11 March 2010

Buying a House/Property in Malaysia - Part 1.

I was reading up on my friend Gareth's blog post about his experiences with buying a property in the country. He covered a lot on the choices/decisions to be made - and let me see if I can add on further. For many of those who are looking at owning their 1st property - there are indeed many factors to consider, such as finding the suitable location, finding the right place to call home, bargaining and negotiations, renovation works, legal procedures, and importantly - how much your budget is.

Since Gareth started off with the choice of property - I shall do the same too.

The ultimate choice of property that you have to make and choose between is-
  • Landed or High-rise
  • New or 2nd hand property
A landed property (picture courtesy of Mah Sing)

I shall cover the differences and comparisons between the landed and high-rise first.

For a start, it all depends on your investment purpose. For those who are buying as an investment property, I would say it all depends on your budget. And as long as you are not overpaying for any particular property and you have chosen the 'rightful' locations, you would not go wrong. For those who are buying for own stay+investment, here are some factors to consider. Certain landed properties tend to give you a much higher capital appreciation in the long run, whilst high rise properties with strata titles tend to give you better yields (comparing between renting the property or paying the monthly mortgage instalments).

The One KLCC. (Perhaps KL's most expensive high rise condominium right now)

So, why own a landed property?
When someone buys a landed property - what they get is the entire built-up, PLUS the whole piece of land of which the house is built on. For those who enjoys gardening or have a little doggie, they would want to consider owning a landed property as it comes with your very own garden. From an investor's point of view, one would see that landed properties would tend to appreciate better (in terms of capital appreciation) in the long term, as compared to high-rise properties.

The used-to-be BOK HOUSE - soon to be high-rise development.
Take BOK HOUSE for example. When Mr Chua Cheng Bok purchased the house and the 1.3 acre tract in 1929, it was probably worth RM200,000 or less back then. Today, if the house was there, it would be worthless. But the development value of the land would be priceless. The land was transacted at RM 124 million - or RM 2,200 psf. The property had appreciated over 600 times in 80 years.

Land tend to grow scarce in times to come while development and resident population quickly catches up. The larger the population, the more rapid the development - and hence, the more expensive prime land would cost.

However, there are also some negative points to landed properties.

As someone who had experienced a house break-in before and faced numerous burglary attempts, security is something that I look at a lot. When you stay in a high-rise properties, and in particular, the upscale ones, security is one of the key selling point of these properties. For landed properties, security is something that lacks, unless it is in a gated or guarded community.

Damansara Idaman - a gated development by TA Properties.

Bungalows in a well designed and planned gated development, such as Damansara Idaman - just outside Tropicana and facing the NKVE, sells for between RM 3.6 million to RM 4.8 million, for land sizes of 8,000 - 10,000 sf and built-ups of about 6,000 sf. This translates to about RM450psf upwards. Comparing this with properties nearby but NON-gated, it commands at least a 20% premium on the pricing. But what you get is a home that is secured - a piece of mind.

Okay - capital appreciation + security sorted. What else?

The 3rd main criteria would be Maintenance.

The Kiara Designer Suites - excellent condo facilities.

For high rise stratified properties, there is a fixed sum of maintenance charges/fees which is paid regularly to the Management Corporation to upkeep the maintenance of the development. This would cover the cost of maintaining the gym, garden, swimming pool, car parks, lighting etc.

For a landed property, you do not pay these maintenance fee - but the owner would need to maintain all his own property on his own. The maintenance of the garden, your piping systems, sewage systems, swimming pool (if any) and any repairs/defects would all have to be covered by the owner himself.

In summary, I think choosing between a landed property vs a high rise property would really depend on your own lifestyle and preference. For me, I would always go for a nice landed property in a strategic location (such as Bangsar/Bukit Bandaraya area) with ample garden spaces for my dogs to run around - and perhaps a nice swimming pool to chill out in during our hot Malaysian weather.


  1. Malaysia is a popular destination for its stunning natural beauty..when looking to investment in property..people should take a long term view..it is important to understand the buying process before you buy a property..