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    House purchase: To own or not to own?

    14 Feb 2019
    SHOULD everyone own a house? While most people praise real estate as an excellent investment opportunity, owning home is not for everybody.
    Firstly, it is expensive to own a house. Not only you have to service the loan every month, you will also need to pay for taxes, insurance and regular upkeep of the property.
    If you have bought an apartment, more money will definitely be coming out from your pocket as you have to pay maintenance fee and sinking fund every month.
    That is why some people prefer to rent as they pay only monthly rental and at the end of every month, they have extra cash to spend for themselves.
    The one setback though is you will go on living your life without having your name on the property title.
    SIZZLING HOT TOPIC
    Real estate is a hot topic in Malaysia. Everybody is talking about it, prices are going up, and today is your last chance to buy it — otherwise you risk spending the rest of your life paying rent.
    But where do you buy, and how? Buying a house isn‘t easy, especially when banks have become more stringent with lending. So how else can you buy a house if your loan application is rejected and your income level doesn‘t allow you to buy the property in cash?
    We shouldn‘t just blame bankers — developers also have been increasing their selling price in tandem with the rising cost of building materials and high compliance cost.
    According to National Property Information Centre, as of the third quarter of last year, the number of unsold homes in Malaysia reached a new high of 30,115 units worth RM19.54 billion. (These are unsold homes completed nine months from Certificate of Completion and Compliance and exclude residential properties build on commercial land such as serviced apartments and SoHo.)
    From the 30,115 unsold homes, some 17,971 units are priced below RM500,000, while the remaining are units range between RM500,000 and RM1 million.
    This figures are alarming and developers will have to find a solution on how to sell the units or face the consequences of being financially burdened.
    A property expo will be held on March 1 to 3 that will see about 180 developers in Malaysia offer some 22,000 properties worth RM22.5 billion collectively.
    Those on the list include medium-end to luxury developers listed on Bursa Malaysia and who are answerable to their shareholders if they report grim sales figures. Most of them have already reported lower property sales and net profits.
    But who will buy their units and how much are they able to sell at the expo, amid the current economic conditions and when Malaysian houses are severely unaffordable? Most medium-end developers sell properties starting from RM500,000, while units by luxury developers can go beyond RM1 million.
    Up to 10 per cent discount or more can be expected from the developers, with other goodies thrown in like free kitchen cabinets, air-conditioners and fully-fitted bathrooms.
    However, the Bottom40 per cent group is finding it difficult to own a house as revealed by Khazanah Research Institute (KRI).
    According to KRI, the real residual household income is merely RM76 per month for those earning less than RM2,000.
    So, is it “mission impossible“ for every Malaysian to own house? “No, it is possible, but we need to have the holistic approach to it,“ said See Kok Loong, executive director of Metro Homes Realty Bhd. See, who is also deputy-president of Malaysia Institute of Professional Estate Agents and Consultants (MIPEAC), told NST Property that MIPEAC may just have a solution that could help the overall property market.

     
     

     

     
     
     
    Source from: www.nst.com.my

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