Themed “Membangun Malaysia Madani”, Anwar, who is also the Finance Minister, stressed the government’s aim is to alleviate the rakyat’s struggles amidst the economic challenges, while ensuring a sustainable fiscal growth for the nation.
Houses for the rakyat
In line with that, there was a list of allocations for affordable housing programmes:
- RM389.5 million to build People’s Housing Project (PPR) and People’s Rented Housing Programme
- RM358 million to build 4,250 Rumah Mesra Rakyat units
- RM463 million to build Malaysia Public Housing Project (PPAM)
- RM50 million to repair run-down lifts in low-cost strata houses
- RM460.2 million for building new and renovating houses in rural areas
- To build 7 million units of affordable houses for armed forces under Satu Anggota Satu Rumah programme (SASaR)
- More than RM500 million to maintain Rumah Keluarga Angkatan Tentera and repair the living quarters and institutions under the Ministry of Home Affairs
Stamp duty exemptions for first homes maintained
For first-time homebuyers, the following measures announced in the October budget have been maintained as follows:
- Full stamp duty exemption for homes priced RM500,000 and below
- 75% stamp duty exemption for homes priced between RM500,001 and RM1 million
Housing credit guarantee scheme increased
The housing credit guarantee scheme has been given an allocation of RM5 billion to help up to 20,000 borrowers with no fixed income from the gig economy to get loans. This is a significant increase from the RM3 billion budgeted in October.
Stamp duty on property transfer by way of love and affection revised
The stamp duty of only RM10 for transfer of properties between parents and children, and grandparents and grandchildren, which was proposed in the October budget, has been revised to the following:
- First RM1 million – full exemption
- Balance above RM1 million – subject to an valorem duty rate and given 50% discount
They are applicable for transfers signed from April 1 this year, and only where the recipients are Malaysian citizens.
]]>There are some land holdings that you need to know before buying a home.
1. Freehold
Freehold or freehold property refers to a permanent ownership interest. This property belongs to you forever and it is easily transferable from one individual to another. You do not need to get permission from an authority such as the state government to transfer ownership.
2. Leasehold
Leasehold or leasehold property refers to you leasing or renting the property from the government. Usually the lease term is 99 years. If the lease term of the property is reduced to like only 10 years left, then you can make a lease extension by paying the lease premium.
The lease will be renewed to maximize it to 99 years again. If you fail to renew it, it is impossible for your property to be taken back by the government. As for the transfer period, it takes quite a long time, less than 18 months or 18 months maximum. It all depends on the situation.
3. Malay Reserve
The land is reserved only for the Malays or called Bumi Lot. It does not matter if the property is freehold or leasehold , this property designated for sale in the indigenous Malays.
4. Ownership: Master , Strata or Individual Title
After approval is given to the developer to develop a piece of land, the land office will grant the master title or Master Title to the developer for the entire housing project.
Once the houses are handed over to the buyer, the developer will apply to the land office to transfer ownership of the property from Master Title to individual ownership. Most individually owned properties consist of landed houses such as Semi D houses and terraces. As for strata ownership, most of them consist of high rise houses such as condominiums and apartments.
If you buy a Master Title property , it will take a long time to be transferred by the developer due to the many procedures that need to be followed. It will be a problem for you during the sale of the house. But, if you buy an individually owned property, it is easier to sell.
That is one of the ownership or holding of real estate in Malaysia. Hopefully, with this brief information, it can guide you in choosing a suitable property and make things easier.
]]>It essentially catered to new homebuyers looking to buy a beautiful home for their family.
After Covid-19 made its mark on the country’s economy, it was reintroduced under Penjana as an initiative to revitalise the property market. It is set to end on May 31, 2021.
The main attraction of HOC is that it provides stamp duty exemption on the instruments of transfer and loan agreement for the purchase of residential homes priced between RM300,000 to RM2.5 million.
The exemption on the instrument of transfer is limited to the first RM1 million of the property price, while full stamp duty exemption is given on loan agreement effective for Sales and Purchase Agreements (SPA) signed between June 1, 2020, to May 31, 2021.
Best of all, the HOC also offers a minimum 10% discount on houses bought under the scheme!
For those looking to purchase a second home or build their property portfolio, there is no better time than the present.
The property market is currently a buyer’s market, which means there is more supply than demand, thus raising your chances to snag a property below market price.
Even potential investors who want to capitalise on the current situation but do not have enough cash can jump on the wagon.
How? The answer is refinancing.
Refinancing is the restructuring of your loan in a way that gives you different terms or rates and usually gives you better cash flow, especially through cash-out refinancing.
Before deciding on whether to opt for refinancing or not, you must first weigh out various options — how much can you save by refinancing your home loan? Would it put you in a better position debt-wise? How will it serve you in the long run? Let’s find out!
Advantages of refinancing
Lower interest rate
Currently, the Overnight Policy Rate (OPR) in Malaysia is at its all-time low at 1.75%. If you refinance your home loan now, you can save on your monthly interest payment significantly. Combined with the HOC, you can apply to refinance for a new home loan at this all-time low interest to reduce your accumulated debt for both houses.
Debt consolidation
Usually, paying for multiple loans is hard. You are more likely to miss a payment or become overwhelmed by the mounting loan installments. To ease your burden, you can refinance to put all your home loans under one loan.
Paying your loans will be easier and you can even bargain a better interest rate in the current situation. Besides, if you invest in a new home under the HOC scheme, you can put that home loan together with your existing ones to put all your obligations in one neat package.
Healthier credit score
Refinancing allows you to save money thus releasing more free cash for your use. You have less monthly interest to pay and less debt obligation in your record. It puts you in a great position to meet your obligations regularly and your debt-to-income ratio also looks considerably better. Thus, it helps you to obtain a higher credit score for further loans in the future.
Large loans
Often, multiple small loans can add to your interest expense. Refinancing enables you to take a larger loan to cover all your existing loans in one single new mortgage. It is easier to maintain and saves you time and hassle in catering to different loans at different times of the month.
Longer repayment period
When you took your first loan, your financial capacity might not have been as good as it is now. Over time, your income has grown, your credit score went up and you are financially healthy.
If this is you, then refinancing your home loan today can give you a better negotiating position to get a longer repayment time. You will have more time to pay your loan which will free up your monthly cash to invest in other important things.
Disadvantages of refinancing
Risk of foreclosure
If you cannot pay your mortgage payment in time, you stand the risk of a foreclosure on your homes. However, if you are able to make your payments on time, then you need not worry about it.
If your sole purpose of refinancing is getting a better interest rate and better terms and conditions, then you will be freeing up cash. So, you will have enough money in hand to make your payments in a timely manner.
Closing cost
When you refinance your home, the closing cost can quickly add up. You will have to pay for a loan application, home appraisal, disbursement and stamp duty. But as long as you keep an eye on the cost and look for a bank that has the lowest closing cost, all will be well.
Interest cost
Refinancing often involves adding your other existing loans to put all debt obligations under one new mortgage. Hence, your new interest rate will be higher than the existing one as you are paying for a bigger loan amount. To avoid overpaying your interest, calculate your existing interest on loans to make sure your new interest is lower.
As with all financial decisions, choosing to refinance is not a decision you can make lightly. You’ll need to weigh all the pros and cons, as well as calculate your monthly commitments carefully before deciding to sign the papers.
Luckily, the approval process for refinancing is not as long as personal loans, so if you apply now, it may even get approved just in time for Raya!
]]>If you are keen about investing in property in Malaysia, Base Rate (BR) System and the Base Lending Rate (BLR) Structure are two cardinal metrics that you must know about.
The BR has replaced the BLR system since January 2, 2015. So when you apply for loans, banks across the country use this as the key reference rate.
Basic Background of Base Rate (BR)
But it is essential to understand the basis and background of the Base Rate. Home loans have a unique position in Malaysia.
Unlike, personal loans or purchase loans, the home loan rate was initially benchmarked against the Base Lending Rate Structure as fixed by the Malaysian Central Bank, Bank Negara.
Previously when the financial market is in good shape, the banks will offer home loans at BLR+ the specific amount a bank sets.
If the financial conditions are stretched, it is BLR- amount decided by the bank. This BLR was eventually replaced by the Base Rate System formally in January 2015.
So now the home loans in Malaysia have an interest rate based on the BR. The Base rate system is now the benchmark of the financial institutions’ fund expenses.
The final loan pricing is a combination of this interest rate other elements like
- Credit risk
- Liquidity issue
- Overall cost of operation
- The risk premium
- Margin of profit
This new BR framework, as a result, becomes a reflection of all these components considered together.
The Banks, unlike in times of BLR system, can determine the BR structure without intervention from the Central Bank.
So, in other words, they can now get an edge in the loan market based on their efficiencies under this new system.
Why Was the BLR System Switched to BR?
The basic question that comes to mind is why was the BLR system switched to BR? How is the latter more desirable than the former one?
According to the Malaysian Central Bank, Bank Negara Malaysia, the primary motive was to promote healthy competition between the various regional banks.
In many ways, the BR system is a function of the individual efficiencies of the banks and differs from one to another.
The basis of this calculation is significantly different from that of the earlier BLR system.
So, the BR varies depending on the cost of funds and individual Statutory Reserve Requirement of a specific bank.
The new system is seen as introducing better transparency in the system. The customers have a better say in deciding the best option for themselves.
Unlike the previous system, they can’t borrow below the base rate in this system.
How Does the Change of BLR to BR Affect You?
So the cardinal factor that worries home buyers and homeowners across Malaysia is how does this affect their overall loan liability?
How does the bank make the change for those who have applied for home loans before 2015?
Most importantly, what’s better for homeowners when you compare the BR Vs. BLR in the Malaysian housing loan space?
Well, actually the overall difference is not very huge.
This is because the final loan liability of an individual is based on the Effective Lending Rate (ELR).
More than the BR, it is the ELR that determines how much the payout will be for individual customers.
In this context, the borrower’s don’t see a huge difference.
How is Effective Lending Rate (ELR) Calculated?
Well, you do understand that it is derived from the Base Rate but there are other factors associated with it.
Remember the ELR is calculated mostly in terms of floating rates for loans. The floating rate of interest though pegged on the BR has a few more elements.
ELR= BR + Spread Framework
Spread Framework is the catchphrase in this context. It includes a range of variants that affect the cost of funding for a bank. These are
- Profit Margin
- Operating Cost
- Liquidity Risk
- Credit Risk
So supposing the BR of a particular bank is 3.89% and it has a Spread Framework of 0.55%, the Effective Lending rate will be a sum of these two factors at 4.44%.
You can refer to the Bank Negara Malaysia website for the latest ELR rates that are offered by various banks.
Here is a quick look at how the BR Vs. BLR stacks up for some prominent banks in Malaysia.
The rates are as of Sept 2018:
Bank | BR % | BLR % |
Affin Bank | 4.10% | 6.96% |
Agro Bank | 3.85% | 7.00% |
Ambank | 4.10% | 6.95% |
Bank Islam | 3.90% | 6.85% |
Bank Muamalat | 3.95% | 6.95% |
Bank Simpanan Nasional | 4.10% | 6.85% |
CIMB Bank | 4.15% | 7.00% |
Hong Leong Bank | 4.03% | 7.04% |
HSBC | 3.89% | 6.99% |
Kfh Kuwait Finance House | 3.65% | 7.54% |
Maybank | 3.25% | 6.90% |
MBSB | 4.15% | 7.00% |
Ocbc bank | 4.08% | 7.01% |
Public Bank | 3.77% | 6.97% |
RHB | 3.90% | 6.85% |
Standard Chartered | 3.77% | 6.95% |
UOB | 4.11% | 7.07% |
Let us explain with an example:
Loan Amount: RM500,000 | BR % | BLR % |
Reference Rate | 3.25% | 6.90% |
Interest Rate | +1.5% | -2.10 |
Effective Lending Rate | 4.75% | 4.80% |
Monthly Installment (RM) | 2,444.28 | 2,460.02 |
Bank A BR is 3.25%
The home loan offer let’s say is BR+1.5%
So the Effective Lending Rate (ELR) is 3.25%+1.5%= 4.75%
Now how much was the bank offering the loans at earlier under the BLR?
Let’s say the BLR is 6.9% and the bank charged BLR- 2.10%.
So the Effective Lending Rate of BLR for Bank A stays around the same levels, which is 6.9%- 2.1%= 4.8%.
In this case, the monthly installment difference of BR and BLR is only RM15.74/month.
So, on the whole, there isn’t a whole lot of difference to the borrower under the new system.
But the onus is now more on the bank. It is but obvious that customers will make a beeline for banks with better efficiencies.
People with Existing Home Loans Before 2015
For those who have applied for loans before 2015, the payout is based on BLR. The Effective Lending Rate (ELR) that they are repaying the loan on is derived from the BLR.
So as of now, there is no change in your loan structure. You do not need to worry about how or why the BR works or changes loan tenures. You can continue paying your Equated Monthly Installment (EMI) as earlier.
However, it makes sense to understand the new structure. This will help you make an informed choice if you are planning to buy a new property.
It will also enable you to calculate the risk-reward ratios of real estate investment in a more comprehensive fashion under the new system.
But for those after 2015, the BR will apply for everyone.
Whether you apply for conventional loans or go for even the Islamic Loans, they are all tied to this Base Rate structure.
In case you want to refinance your home, change the existing loan structure or your bank, you need to understand the new provisions.
Remember they are all counted under new loans and will be processed according to the provisions of the Base Rate structure that has come to play since 2015 January.
Is BR System is Better Than BLR?
The question then veers on the most fundamental element.
Is the BR system a better one?
Experts and the Malaysian Central Bank have maintained that this is undeniably a more transparent system. The idea is to allow customers to leverage the efficiencies of a bank.
But if you ask us, we would say that this is a rather subjective issue and in many ways, it depends on how you are looking at it.
What in your approach is crucial in this case?
But it is true that the Base Rate is heavily based on the Kuala Lumpur Interbank Offered Rate (KLIBOR) and the Statutory Reserve Ratio (SRR).
The KLIBOR is essentially the inter-bank exchange rate, and the SRR is the Statutory Reserve Ratio that the Malaysian Central Bank decided.
Both these set of data is publicly published and updated on a regular basis.
There is nothing shady about how the bank arrives at the Effective Lending Rate (ELR) using this formula.
Experts also feel that this system allowing banks to take advantage of their efficiencies is a major positive.
They feel this will not just allow banks to be more competitive but allow customers to get the maximum benefit.
But you must remember what the Bank Negara has maintained and what we deduced in our previous example.
The Effective Lending Rate does not change drastically from the previous system with this BR structure.
So your tenure or Equated Monthly Installment (EMI) amount remains more or less similar under both these systems and that is the most important aspect for home loan applicants.
What Are the Impacts of Switching BLR to BR to the Banks?
A close study of the overall banking system in Malaysia reveals that the banking system has not seen a major upheaval as a result of this change in calculating the Base Rate.
Analysts say this switch from BLR to BR has not impacted their base business in a meaningful way.
It is more or less business as usual for banks across the country. The effective lending rate is still pretty much around the same levels.
There are many reasons for it. Most importantly, banks have the option to review it anytime if there are no perceptible changes in the Overnight Policy Rate (OPR).
If anything this new system spurs healthy competition amongst banks.
It is also seen as reflecting the rising cost of funds and forcing banks to undertake disciplinary steps to maintain efficiencies.
This is because the rates are now controlled by the banks and this will force them to take up measures that will help in reducing costs.
That is a win-win proposition for most customers and banks.
The only concern area is that the bigger players may have greater room to maneuver cost efficiencies and attract more customers.
Has BR Affected the Property Demand?
The other big question is has the shift from BLR to BR affected consumer demand. Has the Malaysian housing sector seen in the striking shift in demand as a result of this change?
In this context, it is very important to understand that the average consumer is more worried about the Effective Lending Rate (ELR) than the BR.
The ELR or the effective lending rate is the actual rate of interest that they are getting the loans at.
This will decide how they plan their EMI and take a call on loan tenure. On the whole, the new BR system actually benefit consumers more than banks. It is transparent and encourages banks to leverage their efficiencies.
There will be a far better choice of loan options for customers and help them make profitable choices.
However, the only point of concern at this stage is that of customers with questionable credit scores. Those with low income or bad credit scores may be at risk.
This is because the new system enables banks to set a higher ELR to keep their profit margins intact. This can lead to a considerably higher amount of default in this specific customer segment.
But with enough survey, you can obviously get around to deciding a loan that best addresses your limitations and challenges.
3 Determining Factors on How BR is Calculated
Therefore, we can say that the Base Rate is calculated using three primary metrics.
These are not just publicly published information but the Malaysian Central Bank, BNM updates it at regular intervals depending on the overall market and liquidity situation.
A) Statutory Reserve Ratio (SRR)
The Bank Negara will determine a specific SRR level for every bank. This is primarily the minimum cash reserves that the bank needs to maintain before lending out.
The liquidity and the cost of lending are directly dependent on the SRR. The cost of lending rises if the SRR does. As a result, it also impacts the BR and leads to its subsequent rise.
B) Individual Bank’s Profit Margin
The BR also has a direct correlation with a bank’s profit margins. If the profits increase, the BR comes down and vice versa.
C) Overnight Policy Rate (OPR)
The OPR level is the other key determinant of the overall BR. If the Central Bank raises the OPR levels, the BR rises too.
As a result, the Base Rate now becomes a key indicator of the financial health of the bank too.
This is because banks that are more effective and have adequate savings and fixed deposits will offer more attractive rates.
Decreasing efficiencies can become the first sign of strain in the balance sheet and banks with lower resources may not be able to match the rates offered by bigger players with greater savings.
This also introduces distinct flexibility in the banking system and encourages healthy competition.
Conclusion
Therefore from a customer standpoint, you can easily conclude that there is no perceptible change in interest rates as a result of the switch from BLR to BR. But overall with the BR instead of BLR, it is more or less, business as usual.
We are much more confident in the types of land we are awaiting for you such as the residential & general housing land. These are lands where you can build an awesome service apartment, townhouses, Penang-super-condominiums and luxury homes. We have noted that most people especially those with families prefer residential lands where they can construct terrace houses, semi-detached houses and single family stories. Apart from residential land, we have vacant land. In these we have three categories from our clients choose from depending on their genuine intent on the land. However, for any investment, an informed decision is highly recommended and is only generated by thorough checking on the status of the land on demand and is done at the Land Registrar or Land office.
Freehold land is a type of a vacant land and has a full life ownership. This basically means, if you happen to own any of these freehold lands, you will own anything that is in that particular land for an unlimited time. In leasehold land, land ownership expires upon expiry of the lease agreement between you and the owner of the land. We do not however, advise long-term investors to go for leasehold land. This type of land is most suitable for those doing short-term development whose returns can be acquired within the shortest time possible. Basically, the value of leasehold land depreciates as the lease agreement approaches expiry.
Land prices vary from one to another depending on very many reasons especially the purpose of the land. Though we have the most reasonable prices, we also make it clear to our clients what our lands are for. We have classified Bungalow land, Development land and agricultural land. We shall never mislead you on the purpose of the land and what it is mostly suitable for and that which is acceptable by the county council of Penang and the laws of Malaysia. Other valuable types of lands we have available are open land and seaside land. You may decide to construct a beach hotel on this land regarding that Malaysia is a tourist attraction site of most western & middle east countries. Others that interested clients are undeveloped lands and cheap lands. These are one of the most suitable lands for bringing up your land development idea. Basically, we cover all spheres of land development even though it might not have been mentioned here. We are just a call away from you. You can make enquiries from our experts at anytime of the day and make your dream come true.
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Whether as an investment or for own use, there are different types of properties and houses in Malaysia for buyers to choose from.
Property prices differ depending on the size, type, and location. Landed property, especially in the Klang Valley, costs more than units in a high-rise development. Traditionally, landed property in Malaysia usually comes with its individual (freehold or leasehold) title. However, due to the growing demand for gated-and-guarded communities, many new developments come with strata titles. This means that the common areas and facilities within the development are cared for by the Joint Management Body (JMB) or the Management Corporation (MC) and residents have to pay a monthly maintenance charge.
Not just that, it is also important to know and to understand the Housing Development Act (HDA), as well as the differences between a residential and a commercial title. Property buyers and owners need to be aware of the law that can protect their legal rights and interest. This is because HDA protects the buyers’ interest from future disputes between the developer and the property purchaser. On top of that, HDA will also fight on behalf of residents when the property is abandoned and help resolve conflicts between developers and buyers.
We take a look at the different types of properties and houses in Malaysia.
- Bungalow
The bungalows are the creams of the crop when it comes to landed property. The units are surrounded by land without an adjacent unit (standalone), offering privacy and luxury. The bungalows are most likely purchased by quite well-to-do owners for their use or those hoping for capital appreciation.
- The typical built-up size for a bungalow varies from 2,000 sf – 12, 500 sf. Nevertheless, the built-up size can stretch, making it one of the biggest residential options.
- The bungalow prices vary greatly depending on location and land area. Many townships offer ready-built bungalow units but in areas like Country Heights in Kajangand Tropicana in Petaling Jaya.
- You will find that most of the bungalows are unique as each one is designed and built from scratch by owners on land sold by the developers.
- The property is surrounded by a garden, parking area, and a large plot of land.
- Semi-Detached (Semi-D)
Semi-detached houses, or more commonly known as Semi-Ds, are identical houses that share a common wall with its neighbour.
- The typical built-up size ranged from 2,300 sf – 5,600 sf
- Semi-D houses have a strip of open land on one side, front and the back of the house. While not as luxurious or glamorous as a bungalow, the Semi-Ds still offers a degree of privacy and space.
- This property type is protected by HDA due to its residential title.
- Terrace/ Link/ Superlink
Terrace, Link and Superlink houses are units that are built side by side, thus sharing walls with units on both sides. They can be either one- or two-storey units. The corner lots of terrace houses usually have a bigger land area with open land on the side, giving it the feel of a semi-detached unit. These houses are practically the same but differ in sizes. These properties are protected by HDA due to their residential titles.
- Terrace house
- A terrace house has the smallest built-up size compared to the Link and Superlink houses.
- The typical built-up size ranged from 750 sf – 1,600 sf.
- Terrace houses are ideal for first-time homebuyers or those looking to upgrade from highrise houses to a landed one as they often come with a lower price tag.
- Those looking to rent out their homes should also consider terrace houses as tenants prefer a decent rental rate and easier maintenance of the property.
- Link house
- Link houses are bigger than terrace houses in terms of built-up, land area and proportions.
- Superlink house
- The Superlink house has the biggest built-up size.
- It is also the fanciest and the most expensive version of a terrace house.
- The unit usually comes with five to six bedrooms.
- The typical built-up size ranged from 2, 083 sf – 2, 600 sf.
- Townhouse
Townhouses typically consist of two houses staggered within one-two- or three-storey buildings, looking like terrace houses from the outside. They are essentially an ultra-upmarket terrace house.
- The typical size ranged from 560 sf – 7, 000 sf.
- Some units share the same entrance and porch area while some have separate entrances, either at the front, back or side by side.
- Layouts may also vary.
- Some two-storey units are separated so that each owner has one level of space, while three-storey units could be partitioned so that each owner owns a floor and a half each.
- In more matured areas like Bangsar or Sri Hartamas, you can find townhouses within a regular landed residential area, whereas in the newer developments townhouses are built within a gated and guarded community with landscaping and amenities like a clubhouse.
- These units are ideal for families who want to live together, such as young families and their parents, while still having their own private spaces. The main disadvantage of townhouses is that you might end up with a neighbour you do not like.
- This property type is protected by HDA due to its residential title.
- Penthouse
Penthouses are bigger units located on the top floor of condominiums or serviced residences. These units are often dubbed as a bungalow in the sky due to their spacy built-up sizes. Usually, it takes up the entire floor (or even two floors) of the building.
- The typical built-up size ranged from 1, 000 sf to 5, 000 sf.
- These units offer maximum luxury and space with breathtaking views – together with breathtaking prices due to the floor space.
- Some units would even have their private swimming pools and private lift lobbies.
- Some of the most expensive penthouses in Klang Valley is Tijani in Bukit Tunkuand Pavillion Damansara Heights.
- Condominium/ Serviced Residence
These home units are built within a high-rise building and all residents share the common areas like the lobby and swimming pool. Each unit typically comes with a designated parking lot, with options to buy or rent more. Not just that, the property will be protected by the HDA if it falls under the residential title.
- Condominium
- The typical size ranged from 650 sf – 1, 500 sf.
- The layout of a condominium unit varies from three bedrooms to four bedrooms.
- This type of dwelling is popular among homebuyers because of the round-the-clock security and amenities like swimming pool, gymnasium, children’s playground, and event spaces.
- Residents are required to pay monthly maintenance fees, service charges and sinking funds.
- Taller buildings may offer a better view but it also means that the property has a higher density (more units and occupants).
- Residents can apply for a strata title.
- Serviced residence
- While condominiums usually come with the residential title, the serviced residences are upscale commercial units and managed like a hotel.
- The residents are paying higher utility bills, rent, and maintenance fee since the properties are on commercial land.
- These residential units are essentially fancier compared to condominiums.
- The units are also fully furnished and are suitable for both short and long term rental.
- The rental fee covers all facilities and amenities like housekeeping, main lobby, the front desk concierge and security.
- Serviced residences are not eligible for Syabas water tariff migration programme.
- Some serviced residences are attached to malls.
- Duplex/ Studio
These units are suitable for young individuals who enjoy complete privacy. Their proximity to the city and major transportation links makes them ideal for regular commuters. These properties also suit a single individual or couple as the layouts aren’t ideal for families.
- Duplex
- Duplex, also know as Loft is a double-storey unit within a highrise residential building
- The single bedroom will be on the second floor.
- The typical size ranged from 450 sf to 950 sf.
- Studio
- It is a single room residential unit.
- The bedroom, kitchen and living room are spread over a single floor.
- The design is usually an open layout.
- These residential properties are often located in a central location.
- Apartment/ Flat
These properties are the lower spectrum of the highrise. Apartments are similar to condominiums but slightly less glamorous and without top amenities, while flats are the cheapest as the units are smaller in size compared to condominiums and apartments.
- Apartment
- They will still have basic facilities like parking spaces and 24-hour security.
- Apartments make for good starter homes because of the lower prices. The maintenance fees and service charges will also be lower than that of condominiums.
- Apartments located near LRTor along the MRT stations are good options for the rental market.
- The typical build-up size ranged from 550 sf – 1, 200 sf.
- Flat
- Flats have very simple designs and often do not have balconies.
- Taller buildings have elevators while there are also four- to five-storey buildings that only have stairs (which is not a bad option since flats in Malaysia are not always well maintained and elevators break down regularly).
- Car parks in flats are usually not designated and often inadequate, resulting in cars double-parked within the compound and also along surrounding roads.
- Most government-owned flats in Malaysia are meant for the lower-income group and buyers must meet certain requirements, usually a monthly household income of less than RM 2,500 if they want to apply to purchase the flats.
- The People’s Housing Project (PPR, or Program Perumahan Rakyat) under the purview of the Ministry of Housing and Local Government cost between RM 30,000 and RM 35,000.
- These units measure around 70o sf and typically consist of three-bedroom homes.
- SoHo/ SoVo/ SoFo
These highrise properties integrate offices into residential homes. The units are commonly located in commercial areas. The utility bills and charges are pricier as they are charged based on a commercial tariff.
- SoHo
- SoHo or small office home office is a one- or two-room unit within a strata building.
- It can be used either as a home, an office or both.
- Most SoHo also has typical condominium facilities like swimming pools and gyms.
- The units comprise a living room, bedroom, and a fully-fitted bathroom.
- The typical built-up size ranged from 500 sf – 1, 200 sf.
- SoHo is protected by the HDA as it fits the definition of a housing accommodation.
- The owners are also entitled to the RPGT
- SoVo
- It stands for small office versatile office
- SoVo units are usually equipped with business facilities.
- The units are usually favoured by start-up companies.
- SoVo’s layout is similar to SoFo but it can only be used for commercial purposes.
- It falls under the commercial title and is not protected by the HDA jurisdiction.
- The size is ranged from 400 sf – 800 sf.
- SoFo
- It stands for small office flexible office.
- The units offer flexibility as the layout does not have partitions.
- The owners or tenants can modify the units according to their preferences.
- It can be used as an office, home or both.
- It falls under the commercial title and is not protected by the HDA jurisdiction.
- Shophouse
Shophouses are single units of two- or three-storey shops within a commercial area. The ground floor units are often used as restaurants, banks or retail outlets. The upper floors are sometimes used as residential homes, usually by the owners of the businesses downstairs or as dormitories for their workers. Shophouses in busy areas like Bangsar or SS2 in Petaling Jaya can command higher rents. This property usually carries a commercial title and is not protected by the HDA jurisdiction.
- Mixed Development
A mixed development integrates residential and commercial purposes under one roof. The building consists of residential units, business area, and office spaces.
- The typical mix places residential units on the upper levels and retail or offices at lower and street levels.
- Some mixed developments are connected to an underground train station or via a walkway.
- This concept has already mushroomed across the Klang Valley and Selangor area. The KL Gateway and Solaris Dutamas are some examples of mixed development.
- The mixed development often falls under the commercial title thus it is beyond the HDA jurisdiction.
With so many options to choose from, a lot of factors come into play when deciding on the type of property to buy. If it is your stay, location and size would be the main concerns. If it is for rental, the main consideration would be the rental returns.