Real Estate Market is SOFTENING

Real Estate Market is SOFTENING

The real estate market start softening in the beginning of 2016. The events in 2015 such as GST, ringgit depreciation, property cooling measures, banks tightening measures even earlier government policies have all played a part in influencing the market to what it is now.

Prices of properties in some areas have adjusted downward over past few months.
However, the properties transaction volume has remain low.
According to data from National Property Information Centre (NAPIC), the transaction volume in the first three quarters 2015 decrease 12% in Q1, 3% in Q2 and 18% in Q3. 
(Overage -11% in first 3 quarters 2015)

 
The Malaysia poor economic performance, RM depreciation, unstable political situation are factors contributing to the problem.
From the report from REHDA, 68% developers expressed that their unsold property is kept around 30%.
Unsold properties in Selangor and Johor are mostly in the RM 500k to RM 1 million bracket while those in Pahang, Penang Mainland, Perak and Kedah are mostly in the EM250k to RM 500k bracket. 




Developers have change strategy to launch more midrange or affordable houses. In addition, government have introduced several schemes to help increase the affordability of buyers.
However, the measurements are not effective as the people is still facing problem of affordability. 

Main issues that cause people not affordable to purchase a house despite the real estate market is soft:


1. Implementation of GST
2. High Inflation
3. The working class is faced with salary increment that can barely keep up with the rising cost of living.
4. Banks tighten mortgage loan rules

Financial experts have pointed out that the poor financial planning skills amongst Gen-Y as one of the pressing issues leading to inability to afford houses.

Many of today's youth:

1. stuck with massive car loans or credit card debts
2. has some form of long-term loan (those with tenure more that a year)
3. monthly spendingis beyond what they can aford
4. lack of proper documentation to apply for a loan
5. being placed on CCRIS due to late payment

The affordability problem is one issue that many steps have been taken with little result to show for.
The Malaysian government introduced stringent cooling measures and the banks tightened their lending restrictions had caused the softening of real estate market.
However, the measures do not solve the affordability problem.

 

The Process of Looking for A Home

The Process Of Looking For A HOME

Buying a home is certainly the most rewarding experience most of us ever have. It is also one of the most challenging. If you are a first time buyer, the process may seem overwhelming.

The first thing we should do is to start focusing on what we are looking for in a home and establishing priorities.

1. LOCATION  

Your choice of your neighbourhood is better close to :-

i)  Working place
ii) School your children are attending
iii) Various facilities and amenities
iv) Access to public transportation
v)  Convenience to shopping
vi) Recreational opportunity

 2. Personal Taste

i) Type of house that you prefer: example - Terrace house, semi detached house, condominium and etc.
ii) Size of the house
iii) Number of bedrooms and bathrooms
iv) Age of home
v) Floor plan


 3. Budget and Price Range

 To buy a home that suitable for your budget, you should:-
i) Understand your financial status and capabilities
ii) Do a little research from media or consult real estate negotiator

A home buyer's wish list worksheet is a good reference for you to get a good idea of choosing your dream home.  

 

Documents needed to apply a mortgage loan

Documents needed to apply a mortgage loan/ housing loan!

When you apply for a mortgage loan, you need to provide information or documents that allows banks to verify your income and financial status.

Below are some guidelines of documents needed to apply housing loan:-

1. Employee

• Identification Card – NRIC copy
• Property Booking Receipt
• Land Title copy / Sales & Purchase Agreement
• Latest 3 months pay slip (for Basic Salary) or Latest 6 months pay slip (for Basic + Commission Earner)
• Latest 3 months personal bank statement (for Basic Salary)  or Latest 6 months pay slips (for Basic + Commission Earner) (to show salary creditedto bank account)
• Employment Letter / Latest EA form
• Latest KWSP statement
• Latest B/BE Form (income tax) with payment receipt acknowledgement (essential for commission earner)
• Deposit statement, eg. Fixed Deposit, ASB or Bonds (if any) –optional for showing strong financial background.

 2. Self- Employed

• Identification Card – NRIC copy
• Property Booking Receipt
• Land Title copy / Sales & Purchase Agreementent
• Latest 6 months Company Bank statement
• Latest 6 months Personal Bank statement
• Latest B Form (income tax) with payment receipt acknowledgement.
• Deposit statement, eg. Fixed Deposit, ASB or Bonds (if any) –optional for showing strong financial background.
• Business Registration :

(i) Sdn Bhd Company

• • Form 24 & 49
  • Latest Profit & Loss statement
  • Memorandum of Article
  • Company Profile

(ii) Sole Proprietor or Partnership

* Form A and Form D

 
 3.  Employee (Malaysians working in oversea)

• Identification Card – NRIC copy
• Working permit
• Property Booking Receipt
• Land Title copy / Sales & Purchase Agreement
• Latest 3 to 6 months pay slip 
• Latest 3 to 6 months personal bank statement (To show salary credited to bank account)
• Employment Letter / Latest EA form
• Latest KWSP statement / CPF statement
• Latest income tax declaration form with payment receipt acknowledgement. (preferable 2 years)
• Deposit statement, eg. Fixed Deposit, ASB or Bonds (if any) –optional for showing strong financial background.

 4.  Self-Employed (Malaysians working in oversea)

• Identification Card – NRIC copy
• Working permit
• Property Booking Receipt
• Land Title copy / Sales & Purchase Agreement
• Latest 6 months Company Bank statement
• Latest 6 months Personal Bank statement
• Latest profit and Loss Statement
• Business registration
• Latest income tax declaration form with payment receipt acknowledgement. (preferable 2 years)
• Deposit statement, eg. Fixed Deposit, ASB or Bonds (if any) –optional for showing strong financial background.

What is the cost incurred for buying a home?

 What is the cost incurred for buying a home?

In the last post, we discuss about the calculation of  monthly mortgage repayment for a house. With this calculation, we can plan to buy a home that we affordable with our monthly income.

However, there are other entry cost incurred of buying a home. Here, we unveil to you the possible costs which you may incur when buying a house.

i)  Down payment

Normally, the down payment is 10% of the total purchase price OR the difference between the loan amount and the purchase price.
Banks normally can only give loans up to 90% of purchase price or valuation, whichever is lower.

ii) Legal Fee-Sales & Purchase Agreement, Loan Agreement + Stamp Duty


Legal fees is payable to the appointed lawyer who will prepare Sale & Purchase Agreement between purchaser and vendor.
Stamp Duty which also known as Memorandum Of Transfer (MOT) is payable to the government & collected by Lawyer on behalf of the government.

  Calculation of Legal Fees & Stamp Duty :-

a. Legal Fees

Purchase Price	Charge
First 150,000	1.000% (subject to a minimum fee of RM300)
Next 850,000	0.700%
Next 2,000,000	0.600%
Next 2,000,000	0.500%
Next 2,500,000	0.400%
Remainder	0.300%

b. Stamp Duty

Purchase Price	Charge
First RM100,000	1.000%
Next RM400,000	2.000%
Remainder	3,000%

c. Loan Agreement Stamp Duty

0.5% of the loan amount or RM5 per RM1,000

Note: 

• Professional Legal Fees to be included 6% of goods and service tax.
• Disbursement Fees to be ranging of RM1000-RM1500.00 (based on estimation)
• For first time house buyer, there is 50% rebate on stamp duty if your property price is less than RM500,000

iii) Valuation Fee  

If a buyer apply a mortgage loan to purchase a property. The bank will appoint a valuation company to conduct a valuation report for Application of Credit Facility. All the cost of valuation will be borne by the buyer.

Here is how valuation fees calculate base on the property you purchased:-

For First RM100K =0.25%
Next residue up to RM2 mil = 0.2%
Next residue up to RM7 mil = 0.167%
Next residue up to RM15 mil = 0.125%
Next residue up to RM50 mil = 0.10%
Next residue up to RM200 mil = 0.067%
Next residue up to RM500 mil = 0.05%
Next residue more than RM500 mil = 0.04%

Note:
- Effective from 1st October 2009, valuation fee is subject to a minimum fee of RM 400 per property.
- Disbursement Fees and other additional fees may incurred.

iv) Real Estate Agent's Fee 

If you engage a real estate agent to help you to looking for a house, fee of 2% (+ 6% GST) is chargeable.

Please take note that the type of charges and the amount charged might change in the future.

Please meet with financial institution's loan officer for further advice and discussion regarding type of fees and legal services.

How do I know which home I can afford?

 How do I know which home I can afford? 

Most of the times, a home buyer does not know how much they can afford for buying a house.

You can calculate how much you can afford by online mortgage calculator, that will help you estimate/ calculate an affordable monthly mortgage payment for a more accurate figure. 
  
Nowadays, everybody can access to website and smart phone applications to get a mortgage calculator.

With these home loan calculator, you may

• Estimate monthly home loan repayment amount.
• Generate pie chart of housing loan principal versus interest amounts.

Below is the link of mortgage calculator that you may refer (Just click the link):

• Home loan calculator 1 

•    HSBC home loan calculator

•  CIMB Home Loan Calculator 

Below is the Malaysia loan Interest Rates and Banks' Home Loan Interest Rates that can be referred

Malaysia Housing Loan Interest Rates:

 

Base Lending Rate (BLR) = 6.6%
Maximum Loan Amount = 90% of property price.

Bank Fixed-Rate Home Loan Interest Rates:

You can calculate your monthly repayment ability using these mortgage calculator.

Normally, the monthly repayment amount is advise NOT to exceed 30% of your net income
 (income - other loan commitment) 

Of course, you can consult an experienced home loan expert, who will look at your income, debt and credit to determine your loan eligibility.

3 things to determine your housing affordability:

• Cash  in hand
• monthly income
• loan affordability 

   

Introduction !!!!

Cheers.

Please allow me to introduce myself. I am Jimmy, an real estate negotiator.

As a full-time real estate negotiator, I have been helping my clients buy, sell or rent properties in Sungai Petani. In part because my years of experience in this field have help me understand some knowledge about real estate.

My expertise is as below:

Selling/Renting a Home

- As an experienced professional who has helped many homeowners sell/rent their homes for the best possible price in the shortest amount of time.
- I able to help to handle every aspect of the sales/renting process

Buying/tenanting a Home

- I am representing the best interests of buyers throughout the home buying process.
- My services save client's time and money, as well as make the experience more enjoyable and less stressful.
- So whether clients are a first time home buyer, upgrading, or relocating, I take the time to get to know what's important for client's and clients' lifestyle to have in clients' new home and neighborhood.
- In addition, I am working closely with many mortgage lenders/ bankers for helping clients in applying housing loans.

I noticed that quite a lot of my clients who looking for selling/buying, renting properties do not have sufficient knowledge about real estate.

This blog is created to share real estate experience/knowledge that I have learned.