Home Prices to Fall as Recession Hits in 2018

In light of the recession set to hit Malaysia by 2018, economic affairs analyst Prof Hoo Ke Ping expects prices of medium and high-end residential properties to fall as it becomes harder for property speculators to secure bank loans, reported Free Malaysia Today.

Since 1960s, the country has witnessed a recession almost every decade, noted Hoo.

He revealed that the recession in the early 60’s was caused by global rubber prices, by the ringgit crash in 1967, and by global rubber prices in 1970. The recession in the 80s was caused by a property crash and outflow of funds, while that in the 1990s was due to a currency crash.

“In 2008, we experienced another recession but we managed to pull through very quickly. The 2018 recession is expected to hit almost all sectors,” added Hoo.

With this, the next two-and-half years may be the best time to acquire a medium to high-end home.

This is because the property market had begun to show signs of easing six months ago after speculators failed to secure tenants or buyers or bank loans for their properties.

In fact, a condominium unit priced at RM500,000 in 2012 is now going for RM420,000, while some homes are almost RM100,000 cheaper, said Hoo.

He attributed the hike in property prices to Bank Negara’s delay in curbing property speculators from acquiring and selling homes under the Developer Interest Bearing Scheme, in which the “willing buyer willing seller” concept is exercised.

In 2012, Bank Negara finally introduced stricter regulations on market speculators. The delay, however, had resulted to a property bubble with artificially inflated property prices.

As the fake demand spurred developers into building more homes, around 1,000 houses in Penang, 3,000 in Johor Bahru and 6,000 in the Klang Valley would be left vacant.

To overcome the fake demand, Hoo urge Bank Negara to tighten bank loans for property developers in order to force them to sell completed housing units at a cheaper price.

“Most of them built the properties in 2013, when the prices were still inflated. Even if they sell the remainder of their unsold units at a cheaper price, they will still make money.”

Be A Responsible Property Investor

New developments and the rising concern of property oversupply in the market is caused by many reasons, one of them being irresponsible property investors. It is becoming more common for ‘gurus’ to come out and share how to make ‘instant’ money via a vehicle termed loan compression, but little do buyers know that they are headed for a financial crisis if they do not know what they are doing.

There is no doubt that property investment is one of the safer long term investments out there in the market, and below are some criteria that the good gurus will follow.

Responsible Investment

A real property investor is one that studies his lessons properly before jumping onto the bandwagon. He does not just join one or two classes before buying his first dozen properties within the next few months.

The most important aspect that property investors should take into account before buying their first property is mapping out their exit plan for the property before buying it. In terms of exit plan, they will need to understand when to let go of the property. Is it when the property is 10 years old, or is it when the property has gained a capital appreciation of 30%?

And then they will also need to understand how much returns or negative cash flow that they will get upon buying the property. If the property will be yielding a negative cash flow, they need to take into account:

• Where will they get the money from to pay for it
• Why are they buying the property in the first place – is it because it has strong potential for capital appreciation in the coming years?

The Proper Way of Refinancing

Another aspect that gurus will strongly preach to their ‘followers’ is refinancing. Refinancing is a method of waiting for your property to appreciate in price and then going to the bank and getting a new loan for it.

So for example if your property is worth RM500,000 in the current market and you get a 90% loan for it, you will be able to get RM450,000. And after about 10 years if your property is worth maybe RM800,000, you will be able to refinance it – and depending on how much you get, you may be able to get up to another RM270,000 in cash.

However, if done wrongly, refinancing without proper planning will ensure that the borrower ends up in debt forever as their tenure will remain the same. A good guru will teach its students how to avoid this trap.

Proper Research

Performing proper research on a neighbourhood is another one of the main aspects of buying a property. You will need to understand the area, research its background, and study its future. A great example is Kota Damansara.

When Kota Damansara was just being built, it was “a jungle” which everyone predicted would fail. All the naysayers have now however been proven wrong. A shop lot that cost only RM400,000 during its launch now costs approximately RM1.6 million.

For established neighbourhoods, what a buyer would need to check out is the subsale value and rental yields around the neighbourhood. This is to get a rough idea of how much they can expect in returns and capital appreciation.

How to go about hunting for these deals

In as comfortable as it sounds when somebody tells you that they will find you the perfect property for a fee, sometimes is better to know how to do it yourself so that you don’t get hoodwinked. A good guru will teach its students how to find the deals themselves so that they will know the ropes.

Wrapping up, property investment is a great long term investment, where if done properly you will be able to earn a decent amount in the long run.

What you should know about Sales and Purchase Agreement?

While purchasing a property, one will not feel secure by merely signing only the Letter of Offer and Letter of Acceptance, notwithstanding the vendor or the purchaser. This insecure feeling of will persist until the signing of the formal agreement – Sale and Purchase Agreement (‘SPA’).

SPA is the main contract governing both parties and setting out the details like the agreed purchase price, conditioning precedents to be fulfilled, the payment manner, the details of the property, loan, the manner of delivery of vacant possession and any other arrangement in this buy-sell event. Therefore, it is utmost important to understand every detail in the SPA because you are bound by whatever you sign.

Before committing to the purchase of the property, a prudent buyer will always make an effort to view and inspect the property that will form the main cast of the SPA. This is not different from purchasing from Developers where one will view the showroom to get a rough idea of what to be expecting in the near future. Nevertheless, do not expect that the unit you actually get will be exactly the same with the showroom unit.

A showroom is nothing more than a display unit for you to get the idea of the selling. It is no difference from the scale model of the whole development, which is usually displayed in the middle of the sales gallery - which is not stipulated in the SPA; you will not be getting the same at the end of the SPA transaction. Thus, if the specifications like ceiling height, fixtures and fittings, parking, building material are of a concern, details like these should be inserted specifically in the SPA. This is applicable notwithstanding if you are purchasing from a secondary market or not.

This article will focus on the salient items in a SPA. There is no such thing as a standard SPA as the spirit of an agreement is to set out the terms mutually agreed by the parties. The purchase price is fixed upon signing the Letter of Offer, but the bargaining process continues during the period before the SPA is signed.

The good news for homebuyers in Peninsular Malaysia is where the lawmakers have laid down a set of SPA terms for the Developers to adopt in the Housing Development (Control and Licensing) Regulation 1989. The developers may only amend the stipulated SPA if they are offering better terms, such as shorter delivery of vacant possession period or longer defect liability period.

Although this set of SPA is only applicable when one buys residential properties from developers, it also serves as a good guideline for all other SPA terms to follow, such as buying a commercial property from developers or buying any property from the sub-sale market. As a result, it will absolutely cut down the people who go to court due to the ambiguity of the SPA signed.

The most important factor in the SPA will be the manner of payment, regardless the vendor or purchasers. Purchasers must know the manner of payment of purchase price not only to manage his/her finance but also not to incur penalties by accidentally/unintentially breaching the terms in the SPA.

Purchasing a residential property from developers, the billing stages are stipulated clearly in schedule 3 of the SPA. The manner of payment in a sub-sale agreement will be less complicated as the transaction period is shorter and the property is usually ready for delivery.

The common process is accepting 2 to 3% as a booking fee upon signing the Letter of Offer, the remaining 10% deposit is due during the signing of the SPA, then the remaining purchase price of 90% to be settled within 3 months after signing the SPA. In some events, it may be automatically extended for a further 1 month by incurring late payment interest. As mentioned, there is no standard SPA, one may decide to deviate from the norm if it is agreed by both parties.

Your next major concern will be the time you can get the vacant possession. Vacant possession is a legal term that means the property is in a state fit to be occupied. In simpler words, this means the delivery of access keys and cards to your newly purchased property.

For residential development by developers, vacant possession has to be delivered within 24 months for landed property and 36 months for high-rise stratified building. On the other hand, delivery of vacant possession for sub-sale is usually 3 to 5 working days after the purchaser settles the full purchase price. The SPA is subjected to the tenancy when the purchaser is purchasing a tenanted unit. The purchaser will be getting the legal possession as the owner of the property but not the keys to the unit. Effectively, the rental and deposits shall be delivered to the purchaser by way of assignment of tenancy.

If you have purchased a house in secondary market, you will not notice the ‘Defect Liability Period’ clause in the SPA. A defects liability period is the warranty period which the Developer is contractually obliged to repair the defects which have appeared within the period of time due to defective in construction works and material.

Contrary to the privilege of having developer’s warranty, the purchase of sub-sale properties requires sufficient due diligence of the purchaser when viewing and inspecting the property before entering into the SPA. Due diligence includes checking every part of the house especially sewage, piping, leakage, electrical appliances, rooting and any other fixtures and fittings to prevent any undesirable situation arise. Should the purchaser require the repair of anything prior to vacant possession, the purchaser shall make sure his/her lawyer inserts this in the SPA.

Be meticulous, be scrupulous. Do not make assumptions but make sure. No purchaser will want to jeopardize his/her deal or ruin your happiness due to your own carelessness. It is always prudent for the parties to inform their lawyer accordingly of their intentions and to enquire the available protection for anything that matters in the sales and purchase transaction during the drafting of the SPA, not after signing on the dotted line.

Tenancy Agreement

Renting out your apartment may be a good source of passive income but it can give you a host of legal problems if you’re not thorough.

Any conflicts and disagreements between you and your tenant consume time and resources. Especially if the specifics on the tenancy agreement are not detailed before the tenant signs it.

A legal contract will clearly set up the rules and stipulations. It establishes the rights and responsibilities of the landlord and tenant in an official way.

It is the responsibility of all parties involved, including the solicitor and agents to ensure that the tenancy agreement is ironclad and devoid of loopholes.

A tenant agreement is extremely important to the tenant as it protects the tenant from being forcibly evicted should the current landlord sell the property to someone else.

As a guide, we’ve prepared a list of important things you’ll want to look at while drafting out the tenancy agreement;

1. Length and type of tenancy: 
A short tenancy typically lasts for six months. A longer tenancy is usually set at a minimum of a year with an option to renew. You must also determine how many people are allowed to live in the apartment/property and how long a notice your tenant will need to give if they want to terminate it prematurely.

2. Dos & don’ts: 
Are there any restrictions you’re going to impose on your tenants? Will they be disallowed to own any pets or only a certain type? What about loud music and house parties? Will they be allowed to entertain guests and have them stay over temporarily?

3. Rent: 
How much rent you can charge depends on the location of your property, the distance to amenities, the condition of the property and what features are included. You need to also determine when the tenant must pay the monthly rent and what penalties there are for missing payment. State all additional and hidden costs and let your tenant know what is covered in the rent and what aren’t. Also state what factors may influence you to increase the rent.

4. Deposits: 
How much of a deposit does your tenant need to pay? One month or two? When will you return the deposit and under what conditions will it be withheld?

5. Maintenance: 
Will you provide any maintenance services? How frequent will you check on the property? What type of maintenance will you provide? Will you charge for these additional services? Do you provide other services such as maids, laundry and weekly vacuuming?

6. Landlord’s rights: 
How frequently will you visit the property? Will you schedule an appointment? Do you have access to the property when the tenant is not around? How can the tenant be sure that the landlord will not enter the property uninvited? Under what circumstances can the landlord enter the property without informing and scheduling a visit with the current tenant?

Following these guidelines while having your lawyer preside over the contract will go a long way to ensuring that you and your tenant’s rights will be legally and fairly represented at all times.

Real Property Gains Tax (RPGT) in Malaysia

Real property gains tax (RPGT) is a type of tax imposed by the Inland Revenue (LHDN) on capital gains incurred from selling real property whether they are land or buildings and is effective for individuals or companies.

RPGT was introduced as a means for the government to curb property speculation in an effort to avoid/prevent property bubbles from forming. Ultimately, the RPGT is a source of revenue for the government and is used to develop the nation, therefore its fluctuations is dependent on the economical needs of the country.

As a result, the tax can be increased or decreased when necessary. As a real example, the government reduced the RPGT during April 2007 – December 2009 to encourage investment.

Starting from January 1st 2014, all properties disposed within three years or less is subjected to 30% RPGT (previously 15% for two years and below and 10% for three years and below). Properties that are disposed within four years of purchase are subjected to 20% tax and 15% for five years.

Property Disposal in :	2013RPGT	2014RPGT
1st year	15%	30%
2nd year	15%	30%
3rd year	10%	30%
4th year	10%	20%
5th year	10%	15%
6th year & above	0%	0%

The property tax is levied upon anyone selling their properties; however for individuals selling or disposing their property after the 5th year, no RPGT will be levied.

Companies however, will pay a flat rate of 5% starting on the 6th year and thereafter. While non-Malaysians will be levied with 30% of RPGT up to 5 years from the purchase of the property and flat rate of 5% for the preceeding years.

RPGT is supplemented by allowable loss. This means a loss is made after the disposal of a property. Tax relief shall be provided if the disposal price is less than the acquisition price or if the disposal price is equal to the acquisition price.

Top 5 Considerations for Buying Your First Property

Buying a home is a huge commitment, so make sure you are ready before making that big leap. Evaluate to see if you have the capabilities, or the need to purchase a home. Check out mortgage calculators to see how much are your monthly loan repayments. As a general rule of thumb, monthly loan repayments should not exceed 1/3 of your monthly income.

Why do you buy a property?

People buy properties for many different reasons. These reasons will influence the type of property that would be suitable for you. For example, a studio apartment would be ideal for a single working adult who wants to have a place of his own. However, a bigger apartment would be more suited for a newly married couple.

If you have just welcomed your first child, then you might want to opt for a landed residential property with more space for your child to play and grow. Then, there are also investors who seek out specific properties to fulfil their investment goals. Whatever your reason may be, it is crucial to find a property that suits your unique lifestyle and needs.


Who can buy a property?

In Malaysia, as long as you are a citizen aged 21 years old and above, you can purchase any property in the country. However, there are certain properties which are only reserved for Bumiputeras.

How to find a property?

There are several channels to find properties for sale. You can browse through the classified sections in the local newspapers. This medium is also a good source to find newly launched properties in the market.

Another option is online property portals. Some of these internet property portals such as PropertyGuru allow you to customise your search according to location, type, price, and size, which makes it much easier to find the property you want. Alternatively, you can also hire a property agent to do the legwork for you.

Picking the right place

Location is the key to finding the perfect property. Ideally, your house should not be too far from your work place. This would help you cut down on travel time and expenses. For those who depend on public transportation, finding a house near a train station or bus stop would be great.

You also need to consider the amenities in the area. Is it near shop lots, eateries or clinics? Young working adults might want a place in town where the popular entertainment spots are mostly located. For families with children, you may want your home to be near some reputable schools. It is also good to check that the neighbourhood you pick is safe and has a good reputation.

You would want a property that will increase in price, and the factors stated above will definitely help with the appreciation in value of your home. Another notable factor is to see if there are any on-going or upcoming developments in the surrounding area of the property you intend to purchase. Based on the fundamentals of supply and demand, an over-supply of houses will cause slower appreciation in prices. Hence, be sure to do research on developments surrounding your property area that can potentially affect the price of your home.

When to buy?

Like all major decisions in life, you would want to plan ahead before purchasing a property. If you are buying a newly launched house, it will take at least two years to complete. Buying an existing house would mean you can move in almost immediately but you might also need some time for repairs or renovation. The waiting period must be factored in to determine the timing of your purchase.

Then, there is also the age factor. Most financial institutions only offer a housing loan tenor of up to 35 years or a maximum age of 65 years old for the borrower. Based on this calculation, it is best to buy your first property before the age of 30 so that you can benefit from the maximum loan tenure.

Damansara Jaya Intermediate Double Storey Terrace House FOR SALE (Renovated with GOOD CONDITION)

For More info visit at: https://www.facebook.com/Malaysia-Properties-Gallery-857603941040394/

Call me for private viewing. 
Lawrence Looi 
H/P: 012-2556387
Negotiator (REN 20041)
Hartamas Real Estate Sdn. Bhd 


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PJ SS22- Double storey intermediate terraced house for Sale

Owners are welcome to list your landed property in SS22, Damansara Jaya 
================================================== ==========

Land Area – 2037 sqft 
Tenure – Freehold
Guarded community
Fully renovated and extended house
Living hall fully extended
Dining area extended 
Kitchen cabinet
New plumbing and 3 phase wiring 
Move in condition
View to appreciate

The Damansara Jaya township consists of Sections SS22 and SS22A of the town of Petaling Jaya in Selangor, Malaysia.

The township consists of almost 2000 residential dwellings consisting of 1538 units of link houses, 179 semi-detached housing units and 42 bungalows along with a main commercial area (around 3°7′38.35″N 101°36′58.87″E). This commercial centre on the Atria was according to an article in the edgedaily, originally named as the "Gardenia Centre". Google searches indicate that the name "Gardenia Town Centre" was used to describe this former location of the Parkson Grand department store. Damansara Jaya is also home to KDU College (previously known as Kolej Damansara Utama). It has a population of over 11,678 residents.

Damansara Jaya Double Storey Terrace Link House FOR SALE ( FULLY RENOVATED )

For More info visit at: https://www.facebook.com/Malaysia-Properties-Gallery-857603941040394/

Call me for private viewing.
Lawrence Looi
H/P: 012-2556387
Negotiator (REN 20041)
Hartamas Real Estate Sdn. Bhd


================================================== ==========
PJ SS22- Double storey intermediate terraced house for Sale

Owners are welcome to list your landed property in SS22, Damansara Jaya
================================================== ==========

Land Area – 1966 sqft
Tenure – Freehold
Guarded community
Fully renovated and extended house
Living hall fully extended
Dining area extended
Kitchen cabinet
New plumbing and 3 phase wiring
New water tank and water filter
Move in condition
View to appreciate
*** ASKING 1.95M ***

The Damansara Jaya township consists of Sections SS22 and SS22A of the town of Petaling Jaya in Selangor, Malaysia.

The township consists of almost 2000 residential dwellings consisting of 1538 units of link houses, 179 semi-detached housing units and 42 bungalows along with a main commercial area (around 3°7'38.35?N 101°36'58.87?E). This commercial centre on the Atria was according to an article in the edgedaily, originally named as the "Gardenia Centre". Google searches indicate that the name "Gardenia Town Centre" was used to describe this former location of the Parkson Grand department store. Damansara Jaya is also home to KDU College (previously known as Kolej Damansara Utama). It has a population of over 11,678 residents.

Damansara Jaya Intermediate Double Storey Terrace House FOR SALE (Renovated with GOOD CONDITION)

For More info visit at: https://www.facebook.com/Malaysia-Properties-Gallery-857603941040394

Call me for private viewing. 
Lawrence Looi 
H/P: 012-2556387
Negotiator (REN 20041)
Hartamas Real Estate Sdn. Bhd 


================================================== ==========
PJ SS22- Double storey intermediate terraced house for Sale

Owners are welcome to list your landed property in SS22, Damansara Jaya 
================================================== ==========

Land Area – 23’ X 98’
Tenure – Freehold
Guarded community
Fully renovated and extended house
Living hall fully extended
Dining area extended 
Kitchen fully extended, down stair bathroom re-positioned 
Big living hall at the upstair
View to appreciate

The Damansara Jaya township consists of Sections SS22 and SS22A of the town of Petaling Jaya in Selangor, Malaysia.

The township consists of almost 2000 residential dwellings consisting of 1538 units of link houses, 179 semi-detached housing units and 42 bungalows along with a main commercial area (around 3°7′38.35″N 101°36′58.87″E). This commercial centre on the Atria was according to an article in the edgedaily, originally named as the "Gardenia Centre". Google searches indicate that the name "Gardenia Town Centre" was used to describe this former location of the Parkson Grand department store. Damansara Jaya is also home to KDU College (previously known as Kolej Damansara Utama). It has a population of over 11,678 residents.

Uptown Residences, Damansara Utama FOR RENT NOW

For More info visit at: https://www.facebook.com/Malaysia-Properties-Gallery-857603941040394/

Call me for private viewing.
Lawrence Looi
H/P: 012-2556387
Negotiator ( REN 20041)
Hartamas Real Estate (M) Sdn. Bhd

================================================== ==========
PJ, Damansara Utama- Uptown Residences for SALE

Owners are welcome to list your condo property in Uptown Residences
================================================== ==========

Uptown Residences is a vibrant and diverse urban community. It is a walkable neighbourhood which balances commercial, residential and retail possibilities. The new Damansara Uptown will simply be a better place to engage with life. A transformation is underway at Damansara Uptown, with new urbanist ideas are being put into effect to introduce a new lease of life and energy into this well-loved neighbourhood. Soon, the new Damansara Uptown will provide an integrated mix of residential and commercial developments as well as vastly upgraded infrastructure for a significantly smoother flow of traffic.

Property Details

Family Tower
Standard Units
Type A: 2+1 bedrooms + 2+1 bathrooms (1,687 sf)
Type B: 3+1 bedrooms + 2+1 bathrooms (1,967 sf)
Type C: 3+1 bedrooms + 3+1 bathrooms (2,207 sf)
Type C1: 3+1 bedrooms + 3+1 bathrooms (2,516 sf)
Type D: 4+1 bedrooms + 4+1 bathrooms (2,503 sf)

Penthouse
Type A: 4+1 bedrooms + 4+1 bathrooms (4,992 sf)
Type B: 5+1 bedrooms + 5+1 bathrooms (5,516 sf)
Type B1: 5+1 bedrooms + 5+1 bathrooms (5,459 sf)
Type C: 5+1 bedrooms + 5+1 bathrooms (6,548 sf)
Lifestyle Tower
Standard Units
Type A: 1 bedroom (studio) + 1 bathroom (734 sf)
Type B: 1 bedroom (studio) + 2 bathrooms (887 sf)
Type C: 1 bedroom (studio) + 2 bathrooms (1,040 sf)

Penthouse
Type A: 4+1 bedrooms + 4+1 bathrooms (3,608 sf)

Variety types of Facilities