Think long term lah, when it’s property.

I love to read articles which serves to reinforce my personal views. Yes, I remain optimistic about property market Malaysia regardless of what people kept saying and yet doing the opposite. One example, talking as if Malaysia is going to be a bankrupt nation and yet asking me where to buy property. Seriously, keep cash if we believe it’s crisis very soon. Else, stop all the rhetorics and start sharing objectively. Published in a few local media (same article) was a very long article written by Estee Hew, Senior Manager at JLL Malaysia and Chua Yang Liang, Head of South-east Asia research at JLL. Full article here, else read the summary below:

Property market Malaysia witnessed a doubling of prices in some areas of the country. Due to this, the government revised upward adjustment of Real Property Gain Tax (RPGT), the revision of the minimum price of residential properties that foreigners can purchase to RM1 million (S$345,595), and the removal of the Developer Interest Bearing Scheme (DIBS) (a similar interest bearing scheme was banned in Singapore in 2009). Bank Negara Malaysia (BNM) also advised banks to be stricter with their lending guidelines. What happened recently? Read here: Jan 2016: Whopping 62 percent loan rejection

Current outlook remain shaky but it is more sentimentally rather than fundamentally driven. Three major reasons include political uncertainties, plunging ringgit and oil prices, and even a sluggish economic outlook. These are only covering up some of the real demand in the market. They quoted Mah Sing’s own prediction that rebound is on the way with the property market having bottomed. My earlier article here: Market is slow? Well, MahSing launching 6 new projects

They quoted some exciting developments in Malaysia including the 51km MRT Line 1 within the Greater Kuala Lumpur (Greater KL). It is expected to be fully operational by 2017 and this will greatly improve Greater KL’s accessibility tremendously. My views earlier, read here: MRT stations will change area dynamics

The High Speed Rail (HSR) project between KL – Singapore was also mentioned though even currently, the stations of the HSR are yet to be finalised and lots of details of the line needs further ironing. The Malaysian terminus will be built at Bandar Malaysia and China Railway Group (CREC)will have a 60 per cent equity stake worth RM7.4 billion together with joint venture partner Iskandar Waterfront Holdings. Read here: US$2 billion (RM8 billion) from CREC into Bandar Malaysia 

Concern of oversupply in Iskandar is always high but recently, there has been some positive news. They include Microsoft’s new data centre in Sedenak, Coca-Cola relocating from Tuas in Singapore to Iskandar Malaysia and China’s Alibaba starting a logistic hub. Besides that, many more announcements from Korean, Chinese, Russian, US and Japanese MNCs to set up their facilities within Johor. This should provide some relief to all the negative sentiments currently even if it may not mean much until all these new announcements start to show up on the ground. 

The article concluded by saying that property investment should always be a long-term play and thus any investment decisions should be based on such. Challenging times means opening up of more opportunities. With BNM adopting an accommodative stance to support economic activities, the interest rate is not expected to rise anytime soon. With the political instability stabilising oil prices rebounding recently, the writers believed that the long-term prospects of property investments in Malaysia remain strong.

Happy believing or selling. Decision is ours to make anyway.

written on 11 Apr 2016

next suggested article: 5 trends for property market Malaysia

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