Wednesday 17 February 2016
Friday 12 February 2016
Revised 2016 Budget impacting property market
Extracted some important point from my inbox today.
Revised 2016 Budget: Eleven recalibrated measures announced
1. EPF contributions by employees to be reduced by 3%. This is expected to increase private sector spending by RM8bil.
2. Tax relief of up to RM2,000 to those with income of RM8,000 a month or lower. Two million taxpayers to benefit.
3. To reduce cost of living, Govt to liberalise APs for agricultural products including coffee beans and meats.
4. Domestic Trade, Cooperatives and Consumerism Ministry ordered to increase enforcement and action against unethical traders.
5. 30% of contributions to the human resource development fund to be utilised for skills training, including those who are unemployed.
6. MyBeras programme to be introduced until Dec 2016. Each hardcore poor family will be given 20kg of rice every month.
7. The Government will update the management system of foreign workers, with levies clustered into two categories, not including foreign maids.
8. Government will exercise prudent spending on supplies and services and to continue with grant rationalisation.
9. Development budget to focus on projects and programmes that place the people first, have high multiplier effect and reduce imports.
10. Development financial institutions and Government venture capital funds to increase allocations by RM6bil for benefit of start-ups and SMEs.
11. GLCs urged to implement initiatives to reduce the income gap between senior management and workers, to be monitored by the Economic Planning Unit.
From all the above, I would like to, firstly, highlight point#1, that EPF contributions by employees is to be reduced by 3%. With this announcement and assuming that all contributors opted to have their contribution reduced by 3% monthly, there will be an estimated RM8 billion extra disposable income in the market. Do you agree that this is a huge sum of money? This, coupled with other tax incentives (i.e. point #2), will definitely increase the liquidity in the market.
You don’t need to be a genius to guess what will happen next… with the extra disposable income in each household, the consumer confidence level will rise in tandem, which will increase consumer domestic spending, which will then increase the amount of money circulating in the market. Imagine, what is the effect of an additional RM8 billion in the market?
You may be asking me, what has this got to do with properties?
Well, everything!
Let me shed some lights on this. In Malaysia, the Consumer Sentiments Index survey is conducted quarterly on a sample of over 1,200 households. Respondents are asked to evaluate their household's current and expected financial positions and their employment outlook. Questions relating to plans to buy houses, new or used cars and other major consumer durable are also asked. A value above 100 indicates expected improvement in conditions, a value below 100 shows lack of confidence and 100 indicates neutrality.
With reference to the above chart, the consumer confidence index has been on the down trend and has even dropped below 100, especially since 2014, due to the poor economy outlook and the implementation of GST. However, the Consumer Confidence Index in Malaysia is expected to be 72.21 by the end of this quarter, according to Trading Economics’ analysis. Looking forward, it is estimated that the Consumer Confidence level in Malaysia will be on the up trend and reach 88.00 in 12 months time.
As the overall outlook improved with the increasing Consumer Confidence Level, people will start buying again. And property buyers and property investors who was on the side line all this while will soon turn on the buying mode again. This will again spur the property market. Whilst properties has always been seen as a good investment (as compared to buying a car), it is best to know what exactly you are buying into.
Hence, if you are a novice investor, do invest in yourself with the right investment knowledge, before ‘investing’ into any properties or other investment vehicles. Buy a book, attend property talks.
Do whatever it takes and get all your bullet ready to grab this opportunity before it is too late. I sincerely hope you will take action now. I have friends who have missed the opportunity and regretted during the last financial crisis 2008/9 where property prices rebounded and we experienced one of the best era of property boom.
Revised 2016 Budget: Eleven recalibrated measures announced
1. EPF contributions by employees to be reduced by 3%. This is expected to increase private sector spending by RM8bil.
2. Tax relief of up to RM2,000 to those with income of RM8,000 a month or lower. Two million taxpayers to benefit.
3. To reduce cost of living, Govt to liberalise APs for agricultural products including coffee beans and meats.
4. Domestic Trade, Cooperatives and Consumerism Ministry ordered to increase enforcement and action against unethical traders.
5. 30% of contributions to the human resource development fund to be utilised for skills training, including those who are unemployed.
6. MyBeras programme to be introduced until Dec 2016. Each hardcore poor family will be given 20kg of rice every month.
7. The Government will update the management system of foreign workers, with levies clustered into two categories, not including foreign maids.
8. Government will exercise prudent spending on supplies and services and to continue with grant rationalisation.
9. Development budget to focus on projects and programmes that place the people first, have high multiplier effect and reduce imports.
10. Development financial institutions and Government venture capital funds to increase allocations by RM6bil for benefit of start-ups and SMEs.
11. GLCs urged to implement initiatives to reduce the income gap between senior management and workers, to be monitored by the Economic Planning Unit.
From all the above, I would like to, firstly, highlight point#1, that EPF contributions by employees is to be reduced by 3%. With this announcement and assuming that all contributors opted to have their contribution reduced by 3% monthly, there will be an estimated RM8 billion extra disposable income in the market. Do you agree that this is a huge sum of money? This, coupled with other tax incentives (i.e. point #2), will definitely increase the liquidity in the market.
You don’t need to be a genius to guess what will happen next… with the extra disposable income in each household, the consumer confidence level will rise in tandem, which will increase consumer domestic spending, which will then increase the amount of money circulating in the market. Imagine, what is the effect of an additional RM8 billion in the market?
You may be asking me, what has this got to do with properties?
Well, everything!
Let me shed some lights on this. In Malaysia, the Consumer Sentiments Index survey is conducted quarterly on a sample of over 1,200 households. Respondents are asked to evaluate their household's current and expected financial positions and their employment outlook. Questions relating to plans to buy houses, new or used cars and other major consumer durable are also asked. A value above 100 indicates expected improvement in conditions, a value below 100 shows lack of confidence and 100 indicates neutrality.
With reference to the above chart, the consumer confidence index has been on the down trend and has even dropped below 100, especially since 2014, due to the poor economy outlook and the implementation of GST. However, the Consumer Confidence Index in Malaysia is expected to be 72.21 by the end of this quarter, according to Trading Economics’ analysis. Looking forward, it is estimated that the Consumer Confidence level in Malaysia will be on the up trend and reach 88.00 in 12 months time.
As the overall outlook improved with the increasing Consumer Confidence Level, people will start buying again. And property buyers and property investors who was on the side line all this while will soon turn on the buying mode again. This will again spur the property market. Whilst properties has always been seen as a good investment (as compared to buying a car), it is best to know what exactly you are buying into.
Hence, if you are a novice investor, do invest in yourself with the right investment knowledge, before ‘investing’ into any properties or other investment vehicles. Buy a book, attend property talks.
Do whatever it takes and get all your bullet ready to grab this opportunity before it is too late. I sincerely hope you will take action now. I have friends who have missed the opportunity and regretted during the last financial crisis 2008/9 where property prices rebounded and we experienced one of the best era of property boom.
Wednesday 10 February 2016
13-01 Park View unit for sale
In the Chinese New Year eve, a real estate negotiator send me a note saying there is a unit for Sale.
Initial asking is RM310K.
Below are the picture send over on the 3rd day of Chinese New Year.
From the picture, it looks decent without much renovation.
Will have to view to appreciate and negotiate from there.
Initial asking is RM310K.
Below are the picture send over on the 3rd day of Chinese New Year.
From the picture, it looks decent without much renovation.
Will have to view to appreciate and negotiate from there.
Monday 1 February 2016
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