While paying for your property using your CPF Ordinary Account (OA) is the default way to finance your home purchase, there are implications that you need to be aware of.

By Khalil Adis

Buying a property is perhaps the single big-ticket item that we will possibly purchase in our lifetime.

As such, it is no wonder most Singaporeans will use their CPF Ordinary Account (OA) towards their property purchase.

It makes sense since we  have worked so hard and set aside a tidy sum in our CPF.

However, there are implications if you wish to use your CPF OA.

Here are six things you need to know before committing.

#1: Your CPF OA will be (almost) wiped out when you buy an HDB flat

While you can get up to 90 per cent financing when buying an HDB flat, HDB will usually use up your CPF OA towards your flat's purchase.

This is to reduce your loan amount and therefore, your monthly mortgage.

The good news is you do have the option of keeping $20,000 in your OA to pay for your flat purchase.

If you do not have enough, then you will have to pay for it in cash.

This is a better option in my opinion which I shall explain later in point number 6.

#2: You will be subjected to the MSR and Valuation Limit when buying a resale HDB flat (for HDB loan)

If you are taking an HDB loan, do note you will be subjected to the Mortgage Service Ratio (MSR) and Valuation Limit.

MSR refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans. 

Your MSR is capped at 30 per cent of a borrower's gross monthly income.

If your gross monthly income is $5,000, your MSR will be $1,500.

Therefore, your monthly mortgage cannot exceed this amount.

Your Valuation Limit is the lower of the purchase price or valuation at the time of purchase.

Assuming the valuation for the flat and purchase price are the same at $500,000 (which means there is no cash-over-valuation), you can use up to $500,000 in your CPF OA.
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If you are unable to meet your Basic Retirement Sum (BSR), you will need to pay for your mortgage in cash. 

You can use CPF's Housing Limit Calculator here.

#3: You will be subjected to the MSR, Valuation Limit and Withdrawal Limit when buying a resale HDB flat (for a bank loan)​

If you are taking a bank loan, do note you will be subjected to the Mortgage Service Ratio (MSR), Valuation Limit and Withdrawal Limit.

Assuming the valuation for the flat and purchase price are the same at $500,000 (which means there is no cash-over-valuation), your Valuation Limit is $500,000.

For a bank loan, you will be subjected to Withdrawal Limit which is 120 per cent of the Valuation Limit.

This means you can use up to $600,000 in your CPF OA towards your flat purchase.

If you are unable to meet your BSR, you will need to pay for your mortgage in cash. 
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#4: You will be subjected to the TDSR, Valuation Limit and Withdrawal Limit when buying a private property

If you are taking a bank loan, do note you will be subjected to the Total Debt Service Ratio (TDSR), Valuation Limit and Withdrawal Limit.

Your TDSR should be less than or equal to 60 per cent.

Assuming you have a gross monthly income of $5,000 with a total monthly debt of $1,000, this is your TDSR:

$1,000/$5,000 x 100% = 20%

Assuming the valuation for the private property and purchase price are the same at $1 million (which means there is no cash-over-valuation), your Valuation Limit is $1 million.

For a bank loan, you will be subjected to Withdrawal Limit which is 120 per cent of the Valuation Limit.

This means you can use up to $1.2 million in your CPF OA towards your private property purchase.

If you are unable to meet your BSR, you will need to pay your mortgage in cash. 

Do note, your monthly mortgage and monthly debt cannot exceed more than 60 per cent of your TDSR.

#5: Pro-rated CPF usage for properties with less than 60 years of lease

Why are older HDB flats or private properties seeing their value diminishing?

This is because their value will revert to zero towards the end of the lease.

​They are also subjected to a pro-rated CPF usage if their lease is less than 60 years.

This makes them harder to sell as it limits the pool of buyers who can buy such properties.
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Let us assume the following:
Remaining Lease: 50 years 
Youngest Buyer Age: 35 years old 
HDB Flat Price: $400,000

The formula to calculate the pro-rated CPF usage is as follows:

Remaining Lease of Property – 20 / 95 - Age of Youngest Buyer Using CPF - 20

50 - 20 / 95 - 35 - 20 = 30/40

Valuation Limit = 0.75

CPF Usage = 75% x $400,000 = $300,000

For a bank loan, you will be subjected to Withdrawal Limit which is 120 per cent of the Valuation Limit which is $360,000.

#6: CPF amount used with accrued interest needs to be refunded to your Ordinary Account when selling your property

Most people prefer to use their CPF OA when paying for their monthly mortgage. 

In fact, this seems to be the default way to finance our home purchase.

However, there are some repercussions that you need to be aware of.

When you sell your property, the CPF amount used with accrued interest needs to be refunded to your CPF OA.

As such, this may result in fewer cash proceeds or even a negative sale when you sell your property.

Let us assume the following:
Property’s selling price: $600,000
Property’s purchase price: $500,000
CPF amount used with accrued interest: $300,000
Outstanding loan:$200,000
Sales proceeds: $600,000 - $300,000 - $200,000 = $100,000

Do note, this does not include your legal/conveyancing fees, agent’s commission and other miscellaneous costs.

Conclusion
As you can see, paying for your property using your CPF OA may reduce your cash proceeds or even result in a negative sale when deducting all the expenses.

They say cash is king.

So perhaps paying for your monthly mortgage in cash is not such a bad thing after all.

Cooling measures may be implemented if the trend were to continue. Here are 5 things consumers should watch out for.

By Khalil Adis

Singapore’s property market continued to defy expectations in both the private and public sectors increasing by 3.0 and 3.3 per cent quarter-on-quarter respectively in the first quarter of 2021, data from the Urban Redevelopment Authority (URA) and Housing & Development Board (HDB) showed.

Private residential prices soared for the third consecutive quarter growth since the third quarter of 2020 to reach 162.2 percentage points, while resale HDB prices have been on the uptrend since the second quarter of 2020 at 142.2 percentage points.

If this trend were to continue, the prices for resale HDB flats may soon hit or surpass the peak that was recorded in the second quarter of 2013.

Meanwhile, in the private property sector, the landed property segment has bucked the trend registering a price increase of 6.7 per cent in the first quarter of 20201 compared with the 1.6 per cent decrease in the previous quarter.

For the non-landed segment, properties that are located in the Rest of Central Region (RCR) took the lead, increasing by 6.1 per cent followed by those that are located in Outside Central Region (OCR) and Core Central Region (CCR) registering a 1.1 per cent and 0.5 per cent increase respectively.

For the rental market, rentals of private residential properties increased by 2.2 per cent in the first quarter of 2021, compared with the 0.1 per cent increase in the previous quarter.

Meanwhile, in the HDB rental market, the number of approved applications to rent out HDB flats rose by 26.0 per cent, from the 8,472 cases recorded in the fourth quarter of 2020 to 10,676 cases in the first quarter of 2021.

The upbeat market has prompted speculations that property cooling measures may be announced this year should prices continue to reach an unsustainable level.

We dissect Singapore’s property market data for the first quarter of 2021 and what they will mean for you as a consumer.

#1: Sellers’ market with potentially high cash-over-valuation in the HDB market

Built-To-Order (BTO) flats now have a waiting period of up to seven years due to construction delays brought upon by Covid-19.

As 80 per cent of Singapore’s population live in HDB flats, the tight supply for new launches will divert potential homebuyers to look for resale HDB flats instead.

This explains why the HDB Resale Price Index (RPI) has been on the uptrend for the fourth consecutive quarter.

Looking ahead, this could drive up the cash-over-valuation (COV) and may see the RPI surpassing the peak that was recorded in the second quarter of 2013.

For prospective home sellers, this could be an opportune time to sell your property.

HDB resale flats from newly MOP-ed (met their 5-year Minimum Occupation Period) such as those in Punggol and Sengkang are expected to see brisk demand.

We are also likely to see potential homebuyers having to shell out more cash for the COV as demand far outstrips supply.

#2: HDB upgraders may want to think twice 

With the buoyant HDB resale market, many might be thinking of cashing out and moving up the property ladder.

​However, this may not necessarily mean it is a good time to upgrade to a private property.

This is because the RPI and the Private Property Index (PPI) have been on the upward trend and are not likely to see their price gap narrowing anytime soon.

HDB’s RPI now stands at 142.2 percentage points while the PPI is at 162.2 percentage points.

With the tight supply for new launches in the BTO and private property markets, the price indexes for both HDB and private resale properties are likely to surge ahead in the next quarter.

So unless you have sufficient cash and/or CPF to finance your next property purchase, it is best to wait out until the new supply for launches come on stream.

For those who will still like to take the plunge, do ensure you do a detailed financial calculation as you will be required to come up with a minimum 5 per cent cash downpayment and another 20 per cent in cash and/or CPF.
You will also need to take into account the Buyer’s Stamp Duty, conveyancing and agent’s fee.

The Buyer’s Stamp Duty will have to paid for in cash first before you can use your CPF Ordinary Account (OA).

Also, for those who are hitting 55-years-old this year, do remember that you will have to set aside a Basic Retirement Sum of $93,000 in your Retirement Account before you can touch the rest of your CPF OA. 

Should the government impose new cooling measures, it may also impact your ability to obtain financing.

Last but not least, when buying a private property, you will be subjected to the Total Debt Service Ratio (TDSR), Valuation Limit and Withdrawal Limit.

#3: Bright spots ahead for private properties located in the RCR and OCR

Why are private properties that are located in the RCR and suburbs (OCR) doing relatively better when compared to those that are in the central region?

This is because the profile of buyers here comprises mainly local and HDB upgraders.

As the pandemic has shown, the local market has remained fairly resilient due to the tight supply excess liquidity and changes in employment policies to encourage local businesses to hire Singaporeans first as part of the post-pandemic economic recovery.

Meanwhile, properties that are located in the central region have been badly affected due to the exodus of expatriates and the Ministry of Manpower’s tightening their criteria when hiring foreign employees.

As such, the pool of potential tenants and prospective homebuyers will likely shift towards the local market.
This is good news for prospective sellers and landlords.

Meanwhile, potential homebuyers will likely see prices for private resale properties increasing at outside the central region and within the suburbs.

However, not all is bad.

Those thinking of snapping up prized properties on Sentosa Cove or Orchard Road may find some good deals in the market.

#4: Tight supply in new launches may favour landlords

The rental index of private residential properties has been on the uptrend since the fourth quarter of 2021, data from URA showed.

Rentals for private residential properties increased by 2.2 per cent in the first quarter of 2021, compared with the 0.1 per cent increase in the previous quarter.

This may suggest that rent-seekers far outnumber landlords.

As of the end of the first quarter of 2021, there was a total supply of 48,139 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with the 49,307 units in the previous quarter.
Of this, 21,602 units remained unsold as at the end of the first quarter of 2021, compared with the 24,296 units in the previous quarter.

Rent-seekers who are looking for properties in the RCR and OCR may face stiff competition from both locals and foreign tenants.

Meanwhile, private properties that are located in the central area may likely see their asking price being reduced as this market has been severely impacted by Covid-19.

This is good news for tenants but not for landlords.

#5: HDB landlords may want to revise their rental rate for 2021

Likewise, the HDB rental market has seen a spike in their median rents possibly due to the tight supply of new BTO launches and their relative affordability when compared to the private sector.

According to data from HBD, in the first quarter of 2021, the median rents for HDB flats, in general, have seen an increase across the board when compared to the fourth quarter of last year.

For landlords that are renewing their lease for 2021, this may be a good time to renegotiate your tenancy agreement with your tenants.
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Meanwhile, tenants may have to increase their budget slightly in light of the exuberant rental market.

The iconic project would have benefitted both countries since Malaysia and Singapore are historically intertwined

​By Khalil Adis

Since Malaysian Prime Minister Muhyiddin Yassin rose to power in 2020, the local political landscape has shifted rapidly.

On the one hand, it has deeply polarised Malaysians in what they perceive as a ‘back-door government’.

On the other hand, it has caused seasoned investors and political watchers do a double-take to decipher what is really going on.

Against a backdrop of a pandemic, reports of political infighting, defections and ongoing corruption court cases from the previous administration, Malaysia’s political landscape appears to be a fractured one.

From across the pond though, it looks like Malaysia has it all - a warm, tropical climate, rich in natural resources, a melting pot of different races and cultures and one of the very few countries where you can own freehold property.

However, a quick glance on social media shows that Malaysians are tired about the constant politicking which they feel have hindered the country’s progress.

Foreign direct investment affected by pandemic

So how has Malaysia fared so far?

Figures from the Malaysian Investment Development Authority (MIDA) showed that in 2020, net foreign direct investment (FDI) fell 56 per cent to US$3.4 billion in 2020 due to the Covid-19 pandemic.

Meanwhile, Malaysia’s net FDI inflows stood at RM13.9 billion representing a decline from RM31.7 billion in 2019. 

"Malaysia’s lower net FDI inflows in 2020 is not necessarily an unfavourable sign, when taking into consideration the global investment landscape and the uncertainties that prevailed during the year," said MIDA in  its report.

While Malaysia’s FDI last year was affected by the pandemic, the lack of political will to see through certain projects may affect investors’ confidence.

KL-Singapore HSR project

One such example is the cancellation of the Kuala Lumpur-Singapore High Speed Rail (KL-Singapore HSR) project.

Malaysia and Singapore have since the dawn of time been historically intertwined.

Since many Singaporeans have relatives living in Malaysia and vice versa, the KL-Singapore HSR project would have provided immense benefits as it will allow the flow of goods and investments especially in the hard to reach cities like Seremban, Ayer Keroh, Muar and Batu Pahat.

It would also have provided a much-needed boost for the already muted property market in Iskandar Malaysia by tapping onto Singapore’s position as an international aviation hub and among those living in Kuala Lumpur.

Over in Seremban, the upcoming Malaysia Vision Valley would have benefitted from the train service since transportation connection over there is patchy at the moment.

Spanning from Nilai to Port Dickson and with a proposed area of 108,000 hectares, the Malaysia Vision Valley will see the development of high tech, logistics, education, health, tourism and sports industry.

Should the KL-Singapore HSR project proceed, the Malaysia Vision Valley would be able to tap onto local talents from Kuala Lumpur and from the international market in Singapore.

Likewise, it would have resulted in the flow of investments and skilled workforce to Bandar Malaysia, Singapore and  vice versa.

Sadly, this was not to be.

History repeating itself?

Looking back, one cannot help but feel that the KL-Singapore HSR project’s fate echoes eerily similar to the previous scenario in the 1980s and 1990s which had deterred Singaporeans from investing in Johor.

Similarly, Iskandar Malaysia started out full of promises in 2008 until interest somehow fizzled out sometime in 2016.

Once an investors’ darling, Iskandar Malaysia is now facing a severe housing supply glut which has been further exacerbated by the Movement Control Order (MCO) and travel restrictions.

Meanwhile, Medini, a dedicated special economic zone continues to be a ghost town when night falls.

One source who was involved in the joint-venture project between Singapore and Malaysia had complained about the lack of progress and the lack of political will to make things happen.

Adding to the complication is the powers of the state versus the federal government since land in a state matter.

Such bureaucratic red tapes is bound to create frustration.

The source has since left.

It is worth noting that in July 2019, Pinewood Group pulled out of Iskandar Malaysia Studios (IMS) officially ending their 10-year partnership by mutual agreement with the local partners.

A glimmer of hope

​The only saving grace right now is the Johor Bahru – Singapore Rapid Transit System (RTS) Link.

Slated to commence passenger service by end-2026, the project will link Woodlands North MRT station to Bukit Chagar.

Still, the expected economic spillover impact from the RTS Link is minute when compared to the KL-Singapore HSR project.

Last month, the World Bank Group said Malaysia will need to relook at some of its policies and to rebuild them towards attracting more quality investments into the country that at the same time would provide more jobs for the people.

“There should also be a more coordinated promotion effort to get a higher return of investment and finally, it is important to have continuity in policy and direction as well as structural reforms,” Richard Record, the World Bank Group’s lead economist was reported as saying.

This was in response to a question on how Malaysia could attract more FDI to catch up with countries in the region.

Perhaps, one day, when travel restrictions are lifted, Malaysia will revisit the feasibility of implementing the KL-Singapore HSR project once again.

Cooling measures could be introduced in both the HDB and private property markets to ensure prices remain in tandem with wages.

By Khalil Adis

Singapore’s HDB and private property markets have defied expectations amid the pandemic soaring by 5.0 per cent and 2.2 per cent respectively for the whole of 2020, data from HDB and URA showed.

In the HDB market, the Resale Price Index (RPI) for the fourth quarter of 2020 is 138.1 representing an increase of 3.1 per cent over the third quarter.

HDB flats in the resale market saw transactions fall by 1.9 per cent, from 7,787 cases in the third quarter of 2020 to 7,642 cases in the fourth quarter.

However, when compared to the fourth quarter of 2019, the resale transactions in the fourth quarter of this year were 20.6 per cent higher. 

For the whole year of 2020, HDB’s data showed that resale transactions increased by 4.4 per cent from 23,714 cases to 24,748 cases.

Meanwhile, the Property Price Index (PPI) for private residential properties increased by 2.1 per cent in the fourth quarter of 2020, compared with the 0.8 per cent increase in the previous quarter.

The resale private property market saw an increase in transactions in the fourth quarter of 2020 with 4,249 homes changing hands compared with the 3,467 units transacted in the previous quarter.

Market exuberance was seen for the whole of 2020, with 10,729 resale transactions compared with the 8,949 resale transactions in 2019.

For the whole of 2020, prices of private residential properties increased by 2.2 per cent, compared with the 2.7 per cent increase in 2019.

Islandwide, for the whole of 2020, non-landed properties proved to be far more resilient increasing by 2.5 per cent while landed properties rose by 1.2 per cent.

Non-landed properties in the prime areas which are defined by the Core Central Region (CCR) were the worst performing for the entire 2020, decreasing by 0.4 per cent followed by those in the Rest of Central Region (RCR) and Outside Central Region (OCR) which increased by 4.7 per cent and 3.2 per cent respectively.

With this in mind, here are the property market outlook and predictions for 2021:

#1: Cooling measures may be introduced

The pandemic has seen both the HDB and private property markets performing better than expected.

If the trend were to continue, property prices could reach an unsustainable level.

As such, the government may introduce a slew of cooling measures to ensure property prices are in line with wages so that buying property remains within reach.

This is especially so for first-time homebuyers.

The cooling measures could include reducing the loan-to-value (LTV) limit, tweaking the Seller’s Stamp Duty and Additional Buyer’s Stamp Duty (ABSD) and revising the Mortgage Servicing Ratio (MSR) and Total Debt Service Ratio (TDSR).

#2: Supply glut in the private property market could soften the resale market

URA’s data showed that as at the end of the fourth quarter of 2020, there was a total supply of 49,307 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals compared with the 50,369 units in the previous quarter. 

Of this number, 24,296 units remained unsold as at the end of the fourth quarter, compared with the 26,483 units in the previous quarter.

Such unsold units may result in the softening of the resale market as buyers are spoilt for choice.
Sellers who are desperate to offload their properties may cut prices in a bid to draw buyers.
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#3: Buyers’ market especially in the prime areas

In such a scenario, the prime areas located within the CCR as well as in Sentosa Cove will be where the good deals are as these areas are price sensitive and volatile during an economic downturn.

This is already confirmed in URA’s fourth quarter of 2020 data which showed that the CCR was the only region which recorded a 0.4 per cent price decline.

Meanwhile, the suburban areas in the OCR will remain resilient as the homes here are relatively affordable and dominated by local buyers and HDB upgraders.

#4: HDB resale market will remain resilient

Speaking of HDB, the resale market is expected to continue remaining fairly resilient.

This is because HDB flats are seen as an essential need and is home to 80 per cent of the population.

The resale market, particular newly MOP-ed flats (those that have already met the 5-year Minimum Occupation Period), will see strong demand.

Sengkang and Punggol will be among the popular estates for HDB resale transactions.

#5: New BTO launches in mature estates will be oversubscribed

According to HDB, it will offer about 3,700 Build-To-Order (BTO) flats in Bukit Batok, Kallang Whampoa, Tengah and Toa Payoh in its February launch. 

This includes the new Community Care Apartments in Bukit Batok.

In May 2021, HDB will offer another 3,800 BTO flats in Bukit Merah, Geylang, Tengah and Woodlands. 

The BTO projects in Kallang Whampoa, Toa Payoh, Bukit Merah and Geylang are expected to be eagerly snapped up and oversubscribed as these are mature estates that are located close to the central area.

The COVID-19 pandemic has wreaked havoc in the already muted real estate market. We summarise roundups for 2020 and what market trends to expect in 2021.

​By Khalil Adis

2020 will go down as an unprecedented year as countries around the world are faced with a global pandemic. Malaysia is no different as the Movement Control Order (MCO) and travel restrictions have adversely affected an already dampened market.

According to the National Property and Information Centre (NAPIC), the property market contracted sharply in March and April due to the implementation of the MCO before picking up again in May as restrictions were eased during the Conditional Movement Control Order (CMCO) period.

Here are the highlights for 2020:
#1:. Steep decline in the volume of property transaction across the board

NAPIC’s first half of 2020 data showed that the volume of property transaction declined 27.9% with 115,476 units in the first of the year compared to 160,165 units during the same period last year. Out of this, 75,318 units were those in the residential property sector which recorded a decline of 24.6%.

The steepest decline was recorded in the commercial property sector which saw a 37.4% drop followed by the industrial, agricultural and development land and others at 36.9%t, 32.8 per cent and 28.6% respectively.

It is hardly surprising that the Bank Negara Malaysia revised the Overnight Policy Rate (OPR) four times in 2020 itself to bring down interest rates in order to encourage consumer spending and to facilitate the application of new loans.
#2: Residential overhang continued to increase

The COVID-19 pandemic has seen the oversupply situation in the residential property sector worsening.

According to data from NAPIC, there was a 3.3% (31,661 units) increase in the overhang in residential properties. Out of this, 31.7% are priced below RM300,000. 53.2% comprises high-rise units followed by landed terraced homes (29%), semi-detached & detached (12.4%), low-cost housing (1.6%) and others (3.8%).

High rise units within the price range of RM500,000 to RM700,000 form the bulk of the unsold inventory at 4,144 units. Johor had the highest overhang at 19.5% followed by Selangor at 16.4%.

Meanwhile, serviced apartments (which is classified as commercial property by NAPIC) recorded a 26.5% or 21,683 units increase in overhang. 61.8% are priced above RM700,000. A whopping 73.7% are located in Johor followed by 11.6% in Kuala Lumpur.

#3: Majority of new launches were in the mass market segment

Despite the muted property market, developers continued to launch projects, particularly in the mass market segment. NAPIC’s data showed that 13,294 units of new launches were recorded in the first half of 2020. Of this, 50.1% are priced below RM300,000 while 33.7% are priced between RM300,000 to RM500,000.

Landed properties dominate new launches making up 69.7% of the figure while the remaining 30.3% are stratified properties.

Negeri Sembilan recorded the most launches in the entire country during the period with 2,797 units. This was not surprising as properties that are located away from Kuala Lumpur and Greater Kuala Lumpur are more affordably priced for local home buyers.

#4: Steep decline in office and shopping centre occupancy rates

The MCO had a detrimental effect on office and shopping centre occupancy as many Malaysians are forced to work from home. Private office building saw their occupancy rate plunging 74.3% with only 12.70 sq m of space occupied out of the total space of 17.09 sq m.

Meanwhile, shopping centres experienced the most decline at 76.7%  occupancy rate. Only 9.62 sq m of space were occupied out of the total space of 12.55 sq m.

#5: Malaysian House Price Index records first-ever decline, corrected slightly in Q2 2020

The mismatch between what Malaysians can afford versus what is being offered in the market, combined with the pandemic has further worsened the overhang situation resulting in an extremely muted year for developers.

According to data from NAPIC, the Malaysian House Price Index stood at 198.3 percentage point in Q2 2020 after hitting a peak of 199.7 percentage point in Q12020 – the 0.7% decline is the first-ever one recorded since 2010.

Nevertheless, when compared to Q1 2010 (97.25), the price index recorded an increase of 102.5 to reach 199.7 percentage point during the same period in 2020. This suggests house prices across Malaysia have been skyrocketing over the past 10 years before moderating slightly in the second quarter of 2020.

Moving forward, here are the property market trends we can expect in 2021

#1: Affordable homes priced below RM500,000 will rule the market

As seen from data from NAPIC, majority of the new launches in the first half of 2020 are mass market homes priced below RM500,000. This trend will likely continue in 2021 especially for homes that are located in Greater Kuala Lumpur.

Pricing aside, several Budget 2021 initiatives to further promote homeownership, especially for first-time buyers will spur demand for such homes. For example, the full stamp duty exemption on instruments of transfer and loan agreement for first time home buyers will be extended until 31 December 2025.

The stamp duty exemptions for first residential home has been capped for homes priced RM500,000 and below. This exemption is effective for the sale and purchase agreement executed from 1 January 2021 to 31 December 2025.

As such, we can expect the mass market segment to pick up momentum.

#2: Rent-to-Own Scheme in the private and public housing sectors

​High house prices in Malaysia has resulted in both the private and public housing sectors to roll out innovative measures to make it easy for first-time home buyers. With developers under pressure to move unsold units, many will likely continue to offer attractive discounts, rent-to-own schemes and zero down payments to draw buyers.

Meanwhile, in the public sector, the government will implement a Rent-to-Own Scheme by collaborating with selected financial institutions under Budget 2021. This programme will be implemented until 2022 involving 5,000 PR1MA houses with a total value of more than 1 billion ringgit and is reserved for first-time home buyers.

#3: Occupancy rates for office will continue to decline

​The high daily cases of COVID-19 in the country will have an adverse effect on the office occupancy rate as many companies continue to adopt a work from home policy. As such, we are likely to see their occupancy rates continue to decline until a nationwide vaccination is rolled out.

Data from NAPIC showed that as of the first half of 2020, Kuala Lumpur had the highest purpose-built office existing stock at 9,266,687 units followed by Selangor and Putrajaya at 4,030,791 and 2,525,253 units respectively. Meanwhile, there will be an incoming supply of 1,465,441, 244,290 and 208,391 units in Kuala Lumpur, Johor and Selangor respectively.

Collectively, this will result in downward pressure for the office market. Landlords are likely to lower their asking price to continue securing tenants. Meanwhile, corporate tenants will be spoilt for choice as there will be many good deals in the market.

#4: Uncertain time for shopping centres

​In Q42020, several COVID-19 cases have been detected at notable shopping centres in Kuala Lumpur/Greater Kuala Lumpur such as at Nu Sentral, 1 Utama, The Gardens Mall (TGM), Mid Valley Megamall (MVM) and Bangsar Shopping Centre.

Consumer precaution will trickle into 2021 and this will have an impact on footfall as many stay away from shopping malls while the tourism market continues to suffer due to travel restrictions, further limiting footfalls from tourists and holiday-makers.

Similar to the office sector, the shopping centre market will be very challenging. We will likely see the further closure of some outlets resulting in increasing vacancy rates.

NAPIC’s data showed that as of the first half of 2020, Selangor had the highest shopping complex existing stock at 3,712,375 units followed by Kuala Lumpur and Johor at 3,131,431 and 2,452,258 units respectively. Meanwhile, there will be an incoming supply of 639,508, 480,125 and 167,779 units in Kuala Lumpur, Selangor and Melaka respectively.

This article was first published on iProperty Malaysia.

​Punggol and Sengkang are tied at the top spot with 116 transactions recorded last month, followed by Yishun and Tampines trailing behind at 80 and 76 transactions respectively.

By Khalil Adis

​Homeowners in Punggol and Sengkang, hold on tight to your HDB flats (until you get a better offer, that is) as they are the most in-demand HDB estates for September 2020, data from HDB showed.

According to 4-room  transactions captured on HDB's website, Punggol and Sengkang are tied at number one with 116 transactions recorded last month, followed by Yishun and Tampines in the second and third place at 80 and 76 transactions respectively.

In terms of the median transacted price, 4-room HDB flats in Punggol fetched far higher prices at $468,514.97 while Sengkang's figures were $436,909.17.

Other HDB estates that made the cut included Bukit Panjang, Hougang, Bedok, Jurong West, Woodlands, Pasir Ris and Ang Mo Kio.

Of the 11, six (Punggol, Sengkang, Yishun, Bukit Panjang, Jurong West and Woodlands) are non-mature and five (Tampines, Hougang, Bedok, Pasir Ris and Ang Mo Kio) are mature HDB estates.

4-room flats in Woodlands fetched the lowest median average price at $352,380.60 while those in Punggol fetched the highest at $468,514.97, representing a price difference of 32.96 per cent.

HDB estate in northern Singapore (Yishun, Bukit Panjang, Woodlands and Ang Mo Kio) proved to be popular, followed by the north-east (Punggol, Sengkang and Hougang), east (Tampines, Bedok, Pasir Ris) and west (Jurong West).

Here is the ranking from the most to least popular HDB estates.

#1: Punggol and Sengkang

Flat Type: 4 Room
HDB Town: Punggol
Resale Registration Date: Sep 2020
Total number of records found: 116 (Data as at 4 Oct 2020)
Median transacted price: $468,514.97

Flat Type: 4 Room
HDB Town: Sengkang
Resale Registration Date: Sep 2020
Total number of records found: 116 (Data as at 4 Oct 2020)
Median transacted price: $436,909.17

Punggol and Sengkang continue to be popular in the resale market as some sellers seek to offload their HDB flats once they have hit the 5-year Minimum Occupation Period (MOP) while buyers are attracted to the relatively new and better-designed flats.  

Accessible via the North East Line (NEL), LRT and Tampines Expressway (TPE), both estates have a relatively young population.

Data from SingStats showed that Punggol and Sengkang had the highest proportion of children aged below 5 years at 9.9 per cent in 2019.

Despite falling to the hands of the opposition during the recently concluded general elections Sengkang has not lost its lustre as HDB's data showed.

Meanwhile, Punggol is set to welcome the extension of the Cross Island Line (CRL) that will link it to Pasir Ris by 2031. 

The 7.3 km line will comprise four stations – Punggol, Riviera, Elias and Pasir Ris.

Punggol MRT station will be an interchange station to the CRL that will connect residents to the North East Line (NEL) and Punggol Digital District via Punggol Coast MRT station.

Rivieria and Pasir Ris MRT stations will be connected to the Punggol LRT line and East West Line (EWL) respectively.

#2: Yishun

Flat Type: 4 Room
HDB Town: Yishun
Resale Registration Date: Sep 2020
Total number of records found: 80 (Data as at 4 Oct 2020)
Median transacted price: $365,638.15

While Yishun may conjure images of the morbid and macabre, data from HDB showed that it is the second most popular estate on the island in September 2020 with 80 transactions recorded.

So what gives?

Perhaps, it is the recent rejuvenation programme that Yishun had undergone under the URA's master plan. The estate is now home to the new Yishun Integrated Transport Hub and Northpoint City.  

Other infrastructure projects in the pipeline include the upcoming $7 to $8 billion North-South Expressway (NSE) by 2023. 

This will allow residents to travel to the city in just 20 minutes flat. It will also offer better connectivity to neighbourhoods located in the north-south corridor such as Woodlands, Sembawang, Yishun, Ang Mo Kio, Bishan and Toa Payoh. 

#3: Tampines

​Flat Type: 4 Room
HDB Town: Tampines
Resale Registration Date: Sep 2020
Total number of records found: 76 (Data as at 4 Oct 2020)
Median transacted price: $444,814.16

Tampines is the top-ranking mature estate ranking third in place.

A perennial favourite due to the abundance of shopping malls like Tampines One, Tampines Mall and Century Square, the opening of IKEA Tampines has certainly upped the hip quotient to live within this self-sufficient estate.

Served by the East West Line (EWL) and Downtown Line (DTL) via Tampines, Tampines West and Tampines East MRT stations, connectivity will be further enhanced when the Downtown Line (DTL) connects Tampines to the Thomson East Coast Line (TEL) by 2024 via Expo interchange station.

Malls aside, Tampines is conveniently located next to Changi Business Park where jobs abound. 

The business park serves as a hub for data centre, banks and knowledge-intensive industries.

#4: Bukit Panjang

Flat Type: 4 Room
HDB Town: Bukit Panjang
Resale Registration Date: Sep 2020
Total number of records found: 65 (Data as at 4 Oct 2020)
Median transacted price: $414,172.08

Meaning "long hill" in Malay, Bukit Panjang is a hilly estate that was once only accessible via bus and LRT. 

However, since the opening of the Downtown Line (DTL), Bukit Panjang is now served by a dedicated MRT line that links it to downtown Singapore in 30 minutes.

Comprising a mixture of flats, condominiums and private housing, residents can now enjoy a seamless transfer to the MRT and LRT stations via the Bukit Panjang Integrated Transport Hub within Hillion Mall.

Located next to Bukit Timah Hill and the water catchment area of Upper Seletar Reservoir, nature lovers can look forward to the park connectors linking Bukit Panjang Park and Zhenghua Park.

#5: Hougang

Flat Type: 4 Room
HDB Town: Hougang
Resale Registration Date: Sep 2020
Total number of records found: 64 (Data as at 4 Oct 2020)
Median transacted price: $414,482.05

What's there not to love about the mature estate of Hougang?

Known for its rich heritage and delicious hawker fares, Hougang is also home to several good schools such as Montfort Junior School, Holy Innocents' High School, Xinghua Primary School and Xinmin Primary School and Xinmin Secondary School.

This has perhaps explained why Hougang is the fifth most transacted HDB estate in September 2020.

Hougang is served by Hougang MRT station via the North East Line (NEL). 

By 2031,  this station will be upgraded to an interchange station linking it to the Cross Island Line (CRL) spanning from Jurong Industrial Estate to Changi.

Amenities wise, Hougang Central features two shopping centres, namely, Hougang Mall and Kang Kar Mall.

#6: Bedok

Flat Type: 4 Room
HDB Town: Bedok
Resale Registration Date: Sep 2020
Total number of records found: 55 (Data as at 4 Oct 2020)
Median transacted price: $419,888.73

Bedok is the third mature HDB estate to make the list placing it at number 6.

Home to an estimated 289,000 residents, Bedok is the largest planning area on the island offering a mix of HDB flats and private housing options.

Accessible by Bedok MRT station on the East West Line (EWL), residents are now served by three more MRT stations namely, Kaki Bukit, Bedok North and Bedok Reservoir via the Downtown Line (DTL).

By 2023, Bedok will welcome five more MRT stations via the Thomson East Coast Line (TEL) - Marine Terrace, Siglap, Bayshore, Bedok South and Sungei Bedok.

The estate counts Bedok Mall, Bedok Interchange Hawker Centre, Bedok Point, Bedok Public Library and Bedok Polyclinic as among some of the amenities that can be found within the town centre.

Food-wise, Bedok Interchange Hawker Centre is a foodie treasure trove known for its delightful but affordable cuisines ranging from chicken rice to Mee Rebus.

#7: Jurong West

Flat Type: 4 Room
HDB Town: Jurong West
Resale Registration Date: Sep 2020
Total number of records found: 51 (Data as at 4 Oct 2020)
Median transacted price: $397,957.73

Ranking seventh is Jurong West which is home to Nanyang Technological University (NTU) and Jurong Industrial Estate.

Currently accessible by MRT via Lakeside, Boon Lay, Pioneer and Joo Koon MRT stations on the East West Line (EWL), Jurong West will get its own dedicated MRT line by 2026.

Called Jurong Region Line (JRL), this will be Singapore's seventh MRT line to serve both existing and future development in the western part of Singapore. 

When opened, it will connect Jurong Lake District to Jurong Industrial Estate, Jurong Innovation District, and the Nanyang Technological University (NTU).

Comprising 24 stations over 24 km, JRL will have three interchange stations at Boon Lay, Choa Chu Kang and Jurong East MRT stations.

Jurong Town Hall MRT station, in particular, will be an interchange station to the Kuala Lumpur - Singapore High Speed Rail line.

#8: Woodlands

Flat Type: 4 Room
HDB Town: Woodlands
Resale Registration Date: Sep 2020
Total number of records found: 47 (Data as at 4 Oct 2020)
Median transacted price: $352,380.60

If you are looking for affordable housing options on the island that is in demand, then Woodlands should be on your bucket list.

Under URA's Master Plan 2019, Woodlands is set to transform in the next 15 years via Woodlands Regional Centre.

When completed, it is poised to take its place as the largest economic hub in northern Singapore.

Some of the industry clusters that are envisioned to take shape here include business, industry, research & development, and learning & innovation.

As we speak, Woodlands last year witnessed the opening of Woodlands North and Woodlands South MRT stations on the Thomson-East Coast Line (TEL). 

This is especially good news for those who need to commute to Johor Bahru regularly.

When it is ready at the end of 2026, Woodlands North will allow commuters to transfer to the Rapid Transit System (RTS) link.

#9: Pasir Ris

Flat Type: 4 Room
HDB Town: Pasir Ris
Resale Registration Date: Sep 2020
Total number of records found: 46 (Data as at 4 Oct 2020)
Median transacted price: $448,130.43

Located on the other end of the island, Pasir Ris conjures up images of rustic and laid back Singapore thanks to the numerous chalets and resorts that can be found here.

Home to Lorong Halus Wetland and Pasir Ris Beach, the estate is currently served by Pasir Ris MRT station on the East West Line (EWL) that is integrated with the bus interchange.

By 2031, however, the MRT station will be upgraded to an interchange station to the Cross Island Line (CRL) linking Pasir Ris to Punggol.

Offering a good mix of HDB flats, condominiums and landed homes, Pasir Ris is home to two malls namely, White Sands and Elias Mall.

Despite its far-flung location, prices for 4-room HDB flats here are the third most expensive after Punggol and Sengkang reflecting strong demand.

#10: Ang Mo Kio

Flat Type: 4 Room
HDB Town: Ang Mo Kio
Resale Registration Date: Sep 2020
Total number of records found: 39 (Data as at 4 Oct 2020)
Median transacted price: $407,904.51

Ang Mo Kio is among one of the very first housing estates in Singapore making it the final mature neighbourhood to make it on the top ten list. 

Known for its delicious hawker food, Ang Mo Kio has a relatively older population with approximately one in five residents were aged 65 years and over in 2019, data from SingStats showed.

The heart of Ang Mo Kio lies at its vibrant town centre located just next to the MRT station.

Home to Ang Mo Kio Community Library, Ang Mo Kio Polyclinic and Market & Hawker Centre, the town centre has been rejuvenated over the years to cater to the younger generation. 

A new shopping mall called AMK Hub is now integrated with the transportation hub linking residents from the MRT station to Ang Mo Kio Bus Interchange. 

To make the transfer a seamless experience, residents can look forward to a wide array of amenities ranging from NTUC FairPrice to banking options at Bank of China and UOB. Meanwhile, further down the road, a new mall called Djitsun Mall offers four levels of dining, retail and edutainment and fitness experience.

To meet the demands of the upwardly mobile, a private condominium called Centro Residences has also been built just across AMK Hub. 

There's more to come that will increase the attractiveness of Ang Mo Kio.

Under the URA Draft Master Plan 2019, the estate will be rejuvenated with new housing precincts and amenities while retaining its current charms. 
​
In terms of connectivity, Ang Mo Kio will witness the additions of four new stations - Lentor and Mayflower MRT stations on the Thomson East Coast Line (TEL) and Bright Hill and Teck Ghee MRT stations on the Cross Island Line (CRL). 

Bright Hill will be an interchange station to the TEL and Cross Island Line (CRL). 

Meanwhile, Ang Mo Kio MRT station will be upgraded to an interchange station to the North South Line (NSL) and Cross Island Line (CRL).

Infrastructure spending along these lines will act as property boosters for selected areas in Kuala Lumpur and Greater Kuala Lumpur

By Khalil Adis

The last time I was in KL was in January 2020 where I shared the growth areas along the different train lines at Havoc Hartanah.

Despite not being able to physically be present in Kuala Lumpur now due to the Restricted Movement Control Order (RMCO), I wish to point out that there are growth area that prospective buyers and investors should watch out for.

Here are the eight growth areas along the different train lines ranked from the least to most affordable*:

*Note: 
1. Property transactions are based on data captured on Brickz.
2. Monthly mortgage is based on a loan tenure of 35 years with an interest rate of 4.25%. 
3. Affordability is based on the mortgage servicing ratio (MSR) capped at 30% of a borrower's gross monthly income of RM3,000.
4. A monthly mortgage of above RM900 is considered unaffordable.​

#1: Pusat Bandar Damansara

Median transacted price: RM4,000,000 
Monthly mortgage: RM16,484.18
Verdict: Least affordable

Dubbed "the Beverly Hills of Malaysia", Damansara Heights is the most desired address in the country. This is a home among Malaysia's who's who and the address for those who have arrived.

Pusat Bandar Damansara is also a growth area as it is located next to Damansara City. Comprising Menara Hong Leong, Wisma GuocoLand, DC Residency, DC Mall and Sofitel Kuala Lumpur Damansara, Damansara City is an Entry Point Project (EPP) which the Malaysian government had announced in September 2010 to take Kuala Lumpur to even greater heights under its Economic Transformation Programme (ETP) roadmap. 

Soon, it will be home to Pavilion Damansara Heights. Set to open its doors come 2020, the mall will feature 1.17 million sq ft of retail therapy. Amenities here are aplenty to cater to the discerning tastes of the affluent. From high-end grocers at Ben's Independent Grocer to organic restaurants, the lifestyle choices to live the good life here are endless.

#2: Bandar Utama

Median transacted price: RM1,050,000
Monthly mortgage: RM4,327.10
Verdict: Least affordable

Bandar Utama needs no introduction. Home to 1 Utama Shopping Centre, The Curve, IKEA, AEON Bandar Utama, One World Hotel and KPMG Tower, this bustling township comprises mainly landed homes making it ideal for those who prefer a low-density living environment.

Previously, Bandar Utama was very inaccessible. However, since the commencement of the  Sungai Buloh - Kajang Line  (SBK Line) on 16 December 2016, accessibility to Bandar Utama has been greatly enhanced. In addition, a new 35-metre pedestrian link-bridge now connects the station's Entrance B to One World Hotel near the newly relocated Zuan Yuan Chinese Restaurant and the Ground Floor of 1 Utama.

By November 2023, Bandar Utama MRT Station will serve as an interchange station to the LRT Bandar Utama-Klang Line (Klang Valley LRT Line 3). Costing RM16.63 billion, this 37km line will span from Bandar Utama to Johan Setia station with a total of 19 stations. When completed, it is expected to serve 2 million commuters residing in the Western Corridor of Klang Valley.

#3: Subang Jaya

​Median transacted price: RM585,000 
Monthly mortgage: RM4,327.81
Verdict: Medium affordable

Before the advent of Transit Oriented Developments (TODs), Sime Darby has been actively promoting this concept in its township development spanning from Subang Jaya to Ara Damansara.

Subang Jaya is a bustling township that is served by the Kelana Jaya LRT Extension Line which became fully operational in 2016. This extension is part of the government's initiative to extend public transportation to residents living in the southwestern part of Selangor such as Subang Jaya and to Puchong. 

Comprising 13 new stations and covering a distance of 17.4 km, this new extension will bring the total length of the Kelana Jaya LRT Line from 29 km to 46.4 km. The LRT extension line spans from Lembah Subang to Putra Heights and costs RM8 billion to construct.

Connectivity to the airport was recently enhanced in May 2018 via the Skypark Link service that you can catch from Subang Jaya LRT station to Terminal Skypark station. Costing RM533 million to build, the Skypark Link spans some 24km from KL Sentral to Terminal Skypark. 

#4: Jalan Pudu

Median transacted price: RM824,585 
Monthly mortgage: RM3,398.15
Verdict: Medium affordable

Smacked in between Tun Razak Exchange and Bandar Malaysia, Jalan Pudu is located within KL's "Golden Triangle". The former is almost completed and is served by the Tun Razak Exchange (TRX) MRT station while the latter will be served by Bandar Malaysia (North) MRT station. TRX will be Malaysia's first dedicated financial district with a gross development value (GDV) of RM40 billion and with a total gross floor area of 20 million square feet. This iconic project is part of the Malaysian government's Economic Transformation Programme (ETP) to strengthen Kuala Lumpur as the country's financial capital.

Bandar Malaysia will have a gross development value (GDV) of RM150 billion. It will house the High Speed Rail station and two MRT stations - Bandar Malaysia North and Bandar Malaysia South. Bandar Malaysian North will be an MRT station on its own serving the huge mixed-use development. The site area is around 196 hectares and will comprise 27,000 quality and affordable homes. There will also be a dedicated commercial district to support new start-ups as well as small and medium-sized enterprises (SMEs). 

#5: Cyberjaya

Median transacted price: RM512,000
Monthly mortgage: RM2,109.98
Verdict: Medium affordable

Located on the southernmost tip of Puchong, Cyberjaya is poised to enjoy the economic spillover benefits from three major government projects - KLIA Aeropolis, Malaysia Vision Valley and Cyber City Centre in Cyberjaya. The growth areas here will be near Sierra and Cyberjaya City Centre MRT stations.

Being a relatively new township development, Sierra holds the most promise for capital appreciation of property values as many infrastructure projects (including the Sierra MRT station) are still underway. It also with 10 minutes drive to the bustling township of Puchong where it is home to many mega malls and trendy cafes. Sierra is home to only landed homes at the moment.

Meanwhile, 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.

#6: Sungai Besi

Median transacted price: RM510,000 
Monthly mortgage: RM2,101.73
Verdict: Medium affordable

Sungai Besi is located in a growth area in between Bandar Malaysia and Cyberjaya City Centre. There are still homes in the secondary market priced below RM500,000 here. Home to NSK Kuchai Lama and Terminal Bersepadu Bandar Tasek Selatan, Sungai Besi will be served by the upcoming Sungai Besi MRT station via the Sungai Buloh-Serdang-Putrajaya (SSP Line ).

Meanwhile, Sungai Besi LRT station will be upgraded to an interchange station to connect commuters to this MRT station built adjacent to it. When completed, it will also serve as an interchange to the upcoming High Speed Rail station. Sungai Besi is strategically located and is highly accessible up north to downtown KL and down south to Putrajaya and Cyberjaya via the Sungai Besi Highway.

#7: Nilai

Median transacted price: RM215,000 
Monthly mortgage: RM886.03
Verdict: Most affordable

Nilai is poised for further growth as it is located within the Malaysia Vision Valley. Covering Nilai to Port Dickson, it will have a proposed area of 108,000 hectares. The upcoming industries include high tech, logistics, education, health, tourism and sports. The Malaysia Vision Valley is expected to create some 1.35 million jobs by 2035 and investments of more than RM417.6 billion by 2045.

To support the Malaysia Vision Valley, the Seremban HSR station will be sited in Nilai within the Labu and Kirby estates. Seremban HSR station will also be an interchange station to the Seremban Komuter Line and KTM Electric Train Service.

#8: Bandar Baru Nilai

Median transacted price: RM166,955 
Monthly mortgage: RM688.03
Verdict: Most affordable

Bandar Baru Nilai is a growth area as it is located near to upcoming economic drivers in the pipeline that will include the Malaysia Vision Valley, KLIA Aeropolis and Cyberjaya City Centre. It also close to KLIA and KLIA2 that is served by Express Rail Link (ERL) comprising KLIA Express and KLIA Transit.

Soon, connectivity will be further enhanced via the Bangi-Putrajaya HSR station. The station will be located in the south of Klang Valley and within the state of Selangor at Kampung Abu Bakar Bagindar. There is also a proposed connection to the Putrajaya Monorail that will connect this station to Putrajaya Sentral MRT station. When completed, it will serve as an interchange station to Putrajaya Sentral Express Rail Link (ERL) and link commuters to KLIA and KLIA2.

A combination of COVID-19, an oversupply in residential properties and a lukewarm economy have made it a buyer’s market.

By Khalil Adis

Buying a property in Malaysia is a complex process unlike in Singapore.

Being a small country, one can rely on the Urban Redevelopment Authority’s (URA) masterplan to check for planning developments that will be taking place in the next 30 to 40 years.

In Malaysia, however, such information is scant making property buying an arduous and risky process.

When looking to buy a property, you should target the most affordable property but with the greatest potential for capital appreciation. 

How can you do that? Easy, simply by applying the following 5Cs:

#1: Check the masterplan

A masterplan would typically define a township’s development in the next one to two decades. 

​It would also showcase the different designated land use and transportation plans within that particular township. 

An area deemed highly desirable will attract businesses and residents. 

Think about why properties in KLCC and Bukit Bintang are expensive whereas other areas like Bukit Beruntung are not popular. 

With this in mind, you should find out as much as possible about your new neighbourhood.

 #2: Check the transport masterplan

Generally, properties close to transportation hubs such as MRT or LRT stations can command a premium of between five and 10 per cent over the long term.

This is because people generally want to live close to transportation hubs explaining why Transit Oriented Developments (TODs) have become very popular in KL and Greater KL.

This demand translates to an appreciation of one’s property. 

​Are there MRT or LRT stations that are being planned in your area? What about expressways?  

Study the upcoming Sungai Buloh-Serdang-Putrajaya (SSP Line) and LRT Bandar Utama–Klang Line (Klang Valley LRT Line 3) prior to your property purchase.


#3: Check budget allocation from the government

​ Government policies do have an indirect impact on a property. 

For example, budget allocation for improvements in public infrastructure and new economic drivers will have an impact on new and existing homes in and around the vicinity. 

So check where the government is building new hospitals and so on. 

One good example is the development of the Malaysia Vision Valley in Negri Sembilan.

#4: Check for economic drivers

Have you ever wondered why properties in KLCC are so expensive?

This is because it is home to a number of industries such as petrochemical, banking, finance, tourism and so on. 

The best strategy is to buy in an area that is not yet developed but where there are plans for various economic drivers. 

A government-mooted economic corridor or a reputable developer that has experience in building townships are great indicators if the area will succeed or not. 

#5: Check for job creation

 This is like feeling someone’s pulse. 

You need to check if the township you are eyeing for is going to be a ghost town or a happening place. 

If it is the former, perhaps you should stay away. 

If it is the latter, more and more workers will be drawn there, becoming a magnet for people and a hive of activity. 

People are the lifeblood of a neighbourhood.

As the area becomes highly desirable, people will naturally want to live and work in and around the vicinity. 

As there is an increase in demand, property prices in that area will also rise.

That is how a property appreciates over time.
​
Good luck in your property hunt!

A top neighbourhood in the HDB resale market, Sengkang is a good indicator of the changing mood and aspirations of young Singaporeans.

​By Khalil Adis

Having a newly carved GRC and heavy weight political office holders are generally the necessary ingredients to ensure a clean sweep during Singapore's General Election.

However, that does not appear to be the case in 2020.

As seen during the recently concluded election, even having the labour chief and a Senior Minister of State in the Ministry of Health and the Ministry of Transport could not save Sengkang GRC from its electoral defeat.

Helmed by Ng Chee Meng together with Dr. Lam Pin Min, Amrin Amin and Raymond Lye, the election witnessed  Sengkang GRC falling into the hands of the relatively young and inexperienced team from The Workers' Party.

Comprising He Ting Ru, Jamus Lim, Raeesah Khan and Louis Chua, The Workers' Party emerged victorious with a 52.13 per cent win against the PAP's 47.87 per cent.

The rejection of both the NTUC chief and transport minister speaks volume on how the electorate feels about employment and transportation issues.

In Sengkang GRC's case, they are both intertwined.

Last November, Dr. Lam announced in Parliament the banning e-scooters which saw the livelihoods of many food delivery drivers affected overnight.

The ban appeared to be the last straw that broke the camel's back.

Despite a closed-door session at Sengkang West constituency with Dr. Lam himself and a S$7 million assistance package, the session was reportedly a tense one.

Elsewhere in other constituencies, many PMD riders had also expressed their disappointment with their respective MPs.

Meanwhile, the younger team from The Workers’ Party was a breath of fresh air and appeared closer to the ground.

They were humble and earnest yet are backed  with a strong track record in their respective fields.

Jamus Lim, in particular, won over many Singaporeans’ heart during his live televised debate.

Even the police report filed against Raeesah Khan could not sway voters' opinion.

So what gives?

Young neighbourhood

As a district, Sengkang has a relatively young population.

According to data from SingStats, the total population of Sengkang was 244,600 in 2019.

Of this, 159,840 or 65.34 per cent were aged 45 and below.

If we were to break this down further, 213,380 or 87.23 per cent live in HDB flats.

Of this, the majority of them (99,640 or 46.69 per cent) live in four-room flats.

The young population is worried about bread-and-butter issues such as jobs and social mobility.

A segment of these HDB dwellers were food delivery drivers trying to supplement their incomes.

​That is until the ban of e-scooters affected their livelihoods.

Amid the COVID-19 pandemic, this has helped further exacerbate the unhappiness on the ground which has perhaps translated to protest votes on the ballot box.

The 'Jamus Lim' effect

Then, there is also the 'Jamus Lim' effect.

A newcomer to the political arena,  he mesmerised Singaporeans by being able to hold his own when pitted against the more experienced and senior politician, Dr. Vivian Balakrishan.

His message of not wanting to give the PAP "a blank cheque", seemed to resonate with many Singaporeans.

He subsequently became a trending topic on social media - a medium that is highly popular among young voters .

This, plus the rejection of gutter politics, as seen in the Raeesah Khan case, suggests that young and educated voters appreciate a clean fight and want checks and balances.

It also suggests that they are looking beyond municipal issues such as social inequality.

Clearly, character assasination and dangling carrots no longer work.

Sengkang is the most popular estate for HDB resale flats

Politics aside, Sengkang is the most popular HDB estate where 1,795 resale  flats changed hands in 2019, according to data from the HDB.

This was followed by Woodlands and Yishun at 1,794 and 1,791 transactions respectively.

According to HDB's first quarter of 2020 data, resale HDB flats in Sengkang were transacted at a median resale price of S$340,000, S$425,000, S$480,000 and S$565,000 for three-, four- and five-room flats respectively.

While there are other attractive mature estates with better amenities such as Toa Payoh and Ang Mo Kio, their resale value have nose-dived in recent years due to their diminishing number of leases left.

Meanwhile, the resale value of homes in newer estates like Sengkang appear to be better protected.

This has perhaps explained why Sengkang is a popular neighbourhood among young families.

The lure of living in Sengkang

One such person who is currently looking for a home here is property agent Ady Ahmari.

“The flats in Sengkang are younger but cheaper, especially in Anchorvale,” he said.

Another reason is their generous sizes which is something he can attest to.

The property agent sold a 1,130 sq ft four-room flat in the area two months ago for S$350,000.

“The units are very big and comparable to five-room Built-To-Order (BTO) flats which are around 1,184 sq ft,” he said.

Perhaps one surprising intangible reason that he is lured to looking for a home here is the parks.

“Sengkang has a big garden where my family can enjoy the outdoors,” he said.

Indeed, Sengkang Riverside Park is popular among residents here featuring a constructed wetland and is rich in biodiversity.

In fact, the Sengkang ActiveSG Gym which is located within Anchorvale Community Club is the only such gym of its kind in Singapore offering a scenic river view of the Sengkang Riverside Park.

Amenities aside, Ahmari said having an opposition party there has also influenced his decision.

“I need an alternative voice,” he said.

Swing towards opposition could be due to declining resale value of HDB homes

Homeownership and their property value are closely tied to voters sentiment.

Let's look into the case of Toa Payoh HDB estate which falls under the Bishan - Toa Payoh GRC.

In the 2015 General Election, the PAP scored a victory with 73.59 per cent of the vote share against the Singapore People's Party (SPP).

However, the recently concluded election saw a vote swing of 6.33 per cent towards the SPP at 32.74 per cent.

While the PAP won by 67.27 per cent, its support saw a decline of 6.33 per cent.

Likewise, in other mature estates such as Ang Mo Kio GRC and Tanjong Pagar GRC, the PAP witnessed a vote swing towards the opposition at 6.72 per cent and 14.58 per cent respectively.

Conclusion

​The endorsement of Sengkang GRC of The Workers' Party is reflective of the changing mood and aspirations of young Singaporeans.

Yes, they want a strong and capable government.

However, they also want a government who listens to them and not one who bulldozes through policies.

Some of these policies include the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) which they believe have contributed to social inequalities (CECA became a hot-button national topic last year when Erramalli Ramesh was caught on video verbally abusing a Singaporean security guard at a condominium).

They also want a government that does not resort to hitting below-the-belt when it comes to their political opponents.

While the PAP has retained power in many estates, the vote swing towards the opposition could also suggest that older voters want the diminishing value of their homes addressed.

As one elderly person that I spoke to puts it: “This is not what was promised by Lee Kuan Yew”.

9After a two month lockdown, Singapore is slowly easing its Circuit Breaker measure under Phase Two which began after June 18 at 2359 hours. Taken between 10.30am to 9pm on June 26, the Lion City is slowly buzzing back to life as it readies itself for its most challenging general election to be called on July 10. According to the Ministry of Health, the city-state recorded a total of 43,661 COVID-19 cases as of 28 June.

By Khalil Adis