Tag: home-buying

  • New Launch vs Subsale: Which Property Should You Buy?

    New Launch vs Subsale: Which Property Should You Buy?

    Written by: Miichael Yeoh

    A new property feels safer. An existing property feels more predictable.

    But neither statement is necessarily true.

    A new launch may offer attractive incentives, modern facilities and a fresh building. A subsale property may allow you to inspect the actual unit, understand the surrounding neighbourhood and investigate existing rental demand.

    So, which should you buy?

    The answer depends on what you’re paying, what you’re getting, what risks you’re taking and what you expect the property to deliver.

    Let’s look beyond the showroom and examine the decision properly.

    1. The Malaysian Property Market Is Giving Buyers a Reason to Be Selective

    Malaysia’s property market remained active in the first half of 2026.

    The first-half property market report recorded 187,320 property transactions worth RM105.12 billion. At the same time, 33,094 completed residential units remained unsold, valued at approximately RM17.78 billion.

    Developers also launched 27,832 residential units during H1 2026, with reported sales performance of 16.6%.

    These figures don’t mean new launches are bad or that subsale properties are automatically better.

    They tell us something more useful.

    Buyers should not assume that a new launch is a good purchase simply because a developer has launched it, or that an existing property is good value simply because someone is reselling it.

    Every property needs to be evaluated on its own merits.

    And that brings us to the first important difference.

    2. New Launch vs Subsale: What Are You Actually Buying?

    Let’s start with the basic distinction.

    A new-launch property is generally purchased directly from a developer, often before construction is completed.

    A subsale property is an existing property purchased from its current owner.

    That difference affects much more than the age of the building.

    Property Condition

    New launch: The property may still be under construction, so the finished quality cannot yet be fully assessed.

    Subsale: You can inspect the actual unit and building before making your decision.

    Pricing

    New launch: The price is set by the developer, with incentives or rebates subject to the terms offered.

    Subsale: The price may be negotiable, depending on the seller and comparable market transactions.

    Rental Income

    New launch: Rental income generally begins only after completion, handover and preparation for tenants.

    Subsale: Rental income may begin sooner if the property is ready and suitable for tenants.

    Construction Risk

    New launch: An uncompleted project carries delivery and construction-related risks.

    Subsale: A completed property avoids the risk of waiting for construction completion, although other risks remain.

    Defects and Renovation

    New launch: You may need to furnish the unit and address defects identified at handover.

    Subsale: You may need to repair existing defects, renovate or replace ageing fittings.

    Facilities and Management

    New launch: The long-term quality of building management has yet to be demonstrated.

    Subsale: You can assess the existing facilities, maintenance and management standards.

    Rental Demand

    New launch: Future rental demand must be estimated using market evidence and competing supply.

    Subsale: Existing rental listings and tenancy evidence may help you assess demand, although future conditions can change.

    Main Uncertainty

    New launch: Completion, final quality, future supply and market conditions.

    Subsale: Hidden defects, maintenance costs, building condition and future resale demand.

    Neither option wins every category.

    The mistake is choosing based on the benefits of one option while ignoring its disadvantages.

    3. Is a New Launch Cheaper Than a Subsale?

    This is where many buyers need to slow down.

    Imagine two condominiums in a similar location.

    Property A: New launch

    • Developer’s selling price: RM600,000
    • Advertised rebate: 8%
    • Indicative price after the rebate: RM552,000

    Property B: Subsale

    • Seller’s asking price: RM530,000
    • Negotiated purchase price: RM515,000

    At first glance, the subsale property appears cheaper.

    But are we comparing the same thing?

    What is the actual transaction price of comparable units?

    Does the new launch include furnishing, parking or other items that would otherwise cost extra?

    Does the subsale unit require RM30,000 in renovation?

    Are the maintenance fees comparable?

    Are both properties equally attractive to future tenants?

    What are the legal, financing and other acquisition costs applicable to each transaction?

    Until you answer these questions, you don’t know which property offers better value.

    Look Beyond the Advertised Price

    Developer incentives can reduce the buyer’s effective cost, but their value depends on the actual terms and what is included.

    Similarly, a subsale seller’s asking price may not reflect the final negotiated price.

    Compare the complete acquisition cost rather than relying on the headline figure.

    And remember:

    A lower purchase price does not automatically mean a better investment.

    4. The Hidden Difference: When Can the Property Start Working for You?

    For investors, this may be one of the most important differences.

    Suppose you purchase a new-launch condominium that will take several years to complete.

    During that period, you may have construction-stage financing payments, depending on the loan structure. You also have to wait until the property is completed, handed over and ready before rental income can begin.

    Now consider a completed subsale condominium.

    If the unit is in good condition and the rental market is established, you may be able to rent it out after completing the purchase and preparing the unit.

    The difference is time.

    Let’s Use a Simple Illustration

    Assume the subsale property can generate RM2,000 per month in rent once it is ready and occupied.

    If the new launch takes three years to complete, the theoretical gross rental income forgone over those 36 months is:

    RM2,000 × 36 months = RM72,000.

    That is a significant amount.

    But don’t misunderstand the calculation.

    RM72,000 is not a guaranteed loss or a complete comparison of the two investments. It is an illustration of potential gross rental income over that period, assuming the subsale could have been rented continuously.

    Actual results would depend on vacancy, expenses, financing, tenant demand and the timing of rental readiness.

    The new launch might also appreciate during construction. The subsale might need substantial renovation or suffer from weak tenant demand.

    The lesson is not that subsale always wins. It’s that time has a financial value, and investors should calculate it.

    5. Can You Trust the Rental Demand for a New Launch?

    This is a question I would ask before purchasing either type of investment property.

    A developer might describe a project as ideal for young professionals, expatriates or students.

    That may be a reasonable target market.

    But a target market is not proof of rental demand.

    Before buying, investigate:

    • Who actually works or studies nearby?
    • What rents are comparable units achieving?
    • How many similar units are already available?
    • How long do comparable properties typically take to find tenants?
    • What facilities and transport options matter to the intended tenants?
    • How many competing developments are expected to be completed?
    • What will make your property more attractive than the alternatives?

    For a completed subsale unit, you may be able to examine existing rental listings, speak to property managers and investigate actual tenancy evidence.

    For an uncompleted new launch, you will have to make more assumptions about future conditions.

    That doesn’t make the new launch a poor investment.

    It simply means the further you are from observable evidence, the more carefully you need to test your assumptions.

    6. What About Building Quality and Defects?

    One advantage of buying a new residential property from a developer is that qualifying purchases under prescribed housing development agreements have statutory protections, including a defect liability period.

    For standard Schedule G and Schedule H agreements, the defect liability period is generally 24 months from vacant possession, subject to the applicable agreement and legal provisions.

    However, a new building is not necessarily a defect-free building.

    You still need to inspect the unit when it is handed over, document defects and follow the proper procedures for reporting them.

    A subsale property presents a different situation.

    You can inspect the actual unit before purchasing, but you may inherit problems such as:

    • Water leakage
    • Damaged flooring
    • Ageing electrical or plumbing systems
    • Poor renovation work
    • Lift or common-area maintenance issues
    • Inadequate sinking-fund reserves
    • Disputes or management problems

    Some problems are visible. Others may require professional inspection or further investigation.

    For a subsale condominium, I would want to understand the condition of both the individual unit and the overall building.

    A brand-new unit can have defects. An older unit can be well maintained. Age alone does not determine quality.

    Note: The applicable legal protections depend on the type of property, transaction and agreement. Buyers should confirm their position with a qualified property lawyer.

    7. Don’t Ignore the Building’s Management

    This is particularly important when comparing condominiums.

    A new launch may offer an impressive swimming pool, gym, landscaped garden and other facilities.

    But who will maintain them?

    Will the maintenance charges be sustainable for residents?

    Will the facilities remain attractive after several years?

    For a completed property, you have something valuable: evidence of how the building is actually being managed.

    Look at:

    • The condition of common areas
    • Lift maintenance
    • Cleanliness and security
    • Maintenance-charge collection
    • Sinking-fund position
    • Major repairs required
    • Management responsiveness
    • The overall resident experience

    A well-maintained older condominium may provide a better ownership experience than a newer building with poor management.

    Equally, an older building with serious maintenance problems may create expenses that a buyer has underestimated.

    Don’t just compare the units. Compare the buildings behind them.

    8. Which Is Better for First-Time Homebuyers?

    There is no universal answer, but the priorities are different from those of an investor.

    A first-time buyer should consider:

    Affordability: Can you comfortably manage the purchase and ongoing costs?

    Move-in timing: Do you need a home soon, or can you wait for construction to finish?

    Location: Does it work for your job, family, transport needs and daily routine?

    Condition: Are you prepared to manage renovation, repairs or defects?

    Certainty: Would you prefer to inspect an existing unit, or are you comfortable committing to a property that has not yet been completed?

    Future flexibility: If your job or family circumstances change, will the property be reasonably easy to rent out or sell?

    A new launch may suit someone who wants a new home and can wait for completion.

    A subsale may suit someone who wants to inspect the actual property and move in sooner.

    But neither option should stretch your finances to the point that a change in income becomes a crisis.

    Your first property should support your life, not make your life revolve around the mortgage.

    9. Which Is Better for Property Investors?

    For investors, I would focus less on whether the property is new or old and more on the investment case.

    Ask five questions.

    A. What Is My Total Investment?

    Include the purchase price, transaction costs, financing costs, renovation, furnishing and other relevant expenses.

    B. When Can I Realistically Earn Rental Income?

    Account for construction, completion, preparation, vacancy and tenant-finding time.

    C. What Is My Expected Net Return?

    Do not confuse gross rental yield with actual cash flow or net return. Include recurring expenses, vacancy, repairs and financing where relevant.

    D. What Competition Am I Facing?

    Consider both existing properties and future supply.

    E. How Will I Exit?

    Think about the future buyer, resale demand, likely competition and the price at which the property might realistically sell.

    A new launch could offer an attractive opportunity if the price, location, product and future demand justify the purchase.

    A subsale could be attractive if its price is supported by evidence, its condition is acceptable and its rental or owner-occupier demand is sustainable.

    Either could be a poor investment if the numbers don’t work.

    10. The PDS New Launch vs Subsale Decision Test

    Before making a decision, I would compare the two properties using the same framework.

    1. What is the true acquisition cost?

    Include the purchase price, incentives, legal costs, financing and necessary improvements.

    2. What evidence supports the price?

    Look at comparable transactions and the property’s actual features.

    3. What demand exists?

    Investigate owner-occupier demand, tenant demand and the reasons people choose the location.

    4. What are the holding costs?

    Calculate the mortgage, maintenance, repairs, insurance and other recurring expenses.

    5. What risks am I accepting?

    Consider construction, defects, renovation, vacancy, management and future supply.

    6. What is the realistic return?

    Assess net rental income, financing impact, potential capital appreciation and costs.

    7. How will I exit?

    Identify the likely future buyer, resale demand and competing properties.

    The most important point is to compare like with like.

    If the two properties are in different locations, serve different tenant markets or offer different layouts, a simple price comparison may be misleading.

    And if you’re comparing a completed property with one that won’t be ready for several years, timing needs to be part of the analysis.

    So, New Launch or Subsale?

    My answer is straightforward.

    Buy a new launch when the product, price, developer, location and future demand justify the commitment.

    Buy a subsale when the actual property, condition, market evidence and total cost make the purchase worthwhile.

    Don’t choose a new launch just because it is new.

    Don’t choose a subsale just because it appears cheaper.

    And don’t assume that developer incentives, a beautiful showroom or an existing tenant automatically make a property a good investment.

    The right decision comes from understanding what you are buying and why it should meet your needs.

    That is the difference between choosing a property and evaluating a property.

    The Final PDS Insight

    When buyers compare new launches and subsale properties, they often begin with the wrong question:

    “Which one is better?”

    I would start somewhere else.

    “Better for whom, at what price, for what purpose and over what period?”

    A property that suits a first-time homeowner may not suit a rental investor.

    A property that works for a ten-year holding period may not work for someone who needs flexibility within three years.

    And a property that looks attractive today may face very different competition tomorrow.

    There is no shortcut around the discovery process.

    There is only a better way to make the decision.

    Don’t just compare the properties. Discover the decision behind them.

    Property Discovery System™

    Discover Better. Decide Smarter.



  • Boost Your Loan Approval Chances in Malaysia

    Boost Your Loan Approval Chances in Malaysia

    Malaysian bank lending (especially for property purchases) is currently shaped by several key monetary, regulatory, and market-demand factors. Rates have been easing somewhat, but approval conditions remain cautious. Below are the latest numbers and trends.


    Current Figures & Trends

    1. Overnight Policy Rate (OPR) & Reference Rates
      • In July 2025, Bank Negara Malaysia (BNM) cut the OPR from 3.00% to 2.75% – the first cut in five years.
      • Major banks have adjusted their Standardised Base Rate (SBR) to 2.75% per annum following the OPR cut.
      • Base Rate (BR) has also been adjusted (for many banks) in line with this, though BR tends to be higher than SBR. For example, Alliance Bank’s BR is about 3.57%.
    2. Base Lending Rate / Base Financing Rate (BLR/BFR)
      • The BLR or BFR (for Islamic financings) for many banks remains in the ~6.35% to ~6.65% range. For example, Maybank’s BLR is 6.40%, Hong Leong Bank’s is ~6.64%, etc. baserate.my+3Maybank2u+3NewPages+3
    3. Effective Housing Loan Rates
      • While the base/reference rates give a starting point, effective lending rates (what borrowers actually pay) tend to be higher because banks add a margin/spread depending on risk, loan amount, tenure, etc.
      • Recent reports suggest effective rates for housing loans are in many cases 4.15% to 5.7% p.a. depending on bank, borrower profile, loan value, promotion, etc. Property Genie
    4. Loan Approval & Volume
      • There was a 25.7% month-on-month increase in approvals of housing-loan applications in July 2025 after a slump in June. Focus Malaysia – Business & Beyond
      • The approval ratio (i.e. approved vs applied) in July 2025 was about 44.8%, up from ~42.6% in June 2025. Focus Malaysia – Business & Beyond
      • On a year-on-year basis, total approved loan volume declined by ~5.1% for that month; cumulatively over the first 7 months of 2025, approved property loans were ~RM 161.4 billion, about -1.5% relative to same period in previous year. Focus Malaysia – Business & Beyond
    5. Outlook
      • With lower OPR and more competitive base/reference rates, there is optimism that loan approvals (both volume and ratio) may improve in the remaining months of 2025. Government’s likely to include incentives in Budget 2026 to support first-time buyers, low-to-middle income groups. Focus Malaysia – Business & Beyond

    Steps Borrowers Can Take to Increase Chances of Loan Approval

    Given the current environment, borrowers can do several things to strengthen their applications and improve likelihood of approval. Here are practical steps, both before and during application.

    StepWhat to DoWhy It Helps
    1. Check & Clean Up Your Credit HistoryObtain your credit report (e.g. through CTOS, CCRIS, Experian) ahead of time. Ensure there are no outstanding defaults, ensure credit card/HP payments are on time.Banks check creditworthiness; a clean credit history reduces risk and may allow you to access better rates.
    2. Assess Debt Service Ratio (DSR) / Total CommitmentsKnow your monthly obligations: other loans, credit cards, etc. Make sure your net income minus all obligations leaves enough room for loan instalments. Try to reduce existing liabilities if possible.Banks often reject or charge higher margins if your debts relative to income are too high. Lower commitments improves affordability assessment.
    3. Have Stable & Adequate IncomeDemonstrate consistent employment or business income; have documentation (pay slips, tax returns, EPF contributions). If self-employed or commission-based, provide past 2-3 years’ income statements, audited if possible.Stability & predictability of income give banks confidence in your ability to repay.
    4. Make Reasonable Down Payment / EquityThe more you put down (lower loan-to-value ratio), the less risk for the bank. If you’re first-time buyer programs exist (often requiring only 10% payment), check eligibility, but be aware these may still have stricter conditions.Less loan amount relative to property value helps bank exposure and reduces margin required.
    5. Choose Appropriate Loan TenureLonger tenure reduces monthly instalments but increases total interest paid; very long tenure may raise risk from bank’s perspective (future rate changes, income changes). Balance payroll constraints with ability to service.A manageable monthly repayment improves approval chances; less risk of default.
    6. Prepare All Supporting Documents ProperlyHave ready: identity documents, employment letters, income proof, EPF statements, tax returns (if applicable), bank statements, any other asset documentation. Ensure documents are current.It speeds up processing and reduces grounds for rejection due to missing information.
    7. Shop Around & Compare OffersDifferent banks have different margins, promotions, and underwriting criteria. Get multiple quotes. Negotiate (sometimes banks reduce spread or offer incentives).May get better rate, lower fees, more favorable terms.
    8. Provide Clear Purpose & Property DetailsHave the Sale & Purchase Agreement (SPA), valuation report (if needed), title deed, property details, etc. If property is new or under construction, ensure developer’s track record and required approvals are in order.Banks assess property risk as well: location, title, developer credibility affect approval.
    9. Maintain Good Savings / ReservesHaving savings or avoid fully depleting your accounts helps; having reserves gives cushion in case of rate increases or unexpected expenses.Shows financial discipline and lowers risk from bank’s viewpoint.
    10. Understand Bank Fees & RequirementsBe aware of legal fees, valuation fees, stamp duties, insurance (MRTA/MRTT), and any bank-specific requirements (e.g. guarantor, joint-applicant). Make sure to budget for them.Unexpected costs can derail the process; being well-prepared ensures smoother approval.

    Challenges & What Borrowers Should Watch Out For

    • Even with OPR at 2.75% and SBR adjusted, banks’ margins/spreads can still be high depending on borrower risk. So effective rates may still be less favourable for some.
    • Approval ratios (~44-47%) show that over half of applications still get declined. That means it’s not just about rates; credit & affordability are being closely scrutinized. Focus Malaysia – Business & Beyond
    • Rising costs for legal fees, valuation, and sometimes hidden fees can make total cost of financing higher than expected.
    • Inflation, future rate rises, economic uncertainties mean banks may reserve right to tighten conditions suddenly.


    Conclusion

    Bank lending is currently becoming somewhat more favourable in Malaysia thanks to the OPR cut and adjusted reference rates. However, borrowers must still present strong, well-prepared loan applications. Cleaning up credit, reducing existing obligations, having stable income and proper documentation, and choosing appropriate loan terms are all crucial.

  • Malaysia Budget 2025: Enhancing Homeownership

    Malaysia Budget 2025: Enhancing Homeownership

    Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has unveiled the Malaysian Budget 2025, highlighting significant measures to boost housing and development. Key initiatives focus on making homeownership more affordable and improving community living standards.

    First-Time Home Buyers Support

    The Housing Credit Guarantee Scheme (SJKP) will now provide guarantees on loans up to RM500,000 for first-time home buyers purchasing properties on wakaf land. So far, the scheme has approved RM12.8 billion in loans, benefiting more than 57,000 first-time buyers.

    Housing Tax Relief

    To encourage homeownership, first-time buyers of homes priced up to RM500,000 can claim tax relief of up to RM7,000. For homes priced between RM500,000 and RM750,000, buyers can claim up to RM5,000 in tax relief. These benefits can be claimed for three consecutive years for sale and purchase agreements signed between January 1, 2025, and December 31, 2027.

    Affordable Housing Initiatives

    A budget of RM900 million has been allocated for 48 People’s Residency Programs (PRR) and 14 Rumah Mesra Rakyat (RMR) projects, including new PRR developments in Port Dickson and Seberang Perai Tengah. By the end of 2025, 30 PRR projects will be completed, providing homes for nearly 17,500 people.

    Additionally, up to RM90,000 in financial aid will be available for building new homes for residents, including those in the hardcore poor housing programme (PPRT), fishermen, and Chinese new villages. The government has also raised the maximum financial assistance for home repairs to RM20,000. UDA Holdings Bhd will receive RM200 million to develop affordable housing on wakaf land, and the Public Sector Home Financing Board (LPPSA) will assist civil servants in buying homes on such land.

    Maintenance and Facilities Upgrades

    RM200 million has been set aside for maintaining low- and medium-cost public strata housing, with funds going toward replacing old elevators. Another RM100 million will be used to upgrade 48 Madani Public Parks, enhancing recreational areas across the country.

    To further improve communities, RM84 million will be allocated to upgrade basic infrastructure and social facilities in Chinese New Villages, while the Housing and Local Government Ministry will focus on meeting the needs of Indian settlements.

    These comprehensive initiatives aim to ease the path to homeownership and improve living conditions for Malaysians across various communities.

    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