with 1,212 transactions worth RM2.09 billion. The serviced apartment segment, which falls under commercial property albeit its usage as residential, recorded 1,433 transactions worth RM0.97 billion, forming 17.7% of the commercial property transactions volume and 11.5% of the total value. Mirroring the trend of the residential sub-sector, its market performance recorded a decrease of 24.2% in volume (H1 2019: 1,891 transactions) and 25.3% in value of transactions (H1 2019: RM1.30 billion). The performance of shopping complex softened, accomplishing an overall occupancy rate of 78.6%, decreasing slightly from 79.2% in H2 2019. WP Kuala Lumpur and Selangor recorded 82.4% and 80.0% occupancy rate respectively, followed by Johor (78.1%) and Pulau Pinang (73.3%). The overall performance of purpose-built offices remained stable at 80.6% in the review period (H2 2019: 80.6%). The occupancy rate for private purpose-built offices moderated at 74.3%, declined further from 74.8% recorded in H2 2019. WP Kuala Lumpur and Pulau Pinang secured higher occupancy rates at 75.8% and 78.6% respectively; whereas Selangor and Johor logged in lower than
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| DECEMBER 2020
the national rate at 69.8% and 65.0% each.
2020 OUTLOOK The property market performance recorded a sharp decline in the first half of 2020 (H1 2020), in consonance with the Malaysian economic performance, which contracted by 17.1% in Q2 2020 (Q1 2020: 0.7%). According to Bank Negara Malaysia, the Malaysian economy is expected to recover gradually in H2 2020 as the economy progressively re-opens and external demand improves. The Malaysia’s GDP is projected to experience negative growth within the range of -3.5% to -5.5% in 2020 before rebounding to pre-Covid levels in 2021. Further assistance from the government, initiated under the new Short-term Economic Recovery Plan or PENJANA, included the proposed reintroduction of the Home Ownership Campaign (HOC), Real Property Gains Tax (RPGT) exemption, and the relaxation of the current 70% financing margin limit for third housing loan onwards. Despite the cautious optimism towards the nation’s projected gradual economic recovery, with the resumption of market activity under the Recovery Movement Control Order (RMCO) and the proposed measures under PENJANA, the property market is more than likely to remain soft for the remaining half of 2020. The pace of improvement will be
depending on both domestic and external factors such as political stability, global oil and commodity prices, as well as further developments related to the Covid-19 pandemic. As we approach the year-end, it is worth considering the pros and cons of purchasing a property. Favourable conditions include interest rates being the lowest ever, with stamp duty exemptions, rebates, discounts, and low entry costs due to the current home ownership campaign, real property gains tax exemption, and a market that is favourable to buyers. However, adverse conditions include concerns over job security, income stability, loan eligibility, cost of living, low market confidence, balancing responsibilities, and the option to rent while building financial reserves. As research for a Covid-19 vaccine gathers pace and more effective controls over the spread of the virus are implemented, a gradual improvement in the economy may be expected for the year 2021, with the benefits of a recovery trickling into the property sector.
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FEBRUARY 2018
COVER STORY
TITAN OF TITIJAYA LAND BHD
TAN SRI DATO LIM SOON PENG CHANGES HIS DESTINY FROM RAGS TO RICHES, POVERTY TO PROSPERITY
IMPACT OF THE GE ON PROPERTIES HIGH SPEED RAIL: CARRYING THE PROPERTY MARKET FORWARD
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