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Environology and Property: Looking back at 2018 and Outlook for 2019

The year 2018 has been tumultuous for Malaysia and the world. I am often surprised by people complaining about how Malaysia has not improved even after a new government change in May.

First, it’s only been six months since the elections to make such evaluations. Even if you are starting a new job as CEO, is it possible to turn the company around in six months? Can you sack every employee and replace them overnight with a new staff? Surely that is a ridiculous notion!

Second, with the revelation that the country’s finances are in the pits, the new government has limited options in dishing out goodies and incentives to spur the economy.

It is practically banking on its reputation to entice foreign investors with promises of being business-friendly.

Would the country or people have fared better if the previous government had won? There is no guarantee of that. With the election over, it need not work so hard to be popular for another five years.

Taxes could have been raised; incentives could be cut, but, who knows, many more mega loans for mega projects would be undertaken, putting the country at greater risk than now.

If we think things are bad now, it could be a lot worse had the status quo been maintained.

Third, the world is going through an economic roller coaster, thanks to the volatile US President Donald Trump. His trade war against China has thrown the regional supply-chain in chaos.

The tit-for-tat tariff war will create a surplus in soybeans which can depress palm oil prices while his fight against North Korea heightened fears of conflict for a brief moment in time. To make matters worse is his beef with Iran also caused oil prices to spike and then drop.

These events are beyond Malaysia’s control. If anything, our country hogged unflattering headlines through the 1MDB scandal.

The US Department of Justice’s actions against the alleged misappropriation of funds and the possibility of massive punishment on Goldman Sachs is believed to have caused stock markets to tumble.

How does that bode for Malaysia in 2019?

We are likely to experience a continuation of these conditions next year. Presently, property developers and investors are finding it tough to drum up businesses. They are offering special promotions, discounts and fee waivers to entice buyers.

The economic uncertainty weighs heavily on the career prospects of potential buyers, and they are reluctant to take on the financial risk of purchasing a new home. Banks are also cautious and choosy about who they want to lend money.

Next year, contrary to popular belief, is the year of the wooden boar, not earthen.

It is a conducive period for wood-, water- and fire-related industries. It should indicate that the property and construction sectors should do well.

However, other formulas that are used for forecasting the new year indicate that 2019 – and 2018, for that matter – will not be smooth sailing for the economy. It waters down or dampens the positive effect of the year’s Wood element.

The property market will likely stay at present levels. The sub-sales market may see a pick up as property developers and investors look to sell off their inventory.

Developers may also opt for smaller, more modest projects in the coming year to keep themselves busy.

Next year will be a very wet year, and plenty of floods is expected to happen. That will affect not only the agricultural output but also the construction industry. Work is disrupted when it rains, and the company has to contend with overflowing silt traps and the danger of flooding the surrounding areas.

We also hope more care is taken to prevent landslides, often linked to construction and bad weather.

Our calculations also show geopolitical disturbances next year. The corresponding poem for Malaysia in 2019 talks of how a farmer starts off the year optimistically but ends up with an unexpected outcome.

The harvest is very poor, and the cow left by the roadside is stolen by persons unknown.

It suggests problems will dog the government and the source is internal. Could this be inter-party friction among the coalition members or can the internal conflict within the parties cause a disruption? Will there be secret deals that will derail existing pacts and agreements? Let us wait and see.

The world, in general, will also not be faring well. One of the formulas recounted an event in ancient China when the government sent an army through a northern mountain pass to attack the Mongols.

The plans went awry as the army ended up in a temple, besieged by the enemy and decimated.

It suggests the possibility of armed conflict next year. A big possibility could be military action by the US, perhaps against Iran or North Korea. Given the volatility in Taiwan-China relations, that could be another flash point.

China has been trying to get Taiwan to reintegrate with the mainland and used various means to isolate the island-state from the rest of the world. Its patience may wear thin next year, and other measures might be taken.

In the best and worst of times, there are opportunities to be had. One would be best advised to be cautious next year, build up reserves and be on the lookout for a good bargain.

Source: Star Property

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The Property Market Outlook in 2019- A Feng Shui perspective

From the Feng Shui perspective, below is the essential information for the property industry in 2019.

Year Stem: Yin Earth(己)

Year Root: Yin Water (亥)

Sound Consonant: Wood

Year Gua: 8 (Earth)

Hexagram: IOOIII (Gua 25 th “Wu-wang”无妄)

5 Cycle 6 Forces: Earth

Animal Zodiac: Boar

Based on the information above, wood and earth are the two main elements for next year.

Property development falls under the wood related element, property management such as property agencies falls under the earth related business.

It is a good sign that the property market will still perform well next year; hence property developers will be doing better than the sub-sale market players.

From the explanation of hexagram, the medium-cost property will be moving faster than low and high-end ones.

Despite the new RPGT rate, there are still many property investors looking for a property with appreciated value.

There are pockets of areas property investors can look into, but these areas will not bring immediate returns but have their potentials.

Many young couples have started to look outside of Kuala Lumpur to start their families, for affordable landed properties with an adequate amount of space.

North of Klang Valley; Rawang, Sungai Buloh, Puncak Alam and Bukit Beruntung will be coming up in the second half of next year and is expected to perform well in 2020.

Kajang and Semenyih are expected to flourish since there are high potential elements for homeowners and investors.

In a nutshell, next year is indeed a new chapter for the property industry, and it would be an exciting one!

Source: Star Property

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Johor Housing Market To Correct In Long Term, Despite Current Oversupply

The announcement of the many initiatives for Iskandar Malaysia has enthralled developers, which led to the current oversupply situation in Johor, Datuk Zamani Kasim, chief executive officer of Astaka Holdings Ltd.

However, he expects the market to correct itself in the long term, reported the New Straits Times.

“There is an oversupply of apartments and condominiums in Johor Baru because developers were ‘enthralled’ with Iskandar Malaysia when it was first announced, considering all the initiatives that they are taking like Educity and pushing the industrial sector in the region,” he said.

“The developers saw this as an opportunity for them to start early while the other initiatives were still in progress. They (the authorities) are projecting a population of three million by 2025 in Iskandar Malaysia with 1.7 million in Johor Baru alone. With this additional numbers, there will be a need for housing. So, I believe the market will correct itself in the long term, despite the current oversupply situation.”

Based on government statistics, affordable housing accounted for around 60 percent of Johor’s existing housing stock, and not properties priced at RM1 million and above, noted Zamani.

Astaka launched its maiden project, the 438-unit The Astaka @ One Bukit Senyum, with the Johor Baru project achieving 72 percent take-up rate.

With sizes ranging from 2,207 sq ft to 2,659 sq ft, each unit was priced at over RM2 million, said Zamani. “We are selling our units at RM1,350 per sq ft (psf) and have achieved RM800 million in sales.”

He noted that the main problem for affordable housing buyers was the qualification for bank loans.

“While that is a problem the authorities also have to look into issues such as Bumiputera quota and discount at 15 percent in Johor, which is the highest in the country. in other states, Bumiputera discount is between five and 10 percent.”

Meanwhile, Zamani expects the implementation of the sales and services tax (SST) to result in lower property prices.

“I believe (construction) cost will drop with the SST because of the exemption for building materials. Under the Goods and Services Tax regime, the cost for developers was higher,” he said.

“I think there will be a reduction in cost after SST and that would reflect on the selling price. It remains to be seen by how much.”

Source: Property Guru

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Success Story #3: My Goal is Financial Freedom🎖

Success Story #3: My goal is Financial Freedom🎖

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Govt Should Promote Rent-To-Own Concept To Boost Homeownership

The Housing and Local Government Ministry (KPKT) should take the initiative to work with the private sector to promote the rent-to-own concept or other alternatives to encourage homeownership without over-stretching the finances of individuals instead of increasing affordable housing supply, said Socio-Economic Research Centre (SERC) executive director Lee Heng Guie.
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