not affortable

Housing affordability worsened in 2014

KUALA LUMPUR: The Malaysian housing affordability has worsened to 3.6 times in 2014, according to Rahim & Co Chartered Surveyors executive chairman Tan Sri Abdul Rahim Abdul Rahman, in presenting the Rahim & Co Research — Property Market Review 2014/2015 yesterday.

“Housing affordability worsened to 3.6 times in 2014 compared with 3.4 times in 2009. This is based on average terraced house price to average annual household income,” he said. “This essentially means that an average terraced house would cost an average household or family in Malaysia, 3.6 times its annual gross income.

“However, I believe 3.6 times is reasonable and the government should maintain it at this figure. Moreover, the government has a vision to make Malaysia a high-income nation by 2020, and I’m confident we will be able to reach it despite the current economic condition vis-a-vis the lowering of oil prices and lowering of the [value of the] ringgit.”

The data showed that the least affordable terraced house in Malaysia for 2014 was recorded for Sabah at 6.2 times, followed by Pulau Pinang (5.9 times), Kuala Lumpur (5.6 times) and Sarawak (4.4 times). Read more

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House prices seen 3% higher after GST – property consultant

KUALA LUMPUR (Jan 29): House prices in Malaysia are expected to rise about 3% after the goods and services tax (GST) is implemented starting this April.

Property consulting firm Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman said although transactions on residential properties were GST exempted, building materials would be taxed under the GST.

“In my opinion, there will be slight increase in residential housing price, but not higher than 3%.

“There will be a wait and see attitude by house buyers, but I think eventually, the market will absorb it,” Abdul Rahim said today, at a press conference on the Malaysian property market outlook.

Abdul Rahim said the property market was expected to be stable, with signs of a slowdown.
But steady growth is still seen this year, according to him.

He was, however, mindful of a larger supply of office space. According to his estimates, there will be an additional 10 million square feet of office space in the Klang Valley, within the next three to five years.

A larger supply of office space is expected to fuel greater competition and rental pressure, according to Abdul Rahim.

As of the first half of 2014, Rahim & Co’s estimates showed there were 84 million square feet of office space in Kuala Lumpur.

The occupancy rate stood at 80.1%, according to the firm.

 

Source: The Edge

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Malaysia not on foreign property investors’ radar

KUALA LUMPUR: Some property developers had recently observed that the weaker ringgit could lure foreign investors to Malaysian properties but MKH Bhd ( Financial Dashboard) managing director Tan Sri Eddy Chen does not seem to think so as he opines that Malaysia is just not on their radar.

“Foreigners are very savvy investors and to them Malaysia is not a target,” Chen told the floor at the 17th Malaysia Strategic Outlook Conference today.

Chen, who was one of the speakers invited to share his views on the country’s property outlook this year, said this was evidenced from how local property prices had remained cheap relative to more developed markets like Hong Kong in the past 20 years. Read more

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Development spending may be cut

KUALA LUMPUR: While a cut in development spending seems remote for now, a further fall in commodity prices could force the government to consider doing so, especially with a possible credit rating cut looming in the background.

“It all depends on commodity prices. If commodity prices fall further and Malaysia takes a proactive stance, the government may cut its development spending to protect the rating,” said Hong Leong Asset Management’s head of investment Lye Thim Loong at Hong Leong Bank’s 2015 market outlook talk “Seeking growth in the world of divergence” on Saturday.

While the government has tweaked Budget 2015 by trimming its operating expenditure by RM5.5 billion, international rating agency Fitch Ratings on Jan 21 said it would still maintain its ‘negative’ outlook on Malaysia’s long-term issuer default ratings, adding that it was more likely than not to downgrade the country’s ratings within the next 12 to 18 months.

Fitch also noted that the possibility of twin fiscal and current account deficits “will remain a rating sensitivity for Malaysia”. A rating downgrade typically results in a flight of capital from a country, which will then have a weakening effect on its currency.

However, Lye noted that the risk of a downgrade is minimal at this point, so long as the fiscal deficit is kept under the 3.5% of the gross domestic product (GDP) mark.

“I think Malaysia will still run a small current account surplus, provided that oil prices do not trade below US$50 on average for the whole year and crude palm oil (CPO) doesn’t drop below RM2,000 per tonne,” said Lye. Read more

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EPF withdrawal allowed for flood victims to rebuild homes

KUALA LUMPUR (Jan 23): Flood victims can withdraw their Employee Provident Fund (EPF) savings from Account 2 to purchase or rebuild their homes, said EPF in a statement.

Those who have never made the withdrawals for housing and wish to rebuild their homes destroyed by the floods, can also do so by applying with the fund, it said.

The EPF further explained that members can also withdraw to purchase or build a second house, provided the first house has been sold, or disposal of ownership of property has taken place.

According to the fund, the disposal of ownership also refers to the loss of ownership of the first house owned through previous EPF withdrawal, due to several conditions, including the destruction of the house caused by natural disaster (such as flooding, earthquake and landslide), fire, abandoned housing project or cancellation of purchase.

“To be eligible for the withdrawal to build a second home, members are required to obtain a confirmation from the local City Council, Municipal Council or head of village, that their houses, previously purchased/built under the EPF Housing Withdrawals scheme, have been destroyed in the recent flooding,” EFP added.

The EPF will assess the property and verify the amount needed to purchase/rebuild the house, and check the balance of savings that members have in their Account 2. The eligibility for withdrawal is subject to other terms and conditions, it said.

The announcement came after more than 10,000 people in the East Coast were hit by the recent flood. While the government has announced a RM500 million flood relief fund, it estimated the rebuilding efforts to cost billions or more.

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Selling Your Properties

Selling your house for the first time can be a daunting experience. Here are some useful guidelines to help you along the way:

Work with an Agent

Since you do not have any experience in selling a house, it is advisable to do it through a professional property agent. A good property agent will do the marketing and legwork for you and get the best deal for your property. To avoid any complications, get an experienced agent with a good track record. If you are hiring through a real estate company, make sure the company is well-established.

Would it be better to work with a single or multiple agents? If you are in a hurry to sell your property, it would make more sense to hire more than one agent to enlarge your reach and speed up the sale process. However, if more than one agent is competing to sell your property, you might not get the best deal as the agents may offer a lower price to dispose the property for the commission.

Pricing Your Property

A good starting point to price your house is to appoint a property valuer. A professional property valuer will provide a fair and accurate valuation of your property based on many factors such as land status, surrounding amenities, location and industry conditions. At the same time, you can check the prices of similar properties in the area to gauge the market price.

Always price your property objectively based on the valuation and market price. Unless your house has been renovated extensively and is in tip-top condition, do not overprice the house based on emotions as you may lose out to the more reasonably priced properties in the vicinity. Read more