Ariza 2.5 Storey Courtyard Home - A Place To Call Home

Seri Tanjung Pinang, Tanjung Tokong, Penang

Ariza Courtyard Homes For Sale / Rent - Do A Little & Save A lot

Don't let this one get away! A Place you can truly call home!

Best Value! Good Location! Modern Architecture!
Top Developer! E & O Property!

The Ariza Courtyard Homes of Seri Tanjung Pinang are a perfect example of how modern living standards have come together seamlessly with Penang's old-world charm. These elegant 2 1/2 Storey residences, comprising Courtyard Terraces and Seafront Terraces, are designed along the lines of Penang's unique straits-eclectic Peranakan style with internal courtyards open to the sky, tall ceilings, wide windows and breezy living spaces.

Property Details

Type: Terrace Courtyard

Tenure: Freehold

No. of Storey: 2 1/2

No. of Bedrooms: 5 + 1 

No. of Bathrooms: 4 + 1
Land Area: 24 x 80 ft (1,920 sq.ft.)

Built-up: 3,414 sq.ft.

Developer: E & O Property (Penang) Sdn Bhd (Eastern & Oriental Berhad)

Facilities: 24 hours security & courtyard garden

* Motivated Owner and Priced To Sell/Rent

* Furnished & in good condition

* Don't wait, contact us, Penang Real Estate for inspection now by clicking here.

Some of the benefits are as below:-

* Strategically Located at Tanjung Tokong and it is one of the best township development in Penang where luxury living & quality is its theme.

* One of the most sought after property in Penang and in the neighbourhood of Tanjung Tokong

* Easy access to tourist belt like beaches along Tanjung Bungah and Batu Ferringhi, Pulau Tikus and Gurney Drive

* Public amenities such as hospitals, shopping complexes, international schools, banks, colleges, wet market, hypermarket  and others are in the vicinity

* A residence for your family to live in peace, comfort and quiet environment with courtyard behind your lovely home

* Expat's favorite with its convenience location & at Upper Class Neighbourhood

Prime Seafront Location

Location along the coast of Tanjung Tokong and only 5 minutes drive away from Penang's famous dining and tourist belt known as Persiaran Gurney, Ariza rests languidly between the UNESCO World Heritage City of Georgetown, and the renowned beaches of Batu Ferringhi. Perfect for those who want an idyllic seafront home that is just minutes from everything

Please email us, Penang Real Estate now by clicking here to arrange for inspection of the house before it is grabbed by others. 

Seeing is buying.  There is no obligation.

To find out more about Ariza Courtyard Homes, please click here.

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Full-disclosure by developers

BUYERS BEWARE . . . By CHANG KIM LOONG

THE National House Buyers Association seems to have finally succeeded in persuading the Government to make developers provide purchasers with a full set of detailed approved documents of the property.

In fact, this has all along been a legal requirement. As far as landed properties are concerned, the approved layout plan and the approved building plan are to be included in the sale and purchase agreement (SPA) as the first schedule and second schedule respectively.

With respect to the strata titles, there are the site plan, layout plan, floor plan of the parcel, storey plan of the building, accessory plan and common facilities plan, all approved, which comprised the first and second schedules.

The Urban Wellbeing, Housing and Local Government Ministry has now agreed with HBA that the detailed dimensions of the property and its facilities are to be given to the purchaser at the outset as part of the building plan attached to the statutory SPA. These may take the form of copies of the approved plan on paper no matter how thick it makes the SPA or in electronic form, for example, as a compact disc with readable format accessible through the ordinary computer.

Internal features of the property: the building plan, measurements, materials and setting

Developers have taken advantage of purchasers’ lack of knowledge and may be making unauthorised alterations in the measurements, using sub-standard or alternative building materials, changes in the wiring and plugs, plumbing and other ways of saving costs in the hope the purchaser will not discover these in time, at least during the duration of the defects liability period. Without detailed knowledge, purchasers are at an disadvantage in their fight with developers.

External features: Is the playground not part of your property?

Although this is important, the SPA gives the purchaser the impression that they are entitled only to what they have purchased. But often, purchasers may be persuaded by the external features too like playground and open space in the area. Young couples are vulnerable to advertised features such as playgrounds and open spaces but they are blindsided about the existence of an “active” graveyard nearby or the location of the oxidation ponds.

The purchaser buys into the atmosphere or concept of living of the whole housing estate. Is the developer then entitled to mislead purchasers with pictures of a spacious housing estate, only to dig up the children’s playground for a condominium immediately after the houses are sold?

If the developer promotes such features as the playground at the time of sale, then you (as the house buyer) should take down the answers, the name of the developer’s staff and designation and have your solicitor confirm this in writing.

It may constitute what is known in law as “a collateral oral warranty to the transaction” and may be read into the SPA to make it binding on the developer. These matters are not provided for in the SPA because the SPA is a standard form to be used in a whole range of property transactions where the details vary.

However, it does not mean these details cannot be added; the law allows it (Tun Suffian in Lee Poh Choo v SEA Housing Corp) but rare is the developer who would allow it. That is why the purchaser must have his own lawyer, not the legal firm chosen for the purchaser by the developer.

Even with the new requirement, the purchaser may still have to rely on the collateral warranty argument with respect to things not mentioned in the SPA which the developer does not include in the approved layout plan but may still try to give the impression that it is meant to be part of the housing estate.

The density of the area is the number of houses allowed to be built in the housing estate; it makes all the difference between spaciousness and over-crowding. Developers, when they see houses are selling well, sometimes add more houses than was approved.

As this affects the quality of life, the purchaser believing that only a certain number of houses is going to be built, has a cause of action against the developer. He can no longer be told by the developer to talk only about what he has paid for in the SPA.

The quality of a housing estate may also be affected by the types of houses and other buildings. A matter of particular concern may be the number and type of houses and shop houses. Their distribution is also to be taken note of as it may affect the convenience to the occupants.

Advertisements not        affected by the new disclosure rules

As houses are rarely built and then sold by developers, the non-existent nature of the houses requires developers to make use of artist impressions. These are not art pieces. Hence, there is the need for actual dimensions of the property and the purchase price has to be given. Developers are required to submit mock-ups to the ministry for its approval. They enable the ministry to check on the advertisements by developers, and to see if there are any deviations from the approved versions.

However, it is the accompanying verbiage which is seriously misleading. There are those which give amazingly short travelling time to important places without mentioning the mode of transport. For example, proximity to upmarket Mont Kiara even if the place is closer to Segambut. Or that the Petronas Twin Towers are within sight of the property? How long do you want to gawk at it anyway?

Even guarantees of return on investment are promised provided you spend more money on furniture and fittings.

Advertisements calculated to mislead – and which have misled purchasers - may give purchasers right to a civil suit against the developer where the ministry cannot be moved to act. In a Singapore case, the developer’s brochure had boasted of “a panoramic view of the sea”, the court held that it gave the purchasers a right to sue if they had been induced to buy because of that claim.

The law as usual is clear and strict. Under the 1989 Regulations, developers are required to give “accurate and true particulars” in the advertisements of their housing schemes. On conviction, they can be fined a sum not exceeding RM20,000, or face imprisonment not exceeding five years or both; So far, there have not been any prosecutions, not that there have been no violations.

Chang Kim Loong AMN secretary-general of the National House Buyers Association (HBA): www.hba.org.my. - The Star

Property bubble still growing

THE ALTERNATIVE VIEW . . . 

THE property buying frenzy has cooled down, but elements of a bubble brewing are very much intact.

So far, none of the major property projects have been shelved or delayed in Kuala Lumpur and Johor Baru, suggesting that developers are confident of a successful take-up despite statistics showing that there is a slowdown in demand.

According to Bank Negara, the evidence of a slowdown in the property market is obvious, backing the claim with statistics.

It says the Malaysian House Price Index has declined to 9.6% in the fourth quarter of 2013, the first time it has dipped below 10% since the third quarter of 2011. The dip was recorded across most states and most dwellings.

Sales and new property launches slowed towards the end of last year, while borrowers with three or more outstanding housing loans declined to about 4% from a peak of 15.8% before the implementation of the macro-prudential measures to cool down the property market in 2010.

According to the central bank, borrowers with three or more property loans outstanding account for only 3% of total borrowers, and some 84% of housing loan borrowers have only one outstanding loan.

Banks are also seeing an improvement in their buffer against any possible slide in property prices, as the proportion of outstanding housing loans with a loan-to-value ratio of above 70% had declined to 46.6% towards the end of last year compared with 50.1% in 2012.

However, a slowing property market is not equivalent to it not being a danger to the financial system.

The signs of slowing down are there due to the macro-prudential measures that have been put in place since 2010.

A severe blow came about during the budget last year when the Government imposed a 30% real property gains tax (RPGT) on property sold within the first three years of purchase.

This effectively quelled speculation to a large degree. The 30% RPGT ruling effectively shaved off the profit margins of those wanting to offload the property as soon as they received the keys.

However, what’s perplexing is that while the macro-prudential measures seem to have an impact, there does not seem to be any stopping the over-building situation in Kuala Lumpur and Johor Baru.

In the city, the continued building of commercial space is a cause for concern, while in Johor Baru, the massive launches of apartments by developers from China have gotten even government agencies worried.

What’s worse is that the bulk of the over-building of commercial space in the city is coming from government-owned developers.

The Tun Razak Exchange (TRX), a project by the government-sponsored 1Malaysia Development Bhd, is going ahead, thanks to the cheap land it managed to get on a silver platter.

According to property consultants, the first phase of development is slated to kick off with some six million square feet of commercial space coming into the market over the next four to five years.

This is bigger than the commercial space that came into the market from the KLCC project in the late 1990s.

The TRX project is a 15-year development, and eventually, some 30 million square feet of commercial space will be coming into the market. This is based on the present planning approvals. As the years progress, the authorities may get generous with plot ratios, allowing for more building of commercial space.

Apart from the TRX, there is also the 100-storey Menara Warisan that is being built by Permodalan Nasional Bhd, and the Bandar Malaysia project that is being planned on the 495 acres that presently house the air force base in Sungai Besi, Kuala Lumpur.

Over in the south, Johor Baru is expected to see a massive supply of commercial and residential space in the next few years, with the carpet-bombing style of development undertaken by the big guys from China.

Country Garden Holdings Ltd launched 9,000 units of apartments one to two years ago and sold 6,000 units. So far, there is little news on whether the rest of the units have been taken up.

Country Garden is the first of the developers from China to flock to Johor Baru. Many more are coming, with one developer said to be looking at launching some 30,000 units of apartments in Johor Baru.

Existing developers in Johor Baru and Iskandar Malaysia are worried, with good reason too.

It has prompted a government strategic investment arm to undertake a study, which revealed that the number of apartments and commercial space coming into Johor Baru in the next few years is 30 times that of Mont Kiara.

Obviously, the macro-prudential measures have not stopped developers from building.

The macro-prudential measures taken by the Government and Bank Negara are only measures to delay a property bubble. They help to reduce the overwhelming optimism and prop-up demand when the overall environment is sober. It helps smoothen out the boom-to-bust cycle.

Such measures have been taken by central banks from Asia in the last four years to help reduce speculative demand and over-building.

However, questions remain on how effective these measures are in curbing property bubbles.

Many a time, developers and speculators exploit loopholes in the system. For instance, the Government had put in measures earlier this year to stop developers from offering retail buyers with schemes that allow them to reduce their down-payments for purchases.

But it was not effective because speculators had established property clubs to buy property in bulk and circumvent the ruling.

The ruling on a 30% RPGT for the first three years of disposal that came into effect at the beginning of this year has had an impact. But for how long it will be effective remains to be seen.

Over the last four years, central bankers all over the world have been grappling with containing the asset inflation due to ample liquidity without having to raise interest rates.

They have been able to cool off demand on a short-term basis. But the over-building persists and is fuelling a property bubble.

This suggests that macro-prudential measures are no replacement for conventional tools such as tightening monetary policy to curb speculation. - The Star

Clear policy on bulk purchasing vital

A month into the need of prior consent for “four units or more” bulk purchasing of residential properties from developers, there are still no guidelines or a formal circular issued by the relevant ministry on the matter.

Officials are still in the dark and inquiries have been passed around. There is also confusion in the media reports whether there is a need to get consent, give notice or register. Clarification and confirmation would certainly ease compliance and provide certainty craved by all stakeholders.

If you are unaware of the limitation on bulk purchasing, the Urban Wellbeing, Housing and Local Government minister Datuk Abdul Rahman Dahlan on Feb 18 announced that developers selling more than four units of their properties to a single buyer or group must now obtain prior approval from the Controller of Housing.

The aim for this May 15 implementation according to the minister is to curb the collective purchase of real estate for subsequent flipping at a higher price for easy profit, especially towards arrangements between developers and the increasingly popular Property Investors Club (PIC).

PIC is a group of motivated purchasers who collectively bargain with the developer to buy in numbers at a favourable price and terms. Such sales are not unique to PIC only as it is also common for the highly liquid institutional investors.

While strata high-rise development offers affordable pricing for homeowners, the same low entry point is even more appealing to the cash-rich investors.

The passing of the budgeted marketing costs from the developers to the PIC is a given and it is further sweetened by relieving the developers of the hassle of selling.

The resulting perception of high demand with the right PR campaign would also ensure a beeline for the balance units while the developers enjoyed the eye-grabbing headlines of instant successes. This eventually makes way for the developers to sell units in subsequent phases at higher price and the members of the PIC who have bought the earlier phase benefiting an instant appreciation of their already favourable “early bird” property price.

While bulk purchasing by PIC with the intent of flipping and crowding out genuine purchasers is unhealthy, the same modus operandi could be replicated to benefit the genuine homeowners to get a better deal through the simple idea of collective bargaining.

In many ways, affordable housing schemes driven by Syarikat Perumahan Negaraas well as PR1MA works on the same basis with government intervention to match the willing developers with genuine homebuyers in the effort to house a young population.

Thus, is the implementation of a “four units or more” limitation an effective measure to put a full stop to property speculation?

The sales and purchase agreement (SPA) is executed between the developer and the members of the PIC. Taking a strict approach of the minister’s speech, the PIC is not obliged to obtain consent from the Controller of Housing as it will not be shown on the SPA that they have bulk purchased the units and go on distributing to individual member to buy fewer than four units.

Even if the PIC are obliged to purchase the units before transferring the same to the members, there are ways to circumvent the limitation such as assigning three units each to their agents or members or employees where no consent will be needed.

Besides that, such limitation would be inconvenient for the genuine purchaser who has the capacity to purchase more than four units from the developer. Without a clear procedural timeframe, the genuine purchaser may face a long waiting period for the consent.

In such a situation, a purchaser is stuck with the developer for a bulk number of units whereby the developer may then prefer to sell the units to individuals rather than one bulk purchaser. International investors would also turn away from investing in an en-bloc purchases in Malaysia.

It is also unfair for parents who intend to buy property for each and every of their children within the same development when the interest rate and purchase price is good.

A handful measures are already in place to protect the genuine local purchasers and curb speculation. This includes the restrictions on the developer interest bearing scheme (DIBS), the financing of net purchase price by the financial institutions, the limitation on foreigner purchase and the transparency in property transactions.

While there is an official statement from the ministry on DIBS and policy has been amended in certain states for foreign purchase’s threshold, there is still a lot of uncertainity on the procedural guidelines on how the ministry is going to enforce the implementation.

Furthermore the developers and financiers are troubled with doubts and are already struggling to adapt to these new rulings while the minister had introduced this new limitation on bulk purchase of property.

The handling of this issue highlights a fundamental concern beyond curbing the housing crisis. It is important that such measures are well thought of and deliberated within the ministry involving all stakeholders.

Many a times, the public tends to start speculating of a rumour like it is the gospel “truth”. A minister’s speech is different from policy of the ministry as well as the law of the country.The resulting uncertainties would affect the country greatly as the business community cannot react appropriately.

Chris Tan is the founder and managing partner of Chur Associates - The Star

IMF triggers house alarm

Is Malaysia faced with the risk of a housing market bubble?

THE International Monetary Fund (IMF) has sounded the alarm of another potentially devastating housing crash given that house prices are still well above their historical average in many countries in relation to incomes and rentals. The world financial body says the situation has emerged as one of the biggest threats to economic stability.

Indisputably, the many trillions in quantitative easing (QE) money launched by the United States in recent years and record low interest rates are among the contributors for the sharp hikes in property prices in many parts of the world today.

Is Malaysia faced with a risk of a housing market bubble and should we be worried of a potentially damaging burst of the bubble given that the inflated property prices seen in the last two years may not be sustainable?

Borrowing the definition of a property bubble from the internet site, Investopediawhich is dedicated to investment education, National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong says there is a risk of a property bubble in Malaysia as property prices have increased rapidly in the past four to five years, and excessive speculation in the property market has driven property prices to “its current artificially high level.”

According to Investopedia, a property bubble is a situation that shows a run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future.

Chang says in the event borrowers could not afford to pay their mortgage instalments and the banks are forced to auction off their properties, “there is a risk a property bubble in Malaysia can burst, just like what happened during the sub-prime crisis in the US.”

Chang: Excessive speculation in the property market has driven property prices to ‘its current artificially high level.’

“Skyrocketing house prices have forced house buyers to take back-breaking mortgages which have left many borrowers with little or no savings after deducting the monthly instalments and other basic necessities. Many borrowers need to combine their income in order to qualify for a mortgage, and this has placed the family at risk as the family could fall into a deficit situation if any sudden emergencies happen to either of the borrowers,” he points out.

However, Chang qualifies his outlook by saying that as long as Malaysia’s economy holds and there is no downturn, the bubble will not burst.

“Malaysia is still a young country with high demand for housing and coupled with urban migration, there is still a strong demand. But the question is whether this group of genuine buyers can afford the properties that they want.

“Although the frenzied escalation of house prices have somewhat slowed down, overall house prices have not gone down,” Chang observes.

DTZ Nawawi Tie Leung executive director Brian Koh says the fact that housing prices have jumped 15%-20% in the last two years are actually emerging signs of a housing market bubble, but he acknowledges the fact that “a property bubble can only be recognised and confirmed as one after it has happened.”

However, Knight Frank Malaysia managing director Sarkunan Subramaniambelieves the property market is still resilient and with the market cooling measures introduced by the Government, “there will not be a property bubble like a massive property price correction but only a mild price correction of the property market.”

Sarkunan says Malaysia and the other South-East Asia countries have been the bright spots for economic growth and investment returns, and in the aftermath of the global financial crisis, they have attracted encouraging levels of investments that have also boosted their property markets leading to sharp hikes in prices.

“The governments in these countries have acted responsibly by implementing various measures to cool their property markets, averting potential property bubbles.

Despite the recent scale-back in quantitative easing by the US (leading to large reversals of capital flows), Malaysia’s economy is expected to remain fairly resilient supported by a strong banking system.”

Sarkunan says if there is a property bubble, “it is not brewing across the board but only in selected regions or locations, and in certain property segment, category and type, where there are more speculative activities and over-building.”

“A property bubble is akin to having an elephant in the room. We really need to acknowledge that in some areas, the elephant is getting bigger. But the market appears to be self-correcting. Developers are holding back their launches amid weaker market sentiment and revisiting their development plans to cater to current market demand and trend,” he adds.

Concurring with Sarkunan, CB Richard Ellis Malaysia executive director Paul Khong does not envisage any serious bubble in the market, especially this year, and further expects the market to continue to march ahead towards the second half of the year.

“The first half of 2014 has been relatively quiet as predicted earlier, as the property market has been absorbing the market cooling measures silently hoping for some good news. We currently see the secondary market becoming slightly active and prices in select locations are now looking relatively attractive,” Khong says. - The Star

Property consultants: Address structural issues

Dr Cheong says a holistic solution to ensure a more equitable housing market for Malaysians is certainly in order.

STRUCTURAL issues in the local housing market need to be addressed if the market is to advance into a more well balanced and sustainable one, property consultants concur.

A double-digit jump in the prices of houses of between 15% and 20% in the last two years and a spiralling cost of living has caused a widening gap between income level and price levels, and a resultant mismatch between disposable income and house purchase affordability. As a general rule of thumb, mortgage repayment should not exceed 28% of gross monthly income, but for many house buyers, they have no choice but to contend with much higher repayment amount leaving them with very little disposable income.

One of the obvious structural issues is the mismatch in the housing products being launched that comprise a higher percentage of higher priced housing products, even though the supply of affordable and medium-priced housing is still grossly inadequate to meet the high demand.

Chartered surveyor and registered valuer Dr Ernest Cheong says a holistic solution to ensure a more equitable and sustainable housing market for Malaysians is certainly in order.

“The only holistic approach to the provision (or lack of provision) of affordable housing in the form of low-cost and medium-cost houses is for the Federal and state governments to assume the role and responsibility to perform their rightful public duty and responsibility of providing for these housing units. They have at their disposal land reserves and the financial resources to implement the mammoth task of providing affordable housing to the millions of Malaysians who need these housing.

“The private sector developers, being profit-motivated, will not build low-cost and medium-cost houses and sell them at prices they consider to be unattractive or even below their costs,” Cheong says.

Agreeing with him, DTZ Nawawi Tie Leung executive director Brian Koh says the Government has to play a larger role not just in the low-cost but middle segment of the market that is ignored by private developers, and cites the case of Singapore where the city-state has its Housing Development Board building affordable housing projects that make up a high percentage of the total housing stock.

“Meanwhile, at the higher end segment of the market, although there is substantial investment demand, yields and rental demand are too low and insufficient. The property market can do with some tweaking in product offering by the developers to ensure more medium-range housing units are being built to meet the high demand,” Koh points out.

VPC Alliance Malaysia Sdn Bhd managing director James Wong says the main reason why developers are still launching more high-priced products and not enough of the affordable projects is because land prices in the Greater Klang Valley, Johor, and Penang have risen and it will not be feasible for developers to develop affordable housing.

To release more land for affordable housing, the various government institutions have to step in to release the land and do joint ventures with private developers to develop affordable housing, particularly in the Klang Valley, Penang and Johor.

The Government can also absorb some of the infrastructure costs from the private developers so that they can sell at lower prices. It will also help if affordable housing and housing for the low income group are built to be rented out as an alternative to buy.

He adds that speedier and more transparent planning guidelines and approvals of development projects which indicate the actual zoning, density and maximum height for each lot to be developed will also help matters for the lower income group. National House Buyers Association (HBA) honorary secretary-generalChang Kim Loong says HBA has alerted the Government of the sprouting up of a “homeless generation” where the younger generation of Malaysians will not be able to afford their own homes. Also, for single parents and those from the lower income groups, buying a property is getting more and more difficult and may soon “be impossible”.

“We are glad that the Government has finally taken some action in Budget 2014 to address this issue such as increasing real property gains tax and to outlawDeveloper Interest Bearing Scheme. Bank Negara has also imposed a loan to value ratio cap of 70% for the third mortgage to reduce speculation and these measures have cooled down the market,” Chang says.

Knight Frank Malaysia managing director Sarkunan Subramaniam calls on developers, bankers and other stakeholders to play more responsible roles to ensure the gap between supply and demand is manageable, and to be more socially responsible by building communities instead of just being profit-driven.

“In these challenging times, developers have to be more balanced in terms of their pricing strategies, by not overpricing their products and provide purchasers a chance to enjoy potential price appreciation when the products are completed,” he says. - The Star

Fear of housing bubbles

THE International Monetary Fund’s (IMF) unveiling of comparative data on house prices underlines its concern over possible property bubbles in the financial system.

“Our research indicates that boom-bust patterns in house prices preceded more than two-thirds of the recent 50 systemic banking crises,’’ said IMF deputy managing director Min Zhu in a blog post.

With houses selling for more than four times the average household income, the IMF said the ratio in Australia was much higher than its historical average.

A 24-country comparison showed that Australian homes were behind only those of Belgium and Canada when judged by this measure, said the IMF on its website.

In order to prevent housing markets from overheating, the IMF recommends governments consider rules to rein in riskier bank lending, which Australia has so far avoided.

More than 20 countries had adopted “macro prudential’’ policies such as caps on low-deposit loans or debt-to-income ratios in recent years.

In view of this data, Australia should hear the alarm bells and undertake some pre-emptive measures related to risky bank lending.

In India, the infrastructure sector will likely get a major boost via the potential setting up of a US$4bil-US$5bil fund that will especially kickstart many road projects.

Japanese and Korean investors have shown interest to take part in the fund, said the Economic Times Now (ET Now).

The Indian government is working on a timeline of six months to set up the fund, said ET Now.

Many plans are cropping up in India where the new government led by the BJP has taken over.

When it materialises, this infrastructure fund will be a positive start to the sector that has lagged behind that of China.

The IMF has advised China to stick to its growth target of 7.5% and avoid further stimulus measures that will further stoke financial risks.

The weakness in the Chinese economy is its persistent reliance on debt and investments in areas like real estate to power its economy, said the IMF.

“Vulnerabilities have risen to the point that containing them should be a priority,” said IMF first managing director David Lipton in Beijing.

The economy’s lackluster performance has stirred speculation that the government may act more forcefully to shore up activity, even though Beijing has ruled out any big policy moves to counter short-term dips in growth, said Reuters.

China should heed the advice to be disciplined in managing its financial risks.

As the second largest economy, it has the responsibility to ensure a stable economy that will be a sustainable force to be reckoned with.

Columnist Yap Leng Kuen is saddened by the protests in Sao Paulo in the prelude to the World Cup. - The Star

Property sector not all bad, but ...

Property sector

Maintain neutral: Property prices and transactions, which have surged since 2009, have led to fears of an inflationary asset bubble. This has prompted the introduction of cooling measures, via the withdrawal of developer interest bearing schemes (DIBS), the real property gains tax (RPGT) hike and the setting of minimum property prices for foreign buyers.

Since the implementation of such measures, growth in residential property prices has increased by a slower 8.1% in the fourth quarter of 2013 (4Q13) against a 12% jump in early 2013, as prospective buyers adopted a wait and see approach. Our preliminary checks with property agents reveal that property prices so far in 2014 have declined by 5% to 10%.

Housing transactions were also seen lower over the past quarters subsequent to the cooling measures. This was exacerbated by more stringent loan approvals, which saw a loan rejection rate of 49% as at February this year from above 50% for the best part of 2013.

Although housing transactions were slower in 2013, the overall housing supply (comprising the incoming and planned supply) has been on a record high last year at 1.3 million units translating into a 6.5% year-on-year (y-o-y) growth as at December 2013.

Supply growth was seen higher, mostly concentrated within urban locations such as those in Johor, Kuala Lumpur, Selangor and Penang, which accounted for 57% of the total housing supply in Malaysia. Johor recorded the highest y-o-y growth at 12.2%, while Terengganu was the lowest at -2.6%.

Based on the average annual income per capita of RM32,144 and the average house price of RM292,661 (according to the National Property Information Centre), the affordability ratio is still below that of the 1990s, which is around 50% of monthly income against 28% in 2013. However, we believe the average affordability ratio is not reflective of the overall property market in Malaysia as the surge in property prices is centred on certain hot spots. For instance, the affordability ratio is one of the lowest in Kuala Lumpur and Penang, at 40% of gross monthly household income.

While most housing is centred on the main locations, we reckon demand still exceeds supply as demand is well supported by strong demographics, in which about 36% of the population are in the 20 to 40 years old age bracket, representing the group that is most likely to buy/upgrade a house in the near future. There will be another 40% of the population in the age bracket of 0 to 19 years to support the long-term demand.

Besides, urbanisation also plays a role in the housing demand due to higher economic opportunities which will continue to attract migration of the rural population. The urbanisation rate is expected to increase by 2.49% per year going forward from 2010 to 2015.

Against the above backdrop, we prefer the residential players which target the middle income groups such as Tambun Indah Land Bhd, Matrix Concepts Holdings Bhd, Hua Yang Bhd and IJM Land Bhd. This is consistent with our view that demographics are still favourable as we see more demand coming from the young and growing population. We reckon these companies have bigger potential in terms of earnings given their relatively lower earnings base and their reputable branding in their respective locations.

In conclusion, we expect the growth momentum (transactions and prices) to remain muted as investors adopt a wait-and-see approach given the overall unexciting macro fundamentals as well as the mismatch of demand/supply and affordability issue. This is exacerbated by the government capping the sector via price restrictive measures. Hence, we see the consolidation to continue in the near term and prefer selected developers only in the residential segment which targets the middle income groups — Tambun Indah, Matrix Concepts, Hua Yang and IJM Land. Tactically and fundamentally, we are rating the overall sector a “neutral”. — BIMB Securities Research, June 6

This article first appeared in The Edge Financial Daily, on June 9, 2014.

Mah Sing’s Southbay East plan hits roadblock

KUALA LUMPUR: Mah Sing Group Bhd’s proposed acquisition of 20 pieces of prime freehold land in Jawi, Penang totalling 76.38 acres (30.9ha) from four separate vendors for RM42.59 million or RM12.80 per sq ft, has hit a roadblock.

The property developer is suspending further payments of the balance purchase price to Yenher Agro-Products Sdn Bhd due to a breach of agreement for four pieces of land there.

In a filing with Bursa Malaysia yesterday, Mah Sing said its unit Nature Legend Development Sdn Bhd is currently seeking advice as to its legal position and possible legal remedies for breach of the agreement.

It added that Nature Legend has also suspended the payment of the balance purchase consideration to the other vendors — Hong Lee Realty Sdn Bhd, Bor Guan Chye, Bor Chye Teik, Bor Mui Teik, Bor Chai Heng, and Tan Sook Hua — as the agreements are inter-conditional.

Currently the majority of the land is planted with oil palm trees, with parts used as a poultry farm and the remaining land under secondary jungle regeneration.

Mah Sing had in December last year announced that it plans to develop Southbay East, a gated and guarded lifestyle township, which includes link homes, linked semi-detached homes, semi-detached homes, town houses, and shops as well as a clubhouse, on the land. The group had expected to commence the project in the first half of 2015, which was to be developed over a span of three to four years, with a gross development value of some RM400 million.

This article first appeared in The Edge Financial Daily, on June 11, 2014.

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New Factory For Quick Sale or Rent

Best Location at Kulim, Kedah

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• Near Highway and Kulim High Tech Park
• New & ready to be occupied 
• Serious owner

Salient Facts

Location and Accessibility

The subject land is located at Kulim, near Kulim High Tech Park. It is easy accessible via Kulim Highway. 

Description

The land area is about 1.1 acres and it has a built-up of  8,500 sq. ft with 2 storey office and 20ft height production area. In addition, it has a big parking area and loading bay.

Price

Negotiable for serious buyer or tenant.

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