www.starproperty.my www.propwall.my www.ibilik.my StarProperty.my StarProperty
04 JULY 2018 WEDNESDAY
StarPropertyTV
OWNERSHIP ON THE HORIZON
Bringing the general public closer to affordable housing. > P06-07 aMA DEALING WITH TOUGH TENANTS
Make sure the tenancy agreement spells out obligations of both parties
INSIDE THIS PROPERTY SURVEYING ISSUE >CaREA P03
WIN A PRIZE!
Vote for the most efficient affordability calculation to win 6 months of dimsum subscription. > P08
AFFORDABLE ISSUE ACROSS THE GLOBE
From Bogeumjari housing in S.Korea to leasing of public land in Turkey. > P12
02 04 JULY 2018
STARPROPERTY.MY
Events highlights
Affordable does not mean it's cheap
O
www.starproperty.my www.propwall.my www.ibilik.my
When buying property, it’s crucial to find out the value F late, the phrase ‘affordable housing’ has become more evident in both property marketing mateof the property before you commit. Using the carpenter’s By rials and property-speak. One can’t deny that rule, you must have the means to sustain the loan, know Ernest Towle the expression attracts prospects, buyers and what to do with the property once purchased and prepare emotionally to be property owners if you are to become a investors – making them take a second look and perhaps successful home owner. uncover a deal that could have gone unnoticed. More so if a long-term loan is involved in your purchase. Always Affordable sometimes gives the impression of ‘cheap’. But remember, the bank will never forget you as long as the loan is still can the two words be used interchangeably to mean the same thing? outstanding. I think not. As this period is a buyers’ market and deals abound, first-time Cheap usually refers to goods or services that cost less money than home buyers, upgraders and investors will be helping themselves and usual or are underpriced. Buying a cheap property does not mean their future generations by gathering the relevant information before buying an affordable one. Sometimes, it can mean quite the opposite. buying anything. Affordable, on the other hand, generally means that the value They can start by finding out their loan ability followed by in exchange for the payment is either on par or higher. Thus, being everything to do with the developer and the development. Lastly, discerning about the two adjectives could leave you with a rough diahave a solid plan on what to do once they become property owners. mond and not a lemon. The buyers’ market will not last forever. Fortune favours the brave “Measure twice, cut once” is an old carpenter’s rule to be followed but those who are smart and brave will be able to separate the gold because the proverb urges you to double-check before taking any acfrom the glitter and take advantage of the many deals in the market. tion. It ensures you have all the information before making a decision.
StarProperty.my StarProperty StarPropertyTV
Assistant General Manager ERNEST TOWLE ernest@thestar.com.my
Editorial Contributing Editor DAVID YEOH Assistant Manager of Content & Customer Engagement LEE YAN LI lylee@thestar.com.my Content THARMINI KENAS NG PAU LING AISYAH SUWARDI HAKIM HASSAN VIKTOR CHONG
"
StarProperty.my Event Highlights StarProperty.my Real Estate Awards 2018 The StarProperty.my Real Estate Awards (SREA) 2018 is back! For more information, visit bit.ly/srea2018
Video Producer ALAN KHAW alankhaw@thestar.com.my Designers KWONG CHEE OON QUEENY YONG NURUL AIDA TAJUDIN
MARKETING & SALEs Head of Customer Engagement & Support Ivy Leong 03 7967 1347 ivyleong@thestar.com.my Property Business Head of Sales JAMES OOI jamesooi@thestar.com.my Agent Business Head of Sales Kent Thew 03 7967 1388 (ext 1861) kentthew@thestar.com.my
Flip through StarProperty.my Best@Bukit Jalil StarProperty.my’s Best@ is a new series showcasing the unique lifestyle and the BEST guide for local and international homebuyers and investors. Best@Bukit Jalil taps into all things Bukit Jalil and reveals the opportunities as well as the lifestyle features it offers to residents. For full version of Best@ Bukit Jalil, register at bit.ly/BEST_BukitJali
Marketing Manager Faye Tan fayetan@thestar.com.my
StarProperty.my fair is back in Johor Visit this property exhibition to explore the latest housing offerings in the market. Attend talks by prominent speakers to gather essential information on property matters. Venue: AEON Mall Bandar Dato’ Onn, Johor Bahru Date: Jul 3 to 8 (Tuesday to Sunday) Time: 10am - 10pm Go to fair.starproperty.my for more information.
Contest: "Explore Bukit Jalil" How many LRT stations are there in Bukit Jalil? Join StarProperty.my’s Best@ Bukit Jalil’s contest at bit.ly/ExploreBukitJalil to win a Midorie calendar potted plant.
Ask Me Anything Facebook live session: Know the A-Z of feng shui If you are a fan of feng shui, check out our AMA: FB live session with Soleil Trinity Resource founder Jessie Lee. To watch the full Q&A, go to: bit.ly/2yTLVid
Latest happenings NREA 2018 gala night to be held on Oct 21
DBKL and Think City to upgrade ‘laneways’ in KL A ground-breaking ceremony will be held by DBKL and Think City for their Laneway Improvement Programme which aims to create safe, clean, functional and attractive laneways for local stakeholders. Nine laneways within the historic core of Kuala Lumpur have been identified. The pilot project at Lorong Bandar 13 is expected to be completed this October.
The MIEA National Real Estate Awards (NREA 2018) is one of the most significant accolades presented annually to real estate agents, firms, probationary estate agents/valuers and negotiators. The awards gala night will honour the winners of the 17 categories on Oct 21.
Time to mingle before real estate awards night Themed ‘A Starry Night’, the event is an introduction to the upcoming StarProperty.my Real Estate Awards (SREA) 2018 which will be held on Oct 10 at New World Hotel.
RISM organises two-day surveyors congress in KL Royal Institution of Surveyors Malaysia (RISM) conducted the 20th International Surveyors Congress on June 28 & 29 at Istana Hotel in Kuala Lumpur. With the theme of “Future Proofing The Profession”, the event was launched by AirAsia X Bhd chairman Tan Sri Rafidah Aziz.
STARPROPERTY.MY
04JUNE JULY 2018 06
Compiled by Tharmini Kenas tharmini@thestar.com.my
03
Ask Me Anything
DEALING WITH TOUGH TENANTS Make sure the tenancy agreement spells out obligations of both parties
A
sk Me Anything is a platform for all readers to ask about all things property. If you have any inquiries, key in your questions http://bit.ly/AskMeAnythingProperty This month, Low & Partners managing partner Datuk Andy Low Hann Yong deals with readers’ questions on critical issues revolving around tenants. Ask Me Anything is a platform for all readers to ask about all things property. If you have any inquiries, key in your questions at http://bit.ly/AskMeAnythingProperty
Disclaimer: All data and information provided are for informational purposes only. All information is provided on an as-is basis. All users are strongly encouraged to seek professional advice before relying on any data and/or information provided.
Q1: If a tenant damages the property or contents of the property while the tenancy is in force, what is the recourse for the landlord? A1: It is common for a tenancy agreement to spell out the obligation for the tenant to keep the interior of the property and the contents of the property in good condition (fair wear and tear accepted). If it is provided in the tenancy agreement, the homeowner can claim against the tenant for the damage or even deduct the repair costs from the security deposit before refunding it at the end of the tenancy. Q2: Can a tenant who rents a whole unit sublet the property with the intent of generating income without the knowledge of the landlord? A2: A tenant can sublet the property with the consent of the landlord. The homeowner and the tenant can include a clause
granting the tenant the right to sublet as well as specifying the usage of the property. Bear in mind that if the tenant sublets the property to a third party, the tenant shall continue to bear all the liabilities as a tenant pursuant to the tenancy agreement between the landlord and himself. He remains liable to pay the rental even when the sub-tenant defaults. Q3: Can the tenant subdivide the rooms to accommodate more than the stated number of rooms? A3: Generally, the tenant should ensure that any alteration or addition (of rooms) made to the premises conforms to all relevant by-laws and regulations. subject to the tenancy agreement, the tenant will be solely liable for all costs and expenses incurred for such alteration or addition. Upon termination of the tenancy, and if requested by the homeowner, the tenant should restore the premises to the original state and condition.
CaREA
MANy fAcETS TO prOpErTy SUrvEyING By aisyah suwardi aisyahs@thestar.com.my
RISM president Datuk Sr Lau Wai Seang
T
HE work of a surveyor is integral to the real estate industry. The profession is divided into four branches under the Royal Institute of surveyor Malaysia (RIsM), namely geomatic and land surveying,
property surveying, building surveying, and quantity surveying. Those qualified and registered with the institute are granted the title sr (surveyor). “In the property surveying division, we handle the aspects of valuation of real estate, property estate agency and prop-
erty management. Recently, we added intangible assets valuation into our portfolio,” said RIsM president Datuk sr Lau Wai seang. The relatively new field of intangible assets valuation was only effective November of last year. “After RIsM amended its constitution last year, the intangible assets valuer became part of the property management division. Previously, a valuer in RIsM referred to the real estate valuer and intangible assets valuation was done mainly by an accountant. “The division was promoted by the Malaysian IP Operation (MyIPO) whereby they trained 60 people, who have to sit for an exam organised by MyIPO and World Trade Institute (WTI) switzerland,” said Lau. As one of 23 professionals who passed the exam, Lau elaborated that the participants were from a mixed background. “There was an IP lawyer, IP valuer, IP filing agent, an accountant, and property surveyor. I saw that there was no organisation that could represent valuers of intangible assets, so I took up the challenge of putting them under RIsM as a professional development body,” she added. Lau graduated from University Technology Malaysia (UTM) with a Bachelor of surveyor (Property Management). “During the five years of my undergrad-
uate studies in UTM, I learnt about laws that governed properties as well as accounting subjects.” After graduating, she worked at Jabatan Penilaian dan Perkhidmatan Harta (JPPH) till her retirement. “When I first started work, I was tasked to do valuation jobs that included visiting the site, going to the land office to check for land titles, and to the planning department to check on planning status. “At JPPH, my designation was valuation officer (pegawai penilaian) with different job scopes assigned under that title. An officer handles the research department or does training or valuation. The valuation officer is promoted through a grading system but the title remains the same,” Lau explained.
“In the property surveyIng dIvIsIon, we handle the aspects of valuatIon of real estate, property estate agency and property management. – Datuk Sr Lau Wai Seang
04 04 JULY 2018
STARPROPERTY.MY
Advertorial
Artist's impression of the overall development showing Platinum OUG (adjacent to Muhibbah LRT station). The well-connected Platinum OUG makes life convenient for residents when travelling to work or meeting friends.
CONNECTING PEOPLE AND MOMENTS Platinum OUG’s strategic location lends itself to quality living
P
LATINUM OUG Residence will be easily recognised by its façade’s abstract patterns, which reflects the shape of its site, when completed in 2021. Occupying a triangular piece of land after the road bridging Kesas Highway on the left from Jalan Puchong, the 41-storey condominium is strategically located within the Bukit OUG and Bukit Jalil enclave of Kuala Lumpur. In addition to its favoured address, Platinum OUG is adjacent to the Muhibbah LRT Station and is down the street from the Awan Besar LRT Station. “Platinum OUG is a project close to our hearts. It is sited just metres away from one of the most connected and crucial LRT lines within Klang Valley.
Such connectivity for our home owners is great,” said Platinum Victory executive director Gan Yee Hin. “Travelling to work or meeting family and friends is so much easier and less tiring. This means more quality time for yourself and others. That is why the tagline for Platinum OUG Residence is ‘Connecting Moments’. It is all about connecting with your friends and loved ones,” he added. Platinum OUG is a 99-year leasehold condominium of one residential block comprising 660 units in two built-up types; 440 of the units will be 1,250 sq ft and the rest 850 sq ft. The layout of the bigger unit is of dual-key concept with a studio unit while the 850 sq ft layout offers three bedrooms
and two bathrooms. Dual-key concept is gaining popularity especially in populated areas because of today’s small families. The studio unit has the potential of bringing in rental income without compromising on privacy and family interaction. Located within the well-known suburb of Bukit OUG which is next to Old Klang Road and Bukit Jalil, Platinum OUG presents an opportunity for professionals and urbanites to own a home in an established mixed residential area where amenities are already available. The price for the smaller unit is capped at RM300,000 as a mid-cost apartment with one parking bay, while the dual-key unit with two parking bays is priced from RM557,000. Above: Platinum Victory has designed Platinum OUG to exude grandeur. Left: The condominium’s quality facilities are aimed at enhancing the lives of residents.
Comparatively, the Bukit OUG area has seen property prices above RM600 per square foot. The overall development in Bukit OUG will comprise a total of 1,320 homes of two residential blocks on the 5.48-acre site with a gross development value of RM441mil. Besides Platinum OUG, there will be a PPA1M block of 660 apartments with its own entrance and facilities.
“Platinum OUG is a project close to our hearts. It is sited just metres away from one of the most connected and crucial LRT lines within Klang Valley . The abstract triangular patterns on its facade add aesthetic value to the architecture of Platinum OUG.
– Gan Yee Hin For more info, visit http://bit.ly/2tlLUyo
Wednesday 4 July 2018
Starproperty.my
5
06
STARPROPERTY.MY WEDNESDAY 04 JULY 2018
By Tharmini Kenas, Aisyah Suwardi, Ng Pau Ling and Hakim Hassan
cover story
OWNERSHIP ON THE Bringing the general public closer to affordable housing
T
HE Housing and Local Government Ministry (KPKT) recently announced its intention to submit a proposal to streamline the affordable housing projects in Malaysia under one programme to increase the reach and efficiency of the projects. While the mushrooming of public housing schemes is a good sign as far as the issue of affordable housing is concerned, it has created a confusing situation in which prospective buyers are facing a paradox of choice. “The issue with affordable housing in Malaysia is the lack of a mechanism to sell the homes. Affordable housing projects are all over the place, and they are under different schemes,” said Malaysian Institute of Estate Agents (MIEA) president-elect Sr Lim Boon Ping. “It is hard to determine, even for real estate practitioners like me, what are the available units or options in a locality. Many people are lost about how and where to go to apply for affordable housing.”
R easons for unaffordable housing According to the BNM Quarterly Bulletin (Q4) 2017, three major factors that caused the unaffordable housing scenario:
Mismatch in supply and demand Construction has been surpassing the supply of housing in recent years. The imbalance in demand and supply worsened between 2012 and 2014 when the average supply of 85,000 new units could not meet the demand of 118,000 new households. This situation persisted from 2014 to 2016 with 154,000 new households supplied with just 114,000 new units.
600
530
House prices were reported to have increased by 9.8% while the average household income of Malaysians only increased by 8.3%. This mismatch has affected the ability of the public to buy houses.
375
313
amount of middle income households that do not own a home had increased to 1,176,535, a 13% hike from 2012 (1,043,793). The government has since introduced several affordable housing agencies to address the needs of M40, namely Federal Territories Housing Scheme (Rumawip) launched in April 2013 and 1Malaysia Civil Servants Homes (PPA1M) launched in October 2014. While the intention is to address the various household segments, the lack of a centralised mechanism means that the more-than-20 national and state agencies are not coordinated when it comes to application and process. According to the Ministry of Housing and Local Government, there are seven affordable housing schemes to help citizens own their first home. The projects include SPNB, PPA1M, Rumawip and PR1MA. The ministry’s proposal for a National Affordable Housing Council to synchronise the affordable housing projects with clearly defined terms and regulations will accelerate the reach to the masses and ensure home ownership among the B40 and M40 groups. “We are looking at streamlining all the government housing projects into one body and rename it. We will file the Cabinet papers to coordinate the projects from all government agencies,” KPKT minister Zuraida Kamaruddin said recently.
Actual median house prices and maximum affordable prices by states in 2016
454
282
House prices and household incomes
There are three levels of governance in Malaysia regarding public housing developments. The federal government has the power to enact the National Housing Policy, the state government controls land use, while the zoning and building by-laws belong to the local government. Currently, there are more than 20 federal and state government public housing agencies involved in providing affordable housing for the different market segments. Eleven of them are under the federal government while the state governments control 13 agencies. Before the introduction of 1Malaysia People's Housing (PR1MA) in 2012, the government’s public housing policy was focused on low-cost homes meant for the lower-income group (B40) with a monthly household income of below RM2,500. Among the public agencies providing lowcost housing are Syarikat Perumahan Negara Berhad (SPNB), Ministry of Federal Territories, and Federal Land Development Authority (Felda). The establishment of PR1MA was to address the wide mismatch in housing affordability of the middle-income group (M40), with monthly household income ranging from RM2,500 to RM10,000. According to PR1MA Analysis (Market Intelligence) Household Income Survey 2014, the
The fourth quarter (Q4) of 2017 saw the Malaysian House Price Index increasing by 5.8%. During Q3, Malaysia's average house price was RM404,835. Kuala Lumpur was deemed the most expensive area in Malaysia with its average price of RM785,327 while Kelantan was the least expensive with its average price of RM164,300. Under the Median Multiple (MM) approach developed by the United Nations Centre for Human Settlement and the World Bank under the Housing Indicators Programme in 1988, housing is considered affordable if median house prices are less than three times the annual median household income. In 2016, the Malaysian monthly median household income was RM5,228 while the actual median house price was RM313,000. Based on the MM approach, the estimated maximum price of an affordable home should be RM188,208. Therefore, a median multiple of 5.0 makes affordable housing in Malaysia seriously unaffordable.
400
Since 2012, the housing market has been skewed towards high-end property and only 24% of houses built are under RM250,000. This tilted situation caused a reduction in the supply of affordable homes to the masses.
O vercoming the unaffordable issue
T he current scenario
500
Unaffordable new launches
Maximum affordable house price (HCB) (RM ‘000)
405 355
340 302
Actual median house price (state) (RM ‘000)
291
300
273 228
200
229
800 700
620 454
Maximum affordable house price (HCB) (RM ‘000)
523
384
400
200
there are more than 20 federal and state government public housing agencies involved in providing affordable housing for the different market segments.
Actual median house prices and maximum affordable prices by city centres in 2016
600 500
The council is expected to coordinate the const tion matters of affordable housing, create an open tabase on unsold affordable homes and initiate a r to-own scheme. According to PR1MA data, there are 268,537 fordable houses approved by the board as of M 2018 and 138,734 units under various stages of struction. At the recent 20th International Surveyors’ gress, the PR1MA representative confirmed tha though the ministry had proposed to synchro existing public affordable housing agencies, all approved PR1MA projects are still on-going.
Actual median house price (state) (RM ‘000)
60
384 319
300
294
200 100
0
100
Malaysia (5228)
KL (9073)
Selangor (7225)
Johor (5652)
Penang (5409)
Median income, RM (monthly)
Sabah (4110)
Sarawak (4163)
0
KL City (9073)
Petaling Jaya (7443)
Johor Baru (6012)
Median income, RM (monthly)
George To (5477)
COVER STORY 07 STARPROPERTY.MY WEDNESDAY 04 JULY 2018
HORIZON
strucn darent-
37 afMarch con-
Conat alonise l the
d
t
00
own
Zuraida Kamaruddin
Datuk Ng Seing Liong
Datuk Paul Selva Raj
Sr Lim Boon Ping
R ehda: Clear
regulations needed Rehda Institute trustee and past president Datuk Ng Seing Liong lauded the government’s decision to unify the different affordable housing agencies into a single entity. He said the body could at the same time determine the best price for the general population. “We feel that only this body can build affordable housing while private developers concentrate on general housing. Taxes from general housing could then be used to build affordable housing.” He agreed that the lack of clarity in regulations for purchasing affordable housing is cumbersome. “There must be control regarding the sale of subsidised affordable housing. The owner cannot sell without the approval of the authorities. Also, the owner must live in the house and cannot rent it out,” he said. Ng said that state governments should work in tandem to provide housing and help the federal government because the state handles land matters. As for developments constructed before the streamlining, he said the projects would be sold as usual.
A ffordable
housing defined
Tan Sri Lim Hock San
S eeking a clear policy Stakeholders and real estate practitioners are positive about the move to group the various housing projects. Federation of Malaysian Consumers Associations (Fomca) secretary-general Datuk Paul Selva Raj applauded the ministry’s decision to unify the schemes because it will give a positive effect on buyer sentiment. “I think that putting all projects under one body will help the authority coordinate better and assist the public on submitting or getting the right kind of information about the schemes,” said Malaysian Institute of Estate Agents (MIEA) president-elect Sr Lim Boon Ping. He said people were confused and unaware of available projects due to the various agencies
handling the different affordable schemes. “The ministry should ensure that the public will only have to apply or deal directly with the government body without having to go through any middleman or developer. “This move can prevent any corruption or under-the-table dealings,” added Lim. LBS Bina Group Bhd group managing director Tan Sri Lim Hock San urged the government to draw up a clear policy and direction for the new housing council to be more efficient. “The plan to combine all the government housing projects could give developers a clearer direction as we continue to build projects that fall within the affordable medium range,” said Lim, adding that quality should be of importance.
Sr Mohd Zahry Rafie
Affordability has often been seen as a contentious topic. The government, private developers and the public all have different definitions of affordable housing to the extent that some have given up on reaching an agreement and consider it to be an abstract and subjective concept. According to the United Nations Human Settlements Programme, affordable housing can be defined as housing which is adequate in quality and location, not so costly and does not prevent its occupants from meeting other basic living needs. The McKinsey Global Institute says affordable housing covers a broader spectrum and extends to housing that meets minimum standards of living such as essential amenities, floor space, sanitation, without structural building defects and is located not too far from centres of employment (about an hour away).
> StarProperty.my has sorted out three formulas in which to calculate one’s level of affordability (See page 8).
Nur Farah Nisa Abdul Razak
I
nitiatives must benefit rakyat
StarProperty.my asked members of the public what they thought about the ministry planning to consolidate the existing affordable housing schemes as well as the price, design and several other issues. Nur Farah Nisa Abd Razak, 26, expects the government to research extensively on a better system for the public that can be applied to affordable housing. “As different projects require different eligibility, the streamlined regulations might not be fair to everyone. I hope the ministry will look at the different projects thoroughly and come up with the best regulations that will benefit every group,” said Farah, who works in the private sector. Paul Raj suggested that the government sets the maximum affordable housing price at RM282,000 as listed by Bank Negara Malaysia. The number was based on the Housing Cost Burden approach, where a house is considered affordable if the costs are less than 30% of monthly household income.
For Akmal Hakim, 28, government oversight is always necessary and having a unified agency is a welcome move. “It should be done to ensure that these housing initiatives can benefit the rakyat in providing affordable housing.” He added that with more transparency in executing these projects, the rakyat will be kept informed as to what the government is trying to achieve with affordable housing. Lecturer Aiman Misri, 30, agreed and said it will help streamline all applications and processes especially for first-time homeowners. “It will cut bureaucracy when dealing with complaints,” he said. “Whatever policies developed with the new initiative, the end goal must be to drive prices down or ensure any rise wouldn't be too extreme.” BuildSurv Consult (M) Sdn Bhd managing director Sr Mohd Zahry Rafie suggested that the government focuses on building non-transactional public housing.
Akmal Hakim
Aiman Misri
He said the government should offer rental housing to provide better building maintenance for public housing and an alternative option for citizens. “Now people have no choice but to buy. A renting option for low and middle-income earners will eventually help to reduce housing prices and promote a check-andbalance system in the industry,” said Zahry. He pointed out that the biggest challenge faced by lowcost housing is the poor maintenance of the building. “It is the owners’ responsibility to maintain their house. However, some of the low-cost homeowners can’t even afford to service their loans. “If the government held the ownership and took over maintenance of the public housing, people will benefit from the better living quality,” said Zahry. He added that non-transactional housing should be built in the city to provide a shelter for young people who are the engines of growth.
• Down payment: Your ability to put a down payment depends on the loan amount, your assets, available savings and existing debts.
08 04 JULY 2018
Feature
Beyond monthly mortgage, there are additional housing expenses such as deposits for utilities, renovation, furniture and decoration, and maintenance fees.
STARPROPERTY.MY
By Ng Pau Ling pauline@thestar.com.my
Table 1 3: Table Projected household expenditure Malaysians Household expenditure of of Malaysians
Three formulas to help calculate your level of affordability
Table 2: Affordability formulas Formula
Affordability
Remarks
CAN YOU AFFORD TO BUY A HOUSE? Three times annual income rule
This formula is derived from the Median Multiple (MM) calculation which is widely used for comparison of housing affordability across countries and within a country. MM is the ratio of the median house price divided by the median gross annual household income. A house is considered affordable if it is less than three times the annual household income.
Household income* x 12 mths x 3 = affordability
Find out by using three formulas or housing to calculate your level30% ofruleaffordability cost burden A household that spends more than 30% of its income towards housing expenses is considered cost-burdened.
Affordability methods
Household income x 30% = monthly housing expenses
RM5,228 x 12 x 3 = RM188,000
RM5,228 x 30% = RM1,568**
Household income* Household income This formula is derived from the Median Multiple (MM) – non-housing x 12 mths x 3 = costs The money a household is left = financial ability calculation which is widely used for comparison ofafter housing with paying off non-housaffordability for housing expending related affordability across countries and within a country. Thisnecessities and all iture personal debts and expenses. formula is more towards a macro-level method since it completely ignores personal situations such as household size, savings and debt, and necessities.
The 30% rule does not vary according to household size. A single-person household is generally able to afford a larger amount to devote to housing expenditure compared to families with children.
Calculation
Formula
Three times annual income rule Residual income
This formula is more towards a macro-level method since it completely ignores personal situations such as household size, savings and debt, and necessities.
Two-income married couple without children in Petaling Jaya, Selangor
10% from the monthly income
Malaysian median household income
RM5,228
RM560 monthly instalment - Myvi 1.3LG (Auto), zero down payment with 9 years’ repayment period. RM300 – Petrol
RM127.44 - One casual dress in a chain store RM 284.14 - One pair of mid-range sport shoes
Entertainment and leisure RM298.22
RM30 - Cinema tickets for two RM134.11 - Fitness club monthly fee for one adult
RM161.51 - Basic electricity, heating, cooling, water, garbage service for a 915sq ft apartment RM129 - Basic Unifi home broadband plan
Source: Numbeo.com Source: -- cost of living for two Numbeo.com, persons in Petaling Jaya; Perodua website Perodua website
House-buying costs Cost of purchase
Residual income
The money a household is left with after paying off nonhousing related necessities and all personal debts and expenses. Residual income takes into consideration the detailed data of household spending. It is a better measurement of an individual or a family’s housing affordability.
Transportation RM860
Clothing and shoes RM411.58
RM5,228 x 30% = RM1,568*
x 30% = monthly housing expenses
Utility fees RM290.51
Groceries and others RM500
*2016 Malaysia median monthly household income RM5,228.
A household spending more than 30% of its income towards housing expenses is considered cost-burdened. However, the 30% rule does not vary according to household size. A singleperson household is generally able to devote a larger amount to housing expenditure compared to families with children.
RM10 - Meal in inexpensive restaurant RM7.12 - Regular milk (1 litre) RM2.65 - Loaf of fresh white bread
Contingencies RM522.80
RM5,228 x 3 =income takes (Refer Table 3) x 12 Residual RM188,000into consideration the detailed data of household spending. It is a better measurement of individual and family’s housing affordability.
**Calculation is made on a monthly basis 30% rule or housing cost burden Household income
Food and meals RM1,275.51
The residual income for housing budget RM1,069.38
Household income - non-housing costs = financial ability for housing expenditure
Win 6 months of dimsum subscription
(Refer Table 1)
"In your opinion, which is the most efficient affordability calculation? Why?" Join the contest at bit.ly/AffordabilityContest . dimsum is the latest video streaming service in Malaysia serving the best Asian content including drama, entertainment, variety, movies, documentary and news.
• House price: Property price is determined by location (land cost), accessibility (infrastructure), quality (building materials), craftsmanship (labour) and developer’s profit margin.
• Down payment: Your ability to put a down payment depends on the loan amount, your asset, available savings and existing debt.
Cost of maintenance • Owner cost: Costs related to owning property, including monthly
mortgage repayments, assessment and quit rent, home insurance and property taxes. • Maintenance cost: Beyond monthly mortgage, there are additional housing expenses such as deposits for utilities, renovation, furniture and decoration, and maintenance fees.
Sunway Pyramid evolves in the face of increased competition By Hakim Hassan hakim@thestar.com.my
I
ntense competition from traditional mall formats and new e-commerce entrants has resulted in shopping malls having to go the extra mile for their customers. Sunway Malls and Theme Parks chief executive officer H.C. Chan said the mall has invested millions of ringgit on enhancements and upgrades. “The industry as a whole also has to deal with a new reality of consumers demanding more experiential retail as opposed to boring shopping,” he said, adding that it is a paradigm shift that calls for the retail experience to begin at the carpark or entrance, even before the customer reaches the retail floor. With that strategic intent in mind, Chan said Pyramid upgraded its carparks with epoxy flooring so that they look more aesthetically pleasing. “Aesthetics and durability aside, the gloss-like finishing and its reflective na-
ture brightens the carpark and enhances security. This is an important psychological safety feature,” he said. Another concern was how to minimise the transition of the relatively harsh environment of the carpark into the mall. “We adopted an audio-visual sensory strategy at our carpark escalator decks. We named it Oasis Garden,” Chan said. The Oasis Garden concept revolves around flora and fauna. Chan explained that plain walls were turned into flora walls and sounds of fauna were added to create a sensory experience of walking through a garden canopy before entering the retail floors. “These sounds are authentic. To create the project, we worked with Sunway University’s Prof Matthew J. Sansom who is an authority in this field," said Chan. Sunway Pyramid’s porte-cochere (covered entrance), which serves as the main artery of the mall, was also redesigned with sustainability in mind. It is now a bigger passageway with glass walls that allow more natural lighting into the mall.
“It is double glazed to prevent the loss of air-conditioning so that energy cost can be optimised. The old design with sliding doors is not sustainable; we have to be more responsible in our energy consumption,” Chan said. He added that today’s malls are no longer just functional. They are increasingly experiential due to higher consumer expectation and lifestyle changes. “Previously, the atmosphere may come from architectural or hard features of the mall. Today’s retail experience should permeate all touchpoints of the mall, both hard and soft aspects. “We are constantly looking at where we can add value to the shopper’s experience.” For Pyramid, this holistic approach can be seen by the results of its trade mix configuration, flagship stores, marketing events, improved facilities and even connectivity. “As part of Sunway’s integrated development, the mall has been able to enjoy immense benefits from this synergy. It is a crucial differentiator that enables the mall to leverage and collaborate with other business components,” said Chan.
From a master-planning perspective, he said it is akin to creating an entire eco-system where the whole is greater than the sum of its parts. “This strategic differentiator allows the mall to stay ahead of its competitors,” he added. For the full article, visit bit.ly/SunwayMall.
H.C. Chan
Scan for more info
Wednesday 4 July 2018
Starproperty.my
9
10 04 JULY 2018
STARPROPERTY.MY
Advertorial
F
ROM its humble beginnings as an area of rubber and oil palm estates, Shah Alam has grown and evolved to become a vibrant neighbourhood within a few decades. Granted city status on Oct 10, 2000, and bordering other mature regions such as Petaling Jaya, Subang Jaya and Klang, Shah Alam has established itself as one of the most sought-after places to live in the Klang Valley. Naza TTDI Sdn Bhd is capitalising on Shah Alam’s strategic location and connectivity by offering TTDI Sentralis, an 8.03-acre integrated development at the heart of Section 13. This development leads the way in the grand masterplan of TTDI Gateway, an up-and-coming township of 33 acres. TTDI Sentralis offers commercial, retail, office and residential units – all of which form a thriving mixed urban hub that caters to first-time homebuyers, investors and SME owners. The leasehold development, with a gross development value of over RM468mil, comprises 206 units of Shop Office Versatile Office (Sovo), 260 serviced apartments and 101 retail units. A modern and healthy lifestyle awaits residents who will get to enjoy facilities that include a gymnasium, swimming pool, covered parking, mini market and playground. With easy access to recreational and leisure amenities within TTDI Gateway, TTDI Sentralis Lifestyle Suites are set to gain popularity. Residents and tenants will find it convenient to commute via the Federal
OPTIONS APLENTY AT TTDI SENTRALIS
Naza TTDI crafts lifestyle hub in the heart of Shah Alam Highway, New Klang Valley Expressway, Guthrie Corridor Expressway and Elite Highway to all major destinations in Greater Kuala Lumpur, including Klang, Kuala Lumpur International Airport, Putrajaya and Cyberjaya. Those who rely on public transport could utilise the bus and train connections within Shah Alam, with the upcoming LRT3 station located 300m away. Nearby educational and medical institutions include SK Seksyen 13, Management & Science University, KDU University College and Universiti Teknologi Mara as well as the upcoming IJN-Selgate Specialist Hospital located 600m away. With a multitude of entertainment and retail outlets – such as Aeon Mall Shah Alam, Extreme Park, Sultan Abdul Aziz Shah Golf & Country Club, Giant Mall Shah Alam, Tesco Shah Alam and Shah Alam Stadium Kart Circuit – folks at TTDI Sentralis will be spoilt for choice when seeking options for recreational activities and conveniences. For more information, visit bit.ly/TTDI_Sentralis.
Artist's impression of visitors being greeted by a majestic lobby upon entering the building.
TTDI Sentralis Developer
Naza TTDI Sdn Bhd
Website
www.nazattdi.com
Type of Integrated with Shop development Office Versatile Office (Sovo), serviced apartments (SA) and retail units Total units
Sovo: 206 units SA: 260 units Retail: 101 units
Location
TTDI Gateway, Seksyen 13, Shah Alam
Land title
Commercial
Land tenure
Leasehold
Development 8.03 acres size
Tenants get to enjoy moden facilities.
Built-up (sq ft) Sovo: 656 - 1,474 SA: 719 - 1,081 Retail: 994 - 38,000
TTDI Sentralis comprises 206 Sovo units, 260 serviced apartments and 101 retail units.
Total designs Scan for more info
Sovo: 8 SA: 3 Retail: 7
Number of bedrooms
Sovo: 1 - 2 SA: 1 - 3
TTDI Sentralis offers commercial, retail, office and residential units – all of which form a thriving mixed urban hub that caters to first-time homebuyers, investors and SME owners.
With TTDI Sentralis, developer Naza TTDI is capitalising on Shah Alam’s strategic location and connectivity.
Number of bathrooms
Sovo: 1 - 2 SA: 1 - 3
Price range
Sovo: RM562,000 RM937,000 SA: RM602,000 RM828,000 Retail: RM683,000 RM18,000,000
Price (per sq ft)
Sovo: RM635 - RM856 SA: RM767 - RM837 Retail: RM474 - RM687
Gross development value
RM468,509,295.00
Due for completion
2019
Wednesday 4 July 2018
Starproperty.my
11
12 04 JULY 2018
By Tharmini Kenas tharmini@thestar.com.my
Top 10 least affordable cities (housing) in the world
3849.2
4000 3500 3000
Least affordable Venezuela: The Venezuela Housing Great Mission has resulted in two million houses being built in seven years as part of the People's Social Protection System. The government focuses on five main points: people, land, material, financing and executors. According to Bloomberg Business, house buyers in Caracas have an average monthly mortgage payment of US$3,941 while their monthly income is just US$31.
Most affordable United States: Although western countries are not immune to housing woes, they still have the largest number of cities listed as most affordable in terms of
1324 218.8
Beijing
Rio de Janeiro
Moscow
Bogota
Buenos Aires
Top 10 most affordable cities (housing) in the world Average monthly housing cost as % of pay
48.6
3694
48.2
46.9
40
30
2088
2526
46.1
3804
45.1
3607
40
50
1637
2000
2861
3000
40.5
3949
4000
48.2
4887
Average monthly pay ($)
5000
20
Cape Town
Basel
Portland
Montreal
0
Ottawa
0
Chicago
10
Philadelphia
1000
Source: Bloomberg Business
Meanwhile in Asia South Korea: The Land and Housing Corporation supplies diverse types of housing (Bogeumjari houses) to over a million households in Seoul. Houses are categorised into homes for sale and rent. The integration of development and planning reduces the project period from six years to four, resulting in faster provisioning of houses to the public. According to the Korean Statistical Information Service, the influx of new residents in Seoul reaches 15,000 to 26,000 every year. The government has introduced the 2030 Youth Housing programme (2030 refers to youngsters in their 20s and 30s) which aims to increase affordable accommodation in the city centre and to provide quality houses for young adults. Singapore: The Housing and Development Board (HDB) manages and builds affordable public housing in the city-state. More than a million flats have been completed, and about 80% of Singaporeans live in HDB flats. HDB formulates housing policies and builds public housing using a comprehensive database that is updated every five years.
Mumbai
Hanoi
Kiev
Caracas
0
Shanghai
372.3 286 334.1 275 283.7 777 253.5 866 244.2 410 243.0 968 236.4 640 226.9 1287
31
500
31.6
housing. Bloomberg Business has named Houston, Philadelphia, Chicago and Portland as the second, third, fifth and eighth most affordable cities in the world. In Houston, the minimum payment needed to buy a house is US$1,043 while the average monthly pay of dwellers is US$3,949. In Portland, dwellers earn US$3,694 monthly while the minimum wage to be able to buy is US$2,352. Housing affordability is driven by the Department of Housing and Urban Development. The department plans and designs its housing programmes for different target groups. Data for planning and execution is obtained from the American Housing Survey conducted every two years.
1000
Houston
This situation has placed Caracas on top of the Top 10 least affordable cities in the world, according to the Bloomberg Global City Housing Affordability Index. China: The government charges for land hoarding and idle land through regulation and taxation. People in Shanghai earn US$1,324 a month on average while needing a minimum of US$7,787 to buy a house, making the city number 10 in Bloomberg’s list of Top 10 least affordable housing in the world. To ensure housing affordability, Shanghai adopted four approaches for different types of residents, namely lowrent housing, public rental housing system, houses on shared ownership, and homes for people relocated from dilapidated buildings. India: The Union Budget 2018 has announced the Pradhan Mantri Awas Yojna (PMAY) programme to provide more affordable houses for low-income earners. Through this programme, it is hoped that the government will refinance mortgages of finance companies and banks involved in the development of affordable housing in India. The government had previously carried out several reforms such as providing incentives to low-income groups, granting of infrastructure tag and an interest-subsidy scheme to boost affordable housing. In Mumbai, (the fourth least affordable city according to Bloomberg’s report) free housing is provided to slum dwellers and low-cost houses are built for the general public.
1500
31.4
I
T’S easy to assume that challenging housing matters in Malaysia are unique, but you’d be surprised at how similar lives in other countries can be. Affordable housing, a hot topic among young and urban dwellers, is not only an issue faced by us. One-third of urban dwellers, about 1.6 billion people worldwide, will be struggling to secure decent housing by 2025, according to the McKinsey Global Institute Report (2014). Housing woes persist even in countries such as China and the United States where land is abundant. In America alone, the housing bubble that triggered the subprime mortgage crisis between 2007 and 2010 has created a nationwide banking emergency. This has also resulted in the focus on the effect of mortgages on millennials’ finances. On a micro perspective, the case of parents suing their 30-year-old son in New York state to move out of their house might seem to be an amusing story but one might be surprised that it is an increasingly common phenomenon for millennials to live with their parents in some western countries. In the US, 23% of millennials lived with their parents in 2016 compared to 14% in 2005. With our Ministry of Housing and Local Government (KPKT) having announced its intention to look into the various schemes of affordable housing, it would be appropriate to understand the policies of other countries.
Average monthly pay ($)
2000
1755
From Bogeumjari housing in S. Korea to leasing of public land in Turkey, many countries are focusing on affordable housing
2500
Riyadh
AFFORDABLE ISSUE ACROSS THE GLOBE
Average monthly housing cost as % of pay
Calgary
International
STARPROPERTY.MY
Source: BNM Quarterly Bulletin (Fourth Quartet) 2017, BNM Annual Report 2016, Bloomberg Business, World Economic Forum, and Malaysian Affordability Housing Policies Revisited (2016), JLL India
Singaporeans can afford to buy HDB homes through the Central Provident Fund (CPF), a mandatory national-savings scheme where citizens of working age contribute 20% of their monthly salary while their employers contribute 17%. They are then encouraged to withdraw a portion of their CPF to pay a deposit for the affordable housing. Turkey: Publicly-owned plots of land in strategic locations are released by selling or leasing them for affordable housing development. The country’s Housing Development Administration has gathered 4% of urban land through government entities and developed the sites in partnership with private agencies based on revenue-sharing schemes. These steps cater to the increase in housing affordability among citizens. Indonesia: The National Housing Policy encourages private firms to build a certain number of low-cost houses for every luxury home they put up. The focus is on four components: mortgage-linked down payment assistance to lower-middle income households, home improvement assistance for the bottom 40, technical assistance for housing policy reform, and improved governance and enhanced capacity in the housing sector.