Saturday 27 September 2014

Land in Seberang Jaya Wanted

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The young find it difficult to afford a home

The young find it difficult to afford a home

THE removal of the developer interest-bearing scheme (DIBS) in Budget 2014 last year was supposed to help curb speculation in the property market, where prices, especially of residential properties in prime locations, have risen beyond the means of most ordinary wage earners.
However, for first-time house buyers, whose earnings usually fall in the range of between RM3,000 and RM4,000, the removal of the DIBS has simply made life more difficult.
This segment of house buyers finds that it is now much harder to acquire their dream home. This is because under the DIBS, they could have placed a downpayment of a certain amount and not pay anything until the property was completed; usually between 24 and 36 months.
Take Razif, a 28-year-old executive who earns RM4,500 a month, for instance. He lives with his parents and has been planning to move out for a while now. Unfortunately, the potential properties that have caught his eye so far have been way above his budget.
Chang Kim Loong
Chang Kim Loong
“I can’t seem to find a house or apartment that I can afford. They’re just so expensive and I also don’t want to live in a place that’s too far away from the city where I work,” says Razif.
“My parents are already retired and I wouldn’t want to burden them with any requests for financial assistance,” he adds.
Many genuine first-time buyers, especially fresh graduates or individuals under 30, face a similar plight as Razif.
Licensed financial adviser and syariah financial advisory for Excellentte Consultancy Jeremy Tan says salaries of young adults, especially those under the age of 30, are too low to be able to afford most properties within the Klang Valley.
“As a general rule, the loan should not take up more than one-third of your monthly salary. Most young adults are usually already paying for their car loans, which is compounded by other obligations such as income tax deductions and Employees Provident Fund and Socso contributions. Hence, they can’t qualify for a loan.”
Jeremy Tan
Jeremy Tan
MyFP Services Sdn Bhd managing director Robert Foo notes that it is difficult for young adults to buy a house these days, unless their parents “chip in”.
“Unfortunately for young adults, they have to either find something a bit more affordable or wait until they start earning more money. Another alternative is to buy the property in joint names.”
Bleak house
National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong, in his article Affordable housing: The buzzword, notes that the average household is finding it ever more difficult to buy their own property, with the ever-rising property prices coupled with the rising cost of living.
“The prospect of buying a suitable house is looking bleak. The average rakyat is struggling to purchase their dream house amid the ever-rising prices of properties, which have far outpaced the increase in salaries.
“Young adults are unable to afford a reasonable, suitable and liveable house that doesn’t require either taking out a back-breaking bank loan or moving out to a distant and bland housing estate that involves mind-numbing daily commutes.”
Chang adds that young adults are slowly becoming a “homeless generation”.
“Mind you, they are the future economic drivers of the city. Hence, the Government must take concrete and proactive measures to curb the unbridled escalation of house prices.”
Chang says the Government needs to stem the rapid rise of property prices due to false demand and excessive speculation.
Robert Foo
Robert Foo
“Ensure a steady supply of affordable properties to cater to the demands of the lower- and middle-income segments. Prevent a “homeless generation” from emerging that will result in many social problems (and) prevent our young from drowning in debt.”
Malaysian Institute of Estate Agents (MIEA) president Siva Shanker says one of the biggest reasons many young adults cannot afford to buy properties today is due to the upswing in property prices over the past few years.
“The biggest culprit are the developers who used to offer cheap entry costs, such as up to 100% loans, legal fees and/or stamp duty absorption and the DIBS. Many people who had bought a property at that time were those who couldn’t afford it or did not need to own a house.
“Because of this, everybody rushed to buy primary properties and the prices just went higher and higher. For instance, a semi-detached house that used to fetch between RM650,000 and RM800,000 in 2008 now costs RM1.6mil. How can the price jump 100% in just five years?”
Siva says this is a classic case of “unnatural growth fuelled by unnatural demand”.
“Greed has pushed the market up to unreasonable levels,” he says.
A change in strategy
Siva believes that today’s young adults, especially the Gen-Y group of individuals, need to “restrategise” and “change their psyche”.
“Today’s generation does not have what I call the ‘trade-up’ mentality. Instead of buying something affordable and then upgrading from there, they want to go straight for something with class that they can’t afford.
“Instead of buying something that costs, say, RM300,000, they aim for something that retails at RM600,000, which they cannot afford. So, what do they do? They save and save, but by the time they can afford it, the price has gone up to maybe RM800,000!”
Siva Shanker
Siva Shanker
Siva says that if they had purchased the RM300,000 property in the first place, they could have waited for it to appreciate to RM500,000 and then sell it and use the difference to buy a more expensive house later.
“You can get a medium-cost apartment for less than RM200,000 in Desa Pandan, which is less than 4km away from KLCC. But when they have a look and see that the place is not ideal, they back off. Who says there are no affordable properties to buy?
“If buyers are not picky or choosy, then there are, in fact, many properties that they can buy. There’s no such thing as an ideal home. You buy one and make it your ideal home.” - The Star

No wider impact from Selangor move P

No wider impact from Selangor move P

After the hue and cry among developers and property consultants over the Selangor state government’s move to raise the threshold for foreign buyers to RM2mil, the next question is, will this cascade to other states?
Not likely, say property consultants.
Earlier this month, Selangor doubled the price cap of properties that foreigners are permitted to buy from RM1mil to RM2mil for residentials in most districts. Foreigners can only buy strata and landed strata properties.
It divided the state into three zones and also raised the price of commercial and industrial properties for all three zones to RM3mil.
There were no such differentiation previously. Selangor, incidentally, has one of the highest transaction volume in ringgit terms.
A check with property consultants in Penang, Johor and Kuala Lumpur shows that Selangor’s move - seen as a measure to protect the state’s property market and house owners - is unlikely to be followed by other states.
Penang-based property consultant Michael Geh, senior partner of Raine & Horne, says Penang “initiated” the anti-speculation move two years ago when it raised the purchase price of landed units from RM1mil to RM2mil. The cap for condominium units is RM1mil.
Last December, the Penang state government imposed a 3% approval fee for foreigners, in addition to the existing ceiling price of not less than RM2mil for landed properties and RM1mil for stratified ones on the island, and RM1mil for both landed and stratified properties on the mainland.
Ng says it is unlikely that Johor will introduce property curbs.
Ng s ays it is unlikely that Johor will introduce property curbs.
“Penang is not a speculative play among foreigners, with their transactions only accounting for about 3% of Penang’s total transactions in ringgit terms. It is more the locals who are buying and flipping,” says Geh.
If international buyers comprise 10% to 15%, he will be “alarmed”, says Geh. There are some purchases by Singaporeans but this is because they have families here.
The Penang market is healthy based on optimum employment and a high percentage of domestic buyers, he says.
As for foreign developers foraging for land on the island and mainland Seberang Prai, Geh says both locations are on their radar.
Over in Johor, Cheston International managing director Steven Ng says it is unlikely for the state to have curbs.
The current cap is RM1mil with no distinction between the different sub-segments. Foreigners are allowed to buy landed as well as strata-properties. They are, however, barred from buying agriculture and Malay reserved land, says Ng.
Geh: 'Penang initiated the anti-speculation move two years ago.'
Geh: ‘Penang initiated the antispeculation move two years ago.’
In addition to the RM1mil cap, foreigners have to pay a processing/approval fee of RM10,000 or 2% of the market value of the property, which ever is higher, he says. In Medini, there is no bumiputra quota and developers can sell the entire block to foreigners.
On the state of the current Johor market, a source from Johor, who declined to be named, says it is “in a bit of a confusion at the moment”.
“There are two issues here.
“Foreign developers have created a glut in high-rise units. This glut has resulted in Singapore developers holding back their launches. They will have to drop prices if they were to go ahead with the launch,” he says.
“Launches are priced between RM800 and RM1,200 per sq ft now.
“However, to sell at RM1,000 per sq ft and above is a challenge unless it is in a very prime area.
“Secondly, this confused state resulted from a lack of rules. Even when there are rules, there is a lack of enforcement,” the source says.
This has resulted in developers taking “a wait-and-see attitude” with CapitaLand Ltd becoming the latest to postpone the launch of its first phase in Danga Bay township. Singapore-based CapitaLand is South-East Asia’s largest developer. Landed housing, however, is not expected to be an issue, the source says. This should benefit the UEM Sunrise group which is expected to launch their landed units.
Kuala Lumpur-based property consultants and developers say the move by Selangor is “fair”, although there are differing views. It came about after consultations with the Real Estate and Housing Developers’ Association (Rehda) - who resisted the move - and the National House Buyers Association (HBA) about three months ago, a source says.
Says Mak Foo Wi, a project director with Alzac Viva Sdn Bhd: “Right now, Petaling Jaya’s SS2 prices are just below RM1mil. The authorities probably expect prices to trend upwards but before that happens, it raises the cap to RM2mil.”
Suntrack Development Sdn Bhd project director James KK Tan says while he understands the state government’s noble intention, “such restrictions eradicate almost all classes of properties (residential, commercial and industrial) and almost all of the price range of properties available for foreigners.”
He says it affects property sales across the board which include new property and those in the sub-sale market and adds the number of foreign buyers in Selangor is insignificant.
A property consultant who requested anonymity says if one were to make rules based on the significance of foreigner buyers, Selangor will forever have a lax policy.
“Selangor’s property sector is significant. The border between Kuala Lumpur and Selangor is difficult to distinguish. Bandar Utama has a Petaling Jaya address whereas Taman Tun Dr Ismail is a Kuala Lumpur address. Also, foreign developers have gone into Semenyih. The state has noted these events.
“The anomaly is that Kuala Lumpur is retaining its RM1mil cap for foreigners, he says. So let’s wait for the upcoming budget,” he says.
Certain foreign developers are taking their money out of their country and going into other countries. This is an issue for a small country like Malaysia. In conclusion, the market should not be affected by these new rules set by the state government. - The Star

Has home ownership dream become more attainable?

TO address spiralling home prices, the Government had introduced several cooling off measures during Budget 2014. Though the speculative activities have dampened, grouses are heard almost everywhere that home price is still beyond reach. Owning a home remains a dream. Why and what can be done to boost home ownership?
Supply of affordable home
It was announced in Budget 2014 that 223,000 units of affordable houses will be built this year. The Government had allocated RM1bil to provide 80,000 PR1MA homes. Private Affordable Ownership Housing Scheme (MyHome) was introduced where a subsidy of RM30,000 is given for each unit built by the developers participating in the scheme with a total allocation of RM300mil.
While focus is being sharpened to increase affordable home supply, much more are needed. To date, 700,000 people are registered for PR1MA homes, and demand has grossly outweighed supply. Undoubtedly, the state and federal governments remain the prime providers of affordable housing. In Singapore, more than 80% of its population live in public housing, 90% of them are owners.
As Malaysia is blessed with abundant land, hopefully we will see more land and fund allocated for affordable housing in Budget 2015.
To benefit from economies of scale, contracts should be awarded to fewer contractors than what exist at present, taking full advantage of new technology such as Industry Building Systems (IBS) to produce houses at lowest cost.
Several states have set unrealistically high bumiputra quota of 70% on developers, well knowing this is not achievable. The cash flow of developers is tied up unnecessarily for up to 18 months. A more pragmatic approach is to seek cash compensation from developers that do not meet the quota and channel the fund towards building more affordable homes.
Resource distribution
Due to the heated property market in recent times, developers having paid hefty price for land acquisition would invariably optimise their returns by focusing on developing high end lifestyle properties targeted at high income earners and foreigners. Citing for example, almost all the major local developers are in Iskandar Johor, competing with some foreign giants, offering high end products to a small group of buyers. In their quest to build, labour and material costs were driven up due to supply shortage.
As a result, cost of development including medium and lower range housing shot up as well.
Interventions from the authorities and engagements with the developers are required to sequence new launches and to have a better mix of high end, mid-range and affordable homes to cater to the needs of all income groups. Can the people expect some effective measures to be proposed in the coming budget to address this?
Impending Goods and Services Tax (GST)
There were estimations the impending 6% GST will cause home price to hike by 3%-4%. Some developers have factored GST into their costing, causing a price increase. It is worth noting that land meant for housing and financing cost are GST exempt. Further, the 10% sales tax levied on some of the building materials like tiles, sanitary ware and fittings will be repealed. While the home price is likely to go up, to what extent GST cost translates into home price hike remains to be seen as price is often dictated by market force. Where a majority of home buyers act rationally without rushing into forward purchase to “beat” GST, home prices may not surge. Indeed when Australia introduced GST in 2000, house buyers having bought forward deserted the property market for six months after GST came in, resulted in home price decrease.
The Australian government did provide the first home owners grant of A$7,000 to A$12,500 with the purpose of offsetting the impact of GST. Our government may consider introducing such assistance, the quantum of which may depend on the home price increase post GST. There were requests to treat houses below RM400,000 as zero rated supply, allowing developers to claim back input tax incurred. If favourably considered by the authorities, GST impact on affordable homes would be eliminated.
Tax and fiscal assistance
The abolishment of DIBS has made home ownership more difficult. The Government should respond positively to calls made by various parties to re-instate DIBS for first time buyers. In August 2014, China’s Central Bank has urged its commercial banks to quicken loan approval process for first home purchasers.
From 23 February 2013, Hong Kong, while doubling its stamp duty on properties to 8.5%, has provided full exemption to its permanent residents who purchased their first home. In Malaysia, 50% stamp duty exemption is granted to the first time buyers for purchase of house costing not more than RM400,000. Also, loan agreement executed on a PR1MA home is given 100% exemption. These exemptions, which will expire in 2014 and 2016 respectively, should be extended.
The authorities were contemplating to increase the stamp duty rate for transfer of property. If proposed in the coming budget, for a transaction that exceeds RM1.5mil in value, the portion in excess of RM1.5mil would be levied with 4% duty as opposed to 3% currently. This would again add burden to owning home. With the GST introduction, it is hoped that the existing rates be maintained.
As home ownership remains on top of the Rakyat’s wish list, we look forward to more favourable proposals on housing in the coming 2015 Budget.
> Yee Wing Peng is the country tax leader of Deloitte Malaysia. - The Star

Friday 26 September 2014

Jay Series (J Series)

Jay Series (J Series) - One for the money!
Great location, Jalan Gangsa, 11600 Green Lane, Penang

Property Details

Type: Condo
Tenure: Freehold
No. of Blocks: 2
No. of Storey: 21 & 24 
No. of Unit: 342
Units per Floor: 8
Built-up: Appx. 800sf
No of Bedroom: 3
No of Bathroom: 2
Maintenance Fee: About RM100 per month
Developer: Hunza Properties Sdn Bhd

Facilities: 24 Hours Security, Swimming Pool, Landscape Garden, Playground

Strategically Located - in the central of Penang Island, making it convenience to move around Penang Island
* Public amenities such as hospitals, shopping complexes, international schools, banks, colleges and others are in the vicinity
* A residence for your family to live in peace, comfort and quiet environment

There is no obligation.

To see all listings of Jay Series (J Series) For Sale, please click here.

To see all listings of Jay Series (J Series) For Rent, please click here.

Kingfisher Series (K Series)

Kingfisher Series (K Series) - One for the money!
Great location, Jalan Gangsa, 11600 Green Lane, Penang

Property Details

Type: Condo
Tenure: Freehold
No. of Blocks: 3
No. of Storey: 21 storey for 2 blocks, 29 storey for the third block
No. of Unit: 406
Units per Floor: 6
Built-up: Appx. 800sf
No of Bedroom: 3
No of Bathroom: 2
Maintenance Fee: About RM110 per month
Developer: Hunza Properties Sdn Bhd

Facilities: 24 Hours Security, Swimming Pool, Landscape Garden, Playground

Strategically Located - in the central of Penang Island, making it convenience to move around Penang Island
* Public amenities such as hospitals, shopping complexes, international schools, banks, colleges and others are in the vicinity
* A residence for your family to live in peace, comfort and quiet environment

There is no obligation.

To see all listings of Kingfisher Series (K Series) For Sale, please click here.

To see all listings of Kingfisher Series (K Series) For Rent, please click here.

Penang's Ivory Properties in RM2bil joint venture in Johor Baru

Penang's Ivory Properties in RM2bil joint venture in Johor Baru

Low (left), state housing and local government exco Datuk Abdul Latiff Bandi (2nd from left) and other officials looking at an artist's impression of the Johor project.
Low (left), state housing and local government exco Datuk Abdul Latiff Bandi (2nd from left) and other officials looking at an artist's impression of the Johor project.
PETALING JAYA: Penang developer Ivory Properties Group Bhd has entered into a joint venture (JV) with JB Lee Properties Sdn Bhd for a mixed project with an estimated gross development value of RM2bil in Teluk Jawa, Johor Baru.
In a filing with Bursa Malaysia, the company said the JV was in line with its strategic plan of expanding its reach outside Penang and securing partnerships to develop strategically located land-bank.
This will be Ivory’s first project outside Penang.
“Johor has been making waves with its current measures to spur economic growth and attract investment,” group chief executive officer Datuk Low Eng Hock toldStarBiz. “This land of opportunity has since become a haven for property development for many top-notch property moguls.”
Ivory unit, Ivory Residence Sdn Bhd, and JB Lee have agreed to enter into an unincorporated JV for the proposed development.
JB Lee, which is principally involved in property investment, owns the 7.1-acre freehold agriculture land in Johor Baru.
“The property will be converted and re-zoned for use as a mixed development of residential and commercial properties,” the company said.
Low said the development would consist of four blocks of residential towers, which would sit above a commercial podium featuring retail outlets.
“However, this is still subject to approval from the authorities,” he added.
Ivory’s participation in the proposed JV will be funded via internal funds or bank borrowings.
Barring any unforeseen circumstances, Ivory expects the proposed JV to be completed by the year 2020.
Ivory is positive on the proposed development despite talk of the property market slowing.
“We are quite positive on this, given the great location, which is especially ideal for professionals working in the Pasir Gudang industrial and logistics hub. Through the JV, the landowner and developer share the risk,” he said.
Moving forward, Low said the company was open to more developments outside Penang, especially in Kuala Lumpur and Johor Baru. - The Star

Thursday 25 September 2014

Siamese village faces demolition

GEORGE TOWN: A Siamese village that has been home to six generations of the community here for almost two centuries is on the brink of extinction following a proposed development of a hotel.
The village, located off Burmah Road, is believed to be the oldest and last settlement for the Penang Siamese community.
It is also a stone’s throw from the Wat Chaiya Mangalaram Buddhist Temple (Reclining Buddha Temple) built in Burmah Lane in 1845 and the 203-year-old Dhammikarama Burmese Buddhist Temple just across the road.
Speaking to reporters at the village yesterday, Pulau Tikus assemblyman Yap Soo Huey said eviction letters were sent out to the villagers and businesses in April, asking them to vacate.
Yap said she sent a letter to the Penang Municipal Council on Tuesday, requesting for the building plan approval, which was submitted by Five Star Heritage on April 17, to be withheld because there were ongoing talks.
“We would like to come to an agreement to ensure that the heritage value of the village and the community can be preserved to prevent the loss of a cultural heritage,” she said.
It was reported that the proposed development of a five-storey hotel by Five Star Heritage Sdn Bhd would involve the demolition of seven shops and 10 wooden houses on the affected 0.64ha (6,400 sq m) site.
The land, estimated to be worth between RM55mil and RM89mil, was originally bequeathed by East India Company on behalf of Queen Victoria of England to the Burmese and Siamese community of Penang in 1845.
It was also reported that four Malaysian-Burmese individuals, who had identified themselves as the Penang Burmese Trust Properties Group, claimed to be the land’s trustee.
Boon Leua Aroomratana, 56, a third generation resident, said that before the eviction notice on April 23, the villagers had no prior knowledge about the development.
“We also received a letter from the (developer’s) solicitor offering my family a compensation of RM30,000. We are at a loss. As one of the longest-staying Siamese families in the village, this is a sudden decision made without consulting us,” he said.
Another resident, Nai Chan Sararaks, 75, said his parents were buried at a cemetery near the village.
“This place is where my roots are,” he said.
Penang Heritage Trust secretary Clement Liang said the village was once featured on Thai television, adding that any development should benefit the Siamese and Burmese communities.
“If the village is destroyed, then the Siamese community can no longer exist in one common place. For example, the community at the Koay Jetty was split up when the place was demolished,” he said.

Wednesday 24 September 2014

Property fair features award-winning designs

Property fair features award-winning designs

Modern homes: Visitors checking out the offerings by Ivory Properties during its recent Merdeka Roadshow at Gurney Plaza.
Modern homes: Visitors checking out the offerings by Ivory Properties during its recent Merdeka Roadshow at Gurney Plaza.
IVORY Properties Group Bhd will offer special promotional packages for its various developments in Penang during the three-day Malaysia Property Expo (Mapex) 2014 starting on Friday.
These include Tropicana Bay Residences, the first phase of the Penang WorldCity mega waterfront development in Bayan Indah, along with The Wave in Penang Times Square, and The Latitude in Mount Erskine.
Home buyers will also have the choice of assorted units from the developer’s already completed projects at the fair at the Subterranean Penang International Convention and Exhibition (SPICE) Centre.
Ivory corporate communications manager Ann Tan said they received overwhelming response to the Tropicana Bay Residences in their recent Merdeka Roadshow in Gurney Plaza.
Though the residences’ units come in eight different layouts sized between 455sq ft and 1,950sq ft, the 872sq ft units proved the most popular.
The development’s seafront location and overall concept were also appealing.
“We noticed that most were first-time buyers, newly married young couples or small families looking for homes that are modestly sized, affordable and strategically located,” she noted of the current trend.
The residences will be housed in six blocks of 22-storey towers and priced from RM458,000 to RM1.3mil, with an average rate of RM867 psf.
Conceptualised by an international architect, they are designed to foster healthy outdoor living, and feature resort-style amenities like an overhanging pool, tennis court, saunas and gymnasium, among others.
Visitors may also consider The Wave, whose unique design won it a ‘highly commended’ accolade in the ‘Residential High-rise Architecture, Malaysia’ category of the Asia Pacific Property Awards 2014-15 recently.
Tan said the revolutionary concept of The Wave, which is Phase Three of Penang Times Square in George Town, would make it one of the most sought-after addresses in the city.
“Its exterior features sun protection stripes over a glazed glass facade that appears to be in different colours when viewed from different angles and times of the day, creating the impression that waves are rhythmically lapping over the building,” she said
Inside, the 27-storey tower — which sits on an 11-storey facilities, retail and car park podium — will house 312 corner, intermediate, penthouse and duplex units ranging from 1,205 sq ft to 2,905 sq ft.
Those seeking a place to run businesses are catered to with the commercial units of The Latitude, sized at 1,390 sq ft and priced affordably at around RM600 psf.
“They are ideally located in a densely populated area with over 1,500 residential units in the vicinity,” Tan pointed out.
To find out more, visit Ivory’s booths at Mapex 2014, which is on from 10am to 9pm daily.
For more on the Penang WorldCity development, visit its sales gallery near Queensbay Mall, or call 04-6596888, or log on to www.penangworldcity.com.
For details on its other projects, visit Ivory’s sales gallery at the Ivory Tower in Penang Times Square, open from 11am to 6pm daily except Sundays.
Alternatively, call 04-2108000, or email to marketing@ivory.com.my or contact@ivory.com.my. - The Star

‘Move airport offshore’

‘Move airport offshore’

A view of the participants of the seminar on GST Implementation: Impact on Real Property Market.
A view of the participants of the seminar on GST Implementation: Impact on Real Property Market.
A VETERAN developer has suggested that the Penang International Airport in Bayan Lepas be relocated offshore.
Real Estate and Housing Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan proposed that a man-made island be created offshore for a bigger airport to be built as the current one was too small and could not be expanded forever.
He said the relocation of the airport would also free its current site of more than 323ha for property development, most likely for affordable housing.
He said if the current airport was expanded, it would mean more planes flying over the densely populated working areas in Bayan Lepas and a big risk should there be a crash.
“What do you do in the next 15 to 20 years. Either you give some of your flights away to Kedah or build a bigger airport elsewhere if you want to retain the flights in Penang,” Chan told reporters after the opening of a seminar on the impact of the GST on the real property market at Cititel Penang yesterday.
Chan also proposed that the state government progressively take back factory land in Bayan Lepas, when their leases expire in about 20 years, for property development such as high-rise housing.
He said the factories could be relocated to the mainland where land was abundant and cheaper.
He said if these land were to be taken back, there would be less need for reclamation on the island. - The Star

‘Rescind’ new property rules, new Selangor MB urged

‘Rescind’ new property rules, new Selangor MB urged

PETALING JAYA: Property players in Selangor are hoping newly-appointed Mentri Besar Azmin Ali will review the recent hike in minimum prices for foreign purchases in the state, which they claim will further dampen demand.
Malaysian Institute of Estate Agents (MIEA) president Siva Shanker said the guidelines that came into force on Sept 1 should be “rescinded.”
“We believe that various stakeholders should have been consulted first before they were implemented,” he told StarBiz, adding that neither the MIEA nor the Real Estate and Housing Developers’ Association (Rehda) was consulted.
Siva also said the announcement of the guidelines could not have come at a worse time.
“The announcement came without warning. During Budget 2014, the Government increased the minimum price for foreign property purchases from RM500,000 to RM1mil. Budget 2015 is just around the corner and there could be new measures to be announced. This will only dampen the market.”
He added that implementating such guidelines did not make sense if Malaysia aimed to turn the Klang Valley into an international, habitable destination.
“If you want to be a true world class city, you need to attract a sizeable population of international occupants. It’s the foreign element that makes it an international city,” said Siva.
PKR deputy president Azmin, who is also the Gombak MP, has replaced Tan Sri Abdul Khalid Ibrahim as Selangor’s new Mentri Besar.
Under the guidelines, the Selangor state government has set a minimum purchase price of RM1mil for the Hulu Selangor and Sabak Bernam districts (Zone 3) and RM2mil elsewhere (Zones 1 and 2).
Citing statistics from the Malaysian Properties Inc, whereby the number of foreign buyers on a national basis was between 4% and 7%, Siva said: “Those statistics apply to foreigners purchasing property mainly within Kuala Lumpur, Johor Baru and Penang.” - The Star
“You rarely get foreigners buying property within the Hulu Selangor and Sabak Bernam areas. So why have these rules?”
Siva noted that the various cooling measures implemented by the Government, which was aimed at keeping property prices in check, only dampened transactions and not the value of the properties.
“Transactions fell 5% and 10.9% in 2012 and 2013 respectively. It dropped 15% in the first quarter of this year.
“However, transaction activity in the first quarter is not usually a clear indication of the full year’s trend. The number of transactions have dropped over the last three years but their value has not.”
Mah Sing Group Bhd chief executive officer Ng Chai Yong said he expected minimum impact from the new guidelines as foreign buyers made up less than 1% of the company’s sales contribution in Selangor.
“In fact, 87% of our launches are priced below RM1mil and our buyers are primarily locals,” he said.

Rehda: GST awareness to boost demand for property

GEORGE TOWN: The demand for property nationwide is expected to pick up when there is more awareness of the Goods and Services Tax (GST), said Real Estate and Housing Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan.
The demand, which has dropped by more than 30% so far this year, is expected to improve from November, he said.
Chan said the slowdown was due to the Government’s cooling measures and the stringent steps taken by banks and financial institutions.
“About 30% to 40% of buyers failed to get loans early this year. This has now increased to between 50% and 70%,” he said.
Asked about the impact of GST on the property market, he said this would depend on factors such as the cost of living.
“If the cost of living goes up a lot, people will pull the handbrake,” Chan told reporters yesterday.
He said the public might still buy residential property, which is GST exempted, after April if they needed to do so and if developers did not raise prices.
However, this would still depend on the cost of living, he added.
In Penang, residential units costing below RM1.2mil on the island and RM400,000 on the mainland will continue to sell well. - The Star

Tuesday 23 September 2014

Views divided

Developers say new rules on property purchases in Selangor will have minimal impact while house buyers feel otherwise
BY ISABELLE LAI and THEAN LEE CHENG
starbiz@thestar.com.my

Comfort and tranquillity within Symphony Hills
PETALING JAYA: Various stakeholders in the property sector hold divergent views on the new set of guidelines governing property purchases by foreigners in Selangor, with some believing it will prevent them from sweeping up properties and driving up prices.
National House Buyers Association secretary-general Chang Kim Loong applauded the state government’s move to set a minimum purchase price of RM1mil for the Hulu Selangor and Sabak Bernam districts (Zone 3) and RM2mil elsewhere (Zones 1 and 2).
According to an Aug 28 circular, the guidelines, effective Sept 1, apply to foreigners, permanent resident holders and foreign companies.
It added that the land office also only permits these groups to buy strata and landed strata properties.
Chang said this rule would prevent foreigners from grabbing up properties, using their superior exchange rate, which would result in increased prices and depriving Malaysians the opportunity to own such properties.
“Take, for example, the Singapore dollar against the ringgit. It’s peanuts to them,” he told StarBiz, urging other state governments, especially Penang and Johor, to follow Selangor’s footsteps to stop the steep rise in property prices.
Chang said Kuala Lumpur City Hall should also increase the minimum threshold to RM2mil, as RM1mil was considered a basic level entry price of a new property with a Kuala Lumpur address.
Meanwhile, the Real Estate and Housing Developers’ Association Malaysia opined that the new set of guidelines would not have much impact because the total number of foreign buyers here was minimal.
Its vice-president Sivanyanam Sinnathamby said that according to statistics from Malaysian Properties Inc, the number of foreign buyers on a national basis stood at a mere 4% to 7%.
“The number of foreign buyers in Selangor is even smaller. In short, the Selangor state authorities are making rules which affect such a small part of the market,” he said.
He added that foreign buyers were concentrated in Kuala Lumpur, Penang and Iskandar Malaysia, Johor.
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector president Siders Sittampalam opined that it was an “overall fair move”, but expected little impact.
He said Zone 1, which includes the districts of Petaling and Sepang, was the main attraction for foreigners, but said this number was very small even in these areas.
He said that the policy itself was fair in terms of quantum and structure, as prices had indeed moved up quite a bit in the last several years.
“So, even with the RM3mil threshold for the commercial and industrial sub-segments, it is fair. This move is not something that should shake the market,” he said, adding that it was also fair to limit Malaysia My Second Home participants to one property.
Property consultant Khong & Jaafar group of companies managing director Elvin Fernandez said this was a pre-emptive strike to prevent foreign developers from Johor from entering Selangor because they had been scouting around Kuala Lumpur for land.
“This policy is a deterrent to foreign developers,” he said.
Alzac Viva Sdn Bhd project director Mak Foo Wei agreed, saying this move was to deter foreign Chinese developers in Johor from operating here.
He said the move would also protect the locals should property prices go up further, pointing out that an RM800,000 property might move into a range eligible for foreigners to purchase had the threshold not been moved up to RM2mil.
However, Ken Holdings Bhd group managing director Sam Tan said the Selangor market was very different from Johor’s and questioned the need for the new guidelines.
“There are foreigners who just need a small pad. They don’t need to buy a RM2mil property,” he said. - The Star