Desaru Coast

Guide to buying property

Overview

Johor Bahru is Malaysia’s southern economic hub. This is due to its proximity to Singapore and The Iskandar Malaysia project, launched in 2006 to develop a regional economic corridor and powerhouse.

The demand for commercial, industrial and residential properties in Johor are on the rise. Closest to the Singapore border is Iskandar Puteri, one of the flagship developments of Iskandar Malaysia, earmarked as the centre for investment, financial and business opportunities. Located just a few minutes from the Singapore checkpoint and boasting state-of-the-art infrastructure, Iskandar Puteri is one of the top property hotspots in the country.

The advantages of Johor include:

• A variety of properties at different price points, attracting investors.
• Some of the most advanced infrastructure and facilities in the region with the future-ready master plan of Iskandar Malaysia.
• Foreign multinational companies relocating here.
• Expatriates working in Singapore are inclined to live here.

Investments continue to pour in. From 2006 until March 2018, a total of RM262.43 billion has been committed to Iskandar Malaysia, 39% of it being foreign investments; businesses and employment opportunities are in abundance. Long-term gains are in store for those who choose to buy property in Johor Bahru.

If you decide to live here, you may consider these factors:

Section 1

Set a budget

Your debt service ratio

This is the total of all outstanding loans (personal, minimum credit card payments, car, etc) against your total income. It determines how much you can borrow from the bank if you are qualified. In Q1 2017, Bank Negara Malaysia reported that 42% of approved loans had debt service ratios of less than 40%.

Your monthly commitment

As a rule of thumb, allocate no more than a third of your take home pay for your home loan repayment.

Additional costs and fees

On top of the down payment (usually 10% with a 90% margin of finance), you will have to allocate about another 10% for legal fees, stamp duty, etc.

Subsequently, there could be on-going costs, such as maintenance fees and a sinking fund.

Section 2

Browse and shortlist property listings

Since you cannot view the actual unit before purchasing, consider the following:

• What is the unit’s orientation? Is it facing the sun?
• If there is no show unit, imagine walking in the layout—where are the walls, windows and doors? Does it flow well from one space to another?
• Is the unit removed from noise sources, such as the lifts, water tank and intermediate pump room?
• Where is the car park?
• What facilities does it have to offer?
• If you are after a new, off-plan development, make sure the developer has a good track record of delivering quality construction and finishing, in a timely manner.

Section 3

Compare prices & specifications

Check out the transacted prices of similar properties in the vicinity (for new developments) or within the same property (for sub-sale). For sub-sale properties, this will help you to negotiate a fair price that is close to its valuation price; in the next step of applying for a loan, the bank will use the valuation conducted by a licensed valuer to determine the loan amount.

Section 4

Make an offer

For new developments, you will have to pay a booking fee to the agent. Make sure that your deposit/booking fee is refundable if you are unable to obtain a home loan or the valuation is much lower than the purchase price.

Property Calculator

* The calculation presented here is only an estimation of the fees required for your purchase. Actual charges might vary across different states, status of the property, availability of documentations and others. Please refer to your legal firm for an accurate quotation.

Section 5

Apply for a loan

Look around for a bank that can offer you the best interest rates and terms. Factors to consider:

• Traditional (fixed amount) vs flexible (reduce interest by saving money in the linked current account);
• Interest rates;
• Margin of financing: the maximum is usually 90%; the remainding 10% comes out of pocket;
• Lock-in period: the period during which a penalty will be charged (usually 2% or 3%) if you pay off the loan before the end of the tenure.

Get approval for your loan before the next step.

UEM Sunrise offers EASY Financing by assisting buyers in narrowing the gap between the loan amount obtained from the end-financier and the home purchase price.

• With a deposit as low as RM5,000, buyers may start the process of obtaining a dream home built by UEM Sunrise;
• Buyers only need to obtain a loan of at least 60% from an end-financier;
• UEM Sunrise offers financial loans of up to 30% to make up the balance of the purchase amount.

Section 6

Sign the documents

Have your lawyer prepare the loan agreement, Sales & Purchase Agreement and prepare the remainder of the 10% downpayment. Your lawyer should look out for your interests, but understand all the Terms and Conditions before signing.

Section 7

Wait for delivery of vacant possession

Vacant possession means that the property is in a state fit for occupancy.

For new residential developments, developers have to deliver the vacant possession within 24 months for landed properties and 36 months for high-rise stratified buildings.

For sub-sale, it has to be done between 3 to 5 days after payment for the property has been made in full.