Saturday, January 24, 2009

Keeping a vacation home (like in the highlands?)

Keeping a vacation home
Saturday January 24, 2009
By Thean Lee Cheng


Buyers are unlikely to sell their property as they are passionate about it

A year ago, Yen Chong, 47, and her husband bought a two-bedroom apartment of less than 1,000 sq ft in Silver Park, Fraser’s Hill. It set them back by about RM120,000 but the couple was thrilled about the weekly rendezvous.

Economic turmoil notwithstanding, it is a purchase they do not regret a jot.

Recalls Chong: “We were going up to Fraser’s Hill very often and were renting the three-bedroom bungalows which come with a housekeeper and cook for between RM500 and RM600 for the weekend.”

The living area of a waterfront bungalow in Glenmarie Cove. Notice the serenity of the outdoors.
The living area of a waterfront bungalow in Glenmarie Cove. Notice the serenity of the outdoors.


“A friend suggested that since we were up there so often, we should have our own place. We mulled over the idea and decided to buy one. If the novelty wears off, we’ll just sell it,” says Yen.

Today, the couple makes the two-hour drive every Friday evening from their home in the Klang Valley– or as often as they are able to get away – and return on a Sunday evening.

While Yen Chong has her vacation home in Fraser’s Hill, retiree John Lim has his in Country Homes, Rawang. He bought it about 10 years ago.

“When you really think about it, it makes no financial sense to keep two houses. We have to manage two properties, have double or triple of everything and have to do more housework. Instead, I could sell it and make the money work harder. But I enjoy this place and so does my family,” he says.

SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng profiles Malaysians who opt to have a vacation home – usually men (80%) between 35 and 60, from teachers to engineers to retirees.

“What and where they buy depends on the location of their home, and if he is a businessman, his business. Those in the Klang Valley generally like country homes in Seremban, Malacca and Pahang (Genting Highlands).

“They want to go back to nature, but do not want a long drive of anything more than 1½ or two hours. Those who fancy a home by the sea would opt for the islands or Johor,” says Chan.

Ng: Most waterfront projects are located far away from the city. Glenmarie is about 20 minutes from Subang Jaya township.
Ng: Most waterfront projects are located far away from the city. Glenmarie is about 20 minutes from Subang Jaya township.


Generally, vacation falls into different property segments – resort-type bungalows serve as weekend homes, condominiums are purchased because they are near the beach and service apartments with facilities are valued for their highland locations like Genting and Bukit Tinggi.

The principal of Landspecs Chan Khay Eng, who has been in real estate for some 30 years, says the most popular locations for vacation homes are Fraser’s Hill, Cameron Highlands and Penang. Other popular destinations include the foothills of Genting.

Today vacation homes are also found in niche housing projects away from the city. This includes Gita Bayu in Serdang, a gated and guarded development set among the trees, Bandar Country Homes, Glenmarie Cove or just about any development away from the city with a pleasing environment.

Of late, the concept of a vacation has changed from several decades ago, says Chan.

“Before, one either goes to the beach or the hills for a vacation. But with niche lifestyle housing coming up, some of these projects have very pleasing elements. The road networks have helped.

“Many of us work in the city. We don’t want something that is too far away but close enough to make that drive. But a vacation home is not an investment. When you buy a vacation or a weekend home, you are buying it for your own use. It does not provide a yield,” says Chan.

Lim, who has been keeping his Rawang vacation home for a decade, concurs: “I bought my vacation home for about RM200,000. With renovation and interest, it has swelled to RM600,000. I have no need for the money and if I sell, I’ll be lucky to get RM360,000 for it.”

In the past, developers were launching various types of lifestyle property – waterfront bungalows, parkhomes and orchard farm homes – not so much as a vacation home but as an investment. But because of the need to stay close to the city, the middle class bought into these projects and turned them into a weekend-getaway.

Locations that are close to tourist hot spots or popular destinations like Genting Highlands can be rented out. Ai Cheng says: “There is no sentimental value attached to a property purchased for investment but for a vacation home, there generally is.”

Now that the crunch is here, does that mean those with second homes may feel compelled to sell out?

Says Ai Cheng: “The vacation home market is very niche. Those who buy into this segment can afford it. They are unlikely to sell. Most of the owners are also passionate about their purchases. They would have factored in the cost of maintenance and would engage caretakers or part time people around the area to do the cleaning job. Some even opt to do the cleaning themselves as part of the family recreation and exercise. Because a vacation home sort of unites the family, they will not sell even in times like these.”

Chan from Landspecs says “vacation homes tend to be located in secondary locations, away from the city. Hence, the price is not prohibitive and owners are unlikely to sell based on price point.”

Glenmarie Cove, a waterfront project by Glenmarie Cover Development Sdn Bhd, a member of the DRB-Hicom group, for example, has semi-detached houses beginning from RM530,000 to RM780,000. When the project was first launched several years ago, a semi-detached unit was going for about RM400,000.

The development, which comes in four phases, has 346 vacant bungalow lots and 496 units of semi-detached on about 200 acres. The gated and guarded development has a 2km boardwalk which fronts Sungai Langat.

Its chief executive officer Ng Tet Min has a vacation home there. He says this is the only waterfront project in Selangor.

Ng says most waterfront projects in other parts of the world are located far away from the city. Glenmarie is about 20 minutes from Subang Jaya township, which explains why most of its Malaysian buyers hail from Subang, Klang and Shah Alam.

Singaporean, British and South African buyers each make up 15% of the buyers.

Its bungalow prices vary between RM60 and RM188 per sq ft. Those facing the river are the most popular. The company has also built a jetty and owners can park their boats there for a fee.

So, with the economy the way it is today, will people actually fork out precious ringgit to buy a non-yielding home?

Maybe, says Chan, if prices are attractive enough and if property is considered a more holdable option than other forms of assets. -- The Star Lifestyle/Business.

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