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Thread: Iskandar housing glut may hit rental yields: Rehda chief

  1. #1
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    Default Iskandar housing glut may hit rental yields: Rehda chief

    http://www.businesstimes.com.sg/arch...chief-20140930

    Published September 30, 2014

    Iskandar housing glut may hit rental yields: Rehda chief

    Investors told not to snub region, look at quality of developers

    By Lynette Khoo

    [email protected] @LynetteKhooBT


    A LOOMING housing glut in Iskandar Malaysia may weigh down rental yields in the economic zone, with homes being left empty.

    The warning this time came from Malaysia's national organisation of developers, the Real Estate & Housing Developers Association (Rehda).

    FD Iskandar, president of Rehda, noted that some 30,000 homes could be completed by 2016 or early 2017 in Iskandar.

    If these are mainly sold to buyers outside Malaysia and Singapore, "then you will see that these units will be empty and once they are put up for rent and there are so many units available, that will put pressures on rental yields", he said.

    Malaysia's federal government is "actually looking seriously" at this issue, Mr Iskandar added. But land administration in Malaysia lies within the authority of the state government.

    In the past 12 to 18 months, the deluge of homes launched or in the pipeline by China developers, including Country Gardens and Guangzhou R&F Properties, has stoked concerns over a looming housing glut in the Iskandar region, which encompasses an area of more than 2,000 square kilometres in Johor.

    "Obviously, we have seen developers from China launching a few thousand units at one go," Mr Iskandar said, adding that Malaysian or Singaporean developers would typically have 400-600 units in one project.

    Most of the buyers of these Chinese projects come from mainland China, he observed. "Upon completion, of course obviously, they will not use this as their main home, there will be some concerns about these residential units being empty."

    But Iskandar is bigger than Nusajaya or Danga Bay, he said, adding that demand for landed homes still "looks very strong".

    Mr Iskandar noted that many Singaporean buyers prefer to buy from Singapore developers or reputable Malaysian developers.

    There has also been much interest from Singaporean investors in industrial as well as commercial properties.

    Meanwhile, other hot property spots in Malaysia such as Penang and Greater Kuala Lumpur are likely to be shielded from the supply glut in Iskandar as strong population growth in these areas is still supporting fundamental demand for housing, according to Mr Iskandar.

    Kuala Lumpur's population is six million and could grow to 10 million by 2020 through demographic growth, urbanisation and intra-state migration.

    Mr Iskandar estimated that this would translate to some 170,000 homes to be built each year, based on the assumption of four persons per household.

    Investment yields from residential properties in Penang and Kuala Lumpur are likely to hold up in the region of 5 to 8 per cent while commercial properties could reap higher yields, Mr Iskandar projected.

    The retail segment has also emerged as a strong component, with Kuala Lumpur being ranked by global news network CNN as the fourth-best city in the world for shopping after New York, London and Tokyo.

    With the upcoming high-speed rail between Singapore and Malaysia expected to cut travelling time from 51/2 hours to just 90 minutes, both Kuala Lumpur and Singapore will benefit from greater inter-city travelling and cross-border investments, Mr Iskandar said.

    Still, he is not asking potential buyers to completely snub Iskandar that he believes to be a "highly investable location".

    But Mr Iskandar has a piece of advice: "Please look at the quality of the developers. Be savvy investors. If it's for owner-occupation, there's no worry whatsoever but if it is for investment, you need to do due diligence before buying."

  2. #2
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    Better to buy with a view to weekend home, retirement if investment does not work out...

  3. #3
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    Quote Originally Posted by mummy View Post
    Better to buy with a view to weekend home, retirement if investment does not work out...
    Better know the liability, e.g. maintenance, property tax, utilities, etc.

    The retirement or weekend home may become one's nightmare when unforeseen problem appear.

  4. #4
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    My maintenance only 130rm a month as swimming pool, clubhouse and gym is pay per use, utility should not be much as water is supercheap and we only go there about twice a month. Rest of the taxes should not be too much...

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    Mummy, what happened to the thread that you started??

  6. #6
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    Quote Originally Posted by merlion View Post
    Mummy, what happened to the thread that you started??
    Was harrassed by thermofisher so Admin banned him and gave me his IP address and email but I think scared I make police report so deleted the thread and evidence. Said IP address from US and police cannot do much but may shut down forum if I make police report...sigh....I miss my thread too, got deleted because of a pervert...

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    Quote Originally Posted by mummy View Post
    My maintenance only 130rm a month as swimming pool, clubhouse and gym is pay per use, utility should not be much as water is supercheap and we only go there about twice a month. Rest of the taxes should not be too much...
    Yah i really dont see what heavy liabilities there are. Typing this now from my weekend house, & planning to go to nearby golf club tml for a swim & massage....Hee

  8. #8
    OCR properties going to crash!

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    I can see that you are not a good investor, which is why you say 130RM a month and the rest of taxes is very little, totally oblivious to "opportunity costs" of the money you sunk into your so-called "week-end" home.............

    A good investor will ask:
    A) Given the money you sunk into your so-called week-end home, what additional costs you need to maintain it and what are you getting back in net return?

    VS
    B) What return can you get from other investment if you transfer the money you sunk into your "week-end" home into this investment?

    From here, you can see you are "losing" quite a lot of money from your "week-end" home for choosing Option (A)...

    Say your "week-end" home costs $1 Million Riggits, or S$400k.
    You put into shares, if you can earn 10%, that means you will be losing S$40k per year + RM130*12 + etc costs for maintaining your "week-end" home..................



    Quote Originally Posted by mummy View Post
    My maintenance only 130rm a month as swimming pool, clubhouse and gym is pay per use, utility should not be much as water is supercheap and we only go there about twice a month. Rest of the taxes should not be too much...

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    This is what I am trying to say in word, guess still got lots to learn.

    Your Home is not your asset it is your liability when it is not generating positive income.

  10. #10
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    Perhaps a permanent weekend home is a liability but for me it is also a second home ie I may retire there early when

    1. I quit medicine now and sell my terrace here as Ebola is freaking me out and bringing back bad memories of SARS

    2. I rent out both prop here and live in JB and do the daily commute when RTS is up or earlier if jam eases at causeway when toll rises

    3. I sell terrace and finance my retirement and kids uni in future and live there.

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