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Developers fine-tune strategies to attract buyers

May 23rd, 2020 No comments

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During these challenging times of the coronavirus, developers have fine-tuned their marketing strategies in ways that can be very tempting for the potential house buyer.

It is no longer as straightforward as, say, a decade ago where this is the price, this is down payment, and here is the loan amount.

Over this 10-year period, the Malaysian property saw the entrance of developers’ interest bearing schemes, then came rebates and discounts, free legal fees.

Then came the free gifts like holiday tickets for two, or a car for a lucky winner. Then came cash-back offers where buyers actually get cash for buying a house.

Due to concerns about travelling, gifts like mobile phones and cars have taken the place of holidays and plane tickets. But it is not one car, but a car for every buyer.

Today, because of the movement control order (MCO) and later the conditional MCO, some developers have gone a step further by not charging a down payment, and absorbing the stamp duty for memorandum of transfer.It is the down payment, which is 10% of the house price on signing the Sales and Purchase Agreement (SPA), that buyers have difficulties forking out. Hence, said a marketing personnel of a housing developer, during this MCO period, this is being done away with. The other alternative is to give a 10% rebate, which was the trend even before the Covid-19 outbreak. The new perk is the minimum, or zero down payment. Developers handle this differently. Some may require a buyer to pay upfront a minimum amount, only to return it once the deal is formalised.

After all the deductions, the actual price of a house can be a lot lower than the overall headline price.

Malaysians are comfortable with paying booking fees. Having selected a unit and prior to getting a loan, they pay a booking fee and then go about seeking a loan.

Developers have, during this MCO period, made it as minimal as possible. A check shows that developers are asking less then than RM100, others have capped booking fees at about RM188, or RM1,000.

An agent representing a developer reasoned it out this way, “if you fail to get the loan you need, you only lose RM100.00.”

 

Raine & Horne senior partner Michael Geh in Penang, having been in the real estate practice for 25 years, says he has never come across a scenario such as today where so many incentives are given.

“We are going through troubled and interesting times, and developers have gone into very innovative strategies to sell and market their properties.

“Many of these very special deals are done via the social media, on a one-to-one basis. A buyer will not know what the next buyer is getting, or what the buyer before him has received, ” he says.

As for the various perks given during this MCO period, he says: “I believe this will not be forever.”

Geh says there are international buyers who are looking around. “We are engaged with some of them on video communications to buy and we know of some who have bought via this application, ” Geh says.

He decline to say how many his company is negotiating with but says they are from Hong Kong.

The threshold or cap for foreign buyers are RM800,000 for strata high-rise in Penang, he says.

International threshold was lowered to RM600,000 by the Federal Government in 2019 but the Penang state government is holding that cap at RM800,000, Geh says.

What is the SPA price?

Deploying perks to sell will tend to drive house prices down. It is not a direct way of reducing prices but the effect is the same. The question is, what is the price stated in the SPA?

Agents say the SPA will list the overall headline price, despite the actual price being lower.

It is this divergence between the actual property price shouldered by the buyer.

This difference in pricing has grown over the years and during this MCO period, the gap is likely to grow further.

Source: TheStar.com.my

 

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Not OK to waive maintenance fees in light of Covid-19

May 23rd, 2020 No comments

view-from-komtarMany strata property owners may have sought waivers or discounts on maintenance fees since the Covid-19 outbreak and the ensuing Movement Control Order (MCO) period but such fee waivers and discounts are not viable as any adjustments in fee collection or sinking funds will need the approval of property owners via an AGM or EGM, said Chur Associates founder and managing partner Chris Tan.

Furthermore, current laws also do not support virtual or online AGM or EGMs to be held as the Strata Management Act 2013 states that physical presence of owners is required.

“Even if online AGMs are allowed, would it be accessible to all especially those in low-cost or affordable housing schemes? Also, can the system support so many people going online at the same time? How do we ensure the discussion could involve the majority?” Tan questioned.

Low: Even if we give a discount, service providers may not give us a discount as maintenance, repair or cleaning works have to be carried on as usual.
Henry Butcher’s Low said it is impossible to give waivers or discounts as the JMBs and MCs may not have enough funds otherwise.

“Even if we give a discount, service providers may not give us a discount as maintenance, repair or cleaning works have to be carried on as usual,” said Low.

Such requests are also considered unfair to other property owners and to the property managers. During the MCO period for instance, the load level on the property was even higher as everyone was required to stay at home.

Lee concurred saying that the move would be “penny wise, pound foolish”.

“MCO is the time where everyone stays at home and if the buildings are not well-kept, many infrastructure and systems like sewage systems and piping, would fail. Reducing the maintenance charges will ‘sink’ the property’s maintenance level,” he said.

Source: EdgeProp.my

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Federal Court: Single rate of maintenance fees for all the parcels in the project.

May 21st, 2020 No comments

The Federal Court has today rejected an application for leave to appeal against the Court of Appeal’s (COA) decision in the Menara Rajawali case.

The COA had decided on Oct 4, 2019 that the Joint Management Body (JMB) of the mixed development is required to fix a single rate of maintenance fees for all the parcels in the project.

The COA’s ruling overturned a High Court decision earlier that JMBs are allowed to set different maintenance fee rates for different parcels in a mixed development.

According to the COA ruling, the JMB should calculate the maintenance charge for Menara Rajawali according to a fixed formula stated in the Strata Management Act 2013 (Act 757) which has already taken into consideration the different property types in a mixed development.

The landmark ruling has caused much debate among stakeholders due to its implication on parcel owners in mixed developments.

Among those who expressed their concern were the Malaysian Institute of Property and Facility Managers (MIPFM) who said a flat rate will be unfair to affordable housing owners in a development that also comprises high-end parcels as some facilities and amenities may not be accessible to the affordable housing residents.

Source: EdgeProp.my

 

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AFFORDABLE: Nibong Tebal / EcoWorld

May 20th, 2020 1 comment

eco-horizon-type-a-affordable

An upcoming affordable housing development by EcoWorld in partnership with Penang State Government. It is located on a 15.1 acres land along Jalan Sungai Daun near Kalidonia Farm, about 2km away from Nibong Tebal KTM station.

The project will feature 272 low-cost housing units, to be built in two phases at a cost of RM50.94 million funded by Eco Horizon Sdn. Bhd. 80 existing households on the project site will each get a unit, while the rest would be offered to applicants who are registered with the State Government under the Type-A affordable housing.

Phase 1: 112 units (expected completion – 2022)
Phase 2: 160 units (expected completion – 2025)

Each unit will come with a standard built-up size of 650sq.ft, featuring high ceilings and can be renovated to accommodate about 200sq.ft. more. The neighborhood will feature common car parking spaces and community areas such as a lake, park and tracks for jogging and cycling activities.

READ MORE ABOUT AFFORDABLE HOUSING:

Project Name: (to be confirmed)
Location : Nibong Tebal
Property Type : Low-cost housing
Total Units : 272
Land Tenure : Leasehold
Indicative Price : RM42,000
Developer: Chief Minister’s Corporation (CMI) & Ecoword

Location Map:

 

 

UPCOMING: George Town / Marina Pavilion Sdn. Bhd.

May 18th, 2020 2 comments

proposed-development-by-marina-pavilion

Yet another luxury residential development proposed by Marina Pavilion Sdn. Bhd. at George Town. Located within an established neighborhood along Solok York, just a stone’s throw away from Penang General Hospital. This development is only a mere 3 minutes drive to Han Chiang University College and Penang Turf Club.

The proposal will see the construction of 17 units 4-storey townhouse on an approximately 0.8 acre land.

This project is still pending approval. More details to be available upon official launch.

Project Name: (to be confirmed)
Location : George Town
Property Type : Townhouse
Total Units : 17
Land Tenure : (to be confirmed)
Indicative Price : (to be confirmed)
Developer: Wisma Dayamas Sdn. Bhd.

Register your interest here

*By submitting this Form, you hereby agree to our PDPA Consent Clause.
(This information may be used by the developer or their appointed agent to initiate follow-up communications with you on the project.)

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