Miichael Yeoh

Category: malaysia

  • Penang LRT Construction to Begin in December 2024: Transforming Local Real Estate

    Penang LRT Construction to Begin in December 2024: Transforming Local Real Estate

    Penang’s LRT Project Set to Begin with Groundbreaking Ceremony in December: A Game-Changer for the Property Market

    Penang’s long-anticipated Light Rail Transit (LRT) project is poised to transform the state’s transport and real estate landscape, with the groundbreaking ceremony scheduled for December. The first station will be constructed at Lebuh Macallum, marking the initial phase of the 29km Mutiara Line.

    Transport Minister Anthony Loke has confirmed the project’s commencement, which aims to enhance connectivity between Penang Island and the mainland, reduce traffic congestion, and promote sustainable transport. The Mutiara Line will start at Penang Sentral on the mainland and cross the Penang Channel, with stations along key areas including Komtar, Gelugor, Sungai Dua, and the Penang International Airport, ending at Silicon Island, which will serve as the LRT’s depot.

    Impact on Penang’s Property Market

    Once completed, this LRT project will not just reshape Penang’s transport system but also revolutionize its property market. Historically, infrastructure improvements like LRT systems have had a profound effect on property values, especially in urbanized areas. This is already evident in cities like Kuala Lumpur and Singapore, where properties along transit lines have seen significant appreciation.

    Imagine if you own a property today along the LRT line—how much do you think it will appreciate in the coming years? Properties located near LRT stations are expected to see a considerable rise in demand as they become more attractive to homebuyers, investors, and businesses seeking convenient access to transportation hubs.

    Factors Driving Property Appreciation:

    1. Increased Accessibility: The LRT will dramatically improve the convenience of commuting, making areas along the route highly sought after by both residents and businesses. This increased accessibility will naturally boost property values in these locations.
    2. Attracting Investors and Buyers: Real estate near public transportation systems often attracts both local and foreign investors. Buyers are typically willing to pay a premium for properties near LRT stations, given the convenience and potential for future capital appreciation.
    3. Economic Growth and Urban Development: The LRT will likely spur the development of commercial and retail hubs along its route, bringing new job opportunities and services to surrounding areas. These factors will contribute to property appreciation, as areas with new economic activity tend to see a surge in demand for housing and commercial space.
    4. Lifestyle Appeal: Living close to an LRT line will be a selling point for both homeowners and tenants, reducing reliance on cars and making commuting more efficient. This appeal will be especially strong among young professionals and families, who prioritize convenience and connectivity.

    How Much Could Property Values Increase?

    The appreciation potential could be substantial. Based on other cities with developed transit networks, properties located near LRT stations can experience value increases ranging from 15% to as much as 50% over time, depending on location and proximity to key stops. In some areas, even land prices could surge as developers seek to build new projects capitalizing on improved infrastructure.

    For instance, properties around Penang’s commercial and business hubs like Komtar, Gelugor, and the Penang International Airport are likely to see the highest appreciation. As accessibility improves, other areas along the LRT line, such as Sungai Pinang and Bukit Jambul, could also witness significant increases in property values.

    Long-Term Outlook for Property Investors

    For those who already own property near the planned LRT route, the future looks bright. The project promises to uplift not only property prices but also rental yields, as demand for housing and commercial space near transport links will grow. For prospective buyers, now could be the ideal time to invest before prices start to reflect the full impact of the LRT’s completion.

    In summary, Penang’s LRT is not just a transport initiative—it’s a catalyst for real estate growth. As the project progresses, the property market is expected to see a ripple effect, creating opportunities for both current homeowners and future investors. The coming years could see Penang’s property landscape transformed, with areas along the LRT line becoming prime real estate hotspots.

    From the Desk of

    Miichael Yeoh

    Related Articles: https://miichaelyeoh.com/2024/05/06/penang-lrt-project-updated-news/

  • Proposed New Taxes in Malaysia’s 2024 Budget: What You Need to Know

    Proposed New Taxes in Malaysia’s 2024 Budget: What You Need to Know

    Five New Taxes Could Be Introduced in Malaysia’s Budget 2024 on 18th October: Key Highlights and Concerns

    As Budget 2024 approaches, there are talks that the government may introduce five new taxes designed to address various social, environmental, and economic issues. If implemented, these taxes could bring significant changes to consumer behavior, corporate practices, and wealth distribution. Here are the five proposed taxes:

    1. Unhealthy Food Tax

    In a bid to tackle Malaysia’s rising obesity and health-related problems, the government plans to impose a tax on foods high in fat, sugar, and calories. This includes fast food, snacks, and baked goods—products often linked to unhealthy lifestyles.

    According to the 2023 National Health and Morbidity Survey, 54.4% of Malaysians are considered overweight, raising alarms about the long-term burden on the healthcare system. The goal of this tax is to discourage the consumption of unhealthy foods and encourage better dietary choices. Funds collected could potentially be channeled into public health campaigns and nutritional education programs.

    2. Carbon Pricing Tax

    To align with Malaysia’s long-term environmental goals, including achieving net-zero carbon emissions by 2050, the government may introduce a carbon pricing tax. This tax would target industries and businesses that emit large quantities of greenhouse gases, encouraging them to reduce their carbon footprint.

    The tax could be implemented through mechanisms like a carbon tax or an Emission Trading System (ETS). By placing a financial cost on carbon emissions, businesses would have incentives to adopt greener technologies and practices. This would help Malaysia transition toward a more sustainable and environmentally friendly economy.

    3. Inheritance Tax

    A proposed inheritance tax could be aimed at preventing the accumulation of unproductive wealth within a small segment of the population. This tax would target wealth passed down through generations without significantly contributing to the broader economy.

    The objective is to promote wealth equality by taxing large inheritances. The revenue could be used to fund public services or social programs aimed at reducing the wealth gap. However, this tax could be controversial, especially among families who view property and assets as a legacy for future generations.

    * Updated 14/10/2024

    Anthony Loke States Inheritance Tax Won’t Be Included in Budget 2025. “Government policies only become official if they are presented in parliament, and so far, there has been no discussion regarding inheritance tax.”

    4. High-Value Goods Tax (HVGT)

    The High-Value Goods Tax is designed to target high-income earners by imposing taxes on luxury goods and services. Items such as high-end vehicles, expensive jewelry, designer products, and other luxury items would be subject to this tax.

    The goal is to redistribute wealth by generating revenue from luxury consumption and using it to support social programs or economic development. This could also serve to narrow the wealth gap by ensuring that affluent individuals contribute more to public finances.

    5. Artificial Intelligence (AI) Tax

    In recognition of the growing role of technology and innovation in economic development, the government may introduce an AI tax. This tax would primarily target companies developing and deploying artificial intelligence technologies, aiming to ensure that the tech industry contributes to the country’s growth.

    Revenue from the AI tax could support research and development in high-tech industries, positioning Malaysia as a leader in the global AI market. This tax could create a financial framework for innovation, fostering the next generation of technological advancements.

    Property Sector Concerns: The Inheritance Tax

    While the above taxes aim to address a wide range of issues, the proposed inheritance tax raises specific concerns, particularly in the property market. Many property buyers and investors see real estate as a legacy—something to pass on to their children and future generations. If an inheritance tax is imposed, beneficiaries would be subject to taxation when they inherit property. This could complicate the process of transferring wealth and assets across generations, especially if the property needs to be sold to pay off the tax.

    Is It Fair to Property Buyers?

    From a property investor’s point of view, this tax could be perceived as unfair. Many people buy real estate not only as an investment but as a way to secure their family’s financial future. They plan to pass down property to their heirs, building a generational legacy. If this tax is implemented, beneficiaries might face an additional financial burden when inheriting property, potentially reducing the long-term value of real estate investments.

    Moreover, some might argue that such a tax could discourage property investment altogether, as the future tax implications would make it less appealing to hold on to real estate for the long term.

    Will It Affect Future Generations?

    Yes, an inheritance tax would undeniably affect future generations. It could reduce the wealth that families can pass down, especially if property values increase significantly. Heirs may have to sell the property to cover the tax liability, which could diminish the intention of leaving behind a lasting legacy. This could be especially difficult for middle-income families who have worked hard to acquire property as a form of security for their descendants.

    A Personal Perspective

    This is just my point of view, and I understand that others may not agree. In my opinion, an inheritance tax could have unintended consequences, particularly for those in the property market who want to ensure their investments benefit future generations. While wealth equality is important, there needs to be a balance, so the tax does not disproportionately impact those who have saved or invested in property with long-term goals in mind.

    What are your thoughts on this? Do you believe such a tax is necessary, or would it be too burdensome on property buyers and their families?

    Check out the latest article on how Budget 2025 impacts the property sector

    Malaysia Budget 2025: Enhancing Homeownership
  • Road to Financial Freedom

    Road to Financial Freedom

    Road to Financial Freedom: Episode 3 Recap

    We’re excited to share that we’ve just wrapped up Episode 3 of our Property Talk series, featuring the insightful CY Goh. In this episode, CY Goh delved into the crucial topic of achieving financial freedom through strategic planning and disciplined execution.

    CY Goh shared a wealth of knowledge, drawing from his personal journey and the strategies that have fueled his success. After years of attending numerous courses and learning from top industry experts, Goh embarked on his property investment journey. Today, he proudly shares the techniques and insights that have helped him attain financial independence.

    For those interested in learning more, we invite you to watch the recorded video of this episode. You might find that one of Goh’s strategies resonates with you and fits your financial goals.

    However, please remember that the strategies shared by CY Goh are based on his personal experiences and perspectives. They may not be suitable for everyone, and we encourage viewers to exercise their own discretion and consider their unique circumstances before applying any of the advice.

    Enjoy the video, and may it inspire your own journey towards financial freedom!

    UPCOMING

  • Unlock Rental Property Success with a Strong DSCR

    Unlock Rental Property Success with a Strong DSCR

    Ever come across the term Debt Service Coverage Ratio (DSCR)? If not, don’t worry—I’m here to simplify it for you. While it might seem complex, DSCR is actually a straightforward concept that plays a crucial role in real estate investing.

    What is Debt Service Coverage Ratio (DSCR)?

    The Debt Service Coverage Ratio (DSCR) is a key metric that assesses whether a property’s income is sufficient to cover its debt obligations. Think of it as a financial report card for real estate investors, showing if a property is financially sustainable. Let’s break it down for easier understanding:

    The DSCR Formula

    DSCR = Net Operating Income (NOI) / Total Debt Service (TDS)

    • Net Operating Income (NOI): The income generated by the property, including rent and other sources, after deducting expenses like maintenance, property management fees, and taxes.
    • Total Debt Service (TDS): The total annual payments required to service the loan, covering both principal and interest.

    How to Interpret DSCR

    • DSCR > 1: The property generates more income than needed to cover its debt—this is a positive sign!
    • DSCR < 1: The property’s income is insufficient to cover the debt—this signals potential risk.

    A higher DSCR indicates a lower risk of default, making the property more attractive to lenders.

    How DSCR Works in Practice

    Let’s see DSCR in action with a practical example:

    1. Net Operating Income (NOI):
      • Peter’s rental property generates RM50,000 annually.
      • Annual expenses total RM20,000.
      • NOI = RM50,000 – RM20,000 = RM30,000.
    1. Total Debt Service (TDS):
      • Peter’s annual mortgage payment is RM24,000.
      • Total Debt Service (TDS) = RM24,000.
    1. DSCR Calculation:
      • DSCR = RM30,000 (NOI) / RM24,000 (TDS) = 1.25.

    With a DSCR of 1.25, Peter’s property generates more income than needed to cover the debt, indicating financial stability and a comfortable margin for loan payments.

    Why DSCR Matters?

    The Debt Service Coverage Ratio (DSCR) is a critical indicator in real estate investing, helping you assess whether a property’s income can cover its debt obligations. Whether you’re looking to own rental properties or simply exploring the real estate market, understanding DSCR is essential for your success. By maintaining a healthy DSCR, you can build a solid foundation for your investments and ensure long-term profitability.

    From The Desk of Miichael Yeoh

    Check out the latest article on how Budget 2025 impacts the property sector

    Malaysia Budget 2025: Enhancing Homeownership
  • Discover The Keys to Successful Property Investment (Live Webinar)

    Discover The Keys to Successful Property Investment (Live Webinar)

    Are these familiar struggles for you?

    🏠 Feeling lost in the world of property investment?

    💰 Watching your investments drain your finances?

    😱 Scared off by terrifying investment horror stories?

    💸 Struggling to secure funds for investment?

    🏦 Facing obstacles getting a loan from the bank?

    🔍 Bought a property but can’t find a tenant?

    You’re not alone. But here’s what awaits you on the other side:

    • Witnessing others prosper through property investment while you sit on the sidelines.
    • Regretting missed opportunities for passive income generation.
    • Reflecting on how better financial planning could have changed your life.

    What’s in store for you at my seminar?

    🔍 Insights to equip yourself for successful property investment.

    ⚠️ Awareness of common pitfalls to avoid in the property market.

    🏡 Understanding the crucial components of property investment.

    📊 Appreciation for the importance of property data analysis.

    🔍 Guidance on conducting thorough due diligence before buying.

    💼 Experience the transformative power of effective financial planning.

    Audiences and events I’ve spoken and organized for property buyers/investors, developers, conventions, and property study trips.

    Don’t let uncertainty or fear hold you back! Join me and unlock the doors to a brighter financial future!

    Register your FREE SEATS Now as seats are limited…..

    See you soon,

    Miichael Yeoh

  • Secondary Property Purchase Fees for Foreigners in Penang, Malaysia: Complete Guide 2024

    Secondary Property Purchase Fees for Foreigners in Penang, Malaysia: Complete Guide 2024

    In every country, additional fees are typically involved when purchasing property as a foreigner. Malaysia is no exception, and these fees vary from state to state. Let’s focus on Penang.

    The fees involved depend on whether you’re purchasing secondary property on the island or the mainland. Here’s a breakdown of the fees applicable:

    Property Type

    LocationStrata (Min)Landed (Min)
    IslandRM 1,000,000RM 3,000,000
    MainlandRM 500.000RM 1,000,000

    State Consent

    State Consent
    (Individual)    		RM 10,000
    (Residential)    		RM 20,000
    (Commercial)
    State Consent
    (Company)    		RM 20,000
    (Residential)    		RM40,000
    (Commercial)

    State Levy

    RM 1 mil to RM1.5 mil1.5% of purchase price
    RM 1.5 mil above3.0% of purchase price

    Please be aware that the figures provided are accurate as of the time of writing and may be subject to change in the future.

    From the Desk Of Miichael Yeoh

    Buying Property in Malaysia: A Foreigner’s Guide
  • Malaysia’s Property Market up 34.3% QI 2024 (with detailed transaction records)

    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:

  • Malaysia Property Report 2023

    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

  • Praying For Luck in Mortgage Approval

    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

  • BNM Maintain OPR at 3% – Updated 9th May

    BNM Maintain OPR at 3% – Updated 9th May

    Bank Negara Malaysia (BNM) has announced today (9th 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.

    Get ready to seize this incredible opportunity and make your purchase! Get your copy NOW…

    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