News - Stamp Duty

Some old news, decided to publish it again for your information:

Govt Proposes 50 Pct Stamp Duty Exemption For House Purchase

KUALA LUMPUR, Sept 7 (Bernama) -- The government is proposing a 50 percent stamp duty exemption on documents of transfer for the purchase of one house costing not more than RM250,000, Prime Minister Datuk Seri Abdullah Ahmad Badawi said today.

The proposal is effective for sale and purchase agreements executed from Sept 8, 2007, to Dec 31, 2010.

This measure will reduce the cost of purchasing a house by up to RM2,000.The government will continue to ensure greater Bumiputera participation in the property sector, Abdullah said when tabling the 2008 Budget at Dewan Rakyat here.

-- BERNAMA

Citta Mall @ Ara Damansara

Another shopping mall to be launch at Ara Damansara - Citta Mall, and it claimed it is not just a mall. Sound interesting, see below:

Statement from the developer, Puncak Dana:

"We are building something that bridges the gap between a shopping centre and shophouses. It is managed like a shopping centre but with the convenience of a shophouse"

"With Citta, the emphasis is on convenience. The anchor tenant is the car park. In a strip mall, all shops front the car park to allow customers to just park and walk in. You can just park at a carpark bay nearest to the shop you are interested in and walk in"

For further info, you may visit here.

Casa Residence - Kota Damansara

Recently there is a "new launch" at Kota Damansara, spread around Internet. Some of my friends also get introduce by agent to this condo. Info as below:

Name: Casa Residence
Size: 850sf - 950sf
Selling Price: ~RM350,000 +-
Included: Fully Furnished
Type: Leasehold
Location: Next to SEGI College, Kota Damansara as shown below

The agent that spread this news in Internet claimed you can pre-buy this unit before it is launch, and it is selling fast. The catch is you need to pay RM5,000 as commission to him. Sound fishy to me, as reputable developer will not allow agent to do something like this ...

This condo also come with guarantee return scheme, 8% per annum. Usually how it is done is the developer will rent it from you, then re-rent to company/college and etc. Personally I do not fancy this type of scheme, as this type of scheme is not "guarantee as per said", even though you do sign agreement with the developer, as the agreement usually follow by lot of "terms & conditions". I will write about this later, based on real life experience in this. Unless this property is developed by well-known developer, then I may give it a try.

Conclusion is the success of this condo is very much depends on the developer. It is advisable that you perform some background check on developer before you invest your money, especially their track record.

Nearby this area there is Cova Suites and Cova Villa condominium, is selling at ~RM340+- for 1000sf++ unit. Comparing to Cova, this is slightly expensive, about 10% extra. However dont forget Cova is ready product, which can help you make money immediately. And you do need to worry about abandon project (just in case).

Based on iproperty, cova suites smallest unit is asking for RM1,500 onward. Fully furnish unit probably can fetch better rate, probably RM1,800 - RM2,000. It should be enough to cover your loan installment, but maybe no extra.... However this Casa Residence is come with 8% guarantee return. Not exactly sure how is the calculation make....please let me know if any of you know about this....

Reminder: I did highlight in previous article, about the pro and con of buying condo next to college.
- Easily tenant able and can fetch good rental income.
- Capital appreciation is very much depends on the college quality, what student they are targeting.
- Easily to let go, as a lot of investor looking for this type of rental based income.

Icon Residence - Update 2

From TheEdge Property:

KUALA LUMPUR:

Mah Sing Properties is expected to officially launch its latest project, Icon Residence Mont'Kiara, within two to three months, said Mah Sing Properties chief operations officer Teh Heng Chong (pictured above) on Wednesday, July 14.

Before the launch, however, Mah Sing would hold a preview for interested buyers of Icon Residence at the Sime Darby Convention Centre from Friday, July 16 to Sunday, July 18.

"The preview is only for registered applicants for the time being," Teh said. The project currently has 6,000 registered applicants, of whom about 20% to 30% are foreigners. Icon Residence Mont'Kiara (pictured) is located close to Matrade Center and Solaris Mont'Kiara, which is off Jalan Duta in Kuala Lumpur.

The development's modular design is inspired by Santorini in Greece, while the landscape and water features are inspired by the country's Mediterranean feel. "We are creating a collectors' item for those who like fine things," Teh said on the project's niche market. "The buyer of this development is sophisticated and well-travelled."

Icon Residence Mont' Kiara sits on 2.57 acres of freehold land, and has a gross development value (GDV) of RM298 million. It has three towers -- namely Icon 1, 2 and 3 -- which are 26-, 28- and 36-storeys high respectively, with each floor housing two to six units. All are corner units with views of either Kuala Lumpur or Mont'Kiara.

In total there are 260 units, of which 78 units are in Icon 1; 73 units in Icon 2; and 109 units in Icon 3. The unit sizes range from 875 sq ft to 2,697 sq ft, with a starting price of RM956,800. On average, the psf price is between RM1,100 and RM1,200. Fifty units in Icon 3 come with private lift lobbies.Among the units to be sold are six duplex penthouses that range from 4,200 sq ft to 4,436 sq ft, and are priced from RM5.35 million.

These units come with private swimming pools. All units come with kitchen cabinets, wardrobes, air-conditioners, fridge, dishwasher, washing machine-cum-dryer, stove and hood. The recreational area is on the seventh floor and the development also has roof-top gardens atop each tower. The development has 648 carpark bays. Among the green design features include rain-water harvesting, energy-saving lights, low VOC paints and automated waste disposal system, in which all waste is collected to a central area for pick up and disposal. "I believe this is the first development in Mont'Kiara with such a disposal system," said Teh.

In previous artist impressions, the Icon Residence Mont'Kiara featured a wide array of water features and gardens, but they have now been scaled down. "This has been toned down for easy maintenance," Teh said. Construction is due to start in 4Q2010 and will be completed in three years' time.

Property 101 - Delay From Bank

Just to share recent experience I have with Bank.

My cousin bought a condominium last year. Applied loan with Standard Chartered Bank in Dec 2009, and signed the offer letter in same month.

The bank appointed their lawyer for handling this case, "highly recommended" by the bank agent (My cousin have to pay for the loan lawyer fee). Personally I would encourage you to use your "own" lawyer instead of follow advice from unknown people, you may refer to my previous article - Your right hand man.

This so call "good lawyer" make silly mistake in the loan agreement, causing delay in property processing. Eventually the loan lawyer rectify the error and whole process (redemption & balance disbursement) only completed in June 2010 - 7 months in total. Then the S&P lawyer issue penalty letter to my cousin, as there is delay in the property transaction... cost about RM2000++.

Do remember, the property seller will issue penalty to you (the buyer) directly. Not the bank or loan lawyer regardless of whose mistake.

My cousin discussed this matter with me, and we send in formal complain letter to
1. The Manager of The Bank Agent
2. The Loan Lawyer
3. The Bank HQ - Customer Service

The Loan Lawyer and the Manager of the Bank Agent did not bother to entertain us. Worse is the Loan Lawyer keep chasing my cousin to settle the loan lawyer fee. (Of course we disagree as the penalty case is still not settle).

Surprisingly the Bank HQ responded, and agree to bear 90% of the delay cost. Even though not 100%, but it is something very encouraging from consumer point of view. As I never thought such Big Company will response to complain from normal people like us.

Learned a lesson here, if you find the right person in right department to file complain, it may work :)

BP Crisis = Opportunity ?

There is a saying: Where there's crisis, there's opportunity

I am one of the believer in this. Just to share one of the biggest crisis happened in the world now - oil spill at US

I extracted the share price of BP for past 6 months for your thought.....

Icon Residence - Update 1

Icon Residence - Update From Developer Website

• Freehold residence suite
• Most sought after small to medium sized units from 850sq.ft. to 2,500sq.ft.
• Low density with only 260 units
• Innovative architectural concept and design that is poised for better capital appreciation
• Sky bridges linking the 3 iconic towers
• Extensive landscape and water features
• Luxury Garden Terrace in the sky
• Green Building Index assessment*

With average of only 2 to 6 semi furnished residential units per floor where each is a corner unit, and penthouses with duplexes layout, your privacy is assured.

If price

@RM500psf, 850sf = RM425,000
@RM600psf, 850sf = RM510,000
@RM700psf, 850sf = RM595,000
@RM800psf, 850sf = RM680,000

Property 101 - Timing - When to Sell ?

Question: Let say you have invested in a property, have you ever think when is the best time to sell it to maximize the profit?

Very tricky question. This depends on many factor:

1. What is your profit target? Is the offer price able to meet your target?
- RM50,000, RM100,000, RM200,000?
2. Do you have holding power to hold it for another few years?
- Rent it out, and top up the different per months until the property price go higher?
3. How is the supply vs demand at that area? Is supply > demand at this moment?
- Are they many owner rushing to sell it after VP? Should you wait till the demand > supply then only sell?
4. How much is the cost to sell now compare to the cost sell later?
- Penalty from bank due to lock in period of the loan?
- Property gain tax ?
5. Is this leasehold or freehold property?
- Leashold property take longer time to process and your property will be leave empty while waiting for the sales of property to complete.
6. Is the property deliver in good quality, good design, good community, good environment and good place to stay?
- If above all is positive, yur property will command much better capital appreciation.

Maybe I take the soon to be VP - Sutera Damansara as example.

Let's Assume
Property Purchase Price: RM440,000
Loan Amount: RM400,000
Installment Per Month: RM2,000

If Owner Sell immediately after VP
Selling Price: RM540,000

Time to Find Buyer: 2 months
End to End Processing Time: 8 months
Total Waiting Period: 10 months
Estimate Waiting Cost: RM2,000 x 10 = RM20,000

Bank Penalty = 3% x RM400,000 = RM12,000
Selling Agent Fee = 2% (subject to negotiation) x RM540,000 = RM10,800
Selling Lawyer Fee = RM4,000
Property Gain Tax = RM3,000
Total Cost: Rm20,000 + RM12,000 + RM10,800 + RM4,000 + RM3,000 = RM49,800

** Assumption:
- S&P Lawyer Fee free
- Loan Lawyer Fee free
- Interest Free During Construction
- Selling price benchmark based on OSK current selling price
- Loan Lock in is 5 years

Profit if sell immediate after VP: RM540,000 - RM440,000 - RM46,800 = RM50,200

You would be able to cash back: RM40,000 (downpayment) + RM50,200 (profit) = RM90,200

If Owner Rent It Out and Sell after 5 Year Counting from S&P Date
Rental : RM1,500
Time to Find Tenant: 2 months
Rental Agent Fee : RM1,500 (1 month rental)
Basic Renovation Cost : RM15,000
Selling Agent Fee = RM15,000
Selling Lawyer Fee = RM5,000

Total Cost : RM2,000 x 2 + RM1,500 + RM15,000 + RM15,000 + RM5,000 = RM40,500

Estimate Amount to Top Up per month : RM500 (bank installment) + RM200 (misc) = RM700
Estimate Holding Cost per Year: RM8,400

** Assumption:
- Renovation take 1 month to complete
- Rental benchmark based on Park Avenue Condo, Armanee Condo at surrounding area.

If property price at Damansara Damai area

Growing @ 5% a year, in 2013 it is worth RM625,117
Growing @ 7% a year, in 2013 it is worth RM661,523
Growing @ 10% a year, in 2013 it is worth RM718,740

For 5% scenario: Profit if sell in 2013: RM625,117 - Rm440,000 - RM40,500 - (RM8,400 x 3) = RM119,417
For 7% scenario: Profit if sell in 2013: RM661,523 - Rm440,000 - RM40,500 - (RM8,400 x 3) = RM155,823
For 10% scenario: Profit if sell in 2013: RM718,740 - Rm440,000 - RM40,500 - (RM8,400 x 3) = RM213,040

Conclusion
Should I sell the property immediately after VP or later?

- If I confident I can earn >= RM150,00 within 3 years, with the cash I receive (RM90,200) by selling the property in 2010, I will sell immediately
- If the property quality is bad, and foresee the demand for this property is low, as it will impact the capital appreciation rate (5% and below), I will sell it immediately
- Lastly, if I have no holding power, need cash immediately, I will sell it immediately

Just some thought, please share if you have other view....

Property 101 - The Trend

What is the latest trend for Malaysian:

Organic Food - I notice there a lot of organic shop in Malaysia now. Seem like Malaysian become more health conscious and they do believe that organic food is good for health. So they willing to pay extra premium for organic food. Those smart businessman riding on this trend by selling organic food (raw), organic restaurant, organic farm, and the latest one in TV is "Safe Egg".

Pet - Nowadays Malaysian prefer to marriage at later age. Career first, family later when everything stabilise. This make Pets become popular "choice" especially for those who have no children yet. You can see Pet shop is growing like mushroom everywhere. Those more creative one is opening up Pet beauty shop, Pet training center, Pet hotel and etc

Safety - Most of the Malaysia especially those living in city think that Malaysia is not a so safe country, looking at the crime rate and news in newspaper everyday. Many Malaysian willing to pay premium price to get a safer place when come to buying property for family stay. This make Gated & Guarded one of the criteria for Malaysia when come to property now, and this is what I would like to talk today.

Trend can determine the price of property, if you catch it right. Look at the example below

1. Valencia and Sierramas
2. Desa Park City
3. Puchong Lake Edge

You would not able to enter the housing area without knowing the resident inside. They will cross check with the related resident unit before allowing outsider to go in. This is what people are looking for now. This enable those resident feel safe and allow their kids to play around the housing area.

Most of the condominium is build with Gated and Guarded concept by default. However not all the condo management guard it strictly. Therefore those condominium who have implement tight security, double access card entry card system (main entrance + lobby/lift) will command better demand, compare to those conventional condo who you may just go in by waving your hand or just simply register at entrance.

Conclusion: Better demand = Better price = Better profit

also

If you can spot what is the next coming trend, then ....

Is It True?

Sometimes we always heard people say this property price has gone up so much so much. Sometimes we might wonder is this "profit" just merely paper gain, or there is really such a demand?

I found a place where can "check" whether there is really demand for the property. Click Here To View

Don't be surprise that most of the transacted property is at Desa Park City - One of the most sought after place in Malaysia now :)