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Three major reasons why landed is better than condo. What do you think?

October 19th, 2014 30 comments

by Charles Tan

Today, I had lunch with a very capable young friend. She is many years younger than me but she already owns her own business in partnership with a very prominent personality here in Malaysia. A rich one. Over lunch, we were talking about her first property and I asked why is she not thinking of buying a second one. She said, she prefers landed but these days, landed are either too expensive or too far away. She does not want to travel a long time every time just to reach her destination on time. Then, I asked her why she prefers landed over her current apartment. As usual, the three major reasons were presented.

1) Bigger

2) More Land space

3) Standing on actual land.

Bigger. This was true long time ago when landed properties were the norm and high rises were all flats or apartments. Then, many years ago, the condos started. Most of the time, it was those 800 – 1,000 sf ones. These units are really smaller than the typical terrace houses then. Today, there are many more bigger units, from 1,500sf all the way to 2,500 sf. A typical 20 x 70 double storey terrace house would have a built up of just 1,400sf – 1,500sf which meant that just thinking about size alone, its no longer true that landed is bigger. Condos are actually getting bigger, more of them. Landed are getting smaller, most of them or they now give you more storeys, townhouses or superlinks etc.

More land space. I am not sure how you want to compare the tiny plot of ‘grass covered land’ within your 20 x 70 terrace house with a huge park within the modern condominiums of today. Some even have a rooftop garden, complete with an infinity swimming pool. Some allows you to do BBQ on the rooftop while you chit-chat with a huge group of friends. Yes, it is true, you do not swim everyday and you also do not ask your friends to drop by everyday. If you insist that hey, the condo’s BIG plot of land is SHARED while I own my own piece of land, then yeah sure. You win. Do remember, nothing stops me from using the whole big plot of land within the condo. I am not sure if you can use your neighbour’s plot of land.

Standing on actual land. Actually, this is true. If you own a landed property, you stand on the ground itself. Meanwhile, if you are in a condo, sometimes even the ground floor may not be standing on the ground because the car parks might be below. Tell me however, is standing on the actual ground really more important that having a place to stand? As usual, if your answer is that hey, I am prepared to pay a huge premium so that I can stand on my own piece of land and not standing on another person’s rooftop, ok you win.

The purpose of this article is not to tell you to buy condo. It is to tell you that if you like landed, just say you like landed. Don’t give the three reasons above. You can even say I buy landed to show people that I am richer. That’s a pretty good reason too. Or you can say, my parents love only landed property. In fact there are lots of other reasons which you can attribute to just the landed ones and I would agree. As for capital appreciation reason, that’s another story altogether. Happy Investing, whether it’s condo or landed.

>> This opinion article comes courtesy of Charles, the founder of kopiandproperty.com. He is popular for sharing his thought on property investment mostly based on his own 11 years experience as well as from all the readings and conversations with property gurus in the industry. (Source)

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Strata living – a tale of two cities

October 18th, 2014 No comments

The famous opening line in A Tale of Two Cities by Charles Dickens presents to us the tension and opposing attitudes borne between the inhabitants of the two cities. This disparity reflects our perception of “Strata Living” – a form of progressive yet regulated community living made possible by its inhabitants within its gated guarded boundary.

Strata is a legal concept that has been around officially for almost three decades in Peninsular Malaysia since the introduction of the Strata Title Act in the 80s and has never cease to expand its roots till to-date. As a working concept, it stretches further back to history under the subsidiary title under the National Land Code. Official statistics from the Housing Ministry in late-2012 shows that one out of four stays in a strata development in Peninsular Malaysia. In response to such pressured demands, the yet to be enforced Strata Title (Amendment) Act 2013 (STAA) and Strata Management Act 2013 were passed in parliament to better serve such needs.

Strata living often relates to the affordability and buying power. The common presumption is the less fortunate gets a piece of “air space” made possible by construction technology. Nonetheless, parallel to the scenario in the Dickens fiction, there may exist a twin (a Siamese genre for this instance) with overlapping similarities while simultaneously distinguishable by the underlying motivation akin to the two sides of the same coin.

The reality of strata living has come about due to the scarcity of land in areas where infrastructures are concentrated and increasing land cost. Over the years, the Government has been trying to improve house ownership through the introduction of affordable houses, with the most recent example being PR1MA. The basis of strata living is self-management and self-sufficiency.

In other words, once developers have done their part, they wipe their hands clean of any further obligations save for any latent defects or negligence. This form of strata living is seen as affordable. The negative part is you have small plots of land with residential units densely packed together; a suffocating and uncomfortable setting to raise a family. So is the tale of one city – a grey and morbidly dense city.

Yet, by a flip of the same coin, the concept of strata living need not be restrictive. It is not confined to vertical multi-level structures but also horizontal living – gated, guarded and landed communities. This type of strata living is naturally more expensive and caters to the higher income group – lavish strata living with lesser restraint on space, practically the area of an entire building with landscaping. Imagine the typical Western upper-class neighbourhood – the lack of fencing between the houses within the gated boundary creates opportunities for connection and interaction. Children are able to roam freely and safely within the gated boundary.

With the soon to be effective STAA 2013, the exclusivity in strata living lifestyle is expected to increase. By virtue of the Act, the management corporation (MC) has the discretion to designate limited common property areas for the exclusive enjoyment of a particular group of parcel owners. In other words, there will be more diversity in strata living moving forward.

With such an enactment, one can only envision the inevitable formation of the MC that is akin to that of a resident’s committee in Singapore. Moving-in resident, owner or tenant, is required to undergo MC screening, which resembles a school admission interview and will be categorised based on social status, income levels etc.

Moving up a notch, one can envisage the setting up of a property management fund contributed by the owners and managed by professional fund managers to ensure a handsome return to the MC for long-term sustainability in maintaining the desired lifestyle of the strata community. Simultaneously, without much restraint financially, outsourcing such maintenance work to a professional management group is made possible.

Such is the tale of another city – a desired city of hopes and possibilities. There are both strata projects, but so vastly different.

From the above, one city simply does not reflect the other. While the idea of chipping into strata living is involuntary at large, there are pros in strata living that warrant the higher income group to choose and favour strata living.

Bundling with the improvement of the strata regime that caters to the wants of this higher income group, strata living is the way forward for Malaysia in our path to a developed nation.

Chris Tan is the founder and managing partner of Chur Associates

Source: StarProperty.my

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5 Property Fairs In 6 Weeks

October 16th, 2014 13 comments

Five significant property fairs in six weeks!

If you have missed the MAPEX Penang 2014 two weeks ago, you can now plan your time better with 4 more coming within the next two weeks.

Seriously, I think we have way too many property fairs recently. Not only people has started to feel bored and confused, I believed the developers are also having hard time to decide which one to participate. Perhaps the organisers should collaborate among each other to establish a win-win situation.

The good thing is, now you have more options. So if you like shopping, you can choose between Queensbay and Sunway Carnival Mall. If you are staying at mainland and don’t feel like crossing the bridge, you can go to Sunway Carnival Mall. Can’t make it next weekend? You can go to the one in Queensbay Mall the week after.

If you are just too busy to visit any of them, just subscribe to our weekly newsletter. We will keep you updated. :)

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Penang invites Singapore firms to grow together

October 15th, 2014 7 comments

Artist's impression of the future BPO towers on current PDC's site

Penang is vying to become the next hub for Singapore companies’ regional expansion, with the state government open to more opportunities for bilateral partnerships, its Chief Minister Lim Guan Eng said on Tuesday (Oct 14).

“We are putting ourselves on the map – that Penang is open for business, and you can set up your plants here at very attractive rates,” said Mr Lim, who was in Singapore to unveil BPO Prime, a S$500 million mixed-use development project led by Singapore investment giant Temasek Holdings and Penang Development Corp (PDC) – the state’s development agency.

“We can complement the role played by Singapore. We have a technology and electronics cluster, and I believe you should use our core competencies in manufacturing to grow your services sector. The key is convergence,” he said.

“Singapore’s investment into Penang jumped from RM61 million (S$23.8 million) to RM622 million between 2012 and 2013. We feel there is room to grow – and what better way to grow than working together? That’s why we have asked Temasek to come in, not just as an investor but also as a player,” he added.

Sound Alternative

BPO Prime and Penang International Technology Park (PITP), the two Penang projects outlined in a memorandum of understanding that Temasek and PDC signed in May, will have a total development value of about S$4.4 billion.

The developments will be funded via a joint venture that is 49 per cent owned by Temasek.

BPO Prime will break ground in the first half of next year and construction will take two to three years. When completed, it will offer 1.6 million sq ft of residential and commercial space. The commercial element will focus on business process outsourcing.

“Penang’s outsourcing sector saw more than a 20 per cent increase in revenue last year. BPO Prime is a priority project that is part of the state government’s plans to transform Penang into an international outsourcing hub,” Mr Lim said.

Penang can be a sound alternative for Singapore companies to expand in Malaysia at a time when all eyes are on the nearby Iskandar region, said Mr Philip Yeo, chairman of Economic Development Innovations Singapore (EDIS), the project’s master development manager.

“I’m looking for skilled workers, in which case Penang has a better advantage … Iskandar is near enough – but I’ll go where the skill is,” Mr Yeo said, citing his own experience as a chairman of aerospace component manufacturer Accuron, which is planning to grow its workforce of 800 to 1,000 in Penang.

“I believe talent will be a strong selling point for Penang, where spaces such as BPO and PITP will be ideal for high-end activities from Singapore and elsewhere,” he said.

Source: Channel News Asia

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Budget 2015 measures too small to spur property market

October 13th, 2014 No comments

The Malaysian Institute of Estate Agents (MIEA) is disappointed with Budget 2015, as the measures announced are too small to have an impact on the property market, said its president Siva Shanker.

“I am disappointed with the announcement. The budget during the last two to three years only managed to reduce transactions. More should have been done…the measures are too small to have an impact on the market. Thus it will be business as usual and prices will continue to increase,” he told SunBiz.

Siva said one of the issues that the government did not address in the budget was investor clubs, which has distorted and damaged the property market badly.

He said there will be further pressure on the market when those who bought via investor clubs to “flip” the property at a higher price try to sell the units in a market where buyers cannot afford.

However, Siva lauded the government’s move in helping the youth and first-time house buyers with the Youth Housing Scheme, more units to be built under 1Malaysia People’s Housing Programme (PR1MA) and extension of the 50% stamp duty exemption.

The government extended the 50% stamp duty exemption on instruments of transfer and loan agreements and increased the purchase limit from RM400,000 to RM500,000. This exemption will be given until Dec 31, 2016.

“I think the stamp duty exemption is a great idea but there must be a mechanism in place to make sure the buyers are really first-time home buyers,” he said.

Siva said the exemption should be made available only for first-time property buyers to avoid abuses. For example, a person who has bought five commercial properties but yet to buy his first home, although it is unlikely, should not be eligible for the exemption.

“It should be limited to those buying their first property and first home, for own occupation,” he added.

On the Youth Housing Scheme, which is a smart partnership between the government, Bank Simpanan Nasional, Employees Provident Fund and Cagamas, Siva said it is a good move but the 20,000 units available is too little.

“I’m sure there are more than 20,000 married youths who have yet to buy their first home. They should increase the amount,” Siva said.

The government also announced an allocation of RM1.3 billion to build 80,000 units under PR1MA and raised the ceiling of household income from RM8,000 to RM10,000. A Rent-To-Own scheme will also be introduced for individuals who are unable to obtain bank financing.

“This is a good move but 80,000 is not enough. My worry is the implementation, that people who don’t need it will buy it. There must be a fool-proof system to avoid abuse. Enforcement and vetting process must be thorough, to reserve it for those who really need it,” he said.

Meanwhile, Zerin Properties CEO Previndran Singhe said overall, the budget is positive for the property market as it includes affordable housing and infrastructure.

“Infrastructure investments such as LRT 3 will be fantastic for Shah Alam and Klang while the Second MRT Line from Selayang to Putrajaya will be good for Putrajaya estates. Prices in the area will increase. Affordable housing measures are commendable and the income tax reduction in conjunction with the goods and services tax (GST) coming in is also good,” he said.

“We would have liked to see more stimuli for the primary market but overall the measures are good,” he said.

However, he cautioned that house prices will still increase as residential properties are still classified as exempt under the GST, which means developers are not entitled to any refund on their input tax.

“House prices will still go up because there is no way the developers can absorb it,” he added.

Source: The Sun Daily

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