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Uncategorized

Tips for First-Time Home Buyers

Buying your first home can be nerve-racking and confusing. Getting into the right mindset can save you future troubles. A careful research and good planning always pays.

These tips will help you navigate the process and avoid common mistakes. We break them into three categories:

  • Mortgage tips.
  • House search tips.
  • First-time home buyer mistakes to avoid.

Mortgage tips

Start saving for a down payment early

It’s common to put 10% down, but some banks now allow much less, and first-time home buyer programs. Allow yourself some time to to save up. Do not overstretch your credit.

Understand your affordability, down payment and mortgage options

There are lots of mortgage options out there, each with their own combination of pros and cons. If you’re struggling to come up with a down payment, check out:

The amount you put down also affects your monthly mortgage payment and interest rate. If you want the smallest mortgage payment possible, opt for a 30-year mortgage. But if you can afford larger monthly payments, you can get a lower interest rate with a 15-year mortgage loan.

Research for government programs

Research on government house ownership programs. Federal government l
program like PRIMA can benefit you greatly if you qualify. Research on state level program as well. Sometimes it is available only for the state that you live in.

Determine how much home you can afford

Before you start looking for your dream home, you need to know what’s actually within your price range and which area that you can afford. In order, to make life easier for you we have built home search tool. Use it to your advantage.

Check your credit and pause any new activity

When applying for a mortgage loan, your credit will be one of the key factors in whether you’re approved, and it will help to determine your margin of financing and possibly the loan terms.

Secondly, check your credit score and improve it. Update your arrears and lower down your credit card balance. Banks calculates credit score based on financial behavior, income, expenses, financial commitment and your demography like age, sex, year of employment, marital status, education level.

To keep your score from deteriorating when you apply for a mortgage, avoid opening any new credit accounts, like a credit card or auto loan, until your home loan approved.

Compare mortgage rates

Many home buyers get a rate quote from only one lender. You can compare mortgage rates from financial aggregator like imoney, gobear and ringgitplus. During campaign period you might get additional goodies. Get at least three quotes from different banks and compare both rates and fees.

You must read the product term sheet to understand mortgage product features. Many banks are offering Flexi Loan where you have the flexibility to pay part or all of your principal early. Research on Islamic Home loan as well as they have discounts for stamp duty, rate ceiling and some other good features.

House search tips

Hire the right professional agent

You’ll be working closely with your real estate agent, so it’s essential that you find someone you get along with well. The right real estate agent should be highly skilled, motivated and knowledgeable about the area.

Pick the right type of house and neighborhood

But even if the home is right, the neighborhood could be all wrong. So be sure to:

Common first-time home buyer makes

With so many things on your mind, it’s not surprising that some first-time home buyers make mistakes they later regret. Here are a few of the most common pitfalls, along with tips to help you avoid a similar mistakes.

Not saving enough for after move-in expenses

Once you’ve saved for your down payment and budgeted for closing costs, you should also set aside a fund to pay for what will go inside the house and moving in cost. What goes inside the house includes furnishings, appliances, rugs, updated fixtures, new paint and any improvements you may want to make after moving in.

Buying a home for today instead of tomorrow

It’s easy to look at properties that meet your current needs. But if you plan to start a family, you may need to buy a larger home now that you can grow into. Consider your future needs and wants and whether the home you’re considering will suit them.

Negotiate

A lot can be up for negotiation in the home buying process, which can result in significant savings. Are there any major repairs you can get the seller to cover, either by fully handling them or by giving you a credit adjustment at closing? Is the seller willing to pay for any of the closing costs? If you’re in a buyer’s market, you may find the seller will bargain with you to get the house off the market.

Compare surrounding property prices as well, we have the tool to help you scan the best deals around.

Categories
Condominium Property Rental Serviced Apartment

Overview Of Rental Price Per Square Feet For Residential Property In Malaysia

It is important to have the right set of market number to guide you as a reference when making decision before you rent or buy property for rental investment.  By knowing what is the average price per square feet for the same property type in the same location with similar facilities and amenities helps you to filter worst deal quickly from your search list. This should help you narrow down the pool of your selection to smaller list of good deals to search.

Charts and data provided here are for industry wide number and are not representing any specific location or development. This should serve as guide only as the numbers varies based on many other additional factors. Nevertheless, it should give you a good intuition of what is happening in the property market.

Histogram shows asking rental price per square feet of homes to rent. Condominiums and serviced residence are the type of properties that has the highest available number to rent. They also command the highest rental price per square feet in the region of 2 RM per square feet and 3.1 RM per square feet respectively. Landed property such link house and bungalow & semi-d  ask for lower rental price per square feet generally lower in term of supply.

Notes: Rental price per square feet is defined as asking rental price divided by built up per square feet.

House rental per square feet by property type in Malaysia

Rental Price Per Square Feet By Type Of Property

Asking rental price per square feet for landed property is about half of non-landed property.  Highrise, especially condominium and serviced residence  per square feet is mostly higher due to the facilities available and located nearby train stations, malls, shops, schools and workplace.
Table - Highrise house rental per square feet by property type in Malaysia
Table - Landed house rental per square feet by property type in Malaysia

Rental Price Per Square Feet Vs. Built Up Size (Square Feet)

We found something interesting by comparing built up size and rental price per square feet as per charts below.  The trend of rental price per square feet is higher for smaller unit of the highrise (condominium, service residence, apartment and flat). It was a trend in the last couple of years that developers have been building smaller size units of highrise to keep the property selling price lower. Their aim is to make the properties affordable to a wider middle upper income segment of buyers between 400K to 800K as the selling price per square feet has increased significantly (property price = price per square feet x builf up size). These properties are typically built at prime areas and most of it are nearby train stations, malls and business centers.

Generally, for landed property, rental price per square feet is relatively similar across all built up size with exception to bungalow and semi-d type where data is showing that for built up of 3,000 square feet and above is asking for significantly higher rental price per square feet. We have found out that for  3,000 square feet and above bungalow and semi-d, the ultra rich society are willing to pay premium for the exclusive units in the affluent neighborhoods.

Highrise house rental per square feet and build up size by property type in Malaysia
Landed house rental per square feet and build up size by property type in Malaysia

Map Of Highrise Property By Rental Price Per Square Feet

Note: Size and color of the circles represent price per square feet.Distribution of Malaysia Rental price per square feet

Map Of Landed Property By Rental Price Per Square FeetDistribution of Malaysia Rental price per square feet

 

This is just an overview of rental property price. Please subscribe to our newsletter to get more detail insights on which areas or property development that offer great deals.



Categories
Analysis Condominium Serviced Apartment

House Hunting Clues For Affordable Homes Of RM 500K And Below

Rising cost of living and acceleration of house appreciation over the last 2 decades have made many Malaysian low and middle income earners cannot afford to buy a home for their families.  Young graduates in particular, that earn entry level salary and having minimal credit history , stand a low chance of buying the home of their dreams in prime areas. Nevertheless, the options are still there. They can still find smaller places further away from prime areas that they can call their own. We at RED ANGPOW feel for their predicament and by using technology  we aim to help as much as we can to assist them find find best deal around. As such, we have developed data driven analysis and search tools of property below RM 500,000 in order to help them scan the areas that they might find properties that fit their criteria.

Charts below illustrate the overview of property for sale (online) in Klang Valley  – price of below RM 500K against above RM 500K.  Properties above RM 500K is definitely more than below RM 500K by a huge margin. Condominium represents the highest number of property type for sale while flat and apartment are among the lowest type of property available for sale. In recent times developers are in favor of building more expensive type of properties due to bigger profit margin and higher land acquisition cost. Similarly, banks are gunning for higher property loan as it inline with their preferred segments of higher income customers.  One question left unanswered by the property industry and authority- is there a huge mismatch of population demand between property price?  Well, we reserve this serious topic for another day with deeper analysis on the topic.

Note: The data used for the analysis does not represent the entire industry.  However it is sizable enough to tell an accurate picture of what is happening in the industry.

Number of property for sale for the price range of 500K and below is only around 29% of total while majority of population can only afford below this threshold.  No of property for sale for the price range of 500K to 1M represents around 36% of the market. Ideally, to buy 500K property you need RM 7,500 gross monthly income and to buy 1M property you need RM15,000 gross monthly income (using 30% of income rule as suggested by World Bank researchers). How many friends that you know earns monthly income of RM15,000 or above? Who is buying RM 1M dollar properties? Are Malaysians stretching their loans to max?

Properties on sale in Selangor, Kuala Lumpur and Putrajaya

 

Now let’s focus on properties of 500K and below.

Geographical location of affordable homes

Map below tell us there are locations where we can likely find properties below RM 500K. Areas with darker red color offer more affordable properties. The map is interactive and built by our in house expert and for you to use it for free. Best things in life are free isn’t it 😄.  Click here to view full page interactive map.

Map of property below RM 500K fir sale in Klang Valley

 

Key statistics

In term of average size for properties below RM 500K –  town house, link house and bungalow & semi-detached houses in outside prime areas have bigger built up. Serviced residence and condominiums have smaller built up as they are priced higher per square feet and predominantly placed in prime locations. As for apartment and flat, the built up and price per square feet are lower because they are meant to cater for lower income segment of home buyers.

Top areas for affordable homes

We have selected top 30 areas that offer property RM 500K in charts below. Charts shows composition of property type by area, price per square feet, average size and average number of bedrooms. Damansara Perdana has the highest number of affordable properties. For Damansara Perdana we have also includes adjacent neighborhood of Mutiara Damansara and a smaller part of Kota Damansara that includes Pelangi Damansara and Palm Spring Damansara in order to make the area sizable for more meaningful analysis. Damansara Perdana area offers predominantly condominium, serviced residence and apartment with smaller built up with higher price per square feet.  In second place, comes Cyberjaya that offers similar property type as Damansara Perdana. However, Cyberjaya has bigger built up and lower price per square feet relative to Damansara Perdana. Based on our research, Cyberjaya home profile is more geared towards students and expatriates. Below are the charts for you to explore.

 

Affordable homes by area

As a rule of thumb, for homes of RM 500K and below the closer the distance to KL City center the smaller the built up and thus the lesser number of bedroom it has. In order to keep the price relatively affordable, developers in the prime areas especially those that are closer to KL city center have built smaller property size to make within reach or larger group of population.

Affordable homes by size and distance to Kuala Lumpur City Center

More clues on affordable property by category and areas.

Aparment and Flat in Klang Valley by Area

Link House below 500K in Malaysia

 

Listings of Property for Sale Near Train Stations in Selangor, Kuala Lumpur and Putrajaya

The interactive map below helps home buyers to search for property near train station complete with drill down to the listings of property for sale. Home buyers are able to search by train lines (LRT/MRT/Komuter) and property type (Condo+Serviced Residence, Apartment and Flat). You can interchange the base map to satellite view with a push of a button. You can scan amenities, access roads and points on interest nearby by on map, and have bird’s eye view of the surrounding. With this tool, great deals are hard to miss!

Please click here to view to full page the map below.

Affordable property for sale near train station in Klang Valley

Our article are data and facts driven. We aim to keep our information transparent and available for all Malaysian. Do support us by subscribing to our newsletter.

 



Categories
Mortgage

Comparison of Malaysia Home Loan Rates

Buying a house is a long term commitment, so does your mortgage. It pays to do your homework researching into best deal in town. We have gathered online information on mortgage rates (from 5 years to 30 years term) by banks in Malaysia to help home buyers. We have processed it, organized it and put our expert thoughts into it to help home buyers to make comparison clearly.

Every decimal point on the rates matters. It may not seems a lot of difference in monthly installment for 0.1% incremental. However, if  you accumulate the saving over term of the loan, it is very significant amount. For example, for a loan of RM500K for 30 years, for every 0.1% difference the amount you could save is around RM 10,700. If you are getting cheaper rate by 0.5% then the saving amount is approximately RM65K and with that saving you could buy decent national car.

Options area many. Banks competition on mortgage is fierce and home buyers have the upper hand in this crowded market. If you have a great financial standing and strong credit record, many  banks are  willing to cut down their rates and maximize the amount of financing in order to have you as their customer. Some banks give zero moving cost or finance moving cost that can help you to save more money. However, be cautious, nothing is truly free from banks, zero moving cost typically comes with higher interest rates or you have to bring in deposit or purchase additional products to compensate for the free moving cost.

Generally, Malaysia  home loan rates are based on the loan amount . As a rule of thumb, it generally differentiated based on these threshold – RM200 K, RM500 K & RM1 M – where the higher loan amount is cheaper.

Local Banks

The most aggressive in term of home loan rates. Campaign rates, special request rates,  goodies, step up rates, higher margin of financing and and zero moving cost. The best time to best special rates is end of the year when they are closing the year end account as they try meet their internal sales target. Housing market is slow this year and you have solid chance to negotiate down your home loan financing rates in the fourth quarter.

Generally speaking the lower your loan amount, the higher interest rate and  below RM200K being the highest. For loan below RM 200K, Hong Leong offers glaringly high interest rate to this non preferred segment of low income group.

Local Bank Mortgage Rates in Malaysia

Islamic Banks

It mirrors conventional local banks structures except it provides additional benefit like 20% discount of loan agreement stamp duty and maximum capping of financing rates should the base rate goes up above the threshold. Customers of any religion, creeds or believe are eligible to take up Islamic Home Loan Financing. However, for some banks that are practicing strict Shariah rulings it will be a red flag if your source of income comes from non-halal source.

Home Loan rates for standalone Islamic banks that does not have a parent company from conventional group generally higher. For example Bank Rakyat,  Bank Islam & MBSB which offer financing rates across all loan amount.

Foreign Banks

Foreign banks provides more sophisticated product offerings. However, they typically scheming the creme where they only want to on-board customers with good financial standing with good financial behavior. They typically avoid celebrities and politician as their customers.  If you are in high net worth category and has potential to buy other products like investment or deposits they will welcome you with open arms and lure you with attractive home loan financing rates.

Foreign Bank Mortgage Rates in Malaysia

*AIA – only offer fixed rate loan

Complete Comparison Summary

Here is the summary of the rates, lock-in & flexi type segregated by type of banks in Malaysia.  At a glance, it is so easy to spot which are the banks that offer best deal such as no lock-in, lower rates and flexi loan.  This should serve as first level of analysis and you should dig deeper into product summary sheet and loan agreement to know more about the mortgage products.

Maybank Islamic and Kuwait Finance House probably offers the best products with flexi option, 4.6% or below financing rate and no-lock-in. However, our analysis is based on published rates there are some banks that offer aggressive campaign rates from time to time. Other factors to consider are:

  • margin of financing,
  • service level
  • free moving cost,
  • online facility
  • default penalty rate
  • online facility
  • nearest location of their branch
  • discount on loan agreement fees
  • discount on valuation fees
  • gifts
  • loan redemption penalty
  • MRTA/MRTT/MLTA/MLTT cost

Generally speaking Islamic local banks have higher lock-in period and higher interest rate. Are they the bank of “the last resort” of which they accept customers with poorer credit, loyal group of customers that are willing to pay for higher rates or simply because they have higher cost of funds that they cannot lend competitively?

 

 

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Categories
Condominium Serviced Apartment

Mont Kiara Condominiums – The Highrise Jungle

When it comes to up market condominium in Kuala Lumpur, Mont Kiara always come at the top of the list. Situated on the west of KL city center with 15 minutes driving time, Mont Kiara community is a melting pot of expatriates, local professionals and  people from medium upper income groups. It has a list of international schools, banks, vast array of foreign-themed restaurants, classy hangouts and nightlife joints. You can view the point of interest highlights in Mont Kiara here.

Mont Kiara is nearby to highway access such Sprint, NKVE and DUKE. Commuting to work in city center only takes less than 15 minutes but access to public transportation like train station is unavailable, but no sweat, Grab ride hailing is minutes available anytime of the day. There is also walking pavement at the roadside around Mont Kiara but if you area a cyclist the road is not that bicycle friendly. Within a short drive, there is Bukit Kiara Park. It is a very nice garden with plenty of parking.  It is a popular urban park among families, walkers and joggers due to its close proximity to several residential communities. It’s main feature is a large lake surrounded by jogging tracks, exercise stations, children playgrounds and picnic spots. There are also mountain bike trails for those that are into mountain bike.

One of the main advantage for family growing up young children in Mont Kiara is providing them an opportunity to make foreign friends, to experience foreign languages, foreign culture and probably start a global network from young age. Within the neighborhood, there many additional classes that the children can enroll such as art class, coding workshop and sports coaching.

The option for condominiums are plenty in Mont Kiara. It is buyers’ market and and home buyers should carefully find and select the best deal . For the purpose of this article we have grouped condominiums and serviced apartment in Sri Hartamas and Dutamas areas under Mont Kiara.

Maintenance Fee vs Density 

When home owners pay higher maintenance cost they should expect better/newer facilities and lower units density as higher maintenance cost should represent exclusiveness. Charts below show the comparison of maintenance price fee per square feet and number of units in the development for condominiums and serviced apartments around Mont Kiara. It seems that Verve Suites, Kiara 163 and Arcoris have higher than average unit density  per development and higher than average maintenance fee per square feet that technically make them seem like not a good deal. However there are possibly other factors that make different. Please find out further. In this article we are only providing the technical aspects of the properties.

Mont Kiara Maintenance Fee vs Density Mont Kiara Maintenance Fee vs Density

 

Maintenance Fee vs Completion Years and Developers

Should older condominiums charge higher maintenance fee?

Older condominiums are likely to offer older set of facilities and  less likely to offer lower total count of facilities. New condominiums area likely to offer new and  modern facilities such as lap pool, infinity pool, rooftop jacuzzi and rains spa. For older condominiums, home buyers are likely to pay the maintenance of the building and facilities’ wear and tear, rather than paying for new and modern facilities. One clear benefit of staying in condominium is having nice facilities to pamper you and your family. For those that are investing and not for their own use, having good facilities in your property should translate to higher rental yield. Below are the charts for your comparison.

Mont Kiara Maintenance Fee vs Density

 

Mont Kiara Price vs Rental Yield%

The economic principle of supply and demand generally applicable to all businesses. However, sometimes when it comes to home buying, emotional decision decision overrules logic.  As for price of condominium, the property that should be in demand are those that within financial reach of the targeted population. In this instance, for a average family size of 2 children, they probably need a home of 3 bedroom between 1,000 square feet to 1,800 square feet within the price of RM 500,000 to RM 1,000,000. However, we have seen developers are selling larger units only and higher price only development in Mont Kiara that earn rental yield below 4%. The charts below show a general trend  of  rightly-sized and rightly-priced condominiums fetching higher rental yields. Below, we have also illustrated mortgage financing rate for home buyers to compare with the rental yield.

*rental yield = monthly rental * 12 months divided by property price.

Mont Kiara Price vs Rental Yield%Mont Kiara Price vs Rental Yield%

 

Mont Kiara Asking Price vs Transacted Price Per Square Feet(PSF)

Which is the best reference price that buyers show use to compare when buying a new home? Asking price or past transacted price?

In order to assist buyers to make smarter decision we provide below the comparison of median asking price per square feet and transacted price per square feet. The transacted price per square feet is derived from past one year transaction price. We have attended a talk by Jabatan Perumahan dan Penilaian Harta (JPPH) or in English The Department of Property Valuation of Malaysia and they have indicated that there is evidence that secondary home market price is cheaper than primary (new launch) home price for certain properties. This phenomenon might be the result of the new launch offering discount and, sales and purchase price in the agreement is based on price without reflecting the discount. As such the official price reflected in the sales and purchase agreement, valuation reports and bank records can be inflated price without reflecting the discount. Another possible reason is Mont Kiara is experiencing a downward pressure in property price due to oversupply. Thus we urge buyers to be more careful and give more thoughts before buying a property in Mont Kiara. If you must buy now, you need look at both past transaction price and the average of current asking price. Please avoid Lumina Kiara at the moment as it shows asking price PSF significantly lower than the transacted price PSF and probably the worst is yet to come.

 

Thank you for reading. If you like it, please share this with your friends and family. We appreciate your support and please subscribe to our newsletter below to get the latest update in mailbox.

 



Categories
Condominium Mortgage

Malaysia Mortgage For Residential Property

Charts below shows total balance of housing loan lent out by Commercial & Islamic bank in Malaysia. The data was taken from the central bank of Malaysia website.

For the last 20 years Malaysia mortgage market has seen phenomenal growth in tandem with a booming property sales.  Presuming the numbers reported correctly by Bank Negara, the reported loan amount increased to nearly 10 folds in the span of 2 decade.

Malaysia Mortgage Loan

From a loan approval perspective, the growth is experiencing a softening period since early 2015. Since the introduction of responsible lending act by Bank Negara, lenders has been tightening their lending rules and dampens the mortgage growth.

Malaysia Mortgage Loan Approval

Loan Approved by banking System in Malaysia

 

We have taken indicator Malaysia Bank Lending Rate reported by tradingeconomics.com to show bank lending rate movement for the past 2 decades as plotted below. Generally, Malaysia bank lending rate was in the in declining period since 1998 and  continue to decline till recent past years and only starts to show upward pressure in 2018.


source: tradingeconomics.com

Categories
Condominium

Condominium Near Train Stations

Over the last one and half decades, Klang Valley has seen a surge in number of condominiums built. This phenomenon coincides with cheaper mortgage lending rates,  access to EPF withdrawal for house down payment and installment, lengthened mortgage lending period, creative pricing and product features,  rise in home and land prices and,  new transport oriented developments. Furthermore, the planned High Speed Rail between Kuala Lumpur and Singapore promise a better future for Klang Valley property market as this will give spill over effect of Singapore economic strength and purchasing power. That is what happened to Paris where property value appreciated after the completion of London-Paris high speed train.

Currently, condominium is half of the property listed for sale in Klang Valley  and represents the largest type of property being sold online. This means that home buyers have plenty of options to choose from and should carefully weigh their options. Please exercise caution as some of condominiums in popular areas are under pricing stress. There are pockets of bubbles and can be avoided by carefully analyzing the fundamentals.

We at Red AngPow  aim to equip you with unbiased, easy to use tool for analysis and making use of technology to empower consumers to make smarter decision. Armed with decades of data analytics skills, banking experience & property expertise we are bringing to consumers the insights and technology that are previous privy to large corporate at no cost to home buyers.  *We are using condominium listed online as of July 2018 for this analysis.

In this article, we are focusing on condominiums near LRT, MRT & KTM Komuter stations as these where are the most of condominiums are built. Our definition of near train stations is within one kilometer to nearest train stops.

*larger words means more frequent.

Map-based Insights

In order to make house buyers getting great information and and for us to deliver a insightful shopping experience, we have plotted current condominium listing on interactive and zoom-able map . Home buyers can glance at vital statistics at the area of choices and make comparison of the the surrounding properties in one page.  It gives a bird’s eye view of insights that delivers advanced yet simple  information to home buyers. At deeper level, when zooming in down to condominium your can see detail listing of the chosen properties where you can sort and according to the criteria that you choose. You can click on the link to go to the original listing by the the advertisers and property agents.

With advanced technique of Artificial Intelligence and Property Industry experience , we have built a scientifically curated  listing marked with blinking lime colored dots to assist home buyers to find their dream homes or the best  value for their property investment. It was done with no preferential treatment to any developers, property agents or sellers. It was built with pure facts and science with no human bias.

Click here to view map

Condominium in Klang Valley
Condominium in Kuala Lumpur, Selangor and Putrajaya

With our map technology, searching for condominiums nearby train stations by train lines & median price per square feet has never been easier. The first of it’s kind, easy to use and available at your fingertips.

As we can see from the maps, stops at LRT lines are most popular places for developers to build condominiums due to the fact that it pass through populous residential areas, economic centers and transportation hubs. The long stretch of KTM Komuter lines falls second in term of popularity and has the cheapest price and price per square feet. KTM Komuter passed through less affluent neighborhood and has poorer public perception in term of reliability due to frequent train breakdowns. Among the train lines, MRT is the latest addition to Klang Valley transportation system and the first line SBK was completed in 2017.  Middle part to the North West part of MRT SBK line has higher property price while the South East toward Kajang  offers lower property prices. There is also major upcoming township development around Kwasa Damansara and Kwasa Sentral stations that investors and home buyers are eyeing.

Click here to view map

Condominium Distance To Train Station

As evidence suggests, distance to train station has great influence to condominium price. The nearer the property to train stop the more expensive is the price per square feet and most of condominiums in Klang Valley are built within 3 kilometer radius of train stations. Thus, it is very clear that the convenience of being nearer to train stops increases property value. LRT stops has  the most number of condominium around them, followed by Komuter and the least is MRT. Prices of condo near LRT train are the most expensive because it pass through strategic areas and a number of affluent neighborhoods. While MRT is new and the completion of it coincides with the softening property markets the prices around its stops are relatively lower. We foresee that prices around MRT station will catch up in the future when the economic fundamentals is on track e.g. when banks lending policy is relaxed and income of general population rise. Charts below illustrate the relationship between number of property listing online, price and price per square feet against the distance to nearest train station.

Condominium Near Train Stations

Let’s look at the histogram of condominium near train stops in Klang Valley below to understand the density  of price, built up square feet and price per square feet distribution. This will give you good sense of the condominium offerings in Klang Valley. The bar represents number of condominium listed for sales while price, built up square feet and price per square feet are on the X-axis.

  1. Price – price of most condominiums generally is between RM450K to RM1M. Condominium above RM800K are beyond the affordability of general population. We expecting softening demand for above  RM800K price tag.
  2. Built up size – built up size for most of condominiums is generally between 900 square feet to 1450 square feet. Larger size are difficult to rent out as typical renters are  young professionals, couples or young family with small kids that do not  prefer larger size properties.
  3. Price per square feet – price per square feet is concentrated between RM450 per square feet to RM800 square feet. Some developments that are pricing price per square feet higher that overall average of the areas are having trouble to sell despite offering many additional features, more facilities and great design. We hope that in the future, developer do study the affordability of their potential customers before building the properties.

Condominium Price in Kuala Lumpur, Selangor and Putrajaya

Built Up Size for Condominium in Kuala Lumpur, Selangor and Putrajaya

Price Per Square Feet for Condominium in Kuala Lumpur, Selangor and Putrajaya

 

By visualizing the price, price per square feet and built up size in 3D, we can see a trend that the closer condominium to KLCC the higher the price is.  Only LRT train line pass through KLCC and it is expected to see these expensive grouping fall under condominium near LRT station category. On the other hand there is a smaller numbers of condos near MRT stops such as  Pusat Bandar Damansara and TTDI that are very expensive. Further away  from KLCC as far as Subang, Kelana Jaya or Gombak you can get older condominium with double the size of KLCC condominiums and with significantly cheaper price tags but much less exclusive than KLCC and farther commuting distance for those who work in large corporations.

*Size of the bubble represent the distance to KLCC. The smaller  the circle the closer it is to KLCC.

Condominium Rental Yield

This is  one of the most import gauge for true economic value of home price.  Unlike speculators which focus on prospective property price change, value investors often use rental yields to estimate the value of property across economic cycle. Like any form investment where we measure annual return,here we apply the same method to property.  In this case, we use annual cash flow from property rentals divided by property value.  This is gross yield as it does not include associated expenses of owning a property (e.g. maintenance fee etc).  Whether you will be staying at that property or for investment, you must always measure this to see whether you are getting a good deal. Below is the quote from world famous investor Warren Buffet on cash flow, that stays true across all economic cycles. Among the reasons why investors like Warren Buffet is so successful is due to his ability to hold term and his rationality to assess future cash flow generated from his assets without fear and greed.

“Focus on the future productivity of the asset you are considering”… “If you instead focus on the prospective price change of a contemplated purchase, you are speculating.”

Of all the property types, condominium gives the higher rental yield % as compared landed property but lower potential on property appreciation .  With this visualization, it’s easier to see the guidance of expected rental yield, the good rental yield and the bad rental yield.

Rental Yield% for Condominium in Kuala Lumpur, Selangor and Putrajaya

The median rental yield return for both overall condominium and condominium near train station are slightly below 4%. The opportunity is that you can find condominium that can give you as high as 7% rental yields. One and half decades ago, rental yield of 6%-7% was not considered a bargain.

Charts below illustrate the relationship between distance to KLCC (size of bubbles), rental yield%, price and built up square feet of condominiums in Klang Valley. For this, we only illustrate condominiums that are near to train stations and differentiated by colors to mark different train lines.  Rental yield for condo near KLCC is not great. Generally speaking, the smaller bubbles which represent condominium with shorter distance to KLCC are mostly below 4% while the larger bubbles which represent condominium  farther away from KLCC offer higher than median rental yield. Looking at the second chart with different viewing angle, we can see the most expensive condominiums are predominantly come from condominiums near LRT stations because it pass through prominent areas.

Rental Yield% for Condominium in Kuala Lumpur, Selangor and Putrajaya

Different viewing angle of the chart above.

Rental Yield% for Condominium in Kuala Lumpur, Selangor and Putrajaya

 

Developers For Condominium Near Train Station

For some home buyers, developers credibility is an important factor in their decision making. Reputable developers will minimize incompletion risk and give better assurance for the quality of work. Developers are offering their products to different segment of consumers. Some are targeting young young and middle income family with more affordable price points. Some are targeting foreigners and people with high net worth. Due to softening market, nowadays many of developers are offering rebates, gifts and free sales and purchase agreement due to softening demand and affordability issues of general population.

Top Developers for Condominium near Train Stations in Kuala Lumpur, Selangor and Putrajaya

Top Developers for Condominium near Train Stations in Kuala Lumpur, Selangor and Putrajaya

 

Below are the overview of each train stops by train line types. The bubbles represents train stops, the size of the bubbles represent number of listing found online and the color represents the areas in Klang Valley that the train stops located.

LRT

As expected, the most expensive condominium measured by price per square feet are dominated by condominium near LRT stops that are in city center and Bangsar.

Condominium near Train Stations in Kuala Lumpur, Selangor and Putrajaya

MRT

For condominium near MRT stops, the most expensive by price per square feet measure are Pusat Bandar Damansara and Tun Razak exchange. Please note that for condominiums near Pusat Bandar Damansara stop are divided into two areas which are Segambut and Lembah Pantai depending at which sides of the stop they are in. There affordable condominium in around MRT stops which are further away from Kuala Lumpur city center at South-East and North-West sides of Klang Valley. Click here to view the map.

Condominium near Train Stations in Kuala Lumpur, Selangor and Putrajaya

 

KTM KOMUTER

Condominiums near KTM Komuter stops offer more competitive pricing as it pass through less affluent areas. KTM Komuter lines cover more land areas than the rest of the train lines and offer wider selection in term of choice of location from Batu Caves all the way to Port Klang. However this train line is perceived to be old, slower and less reliable making it the least preferred train line.

Condominium near Train Stations in Kuala Lumpur, Selangor and Putrajaya

Well, it is a lot of information to digest in one article. We have to save the rest for future analysis. We will give more granular information from time to time. Thank you for reading our insights. Please subscribe to our mailing list  to receive our insights direct to your mailbox.

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FOR CONSUMERS BY THE CONSUMERS ~ Team Red Angpow.