EP07: Homeownership dilemma: Navigating property landmine | Life & the City - video Dailymotion

The Star

BUYING your first home? Don't let overwhelm lead to costly mistakes! Episode 7 of Life & The City podcast tackles the biggest hurdles for new buyers.  Hosts Aida Ahmad and Farid Wahab, with StarProperty senior content manager Joseph Wong, reveal common pitfalls, smart loan strategies, and the crucial differences between residential/commercial land (and your utility bills!) plus leasehold vs. freehold. The Life & The City podcast series airs fortnightly, spotlighting issues that matter to urbanites. Catch the full episode on www.youtube.com/@thestaronline/podcasts or www.thestar.com.my/metro The Life & The City podcast series airs fortnightly, spotlighting issues that matter to urbanites. Catch the full episode on www.youtube.com/@thestaronline/podcasts or www.thestar.com.my/metro  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

Transcript

00:00:00Farid, property ownership is a daunting experience. I've had to go through that recently and I know

00:00:12you did too. I did. How was it for you? I found the whole process to be incredibly, well, you said

00:00:19it right, daunting and incredibly complicated. Yeah. I felt like I was wading into an area of

00:00:26the unknown. I didn't know what I was getting into, but it had to be done. Yes. And fortunately,

00:00:33we have an expert as our guest today to talk about the landmine of property ownership. And he is one

00:00:43of our colleagues who writes for Star Property. But before we get to the podcast, here are some of

00:00:49our stories on TSOL, Star Online, and the Star, which you can check out today. The subject of

00:00:56tariffs is still hot for it. And the 140-something percent in tariffs, of which Trump says is still

00:01:08high, it might reduce, but obviously not to zero. And the other story is the rise of AI and deepfics.

00:01:17A 16-year-old student in Johor was detained for doctoring images of his schoolmates. Now

00:01:24that's, I mean, also quite concerning and scary as well. Anyway, let's get to our topic at hand.

00:01:33Property ownership. We have today our colleague, Joseph Wong, who is senior content manager for

00:01:45Star Property. Welcome, Joseph. Thank you so much for being with us today. Thank you for inviting me.

00:01:50Yeah. Your insights will be very valuable. For it, let's get the ball rolling. Before we begin,

00:01:57Joseph, I would love for you, if you could introduce yourselves to our listeners. Tell us a bit about

00:02:03what you do and, you know, your experience writing about property markets. Well, I've joined

00:02:08Star Property in 2019, just before the COVID. It was in July. The COVID actually, towards the end of

00:02:17the year was when it started kicking in. And then it went full blown in 2020. So at that time when I

00:02:25joined, I was a bit worried. I thought, how are we going to deal with this situation? Because

00:02:30obviously, the property industry was greatly affected by the pandemic, along with a lot of other

00:02:37businesses. But as time went by, we noticed quite a lot of interesting things that happened. The

00:02:46property market changed quite tremendously during this time period as well. So which was quite exciting

00:02:52for the real estate industry. I covered property for a long, long time. That was in my previous job

00:03:02and in Focus Malaysia. So I've about 13 years writing property. So I've seen 13, over a decade worth of

00:03:11changes in the property industry.

00:03:13Wow. So you're well versed enough to deep dive into this topic today, which is very important. Because

00:03:23home ownership, it is a major milestone in our culture, in Malaysian culture. Why do you think that

00:03:31is, Joseph?

00:03:31Well, for Malaysians, we have this Asian mentality that you must own a home, right?

00:03:40Yeah. But if you look into Maslow's hierarchy of needs, right? Shelter is obviously one of the

00:03:49big three, along with food and water. But what I'm concerned about are the first time homeowners, when

00:03:58they buy into a property, they fall into quite a number of pitfalls. We actually made, what we did was

00:04:10we compile the most generalised pitfalls that they fall into. So we have five common areas that

00:04:19they make when they buy a home. But before we get into the five common pitfalls, Joseph,

00:04:26is it financially sound to buy property as a long-term investment in today's market? Let's talk about

00:04:34Clang Valley. Is it financially sound? Because there are some people who still prefer to rent.

00:04:40They don't want to drop that huge commitment on their lap.

00:04:47Correct. Interestingly that you mentioned this, there was actually a study by the government on

00:04:55why the Gen Y and the Gen Z were hesitating in buying property. The Gen X obviously all have

00:05:02already bought properties. They are towards the end of the property industry already.

00:05:07But for the Gen Y and Gen Z, they hesitating in buying property. But the question is whether it's

00:05:18worth to buy property now? I'll have to say yes. Because if you look at inflation rates,

00:05:25our money will always be devalued over a certain time of time. But when you buy a property,

00:05:32when you buy a property, it acts as a safeguard to maintain your future value of your property.

00:05:42And then you can, obviously the price is going to go up. Then you can sell off and then balance

00:05:47everything out. So I will have to say yes. And on the other hand, I will also have to say no at the

00:05:57same time. Because when you talk about financially stable, that is something they have to look into

00:06:05before you actually buy a property. Before I bought my property, I was extremely financially stable.

00:06:14To give you an idea, I upgraded my vehicle and I bought myself a newer car. And at that time,

00:06:25I didn't want to spend too much time paying off the loan. And banks always offer you a five-year loan.

00:06:33So minimum is a five-year loan for your higher purchase. So I did a mad thing. I actually bought

00:06:42my car on my credit card. So a lot of people are wondering, oh my god, you know, the interest rate

00:06:49is incredibly high for credit card. But I paid off my car in 11 months. So the savings I made was

00:06:59$4,700 if I have taken up my loan. So I was financially stable then, debt-free at that time

00:07:10until I bought my property. Then that's when the debt started falling out. And then at that time,

00:07:18it was said that I was the first time home buyer. So I myself fell into that pitfall.

00:07:24And then as time went by, I realized, oh no. So we started writing stories informing the public

00:07:33what to do and what not to do if you buy a home.

00:07:38For me, when I bought my property in January 2024, I think I signed the sales and purchase agreement

00:07:46sometime in December 2023. And I remember up until that point, I had been looking around

00:07:53for a property to buy. I think about two, three years, I've been going to showrooms. I've been

00:07:57meeting with agents, trying to make sense of this whole world that I had no information about.

00:08:05And then I think a year or two before that, my sister had already bought a house. So I asked

00:08:09a lot of things from her. So she told me a bit about what to expect. But even then, I felt overwhelmed

00:08:16by the amount of information I saw on the internet. It is overwhelming. And just for context,

00:08:21all three of us are in a different age group. So again, there is different aspects when buying

00:08:30property in your age group. Farid, you're in your 30s. I'm in my 40s. And Joseph, you're in your 50s.

00:08:36Correct? Correct. Right. So Farid, when you spoke about the complexities of buying a property,

00:08:48right, it really is, it's really scary from from my experience as well. But the important thing is

00:08:57is talk to as many people as you can. Right? What? Let's get into the pitfalls. Joseph, why don't you

00:09:08start us off? Okay, we categorize into five areas for the pitfalls. I initially I put them into an order.

00:09:19But I think having looked at the common pitfalls, the probably number one thing is when you go and

00:09:31go to a bank to apply for a loan, don't accept the first offer you get. Right? Don't just go to one

00:09:38bank. Go to different banks and then see what they have to offer. So this is something interesting that

00:09:47we discovered that if you go to the same bank, but in a different branch, you might get a different

00:09:56offer. That's interesting. I actually did not know that. I thought one bank, same offer. But you're

00:10:03saying, for example, Bank A, there's a branch in, you know, wherever PJ, Clang, Sha'alam, all three

00:10:12branches might offer you a different rate. Correct. So it can be from the same bank, but

00:10:17each branch have a different hunger for loans. So that might offer you a different rate. And also

00:10:24you must remember, each of these banks, they have got different people working. So they have got

00:10:31different levels of expertise processing your loan. So Bank A's KL branch might be more experienced than

00:10:42the bank A's PJ branch. So the KL branch process it more efficiently. And therefore, they look at your

00:10:51data, all the information they provided to the bank, and they are able to offer you a better rate.

00:10:59Whereas the one in PJ might be a person who has lesser knowledge. And then there are more risk adverse,

00:11:08they might offer you a higher rate. So it really depends. So just because it's from the same bank,

00:11:14don't assume that the same bank is going to offer you the same rate. It can be different.

00:11:19I did not know this because when I bought my property, my agent handled everything. And I feel

00:11:24that for a lot of people, that's probably the case. Especially okay, when it comes to agents,

00:11:27right, Joseph, this is especially true when you're buying new properties, right? For sub sale. Yes,

00:11:34it does happen. From my experience, because I've just bought it off a family member. So we did away

00:11:43with the agent. Yeah, it just makes things a bit simpler. Surprisingly, that's the other pitfall

00:11:50that we would advise first home buyers to work with agents or registered agents and not just agents,

00:12:00don't just go to any agents, make sure that they're registered because if they're not registered,

00:12:04anything that goes wrong, there's no protection. Again, I did consult an agent before because I was

00:12:12looking at another property. But yes, you're right. Consult an agent and just get as much feedback as

00:12:18you can. Correct. Especially when it comes to secondary homes. If you're buying direct from the

00:12:24developer, yeah, you can forgo the agent because there's no point going through an agency in that

00:12:31case. If you're going directly to the developer, then go straight to the developer. But if you're

00:12:37going to buy a secondary home, it's better to go to a registered agent or negotiator because

00:12:44especially one who is familiar with the area and they'll be able to know whether the seller is

00:12:51offering you too high a price. And then if the seller is not aware of the pricing in the area as well,

00:12:59they might not be able to give you a true price of the property you're interested in. And then if you

00:13:06make a lower offer based on the surrounding value of the properties, of similar properties,

00:13:14then that might become offended. So if you go through the agent or the negotiator,

00:13:21at least they will be able to provide data on what the actual value of the property is.

00:13:31And the other thing is also approach the bank as well. Because obviously you can make an offer to

00:13:37the property owner. Now from one of my experience when I was first looking for a property to buy,

00:13:49I was googling online and it was an agent that was selling on behalf of the seller. So I approached the

00:13:57agent and then the the asking price was at that time was $470,000 for a two-bedroom place. And then I

00:14:09went to the bank and asked them for their valuation. And then they had that information available and they

00:14:15said, no, no, no, that property is not worth $470,000. That property is worth $430,000, which was which

00:14:23was the offer that I made to the agent. And the agent got really, really upset. And then he said to me,

00:14:31no, no, no, the bank that I go through says you can buy the property for $470,000. But as a buyer,

00:14:39why do I want to buy at $470,000 when the bank's value, but the bank that go to the valuation is $430,000.

00:14:46So in the end, I rejected and didn't go for it. But it turned out to be a blessing in disguise because

00:14:53the value of that property actually dropped down some more. Really? So sometimes it's good to take

00:14:59a step back and have a look, a second look at the property later on. What's the second pitfall?

00:15:05That was the second pitfall is to go through a registered property agent. So first one is

00:15:13approach as many banks as you can. Correct. Second one is get a qualified

00:15:20registered property agent. Correct. Right. And then the third pitfall is

00:15:26first home buyers always look at the wrong things. Such as? They look at, oh, it's a three bedroom

00:15:32place and you're only paying like under $500,000 for example. And you think, oh, that's a good offer. And then

00:15:39this property has like 72, 75, 80 facilities they can use. Oh, well, so that means people often focus on the

00:15:52cosmetics, aesthetics. Yeah. So they look at the facade of the place and then... Not the bare bones. Correct.

00:15:59They should be looking at the more urgent things. There was an interesting study that was done

00:16:06about how far property buyers tend to buy property from their place of work. And you'd be surprised.

00:16:15It's within nine kilometers. Hmm. So you have, yeah, you have a, um, maybe you have a, uh, property that's cheap and

00:16:25near to a MRT station in Sugan Belor, for example, but you're working in KL. And

00:16:33you can, yeah, you can take the MRT down to KL, but the exact connectivity, because KL is, you're looking at

00:16:41a huge place, right? Yeah. The area of, of KL is what? 720 kilometers, square kilometers?

00:16:47200, so 34, if I'm not mistaken, square kilometers. So, so it's a huge area. So yeah, you might be able

00:16:55to go down to KL Central and get off there, but where's your connectivity, connectivity from there

00:17:01to your workplace? Right. So it, from my own experience, for me to get to work, if I use public

00:17:09transportation, you'll take me an hour. Driving will take you? Driving will take me in, during quick

00:17:15hours, driving will take me 25 minutes. Right. If there's hardly any cars, um, 15 minutes will do. So

00:17:24you save 45 minutes basically, right? And that 45 minutes is crucial for one sanity. Correct. These

00:17:31days with our traffic jams. Can I add something to this, Joseph? Sorry to interrupt. Um, but my sister bought

00:17:38a property somewhere in Denkil, when she works in, I'm sorry, my sister is, is listening. I'm sorry that

00:17:45I'm talking about you, but she works somewhere, she works in, in, in the central area in, in, in KL. And

00:17:51when she bought the property, it was a landed property with three bedroom, I think 1200 square feet,

00:17:56I think about 400,000, 450,000, I think. And my mom was very insistent that I also buy a property in the

00:18:03same area. She said, it's a big area, it's landed property, it's, you know, it's, it's, it's a huge

00:18:07area. But my biggest concern at the time was the distance. Because, um, even though that, uh, it, I

00:18:15think it's very near Cyberjaya. And so that, that, that, there is an MRT there. So, um, I think two or

00:18:22three weeks ago, uh, when I went, I, I slept at her house and then I, I got to work from, I, I, I

00:18:30commuted from her house to, to, to, to the office. It took me about one hour, 15 minutes, one hour, 20

00:18:37minutes. If I had driven, it would be about maybe 45 minutes. But either way, and during peak hours,

00:18:44the, the, the commute time would, could easily take up to two hours. I remember during Ramadan,

00:18:49I was driving home from office. It was about two hours. So I felt like people tend to overlook

00:18:54this aspect because you keep in mind when you buy a property, I mean, unless you want to rent out,

00:18:59but if you are planning to live there, you're going to be living there for the next 15 to 20 years.

00:19:04Yeah. And this is the amount of time you're going to waste every day. You know, your petrol, your,

00:19:09your, your, your tool, your sanity, your sanity, your, your back pain. These are the things,

00:19:15these are the costs that you don't see now. Yeah. But you will incur over the years because of the

00:19:20decision you make now. Yeah. That I think, um, that's also important. Are you buying the property

00:19:27for investment or for you to live in? Right. And most first time, uh, homeowners, they're actually

00:19:33buying for their own stay, right? Because obviously they need a roof over their heads. So if they're

00:19:39looking for their own stay, then they must look into the conveniences rather than the facade,

00:19:46what the place can offer you, you know? Yeah. You, you have a bigger house, you have,

00:19:51it's a landed property, but the distance you need to travel every day. Is it worth it? Yeah, correct.

00:19:57So, I mean, KL is still not as bad as some overseas nations. Um, if you were in Bangkok,

00:20:07the traffic is immensely crazy. Worse than us. Correct. Uh, the same, same thing with, um,

00:20:14uh, Indonesia as well. I, I had, even though the airport was so near to the, to the,

00:20:21to the hotel that I was staying. And because the international flight, I had to, you have to give

00:20:27about three hours and then they give another three more hours just to get to the airport, just in case

00:20:32you get into a jam. You know, you have that kind of aspect. So, but, but since you mentioned cities

00:20:38like Bangkok, their public transport is quite good, right? No, no. Um, they do have public

00:20:47transportation, but it's not quite as good obviously as Singapore. Right. Singapore is quite well wired.

00:20:53Um, Bangkok still falls behind. But, um, having said that, I have to say, uh, Malaysia is improving. Um,

00:21:04the, if they come in with the MRT3, I think that would, uh, encourage me to take public transportation as well.

00:21:13Um, do you have access to a train where you live, Joseph? No. Uh, I have to take a bus down to

00:21:21Gail Central and then from the MRT to, uh, I see. So what you discovered is the drive from your place

00:21:29to the office is not really a problem. Yeah. I would rather drive than take public transportation.

00:21:35But, but having said that, I'm quite a public transportation person. Um, I will advocate for it.

00:21:42And, uh, first time home buyers, if you, like I said, don't look at the wrong things, look at the right

00:21:49things. So if you're going to buy a place, make sure that it clicks all the right boxes. Don't,

00:21:56don't look at the wrong things because that will backfire on you later on. So that's, that's the

00:22:02third pitfall. Okay. So, um, the fourth pitfall is forgetting about the hidden costs because when they

00:22:10buy homes, they think, Oh no, I, I set up enough for the 10% deposit. Um, and then the rest will be covered

00:22:18by the bank loan, but nothing is absolute. Um, bank loans doesn't necessarily mean they will

00:22:23automatically give you a 90% loan. Correct. It really depends on your, your credit, your credit

00:22:30rating and how much you're earning. So you might not get the, the 90% loan. Although for first home buyers,

00:22:38um, I'm not sure whether you're aware of this, but there's a lot of, um, areas where you can look

00:22:46into the government provides, um, some, uh, incentive for first home buyers. So, uh, I think last time they

00:22:55had something called Kagamas that helped with the 10% loan. But now if you buy directly from the

00:23:03developer, they can arrange for you to get the, they'll provide a 10% discount, for example. So you

00:23:13still can apply for the bank loan. And then because of the 10% discount, if the bank loan gives you 90%,

00:23:20that covers your, your dilemma of trying to look for not saving up for the deposit. 10% discount

00:23:28of the 10% down payment. No, no, 10%. Let's say, uh, a place is, uh, half a million. So the, some

00:23:39developers offer you 10% discount. So if you apply for half a million loan, the 10% is already

00:23:47discounted. So the bank gives you 90%. So straight away, you don't have to worry about 10% anymore, right?

00:23:53So there are things like this that you can look for. So if it works out for on, on, on your

00:24:01benefit, check out what are the areas that you can actually minimize your deposit.

00:24:09What's the fifth pitfall, Joseph? Uh, the fifth pitfall is forgetting about the cost of ownership.

00:24:15So the, the, the, the hidden, the hidden costs are going back. Yeah. We have to go back to that.

00:24:20So if you talk about hidden costs, the things like legal fees, your MOT, your stamp duties,

00:24:25your disbursement fees, those are, those are your, your hidden costs. Because when, when,

00:24:32when developers sell you a property, they don't tell you about that part, right? So the other costs of

00:24:40ownership are the things like if you buy Strata, um, development now, uh, any, any Strata title

00:24:46development, you will have to pay maintenance and sinking fund, right? Um, uh, you have to think

00:24:54about, uh, renovation because you are buying a bare unit, especially for new homes. You're buying a bare

00:25:01unit. Um, if you buy a secondary home, sometimes there are already furniture inside there.

00:25:08Even sub sale, sub sale. Yeah. So, so for the sub sale, it depends on the owner. Sometimes they

00:25:14want to sell as is everything in there. You can have it. So furniture wise, everything else already,

00:25:22you, you already minimize that, that cost. But for a primary home, um, most developers will sell,

00:25:32uh, property that's a bare unit. So it means there's nothing in there. Your fixtures are not there yet.

00:25:38But bare unit also, um, comes with some, come with your, um, kitchen cabinets. Not all. Not all,

00:25:48correct. So, um, it depends on the developer. Some, some developers, um, put their partially furnished.

00:25:54So when they put their partially furnished is normally the kitchen sink is there. Right. They'll give you a

00:25:59cabinet. Some developers will give you air conditioning. Some, some developers will give you the points to put,

00:26:06the holes have been, been done ready for you to install your, your, your, your air conditioning.

00:26:13The toilet fixtures are all there. So it's a fully functioning toilet when you go in there.

00:26:17Bathroom fixtures are all there already. So those are the partially furnished unit. Um, it, it, like I

00:26:25said, it really depends on the developer. If you're lucky, you can find one that gives you a lot more. Um,

00:26:31in my case, I was quite lucky. Um, my unit came with the, the kitchenette, um, the stove, the

00:26:41refrigerator, the washing machine, and then all I need to do to bring in was just basically my furniture.

00:26:50Okay. So everything is functioning. The, the toilet, everything is all, all, all, all fixtures, all fixtures

00:26:56done already. So some developers will give you a fully furnished. So it, it naturally, if it's a fully furnished,

00:27:06the price is always higher. Yeah. So it really depends on what you're looking at. But, um, going back to the,

00:27:14the, the, the cost of ownership, um, you also need to pay for your assessment fees. Yeah.

00:27:19Yeah. Quit, um, quit rent. Yeah. That's right. Um, so all those things, a lot of people, when they buy at home,

00:27:26they don't realize that there's a lot of other things that you need to pay for. Yeah. Your yearly fire insurance.

00:27:32Correct. Yeah.

00:27:33All right. Um, that's a lot to consider yourself. Uh, but we also, we want to move this conversation a little bit into

00:27:43other factors to consider. Those are the financial factors that we need to consider. But we at Star Metro,

00:27:49we also know that there are also social factors that we have to consider when we're, when buying a

00:27:53property. I like to say that when you buy a property, you're not just buying a property, you're buying a

00:27:58place to live. And in some cases you're buying neighbors. Correct. You want to know that you will be, uh,

00:28:04you'll be living in an area where hopefully there's minimal, there's minimal drama. Um, but there are so many

00:28:12things to consider like the, like the, like the GMB, the MC, how well they're going to do,

00:28:18how well they're going to do, um, how much the maintenance fee is going to cost every month.

00:28:23And I, I think we want to dive into that a little bit more. Uh, but maybe Aida or, or Joseph,

00:28:30maybe you guys can tell us a bit more about what are the concerns that we need to take into account

00:28:36when we're buying a property, landed strata, not just economic and financial concerns, but other concerns

00:28:41like maybe social factors that we have to take into account. Yeah. That one, um, interesting

00:28:45you mentioned about neighbors, um, you, you cannot control your neighbors. Um, that, that's

00:28:50unfortunate. If you buy a primary property, so it's just been finished building, you, you don't know

00:28:58who your neighbors are. Yeah. So it's a gamble. So it's, it's, yeah, it's a, it's a kind of a gamble.

00:29:04It's not like if you're buying a sub sale, a secondary home, you can actually go and inspect,

00:29:11right? So I, I always tell people, if you're going to buy a secondary home, sub, sub sale,

00:29:19go and see the place at night when everybody has reached home. Yeah. See what your neighbors are like.

00:29:25And just don't go on one day. You go on different days, different time. So if you go during the daytime,

00:29:31everybody's at work or they're in school. So you don't hear the noise. You don't,

00:29:35you think there's a quiet area, but when you go back at night and then suddenly you see all these

00:29:39cars parked the side of the road and there's no parking for you. And you have inconsiderate neighbors

00:29:44where, or they park directly in front of your home. So you cannot even go into your own park space.

00:29:50Okay. So you're talking about landed property. Correct. Okay. Um, we'll get to the high rise.

00:29:55High rise is different thing. Um, so in lander properties, you can see the area and see what

00:30:01your neighbors are like. So in high rise area, again, the same thing. Um, the, the only problem

00:30:07with high rise, um, is that it's normally, uh, has security. Yeah. So city card will not allow you to go

00:30:14in, but you can give a quick estimation from the outside already before you actually even go in. Um,

00:30:22Um, if you know somebody who is living in the, in the, the apartment itself, complex itself,

00:30:30then you can always approach that person and ask them what it's like. So if it's like, again,

00:30:37if it's upsell, um, ask to view the place in the evening when people have reached home, because

00:30:47then you can hear the surrounding sound, whether it's noisy or not, what your neighbors are going to be like.

00:30:52Then it gives you a better indication. That's a very important point. Yep.

00:30:56So, so prime, like I said, primary homes, no control. Um, you just have to grin and bury that

00:31:04and pray that your neighbors are good. I'm a bit paranoid nowadays. You know, when I,

00:31:10I remember when I was buying a property, when I was looking to buy a property, I was looking at, um,

00:31:16at the, whether it's a flood prone area. I was looking at whether it was close to a, like a TNB

00:31:22pylon or something. And then I would, I would even went the extra mile when I remember I was looking at

00:31:29this property somewhere in, somewhere in Puchong, I think. And, and I, I remember going through the

00:31:36Subang Jaya local plan. You know, that local councils, they have these plans where they publish,

00:31:41you know, the, the, the zones, the type of lands and, and what sort of projects they might plan for

00:31:48the area in the future. So I think a lot of Humbayus probably don't go that far.

00:31:52Uh, we do cause it's on our table. It's, it's what we do at Star Metro. But I remember, uh,

00:31:58when my sister bought a house in, in Denkil, uh, in, in, in Cyber South, somewhere in between

00:32:03Denkil and Cyber Jaya, I saw a huge plot of land there. And there was like a huge, um,

00:32:09I say pond or lake. Then I asked her, do you know what, what the state government or who is the owner

00:32:14of this land and what they're going to do with it? And she said, she doesn't know. And I said,

00:32:17you better find out because I don't know, your area seems like a low lying area to me.

00:32:24And that lake seems like, you know, it could be, it could come in handy during rainy seasons. And

00:32:29you might want to, you might want to keep it there to act as a sponge, you know, for, for excess water.

00:32:35Because my concern is what happens if, you know, things get developed, you know, what, what happens

00:32:40in the future. So I, I, I always have that fear what's going to happen 20, 30 years down the line.

00:32:45You know, you want to make sure that, and you want to make sure that the property you buy is safe.

00:32:50And with the recent, uh, I think the recent, uh, incident at Putra Hikes,

00:32:55that to me has added another thing I, I will be looking into when I buy a property.

00:33:00I will be like, wait, is it near a gas pipeline?

00:33:02Yeah, gas pipeline. And if it is, then I want to make sure that there are safety measures in place

00:33:08so that I don't, you know, accidents don't happen. And if they do happen, what, what's going to happen to me?

00:33:12Okay. Yeah. It's interesting that I mentioned that. Um, yes, uh, any property that you plan to buy in,

00:33:22do your due diligence. Um, it, I, it boggles my mind because I, I find a lot of families buy into a flood zone.

00:33:32Unknowingly. Yeah. I wouldn't say whether it's unknowingly or not. Um, because I do have friends,

00:33:41um, when they were buying homes and I advise them, I say, hey, you know, you're buying into a flood zone area.

00:33:47If I were you, I wouldn't buy. And then they went ahead and purchased it. And then they said,

00:33:54oh no, but the developer has made all this, uh, drainage to make sure that the water flow and blah,

00:33:59blah, blah, blah. And then, you know, it's cheap. And then I can afford a landed home.

00:34:04Um, and I said, uh, time will tell. Wow. And here's the other thing. Here's the other thing,

00:34:12right? So, you know, people, people who has expertise and pre-warn you, you should take that,

00:34:19you know, as a big consideration. Yeah. Especially somebody who's been in the industry for a long time.

00:34:24So, Joseph, when you, um, offer your expertise, they know that you have been in the industry for a long time,

00:34:33and they still don't listen. Yes. Oh dear. They turn a blind eye, they turn a blind, uh, a deaf ear.

00:34:39And suddenly, uh, one fine day, um, when the high tide was up and then the heavy rain came down

00:34:49and the water rose up into their home. Oh dear.

00:34:53And they were all asleep. So everything downstairs was just flooded. Um,

00:34:57it wasn't just a minor flood. It was three feet. Wow. So, uh, three feet of water in their home.

00:35:05And then after that, they all cry, Oh no, it's going to rain, flooded. Uh, my home is

00:35:10destroyed. Blah, blah, blah. And I looked at them. I just thought,

00:35:14do I want to pour salt and vinegar to this? But I didn't. I, I just looked at them. I thought, yeah,

00:35:21you are living in the flood zone. Then, and then it clicked. They said, Oh yeah,

00:35:25last time you warned me that this is a flood area, but it's a bit too late. I think people tend to

00:35:32forget, you know, um, you know, maybe that vacant line is vacant for now, but it won't be that forever.

00:35:40You're going to have to, this is why I always tell people, read the paper, know what's happening

00:35:44around you. And you know, when councils want to make changes by law, they are required to publish

00:35:51that information and they do call you for in the local town hall and all that. So you better know

00:35:56what you, what you, what you are signing up for. Yeah. I mean, like you, you, it's no longer you look

00:36:03into a 10, 20 year flood area. It's now a hundred flood years on, you know, you have to look way beyond

00:36:09that, especially with our changing climate and the rising sea levels. I mean, like you, we, we all are

00:36:16aware of this already. So when they buy a home, yeah, just because it's cheap and fits your criteria,

00:36:24but you have to make sure that this is going to be a home. Exactly. You have to protect it. Correct.

00:36:29And comes to my next point. Landed or strata? You know, um, when I, look, I, I grew up in a

00:36:39landed house in Penang. I love living in a house, right? Who, who doesn't? If you grew up in a

00:36:46landed property, when I moved to Klang Valley, um, when I first moved here, I sought shelter with my

00:36:54oldest sibling in a, their rented house in Subang Jaya. Lived there for four years and I eventually

00:37:00moved on my own to an apartment because for me, I thought that security is crucial because you're

00:37:09a single person, you're going in and out, right? You want extra security. And you know, at that time,

00:37:17I was a victim of a snatch theft at knife point, right? So that fear affected me. So, you know,

00:37:26I told myself, okay, I'm going to move on my own. I have to look at high rise. I don't think I want to,

00:37:34at that time, rent a room in a landed property because that security thing just put a lot of

00:37:41fear in me. Yeah. So until, until today, I know, I know we, we, we do hear of people saying like,

00:37:48oh, it's better to get landed property. You know, it's, um, why are you buying high rise? I look for

00:37:57landed property. See, the thing is, right, as a single person, I would prefer the security of a

00:38:03condo. Okay. I'm, I'm going to have to correct you there a bit. Um, strata properties versus

00:38:12landed, right? You were saying, um, strata property can be a landed property, right? So

00:38:20it's, a lot of people get confused. They think that landed is going to be non strata. So, so basically,

00:38:29we're looking at two things here, non strata and strata development. Now, if, if you're concerned

00:38:36about safety and, you know, uh, whether things is going to happen to you or not, um, you know,

00:38:47which a lot of people are because, um, you know, malicious crime rate is actually quite high. Um,

00:38:53so when, when a lot of people buy into, uh, strata management, uh, safety is taken into consideration

00:39:01because, yeah, it's gated. Um, you have to go through security to get in. So it minimizes your

00:39:08crime happening to you, anything untoward that might happen to you. Um, it, it does minimize it,

00:39:15but landed can be a strata management as well because you have landed, uh, gated and guarded properties.

00:39:20Um, yeah, it's, it's spread over a wider area and it really depends on how the property is also managed. Um,

00:39:31there was a, quite a number of gated and guarded property where they actually have, um, guards

00:39:37patrolling the area and they set up TT, uh, CCTV, um, um, sketch, strategic points to make sure that, um,

00:39:45um, there was no illegal entry. So they do minimize the, the, any robbery or, or theft cases within a strata area.

00:39:58So it, it, I think it's quite proven that strata development, uh, you see fewer crime cases.

00:40:08That's, that's a given, but, um, it doesn't, um, don't, don't let that false sense of security

00:40:19get to you because at the end of the day, just because it's strata, uh, property and, and you have

00:40:25your security in place. If a crime is gonna happen, a crime is gonna happen, right? So it really depends.

00:40:32Um, there was a five star, uh, level property that was in KL. Uh, this was a few years back when we

00:40:43were writing on this story. Um, at that time, AB and B was quite, uh, the rage of the time. And

00:40:53this property, even though it's high end, was actually offered on AB and B.

00:40:59And what happened was that, uh, these kidnappers, they took the AB and B so they can enter this, uh,

00:41:12high end place in order to kidnap on people. Gosh, that is scary. So that, that, that actually

00:41:20boil down to, uh, how safe are you actually, right? So at the end of the day, you still need to take

00:41:27extra precaution, even though you're within the strata management. Uh, it, like I said,

00:41:33strata management has less, uh, crime, you have better security, uh, but it's not foolproof.

00:41:42And the CCTV will only record. It doesn't save you. Okay. That's good to know. Yeah. Joseph,

00:41:49I'm sorry that we, we have to move the conversation along, but I, another topic that we want to delve into

00:41:55is the difference between freehold and leasehold land, because this is something that always gets

00:42:00brought up when people buy a property. Maybe you can tell us the pros and cons of each and, and how

00:42:06does that factor into buying decisions? Okay. Uh, I'll have to say a lot of properties now are moving into the

00:42:13leasehold, uh, criteria, but interestingly enough, um, old PJ,

00:42:20some of the properties that were originally freehold, but were converted into leasehold when it was

00:42:27developed are now being reconverted back into freehold. So, um, I'm not sure. I think it really

00:42:36depends on the person. Um, I've actually bought freehold, uh, leasehold, um, not, not freehold. Uh,

00:42:44the reason being I wanted to be nearer to the city. So a lot of the properties within the city area

00:42:52tend to be leasehold. So if you, if you want free, freehold, um, yeah, it's, it's, it's giving you

00:43:01what, uh, 999 years, right? Basically, are you going to live that long? Uh, your, is your next generation going to

00:43:09You mean leasehold? You mean leasehold? You mean leasehold? You mean leasehold?

00:43:11You mean leasehold? Right. Sorry. Leasehold? No, for freehold. For freehold is, uh,

00:43:19there's no limit to it. For leasehold is 99 years, right? So 99 years, obviously my lifetime will be

00:43:28met. Um, but the next generation, um, then they have the option of renewing the leasehold.

00:43:36Yeah. That, that, that time cut, that, that time when it's up for you to renew the leasehold,

00:43:43that's another subject altogether. Cause we've covered stories like this extensively. Yeah.

00:43:48So whether freehold or leasehold, it really depends on the buyer's perception. So I have to say,

00:43:56if you're going to buy a property to stay and it's just you, does it matter that it's freehold?

00:44:02Yeah. Because by the time, by the time you expire, um, the leasehold, the leasehold probably isn't up yet

00:44:11because it's 99 years. Obviously at, at 50 plus, I still have what, um, 80 years of my leasehold.

00:44:19I'm not going to live that long.

00:44:20When I bought my property, Joseph, I found out that the project sits on a commercial land.

00:44:27Yeah. Let's get into that commercial versus residential land.

00:44:30Yeah. I found out then that this means that the water tariffs, electricity tariffs, uh,

00:44:36will be different compared, will be much, will be more expensive compared to properties on

00:44:42residential land. And I also found out, uh, that apparently if you buy a commercial,

00:44:49I mean, a property on a commercial land, you can apply from TNB to convert your electricity

00:44:56tariff, provide you have to, I mean, there's a whole process where you have to apply,

00:45:00but I looked it up online. Apparently a number of people have done it. So it's doable,

00:45:05but for water tariffs, I mean, I still have to, apparently I still have to,

00:45:09I still have to pay to the, to the MC. So maybe you can, you know,

00:45:14explain a little bit about that, Joseph residential and commercial land.

00:45:17Um, my, the property I bought is actually on commercial land,

00:45:22but the apartments that was built on top of the, the retail area, um,

00:45:30has been converted to residential. So here's the thing. If you buy purely on residential land,

00:45:38yes, uh, uh, automate, uh, automatically you get, um, residential electric, uh, bill, uh,

00:45:45your water, sorry, residential, even your, um, your quick rent, um, it's on residential, right?

00:45:55Now, if you buy on commercial land, even though the property on top of the commercial

00:46:01area has been designated as residential. So it means what the, what my developer had done

00:46:09is when we moved that time, they had already convert the rates for us. So the water,

00:46:15water I'm paying and the electricity I'm paying is residential rate. So, uh, there are some development

00:46:23where you buy into commercial area, but it's commercial rate is up to you to go to TNB and go to the

00:46:31waterboard and request for it to be converted to residential. Okay. Okay. This sounds very

00:46:37complicated, Joseph. Um, does this also include the service residence? Yes. Okay. So in, like I said,

00:46:49in the case of my apartment, um, is service residence, uh, uh, title, but, uh, the developer

00:46:56had already converted everything for us. So we didn't have to do anything. So that was a good

00:47:01thing about the developer that, that we bought the property off from is that they, they did,

00:47:07they went ahead and did that all for us. So we didn't have to go through the trouble of individually

00:47:12going to TNB and changing it, but you, but it's possible. Yeah. You can change it back to

00:47:21residential, right? Except for the quick rent, the quick rent will still be commercial because we went to

00:47:27DBKL and requested for the, the assessment rates to be reduced, um, which they did reduce for us.

00:47:34Initially we had to pay like, uh, in the case of my apartment, uh, was over a thousand dollars,

00:47:40but they, but they reduced it down to 900. So, um, there was some reduction now you can request for it.

00:47:48Um, but there's an, there's an interesting thing here that I discovered when we requested for the

00:47:55rates to be reduced in that, in a, in a commercial, um, title, if you own a two bedroom place,

00:48:06you're paying higher rates than a three bedroom place. Why is that?

00:48:09Uh, we, we actually questioned, uh, DBKL and DBKL said it's because your apartment is easier to rent

00:48:17and you can rent at the higher, um, rental. And I said, but that apartment is not for me to rent out.

00:48:25It's for me to stay in. It's a residential, residential place. It's not a commercial place for me to rent out.

00:48:31But they said no. So they turned us down. So interestingly enough, um, the bigger apartment is paying

00:48:39lower rates. I mean, they still pay a big amount because, because it is a bigger square feet.

00:48:44But in terms of square feet, um, because they charge by square feet, um, by square feet, the price I'm

00:48:51paying for my apartment is higher. Hmm. That's another interesting thing, right?

00:48:57Hmm. I feel like I've heard about that, but now I'm, you know, uh, we actually wrote about it before.

00:49:04So it's floating in, uh, stuff of the news. Yes. Please check that out. When, when was that Joseph?

00:49:10Uh, this was some time back. I think it might be three years ago. Okay.

00:49:14So when we talk about residential versus commercial land, right? Is it true that newer developments are

00:49:24being built on commercial land more? Uh, no, it's, it, it can be built on a residential. Um, they need to

00:49:31apply with the, the, the council, um, because a lot of developers tend to build, um, mixed development

00:49:41when it comes to high rise now. And because of the commercial aspect below the apartments,

00:49:49they have to apply for the conversion into commercial. I see. Okay. So I don't know whether

00:49:57that you've, you've given me an idea to, to look into is that if it's a residential land that has been

00:50:04converted into commercial for the aspect of the mixed development, what happens to the residents who

00:50:11are staying on top of the mixed development? Are they paying residential rate or whether they are

00:50:18paying commercial rate just because of the conversion? That would be an important aspect to look into for

00:50:24future property owners. Let's, uh, go back again to the leasehold properties. If it's, if the lease is

00:50:33close to expiry, what should the current or future owners do? Okay. If it's, uh, if it's a new development

00:50:44by the developer, when they, when they build the development, they will have already applied with the

00:50:51council to extend it back to 99 years, uh, minus the construction time period. But if it's a, uh, secondary

00:51:01home, if you buy off a sub sale and it's a leasehold, um, up to a certain number of years, you probably

00:51:09won't be able to get a bank loan. Um, I cannot remember what was the number of years that's remaining

00:51:16that, uh, that, uh, that, uh, that they would disregard the, uh, the bank loan. Um, that one, you, you have to,

00:51:27if you're buying, you have to check on that, but, uh, you can apply for the council. I mean, check, I think

00:51:36falling back to due diligence again, go and check with the council, see whether it can extend the leasehold,

00:51:42if you do buy into that property, because you don't know, um, the council might have a pre-plan

00:51:53to redevelop the area. So if you're buying into the area with a leasehold time period that, that is only

00:51:59if let's say 30 years left and they want to redevelop into something else, then that might shorten the

00:52:08lifespan that you, the time that you have to stay in that, that location that you bought into.

00:52:13Joseph, um, uh, this probably won't come to pass for me, but it might come to pass for other people.

00:52:20What happens if, you know, your property happens to sit on a, on a leasehold, leasehold land that is

00:52:26expiring and this, maybe the state government has said, we would like to redevelop this area.

00:52:31Uh, would you, you know, because you own the structure on top of that land, are you entitled to

00:52:36anything? I don't know. I don't know how, how, how this works. This one, I think we're going to have

00:52:40to discuss in another time. Okay. It's a big topic on its own. Yeah. Yeah. It's a very big topic. Um,

00:52:46a lot of things to consider. Um, even, even, even though the government might not be, um, planning to

00:52:54redevelop the area, um, there were some properties, uh, from my experience that the leasehold was

00:53:02expiring. Um, the, I'll have to say the, the residents of that township was actually very lucky

00:53:10because it, the, the expiry of the leasehold coincidentally time close to the election time

00:53:17period. Huh. So the, the government said, oh yeah, we'll come in, we'll help you. You know,

00:53:22and then, um, they actually had their leasehold renewed at a reasonable price. So they, they didn't

00:53:30have to pay excessively. Uh, so they, they were lucky, but hearing other development as well, where

00:53:36the leasehold was expiring. Yeah. They applied for, um, the leasehold to be renewed. And so far, I don't hear any,

00:53:45uh, any blowbacks from those incidences.

00:53:54Any parting thoughts for it before we end? Oh, no, no, no. There's something else.

00:53:57You still have some more? Okay. Yeah. The, the, the, the advice, one, one major advice is, uh,

00:54:03when they apply for a bank loan, uh, don't go for 35 years just because you are getting a lower,

00:54:10uh, installment, monthly installment repayment. Oh, yes. Please explain on that, Joseph. So,

00:54:15let's, let's say if you take, uh, half of half a million dollar loan, uh, 500,000, uh, 35 years,

00:54:22you'll be paying back 3,000, 3,021, uh, for a monthly installment. In opposed to 20 years,

00:54:29you're paying 3,728. Okay. So actually, uh, the quick, the quick calculation, uh, 20 years,

00:54:37you're paying 3,007, 25 years, you're paying 3,002, 30 years, you're paying 3,001, and then,

00:54:45uh, 35 years, you're paying about 3,000, but if you can afford it, um, I will always encourage, um,

00:54:55because I had a friend who, who went through this, and I actually calculated for him, um,

00:55:01in the end, he went for 25 years instead of 35 years, because at 35 years, he will have to pay a

00:55:07total of 1.1.2 million basically for the, when they finished paying for the, for the property.

00:55:15So if you're minus off the 500,000, which was the value of the, the loan that they took,

00:55:21they are paying in excess of 768,000. Wow. So, so if you take the 25 years for the same amount,

00:55:31you're, you're paying basically 1 million for the entire thing, but if you minus off the 500,000,

00:55:37which you are, um, applying for the loan, you're paying basically another five, another 500,000.

00:55:45So the difference between the 25 years and 35 years, you're looking at 260,000 difference.

00:55:58That's a lot. And that's a lot, yeah, because that is interest. Yeah. So if you extend your loan

00:56:05further up, it doesn't necessarily mean that it's better for you because you're paying a lot more

00:56:10money. It's better for the bank. Yeah. It's good for the bank because the bank will be earning good

00:56:15money. Um, but it's not good for you because you'll be paying so much more in interest. And then

00:56:20the, the difference between the 25 years and 35 year loan was only 300, which was what you could

00:56:27afford. But the amount of savings that you get is a lot better. Okay. And then, um, just a quick one

00:56:36question on the why Gen Y and Gen Z are hesitating to buy. Yes. Um, for men, for men reason, um, is because

00:56:47one, they build up, um, a debt, um, due to their spending. Um, if you notice before COVID and after COVID,

00:56:58the spending is a lot different, uh, what happened was that, um, the, the, the COVID spurred the online

00:57:05shopping, it increased that. So there's a lot more credit card spending. So if you look at, um,

00:57:11um, uh, 2017, I think, um, the, the, the amount that they would spend was 0.78 billion, right? To jump

00:57:28up to 2025, you're now spending 8.8 billion. Goodness. So out of the 8.8, uh, 8.8 billion that you're

00:57:39spending, uh, 3.87 billion is actually on credit card. So you actually increase that credit card

00:57:47spending. So you have created a debt for yourself. So when you want to apply for a loan, your credit

00:57:54is bad. Correct. So it's harder for them to apply for loan. Um, also the, the, the lending requirements

00:58:04for bank has also become more strict and because you have already created that kind of debt in your

00:58:11credit card, then you compound it by having the hard, the, the toughest difficulty in applying for

00:58:19loans. So that compounds the, the, the, the problem. Um, also the housing concepts for, um,

00:58:28um, Gen X, Gen Y, Gen Z is different. They all have different needs. What do you mean housing concepts?

00:58:34Um, well, Gen, Gen Y, we tend to look at bigger homes now, but they, they want the room because

00:58:41Gen X tend to have more kids, right? Gen, Gen Y took a later stage in getting, um, getting married. So

00:58:53you know, marriage, marriage, marriage, marriage in the, the Gen X time was, you'll be looking about

00:58:59their twenties and, but the Gen Y you're looking at thirties onward. So when they do get married at

00:59:06the age, um, the number of kids that they have, it's also reduced. So like my family, I have, there were

00:59:14six kids, there were six of us and that was during my father's time. Now you're looking at, you know,

00:59:20maybe one, two kids. So the house requirement size might not be as great. Right. Right. And then

00:59:30the Gen Zs right now, they are only entering the market. Yeah. Which is why, which is why we can see

00:59:35in certain residential areas like Bangsa, for example, the big bungalows so hard to sell. They're not

00:59:45selling because no one wants to buy those big houses anymore. And also at a kind of price. Yeah.

00:59:51The Gen Zs and Gen Ys can afford that. Yeah. So the Gen Zs are, have a tendency of looking into smaller,

00:59:59smaller units. So different preferences. So it, it, the, how quick the developer can

01:00:08get the information they require in order to build what they need. So there's a, there's always a,

01:00:15uh, uh, the problem with time. So by the time you get the information, um, which unfortunately,

01:00:23Malaysia is quite slow in getting the data they require. So by the time the, the, the developers

01:00:29react to it and it takes like four years or five years to construct a place, for example,

01:00:35then, you know, you have a longer duration time period, then the Gen Zs are, uh, they want a place

01:00:41to stay already. And if it's going to take four years for them to build a place, they will sooner rent

01:00:47at this station, unless they can find a, uh, a place that's already been built. Um, which probably

01:00:54explains why the overhang has also decreased because, um, the, a lot of the overhang were actually

01:01:03service apartments, um, smaller units. So, so that appealed to the Gen, Gen Y and the Gen Zs. So

01:01:12when they started buying after the MCO, we saw the overhang reduce. Hmm. Okay. Hmm.

01:01:20That's a lot to think about.

01:01:21Wow. It's a lot to digest. Um, uh, buying a home, like you said, it's, it's not just one hurdle. It's

01:01:28like multiple hurdles.

01:01:29Yeah. Multiple hurdles.

01:01:30That you jump over.

01:01:31Yeah.

01:01:31It's quite daunting.

01:01:33It is.

01:01:34Definitely very daunting.

01:01:34It is.

01:01:35Even, even from, from a person who's, who's covering, uh, development for a long, long time,

01:01:41it's still daunting for me. When I bought my second property, it's, uh, especially for investment.

01:01:46Um, that was still daunting for me. So it doesn't matter what age you're in or what,

01:01:52what stage you're in. Um, whether you're first home buyer, second buyer, you know, even, even for

01:02:00seasoned investors, um, at the end of the day, one very, very important message, do your due diligence.

01:02:08Yeah. And last bit from me is when you're buying property to rent out, that's a whole new

01:02:16kettle of fish where your tenants, we'll do another show on tenants from nowhere you want to go.

01:02:26Definitely. Definitely. Because you have a good tenants and you have nightmare tenants.

01:02:31Correct. Yeah. We'll do another episode on that. Um, Farid, any last words?

01:02:37Um, I hope this episode has been helpful to people out there. I know for a fact it has been for me

01:02:42because even though I've bought a property, I still found new information today.

01:02:46Correct. We learn new things every day and it's a, um, ongoing thing. It doesn't stop.

01:02:52Yes. Right. That one, I have to admit, um, there is no end to the things that you discover.

01:02:58Even, even from, from all the years I've been covering in the, uh, this industry,

01:03:02I still find new things that bogus my mind. So yeah. But the most important thing is to do your

01:03:11homework. Even, even if you do your homework, you will find that you'll miss certain things.

01:03:15Yeah. You, you, you can't, it's impossible to cover everything. But if you do find a place that you

01:03:20like and you manage to get a loan that you is, is reasonable. I mean, you're, you're already on the,

01:03:27the right path. Thank you, Joseph, uh, for spending time with us today on this insightful conversation.

01:03:34Look out for our podcast, which will be on www.starmetro.com.my

01:03:40and the star online and on YouTube. Thank you for watching everyone.

01:04:10Bye.

01:04:12Bye.

01:04:14Bye.

01:04:16Bye.

01:04:18Bye.

01:04:22Bye.

01:04:24Bye.

EP07: Homeownership dilemma: Navigating property landmine | Life & the City

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