Property Malaysia

We here at Property Malaysia read lots of books, about lots of topics that interest us. However, one thing to note is that there aren’t many books written by Malaysians specifically about property in Malaysia. There are probably quite a few reasons for that, but in recent years this has started to change, but still not too many as compared to the hundreds from the US or the UK.

We are not including law books (you can find a list here, also good for buyers to read).

We should have more books that focus on the property in Malaysia - a lot of what they teach in those foreign books can’t be applied here, unless its all theoritcal stuff which usually don’t interest people.

Anyway, if you guys want to recommend any good books on property or business, feel free to comment. We’re all ears.

(We actually have a section called ‘Books That We Recommend‘, you can see it if you click on the tab above the date of the latest post. Incidentally, they’re all American books, and not restricted to property only…)

Some good news for housebuyers and investors. The Employees Provident Fund (EPF) now allows members to withdraw their Acount II savings yearly to reduce or settle their housing loans. They can also opt to fund the cost of tertiary education (at diploma level and above) for themselves and their children.

In the past, members could only withdraw from their Account II savings once every 3 years to reduce or settle their housing loans.

EPF also said that, “Withdrawals (for housing) can be made annually from the last date of withdrawal, with a minimum amount of RM500.”

The Edge also adds that,

“Some of the conditions for this withdrawal include that the members shall not be the borrower, the spouse is the purchaser and the borrower of the housing loan, the property is mortgaged with the bank and proof of marriage,” it said.
On the latest development, the EPF said it wanted to make withdrawals more flexible and customer-friendly. It had received the approval from the Minister of Finance on the changes to the housing and education withdrawals.
“These changes are part of EPF’s initiative as a responsive organisation to implement more flexibility in our withdrawals,” its senior public relations manager Nik Affendi Jaafar said.
He added: “The EPF is constantly studying the viability of our withdrawals and benefits to meet the changing and diverse needs of our 5.2 million active members.

To read the full report, check it out here.

We got this from REHDA’s website, fairly useful for people who want to get nitty-gritty on certain particular issues.

Most or all of these books can be found in big bookshops like MPH or Times, if not, those old bookstores on Jalan Tuanku Abdul Rahman would have.

for starters, we recommend the HDA, Strata Titles Act, and Local Government Act. Not easy reading though, you need to know what you’re looking for…

LAWS AND REGULATIONS RELATING TO REAL ESTATE AND HOUSING DEVELOPMENT INDUSTRY

Ministry of Housing and Local Government

Housing Development (Control and Licensing) Act 1966
Housing Development (Control and Licensing) Regulations 1989
Housing Development (Housing Development Account) Regulations 1991
Housing Development (the Tribunal for Homebuyers Claims) Regulations 2002
Housing Development (Compounding of Offences) Regulations 2002

Local Government Department

Street, Drainage and Building Act 1974 (Act 133)
Town and Country Planning Act 1976 (Act 172)
Town Planners Act 1995 (Act 538)
Local Government Act 1976 (Act 171)
Road Transport Act 1987 (Act 333)
Control of Rent (Repeal) Act 1997 (Act 572)
Control of Rent Act 1966 (Act 363) (Revised 1988)
Federal Territory of Kuala Lumpur Land Rules 1995
Uniform Building By-Laws 1984
Malaysian Constitution, Schedule 9, Item 76(4) & 95(A)

National Housing Department

Street, Drainage and Building Act 1974 (Act 133)
Uniform Building By-Laws 1984

Fire Services Department
Fire Services Act 1988 (Act 341)
Uniform Building By-Laws 1984

Department of Town and Country Planning, Peninsular Malaysia

FMS Town Board Enactment (Cap 137) Chapter IX
National Land Code Act 56 of 1965
National Land Code (Penang and Malacca Titles) Act 1963 (Act 518)
Street, Drainage and Building Act 1974 (Act 133)
Strata Titles Act 1985 (Act 318)
Town and Country Planning Act 1976 (Act 172)
Uniform Building By-Laws 1984

Sewerage Services Department

Sewerage Services Act 1993 (Act 508)

Other Related Legislation

Communications and Multimedia Act 1998 (Act 588)
Continental Shelf Act 1966 (Act 83)
Electricity Supply Act 1990 (Act 447)
Energy Commission Act 2001 (Act 610)
Environmental Quality Act 1974 (Act 127)
Food Act 1983 (Act 281)
Land Acquisition Act 1960 (Act 486) (Revised 1992)
Land and Mining Plans and Documents (Photographic Copies) Act 1950 (Act 233) (Revised 1980)
Land Conservation Act 1960 (Act 385) (Revised 1989)
Lembaga Pembangunan Industri Pembinaan Malaysia Act 1994 (Act 520) (Construction Industry Development Board / CIDB)
Malaysian Communications and Multimedia Commission Act 1998 (Act 589)
Mining Enactment (FMS Cap 137)
Municipal Ordinance S.S. Cap 133
National Land Rehabilitation and Consolidation Authority (Incorporation) Act 1966 (Act 398) (Revised 1989)
Occupational Safety and Health Act 1994 (Act 514)
Pengurusan Danaharta Nasional Berhad Act 1998
Real Property Gains Tax Act 1976 (Act 169)
Urban Development Authority Act (Act 46)
Waters Act 1920 (Act 418) (Revised 1989)
Waters Enactment FMS Cap 146

Recently, I have been reading this book called “Property Ladder” by Sarah Beeny. Some of you have noticed my previous posts highlighting some interesting points highlighted in this easy-to-read book.

For those interested to know more about how to enter the property market, this book is invaluable. The main gist of this book is how to add value to your property by doing some small renovations and refurbishment, then selling it at a premium or getting better rental returns.

Although skewered towards to UK market and settings, the principles are universal.

Anyway, this is the book:

In Malaysia, the two most common way to buy residential property is from the developer (during launch of housing development of condo) or via private sale. Private sales can be a direct sale between 2 parties or through a real-estate agent.

Here we give description of more ways to buy homes. And all of them are available in Malaysia. So if you’re looking to enter or sell in the market, these options may be able to get that 10% or 20% better price. (For further reading, check out Sarah Beeny’s Property Ladder)

For this post, let’s assume you’re looking to buy a house.

From the developer– this is as mentioned above, buying from the developer. For tips on sieving for good companies, read my earlier post. Generally, ask around with your friends, colleagues and industry personnel about your intended property, remember knowledge is power.

Via agents – First you contact several real estate agents specializing in the area you want. Explain clearly to them what you want (price, location, type of property) and check with periodically to ensure they don’t forget about you. Build a good rapport with your agent, their expertise and contacts is essential in getting you the right deal. When you are shown a property you really want, don’t dilliy dally! Put in your offer as soon as possible (after thinking it through) or the property may be sold by the time you decide.

Auction – This process is fast and furious and there can be pitfalls. Be sure to go with someone experienced and you can trust if you are unsure. A lot of it is dependent to luck, but you need to do the tiring legwork and paperwork before that you can land that good deal. The golden rule is to set your top limit and STICK TO IT. Another thing to remember is that vendors may well put up a property for say if there are complications. Therefore, know the background before you commit anything.

Do-It-Yourself – This may be a good way of finding property although you risk wasting a lot of time as vendors then to colour their description of the property they are selling and describe it in a totally unrealistic way over the phone. The best way is to frequently drive around areas you are targeting and seek out those private ‘for sale’ signs. This way you save on agent’s fees. But again, this is time-consuming and frustrating.

Newspapers – This is a good a way to have a feel of the market pricing of a particular area. Papers will carry details of private sales and auctions. But try to study the property section of the papers for few months before buying – that way you can be relatively confident of not only catching the right property of when it comes up but also that the sale price you are hoping for is not too far way off the mark.

The Internet – This media of property transaction is beginning to take-off here. There are a few good local sites, some focusing on second-hand market, some are agents for new launches, some specialize in auctions. Also, the internet is also a good place to find out more about developers, and to learn more about properties and the industry. A good place to start is this blog! (Yes, please bookmark this site and tell all your friends…!)

Anyway, I welcome any feedback or suggestions from my readers.

Further to my post last week, I’ve found another interesting section from the book Property Ladder by Sarah Beeny.

Buying in a Rising Market – A Word of Warning

‘Trading or speculating on the property market is not the same thing as property developing. It simply means buying properties and either waiting for the market to change in some way or selling the property to someone who will pay more for it than you did in the state when you bought it.

This is effectively the same as if you were a broker trading in the stock market – brokers are not doing anything to add value to the shares, they are gambling on outside forces that are driving the prices up or down. While a rising market may seem an exciting way of gaining lottery-type amount of money for doing almost nothing, it is important to be realistic about what is happening.

A slow and steady growth in property prices undoubtedly benefits everyone but a very buoyant market where property prices rise dramatically over a short period carries with it the danger of unsustainable growth and the knock-on effect of the market becoming overheated and either leveling off or actually dropping (as happened in the 1980s).

Either way there is little you can do to affect the market (unless you have the buying power of an oil tycoon). If you are making a profit on the property due to the rising market rather than actually adding value by changes you make to the property yourself, then you might as well buy a newly-modernized home that someone else had sweated blood over and enjoy living there until it is time to sell.

Your profit should always be calculated on the basis of the value of the property on the day you purchased it. This way if the market rises, so well and good, but if it does drop it will still have a long way to go before you make no profit at all. Don’t forget that as prices go up, unless you are planning on jacking it all in and spending your capital backpacking around the world (quite tempting sometimes) you will have to spend more on the next property you buy so you don’t actually gain that much in the grand scheme of things.

The only one to really gain from a rising market is the Chancellor of the Exchequer (The British Finance Minister), as the more properties cost the more stamp duty is due.’

Some sound advice there, I must say.

The other day I borrowed this book from the library called Property Ladder by Sarah Beeny. The tagline said “How to Make $$$ from Property” (they actually used the pound symbol, it was a British publication).

Actually it wasn’t what I expected it to be. The book was actually talking about how to choose property, renovate it, fit-out with interior decoration and furnishing, and then sell it or rent it out for revenue.

The book was quite informative, but it was totally skewered to the British market, with some pretty neat examples of housing areas near London.

Nonetheless, the book also contained a lot of useful tips for Malaysians, although I doubt many of us will get the opportunity to read this book. So I’ve chosen to highlight a few important portions here over the next few days.

I’ll start with this summary of the section called ‘Deciding on Your Market’:

‘The market for buying or renting properties can generally be split into the following categories. Their relative important will vary depending on the area. To work out which sector of the market you should be targeting your property towards study the market descriptions below. You should also check out the local amenities to see who the shops and services are gearedto and bear this in mind to help you identify the market.’

The Market (summarized)

Students – ideal rental market, near college/university, don’t expect top quality
Young professionals – first-time buyers or professional rental sharers, comfortable surroundings, decent-sized rooms, good transport links.

Older professionals – second-time buyers, expect high quality finishes and an eye for design

Young couples – house buyers, kitchen and garden important, near schools and amenities.

Growing families – house buyers, plenty of separated living space, large garden, established residential area

Downsizing households – smaller home, bungalows popular, comfortable surroundings, low-maintenance.

‘The key is to appeal to as many of these market categories as possible. The greater the number of these different groups interested the more likely you’ll be to get the sale at the price you want. The ideal situation is to have two or more interested buyers – you have a greater chance of achieving your asking price and getting a speedy sale.’