AN INDEPENDENT PERSPective


 It's so important to be true to yourself            "
khaliladis.com
  • Home
  • About
  • Books
  • Services
  • Media
  • Events
  • Blog
  • Awards/Accolades
  • Clients
  • Portfolio
  • Contact
  • Corporate Responsibility

Bandar Malaysia’s revival: What it will mean for market watchers and investors

4/24/2019

0 Comments

 
With 10,000 affordable homes in the pipeline, Bandar Malaysia is both a boon and a bane for Kuala Lumpur’s sluggish property sector. We analyse how this development will impact the market.

By Khalil Adis
Picture
Screengrab of Bandar Malaysia taken from Skidmore, Owings and Merrill LLP website.
The recent announcement by the Malaysian government that it is reviving the shelved Bandar Malaysia project is a piece of welcome news as it gives some clarity to investors on the status of the Kuala Lumpur-Singapore High Speed Rail (HSR) project. 

Since winning the 14th general election, Prime Minister Mahathir Mohamad had reviewed several mega infrastructure projects including Bandar Malaysia and the HSR.

In the face of the country’s mounting debt, both projects were at first announced as cancelled in May 2018.

This prompted Singapore’s Ministry of Transport to issue a statement stating that it “will wait for official communication from Malaysia”.

However, the Malaysian government backtracked on this subsequently.

Instead, it announced in June 2018 that the project was “postponed”.

This created a lot of confusion on both sides of the causeway.

After many months of speculation, the market finally received some clarity in September 2018 when representatives from both governments met in Putrajaya.

In a joint-statement, both Singapore and Malaysia announced that they had signed an agreement to suspend the project until 31 May 2020

“Malaysia will bear the agreed costs in suspending the HSR Project. If by 31 May 2020, Malaysia does not proceed with the HSR Project, Malaysia will also bear the agreed costs incurred by Singapore in fulfilling the HSR Bilateral Agreement. During the suspension period, Malaysia and Singapore will continue to discuss on the best way forward for the HSR Project with the aim of reducing costs,” the statement read.

The HSR project is now expected to commence service by 1 January 2031, instead of the original commencement date of 31 December 2026.

With Bandar Malaysia now being revived, we list down the possible implications on Kuala Lumpur’s property market.

#1: Boost for the construction sector
Picture
Construction works taking place at One Cochrane Residences. Photo: Khalil Adis Consultancy.
The construction sector is currently in the doldrums due to the lacklustre property market in Malaysia.

Loan rejections from buyers and the demand-supply mismatch mean developers are faced with unsold inventory leading to cash flow problems with contractors.

In March, for instance, Bursa listed engineering and construction company, Zeland Berhad filed a statement with the Malaysian stock exchange that it was initiating arbitration proceedings against NRY Architects for RM305.4mil and other contract breaches for the construction of buildings of International Islamic University Malaysia in Kuantan.

It also announced that it is claiming RM3.34mil in outstanding payment for construction works from BBCC Development Sdn Bhd located at the former Pudu jail near Hang Tuah monorail station.

With Bandar Malaysia now back on track, contractors will be willing to bid at a much lower price to stay afloat amid the challenging market condition.

Subcontractors will also benefit.

#2: 10,000 new housing units will likely worsen overhang in Kuala Lumpur’s property market
Picture
An aerial view of Kuala Lumpur. Photo: Khalil Adis Consultancy.
Initially, DBKL had announced that Bandar Malaysia will house around 30,000 affordable homes.

However, a recent announcement puts the figures to 10,000 units.

Kuala Lumpur City Hall (DBKL) had previously indicated that it has set a development guideline for developers to build such homes at around 800 sq ft but priced below MYR450,000.

Meanwhile, Bank Negara’s figures showed that 80 per cent of homes, or 146,196 units priced above RM250,000, remained unsold as of end March 2018.

While Bank Negara did not break down the figures according to each state, recent data provided by the Valuation and Property Services Department (JPPH) showed that Kuala Lumpur recorded the third highest number of residential overhang at 5,114 units.

So unless the homes are priced below RM250,000, we are likely to see Kuala Lumpur’s housing glut worsen.

#3: Boon for first-time homebuyers
Picture
Affordable homes in the background located in Pudu, Kuala Lumpur. Photo: Khalil Adis Consultancy.
Bandar Malaysia has been cited by DBKL as a case study for government and private developers in building transit-oriented development (TOD).

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).

Bandar Malaysia will also possibly serve as the interchange to the MRT Line 3, which has now been postponed.

If indeed Bandar Malaysia will build affordable homes according to DBKL’s guidelines, then it will be a boon for first-time homebuyers as the entry price in Kuala Lumpur is easily above RM600,000.

It will also mean young Malaysians will no longer have to buy a car first after completing their education and thus improve their chances of getting their home loans approved.

Currently, many young Malaysians are trapped in the debt cycle due to various financial commitments such as their National Higher Education Fund (PTPTN), cars, personal and credit cards loans.

So while demand is strong, loan rejections remain an issue further worsening the cash flow for developers.

#4: Bane for landlords and sellers
Picture
The Leafz located near to Kuchai Lama along the Sungai Besi Highway. Photo: Khalil Adis Consultancy.
If indeed 10,000 new housing units will be coming on stream, Bandar Malaysia’s surrounding areas such as Pudu, Brickfields, Cheras, Bandar Tun Razak, Sungai Besi and Taman Desa will be badly affected.

As such, landlord and sellers will likely see their asking prices fall even further as consumers will soon have more choices.
​
Landlords will also find difficulty in doing short-term accommodations as the Malaysian government will be regulating this market segment.

Therefore, rent-seekers and buyers are the clear winners as they are in the position to haggle for the best price.

#5: Sluggish commercial and office market ahead
Picture
Pavilion Kuala Lumpur in Bukit Bintang. Photo: Khalil Adis Consultancy.
​The initial projection for Bandar Malaysia stated that it will have a gross development value (GDV) of RM150 billion.
Measuring around 196 hectares, Bandar Malaysia’s master plan indicates that it will be a mixed-use development with commercial and office buildings.

With so many mega malls and office buildings in Kuala Lumpur, Bandar Malaysia will add on to more floor space in Kuala Lumpur’s already weak commercial and office markets.

Despite this, Bandar Malaysia will likely attract multinational companies to set up their operations here as it is located within the Digital Free Trade Zone (DFTZ).
0 Comments

Buying your first home in 2019? Here are 3 schemes to help young Malaysians

1/4/2019

0 Comments

 
​Announced under Budget 2019, first-time homebuyers should take advantage of the schemes that are being rolled out by the federal government.

By Khalil Adis
Picture
A shophouse in Negri Sembilan with the Malaysian flag. First-time homebuyers can apply for various schemes under Budget 2019. Photo: Khalil Adis Consultancy.
​In case you had missed the good news that was announced during Budget 2019, there will indeed be more help coming your way if you need help in buying your first home this year.

Here are the quick low-down on what the schemes are.
#1: P2P (peer-to-peer) Funding
Picture
Under this scheme, you will need to put down a 20 per cent deposit while the remaining 80 per cent will be financed by investors. Infographics: Khalil Adis Consultancy.
What: 
This is a private sector-driven “Property Crowdfunding” platform to serve as an alternative source of financing for first-time house buyers.

It will be regulated by Securities Commission.

When: 
The P2P exchange will go live in the first quarter of 2019. 

How it works:  
Interested applicants will need to put a 20 per cent downpayment while the remaining 80 per cent will be funded by investors.

Exactly when and how this will be done will be announced closer to the date by the Finance Ministry.

Who should apply: 
Those who have the required 20 per cent downpayment. It is not clear if this is in cash and/or EPF.

#2: RM1 billion fund allocated for first-time homebuyers
Picture
Malaysians attending a talk at Havoc Hartanah Kuala Lumpur in September 2015. A special fund has been set up for those earning less than RM2,300 a month. Photo: Khalil Adis Consultancy.
​What: 
This is a special fund for those earning less than RM2,300 a month.

The fund can only be used to purchase properties priced up to RM150,000.

Bank Negara will be setting up the fund. More details here

When:
The fund is available for two years until the allocation is spent as of 1 January 2019.

You may apply for them at the following banks at a rate of 3.5 per cent:
#3: RM25 million fund allocated for first-time home buyers
Picture
Johoreans attending Havoc Hartanah Iskandar Malaysia in November 2014. This fund is meant for those earning up to RM5,000. Photo: Khalil Adis Consultancy.
What: 
This is a special fund meant for those with a household income of up to RM5,000

The fund provides a mortgage guarantee to enable borrowers to obtain higher financing, including deposit fees.

The fund can is for first-time house buyers who are purchasing properties worth up to RM500,000

The fund will also provide a grant stamp duty exemption of up to the first RM300,000 on transfer instruments and loan agreements for two years until Dec 2020.

The fund will be run by Cagamas. 

When:

Unfortunately, details are scant. You may check Cagamas Bhd for updates.
0 Comments

    Khalil Adis

    An independent analysis from yours truly

    Archives

    January 2023
    December 2022
    November 2022
    August 2022
    July 2022
    April 2022
    March 2022
    January 2022
    November 2021
    October 2021
    September 2021
    June 2021
    April 2021
    March 2021
    January 2021
    December 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    March 2018
    February 2018
    January 2018
    December 2017
    September 2017
    July 2017
    June 2017
    December 2016

    Categories

    All
    121 Residences
    ABSD
    Affordable Homes
    Airbnb
    Allianz Real Estate
    Ang Mo Kio
    Astaka
    Astaka Holdings Limited
    Avenue South Residence
    Aviation Park
    Bandar Malaysia
    Bank Negara Malaysia
    Bayan Lepas LRT Line
    Bedok
    Below Market Value Property
    Branded Residences
    Bright Hill
    BTO Flats
    Budget 2019
    Budget 2020
    Bukit Chagar
    Bukit Panjang
    Cagamas Berhad
    Cairnhill 16
    Causeway Point
    Cheonggyecheon
    Chinatown Kuala Lumpur
    Circle Line
    City Plaza
    Cochrane MRT Station
    COVID19
    CPF
    Cross Island Line
    Defu
    En-bloc
    Energy Saving Tips
    Estate Planning
    Excelsior International School
    Family Violence
    First Home
    Foon Yew High School
    Forest City
    Geylang Serai
    Geylang Serai Bazaar
    GlaxoSmithKline
    Glomac Berhad
    Government Land Sales (GLS) Programme
    Greater Southern Waterfront
    HDB
    Health City Novena
    Heng Swee Keat
    High Speed Rail
    Home Mortgage
    Home Ownership Campaign 2019
    Home Renovation
    Home Rental
    Hougang
    Ibrahim International District
    IKEA Cheras
    Imperial Jade Residenz
    Interior Design
    Iskandar Halal Park
    Iskandar Malaysia
    Iskandar Regional Development Authority
    JB Food Trail
    JB-Woodlands RTS Link
    Johor Bahru
    Johor Bahru City Council
    Johor Bahru City Square
    Johor Property
    Johor Real Estate
    Joint Tenancy
    Joo Chiat Complex
    JPPH
    Jurong Lake District
    Jurong Regional Line
    Jurong West
    Keppel REIT
    Khaw Boon Wan
    KLCC
    KOMTAR JBCC
    KTM Terminal Skypark
    Kuala Lumpur Property
    Kuala Lumpur Real Estate
    Land Transport Authority
    LED Lighting
    Lim Guan Eng
    London Property Market
    London Real Estate
    Loyang
    LRT Bandar Utama-Klang Line (Klang Valley LRT Line 3)
    Malaysia Property
    Malaysia Real Estate
    Masterskill University College Of Health Sciences
    Media Interview
    Melaka Property
    Melaka Real Estate
    Menara Maybank
    Merdeka Generation Package
    Ministry Of Finance Malaysia
    Ministry Of Social And Family Development
    MM2H
    Mutiara Rini Sdn Bhd
    MyTOWN Shopping Centre
    National Day Rally 2019
    Negeri Sembilan Property
    Negeri Sembilan Real Estate
    Novena
    Ocean Financial Centre
    One Bukit Senyum
    One Cochrane
    Overleveraging
    Oxley Towers Kuala Lumpur City Centre
    P2P Funding
    Pan Island Link
    Park Nova
    Park Place Residences At PLQ
    Pasar Karat
    Pasar Seni MRT Station
    Pasir Gudang
    Pasir Gudang Hospital
    Pasir Ris
    Pasir Ris East
    Paya Lebar Central
    Paya Lebar Quarter
    Paya Lebar Square
    Penang Property
    Penang Real Estate
    Penang Transport Master Plan
    Pengerang Rapid Project
    Persada-johor
    Petaling-street
    Plaza-rakyat-lrt-station
    Plp-architecture
    Plq-mall
    Pr1ma
    Ptptn
    Public-relations
    Punggol
    Punggol-digital-district
    Rapid-transit-system-rts-link
    Renovation
    Selangor-property
    Selangor-real-estate
    Sengkang
    Serangoon-north
    Seri-alam-properties-sdn-bhd
    Singapore-budget-2019
    Singapore-budget-2020
    Singapore-economy
    Singapore-general-election
    Singapore Luxury Property Market
    Singapore Office Market
    Singapore Property
    Singapore Property Market
    Singapore Real Estate
    Singapore Retrenchments
    SME Co-Investment Fund III
    Sri Geylang Serai
    Suasana Iskandar Malaysia
    Sungai Buloh Kajang Line
    Sungai Buloh - Kajang Line (SBK Line)
    Sungai Buloh Serdang Putrajaya Line
    Tampines
    Tampines North
    Tanjong Katong Complex
    Tavistock
    Teck Ghee
    The Workers' Party
    Thomson East Coast Line
    Thomson-East Coast Line
    Thomson-East Coast MRT Line
    Tokyo Property Market
    Tokyo Real Estate
    Transit Oriented Development
    TREC
    TriTower Residence
    Tun Razak Exchange
    UM Land
    Universiti Kuala Lumpur
    Universiti Teknologi Mara
    URA Draft Master Plan 2014
    URA Draft Master Plan 2019
    Urban Redevelopment Authority
    US-China Trade War
    Vivian Balakrishnan
    Waterway Point
    Wisma Geylang Serai
    Woodland Regional Centre
    Woodlands Central
    Woodlands North Coast
    Woodlands North MRT Station
    Woodlands Regional Centre
    Yishun
    Y Waterway@Punggol

    RSS Feed

Picture

100 Peck Seah Street
#08-14
PS 100
Singapore (0793333)
Email: ACCOUNTS@KHALILADIS.COM
Phone: +65 8201 9254

What the market is saying

"Hi thank you so much. Keep updating." - Sharveena

"I bought your new book through Popular Bookfest in KLCC yesterday. I just finished my reading. I like it so much as it saved my time to search those information that I have been looking for it. Thank you for writing this book. I believed you have spent a lot of time to prepare it". - PY Chan

Want more bite-sized news?

    Subscribe Today!

Submit
  • Home
  • About
  • Books
  • Services
  • Media
  • Events
  • Blog
  • Awards/Accolades
  • Clients
  • Portfolio
  • Contact
  • Corporate Responsibility