Property Malaysia

WOw, this is something you’ve got to see to believe. This house in Pacific Northwest of the US, has got an underground fortress going down to 45 feet (15 meters)!

Underground Fortress

Taken from the website:

The fortress has over 1600 sq. ft. of living area, plus hundreds of more square feet of passages and secrets rooms. It was all hand dug over a 20 year period, and all the walls were constructed with a small electric hand cement mixer. There are 3 ft concrete walls, using 5-bag cement (20% denser than regular cement). Not only are the walls thick and dense, but the finishing work is amazing quality.

There are tons of photos of this place, showing the features like toilet with hot water, gas powered generator with battery recharge, office and living space, loads of secret compartment and can even act as a bomb shelter.

You’ve got to wonder, how much would that unit cost on the market?

We got this in our mailbox (in our PC, not the real mailbox outside the gate) last week, we’re curious how it came to us. We’re assuming he/she wrote this to his developer and sent a copy to us. And hopefully he didn’t mistake us for his developer, or KPKT for that matter…

Anyway, i hope the person doesn’t mind us putting it up here for our Ask & Answer column for the benefit of other buyers. Cheers!

XX to me (name withheld. Usual reasons, lah)
10-Aug (5 days ago)

Dear Sir,

I’m really puzzled how can most people just happily get their new house keys from the developer and start gathering family members to spring wash their new house???

When approached, developer always say they have no one to spaer to clean the house. Isn’t there any article somewhere somehow indicating that a house must be surrender to the buyer in clean and perfect condition? Imagine buying a new car and you get it in sparkling show room condition. And buying a house but got in urrh..no words to describe the mess in the new house…Cant we demand it to be delivered in show room condition???

Where can we poor people channel our sorrow?? after spending quarter million to buy a house that comes free with 1 ton of building waste…

Dissapointed

Our Response:

Well, the best place to look is in your S&P document if there is any clause to say they must hand over the house in a clean state. But we can bet you that 9.9 out of 10 developers will NOT put such a clause in the S&P. Why? Well, there are a few problems. How clean is clean? Of course, following due reasoning, the developer cannot expend $$$ to make sure everything is super spick and span, since new housing area is bound to be very dusty. Anyway, if they put a clause to impress buyers, they’ll be afraid that buyers will ‘take advantage’ if it and make them clean everything right down to sterile conditions. (More $$$). So you see why they don’t usually do that. Most of the time the developer will think “Aiyah, the buyer will clean anyway, so why bother to clean so much? They won’t move in immediately, then the house will be dusty again…”

But then, buyers must fight for their rights. Or at least good after sales customer service. Here’s what you should do:

1. Put it in the defects list.
2. Take lots of photos.
3. Make an appointment with the developer’s supervisor to come and inspect the handed over house. Make sure he signs receipt of defects list. Keep a copy (should they accidentally ‘lose’ the form)
4. Get a commitment from them as to when it can be rectified (the period is usually stated in the S&P).

If the above still does not get thing done, you need to move into Phase 2.

1. Write letter to developer to complaint. Attach all documents - photos, defects list, and notes of all inspection times and dates.
2. Send photos to papers, with complaint letter so that everyone hears about it.
3. Copy letter to KPKT.
4. For more drastic action - call the press. I hear this particular TV station is always very keen on all these issues.

Okay, fine, the above is a little drastic, but what else can a buyer do? There’s one thing a developer is afraid of is - BAD PUBLICITY. Well, MOST developers lah. Some will think - “Project finish already, i got my profit, can close HDA account, why should i worry? I’m not spending XXX to clean your house!”

Having said that, most developers usually hand over the house in a reasonably clean state, but even so, you still need to clean the house again.We’ve come across a developer that will offer free professional cleaner service once after VP to the buyer, the buyer must appoint the date for them to come. Good idea.

There were two articles in the Star Business section yesterday that caught our attention. Both were actually reports of the Fiabci Smart Investor in Property Seminar IV held in KL over the weekend.

According to one of the speakers, Mr. James Wong of VPC Alliance (M) Sdn. Bhd. timing was of purchase is critical in investment. There are 4 stages in a property cycle – bottom, growth, boom and decline. However, in reality, the property cycle does not run in such manner as there are cycles within cycles.

He elaborated that the Malaysian property cycle between 1970 and 2004 had three boom periods:

• from 1973 to 1975;
• 1978 to 1981;
• and 1995 to 1997.

There were two bottom periods:

• from 1984 to 1988;
• and 1997 to 1998.

He went on to elaborate in detail about how the cycles do not always go through the four phases, and how different segments of the property market go through different cycles concurrently.

You are encourage to read the article for the full write-up, or attend the next seminar which is organized by Fiabci and sponsored by the Star.

A related article reported that Ho Chin Soon of Ho Chin Soon Research Sdn. Bhd. was presenting how the population growth was the highest compared to other regions such as Johor Bahru and Penang.

According to the report,

Between 1991 and 2000, the Klang Valley grew at 4.8% per annum, compared to JB (4.6%) and Penang (1.57%),
“If the growth rate of 4.8% per annum in the Klang Valley is sustained, we will have a population of 8 million in 2016”.

Looks like KL will be joining the ranks of the supercities of the world very soon.

Once again we take another break from local properties to look at some international luxury islands for sale. This few private islands were featured in Forbes magazine, we also did an earlier feature a few months ago (you can read it here).

Obviously, the average Malaysians won’t be able to afford a island by yourself (unless you’re Datuk Michelle Yeoh…!) but we can always look and dream, can we?

Isla de sa Ferradura, Spain
USD$39million
This 14-acre island lies just of the coast of Ibiza and featrures a dramatic white hacienda. Ferradura can be reached by yatch or by car, since it’s connected to the mainland by a small private road.

Baja Island, Mexico
USD$35million
Large enough to accommodate several large hotels – or a private compound amid 35,000 acres of solitude – Baja has a number of beaches and a consistently balmy climate.

Caritas Island, Connecticut
USD$25million plus
Convenience and seclusion come together in Caritas, a 4-acre island just off the Connecticut coast. Members of the Phelps Stokes family built the grand stone mansion in 1906.

Blue Lagoon Island Resort, Fiji
USD$25million
Ringed by a tranquil lagoon, this 225-acre island is home to coconut crabs, giant clams and a mostly finished luxury resort.

For more international luxury islands getaways, check out here.

Right. The Property Malaysia administrator and all the frazzled contributors are taking a short deserved break in Honolulu some obscure Malaysian resort. So for today, we’re doing something different, we’re answering commonly asked questions about owning and buying property. We’ve been asked these question dozens of times, so we’re answering them for the benefit of those who are dying to know.

And while we’re rolling in the sunny seas of the fabulous Malaysian coastline, you can actually send us your questions, if you have any. Just leave a comment, or send us a mail.

(Disclaimer – due to the harmful effects of the sun and salty seawater, we cannot vouch that everything we answer here is 100% the gospel truth…)

I’ve bought a condo property about a year ago, but when I passed by the project site the other day, I can’t see any up above the hoarding! I can see a lot of construction vehicles and workers going in and out, but how come there no structure up?!
I dunno, maybe the contractor found some gold or diamonds in the ground and are secretly busy mining it first? No, actually if it’s condo, they’re probably been working on the foundation and basement (if there is basement). This is of course, assuming the developer has actually obtained all approvals and there isn’t a stop work order in place. Normally, a highrise building’s foundation takes up to a year to complete, and the actual building about one a half years. That’s why the handover is always taken to be 36 months, as opposed to 24 months for landed units. We’re not ruling out the discovery of gold, though.

I want to enter the project site to check that the developer is building my RM1,356,898.49 (after discount) super deluxe house properly, but the security guard wont let me in!!! Why are they being secretive and difficult? I have a right as a buyer to see it, right?
My goodness, you paid RM1,356,898.49, and they call it a ‘super deluxe house’? Anything above RM1.2million should at least be called a ‘villa’ or ‘tropical paradise’ (depending on the location…). And they’re not wrong either, the law says you can’t simply enter a construction site without proper certification from the likes of NIOSH and CIDB. But if you’re really dying to see your beautiful RM1,356,898.49 home, you can actually get your developer to arrange a special visit (frankly, this only works for homes more than a certain value. Any cheaper homes the developer will politely tell you to go fly kites…). Besides, the developer can’t be spending all their time entertaining 259 buyers who want to see their uncompleted homes every other week…

The S&P document my developer gave me is kind of thick. Should I read it? I can’t usually finish a page of a novel without falling asleep (except for Harry Potter)…
No, don’t read the S&P, trust your developer 101%. Just don’t come whining later saying your developer cheated you on this and that. Seriously, check everything before signing. Even if you have to drink espresso to keep awake while doing it. If your England not powderful, get someone who knows about this stuff to do it, like your lawyer or Chinaman contractor friend. It’ll save you a lot of heartache later. Remember, don’t sign until you’re 100% satisfied about what you’re getting.

Okay, now you ask the questions. And we’ll answer them the next time we go on holiday. Which will be sometime soon… I think…

We’ve found an online resource giving 12 tips on how to pay off your home loan faster. This is from SunCorp of Australia, some of the tips may or may not be applicable to your situation here, but some of it is good advice.

In summary, the 12 tips are:

• Pay off your mortgage as quickly as you can

• The way you make repayments
• Deposit any spare cash into your loan
• Have your income paid directly into your home loan
• Pay your first home loan instalment as soon as you settle
• Align your loan repayments with your income cycle
• Don’t lower your minimum regular repayment if interest rates fall
• Use an offset account to knock years off your home loan
• Use Internet Banking for low-maintenance, low-cost loan management
• Protect yourself against rising interest rates
• Pay more off on your loan to build up equity
• Get the right home loan for you

For explanation of the above and some examples, you can check out the original article here.

For home loans available in Malaysian local and foreign banks, check out the following packages:
Home Loans by Malaysian and Foreign Banks Part 1 : Local Banks
Home Loans by Malaysian and Foreign Banks Part 2 : Best selling Islamic Banks Loans
Home Loans by Malaysian and Foreign Banks Part 3 : Foreign Banks in Malaysia

A business acquaintance of mine wants to get into the property game. Not as an investor that buys and sells houses, but as a developer. He’s very old, I don’t know exactly how old, and he’s a millionaire a few times over from other family businesses not related to property development (I won’t mention the specifics here).

So why does he want to be a developer if he has already had it made? I don’t know exactly, but that’s what drives successful people to keep pushing to a higher level.

As far as I know he owns a few pieces of land in other states, which at the moment are not viable to be developed since it is either still primary jungle or unconverted estate land, or too far away from towns and tarred roads.

But he has at least one piece of prime land at the edge of a KL suburb, which he bought almost twenty years ago at the cost of only a few sen per square foot. How things have changed.

Last I heard, he is undecided as to whether to develop the piece of land into a luxury bungalow project (that piece of land can probably fit like 10 units only, so it should be very exclusive) or sell it at an obscene profit. He told me he has had a few enquiries at around RM180 to RM200 per square foot. That’s even more than a piece of prime land in Sri Hartamas would cost now.

As part of our involvement in the industry, we spend quite a lot of time looking at vacant land in and around the city to assess whether they can be acquired to be developed or not. Most of the available land in the city that does not cost an arm and a leg (and thereby killing the feasibility of it being developed) usually have a disadvantage – either it’s too steep, too near power lines, too near existing development, unsuitable access road, unfavourable neighbourhood, too much infrastructure works involved, etc.

Usually, if the other factors are favourable, it then all boils down to the price of the land. And that will almost always determine what kind of development you should consider, and ultimately, how much you’re going to sell.

I wonder if that friend of ours has found a buyer for land yet.

Recently, the service apartments and serviced residences have been quite actively talked about in recent months. This is partly due to the recent spate of new condo launches in and around the city which are either service apartments or serviced residences.

Another reason for this is the decision of KL City Hall (DBKL) and a few other state local councils to temporarily suspend the approval of new condo projects on commercial property due to some rising concerns. One of them is the protection of the buyers, since they do not fall into the HDA.

The Edge ran an interesting article on this issue, and they’ve clearly defined the difference between ‘serviced apartment’ and ‘service residences’:

The term serviced apartments and serviced residences are often used interchangeably but both types are marketed differently, serviced apartments are hotel liked properties for long time staying guests while serviced residences are stratified housing units built on commercial land.

There are stratified housing developments built on commercial land that are sold as serviced apartments. In this instance, although the developer has opted not to use the term ‘serviced residence’ in marketing the property, this is strictly a residential offering in the sense that there are no hospitality services offered.

Below is a summary of the serviced apartment supply in KL, Selangor and overall in Malaysia for the first three quarters of 2005, given in units.

For those of you interest to know how to do the above, here’s an interesting article on it:

“Calculating the cash flow from an investment in rental property will tell you whether your investment makes economic sense. Here’s how to do it.

First, calculate taxable income or loss from the property. Taxable income or loss is rent received minus three types of expenses: operating expense, depreciation, and mortgage interest expense.”

For the complete article, you can read it here (we tried the calculation, it’s a little diferent from ours, but it depends on the individual’s preference…)

This is a continuation of the 3-part series of the latest home loan packages and interest rates offered by banks in Malaysia. The first two parts on this series can be found here:

Home Loans by Malaysian and Foreign Banks Part 1 : Local Banks
Home Loans by Malaysian and Foreign Banks Part 2 : Best selling Islamic Banks Loans

For a complete listing of banks and their info, check this page.

List of Malaysian Banks

This first part to this series focused on the packages offered by the 10 local anchor banks, the second concentrated on the 6 best-selling Islamic banking home loans. In this third and final part coming soon will be on some of the packages offered by foreign banks in Malaysia, which includes conventional home loans and Islamic loans.

This info was also highlighted in Monday’s Star Business section (27 March 2006). For a full listing of all banks (local and foreign) including info like their contact numbers and addresses, you can check out this page.

For more info and further explanation on these home loan packages and prevailing rates, you are advised to check with the individual banks.

In the following tables, ‘C’ denotes Completed properties while ‘U/C’ stands for properties under construction. BLR stands for ‘Base Lending Rate’ while Y1 is for Year 1 and so on. IFR stands for ‘Islamic Financial Rate’. Check with relevant bank for prevailing rates.