Webinar Feb 2015 with Faizul Ridzuan

RM failing – Blessing to property market?

1.  RM falling: Good for foreigner to start buying here.

Falling oil-prices

1. 2009: Global economic crisis (below USD40)
2. Buying opportunity – oil, also for houses.
3. We buy more than we sell.
4.  Effect of lower oil price is not too drastic to our economy

1MDB a Time-bomb?

1. There will be an effect, but not as big as claimed. Not systematic risk that could send us to recession.

Msia overall performance

1. Goldman sachs Endorse Msia as one of gud place to invest in.
2. Bloomberg’s top 20 growing economies
3.  World economic forum: no6. Not too bad.
4. Transparency international corruption index: improved.
5.  Rm236bilion approved in 2014 creating hundred thousands of new jobs
6. Tourism grew by 10% (2013-2014)
7.   International website – a new global retirement option

indicators:

1. Unemployment gone up to 3% (jan 2015) from 2.7%
2.  NPL for residential drops to 1.29% -Good
3. Consumer deposits in dec 2008 was rm685bil to rm1.06trilion in dec 2014. Deposit up – Good.
4. Loan to deposit ratio is better today VS 1997 at average 0.9
5.  Interest rates: BLR was highest during our crisis 1998 (12.27%). Has stabilized since.

Loans

1.  Loan application: reduce from 2013(peak) to 2014. Interest in prop market drop. But not a big drop compared to 2012.
2.  Loan approved: overall reduce but increased for commercial. (2014-2013)
3. Loan approval increased in percentage from 2012 to 2014. (residential and commercial) (maybe bankers filter before they even submit)

Property fraud and misspelling?

1.  GRR- no benefit in doing GRR, some developer inflate their price bcoz of this so we are paying more.. (guaranteed rental returns)
2. Comparing new launch benchmark is not a good way. Compare against subsale and new development.
3. Fake, inflating tenancies – avoid.
4. SOVO, SOFO... etc2 can be used as residential and uses HDA-compliant schedule H. à u can’t, it’s not permit by the law. Check with HDA to avoid paying too much interest. Disbursement schedule for residential is protected, not for commercial.

What to look for in 2015?

1. Target development tht is recently completed especially if you know they gave high rebates or DIBS previously.
2. Fairer deals in the subsale market.
3. Tier-1 properties (location friendly) best bet to buy property!! (premium areas, where expats are familiar with, not like putrajaya)
4. Buy mass market properties, not high end.

What property will suffer in 2015?

1.  Middle upper and high end properties which are not located in tier 1 locations
2. Dibs developments (they don’t have much holding power, they took up DIBS, they are mostly investor, flippers..)
3. High rebate or GRR developments that was sold at an inflated price. à not many ppl willing to support the inflated price.
4.  Properties in newer areas where there are plenty of supply. à ppl’s sentiment..

Investing guides for 2015

1. Look at price, supply and type of product.
2. Look at facts, do own research.
3. Knowing what to do after buy.
4. Property VP this year? – learn to be contrarian.
5. Good year to shop for bargains if you know where to look.

GST impact

Not much impact for residential. Commercial yes. Almost zero for subsale

Extra notes
near petrol station - NOT GOOD.

Need investment advise?

faizul@farcapital.com.my or writetofaizul@gmail.com

1 on 1 sessions – call Hana 011-15088875 (nurfarhana@farcapital.com.my)