South Economic Development Region #5: Where is Iskandar Development Region (IDR)?

Many have this mis-perception saying that Iskandar Development Region is Nusajaya. This is wrong, as Nusajaya is having approximately 10,000 hectares of development land, and is only one portion of the whole IDR planning.

The whole IDR covers areas the following areas:
(1) The whole Johor Bahru District
- Majlis Bandaran Johor Bahru
- Majlis Perbandaran JB Tengah

(2) Pihak Berkuasa Tempatan Pasir Gudang

(3) Majlis Perbandaran Kulai

(4) Part of Pontian
- Mukim Jeram Batu
- Mukim Sg. Karang
- Mukim Serkat

The above gives us a total area covered of 2,217km sq.

And all developments will be concentrated at the following existing urban areas:
(1) Johor Bahru city
(2) Pasir Gudang
(3) Nusa Jaya
(4) Senai-Kulai

I hope i've given you all a better picture on where does IDR actually covers.

Real Estate Tips #6: How to identify a Registered Estate Agent from those illegal brokers on a newspaper advertisement?

Whenever you open the page for the classified ads on a newspaper, you tend to see many ads on properties to let or for sale, how do you distinguish the Registered Estate Agent's (REA) or those from an illegal brokers?

The answer is simple, look for four (4) elements:

(1) Company name
e.g. Tiram Realty
(2) Company registration number
e.g. E(3)0077
(3) Company contact number
e.g. 607-3558877
(4) All advertisements by REA must be specific
e.g. Double storey house at Taman Johor Jaya selling at RM150,000, NOT Double storey house at RM150,000 , which is too general.

Look for the abovementioned elements, then you will know whom to call (the REAs), whom you shouldn't call (the illegal brokers). Refer to Real Estate Tips #1 on why you should always engage a REA in malaysia.

Real Estate Tips #5: What does 3+1 mean in a property transaction?

3 + 1 simply means that in any property transactions, the vendor (owner) will usually give the purchaser a time frame of 3 months (free of interests) plus 1 month (with interests) in order to complete the whole conveyancing (property transfer) process.

In other words, should the purchaser's took more then 3 months to pay the vendor the full settlement sum, the purchase can be charged interests on the amount owning, based on an agreed rate, normally between 8%pa to 10%pa.

What if the case drag on to longer than 4 months? In most instances, the purchaser can request for extension, bearing similar interests, this is however not automatic, and it is really depends on the decision of the vendor whether or not to accept your request. This is also why sometime, we also see 3 + 2, or even 4+ 1 which came into existence. But this 3+2 or 4+1 is normally pre-agreed upon signing the Sale and Purchase Agreement.

Therefore, always do a regular check on your solicitors (probably once or twice in a month) to find out the progress of the transfer process, so as to avoid your 10% deposit being forfeited by the vendor as a result of non-compliance of time frame given.

Real Estate Tips #4: Congratulation to all the newly elected councillors of MIEA.

Please allow me to congratulate and introduce to you some newly elected councillors for Malaysian Institute of Estate Agents (MIEA) over last weekend (21st April 2007):

President:
Mr. K. Soma Sundram
Vice President:
Mr Raymond Leong
Ms Shirley Chai
Honorary Treasurer:
Mr. Kelvin Yip
Councillors:
Mr. Terry Wong
Mr. Gavin Tee
Ms. Angeline Chin
Mr. Sivashanker

Together with other existing office bearers and councillors, i wish you all the best in leading MIEA towards to paradigm shift to new professional level in view of the globalization effects which are due to take place in near future.

South Johor Economic Region #4 : How do i qualify myself for Iskandar Regional Development Authority (IRDA) status?

Already many of my singaporean clients asking me this question, as they are all very interested to know the details so as to benefit from the incentives given by the government, especially on tax.

Before i start answering the question, here's a brief elaboration for you on the IRDA status. For the purpose of boasting the initial investment into Iskandar Development Region (IDR) , our government has come up with this thing called Incentive and Support Package (ISP). This package is targeted at the service sector.

ISP consists of the following:

(i) Exemption from the Foreign Investment Committee rules;
(ii) Freedom to source capital globally;
(iii) The ability to employ foreign employees freely within the approved zones, depending on the amount of space occupied in these zones;
(iv) Exemption from corporate income tax for a period of 10 years from commencement of operations for activities within the zone and outside Malaysia, provided these operations commence before the end of 2015; and
(v) Exemption from withholding tax on royalty and technical fee payments to non-residents for a period of 10 years from commencement of operations.

So, in order to qualified for the above incentives, the company must be an IRDA-status company. There's two general criteria to fulfil in order to qualify as an IRDA-status company, namely:

(1) Amongst the six Qualifying Activities
(i) Creative industries
(ii) Educational services
(iii) Financial advisory and consulting services
(iv) Healthcare services
(v) Logistics services
(vi) Tourism related activities

(2)Situated in the designated IRDA-approved zones
To my best knowledge, there are two such zones available, and the first zone is already in the process of finalizing.

Doesn't sound very tedious, does it? Please note that this initial ISP is targeted mainly on service sector at current stage. As for the detailed qualifying process, we were told finalised report will be released latest by the third quarter 2007.

South Johor Economic Region #3: Developer:" Why do i find it tough to sell my project?"

Many developers in Johor especially, have been struggling to dispose of their launched housing project. Why? Many old timer Johor developers found themselves left with hundreds of unsold units idling, again the same question, why? Isn't the Iskandar Development Region bringing a boast onto Johor Bahru's property market already?

To answer the above questions in the residential housing context, the answer is simple:

(1)there is an imbalance between the supply and demand in the local market.

For your information, the population growth for SJER is only approximately 4.1%p.a.[1] but the approved new housing schemes is 4.3%p.a.[2] for Johor state, and majority of it is in south johor!

At one glance, people might ask me, hey, isn't that a balance you are giving here? Please allow me to further feed you with the following information, do not forget that Johor state has already the most overhang properties in the whole Malaysia, we are already in a suplus for many years, without being able to resolve the overhang issues, but at the sametime building more than our population growth, you tell me, what will be the consequences in the end of the day.

To add things worse, all locals wanted to sell their existing old house and buy/move over to their new houses with all the stylist looks , security and peaceful environment, who's going to take up all the existing old houses? We have seen this trend of decentralisation from Johor Bahru City Central going on for the past few years and it is moving fast.

(2) I hardly hear any developer asking this question, what do Johorean really wants?

There are still many developers in Johor who simply build at their whims, without exploring the local market to survey what exactly is the kind of product/houses we local wants. This is what I called marketing. Marketing is not what most people say, sell, sell, sell. Marketing is about understanding what the market wants, and customize the product for them, then sell the product to the market which already existed.

SP Setia is one of the more successful developer in Johor which has capitalised on the marketing strategy even at the initial stage of choosing a strategic location, house type, infrastructure and style of living for their project. They understand the local, so, they succeeded.

So, for the rest of you, when do you want to start knowing your customer before you sell your product to them?

Footnotes:
[1] Figures obtained from the SJER Comprehensive Development Plan
[2] Figures obtained from Dato' Mani Usilappan's talk during the MIEA 2007 Annual Convention.

Property Auction #2: 6 Things to watch out during auction!

(1) Always READ the Proclamation of Sales (POS) carefully, as it will denote few important details such as :
- the earnest money payable to
- terms and condition
- who's paying the maintenance fees, sinking fund,indah water (IWK), assessment and quit rent and utility bills owed?

(2) Watch out for syndicate
- don't worry about them, just ignore them and make your bid, they are NOT genuine bidder

(3) Watch out for timing
- especially for highcourt cases, always make sure your solicitor can complete the transfer within the prescribed time, usually 90 days or 120 days, if not, your 10% earnest money will be forfeited without questions

(4) Watch out for *caveat*
- always do a title search before auction date, should u find any caveat lodged against the property, the BEST way is to buy CASH. If you are thinking of getting partly funding from the banks for the caveated property, think twice.

(5) Watch out for the previous ownings
- always check and verify the prevous owner's owning to the Management Corporation, Indah Water, assessment , quit rent and utility authority.
- In most cases, the bank will be responsible to maintenance fees, quit rent and assessment,however, this is not automatic, please always check with bankers or POS.

(6) Auction property is always sold without vacant possession
- it simply means that it the property is tenanted, you got to let the existing tenant to continue occupy the premises until the end of the tenancy period, however, i would always advise you to sign a brand new tenancy agreement with the tenant.