RM10 million property, anybody? What’s the mortgage like?

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I was recently involved in a simulation of a dual-bidding option for a Malaysian bank. Dual-bidding means the bidder may choose to register as a floor bidder or an online bidder to bid at an auction. Whether they are online or offline bidders, both would be bidding against one another at the same time, within the same auction and conducted by the same licensed auctioneer. During the bidding process, a bank officer bidder RM700 million for a property and she lost to another bank officer and she lost to another officer who put in RM800 million. Of course, this is just a simulation and both of them would not be asked to pay. 🙂  In real life, I have viewed condominiums which are a few million ringgit as well as landed bungalows which are also a few million ringgit. Assuming you suddenly win a lottery today and you decided to buy a property which is RM10 million, do you know what are your choices?

Let’s take a look at what I found in iproperty.com.my today. Image showing four  different properties which are both above RM10 million. These are your real options. So, which one would you choose? RM12 million for  9,500 sq ft land, RM16 million for 20,850 soft, RM10.3 million for 6,931 sq ft and RM12.5 million for 11,400 sq ft. Me? I am biased towards the super luxury condominium and second choice would be the BEST VALUE; lowest price per sq ft. Yeah, the RM16 million property since the land area is the biggest. For the super-rich, I think their major consideration is the area that the property is located. Birds of a feather flock together. We could see that the areas for these 4 properties are either Mont Kiara, Bangsar or Damansara Heights. All three are considered hotter areas. By the way, assuming we are buying a property which is RM10 million, do we know how much is our monthly repayment?

Let’s take a look at what I found in propertyguru.com.my’s mortgage calculator. Assuming we are buying a RM10 million property and we pay 10 percent downpayment and borrow the remaining. That’s RM9 million worth of loan. The payment per month is only RM44k. By the time we finished paying for it; end of 30 years, the total interest paid would be RM6.8 million. Now, do we know why property prices would be increasing as the year goes by? The owner would not want to part with the property if he / she suffer a substantial loss from the sale. These huge sized bungalows or even condominiums within a hot area will not be increasing in the future. It’s either buying further or paying higher. Choice is clear. 🙂  Okay, enough of day-dreaming. Start a business and we may one day buy one of these. Working full-time and earning a basic salary? All the best yeah. Happy learning.

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written on 21 Sept 2017

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