Property is one of the hardest hit sectors by the COVID-19 pandemic as many buyers are taking a wait-and-see approach amidst the economic uncertainty caused by the health crisis.

However, there is one property sub-sector that is deemed as a resilient safe harbour by industry players and experts – branded residences.

In fact, branded residences have seen a surge in popularity in Malaysia in recent years. Branded residences are luxury homes associated to a premium brand (usually a hospitality or lodging service provider), which allow them to enjoy prestige, recognition and high-quality services through association with the latter.

In essence, this gives the owner the comfort and permanence of a home but with the full benefits and luxury of a five-star hotel. 

The pandemic has highlighted some of the advantages of such developments that serve as a silver lining in the market. 

Here are the top five advantages of investing in branded residences:

1. Location

Most branded residences are located in prime locations, which remains the preferred destination for many to stay due to the convenience and lifestyle they offer.

Meanwhile, the supply of new and quality residences in these areas is shrinking due to the scarcity of land and high development cost.

All these factors are helping branded residences retain their value and attract buyers and tenants.

2. Value proposition

Branded residences often built on prime locations and equipped with intrinsic value built into the proposition, including extensive amenities, attentive service and lifestyle benefits and the backing of internationally recognised hospitality brands.

Moreover, they come with quality workmanship and development delivery, which provides a stronger resale value for their owner.

As these luxury homes cater to the top income earners, they offer investors the opportunity to buy into a niche product that is much more resilient when compared with other types of properties.

3. Price premiums

The luxury home market is actually still performing strongly, especially for branded residences.

This is attributable to their association with prestige brands, which act as a guarantee for high levels of service, quality and ongoing management and oversight, which adds a lot of value for buyers and tenants.

It is precisely these value-adds that contribute to the price premium seen in the market, generally in the region of 30% to 40% over comparable developments, but which also add to the strong resale values available.

4. Rental income

Investors of branded residences can enjoy greater ease when renting out their unit, thanks to the brand recognition and quality services.

Also, many of these residences have their own rental pools or programmes already set up along with an existing pool of potential clients with an affinity for the brand.

The rental income is higher as compared to typical, non-branded condominiums as branded residences usually caters to higher income earners.

You can also enjoy hassle-free ownership with the professional operator management offered by the property manager of the branded residence.

5. Capital appreciation

As compared to non-branded developments, branded residences command a certain level of premium in their pricing.

But the good news is that the owner is able to enjoy a higher capital appreciation due to their exclusive offerings. On top of that, the current limited supply of branded residences also serves to protect prices.

Source: https://www.propnex.com.my/post/details/90?fbclid=IwAR3ochiZk94Te5SZOPcwQbm0ZlwBYfb3NOh6aC8pzEVKdwUHVXIc7kZIew4

UEM Sunrise Bhd announced today that it had acquired 6.86 acres of prime freehold land in Cheras, Kuala Lumpur for a total consideration of RM197 million. 

In a stock exchange filing today, the property developer said its wholly-owned subsidiary UEM Land Bhd had signed a sale and purchase agreement (SPA) with Accolade Land Sdn Bhd, the landowner, with preliminary plans of developing 1.8 million square feet (sq ft) of various types of competitively-priced properties aimed at young homeowners looking for residences with immediate accessibility to the city centre. 

“The development has an estimated total gross development value (GDV) of over RM1 billion and is slated for a two-phase launch, with the first phase kicking off in the second half of 2022 (2H22).

“The proximity of the land to the Taman Connaught MRT Station provides UEM Sunrise an excellent opportunity to explore a transit-oriented development that meets demands of young urban professionals working in the city, complemented by a lifestyle offering in attractively priced residences,” said UEM Sunrise chief executive officer (CEO) Sufian Abdullah in a statement. 

“The transit-oriented development nature of the project will provide us with the opportunity to develop a unique product combining its accessibility and integration with the public transportation system, with the demands of a post-pandemic living space, such as provisions for the low-touch economy and more open recreational facilities, at an affordable price tag. 

“As UEM Sunrise continues to aggressively rebalance its land banking portfolio, we remain to be on the lookout for land that can provide value to our customers and shareholders while rebuilding our sales funnel in the short to medium term,” he added. 

Following the latest acquisition, the group said its total land bank in the Greater Kuala Lumpur area stands at approximately 440.1 acres, amounting to an estimated total GDV of RM29 billion, providing the company with resilient and sustained growth in the long term.

At the noon break today, shares in UEM Sunrise ended unchanged at 42 sen, valuing the property developer at RM2.12 billion.

Source: https://www.theedgemarkets.com/article/uem-sunrise-acquires-686-acres-freehold-land-rm197m-cheras

Malaysian home buyers who are looking to buy a new residential property have until 31 December 2021 to take advantage of stamp duty exemptions. 

In an effort to stimulate the property market and provide financial relief to home buyers following the Covid-19 outbreak, the government will be bringing back the nation-wide Home Ownership Campaign (HOC), which originally ended on December 2019.  As announced by PM Tan Sri Muhyiddin Yassin during the short-term economic recovery plan (PENJANA) briefing on 5 June, the government will be extending the HOC which features significant stamp duty exemptions on Instrument of Transfer and Instrument on Loan Agreement.

This campaign would serve as a much-needed catalyst to boost the housing market in the coming year – Numerous industries, property included was at a near standstill as Malaysians across the country religiously practise social distancing during the MCO and CMCO period. The stamp duty holidays under the HOC coupled with the lower interest rates announced by Bank Negara Malaysia in July 2020 will help spur homeownership as we continue to battle the effects of the Coronavirus pandemic.

Here are a few things you should know about the HOC:

1. What is the Home Ownership Campaign (HOC) all about?
The government first unveiled the Home Ownership Campaign (HOC) as one of the housing initiatives under Budget 2019. The campaign was launched in January 2019 and was originally supposed to end on 30 June, but due to high demand, the government approved REHDA’s appeal to extend the HOC for another six months until December 31, 2019. Six months down the road, the HOC has been reintroduced in response to Covid-19 and was running from 1 June 2020 until 31 May 2021.

On 31st May, the Ministry of Finance (MoF) announced that the residential home stamp duty exemption scheme under the Home Ownership Campaign (HOC) will be extended for yet another six months until 31 December 2021. No doubt this decision was made in tandem with the continued lockdown restrictions in Malaysia, where the Full Movement Control Order (FMCO) will begin from 1 June onwards.

The HOC was a joint effort by the Housing and local government ministry (KPKT) and the Real Estate and Housing Developers’ Association (REHDA) Malaysia. The main focus of the HOC according to Minister of Housing and Local Government (KPKT) YB Zuraida Kamaruddin, was to assist aspiring homeowners in getting a leg up on the property ladder. Besides that, it hoped to alleviate the ongoing glut of unsold properties in the market, thus killing two birds with one stone. The HOC did contribute towards bringing down overhang property stock – According to NAPIC’s Property Market Report 2019, the number of overhang residential properties in Malaysia decreased for the first time after 4 years; by 5.1% in 2019!

2. What are HOC’s terms & conditions?

(A) HOC only applies for properties sold between 1 June 2020 and 31 December 2021.

(B) It is open to all Malaysian purchasers, with no limit to the number of purchases. The current 70% margin of financing limit applicable for the third housing loan onwards for properties valued at RM600,000 and above will also be lifted during the HOC, subject to internal risk management practices of financial institutions.

(C) Only residential properties in the primary market (homes that have been launched or completed) – This means only new residential properties purchased directly from developers with APDL (Advertising Permit and Developer License).

(D) Homes in the secondary market, such as those purchased from a friend, family member or any other person that has previously bought the home from a developer, do not qualify.

(E) Properties for sale in:

Peninsular Malaysia, must be registered with REHDA Malaysia. 
Sabah, must be registered with Sabah Housing and Real Estate Developers Association (SHAREDA)
Sarawak, must be registered with Sarawak Housing and Real Estate Developers’ Association (SHEDA)
(F) Service apartments must be for residential use only and cannot be converted for commercial activities.

3. How does the HOC 2020-2021 benefit homebuyers?

There is a full stamp duty exemption on the Memorandum of Transfer (MOT) and Sale and Purchase Agreement (SPA) for homes that are priced between RM300,001 and RM1million. Homes that are valued at less than RM300,000 do not qualify for the exemption.
Properties that fall in the RM1million -RM2.5 million price range will be subject to a reduced stamp duty of 3%, where the 3% stamp duty will only be imposed on the balance amount after RM1 million. For instance, if the property price is RM1.5 million, the 3% fee is imposed only on RM500,000.
The 0.5% stamp duty charge on your housing loan agreement are also fully exempted – this applies for properties priced from RM300,00 to RM2.5 million.
Homebuyers will get to enjoy a (minimum) additional 10% discount on the purchase price – This discount must be reflected in the Sale and Purchase Agreement (SPA). Property developers are required to offer at least a 10% discount for their residential projects in order to register their development(s) under the HOC. 
NOTE: The discount is given based on approved APDL pricing. For properties where the APDL is no longer valid (for projects that have already obtained CCC), the 10% discount is based on selling price. 

It’s pretty obvious that buying a home under the HOC will save you quite a bit of money. Previously, homebuyers had to pay a stamp duty of 1% for the first RM100,000 on a home, 2% for the next RM100,001 to RM500,000 and 3% for the subsequent RM500,001 to RM1 million. At first glance, this might not seem like much.

However, let’s say you were to buy a home worth RM500,000, the stamp duty charges that you would have to pay amounts to:

= {(0.01 × 100k) + (0.02 × 400k) } + 0.5% of housing loan amount (90% of RM500k)
= RM1,000 + RM8,000 + RM2,250
= RM11,250

Let’s not forget about the 10% discount that developers are required to offer as well. Previously, if you were to buy the property you have your eye on, it would’ve cost you RM511,250 inclusive of stamp duties.

But with the HOC, you could get it for only RM450,000. You’re looking at savings of RM61,250. That’s more than enough to cover the cost of a brand new mid-range car! To put things in perspective, the 2019 Perodua Myvi (1.5L) is going for RM50,290.

MORE: What Malaysian homebuyers should know about the Housing Development Act (HDA)?

4. What should I take note of in the extended HOC?

(A) The Sale and Purchase Agreement (SPA) affecting the transaction must be executed (signed) between the purchaser and the developer on or after 1 June 2020 but not later than 31 December 2021.

(B) It was previously reported in the media that some of the projects being marketed under the HOC have yet to be launched – homebuyers should practise caution in identifying these as the 10% discount will then not apply for these projects.

(C) A developer is allowed to offer the 10% discount to purchasers prior to registering a project with REHDA for HOC.  However, the developer must ensure that the sold unit(s) are registered once the registration process begins and that the Sale and Purchase Agreement is signed within the campaign period.

(D) Make sure any developer promoting homes under the Home Ownership Campaign has been registered with REHDA HOC – You can view the full list of registered HOC projects and the developers involved throughout Peninsular Malaysia here.

5. How do I buy a house under the HOC?

Previously under HOC 2019, multiple expos were held around the country for developers to showcase their residential properties under one roof. The flagship HOC expo for Klang Valley held in March 2019 attracted 43,000 visitors and recorded RM285 million in home bookings. 

This time around, most developers who are selling properties under the Home Ownership Campaign are promoting their residential projects online. You can check out various HOC 2020-2021 deals here – Some developers are offering other goodies on top of the HOC discount such as Free Legal Fees, special discounts/rebates and more.

Source: Iproperty