I think I have written on this a few times. It was also supported by my good friend from the industry, Michael Geh (Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd) Today, an actual number was given by the president of Malaysia Institute of Estate Agents (MIEA), Siva Shanker. He said the secondary market is worth a look as the houses could be 30 – 40 % cheaper. He said many people were unaware of such ‘gems’. I think some do know about this but still chose to forego them. Somehow, the feeling they get from a new home is better. Somehow, when you buy secondary, it’s not as prestigious as a new home. Somehow, those could not afford would still try to apply for a loan and got themselves rejected. Until today, majority of my friends would only consider a new property, never a secondary. I do not wish to dwell on the reasons given. Want to read a bit more? Here: Experts said, ‘affordable properties’ NO MORE (nonsense)
Actually, why are these secondary properties cheaper anyway? There are definitely a few reasons. For example, they are older units, thus if you buy one, you need to get contractors to check the wiring, the piping and perhaps do a new one. The renovations done may not be to your expectations, thus you may need to redo. Just taking down the existing cabinets would cost you. The tiles may be dated or looks jaded and thus you need to retile the whole place. All the bathrooms ‘feel’ dirty and you juist have to redo the whole bathroom. Suddenly, you have additional costs that you have to factor into the secondary property and thus it does not look so cheap anymore compared to a new one. Well, not true. Even with a new unit, you are still going to do renovations. My colleague just told me his renovation would cost him RM150,000. The main reason is because he is likely to stay there forever since it’s near to his parents. Thus, must do the best. 8 years ago, a relative of mine spent RM95,000 for his renovations.
Okay, so should you still be thinking of secondary then? Definitely. Except for my Penang home, my two condos in KL were all secondary properties. Both were renovated units too. One would have cost the owner between RM50,000 – RM80,000. The current one which I am staying in, the renovation of the cabinets alone would have cost RM100,000. Do I like it? Well, I can accept it. Haha. So, I saved at least RM100,000 but I renovated both the bathrooms and just the two bathrooms cost me RM30,000. So, the trick is, keep looking for good secondary units. Surely there is one that meets your expectations and thus you save the 30-40% mentioned and only needed to do minor renovations. Just go online, iproperty or propertyguru. Lots to choose and lots to view.
Oh yeah, if you think MIEA would always say good things about secondary while REHDA would talk great things about primary properties, I can safely tell you that I am not an MIEA member or even related to any developer. I speak only based on my personal observation. Whether you love primary or prefer secondary, I think both have their own advantages. If you need a place to stay, wants a bigger size and lower price, for now, secondary really do stand out. Of course once demand pours in, as usual the price would go up and very soon the price difference may narrow. Happy selecting.
written on 24 Dec 2014
Next suggested article: Secondary condo, Secondary landed. Buying one.