Vantage Desiran Tanjung Wanted

We are delighted to announce that we have ready tenant looking to rent a unit either Ground or First Floor at Vantage Desiran Tanjung, Tanjung Tokong in Penang, therefore if you wish to let yours or know of someone who is, please contact us by clicking here.

He is a motivated tenant so you may get your property RENTED soon.

Behind every successful sale is a Professional Realtor!

We are pleasure to be of service!

Don't wait, contact us immediately if you would ever like your property at Vantage Desiran Tanjung RENTED instead of JUST LISTED. We have a proven marketing programs for getting your property sold. It is even easier when we have ready buyers now. 

For the list of Property Wanted, please click here.

For the list of Land Wanted, please click here.

If you would like a FREE *Market Analysis on the property, please contact us by clicking here.  
There is no obligation.

We make it our business to know you better to serve you to your full satisfaction. Welcome abroad.

E & O Semi Detached Home Wanted

We are delighted to announce that we have ready buyers and tenants looking to own or rent a unit at E&O Semi Deatached Home in Seri Tanjung Pinang, Tanjong Tokong in Penang, therefore if you wish to sell or let yours or know of someone who is, please contact us by clicking here.

Behind every successful sale is a Professional Realtor!

We are pleasure to be of service!

Don't wait, contact us immediately if you would ever like your property SOLD or RENTED instead of JUST LISTED. We have a proven marketing programs for getting your property sold. It is even easier when we have ready buyers now. 

For the list of Property Wanted, please click here.

For the list of Land Wanted, please click here.

If you would like a FREE *Market Analysis on the property, please contact us by clicking here.  
There is no obligation.

We make it our business to know you better to serve you to your full satisfaction. Welcome abroad.

Unit owners not required to pay for extras

OWNERS of affordable housing under the state government will not be forced to purchase extra parking bays for cars or take up renovation packages by the developers.

State Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said affordable housing units come with a parking bay each.

“There are projects with additional parking spaces for sale but these developers have no right to force unit owners to purchase the extra space or take up their renovation offers.

“Let me be extremely clear on this, it has to be on a willing-buyer-willing-seller basis,” he told a press conference after flagging off a vintage car tour at the Esplanade yesterday.

He said he was told by Komtar assemblyman Teh Lai Heng that a Chinese daily’s column which was posted on Facebook had attracted comments from some readers claiming that developers would force house owners to purchase extra parking spaces and renovation packages.

Jagdeep said the purpose of the state in offering affordable housing was for more people to be able to own their own home, not to add an extra burden or deter people from buying the unit.

“There’s no such thing as forcing the owner to buy extra parking or sign up for renovation work with the developers,” he said.

He added that his office had yet to receive any complaints from buyers on the matter but urged those who faced such pro-blems to lodge their complaint with him.

Affordable housing units in Penang are priced from RM200,000 to RM400,000. - The Star

Road project aimed at shortening routes and reducing jams

Sorting out details: (From left) Chew, Wong and contractors discussing the road realignment and expansion at the project site.

THREE roads in Air Itam, Penang, are being realigned and expanded by a developer carrying out a mixed development project in the area.

Air Itam assemblyman Wong Hon Wai said the realignment and expansion of Jalan Pisang Embun, Jalan Pisang Rastali and Jalan Pisang Berangan were part of the requirements imposed by the Penang Municipal Council.

The developer’s technical officer Chew Kwong Weng explained that the three two-way tarred roads were all currently about 5m in width.

“Jalan Pisang Embun, Jalan Pisang Rastali and Jalan Pisang Berangan will be expanded to 20.1m, 12.2m and 15.2m respectively.

“The total length of the three roads is about 3km,” he said at the site yesterday.

Wong said the road realignment and expansion project started in January and was expected to be completed by the end of next year.

“This project will be beneficial for all residents in Air Itam, especially those living near the three roads,” he said.

He added that the expansion was timely as it would provide a shorter route to the proposed 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass.

He said traffic congestion in the area was expected to be reduced as well when the project was completed.

Wong also said a new drainage system would be built from SMK Air Itam to Sungai Dondang in Air Itam.

“This drain will help disperse rainwater when there is a downpour in Air Itam which usually causes a flashflood,” he said.

Earlier, Wong handed two computers and five sets of stone tables and chairs worth a total of about RM8,000 to SJK(C) Sin Kang in Air Itam. 

The money to buy the items was from his constituency allocation. - The Star

Unfair housing loan agreement

MOST if not all house buyers will require financing to buy their dream homes. While there appears to be stiff competition among banks for market share and interest rates may be kept low, house buyers are ultimately at the mercy of banks when it comes to the detailed terms and conditions of the housing loan. (Banks in this context refers to commercial banks, Islamic banks and other financial institutions).

Unfair legal fees

When a borrower takes a housing loan, the borrower is required to execute a loan and other related agreements. This entails the borrower having to pay legal fees, the amount of which varies, depending on the loan amount – the higher the loan amount, the higher the legal fees although the complicity and level of work does not necessarily commensurate directly with the loan amount.

Although it is the borrower paying the loan lawyers’ fees, the said loan lawyer is actually acting for and on behalf of the bank. As such, the loan lawyer is not in the best position to advise the borrower if there are clauses in the loan agreement which are not in the best interest of the borrower. 

In addition, in the event of any dispute between the borrower and the bank, the borrower cannot ask the loan lawyer for advice as the loan lawyer is acting for the banks.

If this is the case, then is it “fair or equitable” for the borrower to pay such legal fees when it is clear that the lawyer is actually acting for the banks? Obviously not. Hence, the bank should absorb the legal fees as the lawyers are clearly there to act for the bank and protect its interest.

Exorbitant fees for simple letters

The banking sector in Malaysia is a very tightly regulated industry. Any fees that banks intend to charge must be approved by Bank Negara. It is disheartening to note that borrowers continue to be charged exorbitant fees which seem to have the explicit blessings and consent of Bank Negara. Instances of borrowers being charged unreasonable fees for copies of redemption statement, EPF statement letter etc are common.

Allocation of monthly repayment to principal and interest

This is a story about three friends who took a housing loan (HL) of RM500,000 ten years ago. They were offered the same HL interest rate of 4.2% (base lending rate of 6.60% less 2.40%) but took different loan tenures as follows:

Albert took a 20-year HL. Eric took a 25-year HL and Jamie took a 30-year HL.

After servicing their monthly loan instalments diligently for the past 10 years, they decided to fully settle their housing loan using a combination of their EPF monies and own savings. When they asked for a redemption statement to find out what was the principal sum outstanding, they received a shock of their lives.

Albert, Eric and Jamie were under the impression as they had served 50%, 40% and 33.3% of the loan tenure, their principal sum outstanding would be RM250,000, RM300,0000 and RM333,333 respectively. 

So, when their respective redemption statement showed that Albert, Eric and Jamie still owed respectively RM301,654, RM359,415 and RM396,652, they got a big shock.

So, why did they still owe so much more than what they had thought? The answer lies in the allocation of the monthly instalment towards covering the principal sum and interest charged by the bank.

In an equitable world, the monthly instalments would be allocated on a “straight line basis” to cover the principle and interest charged. Thus, a borrower who served 10 out of a 20-year HL would only owe 50% of the original loan amount.

However, the reality is that the borrower still owes 60.3% of the original loan amount.

The typical borrower will always be “penalised” for settling his loan before the maturity date. Even in the penultimate year of the original loan tenure, the actual amount outstanding is still higher than the theoretical amount, which should be the amount outstanding had the allocation of monthly instalments been done on a straight line basis.

Is it fair and equitable?

Most borrowers do not know or even understand how this allocation is calculated. Is such an allocation “fair and equitable” to the borrower? Under such circumstances, are borrowers supposed to accept that the bank’s own generated computer system has calculated the interest correctly and allocated the payments in the correct manner?

To the borrower, they have paid 10 out of a 20-year loan, he should only owe balance 50% and not 60.3%. Is this manner of allocation not just another unjust way for the bank to generate higher profits, after all the bank did receive the payments on time and in full every month. It is the dream of every borrower to be debt-free as soon as possible and it is not fair to the borrower to be penalised in such a manner when he wants to settle his loan early.

That said, borrowers have no choice but to accept the calculation of the bank as correct and final. If the borrower were to reject and not pay the required sum, the loan will not be considered as repaid in full. The borrower could even be blacklisted and even have his property auctioned off by the bank to recover the remaining sum outstanding if the borrower refuses to pay up. 

It would be more transparent and equitable if the monthly payments made by the borrower are allocated in a “straight line basis” to interest and principal equally over the

tenure of the housing loan. Short of that, borrowers are at the mercy of banks. 

Some banks operate like a “cartel” and standardise their fees to be charged to customers. One wonder whether such unfair practices are condoned by the regulators like Bank Negara. 

It is also interesting to note that banks are exempted by the Malaysia Competition Commission allowing banks to agree and collude on unfair fees, penalties and practices to be charged to borrowers.

Unnecessary expenses

Loan agreement “printing charges” – sold between RM150 and RM350. The banks’ solicitors need to purchase a standard loan agreement from the bank (via soft copy) and adds the borrowers’ details in order to complete the loan agreement. The banks charge the lawyer and the lawyer charges the borrowers.

Standard loan agreements are now downloaded from the bank’s website or from soft copy. The bank no longer need to print them and should not charge for such documents. Alas, this has been continuing till to date.

Lopsided terms and conditions

Lopsided terms and “add-on” products are aplenty, if the borrower wants to identify with them. It would be good practice to remove or qualify the banks’ arbitrary powers.

Conclusion

The National House Buyers Association (HBA) had on Sept 4, 2014 made representation to the Finance Ministry (MOF), Bank Negara. Housing and Local Government Ministry in the presence of Association of Banks Malaysia and Islamic Banks of Malaysia in the form of slides presentation on some observations and unethical practices of some banks. 

HBA is looking to work closely with MOF, Bank Negar and all related stakeholders to level the playing field for housing loan borrowers in the long-term interest of the banking industry. We had proposed to set up a working committee to resolve all unfair practices. MOF and Bank Negara have a legitimate interest in the final shape of the banking industry into operating a principled and towards a “customer friendly arena”.

Chang Kim Loong is the honorary secretary-general of the national House Buyers Association: www.hba.org.my, a non-profit, non-governmental organisation manned purely by volunteers. - The Star

Customs: No reason for house price hike

PUTRAJAYA: Property developers have no reason to raise prices of houses from April 1 because they can claim back the costs incurred through taxable supplies under the Goods and Services Tax (GST).

Raizam Mustapha, Customs Department’s senior assistant director (property, construction and professionals), said developers could claim Input Tax Credit (ITC) for commercial properties and also for the GST incurred for infrastructural and recreational works of mixed development projects.

“All raw materials, some of which were not taxed under the Sales and Services Tax (SST), will now be taxable.

“Under the SST, materials such as floor tiles, pipes, fittings and paint were taxed between 5% and 10%, and these were not claimable from the Government.

“When the GST comes into effect, a 6% tax rate will be imposed on the materials but the ability to claim under the ITC means developers will see some savings,” she told a media briefing yesterday.

Among the items that would be newly taxed under the GST are cement, bricks and steel, in addition to construction work by contractors. 

The Customs Department had announced that there would only be an impact of between 0.5% and 2% on housing prices, if there were no changes in supply and demand. 

Raizam said the ITC was expected to serve as the stabilising factor to ensure that property prices in the country did not rise drastically.

On maintenance fees for stratified residential properties, Raizam said that as they were exempted from the GST, changes in fees would be decided by the building management committees.

“If they get services from companies which do not have to register for the GST, these firms cannot impose 6% charges on management committees,” she said.

Deputy Finance Minister Datuk Chua Tee Yong, who was at the briefing, later noted that property prices, especially in the cities, had been rising at a rate of over 6% yearly.

“The number of property launches have declined and the cost of building materials has also stabilised. This will help maintain the market price,” he said.

Asked to comment on those who had rushed to buy properties before the GST for fear of high prices, Chua said those giving such advice were not accurate.

“Look at the past few years, even without the GST, property prices have been on the rise. External factors, like state government policies, have also had an influence on the market prices of properties,” he added.

Chua said that ultimately, it was up to the developers to determine if the increased costs under the GST, estimated at between 1% and 2%, would lead to a price hike.

“Some developers may determine they can make a profit and impose a higher price on the properties, while some may believe they cannot sell as many and decide to absorb the costs,” he said. - The Star

City & Country: Exciting year ahead for residential market

THE new year started off on a positive note for Penang homebuyers, says Raine & Horne International Zaki + Partners director Michael Geh. Since the state government announced specific guidelines on Sept 13 last year to encourage the building of affordable houses, there has been “greater advocacy” and more approvals of such projects, Geh says in presenting The Edge/Raine & Horne International Zaki + Partners Penang Housing Property Monitor for 4Q2014.

The guidelines provide for three types of affordable homes: a RM200,000 unit with a built-up of 750 sq ft; RM300,000 unit of 850 sq ft; and RM400,000 house of 900 sq ft. A developer that wishes to build affordable houses will be exempted from the quota to build low or low medium cost units while development charges will be reduced to RM5 psf.

 This bodes well for those looking to buy their first home in Penang, Geh says. From his research, he has found that Malaysia’s demographics is currently onion shaped, with the majority of the population within the 30-year-old range. This group, he notes, can only afford to pay for a house priced at about RM350,000.

“I have found that in the last five years, there has been immense pent-up demand for houses priced below RM350,000. This year is exciting because in the last two years, at every property exhibition, house buyers couldn’t  buy anything as the properties were priced out of their range,” he says. Sales activity for affordable housing, he adds, will grow exponentially this year.

 More developers in Penang are listening to the market and offering affordable houses below RM400,000. Among them is MSummit Group, which launched Ramah Pavilion, an affordable apartment project in Teluk Kumbar, on Jan 31. Ballots for the units — with built-ups of 800 to 1,355 sq ft and priced from RM198,000 to RM398,000 — were held for eligible applicants who had registered with the state government.

Another developer, Ideal Property Group, is awaiting approval to build over 5,000 units of affordable houses in the Relau/Sungai Ara areas, says Geh. There is also Aspen Group Holdings Sdn Bhd’s affordable high-rise project Tri Pinnacle, in Mount Erskine, Tanjung Tokong.

It’s not only developers that have been provided plenty of incentives to jump on the bandwagon, landowners too are encouraged to develop affordable homes on their land, says Geh. As a result, moving forward, he believes the affordable house market will stay active.

 Meanwhile, Geh highlights some hot spots for home owners to consider, among them, inner city George Town, within the Unesco Heritage Zone. Others include Bayan Lepas, including Bayan Baru, which is near the Penang International Airport, as well as Tanjung Tokong, which is within the vicinity of E&O Bhd’s Sri Tanjung Pinang development. On the mainland, Batu Kawan is popular thanks to its proximity to the Sultan Abdul Halim Muadzam Shah Bridge, or second Penang Bridge.

Market activity is mostly driven by domestic demand, says Geh. Moreover, many Penangites who are working abroad are buying homes in the state.

While the affordable housing sector is going strong, the same cannot be said for other property types. The Malaysian Insider had reported on Feb 12 that developers are feeling the pinch as state contributions have been increased. “[House] prices are still up due to rising costs faced by developers,” Real Estate Housing and Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan had said in a press conference.

State infrastructure contributions have been raised of late. For instance, developers need to pay RM15 psf on the gross development area prior to development, while drainage contribution and conversion fee amounts have increased by 100% since 2013, Geh notes.

 However, he believes that “the market should be allowed to work itself out as the Penang property market is undergoing many changes at the moment”.

Geh sees the positive outlook for the last quarter of 2014 following through to the new year. “I saw optimism in the market as affordable housing projects were approved [in 4Q] and this year, they will be sold. This is a marked difference from all other quarters of 2014, where there was negativity and hopelessness in the air as house prices were simply beyond homebuyers’ purchasing range.”

House price breakdown

While areas surveyed in the monitor shows prices have risen from a year ago, Geh notes that they are plateauing now. He believes sales activities will slow, with a slight rise for premium houses priced above RM700,000.

The average price of 1-storey terraced houses in Seberang Perai Tengah on the mainland gained 20%, rising to RM200,000 from RM160,000 year on year, while on the island, houses in Green Lane and Jelutong rose 16.67% to RM780,000 from RM650,000.

For this house type, every area surveyed showed no price growth quarter-on-quarter except for the mainland. In Seberang Perai Tengah, prices rose 10% from RM180,000, Seberang Perai Selatan saw a 6.25% increase to RM160,000 from RM150,000, and Seberang Perai Utara, a jump of 5.56% to RM180,000 from RM170,000.

For 2-storey terraced houses, Seberang Perai Selatan gained 21.43% y-o-y to RM280,000 from RM220,000. The next highest gainer was Sungai Nibong, where homes rose 20% to RM1.1 million from RM880,000, followed by Sungai Ara, up 16.67% to RM900,000 from RM750,000. Q-o-q, most areas saw modest gains. In Seberang Perai Selatan, prices rose 10.71% from RM250,000, followed by Sungai Nibong with a 9.09% increase from RM1 million.

As for 2-storey semi-detached houses, the top gainers y-o-y were Island Park houses, which rose 14% to RM2 million from RM1.72 million. Sungai Ara homes posted a increase of 11.11% to RM1.35 million from RM1.2 million. Houses in Minden Heights rose 10% to RM1.5 million from RM1.35 million. Q-o-q, all houses in this category showed no change or modest price growth.

Moving on to 2-storey detached houses, the biggest gainers were Island Glades and Green Lane with both seeing a rise of 28.57%. In Island Glades, prices rose to RM2.8 million from RM2 million, while Green Lane units hit RM3.5 million from RM2.5 million. In Minden Heights, prices were up 20% to RM3.5 million from RM2.8 million. Q-o-q, only houses in Tanjung Tokong (12.5%) and Minden Heights (5.71%) showed price growth.

In the 3-bedroom flat sector, units in Relau rose 15.38% to RM260,000 from RM220,000. Other areas seeing price growth were Bandar Baru Air Itam (5.26%) and Green Lane (3.13%). Other areas remained unchanged. Q-o-q, only flats in Bandar Baru Air Itam (5.26%) and Relau (3.85%) saw a slight increase while others showed no change.

For 3-bedroom condominiums, all areas surveyed showed price growth. Units in Tanjung Tokong advanced the most, by 22.41% to RM580,000 from RM450,000. In Pulau Tikus, prices rose 17.24% to RM580,000 from RM480,000, while in Tanjung Bungah, prices shot up 16.67% to RM600,000 from RM500,000. Q-o-q, some areas showed modest growth while others remained unchanged.

In the rental market, flats and condomiuns saw no change in rental rates y-o-y and q-o-q. Other property types revealed varied results, with some areas showing marginal growth while other remained unchanged.

Geh says it is currently a tenants market as there is enough choice for renters to be selective. Furthermore, yields have dropped because market values have risen.

 The Penang residential property market looks to get a boost thanks to the affordable house supply that will come onto the market in a few years. How this will change the property landscape is yet to be seen but for now, the pent-up housing demands of young Malaysians is finding an outlet.

This article first appeared in City & Country, The Edge Malaysia Weekly, on February 23 - 29, 2015.

Tambun Indah buys 16 parcels of freehold land in Penang for RM38.9 mil

KUALA LUMPUR (March 16): Property developer Tambun Indah Land Bhd is buying 16 parcels of freehold land in Seberang Perai Tengah, Penang, with a collective land area of 18.8 acres, for RM38.9 million, cash.

In its filing with Bursa Malaysia this evening, Tambun Indah (fundamental: 2.7; valuation: 2.4) said three of its wholly-owned subsidiaries had entered into four sale and purchase agreements for the said acquisition, with Naga Utama Construction Sdn Bhd today.

The subsidiaries are: TID Development Sdn Bhd, Jasnia Sdn Bhd and Intanasia Development Sdn Bhd.

Tambun Indah said these acquisition, which will be funded either via internally-generated funds or bank borrowings, is in line with the group’s strategy to increase its land bank, in order to expand its revenue base.

“In light of the land being close to Bukit Mertajam Town, which is a mature and established residential area, the board opines that the said lands are strategically located, and thus suitable for property development,” Tambun Indah said.

“The location is easily accessible via Jalan Kota Permai, and is of close proximity to Jalan Song Ban Keng. Furthermore, the location is surrounded by amenities such as a hospital, police station, schools, financial institutions, and retail and shopping outlets,” it added.

The group’s board of director is of the view that these acquisitions will contribute positively its financial performance in the future.

Tambun Indah’s share price traded unchanged at RM1.84 today, giving it a market capitalisation of RM775.71 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

Pessimistic outlook for property sector in 2015

KUALA LUMPUR: Developers’ are pessimistic on the outlook for the property market in the first half of 2015 (1H15) and the gloom is expected to deepen by 2H15,  the Real Estate and Housing Developers’ Association (Rehda) told a media briefing yesterday on its Property Industry Survey 2H14 report.

The survey, presented by Rehda president Datuk Seri FD Iskandar, was sent out to 1,000 Rehda members in12 states.

“Feedback from respondents generally indicated that the property market is still cooling down, not only due to the rising cost of doing business and the impending GST (goods and services tax) implementation, but mainly resulting from buyers’ inaccessibility to end-financing,” he said. 

“Affected respondents reported that the percentage of loan rejection over sales has increased from 16% in 2013 to 23% in 2014, with the main problems of end-financing being ineligibility of buyers’ income, lower margin of financing, credit history ... banks requesting for more documentation and limited quota for low-cost or affordable housing.”

The survey also highlighted fewer property launches in 2H14 compared with previous years.

“Residential units launched shrank from 9,362 units in 1H14 to 5,984 units in 2H14. Properties priced between RM200,001 and RM500,000 continue to lead the market, especially in Perak and Johor, while commercial units have been reduced by 18%,” said F D Iskandar. 

He added that for commercial property, the majority of launches were in the price range between of RM500,000 and RM1 million.

Respondents also reported a higher number of unsold units, mainly from Johor, Perak and Kedah. FD Iskandar added that the statistics in the number of unsold units increased by 64% in 2H14 compared with 57% in 1H14.

The main reasons for unsold units were unreleased bumiputera lots, low demand or interest, odd or special lots, and bad locations such as next to a sewage treatment plant. 

FD Iskandar highlighted that Rehda supports the bumiputera quota but would like to see an automatic release mechanism for such lots. 

Other issues include the challenges of dealing with utility service providers, especially in getting approval from the water authorities. Nearly half of respondents stated they faced problems with local authorities. 

Issues faced include slow approval for building plans, inconsistent policies and guidelines, high development charges and slow or no bumiputera quota lot release.

FD Iskandar also said the impact of cooling measures like the GST, high real property gains tax and maximum loan tenure makes it hard for buyers, especially first-timers, to purchase property.

“Currently, the maximum loan tenure for first-time home buyers has been shortened instead of increased,” he said, adding that the government should relook at the developers’ interest bearing scheme that should only be given to first-time homebuyers. 

Property prices ranging from RM250,001 to RM500,000, and from RM500,001 to RM 700,000 currently face the highest loan rejection with both categories standing at 22% and 24% respectively.

He called on the government to re-evaluate and assess the current household debt,  which stands at 40% and buyers’ power of securing end-financing to reinforce demand as property remains a commodity that enhances over time.

He said 1H15 property launches will be low, with 75% of respondents anticipating less than 50% of sales performance.

This article first appeared in The Edge Financial Daily, on March 20, 2015.

Bank’s CSR on affordable housing

alan tong

FESTIVE season is always a time for sharing and giving. During Chinese New Year, I have seen and heard of organisations lending their hands to the needy. Such events bring cheer to both parties, the contributors and the recipients.

Having said that, charity events are not just confined to festive seasons or special occasions. A sustainable way of contributing to the community will be more impactful in the longer term. This explains why many companies have their own corporate social responsibility (CSR) programme. One of the objectives of such programmes is to channel funds to the needs of the various under-privileged communities. 

In my last article, I shared my wish list for the Year of the Goat. One of them being the bank’s CSR on affordable housing. Some find this wish interesting and have asked for more details. I think this topic is worth discussing in more depth considering its benefits in housing the nation. 

Having browsed through the CSR programme of several banks on the Internet, I find that most of their CSRs are focused on workplace, marketplace, community and environment. What was missing is the piece on affordable housing that will benefit the low-income earners. 

Today, most banks in Malaysia are generating a significant portion of their profits by providing loans. As high as one-third of their loan portfolio comes from the property industry. According to Bank Negara’s Monthly Statistical Bulletin January 2015, bank’s exposure to residential property stands at 29.3% and a further 13.4% is from non-residential property. With such high exposure in property industry, it would be ideal if banks could also contribute back to the community by allocating a CSR fund to assist the rakyat in owning affordable homes. 

In other countries, there are examples where banks contribute to national housing efforts. Wells Fargo & Company, a financial services company headquartered in San Francisco with operations in more than 8,700 locations, has contributed US$42.8mil (RM156.6mil) in grants to support home ownership effort in 2013. 

Their effort includes support for affordable housing, home buyer education, counselling, downpayment assistance and home repairs. 

Another example is Bank of America. The bank has supported Habitat for Humanity’s for more than two decades. They also work with families, volunteers and sponsors to build affordable housing for low-income families in the United States, United Kingdom and a few other countries in Asia Pacific. 

The above shows the various ways on how banks can apply CSR on affordable housing. In our country where affordable housing is in high demand, banks can even create more approaches to assist the rakyat in owning an affordable house. 

Just to share a few, banks can consider offering lower interest rate for low-cost housing loan, and imposing certain quota to provide loan for affordable housing, especially for low income families who are first-time home buyers. To help in increasing the supply of affordable homes, banks could provide financing facility with incentive to small and medium-sized developers who plan to develop affordable housing.

Unlike developers who are required to include low-cost elements for development of land beyond 4.47ha, banks in our country has no obligation to contribute to the housing industry despite property loan being one of their biggest business portfolios. To date, developers have contributed significantly to the 1.06 million low-cost homes in Malaysia. Some form of requirement or quotas imposed on banks to allocate their CSR fund to the housing industry will be instrumental in pushing our housing policy forward. 

For a developing country with a young and growing population like us, housing issue is of priority especially when our country aims to become a developed nation by 2020. On this note, as a major stakeholder in the industry, banks play a significant role in addressing the housing issue and helping our nation to march towards this goal. 

CSR on affordable housing is especially relevant at our current stage of development. If banks can set aside part of their CSR funds to help the rakyat to own a roof over their heads, it will elevate the quality of our peoples’ life tremendously.

> FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com. - The Star

Penang seeks tenders for Jelutong dumpsite

KUALA LUMPUR: The Penang Development Corporation (PDC) has placed advertisements seeking tenders for the joint development of Penang state land covering 53 acres at the Jelutong dumpsite.

PDC said it was inviting companies to submit request for proposal (RFP) for the joint development.

PDC is also seeking a new disposal site for the construction of a new dumpsite.

Star Metro reported the Jelutong dumpsite has been operating the last 20 years and if all goes well, it would be rehabilitated by the state to make the land suitable for mixed integrated development.

Domestic waste is still being sent to Pulau Burung on the mainland.

The closing date for the RFP is Sept 14.

The successful bidder would be required to undertake an action plan to resolve dumpsite peat fires as well as to undertake rehabilitation/remediation work to make the landfill suitable for development.

The present market value of the site is RM500 per sq ft which puts the land price at more than RM107mil. - The Star

Changing property market of Penang

Scale models of affordable projects in prime locations at Ideal Property Group office in Bayan Lepas.

Legislation, bridge and location are some factors affecting prices

UNTIL about a year ago, Penang’s south-west district was known as the locality for affordably-priced properties.

Since 2008, Ideal Property Group has developed over 4,000 units with a RM3bil gross development value (GDV) there.

These include One World, One Residence and Fiera Vista in Bayan Lepas, priced between RM300,000 and RM800,000. These have become landmark projects.

In the sub-sale market, prices have since increased from RM380 to RM500 per sq ft (psf) for high rise condominium, and more than 50% for landed units.

With the Penang second bridge project completed last year, new launches of high-rise properties hit about RM550 psf last year.

The very expensive ones are located in prime locations such as Tanjung Tokong, Tanjung Bungah, and Pulau Tikus neighbourhoods in the north-east district.

For example, when the Marinox Sky Villas, a leasehold condominium in Tanjung Tokong was launched in 2012, it was sold at around RM650 psf. This has increased to over RM600 psf last year. 

Similarly, condominiums in City Residence at Tanjung Tokong by Ivory Properties priced at RM750 psf in late 2013 have increased to over RM1,000 psf today.

The location of affordable properties within the RM200,000-RM400,000 price range has started to change, due to the state government’s incentives to sell to first-time house buyers, the high rejection of bank loans, and the slowing down of the economy.

Late last year, developers have formulated plans to build attractively priced properties in Tanjung Tokong and Tanjung Bungah.

Real Estate & Housing Developers’ Association (Rehda) Penang chairman Datuk Jerry Chan says the state government has made it attractive for developers to launch properties in the RM200,000-RM400,000 range for first-time house buyers.

Under the state’s affordable housing guidelines introduced last year, developers are allowed to build 2.8 times or a total of 122,000 sq ft of built-up area on one acre, comprising solely affordable homes.

“For example, they can build 144 condominiums, each with a 850 sq ft built-up. Or a mix of 750 sq ft, 900 sq ft, and 850 sq ft units as long as the total built-up area of the units does not exceed 122,000 sq ft over one acre,” Chan says.

Under the old guidelines, the plot ratio was 2.8, but developers had to make sure that 30% of the units have low-medium cost price tag of RM72,500, and another 35% in the RM200,000 to RM400,000 price range.

“This is why you can see developers getting involved in the affordable home projects in prime locations. These affordable properties have exerted pressure on mid-range houses priced between RM500,000 and RM700,000,” Chan says.

The issue with affordable homes is that if you need to dispose the property within a five-year period, the seller cannot sell it for more than what they pay for.

“The property can only be sold to the buyer approved by the state government. This is unfair to the seller as he may spent considerable sum to renovate or improve the property,” he says.

Ideal Property is also shifting its affordably priced projects into the Tanjung Tokong area. Group executive chairman Datuk Alex Ooi says the group would launch affordabe homes under the I-Condo brandname in prime locations of the island.

I-Condo units will be well equipped with convenient access and upgraded public amenities, according to Ooi. 

“We will soon launch the RM800mil I-Santorini in Seri Tanjung Pinang, Tanjung Tokong and the RM1bil Autumn projects in Bayan Lepas.

The projects comprised a total of 4,515 affordable housing units of 850 sq ft to 900 sq ft, priced between RM300,000 and RM380,000, targeting first-time house buyers.

“The I-Santorini scheme is located on a 9.9-acre leasehold site in Seri Tanjung Pinang, a stone’s throw from the Tesco hypermarket,” Ooi says.

The market has in the past 12 months become increasingly very challenging, as property prices, which have reached all-time high levels in early 2014, are beginning to correct themselves, according to Ooi.

There are now new range of condominium properties in Bayan Lepas priced over RM450 psf, compared to RM600 psf in early 2014.

Even in the prime locations of the north-east district, new launches are about 30% below the usual RM1,200 psf for condominiums.

“The difficulty in obtaining bank loans has dampened the market. In view of the challenging circumstances, we decided to stay focus on affordable projects priced between RM300,000 and RM400,000,” he adds.

Ooi said the state government also made it attractive for developers to build affordable housing by reducing development charges to RM5 psf from RM15 psf previously.

“Since the cost of building an affordable high rise unit is between RM150 to RM200 psf, without taking into consideration the land cost, it is still possible for us to price our products competitively and still make a decent profit,” Ooi says.

There is a perception in market that affordable projects are similar to low-medium-cost houses, according to Ooi.

“I-Condo will totally change that perception. Purchasers can get a condominium at affordable price tag. Our affordable units come with quality finishes, equipped with a wide range of recreational facilities, and come with one free car park,” he says.

Ideal Property Group, which benefited from the acquisition of two public listed companies Ideal United Bintang Bhd and Ideal Sun City Holdings Bhd, is in the process of injecting its assets into the two listed entities.

Another Penang-based developer, Aspen Group Holdings Sdn Bhd plans to launch in 2015 the RM499mil Tri-Pinnacle project in Tanjung Tokong, comprising largely affordable and low-medium-cost homes.

The Tri-Pinnacle comprises two blocks of affordable condominiums with a RM390mil GDV and a block of low-medium-cost units with RM100mil GDV. 

“The Tri-Pinnacle has 859 affordable units with built-up areas of 800 sq ft, priced at RM299,000, while the LMC are priced at RM72,500.

“We have received 25,000 registrations from eligible first-time home buyers,” he says. - The Star

Commercial sector clouded by uncertainties

Consultancy expects softer climate for first 10 months

PREDICTIONS are never easy, and today’s current property market is more difficult to fathom with several national and global wild cards on the table.

This confluence of factors are expected to impact the property market this year. On the national front, there is the weak ringgit/weak oil price, the April 1 implementation of the Goods & Services Tax (GST) and the unravelling 1MDB issue. 

Globally, sources of uncertainty include the European Central Bank’s (ECB) expanded asset purchases which started this week with more countries cutting interest rates.

According to property consultancy Knight Frank’s inaugural Malaysia Commercial Real Estate Sentiment Survey 2015, “there is so much uncertainty surrounding the Malaysian commercial real estate’s likely performance.” 

The survey was concluded in the second week of January, before the ECB’s 1.1 trillion-euro (US$1.2 trillion) or 60 billion euro-a-month bond-buying programme which started earlier this week and before the fast-unravelling 1MDB issue.

In his opening address, Knight Frank Malaysia’s managing director Sarkunan Subramaniam predicted that “at least for the first 10 months of this year, the commercial investment market will see a softer subdued climate.” 

“The healthcare/institutional and hotel/leisure sectors are likely to be more resilient while the office sector seems likely to see some strain. The retail sector will have a slightly poorer year but certainly better than offices,” says Sarkunan.

The logistics/industrial sector may actually turn up to be “a good surprise” for investors, he says.

“But do remember while sentiments do drive the market, hard facts determine said sentiments,” he says. The commercial sector is affected by the GST, while the residential sector to a much lesser degree, says Sarkunan. 

Given time to adjust, there may be more clarity by October/November, he says.

About half (48%) of the Knight Frank survey which concluded in January comprised developers, a third of them fund/Reit managers and a fifth of them (19%) commercial lenders.

Penang property seen slowing down due to high prices

“For landed developments, the option is to either pay increasingly high prices or move further away (from prime locations),” said Real Estate and Housing Developers Association Penang (Rehda) chairman Datuk Jerry Chan.

PETALING JAYA: Escalating prices of landed residential properties in Penang could see transactions slowing down in 2015.

According to Real Estate and Housing Developers Association Penang (Rehda) chairman Datuk Jerry Chan, prices of landed residential properties have been rising over the past few years.

“We don’t see highly motivated sellers yet. Land prices have been moving at a faster rate than their selling prices,” he said.

Chan added that land scarcity was also an issue.

“For landed developments, the option is to either pay increasingly high prices or move further away (from prime locations).”

According to CH Williams Talhar & Wong’s (WTW) in its 2015 Property Market report, prices of newly launched, landed residential properties in Penang continue to rise unabated to new benchmark levels.

It said older residential units in established and growing neighbourhoods, such as Greenlane, remained highly sought-after despite higher asking prices.

“The steep hike in prices is expected to taper off in the near future with more choices of new housing accommodation entering the market.”

According to the report, 985 units of landed residential came into the market last year in Penang Island.

“The construction and completion of the Second Penang Bridge has been a catalyst for new developments in the souther region of Penang Island.

“The existing supply in the Northeast district is slightly ahead of the southwest district (namely 51% of existing supplies in the northeast district and 49% in the southwest district).

WTW noted that the majority of landed residential developments have been focusing on the Seberang Perai area, due to the availability of lands with a comparatively lower land cost as compared to Penang Island.

“According to the National Property Information Centre, existing supply of landed residential was 141,599 units of which 104,804 units (74%) are in Seberang Perai and 36,795 units (26%) in Penang Island.

“With land size nearly triple that of Penang Island, Seberang Perai has abundant land but lacks extensive infrastructure and connectivity. 

Landed residential developments predominated in the past few years with high-rise residential making stronger inroads.”

WTW said cumulative supply of landed residential developments stood at 104,804 units, comprising mainly terraced houses.

“In 2014, low take up rates were observed for newly launched projects in Seberang Perai. 

The landed residential market appeared to be weakening as developers are having a hard time to push sales in order to clear the unsold units.

“However, the transaction activities regained its momentum in the second half of 2014.” 

Compared to the primary, WTW said the secondary market in Seberang Perai remained active, with an upward trend observed in the transaction values of the properties. - The Star