|
One of the factors driving Malaysian property is the Iskandar project. This is government backed economic development policy where businesses are encouraged to set up in special development zones. The other factor is the fact that local property prices have been rising since 2008 leading to an upsurge in buying due to more land been available for less money and lower stamp duty. However, to buy property in Malaysia on Property Guru, here are factors that you should be on the lookout for to find the right piece.
Before Buying Real Estate
If you are looking to purchase a new apartment or house directly from a developer, the initial down payment is a minimum of 10 percent the property value or depending on what the developer is willing to accept. Other costs and charges you will incur include:
• If you are borrowing money from a bank, a loan application fee
• Fire and MRTA insurance if you are taking a housing loan
• Stamp duty
• Legal fees
• Deposit for utilities (water and electricity)
Purchasing from a vendor will also attract the same fees and charges as above. It is important that before the process starts, you identify and work with a qualified real estate agent. Malaysian real estate agents are registered by the Board of Valuer, Appraisers and Estate Agents. The agency fee for services rendered is at, minimal, 3 percent of the property sale value.
You will also need a valuation report to show that the property in Malaysia on Property Guru value is not less that the proposed load. The valuation report is required by banks when an individual is applying for a loan.
The Basics of Home Loans
Budgeting is an essential part of your journey towards property ownership. You have to determine how much monthly loan repayment you can comfortable afford and the property’s highest price. It is advisable that your recurring monthly expenses – house, car and others – do not exceed a third of your monthly income. To get funds for your down payment, start with your savings, then the Employees Provident Fund (EPF) before getting a loan from a financial institution.
Most financial institutions have either a:
• Fixed-term loan: This will require you to pay a fixed amount every month for the length of the loan. This traditional loan term is better suited for individuals with a strict and predictable cash-flow pattern.
• Flexi-loan: Offers you the option of reducing your interest as you wish, with the flexibility in paying off your home loan when you can.
It is important that you also carry out research and find a loan package with the lowest interest rate. Financial institutions charge interest as determined by the Base Lending Rate (BLR) set by the Bank Negara Malaysia (BNM). Other interest rate systems are:
• Mortgage Lending Rate (MLR)
• Base Finance Rate (BFR) – for a Shariah compliant loan
Types of Properties in Malaysia
Before venturing into the real estate world, it is important that you have a fairly basic grasp of the most basic things. Below are the most common types of properties you can purchase in Malaysia:
• Land
• Commercial
• Residential
The four key real estate market segments are:
• Developer/New: New development for direct purchase from developers once you have views the plans or show units.
• Secondary or sub-sale: Defines existing property that has been purchased by a seller who is not a developer.
• Auction: Properties within this market are usually available at below-market rates.
• Commercial: The properties within this segment are for business purposes like offices and shops.
My First Home Scheme and PRIMA
Due to the dramatic increase in property taxes, Malaysia’s government instituted two schemes to help young adults afford property. The two schemes are:
• Skim Rumah Pertamaku (SRP) or My First Home Scheme: Helps young adults who have just joined the workforce to obtain 100% financing. The scheme is open to Malaysian citizens up to 35 years and with a gross income not exceeding RM5,000 a month. On purchase, the beneficiaries are expected to occupy the property and loans are payable via monthly salary deduction.
• Perumahan Rakyat 1Malaysia (PR1MA): Aims to provide middle-income households in urban centeres with affordable lifestyle housing. Open to Malaysian families and individuals with an average monthly income of up to RM7,500. Applicants should be over 21 years and not own more than one property. Beneficiaries are also expected to occupy the property once purchased.
|
