homefinder: What do you think the market is going to be like in 2015?
Stephen Tew: 2015 is most likely going to be a very challenging year. With GST coming into force on 1 April 2015, purchasers of non-residential properties will be hit directly with a new 6% GST. Coupled with approximately 3% of stamp duty & 0.5% stamp duty for loan documentation, prospective purchasers will have to fork-out ‘up-front’ close to 10% of the purchase price as additional cost of purchase even before they make any profits. This is highly probable to ‘put-off’ a lot of potential buyers.
Recent uncertain ‘Petroleum’ prices has led to the announcement of the high likelihood of the deferment of a lot of mega projects. The recent massive drop in value of the stock market will certainly bring down the overall wealth of the investing public and be of great concern. There is then also the drop in price of palm oil which will affect directly the many small-holders of estates spread throughout the country. These and many more will certainly cause potential investors of real estate to slow-down their aggressiveness in acquisitions and investments and err towards caution.
Assuming a crisis is indeed coming, what are some of the measures you can suggest to avert from this crisis?
In preparing for a crisis one should try to ensure that all their available rentable spaces are filled-up (even at a lower rent) and tenancies properly signed and locked-away. You also need to study your cashflow and finance to see if it needs restructuring now before it is too late. Of course if there are mediocre performance assets, you might want to dispose it off quickly.
What remains a good proposition for the property market?
If a crisis does come, opportunities will come from all corners. You just need to have the ‘cash’ to do the deals. No one particular sector is likely to be ‘head-over-heels’ more affected than the other. But one can probably generally say that the best deals will be in the locations between KL city to Subang Jaya as this is perceived as the middle to high-end market.
What is the strategy for an investor and your advice for buyers for own dwelling?
As an investor you should keep your nose close to the ground to smell out ‘value buys’, otherwise ‘don’t bother’. Discipline and patience are the keywords. If you are buying your own dwelling it might be the best time.