Update Your Property Buying Criteria For 2018

Update Your Property Buying Criteria For 2018

Although the property market is predicted to be stagnant this year, the fact remains that real estate in centralised locations are still out of reach for the average income earner.

The inability to afford housing was further highlighted in a 2015 Khazanah report titled ‘Making Housing Affordable’, which labelled properties within KL as ‘severely unaffordable’ with a house-price-to-income-ratio of 5.4 times (the affordable ratio is 3 times or under)!

Furthermore, sought-after locations such as Kuala Lumpur city are out of reach for those earning an average income – which was at RM5,228 in 2016 – as a mere two-bedroom non-landed unit in Bangsar costs more than a whopping RM1.06 million (based on EdgeProp area outlook).

The only ones who will ever paint the walls of homes in that address are income earners with 50% more than the average employee.

So, what can an average income earner with RM5,000 afford? To determine this, we calculated the affordability amount to match a debt service ratio (DSR) of less than 60%.

Without debt commitments
With debt commitments
Gross income
Monthly net income
Monthly commitments
RM700 (car loan)
Property price
RM 400,000
Margin of finance
Loan amount
Home loan interest rate
Loan tenure
Instalment amount

Based on the figures above, an average homebuyer with zero commitment can afford property no higher than RM550,000, while an individual with a car loan of RM700 per month can afford a home of RM400,000 and below.

However, if you have more debt, it would be an endless struggle to secure and sustain such a loan.

Although the government has launched affordable housing schemes for low-to-medium income earners, you could be stretched pretty thin to afford a property at the address that you want.

To balance affordability and also your wish list in a property, location is no longer the be-all, end-all factor in property shopping. Other criteria such as accessibility and connectivity have climbed higher in the priority list of a property buyer.

Micro factors of property location

Exorbitant prices have given us little to no hope of owning a property in locations such as the golden triangle, but there are other townships which fit the bill and are built at strategic locations.

Because of the rise in developments, the location criteria are broken down into micro-factors that shape the desirability of an area.

These micro factors are accessibility, facilities and connectivity. Although a property is not located in a central location, it is still a convenient location to stay.

Fact is, not many people want to live in the city center anymore, due to the limited unit, congestion, noise and just general lack of space.

This is why looking slightly away from the city for a neighbourhood that offers a better environment may seem like a good idea.

Here are what you should really be considering when it comes to location of a property:

Access to major highways and public transport

Most property listings usually indicate the distance between the unit available and public transport as these are one of the main marketable factors that influence homebuyers’ decision.

Traffic congestion is inevitable, and this is the reason that public transport is essential. Furthermore, those who don’t own vehicles have an easy travelling option for their daily commute.

For example, Serenia City, a 1,775-acre integrated township located in the vicinity of Salak Tinggi, Sepang, has both an Express Railway Link (ERL) station just a mere 4.4km away and access to major highways via the Serenia City Interchange, targeted to be completed by October 2018.

Moreover, business travelers or frequent fliers have easy access to KLIA and KLIA2, especially with direct stops via the ERL.

Serenia City is also expected to serve as an economic and transportation hub for its surrounding areas with the existence of the Sime Darby Business Park.

Here are the transport and connectivity options available in Serenia City:

Mode of Travel
Salak Tinggi ERL Station (4.4km away)
KLIA, KLIA2, Bandar Tasik Selatan, Putrajaya & Cyberjaya, KL Sentral (LRT, MRT, KTM)
Maju Expressway (MEX)
Major junctions
Kuala Lumpur Kampung Pandan Interchange/ Kuala Lumpur Middle Ring Road 1/ East-West Link Expressway/ Kuala Lumpur Seremban Expressway/ New Pantai Expressway/ Shah Alam Expressway/ Jalan Seri Kembangan, Putrajaya Link/ Cyber Jaya & Putrajaya Interchange
North–South Expressway Central Link (Elite Highway)
Major junctions
Guthrie Corridor Expressway/ New Klang Valley Expressway/ Shah Alam Expressway/ Damansara – Puchong Expressway/ South Klang Valley Expressway/ Putrajaya Link/ KLIA Expressway/ North-South Expressway Southern route/ Nilai North.

The comfort of convenience

Access to clinics, hospitals, retail, as well as food and beverage outlets within a township makes a home ideal for sustainable living. You don’t have to go to the city just to shop and if there’s a medical emergency, you can rest assure that help is not too far away.

Additionally, growing families or those expecting to start one should take into account the nearest schools within the area to enjoy the security and comfort of having your kids close to you.

With today’s hectic lifestyle, some of the highly sought-after facilities in a township are shopping malls (for days that you just can’t cook a meal and want to eat out while doing some shopping), good schools and university (not just for your kids, but it also increases the rentability of your home if that becomes an option), and hospitals and clinics (you never know when you’d need these facilities during an emergency).

Serenia City checks everything on the list with the following facilities within reach:

  • Horizon Village Outlets (HVO), an outlet mall with luxury and casual brands for all your shopping needs, set to open this year.
  • Nearby local and international schools Sekolah Kebangsaan Sepang (12.9km), Sekolah Kebangsaan Jenderam Hilir (11.5km), Little Caliph Dengkil Pre-school (7.5km) and Brainy Bunch International School (20.6km).
  • Xiamen University Malaysia Campus for tertiary education.
  • Access to hospitals and clinics – Putrajaya hospital and Serdang hospital are approximately 18.7km and 28km away respectively.

Potential appreciation in value as a long-term investment

A property purchase is more than just a home – it’s one of the greatest investments you will ever make. Sure, you can buy a property for your own occupation, or you can buy it to let. However, the truth is, all of us want to know if our property will appreciate in value over time.

Before you fork out your savings, consider these factors to ensure your house will be in high demand in the coming years, as this will give you greater returns if you are opting to sell off the property one day.

The development of the area will largely affect its marketability in the future, which is why you must consider the masterplan of the township because its future potential might bring you the bucks.

One of the main factors that drives up the value of property is the social, cultural and demographic elements surrounding it.

Some factors you should look out for when it comes to a township is:

  • How will the community be like? This will depend on the type of housing – high-end or low-end properties.
  • What kind of tenants will it attract? As Serenia City is within the Multimedia Super Corridor (MSC) zone, this will likely attract a lot of high-technology companies, which will in turn attract professionals and executives to live and work in the community.

Furthermore, Serenia City’s masterplan includes five precincts listed below and shown in Sime Darby Property’s masterplan.

  • Residential – Aman Serenia
  • Residential – Bayu Serenia
  • Industrial – Cipta Serenia
  • Town Centre – Citra Serenia
  • Residential, commercial, adventure park – Puncak Serenia

With residential components complemented by commercial and industrial development plans in place, the township is set to contribute towards enhancing economic growth through job creation, capital appreciation, enhanced socio-economy and many more.

serenia city sime darby masterplan

The developer makes a huge difference

A developer’s reputation is crucial. Finding a property with a price tag within your budget range is great but do your due diligence on who is developing the property.

Just like any other relationship, the success rate is built on trust, which brings us to this question – how do you determine if the developer is reputable?

Horror stories of developers who required their buyers to settle maintenance fees for a vacant possession when the unit was still under construction, are not unheard of.

To avoid expensive headaches as a property owner, here’s a checklist to evaluate the developer before you part with your money:

  • Reputation – Conduct research to find out if the developer has been awarded for its projects. A developer with a good reputation will always be recognised and they are more likely to handle buyers with care as they have a reputation to uphold.
  • Workmanship and awards – A “cheap” price tag does not equal good quality. Thus, do you own inspection and make it a point to understand factors of the unit, such as the infrastructure, piping, or electrical wirings used. Also, pick a developer that has been awarded for its quality. One of the systems that measures and evaluates workmanship quality is the Quality Assessment System in Construction (QLASSIC) – based on the Construction Industry Standard (CIS 7:2006).
  • Experience – Check how long they have been in the industry and go through their past successes on older projects to check the completion rates, and how they have handled their customers. If you know anyone living in these old developments, ask them how their experience has been like dealing with the developer.

Additionally, a developer who maintains a good customer relationship, such as constantly updating the progress of their projects via mediums such as newsletters, is what you’re looking for. This gives you the transparency and confidence you need to ensure no discrepancies will occur later.

Sime Darby Property, who spearheads Serenia City, has gained good reputation in the property industry, with its latest residential project launch of double storey link homes in Bandar Bukit Raja getting a whopping 70% take up rate in one weekend early this year.

 What makes Sime Darby Property a reputable developer?

✔ Successful 45-year track record of developing sustainable communities

✔ Has to date built 23 active townships/developments with a global reach that encompasses assets and operations across the APAC region and United Kingdom

✔ First Malaysian property developer to be awarded the International FIABCI Prix d’Excellence Awards twice for its Subang Jaya and UEP Subang Jaya townships

✔ Achieved Gold at the Putra Brand Awards 2017 for the 8th consecutive year

✔ Past projects include Subang Jaya, Bukit Jelutong, Bandar Bukit Raja, Putra Heights, USJ Heights, Taman Melawati and Ara Damansara

✔ Took home 13 quality building awards at the QLASSIC Excellence Award 2017

The first phase of Sime Darby Property’s residential precinct in Serenia City – Serenia Amani – will be launched on March 31, 2018.

So, if you have been saving up for a property but still don’t know where to put your money in, Serenia City could tick all the boxes.

However, make sure you have the funds to afford a property and if you have been saving up for a house, take note that you can withdraw from your EPF account 2 for property purchase (which you can calculate here).

Interested in Serenia City?

Register your interest and visit Sime Darby Property for more information today.

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