During these challenging times of the coronavirus, developers have fine-tuned their marketing strategies in ways that can be very tempting for the potential house buyer.
It is no longer as straightforward as, say, a decade ago where this is the price, this is down payment, and here is the loan amount.
Over this 10-year period, the Malaysian property saw the entrance of developers’ interest bearing schemes, then came rebates and discounts, free legal fees.
Then came the free gifts like holiday tickets for two, or a car for a lucky winner. Then came cash-back offers where buyers actually get cash for buying a house.
Due to concerns about travelling, gifts like mobile phones and cars have taken the place of holidays and plane tickets. But it is not one car, but a car for every buyer.
Today, because of the movement control order (MCO) and later the conditional MCO, some developers have gone a step further by not charging a down payment, and absorbing the stamp duty for memorandum of transfer.It is the down payment, which is 10% of the house price on signing the Sales and Purchase Agreement (SPA), that buyers have difficulties forking out. Hence, said a marketing personnel of a housing developer, during this MCO period, this is being done away with. The other alternative is to give a 10% rebate, which was the trend even before the Covid-19 outbreak. The new perk is the minimum, or zero down payment. Developers handle this differently. Some may require a buyer to pay upfront a minimum amount, only to return it once the deal is formalised.
After all the deductions, the actual price of a house can be a lot lower than the overall headline price.
Malaysians are comfortable with paying booking fees. Having selected a unit and prior to getting a loan, they pay a booking fee and then go about seeking a loan.
Developers have, during this MCO period, made it as minimal as possible. A check shows that developers are asking less then than RM100, others have capped booking fees at about RM188, or RM1,000.
An agent representing a developer reasoned it out this way, “if you fail to get the loan you need, you only lose RM100.00.”
Raine & Horne senior partner Michael Geh in Penang, having been in the real estate practice for 25 years, says he has never come across a scenario such as today where so many incentives are given.
“We are going through troubled and interesting times, and developers have gone into very innovative strategies to sell and market their properties.
“Many of these very special deals are done via the social media, on a one-to-one basis. A buyer will not know what the next buyer is getting, or what the buyer before him has received, ” he says.
As for the various perks given during this MCO period, he says: “I believe this will not be forever.”
Geh says there are international buyers who are looking around. “We are engaged with some of them on video communications to buy and we know of some who have bought via this application, ” Geh says.
He decline to say how many his company is negotiating with but says they are from Hong Kong.
The threshold or cap for foreign buyers are RM800,000 for strata high-rise in Penang, he says.
International threshold was lowered to RM600,000 by the Federal Government in 2019 but the Penang state government is holding that cap at RM800,000, Geh says.
What is the SPA price?
Deploying perks to sell will tend to drive house prices down. It is not a direct way of reducing prices but the effect is the same. The question is, what is the price stated in the SPA?
Agents say the SPA will list the overall headline price, despite the actual price being lower.
It is this divergence between the actual property price shouldered by the buyer.
This difference in pricing has grown over the years and during this MCO period, the gap is likely to grow further.
Source: TheStar.com.my
Many strata property owners may have sought waivers or discounts on maintenance fees since the Covid-19 outbreak and the ensuing Movement Control Order (MCO) period but such fee waivers and discounts are not viable as any adjustments in fee collection or sinking funds will need the approval of property owners via an AGM or EGM, said Chur Associates founder and managing partner Chris Tan.
