5 things a property investor should remember

The property market has cooled down a fair bit. Singapore has seen two consecutive years of price declines. Malaysia, meanwhile, has seen transaction volumes drop significantly and prices stagnate. Popular overseas investment destinations such as Melbourne, Sydney and London appear to be near their peak, with large incoming supply. The gap between buyers’ and sellers’ expectations is still too big and there does not seem to be much good news on the horizon for either party.

On the ground, we are seeing smaller crowds at show flats and property shows. Property agents are getting fewer enquiries and are seeing lower returns on their marketing dollar. A net total of 1,492 agents left the industry in the Council for Estate Agencies’ registration period ended March 2015.The figure is expected to rise in the next renewal exercise, which ends Oct 31.

In these times of despair and low morale, itis important to remember a few rules on property investing so that your decision- making remains solid.

Property markets work in cycles

What goes up, must come down. So say the critics of the property market who believe that prices must drop further in order to stimulate buying. But the lows of the current cycle are rarely lower than the lows of the previous cycle. Singapore property prices during the downturn of 2009 were higher than those in the stagnation years of 2001 to 2006.

Property prices in Singapore will drop further, but it is likely to be a very gradual drop and unlikely to return to 2009 levels. With more than 80% of citizens owning homes in the city state, the government will intervene to prevent a sharp price fall.

On the other hand, if you look at the glass as half full, having a property cycle also means that at some point in the future, prices will have to inch back up. And one factor driving prices back up is inflation.

Inflation is a property investor’s best friend

A lot of recent discussion about the property market is on supply versus demand. Less has been said about the impact of inflation on prices. A bowl of noodles today costs $4 versus $1 some 30 years ago. People complain about the cost of living and how it only goes up. Similarly, the same can be said about construction and land costs. At some point, the replacement cost to construct a new property will be as high as, or higher than, the price of existing properties. This will push property prices upwards.

Singapore has a historical inflation rate of between 2% and 3%; Malaysia’s is in the 3%to 4% range. Property is a hedge against inflation, so the average annual price appreciation of a property over the long term should at least match inflation. The compound annual growth rate (CAGR) of private property prices in Singapore since 1993 is about 4%per annum, so it has actually outpaced inflation. In Kuala Lumpur, the CAGR since 2000is 6.5% per annum and in Johor, it is 3.2% per annum (although in 2011 to 2013, Johor grew faster than KL and Singapore). This is how the old adage “buy properties and wait” came to be.

If you can hold the property for five to 10 years, your price appreciation would be substantial even if you bought an average property at an average location. Too many investors get cold feet during the down cycle and exit too early, which brings me to my next point.

Stop micromanaging your investments

If your rents have dropped or you have trouble finding tenants, doing a quick sale to exit the investment is often not the best option.

Transaction costs for real estate are high and the property market is an extremely illiquid market, especially during a down cycle. This means you will take a longer time to find buyers and to transact. If you hold the property for a short time frame, you will not enjoy significant capital appreciation, and after taking away your transaction and holding costs, you will not make any money. This applies to Malaysian property investments as well. Singapore-based investors who buy into overseas markets such as Malaysia tend lose confidence easily as they have poorer visibility compared with locals.

This is the property market, not the share market! Do not get infected by “short-termism” and start dumping your investments during a down cycle. It is better to stay invested throughout the bad times and reap the rewards when the upcycle returns. If you have to lower your rent further to attract a tenant, it is still preferable to collecting nothing. An occupied property is better than one that is left empty.

Unless they are financially distressed with no job and income, I recommend property owners hold on and grab any qualified tenant they can get. If too many owners panic and sell, they will create a self-reinforcing downward pressure on their property price, which won’t end well.

The world environment is fragile. Guess what, bad news is not new.

One of the most important insights for an investor to understand is that no matter how intelligent he is, he will not be able to predict all the events of the next five years.

Today, China is slowing down, Europe is still weak and the US recovery is patchy. There is war in the Middle East and commodity economies such as Russia and Brazil are struggling. Singapore has just narrowly avoided a technical recession. Malaysia and Thailand are experiencing political issues and with Indonesia, it is always about the haze. It is hard to predict what other disasters or major events can happen.

Yet, life goes on. The civilised world has gone through numerous tumultuous events, many of which were worse than the ones we are experiencing now. We will survive and society will move forward. We just have to be in the position to reap when the harvest is ready.

Try being greedy instead of being fearful

Most investors I speak to today are fearful, and they have many valid concerns. There is a flip side to this situation. In this down market, the deals on offer are getting better. If we predict that this down cycle will stretch for another year or two, there is a lot of time for these deals to become fantastic. But you will only be aware of such deals if you are actively seeking them.

Unfortunately, too many people out there are still being influenced by bad news and are sitting out the market at a time when they should be paying it full attention. Try to look at the market greedily, rather than fearfully. A good investor buys low during the down cycle and sells high. A bad investor buys high in an up cycle, and tries to sell higher.

If you can remember the five points above, I think you will sleep better at night and perhaps look at the property market tomorrow in a different light. Property investing is fun, exciting and full of opportunities — but only if you choose to make it so.

By Ryan Khoo / Alpha Marketing, The Edge Property 

Debating DIBS for the property market

THE Government is considering housing developers’ request to reintroduce DIBS (Developers Interest-Bearing Scheme) for first-time house buyers.

Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar says the Government is discussing whether to relax current buying and lending guidelines for first-time house buyers.

“It is still at the discussion stage,” he says after the opening of the 2015 Malaysia Property Exposition (Mapex) on Friday. Today is the last day of the expo, which is being held at the Mid Valley Exhibition Centre, Kuala Lumpur.

“As much as we want to promote home ownership, it is important that we make sure that home ownership comes with the ability to service the loans.


“The last thing we want is to force people to own homes and take up loans which they are not able to service later.”

But he says the Government recognises the request by the Real Estate and Housing Developers’ Association (Rehda) to see how they can help young families who are renting and, at the same time, are in the process of buying their first house.

“If they were to buy a house now, it takes three years to complete and they have to continue paying rental for the house they are staying in. But at the same time, once their loan is disbursed progressively for the house they bought, they have to service it, and some people can’t deal with both together (house rental and house loan instalment at the same time),” says Wahid, explaining why developers have requested for DIBS to be reintroduced for first-time buyers.

DIBS is a scheme in which the developer absorbs the interest of the housing loan during the construction period, which means that the house buyer does not need to service the loan until the house is completed, which usually takes about three years from the time the development is launched.

However, this has led to excessive ­property speculation, as people who could not really afford the loans were using DIBS to buy properties because they could do it without putting down any of their money, with the intention of selling – or flipping – the house upon its completion to make a quick profit.

The other widely acknowledged issue with DIBS is that when developers absorb the interest from loans for house buyers during the construction period, they ­inevitably pass that amount down to the house buyer in the form of higher prices for the completed house compared with prices for a house without DIBS.

In November 2013, Bank Negara tightened lending guidelines and curbed DIBS.

When the 2016 Budget was announced recently, the First House Deposit Scheme was introduced with RM200mil allocated to help first-time house buyers afford their down payment.

Wahid says the Government has not yet determined whether this will also apply to second-hand homes or be confined to newly-built property only.

“The main intention is to assist first-time home buyers. It is important to observe the spirit and intention. We appreciate that for many young families to come up with that 10% down payment can be challenging.”

As for complaints that people are finding it hard to secure housing loans because the regulations have been tightened, Wahid says that when the Govern­ment surveyed the banks, the banks told them that the rejection rate for loans is less than 20%.

“This is where we need to look at the detailed data because there might be some screening at the developers’ end.”

He says the cooling measures the Government introduced over the past few years, such as responsible lending guidelines, have had their desired impact in curbing excessive speculation and moderating rapid growth in household debt.

He makes it clear that these measures are not meant for first-time house buyers but rather for those who are buying their third property onwards.

For Wahid, it is crucial for developers and those in the property sector to innovate and embrace new technologies to keep costs low.

He points out that the construction industry is facing productivity-related issues that need to be addressed.

These issues, according to Wahid, include a low-skilled work force, inadequate or a mismatch in training and development, over-reliance on low-skilled foreign labour, limited adoption of modern practices, mechanisation and industrialised building systems (IBS), the lack of data and information-driven decision-making, and a limited adoption of information technology such as building information modelling.

However, Rehda president Datuk Seri F.D. Iskandar Mohamed Mansor claims that 50% of housing loans are being rejected and urges the Government to relook some of its cooling off measures.

“It has taken a toll on developers. We are facing challenging times,” he says.

He says it would help if developers are given GST relief for constructing low-cost and affordable homes.

Iskandar also says another issue affecting the industry is rising “compliance costs”.

When they build something, he says, there are Federal Government and State Government regulations to comply with, and doing so can be costly.

Citing new infrastructure costs, he says this is now being passed down to the developers when it was not the case five to six years ago.

He says land takes up 15% to 20% of the development cost, and compliance costs, which used to be about 5%, now has gone up to 20% in some states.

The Star

What you Should Know Before Buying a Real Estate

What are all the possible costs and charges when I intend to purchase an apartment/ condominium?

If you purchase a new house/apartment directly from developer Initial Deposit - minimum 10% of property value or depending on the offer.

• Loan application processing fee(Some bank waive it depends on package offer) 
• Insurance(MRTA & Fire Insurance) if you take the housing loan) 
• Stamp Duties 
• Legal fees and costs 
• Utilities deposit (Electric & Water) 

If you purchase a sub-sale house/apartment from a vendor

• Loan application processing fee(Some bank waive it depends on package offer) 
• Insurance(MRTA & Fire Insurance) if you take the housing loan) 
• Valuers' fees and costs 
• Stamp Duties 
• Legal fees and costs 
• Utilities deposit (Electric & Water) 

Who are real estate agents and how much should I pay for their service?

Registered Estate Agents are estate agents registered by the Board of Valuer, Appraisers and Estate Agents, Malaysia. Their agency fee for service rendered is a maximum of 3% of the sale price of the property.

What is a valuation report and how much should I pay for a valuers fee?

A valuation report is a report of survey carried out by the bank to ensure that the house's value is not less than the proposed loan. For those who are applying for housing loans from banks, a report by a Real Estate Valuation firm recognized by the banks is needed. Between of RM300 - RM800 is a normal fee for an average apartment valued.

How do I pay for the purchased unit and when should I pay?

If you purchase a new unit directly from a developer The purchase price of the apartment shall be paid by you to the developer by installments as prescribed in Third Schedule of Sales and Purchase Agreement (Schedule Of Payment Of Purchase Price). Every notice referred to in the Third Schedule requesting for

WHAT YOU NEED TO KNOW BEFORE SELLING A PROPERTY

A Registered Estate Agent can market a property under the following types of agency :

Exclusive Agents
Only one agent is appointed and the owner cannot sell on his own

Sole Agents
Only one agent is appointed and the owner reserves the right to sell on his own 

Joint Agency
either two or three Agents are appointed to sell 

Adhoc/General
any number of Agents can be appointed to sell and All appointments are to be in writing


How do Estate Agents handle Earnest deposits?

• Agree to pay to the Agents clients account as stake holders 
• Money to be placed in clients account without delay 
• Proper records must be kept on the placing of the earnest deposit 
• Temporary receipt is to be issued upon collection of the deposits 
• Money to be left in clients account until SPA is signed or when all conditions become unconditional. 
• When fees become due to the REA, the agent can draw down from the clients account and pay to the companies account the fees due and payable. To issue balance payment to client. 
• Not to deduct any cost or charges from the EDv unless the client has given authority to do so 
• Monies received in the form of cash and are without delay paid in cash in the ordinary course of business to a client or on his behalf to a third party in the course of the day need not be banked into the clients account

What are the advantages of engaging the Real Estate Agent in a sale and purchase of a property?

• They are registered with the Board of Valuers, Appraisers & Estate Agents 
• They are governed by an act of Parliament 
• Estate Agents are recognized by the government 
• They are qualified, knowledgeable & experienced 
• They are accountable to the clients for their actions 
• They understand and know laws relating to property transaction 
• They are well informed about currents events 
• They are accountable for monies collected - clients account 
• Real Estate Agents save time & money - do it right the first time around 
• Real Estate Agents advise on property values and negotiate prices 
• The Vendors life is much easier as the Agents take care of the small details 

Essential matters that must agreed upon by both the client and the Estate Agent before putting up the property for sale

• Personal details of sellers 
• Check the title to verify registered owners/details of the property 
• Get a copy of the sale & purchase agreement 
• Confirm Type of Agency & marketing period 
• Confirm the Selling price & earnest deposit to be collected 
• Completion of sale & when is vacant possession 
• Agree on promotional activities like open house, ads, signboards etc 
• Agree on Fees payable to Real Estate Agent plus service tax 
• Agree when fees become due & other cost if any 
• Agree on payments to be made to Estate Agents and understand the operation of the clients account

miea.com.my

马来西亚购房“贷贷平安” 正确规划房贷偿还计划

银行严批房贷，中低收入群首当其冲，民众买房看银行脸色，不仅首间房屋遥遥无期，连可负担房屋也无法负担。

政府提供的可负担房屋房贷计划你了解吗？哪家银行房贷利率最低？每个月房贷供款是否在可负担范围内等问题，困扰著许多首购族。

安达集团进军柔州房产，打造ARC @ Austin Hills服务式公寓, 毗邻奥斯汀山庄高尔夫及乡村俱乐部, 前往新山关卡(CIQ)只须17分钟车程。

本文根据所得资讯，特设中低收入群房贷作战策略，让你在房贷紧缩期间，也能够“贷贷平安”。

买屋前

先了解偿还能力

近几年，国家银行积极打房，虽然成功抑制房价飙涨，无形中也导致许多中低收入群申请房贷被拒。

这对首购族而言，是一项沉重的打击，同时也显示买家的经济能力，还无法负担该项房产，才会导致房贷不获批。

因此在买房前，首购族有必要先瞭解个人可偿还贷款的能力，如每个月的债务负担、可支配收入、储蓄等因素，过后才根据经济状况，申请较有可能获批的房贷，降低被银行拒于门外的几率。

考虑可提供最低房贷利率银行

由于每月房贷偿还数额将视贷款额、利率及偿还期限而定，利率越高、期限越短，偿还数额也将随之走扬，故申请房贷时，仅考虑可提供最低房贷利率、最长偿还期限的银行。

根据资讯网站iMoney.my的房贷利率搜索引擎，国内银行提供10万至50万令吉贷款数额、30及35年期限的最低房贷利率介于4.40%至4.45%。

如果是25岁计划买房，贷款期限较有可能拖到35年，若贷款50万令吉，年利率4.4%，每月需偿还2千335令吉的房贷。

如果是30岁买房，贷款期限可能缩短至30年，即使50万令吉贷款年利率维持4.4%，可是每个月需要偿还的贷款将增至2千504令吉，比35年期限多了169令吉。

勿忽略个人实际财务状况及年龄

若申请者刚好30岁，每个月只能负担2千令吉房贷，如果贷款50万令吉，则有很大可能因无法负担每个月房贷而被银行拒绝。

为顺利获得房贷，最有效的方法是购买符合个人“房贷偿还能力”的房屋，比如每个月只能偿还2千令吉，就该根据年龄，选择偿还数额低于2千令吉的贷款配套及屋子，而不是根据喜好及房屋售价申请房贷。

无可否认，很多人都会先以个人喜好为出发点购买房子，忽略了个人实际财务状况及年龄是否可承担此价位的房屋。

月供款

只佔收入三分之一

在雪隆区，尤其是需求高企的有地房产，售价可能是公寓的3至4倍，即使是可负担房屋级别的产业发展计划，每单位售价约在40至50万令吉水平。

这对每月收入仅几千令吉的首购族而言，根本无法负担，如果是月入4千令吉的打工族，计划购买50万令吉可负担房屋，向银行贷款90%——即45万令吉，以35年贷款期限计，每个月须偿还约2千116令吉房贷，已佔超过半数收入。

一般上，每个房贷月摊还数额，只能佔个人或家庭收入的三分之一，若是个人申请，月入4千令吉打工族将无法获银行批淮贷款，因这已超出个人的房贷偿还能力范围。

单身人士可与家人联名申请

但若是一对收入各4千令吉的年轻夫妇一起申请，总收入达8千令吉，每月2千116令吉房贷偿还率不及总收入的三分之一，故房贷获批几率较高。

至于单身人士，解决方案之一是与家人联名申请，或者缴付更高头期款额，减少向银行贷款的额度，降低每月需偿还的房贷数额，则有可能获银行批淮房贷。

如果两者皆不可行，唯一的方法是降低购屋标准，放弃订价较高的有地房产，改买较符合个人偿还能力的公寓。

中低收入群

“高不成低不就”

基本上，以最长偿还期限35年计，收入最低1千令吉者仅可贷款6万令吉，若根据10%头期计算，首购族只能买得起售价7万令吉的产业，就算是两人收入合计至3千令吉，只能购买订价23万令吉的房屋。

以目前雪隆区的屋价来看，只有“我的雪兰我房屋”（Rumah Selangorku）的A及B型房屋符合1千至2千令吉低收入群的需求；至于收入介于2千至3千令吉的首购族，有较多选择，包括我的雪兰我房屋及一马人民房屋计划（PR1MA）。

至于收入介于4千至5千令吉的中低收入群，由于可负担的房屋价格介于30万至40万令吉，属“高不成低不就”水平。

不仅购买政府可负担房屋被抽中几率低于低收入群，打算购买私人发展商所谓的“可负担房屋”，又因售价超越可负担范围而被银行拒于门外，为所有收入群裡的“孤儿”，有意买房却苦无适合经济状况的贷款及房屋。

6千至8千令吉中高收入群，可负担范围则在45万至60万令吉；9千至1万令吉的高收入群，可负担70万至80万令吉房屋，购买私人发展商推出的产业发展计划暂不成问题，但随著生活水平走高，未来可能也难以负担。
目前一马人民房屋计划在巴生河流域推出的房屋售价介于16万至34万令吉，至于雪州政府主催的“我的雪兰我房屋”计划，售价介于4万2千至25万令吉。


资讯来源：（瑞投资网/南洋商报）

房产指南：马来西亚房产出租前五大准备

多重降温措施后，马来西亚房价还是压不下来，市场上消费者或从购屋转向租屋，租用需求料上升。

身为屋主，若要趁势将马来西亚房产出租，务必了解该市场的基本知识及操作法则。

马来西亚房屋的租用市场可能不像其他国家般，具竞争力，且随着房价飙升，业主要找到能出租，创造正现金流的房产已不容易。

但与此同时，房价不停上升，租屋需求相信也会随着上升。

如果你打算购屋出租，可参考我们的房屋贷款计算器，计算贷款的分期付款和其他置业所涉及的成本。

通过深入的研究和良好的个人财务管理，出租房产仍可为你累积财富。

接下来，让我们将谈谈以下几点：

1.租金

虽然租金是浮动的，但如何定价，屋主必须心中有数。要如何获知合理租金，以下几个方式都值得参考。

房产经纪：这是最快，也可说是最容易的方式。免费咨询，市场价格依据中介的个人经验和数据库资料而定。

网站：市面上已有好几个房产出售/出租单位的网络交易平台。

可通过其它类似单位业主/经纪所开出的租金来估计你的单位合理租金。

个人调查：也可选择在你单位坐落的社区里兜几圈，亲自收集数据。以这方式收集来的数据，或许有些误差，但不失为一个粗略的参考。

2.调整

现在你心里对租金已有个谱，接下来可以单位内所备有的设备及设施做为基准，调整你的单位租金。影响租金的事项包括：

*浴室和厨房设备，如微波炉*新油漆或清理的墙壁*停车位数量*独立/私人入口*保安措施，如保安人员，门禁社区等*提供全部家具、部分家具、或不提供家具*视野（适用于组屋或公寓）*其他设备包括游泳池和健身房谨记以上几点，可从中整理出适合你单位并附竞争力的租金。

3.出租成本

出租房屋涉及多项成本，其中一部分由租户承担，另一些则由业主负责。

租户将支付律师费和印花税，而业主将支付房产经济的代理费用和佣金。然而，这些只是单次费用。

长远来说，业主也必须承担单位的年度维修费，包括物业管理费、法律和会计、保险、清洁、维修、供应、税务、水电费、贷款分期付款、门牌税和地税。

业主的租金收入将会被征收高达26%的税率。业主必须注意，有些出租成本可扣税，有些则不能。业主应当在决定将房产出租之前，将以上的因素考虑在内。

4.租金带来的现金流

房地产投资的最终目地是创造正现金流。租金收入也是房产投资的其中一项好处。那么，如何计算流动资金？

租金收益–空置和信贷损失–出租成本–贷款分期付款=流动资金

例子：

1.每年租金收入：每月RM1,800×12=RM21,600

2.空置和信贷损失：估计占总租金收入5%=RM1,080

3.每年维修费：RM6,000

4.贷款分期付款：每月RM1,100×12=RM13,200

RM21,600–RM1,080–RM6,000–RM13,200=RM1,320正现金流

只要你的投资产生正现金流，你处于优势。接下来就要计算租金回酬。

租金回酬让投资者更清楚预计未来的回酬，以助做出适当的投资决策。

从以上流动资金的例子：

假设房产的市价为50万令吉

租金回酬：（每年租金收入-空置和信贷损失）/市值（RM21,600-RM1,080）/ RM500,000=4.1%

净租回酬：（每年租金收入-空置和信贷损失-开销）/市值（RM21,600-RM1,080–RM6,000）/ RM500,000=2.9%

现金回酬：（每年租金收入–空置和信贷损失–出租成本–贷款分期付款）/市值（RM21,600-RM1,080-RM6,000-RM13,200）/RM500,000=0.264%

5.风险

现在我们谈谈出租房子所涉及的风险，就像所有其它形式的投资，必须加以警惕。

空置：控制的单位无法为你提供租金收入，而你却必须继续承担贷款分期付款和维修费用。

租户：租户破坏你的单位或不支付租金都会为你带来金钱损失。

负现金流：租金收入不足以支付成本，将造成负现金流。

虽然没有什么投资是无风险的，但进行背景调查和研究将助你做出更好的决策，降低风险。


资讯来源：（瑞投资网/南洋商报）

月入RM5300 —可負擔房價 多少？

黃先生，今年26歲。我打算明年在吉隆坡買間雙層排屋，以我目前的資金，可以購買到多少錢的屋子？可以用公積金儲蓄來購買嗎？

我在酒店業工作，目前單身，一個月工資凈值5千300令吉，另外有兼職，不過收入不定，兼職收入大概在200至300令吉之間。

每個月花費包括房租600、電話費50、上網費+水+電+煤氣費100、娛樂和伙食300、公積金500、家用500，剩餘的存起來，酒店有提供一餐伙食。

另外，在新加坡銀行存有9千新元，是之前在新加坡工作所存的，還沒提出來。剛買了儲蓄保險，一年供5千令吉，一共要供6年，打算用每年的花紅來支付，沒有信用卡，沒有購買債券和股票，也沒有購買車子，銀行目前存有1萬令吉。



答：黃先生收入豐厚，加上年輕，購買房屋條件綽綽有餘，在沒有車貸的情況下，以凈收入5千300令吉為計算基礎，每月供期在1千800令吉之間。

如果以供期30年、分期付款1千800令吉作為參考，黃先生可以領取38萬令吉的貸款，可以考慮的屋價最高是在42萬令吉之間。

銀行是以凈收入作為批准考量，兼職收入、額外收入如花紅、超時津貼，都不在考量的範圍，因為這些被視為不穩定收入，時多時少，不能作為標準。

不過，黃先生必須確保首期屋款的來源沒有問題，目前銀行存款只有1萬令吉，加上新元存款也不夠4萬令吉，也許黃先生工作年資不長，因此所存的款項還不多。

我們不曉得黃先生公積金第二戶頭有多少儲蓄，如果不多，提取來購買房屋也不實際，畢竟幫補的作用不大。



资料来源：（星洲日報）

Budget 2016: Can You Afford A House Now?

With these various initiatives, owning a home is now more feasible than ever, but many first-time buyers are unaware of the -true- cost of home ownership.

Soaring property prices have been a long standing issue among aspiring Malaysian home owners, who find themselves having to scrape together a larger capital than ever to own a house.

A recent study by Demographia (a US-based urban developer researcher) further confirms what we already know – it found that Malaysia had a “severely unaffordable” residential homes market, with prices hovering at 5.5 times of median income, compared to Singapore’s 5.1 times.

Property value is considered no longer affordable when it reaches three times or more than that of median annual income.

In response to skyrocketing home prices, the Government had announced cooling measures for Budget 2014 to curb speculation that has been driving up house prices across the nation.

They include the cessation of the Developer Interest-Bearing Scheme (DIBS) – a scheme in which developers bear the interest on buyers’ housing loans until the project’s completion, and an increase inReal Property Gains Tax (RPGT) from 15% to 30% to discourage price-flipping upon completion.

RPGT is a tax on chargeable gains derived from the disposal of property within a set period. A chargeable gain is the profit when the disposal price is more than the purchase price of the property.

Meanwhile, to address housing affordability issues, the Government had geared the 10th Malaysia Plan (2011 – 2015) toward providing quality and environmentally sustainable housing for both rural and urban communities in line with their development objectives.

“ A home valued at RM400,000 with 90% margin of financing will come close to about RM20,000 in fees and charges 

”

Initiatives like the Youth Housing Scheme (YHS), 1Malaysia People’s Housing (PR1MA), and the Rent-to-Own (RTO) scheme were introduced to facilitate easy access to loans and to increase housing needs for the masses.

Programmes like the Private Affordable Ownership Housing Scheme (MyHome) and the My First Home Scheme were also intended to make home ownership a possibility for the average wage-earning Malaysian.

These initiatives will continue as the 11th Malaysia Plan (2016 – 2020) unfolds next year.

Budget 2016 continues efforts to provide affordable housing

The 2016 Budget, announced on October 23, will continue to focus on providing affordable housing to meet increasing housing needs, particularly among the poor, and low-and middle-income households in line with the 11th Malaysia Plan.

The Real Estate and Housing Developers’ Association Malaysia (REHDA) views the 2016 Budget as positive and helpful for promoting home ownership for the nation, especially for the low and middle income group.

“ Owning a home is now more feasible than ever but first-time buyers are unaware of the “true” cost involved 

”

“The allocation of RM200 million for deposit for first time house buyers is definitely good news to the industry especially in this current trying times. Payment for deposit has always been the biggest barrier to house entries and we fervently hope that the deposit will help spur home ownership amongst the rakyat,” REHDA’s president Datuk Seri Fateh Iskandar Mohamed Mansor said in a press release.

REHDA also lauds the Government’s move in making affordable housing a priority, saying it is indeed a step in the right direction towards encouraging the people to own properties.

What should first-time home buyers look out for?

With these various initiatives, owning a home is now more feasible than ever. However, many first-time buyers are unaware of the “true” cost of home ownership.

When it comes to purchasing property, the first thing that comes to mind is always the initial down payment.

Most banks in Malaysia offer up to 90% of the property’s price (margin of financing) for your first two residential properties. If you receive 90% financing, you need to pay 10% cash for the rest of the property’s price.

So for example, if you are eyeing an apartment unit in Puchong for approximately RM400,000, you will need to pay a minimum RM40,000 upfront.

The First House Deposit Financing Scheme announced in Budget 2016 will assist first-time home buyers in making the down payment. However, the mechanism and the bracket for house prices under the scheme is still unclear.

It could also be rolled out later in the year such as the Youth Housing Scheme, which was announced in Budget 2015, but was only introduced in July this year.

Buying and financing a home takes a lot more than just paying the deposit and the loan. Far from it, it also involves a number of miscellaneous fees and charges that many first-time home buyers tend to overlook.

To put things into perspective, a home valued at RM400,000 with 90% margin of financing will come close to about RM20,000 in fees and charges – that’s how much more you will have to pay beyond the down payment to make the sale happen!

Then there is the question of choosing the right home loan for you once you’ve gotten these details down.

Younger home buyers will have the advantage of stretching their home loan tenure to a maximum of 35 years.

This means lower monthly repayment, making the dream of owning a home a much more attainable one.

First time home buyers with good credit rating will also be offered 90% financing, which brings the down payment down to the minimum of 10%.

Also, do you want it fixed or variable?

The interest rate for a fixed loan will remain constant throughout your tenure, which is good if interest rate spike, but if the rate drops, you will miss out on any savings.

You will need to weigh all the pros and cons for your individual circumstances to get the lowdown on the benefits of both types of loan.

Meanwhile, getting a flexible mortgage scheme features lower rates and payments early on in the loan term. However, rates and payments can rise significantly over the life of the loan. Compare the best mortgage loans in Malaysia using our home loan calculator.

Affordable housing by the Government can only do so much, if you don’t have the proper financial planning to own a home, you will still not be able to buy one.

There is nothing you can do about the flailing economy, but you can find a way to make your money work harder for you by using the right credit card.

iMoney.my