Category: malaysia

Malaysia’s Property Market up 34.3% QI 2024 (with detailed transaction records)

Welcoming news to all property buyers.

Malaysia’s real estate market continues to thrive, with 104,297 transactions valued at RM56.53 billion recorded in the first quarter of 2024 (1Q24). This marks a 34.3% increase from the same period in 2023, which saw 89,024 transactions worth RM42.11 billion.

“The government aims to ensure that economic planning, which integrates catalytic projects with inclusive development, will sustain long-term growth in the real estate market,” Amir Hamzah remarked in a statement today.

Valuation and Property Services Department director-general Abdul Razak Yusak attributed the strong performance to significant increases in transactions across all subsectors, particularly commercial real estate (up 51.5%) and agricultural land (up 64.2%).

“Government initiatives, such as extending the stamp duty exemption for first home purchases up to RM500,000 until December 2025, have been pivotal in boosting the real estate market,” he added.

In terms of subsector growth, commercial real estate led with a 33.4% increase, followed by residential at 16.6%, agricultural at 13.7%, and development land at 10.7%.

Additionally, the number of unsold completed residential properties (overhang) decreased to 24,208 units valued at RM16.49 billion, compared to 25,816 units valued at RM17.68 billion in the fourth quarter of 2023 (4Q23).

“Preliminary data for the Malaysian House Price Index (MHPI) in 1Q24 showed a slight increase to 216.9 points (RM467,997 per unit), reflecting an annual growth rate of 0.5%. Most states experienced moderate growth between 0.5% and 4.6%, except for Kuala Lumpur, Penang, Perak, Melaka, and Sarawak,” Abdul Razak noted.

Here are the detailed transaction records:

May 21, 2024
What impact does EPF Account 3 have on Malaysians?

For many Malaysians, their savings for retirement primarily reside in the Employees Provident Fund (EPF). Each month, employees see 11% of their salary deposited into their EPF savings, while employers add another 13%. Traditionally, 70% of these funds are allocated to Account 1, with the remaining 30% placed in Account 2. Account 1 is inaccessible until retirement, while Account 2 permits withdrawals for medical expenses, education, or home purchases.

Starting May 11, 2024, individuals under 55 will encounter changes. A third account, dubbed Akaun Fleksibel (Flexible), will be introduced. Account 1 is renamed Akaun Persaraan (Retirement), and Account 2 becomes Akaun Sejahtera (Wellbeing). This restructuring aims to enhance financial planning for retirement and address long-term challenges while providing for immediate financial needs through Akaun Fleksibel.

With the activation of Akaun Fleksibel, 75% of contributions must be retained in Akaun Persaraan, while Akaun Sejahtera receives 15%, leaving 10% for Akaun Fleksibel. Contributors may transfer funds from Akaun Sejahtera to Akaun Fleksibel between May 12 and August 31, based on specific criteria.

For balances exceeding RM3,000 in Akaun Sejahtera, a formula based on fractions is used for transfers. For instance, a portion of Akaun Sejahtera can be moved to Akaun Fleksibel, with the remainder redistributed between Akaun Persaraan and Akaun Sejahtera.

For balances below RM3,000 in Akaun Sejahtera, contributors can transfer up to RM1,000 to Akaun Fleksibel, with the remainder retained in Akaun Sejahtera. Those with less than RM1,000 may transfer their entire balance to Akaun Fleksibel.

Transfers and withdrawals can be processed via the KWSP i-Akaun app or EPF branches, with disbursements directly to the contributor’s bank account.

This move offers flexibility but also raises concerns about potential misuse. While it enables access to funds for emergencies, there’s a risk of frivolous spending. EPF advises contributors to exercise prudence and responsibility. Ultimately, whether this move is beneficial or detrimental depends on how effectively individuals manage their finances and utilize the newfound flexibility.

What do you think of this move? Is it for the better or for worse?

From the desk of Miichael Yeoh

May 19, 2024
Malaysia Property Report 2023

In 2023, Malaysia’s property market surged, boasting more than 399,000 transactions totaling nearly RM200 billion, marking a notable 2.5% uptick in transactions and a substantial 9.9% increase in overall value compared to the previous year.

Good news, there is a promising decline in unsold residential properties, dropping to 26,000 units valued at RM17.7 billion from 28,000 units worth RM18.41 billion in 2022.

Further buoying this optimism, the Valuation and Property Management Department (JPPH) reported a palpable uptrend in property transactions across various subsectors. Residential transactions saw a notable 7.1% increase, while commercial, industrial, agricultural, and development land and other subsectors experienced growth rates of 17.5%, 13.1%, 4.6%, and 13.8%, respectively, compared to 2022.

Moreover, JPPH noted a significant uptick in new residential launches, up by 4.4% to 56,526 units in 2023 compared to 54,118 units in 2022. Impressively, these launches exhibited improved sales performance, with a surge to 40.4% from 36% in the previous year.

Meanwhile, the Malaysia House Price Index (MHPI) registered at 216.5 points (equating to RM467,144 per unit) in 2023, indicating moderate annual growth of 3.2%. This stable growth trajectory underscores the resilience and attractiveness of Malaysia’s property market amidst evolving economic dynamics.

Here are the Property Market 2023 snapshot by JPPH

From the desk of Miichael Yeoh

May 15, 2024
Praying For Luck in Mortgage Approval
In the picture, what do you think I am doing? Praying for the money to drop

I do not really depend on these. I don’t think money will suddenly drop from the sky or hoping for a miracle to happen. If a car were to break down, you will need a mechanic to fix the problem. He will have to follow a series of steps in doing repair and to make sure your car is running again.

Likewise, in mortgage approval you cannot wait for miracle things to happen. To me, luck have nothing to do on mortgage approval. Many borrowers and agents, prefer to photocopy many stacks of financial documents and give to every bank they know off or can find and submit to them for approval. Is this the right way?

Do you know that every time your documents are submitted, the banks will record and send to Bank Negara which in turn will update the Central Credit Information System (CCRIS) every month? No matter whether your loan is approved or rejected it will be updated on the last page of your record. Let’s say Bank A rejects your loan, Bank B,C and D also rejects but Bank E actually can approve your loan but seeing so many banks rejected your loan the chances are they will also reject your loan.

Never expose yourself. Every bank have different approval criteria. Some banks might not like you but some does. I have a case once, his Debt Service Ratio is very high at 150% in which is higher than the normal 70-85%. Either the banks rejects or do not want to waste time processing his case. I reviewed his documents and to cut things short, I managed to get 70% loan approval. This case is a fine example where the borrower will have to do the following:
- Do a Know yourself (KYS) test.
- Check your credit status
- Check which bank is suitable for you.
You will have to do more work on the last step. You will need to find out each bank approval criteria and also the different types of documents for approval. You are not buying a RM1,000 property but hundreds or even millions worth of property. It is good to do a research first. It is hard to go back when your loan had been rejected. It is easier to diagnose a problem first.

Related article https://miichaelyeoh.com/2024/04/07/what-you-should-do-before-applying-a-loan/

From the desk of Miichael Yeoh
May 12, 2024
BNM Maintain OPR at 3% – Updated 9th May
Bank Negara Malaysia (BNM) has announced today (9^th May 2024) that the Overnight Policy Rate (OPR) will remain steady at 3%. This rate has remained unchanged since May 2023, marking a year of consistent monetary policy.

The monetary policy meets six times annually to deliberate on the OPR.

Source: BNM

Looking ahead , there is uncertainty surrounding whether the OPR will stay at 3% or increase further. Historically, the highest OPR since April 2015 was 3.50%, and the lowest was 1.75% in July 2020 during the COVID-19 pandemic. Typically, changes in the OPR are made in increments of 25 basis points (0.25%).

As for the likelihood of an OPR increase this year, it appears unlikely that there will be a reduction in the near future. Instead, the OPR will either hold steady or increase depending on several factors:
1. EPF Withdrawals: Starting May 11, 2024, contributors to the Employees Provident Fund (EPF) can withdraw from Account 3 at any time, potentially leading to RM25 billion (around 1.3% of GDP) in withdrawals. This could result in increased demand-driven inflation.
2. Civil Service Salary Hike: There may be a raise in civil service salaries by over 13% beginning in December, which could also contribute to inflationary pressures.
3. Fuel Subsidy Rationalization: Implementation of fuel subsidy rationalization could occur in 2025 or earlier, which may further increase inflation risk.
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Given these factors, my prediction is that the OPR is likely to remain unchanged at 3% this year, but it could increase in 2025 due to inflationary pressures. This would allow BNM to maintain stability in the economy while also addressing any potential inflation concerns.

From the Desk of Miichael Yeoh
May 9, 2024