YES (PropertY PeoplE PlaceS) Paper highlights Asia’s Queen of Property Dr Renesial Leong’s live appearance on the Webinar Series with Maybank recently, with some key takeaways presented here
Asia’s Queen of Property, Dr Renesial Leong, wasinvited as the first speaker on Property Investment for Maybank’s financial planning web series, which debuted on their Facebook page and Youtube Channel in October 2020. The property queen shared some of her thoughts for budding investors and first-time homebuyers with Tracy Pan, Maybank Executive Vice President, Head, Mortgage/ Consumer Finance during the inspiring session. PropertY PeoplE PlaceS (YES) Paper reports. Is it a good time for the younger generation to buy their first property now?
The housing demands of Gen Y have matured. Many would have gained financial confidence or are settling into their careers goals – including working two jobs, having online businesses and so on, coupled with the savings habits instilled in them by their Baby Boomers parents as well as the financial assistance received from them. Many Gen Ys now are in the position to buy their first property. The current market conditions provide encouraging factors too.
There is a big sale right now in the primary market! Many developers are giving unprecedented packages and goodies to entice purchase besides the attractive incentives introduced by the Home Ownership Campaign (HOC) 2020.
In the secondary market, sellers who are adversely affected by the global meltdown are offering steal deals. The real estate auction market has been abuzz too. However, auctions are an entirely different ballgame and one should learn the rules of the game before attending one’s first auction. My book “Property Jewels Under The Hammer” provides a clear and comprehensive guide in this area.
With these considerations, and with interest rate for mortgage loans being at an all-time low, it is highly advisable that you start building your relationship with your bankers as soon as possible as they are one of your most important partners in property purchase.
As far as I’m concerned, it is clearly a buyer’s market right now. It’s indeed the best time to go property shopping!
As a beginner, how do I start my venture into the property market?
To be successful in anything, it is always crucial to have a plan. First of all, you need to have a budget plan. Ask yourself questions like how much downpayment do you have, what is the monthly mortgage payment you can afford and how much buffer financial reserves can you set aside. Always remember that it is important to live within your financial means.
Next, identify the type of housing area(s) you are looking for. These considerations include the location, distance from your daily activities i.e. office, parents’ home, social activities, security needs, preferred amenities and facilities as well as connectivity.
Following that, begin by shortlisting (two to three at most) areas that meet your needs and then, start property hunting. View as many properties as possible as with today’s technological advancement, virtual viewing is fast and convenient. Do not rush but take baby steps since you are new to property purchase.
Once you have nailed down your preferred property, do work with your bankers to design your loan. You’ll be surprised at the diverse types of loans available to suit your financial needs. Also, engage a lawyer to get the paper work done. In no time, you will be the proud owner of your first property!
What is currently trending in the property market?
Smaller and more affordable housing is definitely making its mark in the portfolio of most developers as many new launches have a majority of units below 800 sq ft in size.
This is even more apparent in high density and land scarce countries like Hong Kong where units can be as small as 180 sq ft. However, though tiny, I am amazed at how they are efficiently designed to maximise space and most have tasteful finishings as well. This is a stark contrast to established dwellings in London or even the New York metropolitan, where flats are small, old and may not be as creatively designed or done up. Asian cities are definitely in the lead here.
We are also seeing more flexible home layouts to cater for the new Work From Home (WFH) and Work From Anywhere (WFA) arrangements, as catapulted by the Covid-19 pandemic though the WFH model was first created in 1979 to combat the soaring gasoline prices due to the oil crisis. I strongly believe that the WFH or WFA concepts are here to stay with various degrees of adoption even after the global pandemic is over. Hence, layouts catering for this will be in trend.
Other than these trends, green projects will continue to take centerstage to align with the global sustainability drive to improve the quality of our natural resources and avoid further damage to Mother Earth.
There are also renewed interests in shophouses mainly due to their flexibility and suitability for multiple usages catering to Food & Beverage (F&B) outlets, retail and hospitality, whereby users are not constrained by guidelines and the requirements of bigger developments like malls. Furthermore, with the current pandemic, many users find it more advantageous to have full control over the usage of amenities and resources like air conditioners and lights. Lately, even developers are setting up their show units and sales office in shophouses.
For landlords facing tenants who claim they are troubled by the pandemic and are continuously asking for rental reduction, what should they do?
The unique and unforeseen nature of the current crisis has posed challenges to many landlords. Many have offered between 10% to 30% reduction in rental rates. Despite these efforts, landlords who are not able to meet their tenants’ continuous demands for rental reduction have inevitably also been labelled as “bad landlords”.
This is of course unfair and totally uncalled for. To illustrate the situation, let’s look at these two scenarios. In time, when things turn around and should a residential tenant receive a three-month bonus or if your commercial tenant’s business rakes in a multi-million project with lucrative profits, will landlords be paid an extra month of rental? The answers are obvious.
Rental income is the life blood of real estate. Without it, landlords’ cash-flow will be severely affected, putting them in a distressed state if they are unable to service their mortgage loans.
Hence, while empathetic landlords having better financial standing could offer rental assistance to troubled tenants, they are advised to exercise due diligence. It is wise to first establish if the tenant’s hardships are for real. Secondly, consider if the tenant is worthy i.e. by possessing good payment track record, taking reasonable care of the property with the potential for establishing long-term relationship, etc. Evaluate if they are merely taking advantage of the current situation selfishly or otherwise. Unprecedented times after all, call for unprecedented management strategies.
With this, I wish all of the first-time housebuyers out there, the very best in their search and quest for finding the right property. The time, effort and investment is worthwhile as it can be extremely fulfilling, finally settling down in your own nest in time to come.