​As the air and sea territorial dispute enters a second week, it could negatively impact investor sentiment in the already lukewarm property market in Iskandar Malaysia. 

By Khalil Adis

The simmering tension brewing in the Straits of Johor between Singapore and Malaysia has now entered its second week.

In fact, it is like watching history repeating itself.

Growing up during the Lee Kuan Yew era, I recall how both countries would often trade barbs over water to territorial issues.

The relationship between both countries is best described as testy then.

However, much like brothers and sisters, we would soon kiss and make up.

Post the Lee Kuan Yew-Mahathir era, bilateral ties between both countries warmed up significantly under the leadership of Lee Hsien Loong and Mahathir's successors, Abdullah Badawi and Najib Razak.

While the later remains highly unpopular among Malaysians, several win-win deals were concluded between both countries which arose from the land swap deal.

They included the joint development of DUO in Bugis and Marina One by M + S Pte Ltd (Malaysia and Singapore, in case you don't know)

Over in Iskandar Malaysia, Singapore agreed to develop two wellness centre called Afiniti Medini and Avira. 

Subsequently, CapitaLand invested in A2 Danga Island.

Until today, the project has yet to be launched.

With bilateral relations going from cold to warm and back again to cold, we analyse how this will impact the property market across the causeway.

#1: Investors will likely adopt a ‘wait-and-see' approach to Iskandar Malaysia 

This is almost similar to the pre-Iskandar Malaysia era under Abdullah Badawi's leadership when the special economic zone was first announced.

I recall covering a few stories on Iskandar Malaysia then where I had interviewed several Singaporeans.

During that time, many had expressed scepticism on Iskandar Malaysia and avoided buying a property at Horizon Hills.

Back then, it was then launched within the minimum investment threshold of RM250,000.

However, that changed once the land swap deal was concluded in 2010.

As our bilateral ties improved, so did investors' confidence.

As a result, properties in Iskandar Puteri and Medini began selling like hot cakes.

Meanwhile, units at Horizon Hills was transacted at almost three times the launch price as developments at Legoland Theme Park, EduCity and Puter Harbour were gathering pace.

With both countries now embroiled in a maritime dispute, investors are most likely to adopt a similar approach until the issue is resolved

#2: Market sentiment in Iskandar Malaysia  the most affected

July's property cooling measures have made it even more difficult for Singaporeans to buy a private property in the Lion City as the loan-to-value (LTV) limit has been reduced from 80 per cent to 75 per cent if the loan tenure does not exceed 30 years for the first property.

Logically, this makes Iskandar Malaysia much more attractive due to its close proximity to Singapore as we share many similar customs, culture and speak similar languages.

However, the property market is very much sentiment driven as described above.

With Iskandar Malaysia being the closest to Singapore, this will be the property market that will be the most affected.

#3: Developers will face an uphill task in marketing their units

The property market in Iskandar Malaysia is already facing a challenging time due to the oversupply in the residential sector.

According to the first quarter of 2018 data from the National Property and Information Centre (NAPIC), Johor has the second highest number of existing stock of residential units at 795,363 in Malaysia.

The current political climate will no doubt be a double whammy for developers who are already struggling to move unsold units in their inventory.

With the High Speed Rail project now postponed, only the brand name of the developer will be able to win investors' confidence.

As such, developers who have a good reputation among Singaporeans and local buyers will stand to win.

Word-of-mouth marketing will be the way forward.

#4: Possible spillover impact in tourism and retail sectors

The allure of Malaysia is the affordable holiday destination, the many scenic nature and food trails it offers, its close proximity to Singapore and the strength of the Singapore dollar.

Thus, December is typically a busy month at the checkpoints as many Singaporeans go for a short break to Johor and beyond.

As the tension escalates, Singaporeans are likely to stay away this holiday season unless absolutely necessary.

In such a scenario, the tourism and retail sectors in popular malls in Johor Bahru like City Square and KSL will be affected.

In addition, many reservist units and national servicemen are being recalled for mobilisation exercises. 

Many will have no choice but to stay in Singapore.

#5: Malaysians will also be affected

​The current situation affects not just Singaporeans but also Malaysians living in Johor.

In fact, many brave the causeway in the wee hours every morning just to feed their family back home.

As we speak, Johoreans have expressed their concerns that their livelihood in Singapore may be impacted and hope the issue can be resolved amicably.

Allianz Real Estate investment in Ocean Financial Centre is part of its strategy to allocate 5 per cent to 10 per cent of its real estate investments to the Asia-Pacific region.

By Khalil Adis

#1: Ocean Financial Centre is a 43-storey Grade A office tower

The Grade A office tower is located strategically at the intersection of the Raffles Place and Marina Bay financial precincts with retail component on its ground floor and basement level.

It is accessible via the Raffles Place MRT station.

#2: Singapore’s office market is experiencing strong rental growth

While Singapore’s private residential market has been muted by the recent property cooling measures, its office market is doing well.

"The Singapore office market is experiencing strong rental growth. From an occupational cost and efficiency perspective it continues to be favourable vis-a-vis other comparable markets like Hong Kong,” said Mr Rushabh Desai, CEO Asia Pacific at Allianz Real Estate,.

#3: The divestment is worth S$537.3 million

According to Keppel REIT Management Limited, the divestment is part of ongoing portfolio optimisation efforts and presents a unique opportunity to unlock value for its unitholders.

The divestment by Keppel REIT of a 20 per cent minority stake in its subsidiary, Ocean Properties LLP which holds Ocean Financial Centre, to Allianz Real Estate has an agreed property value S$537.3 million.

This is 16.8 per cent above Keppel REIT’s historical purchase price of S$460.2 million.

#4: Divestment has a target completion date by end December 2018

According to Keppel REIT, it currently holds a 99.9 per cent interest in Ocean Financial Centre through Ocean Properties LLP. 

Keppel REIT said the divestment is expected to be completed by end December 2018

With Allianz now holding a 20 per cent a minority stake in Keppel REIT’s subsidiary, Ocean Properties LLP, will continue to maintain a majority interest in Ocean Financial Centre through its 79.9 per cent interest in Ocean Properties LLP.

Additionally, Keppel REIT said it will continue to be the asset manager for Ocean Properties LLP in relation to Ocean Financial Centre.

#5: Unitholders of Keppel REIT set to benefit from the divestment

​According to Tan Swee Yiow, CEO of Keppel REIT Management Limited, the divestment is “in line with our commitment to deliver sustainable total return to unitholders”.

"The partial divestment of Ocean Financial Centre is a unique opportunity for unitholders to realise part of the capital gains from this premium Grade A office building, while maintaining exposure to the strengthening Singapore office market. Despite this being a divestment of a non-controlling stake, the agreed property value reflects the asset's quality and underlying value,” he said in a statement.

The divestment will see Keppel REIT realising approximately S$77.1 million of capital gains. 

This translates to an attractive net asset-level return of 8.3 per cent per annum over the holding period.

Singapore's private property market experienced robust growth but was muted midway by property cooling measures. We list down the key highlights in our 2018 property market roundups and our outlook for 2019.

​By Khalil Adis

Singapore's private property market saw a steep rebound from the fourth quarter of 2017 after many quarters of decline in its Property Price Index (PPI) since the fourth quarter of 2013.

Figures from the Urban Redevelopment Authority (URA) showed that the Lion City's PPI surged by 11.0 points from 138.7 in the fourth quarter of 2017 to 149.7 points in the third quarter of 2018.

However, the market softened from July onwards post the new property cooling measures.

Here are the top five property market roundups for 2018 and our top five outlooks for 2019.

Roundups:
#1: En-bloc fever 

Singapore's property market was off to a fiery start with several collective sales deal that was concluded during the first half of the year.

They included the iconic Pearl Bank Apartments which was sold for S$728 million sales to CapitaLand and Park West which was sold for S$840.89 million to SingHaiyi Gold Pte Ltd.

Data from Cushman & Wakefield Inc showed that the collective sales market recorded S$3.8 billion of en-bloc transactions in the second quarter.

#2: New property cooling measures introduced

To douse the red-hot residential property market, the government announced a slew of property cooling measures in July.

This included increasing the Additional Buyer's Stamp Duty (ABSD) rates and tightening loan-to-value (LTV) limits on residential property purchases.

The new ABSD rates and LTV limits are as above.

As a result, the collective sales market declined with S$353 million worth of transactions recorded in the third quarter, data from Cushman & Wakefield Inc showed.

#3: Industrial property market picks up steam

While Singapore's residential property sector has taken quite a hit, its industrial and commercial property sectors are seeing an uptrend in investment sales.

According to data from Cushman & Wakefield Inc, industrial property deals soared 73 per cent to S$1.2 billion in the third quarter while office sales increased by 54 per cent to S$2.1 billion.

Meanwhile, Jones Lang Lasalle Singapore, citing data from JTC statistics said islandwide all-industrial rental correction stayed modest at 0.1 per cent quarter-on-quarter for three consecutive quarters since the fourth quarter of 2017, while the second quarter of 2018 all-industrial price index flat-lined for the first time since trending down in the third quarter of 2014.

#4: HDB resale values are declining

HDB is a hot bread and butter issue among Singaporeans as 80 per cent of the population lives in public housing flat.

Public interest in HDB dominated the headlines in 2018 as government officials warned that their values could decline, especially those that are more than 40 years with around 50 years left on their 99-year lease.

This marked a stark contrast during Lee Kuan Yew's era when he assured Singaporeans that HDB flats are an asset.

Property agents who specialise in HDB flats in mature estates such as Toa Payoh say they are already seeing prices of older resale flats declining as many buyers are staying clear from such properties following the ongoing debate. 

For example, according to the third quarter data from the HDB in 2018, a 3-bedroom flat in the estate was transacted for S$279, 000.

In contrast, the median price during the same period in 2016 was transacted for S$300,000.

Having said that, other factors do come into play such as the supply of new Built-to-Order (BTO) flats which has influenced the resale price.

However, until the government addresses the uncertainty surrounding older estates, we are likely to see the values declining as it is very much influenced by market sentiment.

#5: Widening price gap between a private property and an HDB flat

While the private property market has seen the price index picking up by some 11.0 points, the HDB Resale Price Index (RPI) has been on a decline.

According to data from the HDB, the RPI has been on a decline since the second quarter of 2013 as it continues to launch BTO flats in the market.

This is the biggest price gap in over 10 years and will likely be a contentious issue when the general election is expected to be called in 2019.

Predictions:
#1: HDB to become a hot-button issue

2019 is expected to be an election year.

As such, HDB will be a hot-button issue as 80 per cent of the population lives in HDB flats.

As we have discussed above, HDB resale prices are already on the decline while the price gap between a private property and an HDB flat has widened considerably.

The government will need to address the ongoing debate on the value of older HDB flats moving forward.

#2: Fewer BTO flats to be launched 

In November, the HDB said it launched 7,214 flats for sale under the Build-To-Order (BTO) and Sale of Balance Flats (SBF) exercise. 

This comprises 3,802 BTO units and 3,412 SBF units across various towns estates such as Sembawang, Sengkang, Tengah, Yishun and Tampines.

However, there will be fewer units being offered in the next BTO launch exercise in February 2019.

The HDB said it will offer about 3,100 flats in Jurong West, Kallang Whampoa and Sengkang.

#3: A sellers' market

With fewer BTO flats on the offering, this could possibly divert some of the buyers to the resale market and prop up the resale prices which have been falling since the second quarter of 2013.

As such 2019 could likely be a sellers' market.

Sellers should watch the market closely while buyers should opt for a BTO quickly.

#4: Five growth areas

​As outlined in the URA Master Plan 2014, the five growth areas are located at Woodlands Regional Centre, Jurong Lake District, City Centre, Paya Lebar Central and Punggol Digital District.

Woodlands Regional Centre will be a transportation hub which will connect the Thomson-East Coast Line (TEL) to the Johor-Singapore Rapid Transit System (RTS) via Woodlands North MRT station.

Meanwhile, Jurong Lake District will house the High Speed Rail station linking Singapore to Kuala Lumpur in 90 minutes flat.

The development of the project has been postponed to two years and will now commence construction in 2020 instead of 2018. 

Meanwhile, the express service will only commence by 1 January 2031 instead of 31 December 2026, as originally planned.

You can read more about URA Master Plan 2014 here.

#5: Opening of TEL will provide a price booster for properties along the line

The TEL is a 43km MRT Line that will add 31 new stations to the existing rail network, with 7 interchange stations.

It will link to the East-West Line, North-South Line, North-East Line, Circle Line and the Downtown Line. 

Spanning from Woodlands North to Sungei Bedok, the line will be opened in stages next year.

Stage one will comprise stations from Woodlands North to Woodlands South.

As such, properties in the Woodland Regional Centre as highlighted above will be among the first to enjoy the price booster when the stations commence service next year.

This will definitely be much to cheer about in the north amid the muted HDB resale market.

​2018 is a watershed moment for Malaysia's politics and the subsequent impact on the property market. We list down the key highlights in our 2018 property market roundups and our outlook for 2019.

By Khalil Adis

May 10 2018 was a watershed moment in Malaysia as it marked the first change of government in the country's history.

Since 1957, it had enjoyed an uninterrupted reign from the ruling Barisan Nasional (BN) coalition.

However, the high cost of living, falling Ringgit, the lack of affordable homes in the market, high unemployment among fresh graduates, the unfettered check on power and the 1MDB scandal proved to be the undoing for BN as Malaysians far and wide casted their protest vote in the ballot box

The message from Malaysians is clear - they have had enough and want a new, clean government to lead the way.

With the Pakatan Harapan government now in power, all eyes are on the newly elected old Prime Minister Tun Mahathir Mohamad and his team to solve the pressing bread and butter issues.

Here are the top five property market roundups for 2018 and our top five outlooks for 2019.

Roundups
#1: Demand-supply mismatch has resulted in an increasing number of unsold homes

​According to Bank Negara, 80 per cent of homes or 146,196 units priced above RM250,000 remained unsold as of end March 2018. 

In comparison, 130,690 units were unsold during the same period last year.

"Imbalances observed in the property market continue to persist," Bank Negara had said in a statement.

#2: Rent-to-own scheme being rolled out

To help ease the entry for the first time property buyers, the private sector has come up with a few initiatives.

Some private developers like Ayer Holdings have introduced a ‘Stay & Own' scheme for their Epic Residence and Foreston projects whereby part of the rent will be converted to the downpayment.

This not only provides a temporary solution for those who urgently need a home but also a form of security.

Meanwhile, Maybank has rolled a similar initiative called HouzKEY which they have called as "a rent-to-own solution that helps you to own your dream home."

The scheme involves zero per cent downpayment with the monthly rental forming part of the home financing. 

#3: Ministry of Housing and Local Government studying Singapore's HDB model

In July, Zuraida Kamaruddin, the Minister of Housing and Local Government paid an official visit to Singapore to study the HDB model.

Singapore has succeeded to build demand driven homes under its Built-to-Order (BTO) scheme to house 80 per cent of the Singapore population.

This is especially useful in Malaysia where there is currently a demand-supply mismatch as in point number one.

#4: Malaysia looking into having a single housing government agency

In Malaysia, there are so many affordable housing programmes being rolled out by the state and federal governments such as Rumah Milik Mampu, Rumah Selangorku, PR1MA, My First Home, Program Perumaha Rakyat and the list goes on.

This confuses the public.

The Malaysian government is currently looking into having a single housing agency to streamline the whole process much like the HDB model.

If implemented, this could solve the current Malaysian housing woe.

#5: More help for the B40, M40 and first-time homebuyers under Budget 2019

More help is on the way for these group of property buyers as announced under Budget 2019.

The measures included the Real Estate and Housing Developers' Association (Rehda) agreement to cut prices by 10 per cent for new launches, the exemption of the Real Property Gains Tax (RPGT) for properties that are priced below RM200,000 and the stamp duty exemption for properties priced in the first RM300,000 up to RM500,000 as well as those priced from RM300,000 to RM1 million.

Outlook for 2019 
#1: Affordable homes to continue driving the market

​There is currently a strong pent-up demand for affordable homes but where the supply is lacking.

As such, the affordable home segment will continue to be in strong demand for 2019.

However, there needs to be concerted efforts from both the government and private developers.

Under Budget 2019, the federal government has pledged to spend RM1.5 billion on such homes via the 1Malaysia People's Housing (PR1MA) and Syarikat Perumahan Negara Bhd (SPNB).

Meanwhile, Rehda has agreed to cut prices as stated above.

#2: South KL to be the growth area

There are many infrastructure projects and economic drivers that are in the pipeline that will further boost property prices in Southern KL.

One such project is Bandar Malaysia will serve as the terminus station for the Kuala Lumpur-Singapore High Speed Rail (KL-Singapore HSR) project linking both cities in 90 minutes flat. 

The development for the project has been postponed to two years and will now commence construction in 2020 instead of 2018. 

Meanwhile, the express service will only commence by 1 January 2031 instead of 31 December 2026, as originally planned.

Bandar Malaysia has been designated as a site for the Digital Free Trade Zone (DFTZ) initiative by Jack Ma. Home to the Satellite Services Hub, DFTZ is expected to create some 60,000 direct and indirect jobs. It will also possibly serve as the interchange to the MRT Line 3, which has now been postponed.

Another economic driver in the vicinity is Tun Razak Exchange (TRX). 

TRX will be a mixed-use development comprising a Grade A office space as well as residential and commercial precincts. 

To be developed in several phases over a period of 15 years, the first phase will comprise four investment grade A office towers, a lifestyle retail mall, two 5-star hotels and up to six luxurious residential towers with a target completion date by 2019.

In addition, Bandar Malaysia will house two MRT stations - Bandar Malaysia North and Bandar Malaysia South which will form part of the alignment for the Sungai Buloh - Serdang - Putrajaya Line (SSP Line).

#3: Properties along Sungai Buloh - Serdang - Putrajaya Line (SSP Line) will  be sought after

Speaking of the SSP Line, properties along the alignment, particularly those situated in the growth areas of Sungai Besi, Bandar Malaysia and Cyberjaya City Centre are worth looking into.

Bandar Malaysia will house two MRT stations as stated above and located a few stops away from Tun Razak Exchange MRT station.

Meanwhile, Sungai Besi MRT station is an interchange station to the Sungai Besi LRT station. 

It will serve as an interchange to the upcoming High Speed Rail station located in Bandar Malaysia, also in Sungai Besi. 

Last but not least,  Cyberjaya City Centre MRT station is a transit-oriented development (TOD) project to be developed by Malaysian Resources Corp Bhd (MRCB). 

With its experience in building the transport hub in KL Sentral, MRCB will be developing a new city that will be integrated with the MRT station. 

Phase one is expected to generate a gross development value (GDV) of RM5.35 billion. 

It will feature a 200,000 sq ft convention centre, a 300- to 400-room business hotel, low and high-rise office buildings and a retail podium. Cyberjaya City Centre will have a development plan spanning 20 years. 

The MRT station is located just opposite Lim Kok Wing University of Creative Technology.
 
#4: Penang to get a boost from Phase 1 of Penang Transport Master Plan (PTMP)

With Lim Guan Eng as Malaysia's Finance Minister, Penang's property market will get a further boost.

Just this month, Phase 1 of PTMP was approved.

It will comprise the Bayan Lepas Light Rail Transit (LRT) project, Pan Island Link 1 (PIL1) project and several main highways.

The proposed Bayan Lepas LRT line will be about 30 km in length with 27 stations running from KOMTAR to the future reclaimed islands in the south.

There will be three interchange stations - KOMTAR, Sky Cab Station linking it to the Sky Cab line across the Malacca Straits and The Light Station linking it to the George Town-Butterworth LRT line.

The LRT Line will also be integrated with the Sungai Nibong Express Bus Terminal at the Sungai Nibong Station.

Meanwhile, PIL 1 is a new 20km highway that will be aligned along the mountainous terrain of the island and will take around 15 minutes from between Gurney Drive to the Second Bridge.

There will be six interchanges in all - Dr Lim Chong Eu Expressway (LCE), Awang, Relau, Paya Terubong, Utama and Gurney.

#5: Johor Bahru to get a boost from the Rapid Transit System (RTS) Link

​Meanwhile, over in the southern state of Johor, Iskandar Malaysia's muted property market will get a boost as the RTS Link will commence construction next year.

The RTS Link will link Bukit Chagar station in Johor Bahru to Woodlands North MRT station in Singapore when completed in 2024.

There are also plans for a Bus Rapid Transit (BRT) system within Bukit Chagar station to link it to the different areas of Iskandar Malaysia.

The BRT will feature a dedicated bus lane with three lines -  BRT Line 1 will span from Bukit Chagar to Tebrau, BRT Line 2 from Bukit Chagar to Senai and finally, BRT Line 3  from Bukit Chagar to Iskandar Puteri.

However, based on market talk in the ground, there is a possibility that the BRT system will be upgraded to an LRT system instead.

A cautionary property tale of joint tenancy, abuse and escaping to a safe haven.
By Khalil Adis​

It is hard to believe a family member that I initially grew up with can turn out to be so abusive.

My parents had divorced and as a result, we were living with our guardians.

My mom and I lived with an uncle while the other family member, was sent to live with another uncle, owing to her very difficult behaviour.

We then got a flat together in Taman Jurong where I was living my mom and this other family member when I was around 18-years-old. 

I remember thinking - “Finally! We have a place to call our own.”

However, little did I know this family member would turn out to become a monster.

The first instance of abuse occurred when I was kicked out of home at 21-years-old.

I recall having my bag thrown out of the house and living temporarily at the police station where I was posted at for my national service.

Back then, I did not know any property laws and did not know any better.​

I then rented a place for a while near to Admiralty MRT station.

To pay for my rent, I would give tuition.

The subsequent abuse happened in 2014 when the family member came back with her family after having lived overseas.

My mom and I were on the constant receiving end of abuse, bullying and threats to kick us out of our family home.

Mind you, I was paying for the mortgage and taking care of my mom.​

Things got so bad that my mom and I had to lodge a police report and sought help from my MP Tharman Shanmugaratnam.

Thankfully, I now have my own home and a safe place for my mom and I away from the abuser.

I subsequently dedicated Property Buying for Gen Y to my MP.

Complications of joint tenancy

The Ministry of Social and Family Development defines violence as physical injury, direct or indirect threats, sexual assault, emotional and psychological torment, damage to property, social isolation or any behaviour which causes a person to live in fear.

My mom and I have experienced some of those forms of abuse described.

While it is hard to believe that your own flesh and blood can turn their back against you, family violence is very real.

In closing, it is my hope by sharing this cautionary tale that others in a similar situation will be spared the agony of what my mom and I have had to endure.

If you have a family member who is abusive or know a family who is being abused, do not hesitate to call the authorities. You can find out more at Break The Silence.

Last but not least, there needs to be a different level of affordability in the different states in Malaysia rather than a one blanket definition of say, less than RM500,000, for affordable housing.

This is because the cost of living and the median income differs significantly from state to state. According to the Department of Statistics Malaysia, the median income in 2016 for fairly urbanised states like Kuala Lumpur, Putrajaya and Selangor are RM9,073, RM8,275 and RM7,225 respectively.

On the other end of the spectrum, the median income in less urbanised states like Kelantan, Kedah and Pahang are RM3,079, RM3,811 and RM3,979 respectively.

From here, the state government should work backwards to determine the price of affordable housing based on the gross income not exceeding 30% of one’s mortgage.
​
This will better address and target the needs of Malaysians in each state.

​This article was first published by StarProperty.my

By Khalil Adis

Ask any young Malaysians and chances are many are still unsure if they can buy their first home. 

Their lack of knowledge, financial literacy, inability to get a loan and the lack of supply of such homes across Malaysia are further exacerbating the Malaysian housing issue.

From Johor to Kuala Lumpur, there is currently a demand-supply mismatch whereby most new launches in the market are priced above RM500,000.

This is far beyond what the average Malaysian can afford.

According to the first quarter of 2018 data from the National Property and Information Centre (NAPIC), Selangor has the highest number of existing stock of residential units followed by Johor and Kuala Lumpur at 1,516,960, 795,363 and 471,475 units respectively.

With Budget 2019 to be announced in November, perhaps the Malaysian government can take a cue from Singapore how the city-state is able to house 80 per cent of its population.

Step 1: Have a single affordable housing agency

In Singapore, there is only one government agency called the Housing & Development Board (HDB) which is tasked to provide affordable housing for every Singaporean.

In comparison, in Malaysia, there are so many affordable housing programmes being rolled out by the state and federal governments such as Rumah Milik Mampu, Rumah Selangorku, PR1MA, My First Home, Program Perumaha Rakyat and the list goes on.

This confuses the public.

The government should consolidate the affordable housing segment under one single government agency much like the HDB model.

Recently, Zuraida Kamaruddin, the Minister of Housing and Local Government, was in Singapore to study the HDB model.

By having it under one government agency umbrella, this will enable the federal government to better gauge demand from the public.

This leads to the next point.

Step 2: Build demand-driven homes

​In Singapore, the HDB builds homes that are demand-driven called the Built-to-Order (BT0) scheme.

The public is then invited to apply for the various homes that are on offer in different parts of Singapore.

By doing so, this enables the HDB to gauge demand from the public and allocate homes using a balloting system.

The balloting system will then inform applicants of the status of their application.

If Malaysia were to follow such a system, this will help to solve the current demand-supply mismatch in the market and build homes according to demand.

Step 3: Introduce grants and subsidies

In Singapore, a first-time applicant can enjoy a housing grant called the Additional CPF Housing Grant (AHG) and Special CPF Housing Grant (SHG) of up to S$40,000 depending on one's household income.

To qualify for the AHG, applicants must apply for a 2-room flat or larger with an income ceiling of S$5,000 per month,

Applicants must also be employed at the time of application and be at least in employment for the past one year during the housing application.

On top of that applicants must not be an owner of any other properties in Singapore or overseas.

Applicants can also qualify for additional grants under the SHG here or if they live close to their parents.

By introducing such grants, it lowers the entry price to buy a home.

Likewise, if similar grants are introduced in Malaysia, it will mean more Malaysians can afford to buy their first home.

You can read more about the scheme here:

Think about it.

Step 4: Introduce housing loans direct from the housing ministry

In Singapore, most Singaporeans will opt to get a loan directly from the HDB which gives a concessionary interest rate at 2.6 per cent. 

This means, regardless of the economy, the interest rate will remain the same unlike taking a bank loan.

In addition, the HDB is more compassionate if say, one is unable to service their loans.

The HDB will still require you to pay your monthly mortgage but will work out a plan that will ensure you will still have a roof over your head.

However, banks are less forgiving when you take a bank loan and will not hesitate to repossess your flat if you do not pay your mortgages on time.

In Malaysia, applicants must apply for a bank loan.

However, due to non-payment of PTPTN as well as bad credit, some applicants find their loans being rejected.

Perhaps, a way to get around it is to have a housing loan disbursed by the housing ministry with its own set of rules similar to the HDB. 

Step 5: Introduce a rent-to-own scheme (for those who can't afford downpayment)

While there is no rent-to-own scheme in Singapore, this mode of housing ownership is getting popular in Malaysia.

For example, Ayer Holding introduced a ‘Stay & Own' scheme for their Epic Residence and Foreston projects whereby part of the rent will be converted to the downpayment.

This not only provides a temporary solution for those who urgently need a home but also a form of security 

You can read more about the scheme here: 

​Since taking power in May 2018, the newly formed government has announced a slew of policy changes that will impact developments in Iskandar Malaysia. We analyse the impact of its policy changes in Iskandar Malaysia and how they may affect you as a consumer.

By Khalil Adis

Take a drive around Iskandar Puteri, Danga Bay and Johor Bahru and one cannot help but notice the rapidly changing skyline at this Malaysian state bordering Singapore.

Once seen as a buyers’ beware market, Johor has since 2008 rebranded itself as an up and coming economic zone called Iskandar Malaysia which is meant to complement the Lion City.

For a while, Singaporeans were afraid of buying Johor properties due to the many horror stories reported in the local press.

However, interest surged in 2010 after Singapore and Malaysia agreed to a land swap deal which led to Temasek Holdings and CapitaLand investing in Danga Bay and Medini respectively.

The warming bilateral relations, coupled with HDB flats hitting the million dollar mark, saw properties in Iskandar Malaysia being snapped up like hotcakes.

However, in the subsequent years, the entry of Chinese property developers like Country Garden, R&F and Greenland raised alarms of a potential oversupply as they appear to be building townships by the thousands.

Perhaps, more pronounced, is the development of the controversial Forest City project.

The project sparked concerns of environmental damage and land encroachment leading to an official protest from Singapore.

As a result, interests in Iskandar Malaysia started to wane as Singaporeans steered clear from the property market.

Here are the five impacts post GE-14:

Impact 1: No more foreigner only enclave

Forest City is currently one of the mega projects under review by the Pakatan Harapan government.

Although Forest City is a relatively new entry to the property market, it was granted a special economic zone status much like Medini.

This confused the public while many local developers were reportedly not very happy about it.

For example, it was not subjected to build a specified number of low-cost homes or to allocate a certain percentage of its development for bumiputras.

In addition, there are no caps on foreign ownership but with a minimum price threshold at RM500,000 per strata unit for foreigners.

It was also granted a duty-free zone where buyers will automatically be eligible for the Malaysian My Second Home (MM2H) programme.

This programme enables foreigners to enjoy a long-stay visa of up to 10 years.

However, as of September 2018,  MM2H will no longer be granted automatically.

In addition, the federal government has said a foreigner-only township is no longer allowed.
 
As it stands, the current entry price for a condominium here averages RM1,400 per sq ft which is way beyond what the locals can afford.

For now, the developer is required to build affordable homes for locals.

Meanwhile, the minimum purchase price for a foreigner has been reverted to RM 1 million per strata unit.

The only thing that remains is its duty-free zone status.

Impact 2: Longer development period for Gerbang Nusajaya and Iskandar Puteri

​This follows the review of another major project which is the High Speed Rail project linking Singapore to Kuala Lumpur.

The project was initially cancelled and then postponed.

Full service for the line will commence before 1 January 2031.

The Iskandar Puteri station will be located close to Motorsports City near East Ledang in Gerbang Nusajaya.

In April 2015, Nusajaya’s master developer UEM Sunrise Berhad revealed its comprehensive development plans for Gerbang Nusajaya which will have its own CBD similar to Jurong Lake District.

Spread across 4,551 acres of land, this second phase of Nusajaya’s development will be designed with catalytic industries similar to the various economic drivers in Nusajaya and Medini.

In anticipation for the High Speed Rail terminus in Gerbang Nusajaya, a number of catalytic developments have been planned.

They include Nusajaya Tech Park, a 519-acre integrated eco-friendly tech park and FASTrack Iskandar which is a 300-acre ‘motorsports city’.

Gerbang Nusajaya will have a gross development value of RM42 billion and with an estimated 220,000 population upon its completion 

However, now that the project has been suspended, it will take a longer period for Gerbang Nusajaya, Iskandar Puteri and Medini to experience the expected spillover impact from the High Speed Rail project.

Impact 3: Opportunity costs to be passed on to consumers

With the delay of the High Speed Rail project, it may even result on the opportunity cost from developers to be passed on to consumers.

As such, new launches will likely be priced higher.

Developers who are banking on the project will be affected.

Impact 4: Correction of prices in the property market

The postponement of the projects plus investors sentiments on the perceived oversupply situation have impacted the market.

In fact, there is currently a glut in the housing sector in Johor.

According to data from the National Housing and Information Centre (NAPIC), Johor has the second highest number of supply of homes in the first quarter of 2018 - 795,363 units.

In comparison, Kuala Lumpur trails third with 471,475 units.

With the High Speed Rail project as the only property booster at the moment, the property market in Iskandar Malaysia is expected to be muted, moving forward.

This will likely impact the prices for current homes

For example, the median condominium prices in Iskandar Puteri and Medini were RM900 per sq ft and RM700 per sg ft respectively in 2015 since we first started tracking data based on our on the ground survey.

However, the latest data from Brickz showed that the median prices have now corrected to RM515 per sq ft and RM542 per sq ft in Iskandar Puteri and Medini respectively. 

Likewise, the median condominium prices in Johor Bahru and Danga Bay were RM1,000 per sq ft and RM1,200 per sq ft respectively in 2016.

However, the latest data from Brickz showed that the median prices have now corrected to RM662 per sq ft and RM863 per sq ft in Johor Bahru and Danga Bay respectively.

Impact 5: Iskandar Halal Park and Pengerang Rapid project still ongoing

Iskandar Halal Park and the Pengerang Rapid project were spared from the policy changes.

Iskandar Halal Park is part of the state government’s effort to promote entrepreneurship in Johor.

Recently, Iskandar Halal Park scored a major coup among when US based-company, Chocolat Moderne from New York, picked Iskandar Halal Park as the manufacturing site to set up its first business in Asia.

Meanwhile, the Pengerang Rapid project, with a gross development value of RM70 billion, was affected by the slowdown in the oil and gass sectors.

While both projects were spared from major reviews, there has also been a price correction for residential homes located in the Eastern Gate which spans from Pasir Gudang to Pengerang.

For example, the median housing prices in Permas Jaya and Pasir Gudang were RM300 per sq ft and RM450 per sq ft respectively in 2016.

However, the latest data from Brickz showed that the median prices have now corrected to RM272 per sq ft and RM329 per sq ft in Permas Jaya and Pasir Gudang respectively. 

Only Pengerang recorded a price increase from RM80 per sq ft  in 2016 to RM236 per sq ft in 2018.

Mention Cochrane and the first thing that comes to mind is IKEA Cheras and MyTOWN Shopping Centre.

Previously an area dedicated for government quarters comprising mainly landed terraces and semi-D types, Cochrane, upon redevelopment is now slowly buzzing with life since the opening of Cochrane MRT station last year. 

For the longest time, this part of KL has been largely ignored as a property investment destination, save for the local attractions such as the Pudu Wet Market and Flea Market.

However, all that changed when the construction of Sungai Buloh-Kajang (SBK Line) was announced in September 2010 under Budget 2011.

Costing an estimated RM23 billion with 51km of train track and 31stations developments in this part of Cheras suddenly started gaining momentum when Cochrane MRT station was confirmed.

First was the opening IKEA Cheras by the Ikano Group in November 2015 followed by the opening of MyTOWN Shopping Centre by Boustead Ikano Sdn Bhd in the first quarter of 2017.

Quality condominium developments are a rare find here with recent launches in the area being One Cochrane.

​Located just next to the upcoming dedicated financial district of Tun Razak Exchange (TRX) and the recently completed vibrant entertainment enclave of TREC, Cochrane is set to become one of KL’s hottest areas as it is just a stone throw’s away from the future Bandar Malaysia project which is currently being reviewed.

We list down eight things we love about living in Cochrane.

#1: Located just next to Cochrane MRT station

One Cochrane is located just next door to Cochrane MRT station at approximately 150 metres away. With a daily ridership of 400,000 that the SBK Line is expected to generate, this will not only mean easy access for homeowners but also a ready catchment pool among investors from the potential tenants commuting within KL and Greater KL.

#2: SBK Line as a property booster

MRT Corporation Sdn Bhd, the developer and asset owner of the Mass Rapid Transit project, envisages that the SBK Line is expected to raise the overall property values in the Klang Valley by around RM300 million per annum. 

As One Cochrane is located just next to the MRT station, the impact will be felt even greater as it is surrounded by other property boosters such as IKEA Cheras and MyTOWN Shopping Centre. As such, we can expect the property prices in the near future to hover at around RM1,400 per sq ft  and beyond, similar to Bukit Bintang’s average per sq ft price. 

#3: Direct access to IKEA Cheras and MyTOWN Shopping Centre

​Speaking of IKEA Cheras and MyTOWN Shopping Centre, did you know a new underground link has been opened since last year? During our recent site visit, we were pleased to see that IKEA Cheras and MyTOWN Shopping Centre are now directly connected to Cochrane MRT station making shopping and taking the MRT a breeze. Previously, commuters had to exit from the station and then jaywalk across Jalan Cochrane just to get to them. 

IKEA Cheras boasts 56 showrooms, a 780-seat restaurant and over 1,700 parking bays in two underground carparks while MyTOWN Shopping Centre is a 1.1 million sq ft lifestyle shopping haven with five floors of retail space. Some of MyTOWN Shopping Centre’s anchor tenants include Uniqlo and Parkson, ensuring there is something for everyone to enjoy.

#4: Located within the growth area in Southern KL 

That’s not all. Cochrane is surrounded by various iconic projects that will further boost property prices in the area. With Tun Razak Exchange (TRX) and TREC just one stop away via the Tun Razak Exchange MRT station and Bandar Malaysia just four stops away via the upcoming Sungai Buloh-Serdang-Putrajaya (SSP Line), Cochrane is set to enjoy the spillover impact from the two MRT lines as well as the iconic TREC and Bandar Malaysia projects.

#5: Party away at TREC

Letting your hair down is now a breeze as Cochrane is located next door to TREC. TREC which stands for “Taste, Relish, Experience, Celebrate” feature a variety of different styles, atmospheres and moods in five separate zones offering casual and fine dining, quirky and independent cafes, wine bars, pubs, lounges and clubs, including Zouk KL, Velvet Underground and Phuture. Costing RM323.6 million to develop, TREC is expected to create over 1,500 jobs and estimated to add RM143 million to the local economy annually.

#6: Next door to the financial district of Tun Razak Exchange (TRX)

TRX will be a mixed-use development comprising a Grade A office space as well as residential and commercial precincts. To be developed in several phases over a period of 15 years, the first phase will comprise four investment grade A office towers, a lifestyle retail mall, two 5-star hotels and up to six luxurious residential towers with a target completion date by 2019.

When fully completed by 2027, TRX is expected to raise the country’s Gross National Income per capita to USD15,000 and investments of US$444 billion by 2020. Some 500,000 jobs will be created directly and indirectly once TRX is completed. In addition, Tun Razak Exchange MRT station will serve some 3.3 million workers providing further potential quality tenants for investors.

#7: Hop on to the High Speed Rail nearby

Bandar Malaysia will serve as the terminus station for the Kuala Lumpur-Singapore High Speed Rail (KL-Singapore HSR) project linking both cities in 90 minutes flat. The development for the project has been postponed to two years and will now commence construction in 2020 instead of 2018. Meanwhile, the express service will only commence by 1 January 2031 instead of 31 December 2026, as originally planned.
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#8: Next door to the Digital Free Trade Zone (DFTZ)

Bandar Malaysia has been designated as a site for the Digital Free Trade Zone (DFTZ) initiative by Jack Ma. Home to the Satellite Services Hub, DFTZ is expected to create some 60,000 direct and indirect jobs. It will also possibly serve as the interchange to the MRT Line 3, which has now been postponed.

Last but not least: Two stops away to the shopping belt of Bukit Bintang

​With the completion of the SBK Line, you no longer have to endure the traffic congestions along Jalan Bukit Bintang. All you have to do is hop onto the MRT where you can enjoy some of the best things that life has to offer at Pavilion KL, Lot 10, Fahrenheit and Starhill Gallery just two stops away at Bukit Bintang MRT station. From shopping for luxury timepieces to enjoying street food at Jalan Alor, those dreaded traffic jams are now over. So #jomnaikMRT!

Details below:
Date: 29  September 2018
Time: 11 am
Venue: One Cochrane Sales Gallery, Jalan Cochrane, Lot 1246, 55100 Kuala Lumpur, Malaysia​
RSVP here

*First 10 to RSVP will receive a copy of Khalil Adis's best-selling book 'Property Buying for Gen Y