Over the past two years, we have observed a slower property market with stagnant prices in most of the projects. If you wish to buy a house before the cycle of the property market goes upward in 2018 as anticipated by Malaysian property investor Dato’ Sri Gavin Tee, this year is probably a good time to do that.
It has been more than two years since the local property market went downhill from 2014 and developers were more stressful than ever to sell new projects, especially high-end residential projects.
Developers were offering more packages and freebies to sustain their sales, yet the number of transactions and the total value of transactions dropped by 11.9% and 16.4% respectively year-on-year for the period Q1 to Q3 2016.
Though it is still not a full buyer market now, consumers can take advantage of the fact that completed but unsold units (which have been building up over the years especially with recent completions) have spurred developers to offer substantial discounts to reduce inventory, according to Property Consultants Sdn Bhd executive director, Nawawi Tie Leung.
Here is What You Need to Do to Buy a Property:
1. Optimise Your Credit Ratings
If you have a credit card, personal loan, student loan or any other debts, you might want to make sure your debt service ratio (total monthly debt repayment / gross salary) is lower than 50% and do not miss any payments for at least two years. This will help to convince the banks that you are a good paymaster and the chances of mortgage loan approval for your next house is higher.
2. Have Enough Savings for Down Payment
Apart from down payment for your dream house of at least 10%, you need to save another 5% to 10% of funds to pay for legal fees, stamp duty, and documents costs. For example, if you are buying an apartment priced RM300,000, you will need at least RM45,000 of cash ready for entry cost.
However, if you do not have that amount of cash, you can choose to get the funds from your friends or family, get a personal loan with low interest rates or even get a cash advance with a good credit card, then use balance transfer with another credit card to minimise the cost of your debts.
3. Estimate Your Renovation Costs and Start Saving
It will be even better if you already have enough funds since the beginning of your savings plan to buy a house. As a general rule of thumb, home renovations should be about 10-15% of the value of the home; if your home is valued at RM 400,000, keep the costs to RM40,000-RM60,000. For newbie renovators, it is best to hire out the bigger ‘fixes’. Get a few quotations from contractors and their portfolio of past work if possible, try using Recomn.com or Kaodim.com for starters. Choose the one that fits in with your budget and timeframe.
Above all, make sure you do enough research on nearby developments of your future house, developer’s review, and financial capabilities before making any decisions.
This article is contributed by CompareHero.my, Malaysia's most trusted financial comparison portal dedicated to saving you time and money by comparing credit cards, broadband plans and personal loans in Malaysia.