More Malaysian millennials are beginning to dip their toes into the property market and become prospective buyers. With their limited budget, only affordable properties are within their grasp. Horror stories of impulse buys and hidden costs aside, are high maintenance fees scaring them off.

With tight budgets, millennials generally prioritise pricing for their starter home, therefore, a high maintenance fee is a big no-no. While many prospective buyers understand the necessity of a maintenance fee, safety and security are the primary reasons they are willing to pay a maintenance fee.

“It is important when it is well maintained, it provides a better and safer place. However, the cooperation in paying it from all the owners is important too,” said a counsellor who wished to be identified as Amber.

While it is true that more millennials are buying property as their jobs stabilise, their willingness to pay for high maintenance fees vary. And depending on the type of property they are seeking, the affordability range is also wide.

According to Khazanah Research Institute (KRI), the price range for an affordable home for 46% of the country’s residential properties range from RM100,000 to RM400,000.

Most look for the lowest maintenance fees as this is a monthly expenditure but this amount has a positive correlation to the number and type of amenities they would like to have.

“They like it but can they actually afford to buy it?” Rahim and Co International Sdn Bhd research director Sulaiman Saheh pointed out in the recent 30th National Real Estate Convention.

Millennials are known to have a strong preference for lifestyle-oriented property, but millennial respondents who were asked about their preference are looking for cleanliness, distance to their workplace and the feel of the area.

Sulaiman similarly noted that young working adults prioritise convenience more than older generations, preferring property that is transit-oriented and in a good location, being close to their workplaces or in urban environments.

Facilities such as a swimming pool and gymnasium are considered luxury expenses to young buyers. They would rather rent and leave the maintenance fee to the owner.

The general sentiment is that they should save up for their ideal property, instead of making a rash purchase.

Unaffordable housing is making people choose between saving and renting, noted Sulaiman.

Being in the working stage of their lives, millennials are forced to think economically. They are beginning to prioritise location and convenience over luxury and special features.

When asked if they were willing to budge on paying more maintenance fees for additional features, the answer is a resounding: No.

Naturally, those who have access to a larger income are more willing to pay for higher maintenance fees. These millennials buy to invest and are more willing to spend more.

“Usually people around my age who own or plan to buy are either funded by their parents or they are planning to marry,” said line producer Koh Xin Yu.

Others are hoping for the government to offer more subsidies and developers to offer more discounts before they commit to buying, she said.

Source: StarProperty.my

A newly proposed freehold mixed development by Lestari Duta Sdn. Bhd. (a subsidiary of Ideal Property Group) at Bertam in Northern Seberang Perai. Located on 467 acres of land along Jalan Tun Hamdan Seikh Tahir, adjacent to Eco Residence @ Bertam Perdana 5 housing scheme by Bertam Properties and Mekarsari by Hunza Group. It is just a stone’s throw away from Setia Fontaines integrated development by S P Setia, about 5km away from Bertam Toll Plaza.

The initial phase of this development comprises 48 units of 3-storey semi-detached and 8 units of 5-storey detached factories. It will follow by another 49 industrial plots in the second phase.

This project is still pending approval. More details to be available upon official launch.

Project Name: (to be confirmed)
Location : Bertam
Property Type : Industrial
Built-up Size: (to be confirmed)
Total Units: 48 (semi-detached factory), 8 (detached factory)
Indicative Price: (to be confirmed)
Developer : Lestari Duta Sdn. Bhd.

Seeing the rubbish-ridden beaches in her hometown prompted 10-year-old Siti Zulaikha Hazrul to take part in a clean-up programme at Pantai Bersih, Penang.

The Year Four pupil from Sekolah Sri Impian, in Taman Guar Perahu, said she was shocked to find plastic bottles and containers as well as food wrappers strewn along the beach.

“It is sad to see so much rubbish on the beaches which I used to visit every week with my family.

“So when my uncle invited my sister and me to accompany them, I was the first to say yes,” she said.

Siti Zulaikha and her sister Siti Nursyafiqah Hazrul, 13, along with their uncle and aunt, were among 60 participants of the beach clean-up programme organised by Penang Youth Development Corporation (PYDC).

The programme, which aims to raise environmental awareness, especially among youngsters, was co-organised by Seberang Prai City Council (MBSP), Malaysian Youth Council, Junior Chamber International Butterworth Chapter and Lions of Bukit Mertajam.

MBSP employees, fondly known as Wira Oren, also took part in the beach clean-up.

Siti Zulaikha’s uncle Khairol Annwar, 36, said he hoped the programme would expose his nieces to volunteer work and instil awareness of the importance of protecting the environment.

“I have been a volunteer since my school days. I think this programme is good so I brought my nieces along,” he said.

Khairol hopes the girls will learn the importance of cleanliness and protecting the beaches not just at Pantai Bersih but other places too.

Penang youth and sports committee chairman Soon Lip Chee said the involvement of youth and children in such programmes was important as it could instil in them a sense of belonging.

“By participating in such programmes, they can learn how to love the environment and ensure a clean beach,” he said in his speech.

He called on the public to keep Pantai Bersih clean so that everyone could enjoy spending their weekends there with loved ones.

Meanwhile, Seberang Prai mayor Datuk Azhar Arshad congratulated PYDC and Soon for coming up with the programme and he hoped that more of such activities would be conducted in Seberang Prai.

“It is a healthy and good collaboration, and the youths who participate in the programme will learn how to appreciate the environment,” he said.

Source: TheStar.com.my

About Muze @ PICC

The first phase of residential offerings at Penang International Commercial City (PICC) integrated development by Hunza Group. This 43-acre development is strategically located within the vicinity of Bayan Baru township. It comprises two 58-storey towers featuring 846 residential units with 10 levels of car parking podium.

Find out more about Muze @ PICC

Real Estate and Housing Developers’ Association (Rehda) deputy president Datuk N K Tong said the latest survey conducted by the association showed that some developers expect housing prices to rise on the back of anticipation of increased construction costs.

Respondents in the survey expect construction costs to surge an average of 19% in 2022 due to rise in prices of building materials, wages and financing costs.

However, Tong said it is challenging for property developers to raise their property prices.

“I think some developers may be having a low profit margin, and then there are some developers, as you see from the survey, who have chosen to reschedule or not launch in this uncertain environment.

“So I think some developers have offered to observe what is going on first before they can tell how to price the houses. If they try to factor in all the inflation, developers may be at risk of pricing themselves out [of the market]. But if they do not price in enough inflation, they may be at risk of building at a loss. So it’s quite a challenge,” he added.

The rising cost of development is a growing challenge faced by many developers within the sector, according to Rehda.

Tong warned that rising construction costs would have an impact on future property launches, adding pressure on already dwindling profit margins of developers.

“I think the construction cost increase has had an impact in terms of future launch prices. How will the impact be? I think it’s both the cost-push inflation and buyers’ sentiment as well. Those two will have an impact on future launches,” Tong said in a virtual briefing on Tuesday.

Additionally, Rehda vice president Zaini Yusoff noted that increasing property prices for future launches will be a difficult task for developers as this may curb housing demand. He also warned that the costs will rise further in view of the current inflationary environment.

“We have to do a lot of value engineering in order to maintain the [housing] price. And to [an] extent, we have to look at the new technology in terms of design to keep the price. If not, in the future the designs will be smaller in terms of built-up area in order to maintain the pricing. [This is because] if we increase the price, it doesn’t go in tandem with getting the loans with the bank (harder for house buyers to get finance approved),” Zaini added.

“In fact, we have been lowering our profit margin for the past two years. In business, it is about striking a balance, you don’t want to end up having a cash trap, because you have already constructed the building. So a lot of developers [had] a profit margin as low as probably to even break-even to sell the units,” Zaini said.

Cost of doing business spiked 18% in 2021, highest in five years
Respondents to Rehda’s Property Industry Survey for the second half of 2021 (2H21) revealed that 79% of respondents remarked that overall cost of doing business had increased up to 18% in 2021, the highest over the past five years.

The average cost of doing business was up 8% in 2017 and steadily rose to 11% in 2020.

To reduce operation costs, the respondents said they will freeze new recruitment, give less benefit/perks as well as undertake salary reduction. They will also reschedule the launching of planned projects, reduce the scale of launches and delay some projects.

Additionally, 49% of the respondents stated they are not launching any property in 1H22, with most citing unfavourable market conditions (29%) and being affected by Covid-19/movement control order (26%) as the top reasons.

Another 51% of the respondents said they are planning to launch projects in 1H22, totalling 24,557 units comprising 17,969 strata residential units, 5,997 landed residential units and 591 commercial units.

Of those with planned launches, 77% of them were anticipating their sales performance to be 50% and below for 1H22.

Most states aimed to launch residential units within the RM250,001 and RM500,000 price range. Johor, Selangor and Penang, on the other hand, will have mostly units priced between RM500,001 and RM700,000 in their 2022 offerings.

Meanwhile, 96% of the respondents reported they will be affected by the current economic scenario, with the top three components affecting cash flow being material and labour costs, compliance costs as well as financing and land costs.

Overall, the outlook for 2022 is largely neutral, but respondents are more optimistic for 2H22.

The survey was compiled from the responses of 124 respondents from all over West Malaysia.

Source: TheEdgeMarkets.com