IS NOW A GOOD TIME TO BUY? THE ANSWER LIES ON THE PROPERTY OF YOUR SELECTION

Tuesday, November 28, 2017


IS NOW A GOOD TIME TO BUY? THE ANSWER LIES ON THE PROPERTY OF YOUR SELECTION | Every Malaysian’s dream that was fostered in them by their parents since they were a child is to be the proud owner of their own home once they grow up. Unfortunately buying a property in current times is getting more challenging, and new homebuyers are beginning to have concerns on where to buy their first property and what are the criteria to look at amongst others. Below are few of the top concerns for potential home buyers who might be interested to invest in latest property in Iskandar Malaysia, Grid Residence Iskandar.

BANK REJECTION RATES

The most common reason nowadays for loan rejection is the non-service of PTPTN loan repayments. There are of course also other reasons, such as a lack of credit records and late credit card repayments. Having delayed payments or low credit scores would definitely affect the bank’s decisions to offer facilities for the potential borrower. The best way to stop yourself from becoming another statistic is to check your CCRIS records before applying for a mortgage loan. All you need to do is to go to Bank Negara where the guards will kindly direct you to the CCRIS kiosks, and then insert your IC, allow the machine to read your thumbprint. If you are too busy, there are online methods to obtain your CCRIS report as well. When you look at your record, you will see a list of all your debts from all your credit cards, study loans and etc. If you are a good paymaster, you will notice that all the numbers of the right side of the paper under the months will be ‘0’. If there is a number ‘1’, it means that you did not make payment or made a late payment for that month. And as long as there is a ‘1’ in the columns on the right, your loan application may be rejected as it shows that you are not a good paymaster. The only way to clear your record immediately if there is a number ‘1’ in any of the months, is to clear off the entire debt immediately. Otherwise you need to continue making your monthly payments regularly for a cycle of 12 months to push the ‘1’ out of the chart.

IS NOW THE RIGHT TIME TO BUY A PROPERTY?

Property prices are never going to go down. Since the inception of Malaysia, property prices have never failed, and in fact between the ‘slow’ years of 2009 and 2014, overall Malaysia property prices experienced a compound annual growth of 7.8%. As a potential buyer, you must consider the cost and benefit of purchasing a property at this market instead of worrying about prices in the future. Despite the general consensus that properties do not actually devaluates, the problem would lie in the appreciation of the property as well. Having a property that does not appreciate after a select period of time would not be a good idea for a potential investor. For example, as a potential investor, Grid Residence at Iskandar Malaysia may be a good option for it is soon to launch, just in time. 

LOCATION OF THE PROPERTY

Ideally, your property should always be centrally located to the city for a convenient lifestyle. Living closer to your office would definitely be better in terms of lifestyle and stress levels compared to staying somewhere in suburban areas. The extra driving and distance may not be suitable for people who are not interested with traffic conditions. The price to pay for location is the most painful part, but if you do your due research you will find that there are actually still some great new properties that are still selling below the market price when it comes to developments in the city.

PRICE VERSUS LOCATION 

Location is definitely more important - after all, you can still obtain a 6,000 sf bungalow in Bukit Beruntung for only RM580,000. But there is a lack of amenities there, and the township is almost 50 kilometres away from Kuala Lumpur. As mentioned above, if you do your due diligence, you will find that there are still many great developments to be found in the Kuala Lumpur city at affordable prices.

WHICH TYPE OF PROPERTY WILL GIVE ME BETTER ROI?

The general consensus is that landed properties will give you a better return on investment (ROI), but that will depend on what you are looking for and what is your holding power like. At a time when the typical salary was only RM700 per month 30 years ago, a semi-detached house in Section 11 Petaling Jaya cost RM180,000 which in current times translates to a monthly repayment of RM595 per month at a loan period of 35 years and an interest rate of 4.25%. Thirty years later in 2016, the same house costs RM1.8 million at bank valuation.

Landed properties are therefore deemed to be more suitable as long-term investments as its capital returns are higher and condominiums and service residences are better for short-term investments with occasional luck to make some good money. Depending on investors and their risk appetite, they should invest according to their style instead of picking a general guideline and following it.
For a ‘immediate’ returns, finding a property that is ideally located to be rented out is more suitable. For example, properties located around many universities such as in SS15, Subang Jaya is a great place for rental returns. Then again, public transportation is the future of Malaysia with all the upcoming train lines, hence finding a good property close to the rail tracks will provide better ROI in the coming years.

FAILURE TO SERVICE LOANS

Always find a property that you can afford to pay for with only 30% of your household income for the safest approach. Having an expensive property but having no proper means to repay the installment would not be a good idea. 

Hope this entry will help you out there to think again on is it a good time to buy property.  See you again all readers. Bye !!


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