Joseph Chan of MIP Properties is the Exceptional Rental Transaction Negotiator (by volume) award winner at the 2019 StarProperty Real Estate Awards, the most prestigious annual awards event for practitioners of real estate in Malaysia. In an exclusive interview with StarProperty, he speaks about the credibility of social media networks, property hotspots around the country, and the real estate market outlook in 2020.
As someone who relies heavily on social media exposure to attract new clients, do you believe social media networks like Facebook have lost any credibility given the events of the last year? Do people still extend the same level of trust on Facebook as they have in previous years?
I still believe that Facebook has not lost its credibility – especially among Malaysians. During the events that occurred last year, I feel that the Malaysian user and the local media have not really expressed any concerns. One of the reasons would be the most recent general election, which has distracted attentions towards the change in government.
Facebook is now 15 years old, and the penetration of users in Malaysia is as high as 80% – which has created a huge opportunity for marketing on Facebook. In recent years, we have seen more companies using Facebook for marketing – which is lowering costs and creating higher exposure. This also applies to real estate advertising, where many negotiators and developers are still willing to spend on Facebook marketing. Facebook has allowed us to market our properties based on selected demographics and users, which increases the effectiveness of our advertising efforts.
Malaysians are still heavily relying on Facebook to browse. However, I feel that there are some noticeable decreases in users posting on their personal pages – this feature is perhaps not as exciting as it once was. Also, today’s Facebook is flooded with all kinds of advertisement. This can be annoying to users at times – which may result in decreasing the exposure of our real estate advertisements.
Are you relying on channels other than social media to attract new clients at this time?
Facebook and Instagram have played an important role in my real estate activities as these platforms could easily reach many users. I have to consistently keep my pages active with interesting news and deals to ensure the followers are excited.
Besides these social media platforms, I believe that using WhatsApp has been crucial to my business because the app allows us to broadcast messages and pictures directly to our clients instantly. Due to the user-friendliness and wide use of the application, we rely on WhatsApp for our day-to-day communication to the point that we hardly use the traditional Short Messaging Service (SMS).
Other than that, YouTube has played an important part in our real estate activities because it allows our clients to have better visuals of our product and ourselves. Short video advertising is now the trend and the platform provides more trust and credibility to our clients.
You probably recall us asking you about the rental hotspots in the country last year, do you stand by Mont Kiara as an ideal neighbourhood for upwardly mobile tenants, and Shah Alam for growing families, or have your opinions about these places shifted?
I feel that Mont Kiara is still the ideal neighbourhood for upwardly mobile tenants because the environment has been created to be expat-friendly, with international schools and good security. Even though many tenants could be working outside of Mont Kiara, they still decide to live there because there are no townships in the Klang Valley that could offer the same kind of lifestyle. Many young professional working adults have also considered renting in Mont Kiara due to the classy environment that they are seeking.
Shah Alam remains the hotspot for growing families as there are many developers offering affordable homes with gated and guarded neighbourhoods – for example, Setia Alam, Denai Alam, and Kota Kemuning. As cities such as Subang Jaya, Petaling Jaya, and Damansara mature with premium property pricing, residents are now considering cheaper and newer alternatives such as Shah Alam. The multiple highways connecting to Shah Alam has also attracted many residents moving there. The rentals in Shah Alam are considerably cheaper than the other parts of the Klang Valley because, in recent years, there has been quite a huge supply of new apartments and houses. The rentals and property prices will gradually increase when the buildings show better occupancies and the LRT Line 3 is completed in the next five years.
Mont Kiara is almost fully built-up in 2019, do you think there are still some primary sale transactions to be had there? Do the possible rental rates of the area still make the high price of buying there worthwhile?
Developers are still launching projects in Mont Kiara as there is still plenty of lands available, especially on the stretch of Jalan Kiara 3, and with the condition of the market, the recent launches have been below market value.
Apart from that, with the introduction of the Home Ownership Campaign (HOC), many first-time buyers are considering Mont Kiara, where they could save on stamp duty costs.
Malaysia property prices are still relatively cheaper than in neighbouring regions, and Mont Kiara remains the top pick for foreign buyers due to the fact that Mont Kiara is in Kuala Lumpur and the requirement for foreign purchases within city limits is above RM1million (RM600,000 as of the 2020 Budget).
Compared to Selangor properties, the minimum purchase property price requirement by foreigners is RM2mil. As a result, Mont Kiara being in Kuala Lumpur would definitely be seen as a better investment. The weakened ringgit Malaysia is also one of the factors attracting foreign buyers.
As there is still strong demand for expatriate and local tenants in Mont Kiara, rentals in this area remain good. Even with the current market conditions, most of the properties are still able to fetch Returns on Investment (ROI) of at least 5% – which is considered a good investment. The positive returns have attracted property investors to consider Mont Kiara as their top selection.
Have you begun focusing on other parts of the Klang Valley, or the country, to help you win another StarProperty award for the highest volume of rental transactions in 2020?
I believe in focusing on an area to achieve better productivity and Shah Alam remains my area of focus. Shah Alam is still developing and it is one of the biggest cities in Selangor. With many developments going on in Shah Alam, it provides us with opportunities for new listings. As of now, my team and I have not fully covered the entire Shah Alam and my ambition is to have my team achieve strong penetration in every corner of Shah Alam.
Professionalism and good service are something we want to deliver to our Shah Alam clients and we want to be known for extraordinary servicing. As much as we want to close many deals, we still believe that giving the best service experience is the way to go further. With my strong reputation in Shah Alam, I have received repeat clients, and client referrals have increased my transactions over the years.
Do you feel that the trajectory of the real estate market in 2020 is conducive for another win for you? Or do you believe that sales will begin to outpace rentals next year?
I believe I am able to win again in 2020 as the market has shown signs of recovery with consumer spending increasing. This is always the case when the market is optimistic, people are always searching for bigger and newer premises.
With the recent StarProperty Real Estate Awards, my reputation has been boosted and my level of expectation is also higher. I have received more enquiries and referrals from clients due to this achievement.
However, I still have to remain focused and humble to ensure that I remain on track. Besides that, I believe constant training and being surrounded by motivated peers are the key ingredients to improving my performance in 2020.
Sales transactions will not outpace rentals for next year, especially in the sub-sale market, because the idea of renting is still considered cheaper than purchasing. We are moving towards a rental generation especially with the younger generation – where the cost of renting seems to be a better alternative to owning a property – which would require a huge sum in down-payment and not many people can afford that at this time.
Apart from that, the loan instalments would usually be double or triple the amount of rental. With the lower entry and flexibility for rental properties, the idea of owning property may seem to be diminishing – which is a characteristic seen in more developed countries.
What suggestions would you give to developers who are seeking to clear their stocks of unsold properties in 2020?
In my opinion, the rent-to-own scheme would be a good initiative as it allows the purchaser to gradually obtain the necessary deposits and get their loan approved. Most of the buyers who may not be able to afford a property in the first place, would eventually advance in their career or acquire a joint borrower to support their finances.
I would also suggest that developers provide affordable personal financing on deposits, especially to those purchasers who are at a 70% loan-to-value ratio, because this category of purchasers is mainly property investors with more than two properties.