Bungalow trial: Phang Li Khoon lost money selling the bungalow

Lim Sian See

In Lim Guan Eng’s trial today a Bank Manager testified that Phang Li Khoon took out a housing loan of RM2.125mil for the RM2.5mil purchase of her bungalow in 2008 – or a margin of financing of 85%.

The housing loan was at 6.75% BLR but there was a discount of 2.2% interest – meaning 4.55% interest rate for the first 30 months.

This translates to a monthly installment of RM11,872 – principle of interest. This suggest a housing loan period of 25 years.

However, Guan Eng initially rented the bungalow for RM5,000 per month starting on July 1st 2009 before buying it in July 2015 for RM2.8 million.

This means that Phang collected total rental of RM360,000 for the 6 years from 2009 to 2015 from Guan Eng.

However, at the point of July 2015 when Phang had sold the bungalow to Guan Eng, she would have paid about RM850,000 in total interest alone.

This means that she has lost RM500,000 in interest costs alone after deducting rental collections – which means the RM300,000 profit she made on the house by selling at RM2.8mil when she had bought at RM2.5mi cost.

This is even without taking into account of the assessment or quit rent fees or any renovations that she did. Or even if she rented it out fully furnished – meaning she needs to buy the furniture too.

Photos had suggested that extensive renovations had already been done but so far no one has stated the cost. Perhaps the court will ask about this later.

Phang Li Khoon did not just sell way below market value or even JPPH value of RM4.27mil but she must be the only property investor in Penang who actually LOST MONEY on landed property during the period 2008 to 2015 when the property sector was hot in Penang.

Source: Lim Sian See

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