5 Tips On Selecting The Right Developer

I don't know about your country, but in mine, Malaysia, when you're looking to buy property of any type, one of the important criteria you would want to look into is - the developer.

The project is important, but you would agree that the developer plays even a bigger role; in ensuring that you're getting the best property deal in Malaysia.
So, you might want to read on to find out, who would be your ideal developer...

Well, basically, these are the criteria to look for:

1. Reputation and Reliability

Need I say more? You know this already, don't you? But...

The most important thing is: How do you find out reputation and reliability of a developer, right?

Simple, just ask around residences or owners of previous property projects by your targeted developer! You should be able to get some hints from these neighborhoods.

While you're there, open you eyes; BIG and WIDE! Observe their workmanship. Would you be happy with the quality of work that you see right before your eyes?

You can also check who their financiers are. Do they owe their contractors, vendors and suppliers? You wouldn't want to be involve with a bad pay master, would you?

One more thing...

Find out if this is their first project? If they are not from a developer background, you should think again...

2. They should be registered under REHDA

REHDA, or the Real Estate and Housing Developer Association, is the association that keep track of a developer's records.

Reputable property developers in Malaysia are members of REHDA... and if it is not registered... well, you know what to do, right?

3. Timeliness in Delivery and Quality

While checking out the previous projects by the developer, find out about their timeliness. Are they delaying project consistently? What is their compensation for the delay? Is the compensation fair and following the legal requirements?

4. Credibility, Management Effectiveness, After Sales Services.

These are the normal things to check. A MUST!

When you’re uncovering the background of the developer of property projects in Malaysia, find out about their credibility, their management teams and effectiveness, and what is the quality level of their services?

And now... the most outrageous criteria!

5. License!

Huh? Property developers in Malaysia MUST have a license, don't they?

Alright, before I go about embarrassing my lovely state... let me explain:

You see, there are certain licensing requirements for properties in Malaysia. And not all property projects are necessarily regulated. Thus, there's no pre-requisite to have a valid license for certain project types.

Property projects that requires a valid license in Malaysia are any buildings that are intended for human habitation, partly or wholly. Examples, low and medium cost apartments, condominiums, terrace houses etc.

But then again, The Minister may by notification published in the Gazette, exempt any housing developer from any or all of the provisions of the Housing Development (Control & Licensing) Act, 1966.

So, these 'exempted' developers may not need any license as well!

Now, you probably would be asking: What else does not require a valid license?

Here's the loopholes...

If the developer is building less than four units; or the units are only sold after full Certificate of Fitness for Occupation has been issued. No license is required.
Besides that, any approved commercial development, no valid license are required.

Examples, service apartments, commercial buildings, shop lots, shop offices, bungalow plots and/or land, orchard land and/or agricultural land, industrial and/or factory lots, and other types of properties not specified as ‘Housing Accommodation’ under the Housing Act.

The Changing Landscape Of Penang

Penang is on the verge of a property boom that will drive the state's growth into a vibrant regional hub for north Peninsular Malaysia.

Coupled with the entrance of major Klang Valley-based developers like SP Setia Bhd, E&O Property Development Bhd, Mah Sing Group Bhd, IJM Properties Sdn Bhd and Sunway City Bhd, it will further spur and change Penang's property landscape where the locals will enjoy better designs and concepts.

Although the state's economy is largely driven by the electronics and hospitality industries, the property sector is emerging as an important activity with many new projects underway or are on the drawing board.

The impending roll out of infrastructure projects under the Ninth Malaysia Plan (9MP) will be a boon to the real estate sector as new areas are open up for development.

The state has been allocated a RM6.6bil development budget for various projects, including the second Penang Bridge, Penang Outer Ring Road (PORR) and monorail project.

If the projects are conceived and implemented as a holistic infrastructure master plan to upgrade the state's road and transportation connectivity will be a big spin off to the state's economy.

The improved transportation network from various infrastructure projects would open up new frontiers of development that were formerly inaccessible, such as Batu Kawan and Balik Pulau.

Places near the site of the second Penang Bridge are also coming alive with renewed interest from developers. More developed areas in the southern part such as Sungai Ara and Bayan Lepas will continue to attract keen interest due to its proximity to the airport and free trade industrial zones.

The 9MP projects would benchmark Penang to be on par with some of the world's more modern cities.

A number of factors have contributed to Penang's “hot” property status - strong property demand and prices, high urbanisation rate and a household income that is above national average.

Of the population of 1.6 million people, nearly a third are between 25 to 44 years old - a good catchment market for property.

Penang's “nostalgic charm” had endeared it to the people, including foreigners and Penangites who resided outside the state.

Its island state appeal makes Penang a natural tourist attraction and it is no wonder that the state tops the list in attracting participants of Malaysia, My Second Home (MM2H) programme.

The exemption from real property gains tax and relaxation of Foreign Investment Committee guidelines for foreign buyers have promoted greater foreign buying interest for properties in the state.

Despite the many pluses, Penang is still a relatively untapped market with room for more innovative and better design projects as products offered have not caught up with changing market trends.

There are immense opportunities in both the residential and commercial property sectors with an acute need for better design products that will promote a better quality of life among the people.

Until a few years ago, most of the housing projects are the usual barrack-style houses or high-rise apartments with basic amenities.

Except for some new project launches, there is a lack of creative lifestyle products such as gated communities and resort-style developments.

In the commercial sector, there is also a need for better-planned office buildings, shopping complexes and food and beverage facilities.

Reflecting their growing affluence and changing lifestyle, Penang folks are now keen to upgrade to better planned and designed projects that offer them good security, amenities and environment.

Having the right address has become a measure of one's status and achievement in life and so good projects in the right location will do well for developers.

Penang Land Prices Not Likely To Dip

The Penang island's land prices are unlikely to drop, even if another economic slowdown happens.

For the past 10 years, Penang’s land value has been increasing.

It was a misconception to say that there was not much land left in the state.

With NCER, Penang can be a microelectronic hub of excellence, logistics hub in the northern region and has potential for an oil industry spin-off.

Penang’s strengths were its friendly locals, strong engineering workforce and vibrant nightlife.

However, the state’s weaknesses were its over dependence on the electronics and manufacturing sector, limited direct flight destinations, lack of top jobs for other sectors and slow pace in property development.

But the state’s declining population growth due to intra-state migration would hamper its development rate.