There were over 66,000 shiny new residential units launched in Malaysia’s property market in 2018. That figure represents tens of thousands of both high-rise and landed properties to meet the needs of homebuyers.
And behind each and every one of those, lies a property developer with a reputation and track record to protect.
What is the role of a property developer?
Sometimes, the question sort of answers itself! A property developer is an organisation or individual who invests in developing or redeveloping property.
Good property developers have comprehensive understanding of planning laws and construction requirements, alongside an appreciation for how to realise a good investment return.
By purchasing vacant or underused land/buildings, property developers can then turn that area into a new apartment block, glittering mall, or whatever is deemed as appropriate (and lucrative) for a given location.
A crucial part of a property developer’s business is securing the initial funding for a project, which may seem doable if you’re redeveloping a couple of faded terrace houses.
But if you compare that against the RM1.2 billion that investors in the Bandar Malaysia project had to pay as a deposit for construction, you begin to see how massive the business of property development can get!
Why is it important to choose a trustworthy developer?
While Malaysia’s property development industry is largely driven by ethical, experienced, and trustworthy companies, there're some dodgy developers that you should watch out for!
So, why is a good developer so important? Here are a number of reasons why you want to ensure that your property is being handled by a real expert.
1) Good construction practice
The best developers have extensive experience delivering quality projects to their customers.
They'll have strong relationships with great architects, material suppliers, and construction companies, meaning you’re far more likely to get a truly outstanding property at the end.
2) Financial security
There’s no greater fear for a homebuyer or property investor than a project going bust. Abandoned projects cause significant financial loss to investors and purchasers, especially if they've got monthly loan repayments to deal with.
If you’re committing your money to Bob the builder from down the road, you’ve got far less financial security than trusting it to a multibillion Ringgit property developer in Malaysia with fifty years history in the field.
3) Planning and scheduling
Property is a big investment, and one which often requires a significant downpayment upfront. When purchasing a new home during the construction process, that financial outlay is weighed up against the period of time you have to wait to receive your property.
Since you’re probably coughing up cash for things like rental and home loans, you want to know a property will be finished on time.
So, the better and more experienced a developer is, the more likely they are to hit their targeted deadlines.
4) The value of reputation
A great reputation is a good thing, in more ways than one. The top developers are not only committed to delivering projects without faults, they’re much more motivated to fix any problems if they arise.
The best developers in Malaysia want to keep their reputation for being… well, the best developers in Malaysia.
That means they’re less likely to risk their image being tarnished by ignoring customer complaints or avoiding fixing problems during periods such as receiving vacant possession of a building.
5) Brand recognition
As a property investor, it’s hard to overlook the value of brand recognition. If you’re buying a property with the purpose of making money off it one day, then having that big name developer behind you is a powerful part of the story.
Homebuyers want to buy properties from top developers, for all the reasons we’ve listed above.
That means if you have the developer brand recognition with your property, it could be worth a substantial premium when it comes to calculating your returns.
The importance of research and the APDL License
Not every property developer in Malaysia can achieve top developer status, but one thing they should all have is the APDL License.
The Advertising Permit and Developer License (APDL) is a legal requirement for property developers when selling property.
It's an official approval received from the local housing ministry to confirm that they have permission to advertise and sell the property in question.
When you see an advert for a property development, the ADPL should form part of this message. It should include:
- Validity period
- Project name
- Land tenure
- Projected completion date
- Minimum and maximum price
- Building plan number
If you don’t see an ADPL, alarm bells should be ringing. Although it might just be the marketing department having a bad day and forgot! Still, it's better to check and be safe, than sorry.
What’s even more important is that you do your research! Find out as much information about developers and their previous projects as you can.
Take a look through developer websites to see if they’ve won awards, a sure sign they’re amongst the cream of the crop.
Have a little check of news pieces too; bad developers tend to come with complaints from the public, just like how good developers tend to be published for the awesome projects they've completed.
What goes wrong with the wrong developer?
The list of problems and complaints about choosing the wrong developer is a long one. At the most fundamental level, taking possession of a home that doesn’t live up to expectations is a hugely disheartening event.
Some people aren’t even lucky enough to receive the property they paid for. A developer declaring bankruptcy or abandoning a project is a horrible way for a property investment to terminate.
Not only will you not get your property, you’re extremely unlikely to get your money back too.
When you do receive your property, persistent problems and worries about health and safety are going to significantly undermine your happiness.
And if a developer is inconsistent enough to deliver a poorly finished property, they’re probably unreliable when it comes to rectifying those mistakes too.
Now Malaysia’s property industry is by-and-large run by awesome developers delivering awesome projects to the people. That’s great, because we all love a safe place to call 'home'.
When it comes down to it, top property developers are those that can display consistent and conscientious developments that deliver on their promises.
Looking for a property with promise? Sometimes that promise is all down to you! It’s time to explore – Which Is Best For Your Home: Remodel, Restore, Or Renovate?