WHILE some investors have reservations regarding entering the property market now due to concerns about economic uncertainty, speaker Dr Renesial Leong has encouraged the investors to swim against the tide
In the recent StarProperty.my Forum, Leong, who is both a real estate investor and a book author, shared the reasons on why one should invest in property now in her talk titled “Why it is time you should venture into real estate”.
- Malaysia’s market has exceeded all expectations
The bright factors in Malaysia’s market including the appreciation of Ringgit that strengthen by 10.4% against USD in 2017, hitting an 18-month high on Jan 15 to break the barrier of “USD4”.
Meanwhile, Malaysia’s gross domestic product (GDP) has a projected growth of 5.3% in 2018. Together with the positive inflows of foreign direct investment (FDI), high employment rate and steady income growth, there are signs of improvement in market sentiment.
- Low cost of fund
Although Bank Negara Malaysia raised its overnight policy rate (OPR) to 3.25% in Jan, the cost of lending remained low in Malaysia, with an estimated interest rate of 4.5% for the mortgage loan.
- Public transportation
The upcoming transportation infrastructures such as Mass Rapid Transit (MRT), Light Rapid Transit (LRT), Bus Rapid Transit (BRT) and High-Speed Rail (HSR) will bridge the “last mile” for a better connection between spaces. The integrated public transportation system will eventually lead to the creation of new hotspots.
- Significant new supplies and goodies
Unlike in the market peak where buyers need to queue overnight in the showroom just to get their unit, the house buyers now can enjoy a lot of “goodies” from the developers.
“There are significant new supplies and existing stocks in the primary market, and developers are now offering goodies such as free sales and purchase agreement (SPA) and loan agreement, complimentary interior design packages, and other easy-entry schemes to boost sales,” said Leong.
- Motivated sellers in the secondary market
The secondary market is seeing more enthusiastic sellers, and they tend to have a more open attitude to price negotiation. Auctions properties are another highlight in the current market.
- Robust rental market
Due to the current economic situation and the challenges in home loan approval, there is a huge demand for rental property.
Homeowners can also gain from the 50% tax exemption on rental income not exceeding RM2,000 per month as announced in Budget 2018.
“As a landlord, always stand by and support your tenant, this will encourage royalty and long-term relationship,” said Leong.
With over 20 years of experience in real estate investment, Leong described real estate investment as “building wealth through a good debt”.
“A good property will provide a passive stream of rental income and capital appreciation. There is no right or wrong timing in property investment, what an investor could do is find a conducive property to put in their money and let it grow,” added Leong.
She also predicted that the next property cycle would take off from second half of 2019 to first quarter of 2020.