Property News

[xebay11]

Absolutely agreed. In bad times, money in my own pocket is anytime better than those in the bush.
RM 1.0m give you RM 3,743 per month based on 4.2% FD. It is good rate in Malaysia. Even Singapore Gov. Bonds give you only 1.7% only.

Also don't know why the peeps here don't realise that unless they buy property in cash, the interest rate for mortgage in Malaysia is damn high and are actually paying the interest of people who put their money in FD.

 

[Tekkun]

Also don't know why the peeps here don't realise that unless they buy property in cash, the interest rate for mortgage in Malaysia is damn high and are actually paying the interest of people who put their money in FD.

Not everyone is as cash rich as you la.
You won't be able to understand the poor man's game. I know..cos I was part of them.
I even resorted to borrow money from credit card @18% pa to pay downpayment. Try figure why..

 

[mpan12]

Of course nobody wants to lose any money if they can help it. But losing a cool SGD$1 million dollars is not a small pill to swallow either, unless one is filthy rich. I’m just saying that the burden of a $300K loan is far more manageable than a $1 million loan, when the market is not doing well. Anyway my view is that JB and SG present different opportunities to different folks. For peasant folks like me who have no spare money to invest and certainly no money to lose, SG properties are virtually untouchable for me but JB offers me something that SG cannot. I’m also not saying that cheap means it’s good, though I would say that to me it is good that it is cheap, relatively speaking of course.:p

So I find the comparison is moot.

$1mil is not small according to whom? If the person is a multi-millionaire, $1mil may be just a small portion of his wealth. He can take it. Moreover, he could have made more money from his other properties or investments. He could just be cutting his loss by selling that property now. We can't just view the absolute amount and exclaim, OUCH! $1mil is so much money to lose.

On the other hand, if one is a peasant, losing $300k in a JB property can be very painful. It doesn't make sense to generalize $300k is less painful to lose compared to $1mil so I'm ok to buy an Iskandar property (with the possibility of being stuck with the property for decades or for life) rather than an SG property.

I spoke to a lady once who bought Country Garden Danga Bay, the notorious development with a whopping 9,000 units. She regretted a bit after realizing her folly of rushing in during 2013 like many other buyers then. Later she told me she consoled herself by saying even if she can't sell off next time, she just needs to work 2-3 years and she can recoup the money. So to her, it's "not so bad".

I told her that's very painful. She can console herself that way but it's not going to change the fact that she is losing unnecessary money. Buying a property "cheap" doesn't mean it's safe. If it has little or no resale value, few buyers interested in future, it can be a lot worse than buying a more expensive property with strong value. Of course, for the latter, you must have enough money to begin with.

 

[mpan12]

This article was published in 2014 during the peak of launching of residential units all over JB, you should read this again, very carefully.
http://www.stproperty.sg/articles-p...-down-fears-of-property-glut/a/174342/page2/1

The justification for the 300,000 new homes, under construction or planned in JB given by the Iskandar Regional Development Authority (IRDA) CEO Mr Ismail Ibrahim.

His reasons basically:

1. The MRT/BRT (bus rail transit) between JB and SG targeted to be completed by 2018 or latest by 2020.
2. Petroleum Integrated Complex in Pengerang (PIPC) when completed will ultimately need 1,400,000 employees and 600,000 new homes in the Iskandar region.

Now 2016, two years later, the RTS is still talk only with nothing confirmed...........so now maybe possible in 2025 ?
PIPC, now with RM5.1 billion project officially scrapped last week and starting of major development in PIPC pushed to AFTER 2018
So new housing units completed in 3 years time for the projected 14,000 new jobs, including 4,000 professionals will not get a tenant for a long long time.

Totally agree. I went to look back at all the things that should be happening at Iskandar as proclaimed back in 2012 or 2013 when they were marketing it like crazy. So many things were of wrong info or still missing now.

One of them is that the RTS will be built beside Legoland. Whoa....

Another one had Country Garden Danga Bay printing their colourful brochure with HSR train situated near to it. Whoa....

Then the rest are residential properties in Medini said to be completed in 2016. But till today they are not even half way thru.

Many projects got held back, such as Capitaland's Danga Bay, and a few other residential condos there. Avira I think was co-developed by our Temasek Holdings.. but no news about it. I walked past the Afiniti condo... it was so quiet and empty. Before that, agents were all praising, Buy buy! Near to Legoland and Gleneagles.... so huat one! Ermmm....

1Medini FULLY SOLD OUT! Wow, so hot this project? But you go there to see... it's completed several months ago with still lots of empty units. Beside or near it are hundreds/thousands of other condo units still building now. Future tenants/buyers from where?

Volt in Medini, such a nice video, showing the hotel, shopping centre, more condos (gulp!!!), convention centre... you go there today, it's still trees and trees all over. All the offices they promised either empty or nothing yet. Our MDIS was supposed to be there... but no news yet. Whatever ferry service from Harbourfront to Puteri Harbour, supposed to be ready in 2013? Now 3 years later, still not there. Yes, some say Coming liao, coming... yes... I don't know.

RTS by 2018? Don't even know if it will be proceeding. HSR by 2020? The 2 PMs already admitted it's not possible. Such a big project between 2 very different countries. You think it's only a few years of planning and building? I would even wonder if it will be ready by 2025.

Of course, some may argue, relax man, this is Malaysia, things proceed slower. But should I remind Time is money?

It may not matter to you cos you got excess money to put in. The condo you bought is for own stay, go there retire/relax. But for common poor man investors who want to make their money work harder than leaving it in the bank, this is worrying. Opportunity cost is lost, the money is simply parked in the property that is taking a long time to build. It could be stuck for a long time with no tenants or buyers. Will they default their bank loans or dump their properties? We shall see....

With no demand from businesses and industries to support the residential properties, the whole "scheme" is very questionable. Where will your tenants be coming from. When? And who are your future buyers given so many condos everywhere?

 

[mpan12]

Then why do Singaporeans buy new projects in Iskandar? Most buy cos the entry cost is low. It give them an opportunity to own a property with minimal cost. They cannot afford to save for years and when they got enough, the goal post move again. So it is either you jump in or you won’t get to go in at all. I would say if you want to buy purely for investments, open your eyes big big and do not listen to anyone. Trust yourself and go to the site yourself and feel. Many just buy and don’t even know where it is. They trust those brochures that has nice views and clear water. They think the world is so perfect. And they listen to the politicians and press release as gospel truths. This is Malaysia, not Singapore. Overall, we take calculated risks in everything we do. Calculated risks in this case, we have when investing in Iskandar is the monetary much lower than In Singapore. People buy cos they are comfortable with the surroundings. They can feel and manage the risks.

They hope there will be CA. Let’s leave CA aside as over long term, any properties in the world would have CA unless there’s a radiation leak. Then they look for tenants and hope rentals would cover their mortgage. If I were them, I would see if the infra and the neighbourhood would support these rentals. Is the pillars of the economy there to support these rentals? Or is it just a hyped up one? Look at history. For the past 25 years, is Malaysia badly affected by recession and can it recover?

The problem is, those who bought in 2013, the entry cost is not low any more.

I know some who argue I have a friend, or my uncle, or I myself bought JB properties 10 years ago, now they and I have made twice the amount. Who says buying Iskandar can't make money?

I have to point out 2 things:

1. Many of these buyers have not sold their properties. They may make "on paper" only. Until you can really sell off, then you officially have made. Sometimes, paper gain does not translate to real gain. There are too many properties to choose from for buyers.

2. They bought their properties 10 years ago! Iskandar properties have increased in price by so much already in 2012 and 2013 especially. So entry cost is low according to whom? You compare it to Singapore then of course it's a low. But if you are buying in Malaysia itself, you can't use Singapore's pricing to compare. At RM750 and above for a condo, or RM1,000 or more, it is super duper expensive. The question is, who are the buyers? They are mainly the foreigners and richer Malaysians. The normal common Malaysians won't be able to afford it.

What this means is that your pool of future buyers is so much more limited.

The increase in price is also not sustained by a better economy or more job creation. Do you all realize it's the developers who set all these inflated prices?

I go to Medini and I see so much empty land and trees all over. I don't see why condos there should be sold at RM750 psf and above so quickly. All these prices have been artificially inflated by the Iskandar authority. Developers also want to make profits so they need to sell high. I think even if they sell 50% of the units, they could easily recoup their costs? The buyers are the suckers who pay high and they need to find other suckers if they want to sell off their units next time. How sustainable is such a market?

(Note: I am strictly discussing the above for the common investors. I know if you bought for your own stay, you want to see nice views, you don't mind paying big money for it.)

 

[Tekkun]

The problem is, those who bought in 2013, the entry cost is not low any more.

I know some who argue I have a friend, or my uncle, or I myself bought JB properties 10 years ago, now they and I have made twice the amount. Who says buying Iskandar can't make money?

I have to point out 2 things:

1. Many of these buyers have not sold their properties. They may make "on paper" only. Until you can really sell off, then you officially have made. Sometimes, paper gain does not translate to real gain. There are too many properties to choose from for buyers.

2. They bought their properties 10 years ago! Iskandar properties have increased in price by so much already in 2012 and 2013 especially. So entry cost is low according to whom? You compare it to Singapore then of course it's a low. But if you are buying in Malaysia itself, you can't use Singapore's pricing to compare. At RM750 and above for a condo, or RM1,000 or more, it is super duper expensive. The question is, who are the buyers? They are mainly the foreigners and richer Malaysians. The normal common Malaysians won't be able to afford it.

What this means is that your pool of future buyers is so much more limited.

The increase in price is also not sustained by a better economy or more job creation. Do you all realize it's the developers who set all these inflated prices?

I go to Medini and I see so much empty land and trees all over. I don't see why condos there should be sold at RM750 psf and above so quickly. All these prices have been artificially inflated by the Iskandar authority. Developers also want to make profits so they need to sell high. I think even if they sell 50% of the units, they could easily recoup their costs? The buyers are the suckers who pay high and they need to find other suckers if they want to sell off their units next time. How sustainable is such a market?

(Note: I am strictly discussing the above for the common investors. I know if you bought for your own stay, you want to see nice views, you don't mind paying big money for it.)

I think discussions is for future investors. No point harping on the past. What had happened has already happened. The market had moved. It would be more worthwhile to look at what factors there are in Iskandar if one is interested to invest. I do not know why people buy other areas but I like Puteri Harbour personally based on these factors:

Buy where there is limited land, do not buy where there is limitless land. PH land is limited.
Buy where there is integration and support. PH developments are closely linked.
Buy freehold, do not buy leasehold. PH is freehold.
Buy where there is traffic. Government offices and hotels are in PH.
Buy where there is infrastructure. CIQ and the BRT will be there. Water taxis??
Buy valued views. Landscape can change. Seaviews do not.

Admittedly I paid premium for a 2 roomer in Encorp for one of the best unit available. I made my decision based on the best information at material time in 2013. Things will change, policies will differ over time. It is the challenge and I am enjoying the investment process. Fingers crossed.

 

[winners]

Yesterday, went to view a 1,615 sq ft unit on the 18th floor in Sky Loft (Bukit Indah). It's a bare unit and has been vacant since CFO (TOP), which should be about 1½ years ago.

It's selling for RM930k, but I told the agent that there are some sellers offering similar sized units for only RM690k, albeit on a lower floor and different facing. He admitted that these are desperate owners willing to sell even at a loss.

 

[mpan12]

Jialat... the oversupply is for real. I thot Bt Indah is a developed place already.

1.5 years unoccupied is quite a long time. The problem is, even if try to sell at a loss whether there will be buyers.

Yesterday, went to view a 1,615 sq ft unit on the 18th floor in Sky Loft (Bukit Indah). It's a bare unit and has been vacant since CFO (TOP), which should be about 1½ years ago.

It's selling for RM930k, but I told the agent that there are some sellers offering similar sized units for only RM690k, albeit on a lower floor and different facing. He admitted that these are desperate owners willing to sell even at a loss.

 

[Frodo]

Not everyone is as cash rich as you la.
You won't be able to understand the poor man's game. I know..cos I was part of them.
I even resorted to borrow money from credit card @18% pa to pay downpayment. Try figure why..

Point well said! It is impossible for me to have $300k to put into FD in any country, even if the returns is 10%! But MY boleh and I can borrow and buy $300k property. I am still playing poor man's game and looks like will still be playing it for a long while. :(

 

[xebay11]

Jialat... the oversupply is for real. I thot Bt Indah is a developed place already.

1.5 years unoccupied is quite a long time. The problem is, even if try to sell at a loss whether there will be buyers.

This time oversupply not like last time. This time and moving forward it is going to be more serious.

Investors beware!

 

[Frodo]

Jialat... the oversupply is for real. I thot Bt Indah is a developed place already.

1.5 years unoccupied is quite a long time. The problem is, even if try to sell at a loss whether there will be buyers.

Maybe if sell at RM300K the sharks will come?

 

[Frodo]

So I find the comparison is moot.

$1mil is not small according to whom? If the person is a multi-millionaire, $1mil may be just a small portion of his wealth. He can take it. Moreover, he could have made more money from his other properties or investments. He could just be cutting his loss by selling that property now. We can't just view the absolute amount and exclaim, OUCH! $1mil is so much money to lose.

On the other hand, if one is a peasant, losing $300k in a JB property can be very painful. It doesn't make sense to generalize $300k is less painful to lose compared to $1mil so I'm ok to buy an Iskandar property (with the possibility of being stuck with the property for decades or for life) rather than an SG property.

I spoke to a lady once who bought Country Garden Danga Bay, the notorious development with a whopping 9,000 units. She regretted a bit after realizing her folly of rushing in during 2013 like many other buyers then. Later she told me she consoled herself by saying even if she can't sell off next time, she just needs to work 2-3 years and she can recoup the money. So to her, it's "not so bad".

I told her that's very painful. She can console herself that way but it's not going to change the fact that she is losing unnecessary money. Buying a property "cheap" doesn't mean it's safe. If it has little or no resale value, few buyers interested in future, it can be a lot worse than buying a more expensive property with strong value. Of course, for the latter, you must have enough money to begin with.

As you pointed out, the comparison is moot if you are comparing the purchase choices of a filthy rich man and a lowly peasant. The former does not even need to buy in JB. The latter CANNOT buy a property in SG or put anything in FD. He can't even borrow $300K from bank to put back into FD! Yes, cheap does not mean safe. It just means cheap, relatively speaking. But all things being equal it is fair to generalise that the burden of $300K loan is lesser than $1 million loan. And for some people, like me, it's either that in JB or nothing at all anywhere.

 

[Tekkun]

Maybe if sell at RM300K the sharks will come?

The sharks already here. Just waiting only

 

[mpan12]

Maybe if sell at RM300K the sharks will come?

Sell at RM300k, means only RM186 psf. What sort of loss will they be making? I don't think they bought their condos so cheap. At least closer to RM500 psf.

 

[jasonjst]

Jialat... the oversupply is for real. I thot Bt Indah is a developed place already.

1.5 years unoccupied is quite a long time. The problem is, even if try to sell at a loss whether there will be buyers.

I think the real problem is foreigner can't buy these even it is lelong price . They should have put the limit at 500K for condo instead of 1m .

 

[mpan12]

As you pointed out, the comparison is moot if you are comparing the purchase choices of a filthy rich man and a lowly peasant. The former does not even need to buy in JB. The latter CANNOT buy a property in SG or put anything in FD. He can't even borrow $300K from bank to put back into FD! Yes, cheap does not mean safe. It just means cheap, relatively speaking. But all things being equal it is fair to generalise that the burden of $300K loan is lesser than $1 million loan. And for some people, like me, it's either that in JB or nothing at all anywhere.

Actually I was commenting on your previous comment:

"It is not always rosy and bao jiak when buying properties in Singapore. When the chips are down, some may face greater losses compared to a $300K loss in JB. Moreover it may be easier to hold a $300k JB property compared to a $1.3million or more SG condo."

To put in another way, what I am saying is, the so called loss of $1mil by the rich man may not be an overall loss as he has other investments to back him up. Or even if he loses the $1mil he can take it cos he is rich.

But if you're a peasant, the loss of $300k is likely very significant and it's a lot.

In that case, it is not as easy to hold the $300k JB property as you claim.

The bottom line is, bu ya property that has value and can be sold easily to buyers in a robust market. Otherwise, be prepared to bleed or make losses keeping it. However, if you're rich enough, maybe it doesn't matter. But if not, don't play the fool. This is no small matter. You can't liquidate properties so easily.

 

[mpan12]

I think the real problem is foreigner can't buy these even it is lelong price . They should have put the limit at 500K for condo instead of 1m .

Opps... I forgot about this RM1lmil ruling. Ouch... That's painful and where the problem is. At RM690k, the common Malaysian will find it too expensive.

So those desperate ones are banging their luck that Malaysians will buy. They're screwed and stuck man.... All these condos are stirred by and built for foreigners. Locals won't touch them.

 

[mpan12]

This time oversupply not like last time. This time and moving forward it is going to be more serious.

Investors beware!

And this is in Bt Indah, a relatively vibrant place.

Those coming up in Medini and Danga Bay will be a lot worse.

Puteri Harbour maybe safer but not spared also if one is strictly trying to sell as investment.

 

[Frodo]

Sell at RM300k, means only RM186 psf. What sort of loss will they be making? I don't think they bought their condos so cheap. At least closer to RM500 psf.

Well, they are desperate to sell even at loss, right? So you think there will be buyers at such fire sales prices?

 

[xebay11]

Opps... I forgot about this RM1lmil ruling. Ouch... That's painful and where the problem is. At RM690k, the common Malaysian will find it too expensive.

So those desperate ones are banging their luck that Malaysians will buy. They're screwed and stuck man.... All these condos are stirred by and built for foreigners. Locals won't touch them.

Yes also what I said all along, now all my posts coming true.