Property Hunter Magazine November 2014 by Victor

/// COVER STORY

Skycity by

Homesign Network /// HOT TOPIC Property Management: Is it a critical factor? /// HOT TOPIC Grade A Offices

NOV 2014

ISSUE 60 RM8.90

• • • • •

Malaysian Budget 2015: Housing Sector Highlights Kua Say Yong: Redefining a Lifestyle SHAREDA Youth to Build New Housing for the Blind PH Expo KK Commercial Edition 2014 EcoWorld Sibu Premium Property Showcase

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06  07 | Cover Story /// Contents

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Cover Story Skycity, Karamunsing by Homesign Network: The iconic haven for creating and living

Exclusive Interview Kua Say Yong : Redefining a Lifestyle

Feature Property Event PH Expo KK Commercial Edition 2014

Hot Topic Grade A Offices

Hot Topic Malaysian Budget 2015: Housing Sector Highlights

Hot Topic Property Management: Is it a critical factor?

Sabah Property News

Feature Property Event EcoWorld Sibu Premium Property Showcase

Sarawak Property News

West Malaysia Property News

Contributor: Dr. Daniele Gambero Budget 2015, The Strategic Planning And The Micro-Propenomy Effects Of A Macro Economic Budget

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Contributor: Charles Tan Affordability, Availability, GST and More Money (new income tax rate)

Contributor: Michael Yeoh Post Budget 2015: Mortgage Perspective

International Property News

Banking and Investment News

Property Listing

Skycity, Karamunsing by Homesign Network: The iconic haven for creating and living

18 PH Expo KK Commercial Edition The first expo dedicated to commercial properties featured a select list of high-quality properties from Sabah and Peninsular Malaysia

44 EcoWorld Sibu showcase

Ecoworld made an impressive debut in Sibu with an exclusive showcase of its prime properties in Klang Valley, Iskandar Malaysia and Penang

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Hot Topic We look back on the year that was with the biggest news, product launches and innovative concepts that influenced Sabah’s property development industry in 2014. Hot Topic The one thing that will remain constant is change and we are looking forward to whole lot of it in 2015! Join us as we explore the exciting new projects and developments in the coming year and the people driving the industry towards this transformation.

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Contributor: Chris Tan Last Budget Under 10th Malaysia Plan and the First Budget under GST : Are you reading between the lines?

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/// Cover Story

/// COVER STORY

Skycity, Karamunsing

The iconic haven for creating and living Sun, sand, sea and now there’s Skycity in Kota Kinabalu. Poised to be an iconic symbol, Skycity is an integrated mixed development that is located in Karamunsing, a commercial and financial district that inter-connects with matured residential areas. It is at the intersection of lush greenery and city conveniences – perfect for those who appreciate the best of both worlds. Skycity embodies an all-in-one lifestyle that encompasses 2 blocks of commercial suites (Sky Suites), 1 block of hotel and offices (Sky Offices), and a lifestyle mall (Sky Lifestyle Centre). Skycity is designed to stand majestically in Karamunsing,with its oval-shaped contemporary and aesthetic façade that spans across over 2 million sq ft of gross floor area. This self-contained development ensures that all four components are seamlessly linked, and movement throughout the development is orchestrated to ensure a smooth and easy flow for tenants and visitors alike. Getting to Skycity is also a breeze as it is well connected to all major routes providing options to ease away from traffic congestion. For frequent travellers, the airport is just a quick 10-minute drive from Skycity.

Live. Work. Unwind. It is easy to spend hour after hour at Skycity, as it provides a hassle-free living experience where you can meet up with friends, network with business partners, clock in some retail therapy, work in style, or enjoy a hotel stay that pampers you 24/7. Skycity is truly a “city” where you can live, work and unwind – all in one gorgeous location.

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/// Cover Story

The friendly lifestyle mall Skycity is an ideal and convenient escape for families as it is envisioned to be a hub of activities. The mall will occupy one spacious level and will be Sabah’s first and only heritage destination that gathers a choice selection of local and international cuisine. If you love food, you will love this gourmet heritage village. From fine dining to fast food outlets, your palate will be in for a grand feast. There will also be something for everyone, with a special focus on women and children. There will be a dedicated ‘Ladies’ World’ designed to cater to the whims and fancy of all women. This floor is exclusively for women, hair salons, make-up counters, consultation centres, and plenty more, await to serve all ladies. Plus, there will be an area

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for children with services like early-childhood education and family development centres

conference rooms; built to maximize efficiency in space planning.

located at Skycity, and even seal the deal at one of the many eateries.

One tower, two components

•

There are two components in the mixed towers – Sky Offices and a hotel.

This 5-star hotel offers the best of modern oriental hospitality as it will be operated by an award-winning international brand. Guests will discover a world that exudes warmth and genuine care.

There are two blocks that are currently available for progressive entrepreneurs to own and invest in. Block A comprises 214 units, while Block B comprises 286 units. Sky Suites will be launched in Q1 of 2015, and will be ready to house its occupants within 3 years.

•

Sky Offices

These Sky Offices will set a new benchmark as the address to be, as it will be the first Grade-A office in Kota Kinabalu to be complemented by a clubhouse and childcare centre. In the said clubhouse, one can chill out or even attend to business appointments at the exclusive F&B outlets while maintaining a healthy lifestyle utilizing the gym and swimming pool. On top of that, Sky Offices provide shared meeting and

Hotel

Success in the sky Build greater business success in the commercial suites, aptly named Sky Suites. Putting your business at Skycity also means putting your business at an advantage, as you can meet over coffee, discuss business plans in a conducive environment, connect with other business owners

A flagship development Skycity is a flagship development by Homesign Network Sdn Bhd, a customer-centric company with core strengths in creating exceptional values. The company constantly delivers sustainable projects that are based on practical ideas. Homesign Network has garnered a reputation of excellence in property development, with a proven track record in Kota Kinabalu. Some of its projects include Sierra Biz Hub, HS I-Park, Donggongon Avenue, D Residence, 360 Boulevard and HS Commercial Centre, among others.

OPEN FOR REGISTRATION Meet us at G-37-5, 5th Floor, Block G, KK Times Square, Off Coastal Highway, 88100 Kota Kinabalu, Sabah

+6088-238 722 or +6088-238 733 Email: inquiry@homesign.com.my

Website: www.homesign.com.my

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/// Exclusive Interview

Kua Say Yong

/// EXCLUSIVE INTERVIEW

Redefining a Lifestyle

eneral Manager of Homesign Network Sdn Bhd and recent local expatriate from Teluk Intan, Perak, Kua Say Yong heads a group of young and dynamic individuals who has set out to create new milestones in the Sabah property development industry. Kua is not one to sit idle and thrives on the energy of creating and trying out new ideas.

for continuous improvement in building façade design to the proven design strategies to create visually stimulating products.

Homesign Network currently has three ongoing projects with three more sets to be launched by early 2015. According to Kua, the city landscape will be in for an architectural revolution once these three projects are completed with Skycity being the focal point of this impending change.

“The property development industry in Sabah is just starting to become more competitive and this is really exciting. While the buying interests still remain strong, buyers now are equipped with information and they are more selective with products that appeal to them. In Sabah, you still have the opportunity to create fresh designs that have never been attempted here before and by doing so; you create a niche where you can lead the transformation of Sabah’s property landscape into a whole new era.”

“Our development projects’ direction is pretty much in tandem with our slogan which is to redefine lifestyle,” explains Kua. “We are trying to give something different to the community and we are passionate of what we are doing. Homesign Network infused creativity in the sense that all our developments are carefully thought of even with the fine details. Cost is always secondary when it stands in the way or compromises with quality and functionality. We always believe in giving the best for the same dollar spent. Our philosophy is there is never best, only better.“ To prove his point, Kua espouses the many benefits that come with living and working in what is destined to be the place to be among the city’s elite business and social communities. Designed by Bon of Malaysian architecture firm Simplex, Skycity will be a product of his extensive experience and modern architectural influences garnered while working in various high-scaled projects in San Francisco and Asian cities such as Tokyo, Beijing and Hong Kong over the last 25 years. Skycity will be the first oval shaped building in Kota Kinabalu that veers off from the conventional four-sided building and curves gracefully instead with glass windows reflecting the sky’s changing hues. “An oval shaped building might not be very efficient in terms of use of space and it also costs more to build but by being unique, you create the “wow” factor,” enthuses Kua. “We have spent considerable time and effort to achieve the equilibrium of outstanding looking façade and practicality of useable space. It is never a mutually exclusive feature but in Skycity, we have both which is aesthetic and practical.” He adds that many projects replicate successful designs as they have stood the test of time in terms of practicality. However, it is also important

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As Anthony J. D’Angelo was quoted to say, “Don’t reinvent the wheel, just realign it”, it pays to put some extra effort in improving on design and style to stand out spectacularly.

Focusing on the future Being creative and able to think out-of-the box has also created some tantalizing prospects for Sabah to fuss about at Skycity. The first ever Ladies’ World is a section dedicated entirely to women with services running the gamut from apparel to a range of health and beauty treatments and products including cosmetic surgery. All the staff is women to create a place where women can indulge their every whim and fancy with no inhibitions. Another section will be dedicated to the young ones with a child-care center and an educational hub. Other than the flagship development of Skycity, Homesign Network also has another two future projects. Its integrated mixed development project located in Bundusan will be the first such development in the area. Poised to be self-sustaining and a one-stop address for locals and tourists alike, it is also just 10 minutes away from Kota Kinabalu city. The development also showcases the best mix of retail outlets here and the patrons can indulge in the recreational facilities and services offered. While the other project is located in Penampang district, its architecture is designed with a touch of modern contemporary. This modern condominium is situated at the urban center overlooking the surrounding landscape with a panoramic view from the designer suite. It is an affordable luxury with great functionality while providing the ambiance of coziness away from the hectic city life. “Our projects appeal to investors who are looking for exceptional return on their investments and home owners who put more emphasis on quality of lifestyle,” says Kua.

Realizing the goal With his extensive background in hospitality management, having worked with Galaxy Macau, MGM Macau, Sunway Resort Hotel & Spa and Star Cruises, Kua will be drawing on his years of hands-on experience to make sure that facilities and services offered at all the projects are up to the highest standards. He understands the vast potential that is still untapped and is ready to explore all avenues. “Our aspiration for these projects is simple which is to change the outlook of Kota Kinabalu and lift the bar higher for future competition which we think will be instrumental to the future development of Kota Kinabalu.” Being in charge of projects with a GDV of more than RM1.54 billion might be daunting but Kua is confident in himself and his team. “I work with a team of young and enthusiastic people who share the same passion for creating and inspiring innovation in the property development industry. Being involved wholeheartedly in your job is important as there are always obstacles to overcome.” Kua talks about a few major challenges in developing these projects. “Obtaining the approvals from all relevant authorities especially at this scale is always the biggest obstacle. Secondly will be the tightening of bank approvals when it comes to loan applications and even financing package. We have to be creative when it comes to obtaining financial package from the banks. Last but not least are buyers remaining cautious with the implementation of GST.” Talking about the future and challenges ahead for Homesign Network in Sabah sets off a noticeable spark of excitement in Kua’s eyes but he has also learnt to appreciate the more easy-going lifestyle in Sabah which he has called home for the last two years. There is less traffic compared to KL, commuting to work is less stressful, and the air is fresher. The environment is more relaxed and there is a real sense of neighborliness.

Kua Say Yong General Manager Homesign Network Sdn Bhd

Photo by Louis Pang Studio

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/// Featured Property Event

PH Expo KK Commercial Edition

/// FEATURED PROPERTY EVENT

Datuk Michael Lui Yen Sang (centre) flanked by members of the Kota Kinabalu Chamber of Commerce and Property Hunter Staff

he spotlight was on commercial properties at the expo held at Suria Sabah Mall from 3 â&#x20AC;&#x201C; 6 October, 2014. A diverse range of properties from Sabah and Peninsular Malaysia featuring shoplots, townships, offices and a resort gave visitors ample opportunity to explore new investments for their current and future business needs. Datuk Michael Lui Yen Sang, President of Kota Kinabalu Chinese Chamber of Commerce & Industry, and members of the association were given an exclusive tour of the exhibitor booths to highlight the fast rising potential of commercial properties in Malaysia, and Sabah in particular.

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/// Featured Property Event

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/// Hot Topic

the top considerations in selecting an office building to work from. These employee centric considerations are indicative of companies placing more importance on their working environment. A Grade A office takes this a notch higher by providing facilities that goes beyond basic necessities.

/// HOT TOPIC

Grade A Offices

s the economic fundamentals in Sabah continue to improve, the demand for improved work space is influencing the development of offices that meet a higher standard of concept, design and workspace environment. Confidence in the Sabah office market, especially for prime office space, is gaining ground. Evidence of this can be seen with the pending addition of Grade A offices in Kota Kinabalu. A Grade A office is described as the highest quality of office space available and are generally newly constructed, and have been outfitted with top-of-the-line fixtures, amenities and systems. Its architecture is aesthetically pleasing as it’s often located in high-visibility areas such as a city’s central business district. Property management and maintenance are impeccable. All in all, a Grade A office is the representation of a premier business address that exudes prestige and success that epitomizes its tenants and their company profile. Many companies in Kota Kinabalu are now searching for that extra edge to carve their niche in the business market and image building is a prime consideration. Multinational companies that have set up offices in cities across Malaysia including in Kota Kinabalu are more likely to opt for a Grade A office for the status level these offices offer. Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia, has commented that office space in integrated developments with complementary components such as retail, residential and hotel, particularly those located in close proximity to public transport links, will continue to be attractive options especially to multi-nationals and corporations. These factors make it more attractive to employees due to availability of conveniences such as transport. In the Kuala Lumpur office market, the supply of Grade A office will continue to experience moderate growth albeit at a slower pace. According to Knight Frank Malaysia, there was limited activity (in terms

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“We have been to a lot of places like Hong Kong and Singapore to study their Grade A office set up and plan to include suitable elements in our own development. We have seen workplaces with an ultra-premium clubhouse for their employees, a child-care centre, F&B outlets, gym facilities and swimming pool,” says Kua. Having all these facilities in one place makes it easier to balance your work, family and personal life. You don’t have to commute through rush hour traffic as you can do all your after work activities here. It’s going to be like a home away from home but with everything taken care of for you to help you manage your time efficiently.’

The Right Price of Hap Seng Properties elaborates on the select features that differenciates Menara Hap Seng from other offices. “The office floorplan is the largest in Kota Kinabalu at 18,226 sqft net per floor and this spacious expanse will be furnished with high-quality finishings and fixtures. We also have green building certification to make sure we do our part in preserving the environment.

of volume) in the investment market in line with the cautious outlook in the first half of 2014 but developers however continued to announce more new integrated projects with office space as an integral component.

Being well-secured is also an important component of Grade A offices. There are four levels of carpark with lighting features to enhance security, and male and female shower rooms for those who ride bicycles or walk to work to freshen up before going into the office. A selection of gourmet F&B outlets will offer a variety of cuisine and venues for busy executives to conduct business lunches and to relax after work.”

“Efforts by the Malaysian Investment Development Authority (MIDA) to attract more than 200 investors into the country with the goal of turning the nation into Asia-Pacific’s oil and gas hub by 2017 are showing progress. This will augur well for the office market,” adds Sarkunan. Sarkunan expects major leasing enquiries on office expansion and relocations to come from the oil and gas, financial and IT industries.

The rise of Grade A office in Sabah Grade A offices have been a part of the commercial property development scene in Peninsular Malaysia for almost a decade. The supply and demand of quality office space has played an integral part in the rapid economic expansion of major financial centres like Kuala Lumpur and Penang. Chief Minister of Penang, Lim Guan Eng had claimed in early 2014 that Penang

Skycity

Menara Hap Seng

has almost run out of Grade A office space due to high demand from top companies such as Air Asia, Wilmar (a global edible food giant), and Citigroup. The demand for premium office space is also not abating in Kuala Lumpur with about 5.3 million sqft of new supply expected to be completed in 2014 and 2015. Hap Seng Group ventured into the lucrative business of premium office buildings with the construction of Menara Hap Seng at Jalan P. Ramlee,

Kuala Lumpur and is now bringing their expertise back home to Sabah. COO John Tan of Hap Seng said that after 40 years of property development experience in Sabah, they feel that Sabah is ready to have its first Grade A office building.

can’t run away from location. We believe we have a prime location and as with any prime location, you need to have a prime building of equal standing,” says Tan.

Hap Seng Group is currently developing the 14-storey Menara Hap Seng at the previous Golden Screen Cinema site in Kota Kinabalu.

“We were initially considering a condominium development for the site but after studying the market needs, we decided that a Grade A office building would be more appropriate. We felt this was lacking in the current market and wanted to establish a premium business address for a small and exclusive tenant list. Our tenants are on an invitation only basis and they have the privilege of enjoying the best of both worlds here – work and leisure.”

“When it comes to property, you

Willie Pang, Senior Manager (Marketing & Leasing)

Although a generous amount of space is a much sought after feature, how the space is utilized is equally significant. Kua Say Yong, General Manager of Skycity, a mixed development with a Grade A office tower located at Karamunsing says the company had engaged a team of Japanese interior designers to come up with ideas that will add value to the office space and create of working environment that is smart and functional. Facilities that help make the working environment more appealing to employees is given more attention in Grade A buildings and is one of its selling points. The Importance of Office Building Attributes (Source: Knight Frank Asia Pacific Occupier Survey) listed employee proximity, mass transit and staff attraction/retention as among

Moving up from a Grade C to a Grade B or eventually Grade A office will undeniably put you in a higher rent category. The price tag for a Grade A Office may be higer but considering all the value added facilities and services that come with the territory, it remains a very attractive option. Based on asking rentals in selected Grade A offices in Kuala Lumpur, the rate ranges between RM6.50 to RM11.00 psf per month.Taking KK Times Square as the benchmark for new office space in Kota Kinabalucunrrently, rates are at RM3.00 psf. (Source: Knight Frank The Sabah Property Market Report 2014). Menara Hap Seng will be looking at a range of RM5.00 to RM5.50 psf depending on office size. “This is the starting price but we have confidence that when people start to feel the prestige and comfort that comes with a Grade A office, things will change,” says John Tan. There are many office buildings in KK but there is none of this standard. What we want to do is to bring up the standard. Offices are traditionally rented from shoplots and we want to bring it a step forward especially for corporate office.” The office market has proven to be resilient over the past few years. New buildings are getting the bulk of the tenants which include new tenants and owner occupiers migrating from traditional decades old shoplots to strata commercial lots paving the way for new office developments as Kota Kinabalu mature into a more modern city. “I think that the developers in Kota Kinabalu are making a lot of good changes with collective efforts to bring improvement to build Kota Kinabalu into a better city. Kota Kinabalu will be the city to watch,” says Kua.

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/// Hot Topic

Malaysian Budget 2015:

/// HOT TOPIC

Housing Sector Highlights

two years to reduce the burden of monthly installments. The Government will also give a 50% stamp duty exemption on the instrument of transfer agreements and loan agreements. The Government will also provide a 10% loan guarantee to enable borrowers to obtain full financing including cost of insurance. Borrowers can also withdraw from EPF Account 2 to top up their monthly installment and other related costs. However, this is only offered to the first 20,000 eligible youth on a ‘first come first served basis. AFFORDABLE HOUSING SCHEME Affordable Housing Scheme to be continue with the following improvement: •

80,000 units to be built under the 1Malaysia People’s Housing Programme (PR1MA) with an allocation of RM1.3 billion.

•

The ceiling of household income is raised from RM8,000 to RM10,000.

•

Rent-To-Own Scheme will be introduced specifically for individuals who are unable to obtain bank financing;

•

26,000 units to be built under People’s Housing Programme (PPR) by National Housing Department (JPN) with an allocation of RM644 million.

•

A total of 37,000 affordable units to be built under Rumah Mesra Rakyat (RMR), Rumah

YOUTH HOUSING SCHEME

new scheme, Youth Housing Scheme, to be introduced with smart partnership between the Government, Bank Simpanan Nasional, Employees Provident Fund and Cagamas: A funding limit for a first home not exceeding RM500,000 for married youth aged between 25 and 40 years with household income not exceeding RM10,000. The maximum loan period is 35 years. The Government will provide monthly financial assistance of RM200 to borrowers for the first

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Idaman Rakyat & Rumah Aspirasi Rakyat programme by Syarikat Perumahan Negara Berhad (SPNB). MY FIRST HOME SCHEME The scheme to be improved by raising the ceiling price to RM500,000 in line with the stamp duty exemption. In addition, the age of borrowers to qualify for the scheme will be increased from 35 to 40 years. PUBLIC HOUSING MAINTENANCE RM40 million will be allocated under the Public Housing Maintenance Programme. While another RM100 million will also be allocated under the 1Malaysia Maintenance Fund for maintenance of private low-cost housing. TAX AND STAMP DUTY To enable more people to own their first home and reduce the cost of buying a house, the Government has agreed to extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000. The exemption will be given until 31 December 2016. It is proposed that tax on gains from the disposal of property be self-assessed by the taxpayer effective from the year 2016.

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/// Hot Topic

Property Management:

interest free or not, for other purpose. In the unfortunate case of the developer’s liquidation or winding up, the money in the Trust Account can be transferred to the organization taking over the management of the same property. In many cases, the Trust Account has not been set up, and the sinking fund ends with the developer’s insolvency, truly “sunk” or in a worse case, become a negative figure for which the owners are obliged to make good.

/// HOT TOPIC

Is It A Critical Factor?

managed building can command better value than one that is poorly managed. Johnny Chong, Director of WTW Property Services (Sabah) SdnBhd explains what it takes to be a property manager. “A property manager can be anybody with the relevant experience or exposure in property management. The important thing is that a property manager must have the knack for public relations so as to be able to give satisfactory explanation to owners/residents whenever clarification is needed for any management related issues; an eye for problem solving especially in regards to making good defects and repairs and handling nuisances. Some accounting and legal knowledge is essential, the former for understanding the financial health of the property being managed and the latter for going after defaulters and those creating nuisances. Not everybody can be a property manager as the work demands patience and perseverance especially in dealing with ‘problem people’. Often the property manager is preoccupied with solving peoples’ problem rather than problems with the property itself.”

Responsibility works both ways Although professional property management covers a multitude of functions and services geared towards providing a comfortable, safe and secure environment for the tenants, there is a certain onus of responsibility on the tenants as well. Fit-out guidelines which highlight the dos and don’ts that residents have to adhere to when undertaking fit-outs or renovation of their apartments or condominiums is one of the most crucial. The basis of these guidelines is to avoid any structural damage to the building and disturbance to other residents. Other guidelines generally pertain to compliance of safety and security rules and regulations, cleanliness, use of communal areas and prompt settlement of maintenance fees.

f you are living in a strata title unit, then the answer should be a resounding ‘yes’. However, many who live in apartments and condominiums, or work in office blocks and malls do not regard this as a main consideration. Property management in a nutshell is a one-stop solution to address various aspects of building maintenance and tenant expectations in a professional and transparent manner. A general list of services would include among others

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electro-mechanical (E&M) services, housekeeping services, security services, help desk services, hardscape/landscape management, and garbage management. Residential properties with enhanced services and facilities might include aspects such as clubhouse management. The increased number of high-rise residential and commercial buildings in urban and suburban centers has generated greater awareness of what property management is about and how a well-

Financial issues are often the most testing to address. There has to be a clear understanding of how the monthly maintenance fee paid by tenants is being managed and what recourse tenants have if it is not managed well for the benefit of all. Johnny says that the main misconception that property owners have on property management is that they think all the service or maintenance charge collected goes into the property management company’s pocket.

Another area of concern in which most owners are not familiar with is the management of safety and security. Regular fire inspection and fire escape practice and visitors’ screening procedure not only save lives, they also hugely influence the property value. No one wants to buy an unsafe property to live in.

“Nothing is further from the truth. In fact the only money due to the management company is a pre-agreed fee specified in the Management Agreement. The rest of the fund collected in the form of service charge, sinking fund or rental of facilities and common areas go into the operation, maintenance and running costs of the property,” he adds. “As human beings, owners always want the best of everything, this is understandable. We deal with this issue by studying the request and whether it is appropriate taking into consideration the type of property and money available. If there is a financial constraint, the problem is discussed with the owners’ representatives, usually in the form of Resident Committee or Management Corporation to find a solution or a suitable compromise. In most cases owners are very understanding and accommodating. “ But what happens when property management is not performing to an acceptable standard? STOPS or Subsidiary Title Owners & Purchasers Association Sabah was formed to address issues and complaints by tenants unsatisfied with their property management services. In a press statement released during a seminar entitled “Property Management…Why Bother” in June this year, STOPS cited that in Sabah, most subsidiary title buildings older that five years show dire need of repainting and repairs; some have even been left in dilapidated condition and become unsafe to be used as dwelling premises. It goes on to say that the problems with poorly maintained properties lie with poor management. Many owners are not aware of their rights and the relevant Act affecting a better management, especially in the financial area. For example, many members of STOPS did not know about the “Trust Account” rule. The Trust Account should be set up by the developer independent of his financial arrangement. The sinking fund is placed in the Trust Account for maintenance and repairs of the property to which the Account is dedicated. It is illegal to be used by the Developer as a “loan”,

Robert New, proprietor of Smiths Gore Sabah who has practiced as a valuer and property consultant in Sabah for over 30 years, says that cash flow is the lifeblood of property management. “You have to budget and monitor your expenditure. It is a good management to be on budget. If you spend too little or too much, it is a sign of bad management because the money has already been allocated.” He adds that adhering to rules and regulations that govern property management can be very taxing. He cites an example where getting three quotations for a small RM500 repair and maintenance job can take up too much time and effort which could be spent more productively tackling bigger problems.

are renting and the property management is not good, you can just move out.” Her main criteria when deciding to rent would be location, facilities, furnishings, price and finally property management in that order. She does concede however that if she was thinking of buying a unit, she would be more conscious about the quality of the property management. “I would look at several things more closely for example, how clean and tidy is the environment, landscape, and external painting as well as facilities such as the swimming pool, gym, and communal areas. Above all would be security as everybody is now talking about double security at the main gate and entrance to your block.” Laynee Mariano also places security as her top priority in choosing a property to rent. Although she already knew the property management quite well before moving into her current residence, she feels that the level of security could be improved with more accessible 24-hour response to emergencies, stricter monitoring of security guards and their background, and being more proactive in dealing with problems. Property management plays a crucial part in attracting buyers as a well-managed property is free from maintenance, reparative and security problems.It is the decisive difference that will ultimately distinguish between a good and bad investment decision.

“You have to prioritize issues and if there are too many issues, you tend to get complaints when these issues are not attended to promptly. So you have to make wise decisions because as the end of the day, whatever you do has to add value to the property,” he adds. Johnny concurs and adds that one of the most critical tasks of being a property manager in Sabah is balancing the budget especially with small properties with limited funds where money is never enough to meet with escalating operational, maintenance and reparative costs. For bigger and higher class properties the challenge is to meet with owners sometimes exalted expectations. But overall when owners are made aware of the financial situation of the property most are reasonable and happy as long as the management can provide a decent standard of service and maintenance.

A matter of choice Getting to know the property manager of a residential condominium should be in the top half of a potential buyer or tenant’s checklist. But here is where priorities differ. Janie Liew does not fuss too much about how a property is managed as she opines, “If you

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18  19

/// East Malaysia Property News

Google Finally Brings Street View to Sabah & Sarawak

SABAH

Google View’s vehicle spotted in and around Kota Kinabalu

The imageries were captured over a year using cameras installed on cars. For offroad sites, a wearable backpack-mounted camera system was used.

PROPERTY NEWS

Keep track of the latest property and real estate news plus reviews in the property market in Sabah

Sivanandan said, however, that the images available on street view are not real-time and will be updated on a monthly or bimonthly basis. He allayed privacy concerns, stressing that street view blurs human faces and licence plates of vehicles to render them unidentifiable. “Google is very responsive to any requests received from users to further blur any images that feature them.

Sabah Property Sector Outperforming favourable labour market conditions, according to the report. On the headwinds, they pointed out that the low interest rates may rise amid higher inflation and risk of financial imbalance. Inventories are still low, but are building up. Growth in new launches picked up strongly to nearly nine per cent year-on-year in the fourth quarter of last year on strong demand and a drop in inventory, before easing to about five per cent as of the first quarter of this year. Kota Kinabalu, Sabah

Some consolidation is due for the Malaysian property market following the “property boom”, according to research from a leading financial institution.

will be positive for the economy in the long term,” economists Edward Lee and Jeff Ng said in a report.

A tighter monetary policy and macro prudential measures will help cool the property market, noted Standard Chartered Bank in a recent report.

Housing prices rose 72 percent during the first quarter, enjoying a 6.7 percent average growth annually. Sabah outperformed with prices more than doubling, while prices in Malacca rose the least at 50 percent.

“Housing prices have been rallying strongly for some time and some consolidation is due… this

The boom came about from a strong domestic activity-driven economy, low interest rates and

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Three Times MIEA Award Winning Agency Enters Sabah

“The property market is likely to face supply headwinds, considering the current population growth rate of about 1.5 per cent,” the report noted. This story was first published by www. propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

Google map view with 3D panaromic view feature

Users of Google Maps can explore many of Malaysia’s famous landscapes, cities and neighbourhoods through panoramic street-level photographs. Approximately 90 per cent of the Malaysian peninsula’s scenery is now accessible online via Google Street View, a comprehensive street-level imagery of buildings, highways and roads, the company said today. “It is a way to go to that place before you go there in person. “Malaysia is a diverse and constantly growing country, and by providing users and businesses with more useful map information, street view can also help create lasting economic impact,” Google Malaysia managing director Sajith Sivanandan said at a media briefing.

“To submit a request, people can use the ‘report a problem’ tool available on the bottom right corner of Google Maps,” Sivanandan added. He added that Google Malaysia is currently working on developing a street view option for east Malaysia. “With Street View, we are putting the layers on Google maps,” said Google Malaysia’s media spokesman Zeffri Yusof. Director of Property Hunter, Michael Hiew also added, this will greatly enhance property search on www.propertyhunter. com.my as it is linked with Google Map. He said, agents who listed their properties on our website which has also included their property location on Google Map will allow property searchers to even view the exterior of the property prior to calling or arranging for viewing.

Property Hub Sdn Bhd, a three times MIEA award winning real estate agency makes entry into Kota Kinabalu and establishing its office at KK Times Square. The leading agency headed by Sabah born, Vice President, Mr Enoch Khoo made waves at its Sabah’s inaugural career talk on 2 October, 2014 at Celyn Hotel, City Mall attracting over 70 people from all walks of life wanting to get more insights on the mountainous path in becoming a successful real estate negotiator. The inspiring talk delivered by, Mr Enoch Khoo and renowned Sales Performance & Real Estate Negotiator Trainer, Mr Neoh Soon Hin, and Founder of Property Hub, Mr Christopher Lim gave the real deal into being a real estate negotiator. Real life examples was given by current negotiators at property hub and the initial struggles and hurdles that is being faced by rookies in the industry. Property Hub also openly presented their secret to success in the industry and how to tackle the issues faced by fall out rookies as well as assistance from fellow team leaders and trainers to help newly signed up negotiators to make the break in their critical first six months in the industry and lead on to a bright career. Property Hub will also be offering a full 3 days PHSC (Property Hub Success Course) for an introductory rate of RM488 inclusive of course fee, certificate, participant’s notes and meals, discounted from the regular fee of RM888 conducted on 6 - 8 November by Mr Neoh Soon Hin held at Property Hub’s office in KK Times Square Signature Office, Block K-62-6, 6th Floor. The course welcomes participants from any industry as well as other estate agencies, for more information please contact Ms Fiona Wong +60109441681

Hiew further added, technologies are changing the landscape of property search in East Malaysia and estate agents will have to keep up with the current trends.

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/// East Malaysia Property News

Property Expert Faizul Ridzuan Speaks at the W Group’s Property Showcase in Labuan

The W Group showcased its hot selling properties, University Utama Condominium (UUC) and University Utama Square (UUS) to Labuan residents on 11th October 2014 at Grand Dorsett Hotel, Labuan coupled with an exclusive free to attend Property Talk presented by property expert Faizul Ridzuan. UUC is to date the largest residential development in Kota Kinabalu consisting of over 5,000 units of condominium. The development provides condominium facilities such as club house, sport complex and swimming pool. Beside this, each unit is fitted with Intelligent Smart Home System and high speed fibre optic internet access provided by WitNet. UUS on the other hand is a complementary development right next to the UUC which comprises of 183 units of double storey shop offices. Officially launched on 27 September 2014, the commercial lots at UUS have garnered positive interest from the market. With regards to the recently announced Budget 2015 for the nation, speaker of the event Mr Faizul Ridzuan thinks that the contents of the budget are positive ones. The government is making property ownership more accessible to first time owners and the younger population. Some of the positive points from the budget announcement highlighted during the talk are: BUDGET 2015 •

Skim Perumahan Belia with 100% loan available for 1st time home buyer.

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•

Infrastructure development – Pan Borneo Highway from Sarawak to Sabah.

•

Lease Then Own Scheme

Based on the current economic situation in Sabah, Ridzuan foresees that the game changer for Sabah in the coming years are: 1.

Tourism – with over 3.5 million tourist arrivals in 2013, the number of tourists arriving is higher than the local population in KK, which is approximately 700,000. The Pan Borneo Highway – connects Sarawak, Sabah and Brunei, making major cities even more accessible to rural populations, and as a result, rural population will flock into the cities which will increase property prices.

The organizer of the event The W Group is opening up the sale of its newly launched UUS (commercial shop office) and Phase 3 of UUC (residential condominium) during the event. Interested parties can call +6088 260 727 for more information. Expert Suggestions by Faizul Ridzuan 1.

Property investment is a long term investment tool, keep it for a minimum of 10 years.

Buy only what you can afford.

Mass market properties are a safe option. A rentable property is a sellable property.

Property Prices to Increase Further, Report

Following the rise of eight percent in Q1 2014, property prices in Malaysia are expected to increase further as developers pass on the increasing cost of developing houses to buyers, Credit Suisse said in a report. However, higher selling prices does not equate to heftier profits for developers as the cost of doing business in the country has climbed by 20 percent in 1H 2014. “Margins are being compressed,” said Credit Suisse – which is negative on the sector. The report noted that property sales, particularly in the affordable category, had moderated since the start of 2014 as measures aimed at curbing speculative acquisitions dampened sentiment in the market. The government mulls rolling out additional measures to cool down increasing property prices, with specific plans to address concerns on affordable housing. Credit Suisse believes that measures targeted at facilitating home ownership among middle and lower income groups – such as allowing developer interest bearing schemes for first-time home buyers or those below a particular income level – would be positive for the sector. “However, a blanket policy to stop the rise in property prices would

be negative as sentiment is already so low,” it said. According to media reports, the Real Estate Housing Developers Association’s 1H 2014 property industry survey showed that majority of developers are either negative or neutral of the property sector’s outlook for 2H 2014. It is also expected for this sentiment to persist in 2015, with only 13 percent of respondents optimistic for 1H 2015. Notably, developers have been holding back new launches this year, with only 39 percent of respondents launching in 1H 2014, down from last year’s 52 percent. At the same time, take-up rates dropped to 49 percent. This is the first time it fell below the 50 percent level. Despite the soft market condition, Credit Suisse expects property prices to continue to head north in 2015 as input costs are pushed up by the Goods and Service Tax (GST). “Residential properties are GST exempt, but developers would look to pass on the higher costs via higher launch prices,” it said. This story was first published by www.propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

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/// East Malaysia Property News

Sabah Working to Slow Down Rise in Home Prices, Says Hajiji

Sabah’s Local Government and Housing Minister Datuk Seri Panglima Hajiji Noor delivering his speech on stage

A comprehensive undertaking is under way to lower Sabah’s house prices which have increased faster than the average income growth. State Local Government and Housing Minister Datuk Seri Panglima Hajiji Noor said the state was aware of persistent grouses that house prices are now beyond the reach of many. He said the price of a double storey house in Kota Kinabalu in 2007 was about RM210,000 but a similar unit in the city’s outskirts was now going for RM450,000. That is a growth of about 11.5% while the average income growth between 2009 and 2012 was about 7.2%, Hajiji said. He said the increase in house prices was obvious over the past five years and among the reasons cited were a jump in land, building material and labour costs. Responding to these cost hikes, the ministry is trying out various administrative procedures to curb house price increases. “If and when necessary, I will ask the Housing Controller to seek new approaches such as getting a quantity surveyor to evaluate submissions from industry players prior to approving their Housing Developers Licence.

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“The reasons given by developers to increase prices is only one side of the story,” Hajiji said after opening a forum on rationalising property development in Sabah. He said the Sabah government also wanted utility firms to do their part in helping to lower house prices in the state. He said Sabah Electricity Sdn Bhd and Telekom Malaysia Bhd, as well as the Water Department, should lower their capital contribution rates for housing projects. (Developers are required to pay capital contributions to utility firms for the provision of power substations and other infrastructure at any housing scheme.) Noting that the SESB’s capital expenditure rate was about five times higher than that of Tenaga Nasional Bhd rates in the peninsula, Hajiji said this situation should not be allowed to prevail. “Developers here then have no choice but to pass on the high costs to house buyers. “We would like to see lower capital contribution rates or at least on par with those in the peninsula,” he added.

S P Setia Bhd Group Showcase Features Nature Inspired Eco Sanctuary Condominiums

S P Setia Bhd Group is out to prove that there is still wondrous nature within the concrete jungles of Singapore that offer a refreshing respite from the stresses of city life. The Eco Sanctuary took pride of place at the recent Singapore Property Showcase held at the Hyatt Regency Kota Kinabalu from 20 – 21 September. The three tower luxury condominium residence is a work of art that draws from nature to create various forms of design and innovation to give its residents an unsurpassed quality of life. The project spans an area of 4.62 acres which provides a copious amount of space to incorporate a memorable living environment. Nature is manifested in its iconic hexagonal façade that is fashioned after the beehive and acts as a sunshade to shield against the harsh sunrays. The extended outline also affords each unit with absolute privacy and a sense of ease. The soaring towers are positioned specifically to maximize panoramic views of the stunning natural environs which include an adjacent 3,000 acre nature reserve, lush landscaped gardens and stunning water features. Designs that feature the whimsical butterfly is seen throughout the meticulously crafted garden where you can cycle, exercise, work out, stroll or simply to entertaining nature at its best. The Sky Clubs on the 14th floor of each tower are designed for those who enjoy a leisure lifestyle with a gourmet kitchen to whip up a meal

and dine alfresco with friends and family. A sleek and stylish spa with Jacuzzis, massage beds and other therapeutic delights on the same floor offer the perfect combination of a day of total relaxation and an evening of lively entertaining. Alvis Tan, sales and marketing manager for S P Setia, said that Eco Sanctuary had gone to great lengths to create a residence that fulfills all the essential requirements of a premium lifestyle and more. “Eco Sanctuary is located in the upmarket Upper Bukit Timah Road with easy access to Orchard Road, Marina Bay/Raffles Place and surrounding amenities which includes schools and malls. A new MRT station scheduled for completion in 2016 will increase accessibility convenience and undoubtedly make Eco Sanctuary an even more desirable location to live in,” says Alvin. He adds, “Every detail has been considered from the design to finishings. Ultra-high ceilings measuring 3.4m to 4.8m in height ensure ample ventilation at all times while injecting a sense of grandeur and spaciousness into the living area. Each unit is fitted and equipped with designer appliances from Hansgrohe bathroom fittings to Bosch kitchen appliances to add another level of class and quality.” Eco Sanctuary has recorded strong interest from both local and Malaysian investors and continues to set the standard for a lifestyle that truly embodies the meaning of quality, elegance and nature.

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/// East Malaysia Property News

SHAREDA Calls for Action at Forum on Rationalisation of Property Development tag on the respective items and certainly no developer would like to overprice their products. If, he does, I wish the said developer “good luck” for punishing himself with a death wish of failing to complete his development and the worst scenario befall upon him is towards abandonment of its project and legal suits.”

Datuk Francis Goh, President of Sabah Housing and Real Estate Developers Association (SHAREDA) delivering this presentation

The Institute of Development Sabah (IDS) recently organized a forum on Rationalisation of Property Development in Sabah officiated by the Local Government and Housing Minister YB Datuk Seri Panglima Haji Hajiji Haji Noor with two speakers invited to present their talks in the forum. Datuk Francis Goh, President of Sabah Housing and Real Estate Developers Association (SHAREDA) spoke on Property Development: Current Issues and Way Forward whilst the other speaker was Encik Rayman Loudrize, Deputy Permanent Secretary who spoke on “Policy and Direction on Housing Development in Sabah.” Several concerns and anxieties over issues and challenges related to property development were explicitly discussed by heads of government departments over some of the strategies and measures for the good of the property industry particularly on affordable housing and how to reduce inflating property prices. RISM TO SPEED UP THE STUDY ON PRICE INCREASE IN PROPERTY SHAREDA President, Datuk Francis Goh fully supported YB Datuk Seri Hajiji’s call again to the Royal Institute of Surveyors Malaysia (RISM) to speed up the study on the reasons why property prices have increased significantly and to give positive proposals to overcome the situation by the end of the year.

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HAJIJI WANTS LOWER CAPITAL CONTRIBUTION RATES SHAREDA fully concurred on the suggestion made by Datuk Seri Hajiji in his keynote address, urging SESB to waive the capital contribution imposed on property developers as they will transfer such cost to house buyers eventually. The entity should disclose that it operates in deficit costing in Sabah if its service level and operational management did not achieve a satisfactory level. “TNB earned RM4.61 billion in 2013. Hence, there should not be an unjust levy imposed on Sabahans on higher capital contribution and tariff rates for such services which are much lower in Peninsula Malaysia,” Datuk Seri Hajiji added. TO ENGAGE A QS TO VERIFY THE BUILDING COST Datuk Francis Goh also boldly stated that, “We, in SHAREDA lauded and concurred that another move by our Minister YB Datuk Seri Hajiji’s proposal to engage a Quantity Surveyor (QS) to be positioned in the Housing Controller Secretariat in the Ministry to check the submission of development costing by housing developers. Our sincerity in supporting this move indicates that we are not in any way intimidated or am fearful of a third party professional QS coming in to verify our costing and selling price which are transparent to the bearing of the prevailing market price. Because members of SHAREDA will not intentionally put a wrong price

Generally, not many people are aware or know that the Housing Controller actually imposed a ruling to curb the ceiling profit margin at 30% maximum of the gross development value on the housing products in Sabah. Goh remarked, “A housing developer will be laughing all the way to the bank if they had earned a profit of more than 20%.” The SHAREDA President said, “It is a very reasonable profit of 20% if it can be achieved. Starting from day one till completion of a project, it will take about 6 years i.e. from acquisition of land to the stage of Development Plan approved will take about 3 years of idling period plus another waiting period of 3 years to complete construction of the intended project. With the market risks and holding cost spread over a duration of about 6 years, the 20% profit can just barely cover the operational and management costs to support the manpower. Generally, a developer company somehow has to sustain and support the current workforce or staff even when they are on “gaji buta” payroll prior to the commencement of works after licence is obtained from the Housing Ministry. Once the licence is issued by the Ministry, the price is fixed during the construction period and cannot be amended or increased. In a worst case scenario, the developer has to pay a 10% late delivery penalty if the development project cannot be completed on time.” Hence, it is tough and challenging for developers nowadays to continue to strive and sustain in the construction and property development industry, unless they are financially sound coupled with good stable and skilled workforce, incorporated good governance practices or ISO within the organisation’s management, and other measures.

TO SET UP A ONE STOP CENTRE (OSC) IN EVERY LOCAL DISTRICT COUNCIL The unusually long waiting period in getting approval of development orders can be shortened or improved with the forthcoming ONE STOP CENTRE (OSC) to be set up at every respective local District Council by the Housing and Local Government Ministry as informed by the Deputy Permanent Secretary, Rayman Loudrize during the forum. Datuk Goh expressed thanks and praised the foresight leadership under the purview of YB Datuk Seri Panglima Hajiji to make the implement the OSC throughout Sabah happen. With OSC in place, this shall definitely shortened the development order process period to about 6 months from a delay period of about 30 months or more in obtaining a developer licence. Goh added that, “SHAREDA pledged to our Minister YB Datuk Seri Panglima Hajiji and his good Ministry of Local Government And Housing to give our utmost full co-operation and support in order to realise the enhancement of a good delivery system to smoothen and ease the facilitation of future project launches by developers to increase the supply of housing products in the market. By shortening the development processing period from 30 months to 6 months will reduce our housing products selling price by 5%. Datuk Francis concluded that SHAREDA is confident that the property industry will propel to excel in delivering better and more quality lifestyle living homes with affordable price range for our people. With the future implementation of a good delivery system in place and a fair policy with waiver of any capital contribution charged by SESB, it will further bring down the selling price of the housing products to another 3%. SHAREDA members are urged to absorb the price hike of 6% GST to be imposed next year. One of the evidence is that about 5,800 units of affordable homes will commence work in 2015 throughout Sabah with selling price of not more than RM250,000 for a 850 square feet unit.

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/// East Malaysia Property News

Worry Over Drop in Property Sales in 1H2014 with a 53% sales rate. The figure dropped to 49% in the first half of 2014 with 10,189 units launched and 4,989 units sold. If a 4% drop in sales is considered worrying, how would other states, and in particular Sabah, fare in the same equation?

Datuk Francis Goh, president of Sabah Housing and Real Estate Developers Association (SHAREDA)

Sales in the primary market have fallen to a “worrying” 49% in the first six months of this year, according to the Real Estate and Housing Developer’s Association’s (REHDA) property industry survey in the first half of 2014 (1H2014). In the first half of 2013, a total of 9,364 housing units were launched

The scenario is not very different in Sabah as pointed out by Datuk Francis Goh, president of Sabah Housing and Real Estate Developers Association (SHAREDA). But there are other prevailing circumstances that continue to impact the drop in sales figures in Sabah. “The property market in Sabah was affected by several untoward incidences such as the repeated kidnappings on the east coast and the airline tragedies of MH370 and MH17,” he says.

“Declining sales figures in the first half of 2014 was further impacted by the stringent housing loan policy by Bank Negara Malaysia which resulted in 35% of Sabah housing loans being rejected. Although implementation of the control measures was put in place to curb property speculation, it also affected loans given out to the real buyers and we saw a decrease of 7.1% in 1Q2014. The imbalance between escalating house prices and household income has also affected the buying potential of prospective home buyers.” Goh added that based on current trend, the remaining half of 2014 might see an overall drop of 25% in property sales in Sabah. Part of this is contributed by the fact that although the cooling measures have brought down the number of property development launches, it has failed to reduce property prices.

“Land, material and labour costs in Sabah is 30% higher than in Peninsular Malaysia making it a big challenge to build low cost houses. What we can offer is to build affordable houses in the range of RM200,000 to RM250,000 per unit,” “says Goh. Prices for high-end residential property have gone up too much over the last few years and have created a chasm between those who need housing and their ability to purchase a house. Developers will be pressured to cater to this market segment and to build more affordable homes in the next year. However, as the market stabilizes, prices for high-end properties are expected to settle into a more realistic price range and be within reach of the growing middle-income group.

Mah Sing Group Launches Kota Kinabalu Convention Centre Sales Gallery residential apartments and a fivestorey car park. The project which measures a total of 15.28 acres inclusive of an option land has a potential GDV of RM2 billion.

Meligan

As part of the company’s 20th Anniversary celebration, Mah Sing will feature the company’s current projects under one roof, at all regions on the designated celebration venues, including Kota Kinabalu. During the 2-month long campaign, guests who are interested to purchase Mah Sing properties in other regions can now have a glimpse of each development under one roof.There are 18 projects participating in the campaign including Mah Sing’s maiden project in Sabah, Sutera Avenue. Loyal customers and new buyers can enjoy attractive sales packages aimed at providing customers with optimal value for their money.

Premier lifestyle developer, Mah Sing Group Berhad brought the Group’s 20th Anniversary celebration to East Malaysia with the launch of its Kota Kinabalu Convention Centre (KKCC) sales gallery. Mayor of Kota Kinabalu, YB Datuk Abidin Madingkir

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was present to grace the event held on 18 October, 2014. Mah Sing’s KKCC is a world class waterfront integrated development aiming to tap into the ready catchment from the upcoming

Sabah International Convention Centre (SICC), which is located adjacent to it. KKCC will comprise of a 300-room five-star hotel, 330room four-star hotel, 348-room three-star hotel, a five-storey corporate office, 229-units of

Mah Sing Executive Director Dato’ Lim Kiu Hock commented that the State is well-managed with a lot of resources while at the same enjoying a boom in Tourism. He pointed out that developers just need to churn out the “right pricing for the right product”.

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More Power, More Money Uncontrolled power consumption is burning a hole in consumers’ pockets and the earth’s ozone layer. Renewable energy has been touted for decades as one of the ways to resolve this issue and new technologies have emerged to make it possible for countries to produce and consume energy efficiently.

generated. The electricity is fed back to SESB via a separate grid who will then pay the house owner for the electricity. This is a reverse of when you pay SESB for electricity consumed to power up all your household appliances. Now, here’s the catch. SESB actually pays you MORE than you pay them.

Renewable energy targets exist in at least 66 countries around the world and Malaysia is following suit. Since the 8th Malaysia Plan (2001 – 2005), renewable energy (RE) has been identified as the 5th fuel that can contribute towards the country’s energy resource. The Sustainable Energy Development Authority (SEDA) has introduced a new scheme, Feed-in Tariff (FiT), to help it achieve its target of 73% dependency on renewable energy in Malaysia by 2050. The scheme was launched in Peninsula Malaysia in 2011 and now in Sabah.

Candy pointed out that if you were to check your current electricity bill, you will see a 1.6% surcharge which is channelled to the RE (Renewable Energy) Fund Contribution. Payment for electricity generated from the FiT scheme comes from this fund so essentially, you are being paid back money you have contributed as a consumer.

Candy Chung of BT Solar, the appointed service provider in Sabah,was at the recent SHAREDA Propex 2014 to introduce the scheme to the public, particularly house owners. “The FiT scheme has been active in Peninsula Malaysia for a few years and has produced good results,” says Candy. “Setting up the FiT framework in Sabah took a bit of time but we are now prepared to introduce it to the public.” BT Solar provides all the necessary services from application to installation of solar photovoltaics or solar cells on the roof. There is a quota for the number of installations throughout Malaysia and registration has to be done online. “Because the scheme is still quite new to many people, we need to create awareness and to clear any doubts on the practicality of the system,” adds Candy. “It is a scheme that can actually make money for the house owner to offset the house’s monthly electricity bill.” In a nutshell, a house owner who registers for the FiT scheme has his or her house set up with solar panels on the roof and a meter to calculate the amount of electricity

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House with Solar Cell

“The higher amount paid out in this scheme is an incentive for people to change their attitude towards energy consumption. The investment cost is very reasonable and you can potentially earn back your investment within 5 – 6 years,” adds Candy.

Property King

“It will also generate more electricity for Sabah to cope with current demand so it really is a win-win situation.” Various parameters are being worked out to overcome challenges in implementing this scheme. Among them is the low electricity tariff in Malaysia and availability of RE funds. Households that consume less than 300 kWh per month are exempted from the 1.6% RE surcharge which puts a limit to the funds available to contribute to the FiT scheme. This has resulted in a quota placed on applications for the scheme. In comparison, Australia imposes a 2.4% surcharge, Japan 3%, Italy 8% and Germany 19%. Electricity tariff in most of these countries is also unsubsidised which places a higher responsibility on the consumers to resort to renewable energy sources.

Chart of Solar Process

The higher amount paid out in this scheme is an incentive for people to change their attitude towards energy consumption. The investment cost is very reasonable and you can potentially earn back your investment within 5 – 6 years,

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/// Hot Topic

SHAREDA Youth:

/// HOT TOPIC

to Build New Housing for the Blind

The project was firmed up after a courtesy call by the Sabah Society for the Blind to SHAREDA’s President Datuk Francis Goh who immediately offered the association’s support to address their concerns. President of the Sabah Society for the Blind Rosalind Chew expressed her gratitude for the affirmative action taken by SHAREDA to come to their aid and to contribute their expertise in designing the new housing unit. “The two main concerns of the centre are to provide housing and job opportunities for the blind who come to us because they have no other resources to fend for themselves,” she says. “Although we receive financial assistance from the government, it is not sufficient to bear the cost of running the centre. We do receive support and funding from the public and corporate companies which we are very grateful for but we still need to be proactive to source for more funds to provide for better facilities for the blind here. I am so happy that the youth of SHAREDA is spearheading this project because they have the energy and strength to make it a success. And at some point, we have to hand over the responsibility to the younger generation to take care of the less fortunate in our society.” Funds for the new housing will be raised through a charity event to be organized by SHAREDA in early 2015 and construction is expected to commence by April.

There are 35 families living in the housing provided at the centre but many of the houses are now in unlivable condition and unable to cope with the demands to accommodate more residents.

ousing for residents at the Wallace Sheltered Workshop in Tuaran was built more than 20 years ago and, except for repairs done on several of the units two years ago, is in urgent need of repair.The workshop is managed by the Sabah Society for the Blind to provide the blind a place to work and stay while waiting to secure employment. There are 35 families living in the housing provided at the centre but many of the houses are now in unlivable condition and unable to cope with the demands to accommodate more residents. Members of SHAREDA’s youth wing led by its Vice President, Kevin Thong paid a visit to the

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centre this morning to survey the area in preparation for its CSR (Corporate Social Responsibility) project to build a new housing unit to replace the dilapidated houses. Also included in the visit was All-4One Production, who documented the survey on video and Property Hunter magazine who will be supporting the project with regular updates on its progress. A design proposal to construct a longhouse unit with six twinsharing rooms and a common dining and living area has been prepared and will be brought to the centre’s management for consultation to ensure that the needs of the residents are incorporated into the design.

SHAREDA Youth Committee Members group photo with residents of Sabah Society for the Blind in Tuaran, Sabah From Left: Shim Yen Lin and Rosalind Chew of the Sabah Society for the blind discussing the proposed project with Benny Ng of Shareda Youth

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/// East Malaysia Property News

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/// Featured Property Event

/// FEATURED PROPERTY EVENT

EcoWorld Holds Premium Property Showcase In Sibu

ell known property developer EcoWorld recently held a property showcase for the first time in Sibu. During the event, EcoWorld showcased a series of premium properties built by the group, namely, EcoTerraces (Penang), EcoSky (Klang Valley), and from Iskandar Malaysia, EcoSpring ,EcoSummer, EcoBotanic, EcoTropics and Eco Business Park. The maiden event in Sibu attracted a high number of keen investors seeking to explore the range of property developments EcoWorld has to offer. This is also the first time that all the projects from the developer were exhibited alongside in East Malaysia.

EcoSky - Klang Valley EcoWorld’s maiden project in the

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Klang Valley is EcoSky, which was launched in November 2013. It is a 9.6-acre freehold integrated commercial development located on Jalan Ipoh in Taman Wahyu, Kuala Lumpur. This ground-breaking project, comprising of three residential towers as well as retail and office lots, will redefine city living in line with its development concept of “360º Living”. As a GBI, LEEDS and BCA Green Mark certified project, EcoSky aims to create a fully integrated and sustainable environment with comprehensive amenities including 33,000 sqft of land reserved as a green zone.

EcoSpring & EcoSummer – Iskandar Malaysia EcoSpring and EcoSummer are located on a 613.8-acre tract in the matured and well established

Tebrau corridor. EcoSpring offers clusters and semi-dees while EcoSummer offers terraced houses. With a GDV of RM5.87 billion, both freehold developments will share an 18-acre town park with some 16% of the total lands reserved for greenery and water bodies. EcoSpring and EcoSummer, sit side by side and are set amidst lakes and streams, framed by a tropical landscape and inspired by classic European architecture.

EcoBotanic – Iskandar Malaysia Located within Nusajaya and directly neighbouring EduCity, EcoBotanic is a premium gated and guarded township featuring cluster, semidee and bungalow homes. Nestled within the EcoBotanic township is a collection of exclusive low density freehold apartments named EcoNest with first-class amenities. Encircling EcoNest is EcoBoulevard, one of the first commercial shop

offices in Nusajaya that features innovative new design concepts to provide an enriching and invigorating lifestyle experience.

EcoTropics – Iskandar Malaysia EcoTropics is a 1,000-acre township with a GDV of RM5.4 billion that comprises freehold residential and commercial properties, as well as Eco Business Park III – a newconcept commercial hotspot. This quaint neighbourhood features further enhancements, including broadened roads, 24-hour security, urban pocket parks and wellmanicured gardens, along with a beautiful boulevard that serves as a grand welcome to its residents.

Eco Business Park – Iskandar Malaysia Built in strategic locations across Iskandar Malaysia, all Eco Business Parks (EBP) – the 612-acre EBP I

in Tebrau, the 383-acre EBP II in Senai and the 248-acre EBP III in Pasir Gudang – enjoy easy access to the Pasir Gudang Highway, Eastern Dispersal Link, North-South Expressway, the Johor Bahru city centre, the Causeway, Second Link and the Senai International Airport. Eco Business Parks are designed with multiple intelligent green features; a wide array of business solutions; synergistic smart facilities sharing; and a proprietary “EBP one-stop business solution” that helps owners, especially those based overseas, to set up their business in Malaysia. Additionally, Eco Business Park I Phase 2 and Eco Business Park III feature a brand new green business hub concept that synthesises retail, office, showroom and factory into one highly synergised gated development.

EcoTerraces - Penang A luxurious niche development in the Paya Terubong district, EcoTerraces is conceived as a low density, fully gated and guarded development. The existing natural waterfall on site acts as a focal point for the creation of a visually arresting vista of cascading pools and water features. This will form the backdrop for the eco-inspired concept condominiums, superlinked terraces and semi-dees comprised within the development.

For more information and enquiries, please call +607 2362552 or +607 2382525

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/// East Malaysia Property News

Completion of Pan-Borneo Highway to Be Hastened

SARAWAK

Sarawak’s Chief Minister Datuk Patinggi Tan Sri Adenan Satem

The tenure of land lease, after conversion or sub division, will be maintained as the government is encouraging realty development in the state.

PROPERTY NEWS

Keep track of the latest property and real estate news plus reviews in the property market in Sarawak

East Malaysia Based Online Solution for Kuching Property Agents allows agent to upload property listing and details of the property, of which the listing will be promoted extensively across the various marketing platforms that Property Hunter champions.

Property Hunter recently hosted a private event to meet with property agents, negotiators and developers in Kuching. This event marks the first step towards a visionary expansion plan into the state of Sarawak. PropertyHunter.com.my is an established online property portal which was launched in 2013 in Kota Kinabalu. It has since then

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grew exponentially garnering over a thousand of property listing within 12 months, and attracted the attention of property buyers. The web portal which is also available in a mobile version, provides a comprehensive property listing feature to assist property agents in promoting and selling or renting their properties. The portal

Sarawak Land Lease Period Unchanged, Assures Adenan

“We encourage property agents to fully utilize the functions on the website to their advantage. In fact, it is designed to be used as the Agent’s personal property sales catalogue, which clearly lists our all the properties that the agents represents for sale or rent.” Elson Kho, director of Property Hunter. He added “we created a platform to simplify the marketing process so agents can focus on selling to the right person. All they have to do is just send the listing’s link to a prospect client to see before arranging for a physical inspection, thus saving a huge amount of time and resources.” SUPPORTING LICENSED AGENTS AND NEGOTIATORS PropertyHunter.com.my allows licensed agents and negotiators to sign up for account to list up to 150 properties on the website. Unlicensed guest accounts meant

for genuine homeowners are only allowed to list 1 property, and each account must be verified by email and mobile phone. As a result, the system automatically eliminates the amount of transactions by illegal brokers, and protecting the credibility of the industry. MAKING ONLINE PRESENCE With the wide adoption of mobile smart devices, researching online for information has become the most fundamental practice that everyone engages. This is particularly relevant in the property industry as research has shown that there is a significant increase in property search via online portals, and increasingly people are moving away from the traditional classified advertisement found in newspapers. Agency listing on PropertyHunter. com.my will enjoy multiple exposure as their listings are randomly shared via Property Hunter’s facebook page, which currently has over 18,000 fan base in East Malaysia. Besides this, the selected listings are also printed in the monthly magazine as well as in promotional board during the exhibitions.

The proposed RM13 billion Pan-Borneo Highway which is scheduled for completion in the next 10 years will be fast-tracked so that it can be completed at least one or two years earlier, disclosed Works Minister Datuk Fadillah Yusof.

“Then we have to improve the stretch from Serian to Sri Aman and Sri Aman to Betong, which would eventually improve the whole stretch of road from Kuching to Betong and thereafter,” he stressed.

He added that his ministry was mulling how best to complete the 1,500km dual-carriageway in less than a decade.

He also disclosed that both the Limbang-Lawas Road as well as the proposed Tanjung DatuSematan Road were now at the design stages, and that both roads could be implemented by next year. The Petrajaya MP disclosed that the Datuk Kipeli roundabout in Petra Jaya would be upgraded into an under-path, similar to the one at the Third Mile to retain the surrounding environment.

“Our target to complete the Pan-Borneo Highway is by 2025. But my ministry is working on a mechanism to fast-track the completion so it would provide better connectivity between major towns and cities in Sarawak,” Fadillah told The Borneo Post. He pointed out that for a start, his ministry had taken the necessary steps by completing overtaking lanes in at least 12 areas and would be implementing another 20 in the next two years. Each of this stretch of overtaking lane cost at least RM5 million. “Our immediate target now is to complete the five mile missing link between Mile 10 and Mile 15, for which we have gotten the funding and is now at the design stage. Hopefully by next year, it can be implemented so that the road from Kuching to Serian will be the first to have a dual-carriage way in Sarawak,” said Fadillah, adding that it would cost about RM50 million to implement.

“It’s hoped its completion would ease traffic congestion in the area and that the E-Mart, Matang Road will be linked with Stapok with completion of the proposed new bridge across Sg Sarawak.” Fadillah said the prime minister and the chief minister have directed him to ensure Sarawak has better connectivity; with better roads that are of the same standard as those of Peninsular Malaysia.

Chief Minister Datuk Patinggi Tan Sri Adenan Satem said the lease period will remain unchanged – meaning a land with perpetuity title will still have a lease of 999 years and a 99-year lease will remain so. Adenan has been looking at the idea of AVTC (Arbitration for Valuation of Titled Condition) for sub-division of land to maintain the leasehold period and have a more liberal policy on land matters. “In respect to the general policy of the government on realty development, we have decided not to change the tenure of land leasing period. If the period is 999 years, the conversion would remain 999 years. If it is 99 years, it will be converted to 99 years. The amendment to the state’s land policy in the past regarding conversion, sub-division and renewal had created discontentment and confusion among the people. One of the problems was that landowners of freehold or 999-year land lease found their land being reduced to either 99 or 60-year leases after conversion. In addition, Adenan mentioned that the government was currently in negotiation with SESCO to reduce the amount of capital contribution. He hoped that the discussion would be successful.

“Our task is to provide better connectivity within Sarawak, Sabah and even to improve the connectivity in some places in West Malaysia,” he added.

One of the immediate targets of his ministry, he said, was to improve the Sibu-Bintulu-Miri stretch which would take at least two to three years to complete.

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/// East Malaysia Property News

MJC City Showcases Projects During SHEDA’s Property Bintulu Roadshow

MJC’s SkyVilla condominium project at the new township in Kuching

or retirees to property investors where you can choose to own a unit ranging between 1,001 square feet to 1,367 square feet.” For this project, MJC City has introduced “4U2OWN” Scheme to help you own your dream house today and also an additional RM5,000 discount for early bird buyers during SHEDA roadshow at Bintulu.

An artist’s impression of the Papilion Street Mall. The Central Piazza on the first floor gives you more create an inviting ambience perfect for entertaining clients or casual outdoor meetings

MJC City Development Sdn Bhd (MJC City) showcased several of its projects during SHEDA’s Property Roadshow in Parkcity Everly Hotel, Bintulu from September 26 to 28, 2014. The group in a statement said many have made handsome returns by investing at MJC New Township, earning up to 13 per cent per annum for those who buy-to-let in return and a six per cent rental returns per annum for those who wish to go for long term investment.

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Additionally, MJC City continues to promote the award-winning residential high rise development called Skyvilla Condominium after its successful launch in 2008. “Bella (Block C) is currently the latest block in SkyVilla Condominium up for grabs and has the most unique views of Kuching City skyline or the lush greeneries plus mountain view,” it explained. “The design of SkyVilla Condominium offers flexibility for young couples

“Don’t miss this chance to grab a unit of Bella as your ideal home or for investment purposes before the implementation of the Goods and Services Tax (GST) that will impact prices soon,” MJC City said. Meanwhile, another project on display this weekend will be the Papillon Street Mall, a “new revolution” of street malls with high return in two years on your investment in Kuching. Endowed with the modern sensibilities of the design, most branded and flagship shops such as Level Up Fitness, one of the confirmed tenants there, choose to operate at Papillon Street Mall and

soon to become a new landmark in MJC New Township. Only limited units are available at the Ground Floor which are highly recommended to a variety of retail and F&B businesses due to its double entry and exit design accessible via pedestrian-oriented design allowing patrons to park and grab any specialty items made available conveniently. The new phase of One Residency is now opened for registration. One Residency is the first gated and guarded link home with resort facilities in Sarawak and it won an award during SHEDA Excellence Awards where there are more than 200 residents from businessmen, professionals and retirees choose to stay in this highly secured enclave land currently. There are 31 limited units which consist of townhouse and double storey terrace house. For more information, please contact Joan at 016-5777817, Goh at 014-9917917, Lai at 012-8856169, Gan at 016-8910877, Kiew at 0178990046 or Jae at 013-8184335.

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/// East Malaysia Property News

MetroCity Square to Become a Central Business District for the North Kuching Region

Adenan observes as Ling and Chong; signing ceremony between CKH Realty and Boulevard Group

he emphasised, adding that Ling is giving back to the state by developing projects that bring socioeconomic returns for Sarawakians.

attendance today to take serious note and consider the excellent opportunity to set up your presence here in MetroCity,” he emphasised.

“MetroCity Square is situated in the heart of MetroCity Matang New Township’s business district and is the first step in the creation of the Central Business District (CBD) of Matang.

Also present were Assistant Infrastructure Development Minister Datuk Daud Abdul Rahman, State Secretary Tan Sri Datuk Amar Morshidi Ghani and Kuching North City Commission (DBKU) Datuk Bandar Datuk Abang Wahap Abang Julai.

“MetroCity Square is situated within a large commercial centre including 314 new shops, petrol stations, F&B (KFC and McDonald’s drive thru restaurant), transportation terminal and an education college amongst others,” Chong highlighted. CKH Realty has officially signed with Boulevard Group for the setting up of a stand-alone Boulevard Department Store and Supermarket in MetroCity Square 15 September, 2014. The guests of honour at the launch and signing ceremony between CKH Realty and Boulevard Group were Chief Minister Datuk Patinggi Tan Sri Datuk Amar Adenan Satem and Datin Patinggi Jamilah Anu. In his speech yesterday, Chong Kia Hoi, Chairman and Managing Director of CKH Realty said they are launching MetroCity Square. This project comprises 356 SoHo apartments, 129 strata-titled shops,

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an eight-storey corporate office tower, 25 units of three-storey commercial shop offices and a stand-alone Boulevard Department Store and Supermarket, together with a multi-storey car park with close to 600 parking bays. With Boulevard Group coming in to set up their department store and supermarket at MetroCity Square, Chong affirmed that Tan Sri Datuk Ling Chiong Ho, Chairman and Chief Executive Officer of Shin Yang and the Boulevard group of companies, has big plans for Matang. “His participation in MetroCity Square represents the first step in Boulevard’s progressive and increasing presence in Matang,”

He made a special mention of McDonald’s and commended them for opening their first double-storey 24-hour McDonald’s drive thru in Kuching City North. He also gave special thanks to KFC Sarawak, Petronas, SIDMA College, Green Gallery Group, Syarikat Jasmine, Hung Cheong, Wan Fatt and other India Street merchants for setting up their operations in CKH Realty’s business district.

Present at the officiating event were CKH Realty chairman and managing director Chong Kia Hoi, Shin Yang and the Boulevard Group of Companies chairman and chief executive officer Tan Sri Ling Chiong Ho, Assistant Infrastructure Development Minister Datuk Daud Abdul Rahman, state secretary Tan Sri Datuk Amar Morshidi Ghani and Datuk Bandar of Kuching North Datuk Abang Wahap Abang Julai at the official launching of MetroCity Square (MetroCity Matang New Township) and signing ceremony between CKH Realty and Boulevard Group of Companies at Imperial Hotel.

“This area will see many businesses and services being offered to residents and visitors alike. What is required next is for the banks to come in and set up base in MetroCity. I urge all bankers in

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/// West Malaysia Property News

Business in JB Down 30% Following Causeway Toll Hike, Says DAP

Greater KL Property Projects Hit by Water Issues

WEST MALAYSIA PROPERTY NEWS

Sharing news and information about various issues related to the property industry from Peninsular Malaysia.

Woodlands Customs, Immigration and Quarantine (CIQ)

Skudai assemblyman Dr Boo Cheng Hau said that the Singapore Land Transport Authority’s announcement that it would match the toll rates at the Woodlands Customs, Immigration and Quarantine (CIQ) with that of Iskandar CIQ would have an adverse impact on businesses in Johor Baru. “This will have an adverse impact on Johor Baru’s businesses and Johor folk working in Singapore,” he said in a statement.

Selangor’s New Property Rules Will Have Minimal Impact Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector president Siders Sittampalam notes that while the policy was fair in terms of structure and quantum – given that prices had indeed increased over the past several years – he expects it to have little impact.

The Real Estate and Housing Developers’ Association Malaysia expects Selangor’s new property rules to have minimal impact given that the number of foreign buyers within the state is limited, reported the media. Its vice-president Sivanyanam Sinnathamby pointed that figures from Malaysian Properties Inc indicates that foreign buyers on a national basis stands only at four percent to seven percent. “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, adding that foreign buyers are concentrated in Penang, Kuala Lumpur and Iskandar Malaysia, Johor.

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“So, even with the RM3 million threshold for the commercial and industrial sub-segments, it is fair. This move is not something that should shake the market,” he said. Meanwhile, the National House Buyers Association has applauded the new guidelines, saying that the rules will prevent foreigners from snapping up properties with their superior exchange rates and drive up prices. “Take, for example, the Singapore dollar against the ringgit. It’s peanuts to them,” said secretarygeneral Chang Kim Loong, who also urged other state governments, particularly Johor and Penang, to do the same. Chang noted that Kuala Lumpur City Hall should also raise the minimum threshold to RM2 million since RM1 million is considered as a basic level

entry price for a new property located in Kuala Lumpur. Property consultant Khong & Jaafar group of companies managing director Elvin Fernandez and Alzac Viva Sdn Bhd project director Mak Foo Wei reckon that the move was a pre-emptive strike to deter foreign developers in Johor from entering Selangor. However, Sam Tan, group managing director at Ken Holdings Bhd, questioned the need for the new policy saying that Johor’s market is very different from Selangor’s. “There are foreigners who just need a small pad. They don’t need to buy a RM2 million property,” he said. This story was first published by www. propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

Johor DAP chairman Liew Chin Tong said the Causeway toll war was creating a wall separating Malaysia and Singapore. “With both sides now increasing the toll rates by up to 470% each, it is now almost impossible for ordinary Malaysians to commute on a daily basis across the Causeway. “The Iskandar Development Region is as good as gone while the local economy in Johor will face bleak prospects.”

“For an average car, toll charges at both Iskandar and Woodlands CIQ would cost RM33,” said Dr Boo, adding this was an additional burden for Johor folk.

Liew said that since Putrajaya announced the CIQ toll hike in July, Prime Minister Datuk Seri Najib Razak has not spoken on the subject.

“Even though S$13 may not be a burden for Singaporeans working in Johor, it is a heavy burden for commuters from Johor, including school buses, buses, taxis and domestic commuters.”

“It is time for Najib to step up and empathise with the plight of ordinary Malaysians,” he said, adding that Najib should show his leadership skills and resolve the crisis.

The new toll rates at Woodlands CIQ will take effect on October 1.

The toll implemented on August 1 is to fund the RM1.3 billion EDL, which is free for all motorists in Johor Baru, except for those going through the CIQ complex to Singapore.

“The toll hike by Singapore will further hurt businesses in Johor Baru,” Dr Boo said, adding that investor confidence in Iskandar Malaysia would also be affected. “The lack of transparency on the toll collections by concessionaire PLUS over the past 29 years will also have an impact on investor confidence.” He said PLUS was estimated to have collected between RM876 million and RM1.5 billion over the past 29 years. “This is more than sufficient to cover the construction of the proposed Eastern Dispersal Link (EDL) which is estimated to cost RM1 billion.”

Motorists from Singapore entering Johor through the CIQ Complex have to pay a toll of RM9.70, up from the previous RM2.90. Those travelling from Johor to Singapore previously paid no toll, but are now subject to a new toll of RM6.80. While motorcycles are exempted, buses, goods vehicles and taxis now also have to fork out extra at the Malaysian checkpoint.

Selangor’s ongoing water issue has affected the property development sector, with 80 percent of property developers in Greater Kuala Lumpur having difficulties securing the approval for their projects, revealed the Real Estate and Housing Developers’ Association Malaysia (REHDA). “Greater KL is facing problems with SYABAS (Syarikat Bekalan Air Selangor Sdn Bhd). About 80 percent of developers have difficulty getting approvals. SYABAS is not approving projects because there is not enough water,” said REHDA president Datuk Seri Fateh Iskandar Mohamed Mansor at a briefing on REHDA’s Property Industry Survey 1H 2014. The survey, which polled 152 REHDA members, showed that 57 percent are having problems with utility providers. In terms of approval issues, 45 percent was related to water.

service providers, the survey also showed that property developers witnessed higher costs of doing business in 1H 2014, with 61 percent posting up to 20 percent higher costs. Fateh attributed the higher cost to higher compliance cost, scarcity of land, higher infrastructure contribution funds and higher conversion premium. Meanwhile, 43 percent of those surveyed reported building material issues such as rising price of steel bars, cement, bricks, sand and river sand, and labour issues like high wages as well as shortage and inconsistent supply in 1H 2014. Overall, 45 percent of the respondents are neutral of the property market in 2H 2014, while 33 percent are pessimistic. Moreover, 41 percent of the respondents are pessimistic for 1H 2015.

“I think combined Kuala Lumpur and Selangor under SYABAS, there are easily more than 800 projects affected. For new blank projects when you apply to the authorities, they will reject your application first. They say there is no water so they cannot support the application,” noted REHDA deputy president Datuk Soam Heng Choon. Aside from issues with utility

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/// Contributor

Strengthening Economic Growth

It, Innovation and creativity Malaysia is now stepping into the status of an innovation driven growth and for this reason boosting research and development centers, creativity and new technologies is going to contribute in a strategic way to enhance the market position of the national industries. The construction industry will be mostly affected, in a positive way by this move and possible generate more livable and comfortable housing and industrial premises to respond to a raising demand of new type of products with high standard characteristics and fittings.

Dr. Daniele Gambero

SMEs Promotion A stronger service sector with a world leading positioning of Malaysia as Islamic Finance Hub is must and is the necessary background to become fully developed. Down line of this is an expected strong demand of office and residential space above all in the various CBD throughout Malaysia.

CEO and co-founder of REI Group of Companies Dr. Daniele Gambero is the CEO of strategic marketing consultancy firm REI Group of Companies. He holds an MBA from L. Bocconi University in Milan-Italy, Master in Communication from the University of Michigan Ann Arbour MI – USA, Ph.D in Marketing Strategies and Communication from L. Bocconi University and University of Michigan. With his vast experience in strategic marketing consultancies, investment studies, researches, property market reports and business valuation globally, the REI Group of Companies helps Malaysian developers with business solutions relating to design, concept, strategic marketing and pricing, advertising and marketing and sale procedures for their residential, commercial and industrial projects since 2007. Dr. Gambero’s lectures attract large crowds due to his lively presentation of serious topics with deep insight into the Malaysian Property market since 2011.

Promoting Domestic Shipping Industry It is a recognized fact that the World Economy is shifting towards East, China and the South Pacific region are already generating almost USD 400 bil of FDI and the most advanced economies in the World are all moving their interest in this booming region. Malaysia occupies the center stage from a geographic point of view and promoting domestic shipping industry will surely help to enhance the economic growth boosted by the high demand of logistic services. From a Property point of view we will see more and more Logistic hub growing nearby international shipping harbors, some possibly will be halal certified opening in this way the door to unlimited markets, new industrial areas with connected residential township will immediately follow and the already interesting investment spot will be even more appealing.

BUDGET 2015, THE STRATEGIC PLANNING AND THE MICRO-PROPENOMY EFFECTS OF A MACRO ECONOMIC BUDGET

ctober 10th is already history, the Malaysian Prime Minister YAB Dato Sri Mohd NajibTun Haji Abdul Razak has been tabling next year budget titling it “Budget 2015: People Economy”.

If we compare the past year budget and its 5 Trust with the 7 Strategies of the latest one, it appear quite clear the effort put by the Government in giving a logic continuity to the Nation’s development and growth. Being in the Property industry I’ve heard many unsatisfied comments on next year Budget mostly coming from the feeling that the property and construction sectors have been taking up the role of Cinderella.

While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views.

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Being a “Strategic” budget we should all read it with a “strategic” eye looking at the big picture that it gives and not concentrating ourselves on a small particular industry. I’ve read the full text few times and I’ve been going through the analysis and commentaries of the last few days and, to be honest, I look at this budget as a possible booster for the final struggle to make of Malaysia a fully developed with high-income Country. When reading it we should also remember that next year in May there will be the launch of the 11th Malaysian Plan that is supposed to be the last one issued as developing country. A brief commentary to the 7 Strategies of next year Budget shows that each of them represents a meaningful and strong statement towards economic growth and consequently people’s growth and consequently Property Market healthy growth.

Continued Promotion of Investment in less Developed Areas It is extremely important to have a balanced growth of the Country that will bring forward a fair and proportionate distribution of the nation wealth. Every Malaysian state has unique characteristics which, if properly developed, will leverage the economic growth and the pro capita income. This will allow families to up-grade generating further demand for affordable housing, retail areas and office space.

Incentives for Industrial Areas Management As a developing Country Malaysia has to enhance the quality of the industrial park and facilities to be able to compete with world leading economies. The geographic positioning its already offering a big plus point for international investors to look at Malaysia as a prime location and in the moment in which the qualitative offer will match the current demand there will definitely be an important growth contributing to the finalization of Wawasan 2020. Property wise, industrial parks and related residential township demand will possibly be boosted in the next five to ten years.

Everywhere in the world SMEs are the spine bone of economic development and growth. The Government is ensuring that also the Malaysian SMEs will be able to enjoy a more conducive environment and to receive special supportive packages to contribute to their healthy growth. SMEs besides being the crucial factor of a proper Economic growth are also employing a large portion of Malaysia’s 12 million labor force. Enhancing SMEs means, in other words, enhancing and contributing to the social and economic growth of their employees with direct impact on retail and residential market in terms of property.

Boosting Tourism Industry The important contribution of Tourism Industry to the Country’s GDP is undeniable and for the last two years the Government has spurred it in terms of funds and oversea promotions and road shows. 2014 has surely been a sad year for Malaysia in terms of safety and airplane crashes but, if we want to pay additional respects to all the victims of these accidents, we should look into what happen by saying that today everyone in world knows where Malaysia is and due to the firm and straight forward position and statements of the Prime Minister in the proceedings of MH17 crash site investigations the world has been paying respect to Malaysia. We just need to leverage on this in a positive way and the Budget allocation to the Tourism Industry will have a much higher impact in terms of tourist arrivals and spending. Here we don’t need to mention the huge impact that a proper boosting effect in terms of economic growth will have on property market but just mention the sectors which will be affected which means: residential (soho and sovo are perfect solutions for modern travelers in terms of short staying), retail (tourist are spending and the more attractive a destination is in terms of “shopping parade” the higher will be the amount spent), hospitality (hotels, resorts, F&B and more will be touched positively but a raising tourist arrival) and more.

Enhancing Fiscal Governance

Promotion of Automation, High-quality and Focused Investment This paragraph of the first strategy can be read as the previous one. It is indispensable and will generate automatic and positive consequences on property market.

Public private Partnership PPPs are the way forward to complete in logic and economic way a proper infrastructure and public services which are deemed necessary as a complement to a growing nation. The impact generated by this part of Budget 2015 on the Malaysian properties is huge and will positively affect many areas of the country as we are looking at roads, highways, railways, busways, social services and education.

A fast developing Country as Malaysia is needs to be supported by a proper fiscal and taxation system based on equity and high collection. Citizens must understand that, even though might be looking painful, paying taxes is a “must do” in a modern and conducive economy. For sure the Government will have to proof that tax payers’ money is wisely and economically spent and return to the Rakyat services, infrastructure and proper social services.

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Upholding Role Of Women

Budget 2015 to Offer More Perks for First-Time Home Buyers

MIEA Disappointed With Budget 2015 “I think the stamp duty exemption is a great idea but there must be a mechanism in place to make sure the buyers are really first-time home buyers,” said Siva. The exemption should also be limited to “those buying their first property and first home, for own occupation.” The government also allocated RM1.3 billion for the construction of 80,000 units under PR1MA and raised the household income cap to RM10,000 from RM8,000.

Infrastructures, PPPs, security, safety, social housing and so on cannot be supplied by cash strapped Government and the Rakyat has the civic responsibility to respond positively to the tax paying call. Incoming GST will allow a better and more evenly distributed tax load on all parties while giving the extra fuel to the Government to complete the Country’s development within the given timeframe. Through a differentiated tax saving scheme this Budget will build in the pocket of the Rakyat the extra cash that might be needed to own a house. Education is more and more becoming “the issue” in Malaysia. The Government is paying attention to the quality of education and is proposing a number of actions which are towards a general enhancement of the system. This leaves ample room for the hope to see a better quality workforce coming in to play a strategic role within the short medium term. In terms of property development this will touch schools and higher education compounds, students’ and lecturers’ accommodation and social services, enough even for the most demanding investors.

MIEA President, Siva Shanker

It was about time for this to happen, women are contributing as much as or even more than men to the development of a Nation. Being supportive wives, carrying mothers, business women or productive employees their role is strategically high in this final chapter of the Malaysian development. The last two strategies of this Budget 2015 are most directly related to property and this will require a in-depth analysis that will be done in the next issue. Get ready for interesting surprises and learn how to look at things with a very open and positive mindset.

Advancing The Bumiputera Agenda

Bumiputera represents almost 70% of the Malaysian population and it makes sense to have a special program to enhance their contribution to the growth of the Country. Meritocracy should be the name of the game and the proposed agenda looks like heading in this direction. If this is the case, then we will see a much wider range of industries and services controlled by Bumiputera and the economic growth of the Country will be more equilibrated. Being housing or dwelling one of the basic needs of people, enhancing the status of Bumiputera will carry along a high potential market segment for property developer in terms of a widely diversified range of products.

The Malaysian Institute of Estate Agents (MIEA) believes that the measures unveiled in Budget 2015 were too small to have an effect on the property market, reported the media. In Budget 2015, MIDF Research expects the government to unveil more measures for the affordable housing segment including the comeback of the full loan facility under the My First Home Scheme, reported the media.

Bhd and Mah Sing Group Bhd are expected to benefit from the measures, it could be a setback for companies with significant exposure to high-end properties like SP Setia, Sunway Bhd and E&O Property Development Bhd.

“We anticipate some of the measures introduced in prior years to make a comeback (full loan facility under My First Home Scheme) or extended (50 percent exemption in stamp duty for first-time buyers of houses worth RM400,000 and below) and broadened (better incentive to encourage private developer participation to build low to medium cost properties, and more 1Malaysia People’s Housing Scheme/People’s Housing Programme units built in 2015),” said its analyst Annuar Rahman.

“We are currently neutral on the sector as we see the GST imposition may lead to some reduction in disposable income and dampen consumer sentiments in the near term,” said Annuar.

He also expects further relief targeted at first-time home buyers like zero-rated goods and services tax (GST) for properties valued at RM400,000 and below as lobbied by the Real Estate & Housing Developers Association Malaysia. “The floor price of properties accessible to foreigners could also be raised and providing cheaper funding for first-time buyers. We are not expecting another round of hike in real property gains tax,” added Annuar.

Sources: IMF and World Bank various reports, Department of Statistics, Minister of Home Affairs, REI Group archives NOTES

REI Group of Companies CEO and co-founder Dr. Daniele Gambero gives presentations on the Property Market and welcomes feed-back at daniele.g@reigroup.com.my “

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While companies with a good mix of medium-to-low value property like IJM Land Bhd, LBS Bina Group

“However, we think this could be offset by the government’s targeted measures aforementioned while longer term prospects remains positive against the positive outlook for the domestic economy.” This story was first published by www.propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

“I am disappointed with the announcement. The budget during the last two to three years only managed to reduce transactions. More should have been done…the measures are too small to have an impact on the market. Thus it will be business as usual and prices will continue to increase,” said its president Siva Shanker.

“This is a good move but 80,000 is not enough. My worry is the implementation, that people who don’t need it will buy it. There must be a fool-proof system to avoid abuse. Enforcement and vetting process must be thorough, to reserve it for those who really need it,” said Siva. This story was first published by www.propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

He noted that the government failed to address investor clubs, which has badly damaged and distorted the property market. Nonetheless, Siva lauded the government’s effort in helping the youth and first-time home buyers with the launch of the Youth Housing Schemes, extension of the 50 percent stamp duty exemption and more units to be constructed under 1Malaysia People’s Housing Programme (PR1MA). While the Youth Housing Scheme as a good move, the 20,000 units available is not enough, he said.

I think the stamp duty exemption is a great idea but there must be a mechanism in place to make sure the buyers are really first-time home buyers

“I’m sure there are more than 20,000 married youths who have yet to buy their first home. They should increase the amount.” The government has also extended the 50 percent stamp duty exemption on loan agreements and instruments of transfer as well as increased the purchase limit to RM500,000 from RM400,000. This exemption will be offered until 31 December 2016.

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PM Najib Unveils Rent to Own Scheme

Prime Minister Najib has the Rent to Own scheme officially launching

Prime Minister Najib has launched the Rent to Own scheme in order to help PR1MA applicants who are struggling to obtain housing loans. “This programme is to help applicants who are rejected by the bank, such as those without permanent jobs or a bad track record.” “Hence we agree with the bank to offer the Rent to Own scheme that enables the applicant to only pay rent within 20 to 30 years and the house will belong to them,” he said after the groundbreaking ceremony for the PR1MA project in Seremban Sentral. Located in the rear of the Seremban railway station, the PR1MA project in Seremban Sentral comprises 3,196 low-cost homes. 1,504 units will be built in the first phase, while the second phase will involve 1,692 units. Depending on their financial capability, buyers can select a home with two rooms and one bathroom, or a house with three rooms, two bathrooms, living room and kitchen.

The project is targeted for completion within two to three years, noted Najib, adding that the government plans to build another 2,000 PR1MA homes near the Keretapi Tanah Melayu (KTM) depot site and an additional 10,000 in Labu, Seremban. Seremban Sentral PR1MA is a collaboration between PR1MA, the state government, Keretapi Tanah Melayu (KTM), Railway Assets Corporation (RAC), Public Private Partnership Unit (UKAS) and private developer Brunsfield International Group. Aside from affordable homes, the 23ha Seremban Sentral also features a hotel, public amenities, office buildings, shopping centre, medical facilities, recreational parks and educational campus. This story was first published by www. propertyguru.com. my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

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Developer Marks Success With New Sales Gallery at PJ Mall a third serviced apartment block in Tropicana Gardens, a mixed residential development located in Kota Damansara close to the Dataran Sunway MRT station.

Property developer Tropicana Corporation Berhad celebrated two significant events in the Tropicana City Mall in Petaling Jaya recently. The company unveiled its Tropicana Flagship Property Gallery as well as its new corporate website — www. tropicanacorp.com.my The Flagship Property Gallery, located on the ground floor, at the centre court of Tropicana City Mall, is meant to be a onestop information centre for property buyers. To provide a complete experience, the group designed the gallery to provide guests with a memorable visit. The showroom focuses on strengthening dialogues between guests and sales consultants, by showcasing a wide array of Tropicana’s integrated developments in an exclusive lounge-like setting. A large 3m-by-5m video wall serves as a source of entertainment and information for people waiting to speak to consultants in the gallery. Guests will also be given an insight into Tropicana’s development DNA built on the cornerstones of: accessibility, connectivity, innovative concepts and designs, generous open spaces, amenities, facilities, multi-tiered security and quality. In line with its rebranding exercise, the company also unveiled its new corporate website. With its seamless navigation, user-friendly

and interactive features, the company designed the site with its users in mind. The main objective is to ensure that the site is a valuable resource and useful portal for old, new or even potential customers. Speaking at the opening of the Flagship Property Gallery, Tropicana group chief executive officer Datuk Yau Kok Seng said, “It is said that home is where the heart is. This rings especially true as we have always believed in building homes that not only appeal to the eyes and minds of our consumers, but to their hearts as well. Fuelled by our passion to develop products that are linked to our development DNA, we want to introduce the right projects in the right locations, at the right prices. We also plan to appeal to our purchasers via product differentiation, attractive packages and emphasis on land market segment. We appreciate the continuous support and therefore, we have crafted an array of special events and packages to our customers.” In conjunction with the double celebration, Tropicana presented “Redefining the Art of Living” showcase that runs until Oct 19.

Fairfield Residences, the first phase of terraced houses in Tropicana Heights is almost sold out while the first two blocks of serviced apartments in Tropicana Gardens, Arnica and Bayberry, have seen an overwhelming response, with Arnica fully sold and Bayberry only having only a few units remaining. Tropicana is also planning the maiden launch at Tropicana Aman at Kota Kemuning, an integrated township development on 1,172 acres, previously known as Tropicana Canal City. Yau says the company’s prospects remain robust. Its 2,200 acre landbank across the key growth regions in Malaysia, with a total estimated GDV of over RM70 billion, is strategic and prime. There is strong potential for unlocking value in the landbank, and for Tropicana to sustain growth in its continuing focus to transform into a premier property group in Malaysia. Buoyed by its recent successful Tropicana Collection Campaign, which saw RM649 million in sales over six weeks; its positive second quarter financial results with net profit rising 133% to RM89.5 million; and being named the Highest Profit Growth Company in the Property & REIT Sector at The Edge Billion Ringgit Club Corporate Award 2014, the company has lined up a series of exciting events at its property galleries across Malaysia.

Guests will see a showcase of inspired living choices focusing on premier developments in the property hotspots of Penang, Klang Valley, Iskandar Malaysia and Kota Kinabalu. Moving forward, the company is preparing to launch new phases of terraced homes in Tropicana Heights, Kajang, and

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2015 is a year of uncertainties as the effect of GST is unpredictable and of course unprecedented. Despite praying for the successful passing of the above measures in Parliament to ease the anticipated rise in cost of living, it is equally crucial to keep track on updates from the relevant stakeholders.

Chris Tan

Lawyer Specialising in Real Estate Chris Tan is the founder and now Managing Partner of Chur Associates, a boutique legal practice that thrives in delivering business friendly solutions for its clients and having a niche positioning of ‘Everything Real Estate’ serving the entire value chain from the upstream to the downstream. Chur Associates is a boutique legal firm founded in 2004, specialising in designing legal solutions catered to our clients’ needs. Chur Associates’s brand promise is “We Deliver!” To that end, they offer clientsthe necessary means and methods to ensure their requirements are met. You can get in touch with him at Facebook: Chur Associates Email: consult@churassociates.com

Last Budget Under 10th Malaysia Plan and the First Budget under GST Are you reading between the lines?

he acclaimed “pro rakyat” Budget 2015 was read by our Prime Minister, Datuk Seri Najib Razak in the Dewan Rakyat at 4.00pm on 10 October 2014. A day earlier, our Prime Minister who is also the Finance Minister hinted that measures will be introduced to ease concerns over the costs of living. Amongst the highlights of the budget proposal, the same has ascertained the Government’s determination in the following:

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1. Implementation of Goods and Services Tax (GST) on 1st April 2015; 2. Abolishment of Sales and Services Tax (SST); 3. Assistance to the first-time homebuyers; 4. Maintaining the current rate for Real Property Gains Tax (RPGT); and 5. Maintaining the abolishment of Developer Interest Bearing Scheme (DIBS) or any similar schemes.

Probably the biggest trick ever pulled by the Malaysia Government despite early warning given, we will celebrate the next April Fool’s day by paying 6% GST on any consumption of goods or services thereafter. Other than the abolishment of SST, the only relief was that further extension was made to the exemption list of GST by adding certain basic food items, medicines and fuel. Recognizing the implementation of GST will attract higher cost of living, there will be reduction of corporate and personal income tax while increment of the assistance program such as Bantuan Rakyat 1 Malaysia (BR1M). However, in view of the looming GST, the nominal corporate tax and personal income tax reduction will inevitably increase the costs of doing business in Malaysia. Bearing in mind that Wawasan 2020 is to make Malaysia a high income nation, the increase in BR1M handout is not a long term and sustainable solution as it is just a temporary measure to address the income gap. The Government must recognize that all high income nations would have relatively high costs of living and BR1M is only dressing up the symptoms without a real plan to go to the root of it.

Budget 2015 is formulated with focus on the People’s Economy – an economy that is rakyat-orientated covering priorities and interests of the rakyat such as cost of living, household income, education opportunities, employment and business, quality of life, skills training, entrepreneurship as well as security and safety. In the context of affordable homes, a quick recap from Budget 2013 that 123,000 units to be built in Kuala Lumpur, Shah Alam, Johor Bahru, Seremban and Kuantan with a price tag between RM100,000 to RM400,000 while in Budget 2014 a subsidy of RM30,000 for each unit of affordable homes built will be allocated to the developer. Budget 2015 introduced the Youth Housing Scheme to couples aged 25 to 40 with household income less than RM10,000 to finance their first home not exceeding RM500,000 with monthly financial assistance of RM200 from the Government for the first 2 years. Meanwhile, 50% stamp duty exemption on the instrument of transfers and loan agreements is maintained with a RM100,000 increment to the purchase limit for first homebuyers. This begs the question why the Government does not waive the stamp duty completely for the first homebuyers? Certainly this can be better than any subsidy as it will reduce the costs of purchase. While it might seem that the Government has the aspiration to house the nation, expanding the qualifications for My First Home Scheme, PR1MA, SPNB and Cargamas etc only scratches the surface. The expanded group of Malaysians qualifying for these schemes inevitably suggests the fact that Malaysians cannot afford their own homes without the help of the Government. Meanwhile, the financing banks can play a better role herein, especially in the sector we now deem “affordable”. By the way, do we have a mutual perception of what “affordable” is in terms of housing? A clear guideline on this will certainly benefit all the stakeholders. Other than affordable homes, Budget 2015 did not address all the issues in the property market. No changes were made to the current 2014 RPGT rate after doubling the 2013 RPGT rate to a maximum of 30% last year. The announcement of Budget resembles the announcement of lottery draw for RPGT rate each year as RPGT is calculated on the date of disposal rather than acquired. RPGT should stay fixed as it is not the most efficient way to tax and the focus should be on taxes with more direct imposition. Pursuant to the promise made by the then housing minister and now Tan Sri Chor Chee Heung in 2012 who said the build-then-sell (BTS) system be made

mandatory in 2015, it remained silence in the Budget 2015. The reason behind this may be in line with the current Housing and Local Government Minister Datuk Abdul Rahman Dahlan’s proposal in August 2014 for the BTS system to co-exist with the sell-then-build (STB) model, making it an option for the developers. In this context, BTS is certainly more than welcomed as another choice but not mandatory in particular to address the affordability issue. BTS requires a different financing system from the banks and the developers need to have strong financial muscles without relying on the progressive payments under the current STB model. Speculation of the returning of DIBS scheme for the first homebuyers is yet another disappointment as the same is not enclosed within the Budget. DIBS should not be prohibited but regulated. In any capitalist society, it is always good to increase the variety of choices to the purchasers. Furthermore, the fundamental of having DIBS is that the selling price backed by the end financiers is good enough for the developers to sacrifice part of the profit to support DIBS. But wait a minute… Budget 2015 as you understand it now, is just a first reading in the Dewan Rakyat and is still subject to a second reading, debate and amendment by the Members of Parliament who may be getting a pay rise soon. Thus do not take every word in Budget as if it is the law as there is still space for adjustment. Smart investors will always look beyond the speech. Once it is passed for implementation, the relevant ministry will circulate the announcement with the effective date. For example, the Ministry of Housing only formalized the prohibition of DIBS on 15 November 2013 (that was weeks after the first reading) and it has no effect whatsoever on nonresidential property and similarly the financing of net purchase price is never formalised by Bank Negara Malaysia while the Banks are merely adopting it as part of its lending policy. 2015 is a year of uncertainties as the effect of GST is unpredictable and of course unprecedented. Despite praying for the successful passing of the above measures in Parliament to ease the anticipated rise in cost of living, it is equally crucial to keep track on updates from the relevant stakeholders.

This is a series of articles that examine the latest trends and issues in real estate investment. Stay tuned. NOTES

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/// West Malaysia Property News

Highest Loan Rejections for Properties New Guidelines to Prevent Owners of Affordable Homes in RM200,000 - RM500,000 Range guidelines for responsible From Selling Property

Better Property Sales for Mah Sing in FY14 – Analysts The research firm added Mah Sing upcoming property launches for 2H14 in Johor would include Meridin Bayvue, which represented the last phase of the matured Sierra Perdana township.

lending to property buyers. He further pointed out that for the first time in the recent history of the property sector, less than 50% of units launched were sold in a half-year period. Of the total 10,189 units launched in the first half of this year, only 49% were taken up. Of that figure, 41% of the launches were in the RM200,001 to RM500,000 price range, mainly located in Johor and Pahang, while 31% were in the range of RM500,001 to RM1 million. This trend was similar to the the second half 2013 period.

The Johor government will set new guidelines for buyers of affordable homes in the state to prevent them from selling their property within a five-year period, revealed media reports. Menteri Besar Datuk Seri Mohamed Khaled Nordin said the condition would be imposed to avoid buyers from making easy profit. “The affordable houses by the state government are built with very high subsidy and if not for this buyers would have to pay a high price for the actual cost of the house,” he said. “We do not want foreigners to own the houses by offering high price to the local buyers,” he said at the ground-breaking ceremony for the Kampung Sungai Danga affordable housing project recently. A total of 37,000 affordable houses would be built by 2018, which is an increase from the initial target of only 28,000 units. “Out of the total, 31,000 houses will be in the Johor Baharu district, particularly in Iskandar Malaysia, to be priced at RM80,000 and below,” he added. He said Iskandar Malaysia was chosen for the affordable housing project because of the population growth and rapid development in Medini. Until July this year, the Johor government has received 47,367 applications for affordable homes. This story was first published by www. propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

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Property developers have come out with some hard facts that suggest that the sector is cooling off. According to the first half 2014 Property Industry Survey by the Real Estate and Housing Developers’ Association Malaysia (REHDA), properties in the affordable housing price range below RM1 million have been facing a tough sell largely because of homebuyers’ difficulty in getting financing and a glut of unreleased bumiputra lots. Also, some 31% of properties in the RM500,001 to RM1 million range were still left unsold after completion in the past three years. These were largely in hot property markets like Selangor and Johor. Properties in the price range of RM250,000 to RM500,000 also faced the same dilemma, with 34% of the completed units unsold. These were located mainly in Perak and Pahang. Close to 90% of the respondents experienced a slowdown in property sales due to cooling measures announced in Budget 2014 and over 80% of the respondents of the survey held a “neutral” to “pessimistic” outlook for the first half of 2015.

REHDA president Datuk Seri Fateh Iskandar Mohamed Mansor said demand for property was intact but with the Government’s cooling measures introduced a year ago, developers were finding it difficult to successfully sell in the affordable housing segment. “A property is a person’s biggest wealth creation asset, yet they can’t seem to own one,” he noted. He suggested that the Government reinstate the developers’ interest bearing scheme for first-time house buyers to allow the working class to own a roof over their head. The survey found that while 84% of developers were able to get bridging financing for their projects, 53% of their buyers faced challenges getting financing to buy the properties. Among the loan rejections from financial institutions, the highest rate was among home buyers in the RM200,001 to RM500,000 property range. “We can build but it is a different story for those with the capacity to buy the homes,” he said, adding that the 70% loan-tovalue ratio was beyond the capability of many home buyers too. Hence, Fateh Iskandar appealed to the banks to revisit the

At the same time, property developers have had to struggle with the lack of demand for bumiputra lots in locations where bumiputras do not traditionally settle in. Fateh Iskandar said the authorities’ call to raise the bumiputra quota in property developments up to 70% would only further squeeze developers who would not be able to sell the lots despite their best efforts in marketing the projects to the targeted buyers. “Demographics and locality can’t be pushed. If you were to ask a non-bumiputra to buy a property in Kampung Datuk Keramat or a bumiputra to buy a house in Jinjang, for example, it’s going to be difficult,” he said. “Yet these quotas are still being put in place everywhere.” Fateh said developers were supportive of the original quota of 30% bumiputra lots but felt a higher quota would not serve certain locations. REHDA has suggested for the automatic release of the unsold bumiputra lots in tranches – 10% release every six months from the launch – but this notion has not been taken up by the federal nor state authorities.

Apart from that, AmResearch noted Mah Sing has planned to launch up to 588 units of houses in two blocks of condominium from pricing of RM414,000 per unit with built-up area of 980 square feet. The research firm also said the property developer other property project launches include Bandar Meridin East in Pasir Gudang.

At the launching event of Lakeville Residence

Mah Sing Group Bhd (Mah Sing) is poised to achieve higher property sales of approximately RM3.6 billion in financial year 2014 (FY14) compared with RM3 billion in 2013. Following a meeting with the company’s management, AmResearch Sdn Bhd (AmResearch) in a report said the property developer is banking on new property launches in the second half of the year as well as its affordable or mid-range segment to sustain its turnover. In the meantime, the research firm observed that Mah Sing has generated about RM1.5 billion in sales in the first half of 2014 (1H14) which exclude about RM708 million achieved during the launch of Lakeville Residence@Taman Wahyu in Kuala Lumpur recently. AmResearch said the buying momentum for property is set to gain pace in 2H14, supported by Mah Sing’s six new launches which include projects such as D’sara Sentral serviced apartments at Sungai Buloh (Selangor Darul Ehsan), Canal Link @ M Residence(Rawang, Selangor Darul Ehsan), Meridin Bayvue @ Sierra Perdana, (Johor), Bandar Meridin East, Pasir Gudang (Johor), The Coastal @ Southbay City (Batu Maung, Penang) and Feringghi Residence – Precinct 2 (Penang). Additionally, the research firm believed that the strong take-up rate for Mah Sing’s new property launches would be sustained with the property developer’s focus on the affordable or middle range segment.

It noted about 87 per cent of the property developer’s residential launches for 2014 would be priced at RM1 million or below. Obviously, the research firm noted that there is still strong demand for landed residential houses priced below RM1 million and RM700,000 for high-rise units. Moreover, AmResearch observed that a few of Mah Sing’s recent key projects have registered strong takeup rates. It noted that one of the projects, for instance, Lakeville Residence which was launched in the middle of August has achieved an 85 per cent take-up rate for the first four tower blocks which has 1,244 units. Moving on, AmResearch expects the demand for Mah Sing’s upcoming launches at Southville City @ Bangi, (Selangor Darul Ehsan) should increase once the proposed interchange to the North-South Highway is being constructed. As for the group’s property projects in Johor, AmResearch said Mah Sing remains optimistic that its projects would be well-received as it has been targeted towards the affordable segment with pricing from below RM350,000 and RM400,000 for landed houses. Besides that, the research firm said the property developer has expressed confidence in its pricing structure of RM650 per square feet to RM700 per square feet for the Medini project is within the budget of many local buyers.

Other than that, it said Mah Sing has targeted to complete the sales of industrial units at Mah Sing i-Parc industrial development near Port of Tanjung Pelepas, Johor. As for Mah Sing’s projects in Sabah, AmResearch said property sales for shop lots or retail units at Sutera Avenue located in front of Kota Kinabalu Times Square has been brisk while upcoming launches consists of service apartments atop a retail mall that the group is currently building. Nevertheless, the research firm observed that the response towards the property developer’s project has witnessed a slowdown within certain segments in Sabah. It believed that the lukewarm demand could be due to less interest from Chinese property buyers as a result of negative newsflow particularly the MH370 and MH17 incident coupled with the kidnapping incident in East Sabah.

the ‘Damansara Heights’ of Shah Alam. The research firm noted the highend development project would consist of super-link houses, semi-detached and some small condominiums. Year-to-date, AmResearch observed that Mah Sing has acquired new landbank with a combined gross development value (GDV) of RM19 billion against RM9 billion for 2013. Hence, the research firm noted that the landbank acquisition has boosted the property developer’s pipeline of projects to RM50 billion. AmResearch believed that Mah Sing’s aggressive landbanking would enable the property developer to emerge as one of the largest developers by GDV in the the future. Therefore, the research firm is upbeat that Mah Sing would be able to achieve its property sales target and enhance its earnings for FY14.

Mah Sing Group Bhd (Mah Sing) is poised to achieve higher property sales of approximately RM3.6 billion in financial year 2014 (FY14) compared with RM3 billion in 2013.

Despite that, AmResearch said Mah Sing remains positive on a potential resurgence in demand over the medium term for the high-end segment given the limited supply over the last few years. The research firm noted that Mah Sing is expected to launch its project at the Kelab Golf Sultan Abdul Aziz Shah (KGSAAS) golf course land in Shah Alam in two years’ time. AmResearch said the property developer does not expect any major issues in receiving the development order for the prime KGSSAAS land, which is dubbed as

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Imagine if no developers are interested to build because no buyers are interested to buy and this continues for many years. Stop speculation, without any doubt but the right market growth needs to be proactively supported. Just look at China. After much cooling, it has started ‘warming’ recently. More importantly, Budget 2015 must be followed through with effective and efficient implementation.

Charles Tan Founder, kopiandproperty.com Charles loves cars but he buys properties instead. A good car gets you to your journey faster but a good property gives you returns for your comfortable retirement faster! Currently, he has properties in Penang, Klang Valley and Kota Kinabalu. His mantra for property investment is, ‘Buy Objectively’. In his previous role with a leading property portal in Malaysia, he regularly speaks about the property market in property fairs, public property talks, workshops and even as panels in property related forums. He blogs on a regular basis inkopiandproperty.com which is a popular property blog in Malaysia. The blog is dedicated to his personal views about the property market.

Affordability, Availability, GST and More Money (new income tax rate)

udget 2015 tries to address two chief concerns in the property market; affordability and availability. In KL, the average price for property has reached RM700,000 and has shown no signs of weakening despite transactions on a downtrend since 2012. Within Penang island, it is almost impossible to get a family-sized condo within the range of RM450,000 – RM550,000. My term for family-sized is a minimum of 1,000sf and higher. Let’s get real; landed properties are no longer an option for any hot area. Well, since we are talking about affordability and availability, if we look at the Malaysian property market today, is it heading towards a bubble in the near future? After all, the average prices of properties in major property markets like KL, Penang, Iskandar and even Kota Kinabalu, has been rising even with the downtrend in transactions since 2012. My personal opinionafter referring to a few major property portals in Malaysia? No.

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Let’s look at the first concern; affordability. Most of the time, this is the first sign of a bubble. In Malaysia, no bubble is waiting to burst because those who could not afford or could barely afford just could not get a loan to buy any unit. Fortunately, the banks are very strict as they are also afraid of having bad loans. Unfortunately for buyers, this has made it much harder for them to get their dream home. Malaysia is still a young country and with continuous urbanization, the majority of us are working and living in bigger cities. This means demand is strong but if affordability is not addressed, we are looking at one whole generation of people without homes. For this, Budget 2015 gave the married youths between the ages of 25-40 something to cheer about. If they are buying for the very first time, they can get a 10% loan guarantee and this facility is available to the first 20,000 units only. The property price should not exceed RM500,000.This is a smart partnership between the government, Bank SimpananNasional, Employees Provident Fund and Cagamas.If you are still single, it may be time to get married. Trust me, its fun. I have been married for over 11 years. Beside this, a total of 143,000 low cost housing units would be built. There were not much details made available for this yet but my guess is that it includes all the affordable schemes that the government has announced including PR1MA. This is good news because one recent study has shown that there are still 2 million Malaysian households living on less than RM3,000 per month. A roof over their heads is of utmost importance. Failing to address this sufficiently is likely to cause social problems which will escalate to many other negative issues. Let us not go into that.

The only reminder would be on the implementation and the rules governing the 20,000 units. I feel that everything must be made transparent as much as possible. Target the needy and not just anybody. Once they are accepted as a buyer, they should not be allowed to profit from this. Not just RPGT but beyond that. Perhaps a period of 10 years like what the Penang state government has announced? Seriously, those who are really buying it for their family and trying their best to avoid loan rejection would not be moving home so soon. This should strictlybe only for those buying first property, whether it’s residential or commercial. And 20,000 units isreally not that many to begin with. Second concern is availability. Availability of properties in areas we want. For this concern, Budget 2015 is addressing this through the expenditure on infrastructure such as thenew LRT extensions between Shah Alam and Klang as well as the second MRT Line from Selayang to Putrajaya. This means that areas that was once hard to reach or considered outskirts would now be just a train ride away. These new infrastructure would help to expand the choices available instead of everyone trying to buy where everyone else wants to buy causing prices to move up too fast. If you think Selayang is not as great as Cheras, think again. Why not? Cheaper today for better convenience tomorrow. I am staying on the fringes of Sungai Buloh and have faced much less jams compared to many other hotter areas. One major reason? MRT Line 1 which is less than a few minutes’ drive away and affordability. What about GST? Would it affect property price? GST is well on track and the proof is the reduction of both the individual income tax and corporate income tax. (Refer to Table 1).I do not believe GST would affect the property market too much beyond a one time tiny adjustment, if any. Looking at the few latest property fairs in KL and the crowd, I think the developers would be glad to absorb that increase if they can sell faster.

NOTES

Budget 2015: Personal Tax Rates for 2014 and 2015 Chargeable Income (RM)

YA 2014 Tax Rate (%)

YA 2015 Tax Rate (%)

Reduction (%)

1 - 5,000

5,0001 - 20,000

20,001 - 35,000

35,001 - 50,000

50,001 - 70,000

70,001 - 100,000

100,001 - 250,000

250,001 - 400,000

24.5

1.5

Exceeding 400,000

1 Table 1

What about subsidy? With lesser subsidy, some say that the affordability may be lower. I am not sure if anyone relies on subsidy to buy homes but I do not think it works. Subsidy rationalization would continue to happen and the next step would be to ensure that those who really need it get it. I am a firm believer of targeted subsidy and not for all. I know that my driving a 1.6 litre car, petrol subsidy may just miss me. It is ok. There are only two ways to go about it. Get used to it if we can afford it or make ourselves poorer so that we will get the subsidy. You decide. Instead of supporting the property market, Budget 2015 is mostly focused on the first-time buyers. For now, this is okay even though transactions are still on a downtrend. A prolonged downtrend plus a negative sentiment is however not healthy for the country. Imagine if no developers are interested to build because no buyers are interested to buy and this continues for many years. Stop speculation, without any doubt but the right market growth needs to be proactively supported. Just look at China. After much cooling, it has started ‘warming’ recently. More importantly, Budget 2015 must be followed through with effective and efficient implementation.

Keep reading up on more information and articles from experts in Property Hunter to get the latest news and views in and around the market.

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/// West Malaysia Property News

Developers Will Not Be Compelled to Adopt BuildThen-Sell Concept

EcoWorld Launch New Township for Iskandar

Government to Create Several International Property Zones Within Johor Baru

CEO Voon Resigns From S P Setia group sales recorded since financial year 2012.

developer Ivory Properties Group Bhd and local landowner JB Lee Properties Sdn Bhd to jointly develop a 3.6ha mixed development project in Teluk Jawa.

“The group achieved RM1.42 billion sales during the third quarter, up from the previous quarter’s sales of RM715 million,” it said.

Asked about talk that there was a housing glut involving high rise projects which has resulted in the price of homes coming down, Latiff said that he was informed about it but attributed it to the year and expected prices to pick up next year.

Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan

The government does not plan to compel property developers to adopt the buildthen-sell concept in new housing projects as suggested by House Buyers Association (HBA). According to Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan, the ministry, in principle, does not believe that the concept will solve the country’s problem on house price hike.

EcoWorld launched its EcoSpring and EcoSummer Show Village in Iskandar Malaysia, Johor recently. Over 3,000 visitors came to the show village which offered visitors a taste of the living experiences that both townships have to offer. They were also treated to an evening of fun activities to commemorate the occasion.

“The build-then-sell concept need not be compelled, but any housing developers are welcomed to adopt the concept,” he said after opening the Cameron Highlands UMNO delegates’ meeting in Felda Sungai Koyan.

MediaCorp artiste Vivian Lai hosted the evening and the crowd was entertained to clowns, unicyclists, stilt walkers and balloon artists.

“We fear that if the developers were compelled to adopt the concept, it will affect them and hence, reduce the number of housing projects, which will eventually lead to a hike in the house price.”

There was also 3D street art, a street cuisine buffet, horse rides and costumed superheroes for photography sessions.

However, he revealed that the association’s demand and proposal will be discussed in the Cabinet meeting soon.

A lucky draw also saw 10 visitors winning cash prizes worth RM888. But the brightest moment of the night belonged to the main act – a mind-blowing magic show by Zlwin Chew. The world-famous international illusionist and street magician, who has performed for celebrities and royalty across the globe, put on a spectacular show and kept the crowd mesmerised with one magic act after another. The day ended on a high note with a dazzling two-minute fireworks display. EcoSpring, like its namesake, is an upmarket township

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of cluster homes and semidetached houses set in a beautiful spring-themed environment. Over 13% of EcoSpring is reserved for nature. The township, which is entered through a bridge, is dotted with a plethora of gardens full of blooming flowers and surrounded by pristine lakes, streams and lush greenery, that help to lower the temperature by 4-7°C naturally. Each of the four precincts also come with their own garden. The township is gated and guarded, as well as patrolled by security personnel around the clock. In addition, the precincts are safeguarded by individual security checkpoints for added exclusivity and peace of mind. There are also dedicated lanes for pedestrians and bicycles as well as free shuttle buggies for residents to travel around the township safely. EcoSpring is designed with up to 65 world-class outdoor and indoor facilities, including a state-of-the-art gymnasium, floating stages, a skating rink, outdoor pavilions, viewing decks, basketball courts, and even a resident-exclusive clubhouse with a lap pool. EcoSpring’s double-storey residences, which are named after scenic places in England and range from 32’ x 80’ cluster homes to

50’ x 80’ semi-ds, feature a unique architectural style that combines sophisticated European architecture with smart contemporary designs, like walk-in wardrobe, en-suite bathroom and more. Adjacent to EcoSpring, separated only by a stream, is EcoSummer. A tranquil stream-side township of 1,255 garden homes, approximately 16% of the total area of EcoSummer is reserved for nature.

”All projects will have their own challenges but I am confident that the prices of property will go back up again next year,” he added.

(From Left) Astaka’s Sales & Marketing Director takes Michael Hiew, Founder of Property Hunter on a private tour of the project in Johor Bahru

The government has identified several locations within the district to be turned into international zones for foreigners to purchase properties.

At its heart is one of the longest linear gardens in Iskandar Malaysia.

State Housing and Local Government exco Datuk Abdul Latiff Bandi said that their study on the matter was in the final stages and they expect it to kick off next year.

To ensure that its residents can live with complete peace of mind, the township is safeguarded by 24-hour security and CCTV surveillance. The facades of EcoSummer are inspired by Western Country homes.

”With the zoning system, the government is able to implement a different tax rate for foreign buyers living compared with what the locals will have to pay,” he said declining to reveal the locations but said that it would cover along Danga Bay and Tebrau.

These modern residences also feature comfortably wide open living and dining areas, as well as a 10ft backyard garden with a 40ft backlane.

He added that presently all high-rise developments were allocated 20% as international lots but there has been numerous requests to increase this quota.

The first phase of EcoSummer is completely sold out, but there are still opportunities to own a double-storey garden home in EcoSummer, thanks to the launch of its new phase, the North Gardens.

”As such we will introduce the international zones that will allow foreigners to purchase homes which are priced more RM1 million,” he said, adding that the new international zone will only cover high rise projects and not landed properties.

For details, call 07-236 2552 or visit the EcoSpring and EcoSummer EcoWorld Gallery.

He was speaking to reporters at a joint venture signing ceremony between Penang based property

Latiff also dismissed speculation that Singaporean buyers might shun the property market due to the high toll rates saying that the prices of property in Johor was still cheaper than the Island Republic. On the The Johor Real Property and Housing Board Bill, he added that the Johor Sultan has yet to sign it off as it has yet to be presented to Tuanku along with the Water Enactment (Amendment) 2014. ”We will do all the amendments and present to his majesty at the appropriate time,” he added. Meanwhile Ivory Properties group CEO Datuk Low Eng Hock said that this was their first venture into the Johor market. ”This project has an estimated gross development value of RM2 billion. ”The project known as Four-Leaf Clover Residences is a premier residential enclave designed to cater to the growing needs of both locals and expatriates especially professionals working in Pasir Gudang,” he said, adding that the first two towers would be completed by 2018 while the whole project would be completed by 2020.

Specifically, the group’s 40 percent stake in the Battersea Power Station project translated to sales of RM735 million compared to the group’s overall sales of RM1.42 billion for the period under review.

Datuk Voon Tin Yow

After serving S P Setia for nearly 20 years, Datuk Voon Tin Yow has resigned as the group’s acting president and chief executive officer (CEO), with effect on 1 January 2015. Notably, Voon took on the position as the group’s CEO from May this year, after its founder, Tan Sri Liew Kee Sin left the company on 30 April. “Having served for almost two decades, it is time for me to step down to pursue my own interests…I am happy that S P Setia is currently strong and stable; and I believe the team spirit in the company will persevere during this period of transition,” said Voon in a statement. The company revealed that Voon will be replaced by its acting deputy president and chief operating officer Datuk Khor Chap Jen from 1 January 2015, while executive vice-president Datuk Wong Tuck Wai will take on the post left vacant by Khor. Meanwhile, the company announced its third quarter ended 31 July financial results, which witnessed its revenue climb 12 percent to RM902.66 million from last year.

S P Setia’s total sales for the first 10 months of FY2014 stood at RM3.81 billion, with unbilled sales at RM10.88 billion. “Despite the Malaysian property market going through a period of softness, the group posted satisfactory sales for the current quarter largely due to the successful Phase 2 residential launch by its joint-venture project, Battersea Power Station, in the United Kingdom,” it added. This story was first published by www.propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

After serving S P Setia for nearly 20 years, Datuk Voon Tin Yow has resigned as the group’s acting president and chief executive officer (CEO), with effect on 1 January 2015.

The group’s net profit marginally increased by two percent to RM103.32 million compared with the previous corresponding quarter. S P Setia attributed the better financial performance to improved profit contribution from completed parcels as well as to higher overall

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/// Contributor

Loan Agreement stamping fees is calculated based on 0.5% on the loan amount. Let’s say your loan amount is RM300,000. Loan Stamping Fees will be RM1,500 and with 50% discount you only pay RM750.

Let’s look at the current approval conditions for SKIM RUMAH PERTAMAKU introduced by the government. Key Features and Benefits

My View…….

First Home purchase (Subject to affordability)

This discount is only applicable from January 1st onwards. If you are buying properties below RM400,000three is no need to wait as the 50% discount is already there. For those of you who are buying between RM400,000 to RM500,000 then you will have to wait until next year. Please take note that property prices next year might increase and outweigh the discounts given.

1. Up to 100% financing

The Mortgage Expert

3) Minimum Eligibility for PR1MA Purchasers

Eligiblu Borrowers

With over 15 years of experience in the mortgage and investment industry and working with prominent companies such as Standard Chartered Bank, Hong Leong Bank, HSBC and Hwang DBS Unit Trust, Michael has helped thousands of loan borrowers by providing comprehensive mortgage advisory and solutions.

Household income increased to RM10,000 from RM7,500 previously. PR1MA buyers enjoy financing up to 105% in which the additional 5% is to cover Mortgage Insurance.

Michael regularly conducts mortgage courses and has produced many graduates. He is also a regular columnist and also has being featured in New Straits Times Press, The Star, Property Guru and also Property Hunter magazine. He speaks regularly in Property Exhibitions, Seminars and also for developers.

Personal Income tax reduced between 1-3% and corporate tax by 1%. This will ease the debt service ratio (DSR) calculation on loan approval. Let’s say if a person earns RM50,000 a year there will be an additional tax savings of RM600.

Eligible Properties

My Views…..

3. Maximum property value of RM400,00

Michael Yeoh

You can get in touch with him at Website: www.michaelyeoh.com.my

My View…… This is good as more people will be eligible under this category. 4) Income tax rate reduced for both personal and companies

Post Budget 2015 Mortgage Perspective

ow that the dust has settled and everyone is fully aware of the ingredients in Budget 2015 after the announcement by our Prime Minister. For the past few days, I have been reading and listening to feedbacks and comments from various people. Now is the time for me to pen down my views in a written article. I have extracted a few important points that I would like to highlight which is relevant to mortgage financing in Malaysia. 1) Youth Housing Scheme As the name applies, this scheme is for married couples aged between 25 and 40 years old with household income not exceeding RM10, 000. Loan tenure is fixed at a maximum of 35 years period with property price not exceeding RM500,000. This scheme is a partnership between the government, Employee Provident Fund, Cagamas and Bank Simpanan National (BSN) which will enable loan borrowers to borrow up to maximum loan of 100%. My View…..

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Please take note that this is for the first 20,000 units or applicants only. I think the limit will be up in minutes after this is launched. There are definitely more than 20,000 first home purchasers in this category in Malaysia. What is not highlighted here is how will the applicant be accessed for approval. Interest rate will also be a factor to be considered as BSN is known for not so favourable rates.

2. Residential property only Qualifying Criteria 1. Must be a Malaysian citizen 2. First time home-buyer 3. Individuals up to age 35 years 4. Single borrower gross income not exceeding RM5.000/month and joint borrowers gross income not exceeding RM10.000/month (based on gross maximum income of RM5.000/month per borrower) 5. Repayment of total financing obligation must bot be more than 60% of the net monthly income or maximum financing limit of the participating bank, whichever is lower

1. Residential properties located in Malaysia 2. Minimum property value of RM100,00

The savings is not significant enough which can translate into lower DSR. If a person is a borderline rejection case, this might help.

4. Owner occupied (buyers are required to reside in the property)

5) NO GST on Petrol

Financing Requirements

Luckily, petrol is not included in GST together with other products. It could be worst. When petrol price increases it will again have a bandwagon effect on other products as well and surely inflation will increase again and at the end will push up interest rate another round. My Views…..

1. Financing tenure not exceeding 35 years, subject to borrower’s age not exceeding 65 years at the end of financing tenure. Revised maximum tenure is in line with BNM’s ruling announced on 5 July 2013 2. Amortising facility only (no redrawable features) 3. Installments payable via monthly salary deduction or standing instruction 4. Compulsory Fine insurance/ takaful

Yes, petrol is not included into GST. Looking at the recent cut in petrol subsidy by 20 cents, you can expect inflation to rise again and subsequently interest rate will follow suit. As long as petrol price keeps on increasing, it will affect other product prices as well. Whether you like it or not, when GST is implemented on 1st April, inflation will also increase which will translate into higher cost of borrowing if interest rate follows. I feel that Budget 2015 did not actually touch the core of the problem to relax the loan approval conditions of first time home buyers. The ratio between loan submission and approval stands at below 50% which means every 10 cases been submitted to the bank more than 5 loans will be rejected.

2) 50% Stamping Fee discount on transfer and loan agreement for properties below RM500,000 This is an increase from RM400,000 previously for first time home purchasers. Purchasers will stand to gain from stamping fee savings on transfer of property and also loan agreement. Let’s say you buy a RM450,000 property. Your stamping fee will be 1st 100k 1% and 100k to 500k at 2%. Total Stamping fees will be RM8,000. With 50% discount purchasers will save RM3,500.

NOTES

Keep reading up on more information and articles from experts in Property Hunter to get the latest news and views in and around the market.

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/// International Property News

Singapore Developers Lured to Australia by Bigger Gains Moreover, the country’s appeal as an investment destination was further boosted by the weaker Australian dollar, added CIMB. Besides the local demand, its housing market is also capable of tapping a much larger pool of foreign developers.

INTERNATIONAL PROPERTY NEWS

Sydney, Australia

Amidst Singapore’s sluggish residential market, many property developers here have been venturing into Australia in the past 12 months to reap more profits, according to CIMB and reported in the media.

Catch up on the latest property and real estate news, views and analysis from across the globe featured

The country is also a good place to redeploy capital as it offers higher returns, added Century 21 Singapore.

Scientists Develop 3D Model to See How Smog Moves Among Hong Kong Skyscrapers

“If you could team up with a good builder, or joint-venture with a good developer and control your cost well, Australia still has better margins than

Singapore,” said its Chief Executive Officer Ku Swee Yong. It’s possible for property developers there to generate a 20 percent return on investment (ROI) per annum, but in Singapore “I don’t think you can achieve even 15 percent”, he noted. Aside from big property players like City Developments and Frasers Centrepoint, some smaller developers are also eyeing Australia’s greener pastures.

For instance, boutique developer Heeton Holdings will build a mixeduse project in Brisbane’s Fortitude Valley with the help of Australian firms Sunfire Asset and Twin Ocean Property, as well as SGX-listed companies KSH Holdings and Lian Beng Group. Comprising 198 hotel rooms and 324 apartments, the AUD$150 million development is expected to be ready by 2017.

Century 21’s Ku agrees, saying: “They (developers) can also decide to launch it in Singapore, instead of just selling it into the domestic market. For an Australian product, you can bring it out of Singapore, to Hong Kong, Taiwan, China and there will be buyers. So your market reach in terms of distribution and sales would be much wider.” Other pull factors include a stable economic forecast and Australia’s status as the world’s third most transparent property market after the UK and the US based on a JLL index. This story was first published by www.propertyguru.com.sg and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

Prices Plummet in Prime London between August and September, whilst average prices rose by just 0.2 percent across England and Wales. So far only the most expensive parts of London are suffering serious price deflation, but it may well spread according to the firm.

In crowded, high-rise Hong Kong, fully 40 percent of the population lives above the 14th floor. You can see what this looks like in photographer Michael Wolf’s stunning ongoing portrait series of Hong Kong tenements, “The Architecture of Density.” “This illusion of unlimited size really conveys what we experience in mega-cities,” Wolf told the New Republic. “If you go to Shanghai or Hong Kong or to any of the big Chinese cities, you have this tremendous density around you.” Hong Kong’s vertical geography inspired a different set of questions in a group of scientists from King’s

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College London, the University of Hong Kong, Simon Fraser University in Vancouver, and the University of British Columbia. The researchers wanted to know how much of the toxic exhaust fumes generated at street level—a major contributor to smog—waft up to high-rise balconies. Moreover, does distance from the street level translate to significant differences in health outcomes? To find out, they are designing a 3D model to map how pollution moves around in a city of skyscrapers. “Monitoring pollution in such environments can be quite

challenging,” Benjamin Barratt, a lecturer at King’s College, said in a statement. “Developments in miniature air sensors, coupled with rapid advancements in 2-D urban pollution modeling, mean that this ambitious project is now feasible. … City-scale three dimensional models have never been explored before in urban pollution monitoring.” Their two-and-half year research project is underway. Researchers are busy affixing air pollution sensors inside and outside Hong Kong buildings at varying heights. The next step will be to examine hospital records to see whether residents

living and working on upper levels of buildings show similar or lower levels of pollution-related ailments when compared to ground-level residents. “Hong Kong is an ideal urban laboratory for this research. It has very high canyons and very high population density,” said Barratt. “Pollution becomes trapped between the buildings and it is likely that this infiltrates into homes.” The researchers hope their findings may also be relevant for such dense, vertical urban environments as those of Manhattan, Tokyo, and Seoul.

Prices of homes in London’s most expensive areas are plummeting, sparking fears of a domino effect of house price falls across the United Kingdom. The latest data from website home. co.uk showed falls in six out of ten of the U.K.’s most expensive areas, all of which are in central London. Average sales prices fell by 8 percent in Belgravia over the 12 months ending September 2014. Over the same period, prices in Westminster dropped by 6.3 percent, in Soho by

5.7 percent, in South Kensington by 4 percent, in Chelsea by 3.5 percent and in Charing Cross by 2.7 percent. Tightening mortgage credit in the wake of the Mortgage Market Review as well as an increase in supply are among key factors in this price drop in the capital’s most expensive, and arguably most overheated, property markets, according to the website. House price inflation is now cooling across all of Greater London. Across the capital region, the average asking price fell by 0.1 percent

This latest trend in London’s property market follows a period of dramatic increases in house prices in the capital, fuelled by low interest rates and foreign property investment. Prime property was the first segment to recover following the credit crunch in 2007. A wave of soaring prices then moved out from prime central London as buyers refocused on less expensive areas. The average asking prices in London rose by 9.8 percent in the last six months. Over the last year, some parts of the capital saw price rises far above the average of 19 percent for Greater London. In Stratford, the average sales price of a twobedroom property soared by 44.9 percent in the 12 months ending September 2014, while in West Norwood the same property type saw a price rise of 44.2 percent over

the same period. Doug Shepherd, Director of Home. co.uk, said: “Overall, it’s been a simply staggering year for property prices in London. Some areas have far exceeded the 19 percent rise overall for Greater London, whilst others have underperformed relative to this figure. “The list of the top five locations revealed some jaw-dropping gains. Moreover, it is highly likely that many owner-occupiers in these locations earned less than their homes did over the course of the last year. “However, when prices rise at an unsustainable rate, boom can quickly turn to bust. Prime London prices are falling and the middle-income areas that have seen the biggest price hikes this year are likely to suffer the same fate.” This story was first published by www.propertyguru.com.sg and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

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/// International Property News

Off-the-Plan Apartment Values Plunge in Sydney and Melbourne Even more supply is coming on; 41,400 high-rise apartments were approved last year for Melbourne, a 30 per cent increase on 2012. That makes it even tougher for investors, many of whom use self-managed super funds to find tenants who pay rent and generate income to repay the mortgage.

Sydney, Australia

Apartment values in Melbourne and Sydney are falling by up to 20 per cent between purchasing off the plan and buyers receiving the keys, despite housing shortages and booming residential prices, according to analysis.

It takes between six and 10 years for the price to return to what was originally paid, according to industry experts. Mr Pabst said the negative equity appeared to be worst for two-bedroom apartments priced between $500,000 and $700,000.

Nearly 44 per cent of apartment purchases in the most populous cities are below the sale price at the time of completion, and units in mushrooming high-rises in major capital cities are the hardest hit, according to WBP Property Group, a company specialising in v aluations and property advice.

Many buyers want to lock in a price and can buy on a low initial outlay because the entire deposit – usually 10 per cent – does not need to be paid until the property has been built. Others are chasing the tax savings, such as reductions in stamp duty and claiming depreciation on investment properties. Prices are also hit by oversupply, which has an impact on resale prices, similar to values falling on new cars.

“It’s a tragedy,” said WBP chief executive Greville Pabst. “Some investors are losing their deposit because they can’t settle, or they have to make up the funding shortfall. Those considering these types of properties as investments should seek details on rental performance and history of capital growth.”

A huge increase in the construction of high-rise apartments is reshaping the capital city skylines, particularly in Melbourne, where new innercity precincts are being opened for development.

Property analysts have issued red alerts against buying apartments in Perth, Brisbane’s CBD and parts of Melbourne’s CBD. ACUTE PROBLEM According to the survey, off-the-plan apartments in Sydney, mainly around the CBD, are slipping by about 13 per cent between purchase and possession. The problem is most acute in Melbourne and Perth, where apartment construction is outpacing population growth, and the slowing manufacturing and mining sectors are reducing demand for labour and accommodation. In the Perth CBD, vacancy rates since March 2012 have increased from less than 1 per cent to more than 7 per cent, dropping average rents about 15 per cent. In Sydney, traditionally a mecca for migrants and property investors, the vacancy rate is about 2.5 per cent, which is expected to rise as new developments are c ompleted. “Buyers need

to do their research,” warns Louis Christopher, managing director of SQM Research.

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Philippine Island Sold for $2 Billion to US Buyer

Hong Kong emerged as the least affordable city

Fuga Island, Aparri, Cagayan

“It is notoriously difficult to choose, because in some cases these apartments can do very well.” In Melbourne, where 100-storey-plus skyscrapers are planned, the vacancy rate in Southbank is over 8 per cent and rising sharply. It is more than 5 per cent in Docklands and the CBD. Timing is important. Developer Mirvac reports apartments bought off-the-plan two years ago in projects in the Sydney suburbs of Chatswood, Rhodes and Glebe, are now finished and being resold at prices 10 per cent to 15 per cent above the original purchase. Morrell & Koren director Christopher Koren, a buyers’ advocate, former auctioneer and 30-year veteran of the property market, said: “It’s absolutely no surprise that if you keep building apartments, supply is going to exceed demand. It’s like the US government printing dollars – after a while they tend to lose value.. Anyone who buys off the plan is paying the developers’ 20 per cent to 40 per cent margin.”

UK House Prices Continue to Rise House prices in the United Kingdom increased by 11.7 percent in the year ending July 2014, up from 10.2% in the year to June 2014.

Excluding London and the South East, UK house prices increased by 7.9 percent in the 12 months to July 2014, the survey found.

The report from the Government’s National Statistics Office also reported that house price annual inflation was 12.0 percent in England, 7.4 percent in Wales, 7.6 percent in Scotland and 4.5 percent in Northern Ireland.

On a seasonally adjusted basis, average house prices increased by 1.6 percent between June and July 2014. In July 2014, prices paid by first-time buyers were 13.5 percent higher on average than in July 2013.

The survey found that house prices are increasing strongly across the U.K., with prices in London again showing the highest growth.

For owner-occupiers (existing owners), prices increased by 10.9 percent for the same period.

Annual house price increases in England were driven by an annual increase in London of 19.1 percent, and to a lesser extent increases in the South East (12.2 percent) and the East (10.6 percent).

All Asian Cities Fall Below Top 10 Among the 20 Global Cities Tracked

The new Generation Y Cost of Living Index, released as part of the inaugural Knight Frank Global Cities 2015 Report, assesses the affordability of the Global Cities for young professionals to live. Hong Kong emerged as the least affordable city whilst Frankfurt topped the Index. All the seven Global Cities in Asia Pacific fall below top 10 on the Index. The results of the report’s Cost of Living Index shows that young graduates based in Frankfurt have the most disposable income, with around 60% of their net salaries left at the end of every month, compared to 4.61% deficit for a Hong Kong graduate. Knight Frank has compiled the Cost of Living Index for young graduates in the districts surrounding the CBD, using variables including graduate starting salary, cost of rented accommodation and utility bills as well as the cost of a pint of beer, a coffee and groceries. The report analysed the cost of living in the emerging districts surrounding the world’s traditional central

business districts of the Global Cities such as the areas surrounding Square Mile in London or New York’s Downtown. James Roberts, Head of Commercial Research at Knight Frank, says, “Many of the new districts emerging around the traditional CBD’s have developed as vibrant and edgy places to live, and often appeal to young graduates starting out on their career. However, as the areas gain popularity, prices rise and often the young graduates struggle to remain in the area. “It can no longer be assumed that older employees want to move to the suburbs, instead they are joining younger workers in preferring a vibrant urban lifestyle so competition for homes in many of these edgier locations is hotting up. The challenge across many of these Global Cities will be balancing the conflicting demands of accommodating the new wave of firms, and their workers, in the same highly soughtafter districts.”

Generation Y Cost of Living Index (ranked by affordability) Global City

Rank

% of income remaining after expenses

Frankfurt

59.80%

Berlin

57.29%

Paris

47.85%

Mexico City

47.73%

Edinburgh

46.46%

Amsterdam

44.86%

Washington

44.27%

Madrid

41.14%

San Francisco

37.16%

New York

36.14%

Beijing

35.50%

Sydney

30.70%

London

27.97%

Tokyo

27.63%

Cape Town

15.37%

Singapore

9.91%

Bengaluru

1.07%

Shanghai

-0.36%

Warsaw

-2.88%

Hong Kong

-4.61%

An unidentified American buyer has spent US$2 billion for a 25-year lease on a private island in the northern Philippines, according to media reports. The mystery buyer is the latest addition to a list of famous owners of private islands, which includes Leonardo DiCaprio, Larry Ellison and Richard Branson. With a land area of 10,000ha, paradise island Fuga is dotted with white beaches and surrounded by turquoise blue waters. It is located in Aparri, Cagayan and is home to 1,786 people. Lamudi, a website used by property agents worldwide to advertise luxury properties, has noted a sharp spike in lettings and sales of private islands in the Philippines. “With its vibrant and buoyant real estate market, buying property is becoming more fun in the Philippines. Now the demand, especially from foreign clients, is spilling over to private islands and isles, which is not surprising as the country has over 7,100 to choose from,” said Jacqueline van den Ende, Managing Director of the site’s operations. This story was first published by www. propertyguru.com.sg and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

Source: Knight Frank Research / Newmark Grubb Knight Frank, Global Cities 2015 Report, Page 93

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/// International Property News

Unlicensed Estate Agent Sentenced to Heavy Fine

Almost Half of China’s Rich Want to Leave the Country

China’s Rich Still Prefer to Live in Singapore sector rose by 43 percent to US$594 billion over the same period.

But the report also found that 47 per cent of the firm’s wealthy Chinese customers said they planned on leaving the country permanently in the next five years. That was well ahead of rates seen in the U.S. and Japan, where six and seven per cent, respectively, said they were planning on leaving soon.

A report out from venerable British Bank Barclays saying almost half of its rich clientele plan on leaving the country in the next five years, more than millionaires from any other country.

High Court of Singapore

Jordan Goh Swee Thye (48 years old, Singaporean male), was convicted in Court for unlicensed estate agency work on 10 September 2014 and sentenced to a fine of $16,000, or in default six weeks imprisonment.

Jordan Goh had knowingly performed estate agency work even though he was not licensed with CEA. The consequences of Jordan Goh’s action were severe, including the re-possession of the HDB flat.

In an investigations by the Council for Estate Agencies (CEA) revealed that Jordan Goh had advertised a HDB flat in Block 92 Henderson Road for rental in the internet portal www.gumtree.com.sg. The flat was a HDB rental flat and HDB did not allow any sublet of the flat.

After investigation, Jordan Goh Swee Thye was charged by CEA in Court on 18 June 2014 and convicted and sentenced on 10 September 2014.

A subtenant saw Jordan Goh’s advertisement, contacted him and arranged to view the property. Jordan Goh conducted the viewing and assisted in the negotiation of the monthly rental amount between the main tenant and the subtenant, which was eventually agreed at $1,200 per month and a tenancy agreement was signed for one year from February 2012 till February 2013. Jordan Goh collected $600 commission each from the tenant and subtenant. Jordan Goh was aware that the flat was a HDB rental flat and he knew it was not supposed to be tenanted out. HDB took action against the main tenant and repossessed the flat in June 2012 after it was discovered that the flat was illegally sublet. As a result, the subtenant was unable to occupy the flat and he reported the matter to CEA. He was unable to recover the rental deposit from the main tenant and his commission from Jordan Goh.

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Consumers are advised to engage only estate agents and salespersons licensed/ registered. When consumers respond to advertisements in internet portals, they should check if the person posting the advertisement is licensed/registered or the owner of the property. Such persons are required to display their licence number and registration number in their advertisement. Where the licence and registration number is not displayed in the internet advertisement, such as in this case involving Goh, the consumer should exercise caution.

The investment bank published its annual review of its high-net worth individuals on Monday. It shows the world’s wealthiest are becoming more mobile and worldly than ever. More than 40 per cent of them have lived in more than one country — the first time since Barclays started keeping track that that’s been the case. More than a fifth of them have lived in at least three countries. China struggles with its wealth gap, “The wealthy are increasingly being motivated to move between countries in order to fulfill their international career aspirations, seize financial opportunities and ensure a better quality education for their children,” Barclays said in the report, which polls more than 2,000 of the bank’s customers around the world, each with a net worth of at least $1.5 million of investable assets. The report also finds that some cities — notably London, New York and Singapore — have become “wealth hotspots” to which the world’s rich are increasingly drawn but Canada remains the top destination. Canada is among the most desirable destinations for wealthy Chinese citizens, investment bank Barclays said.

A lot of investment seems to be coming from Asia, with 28 percent of wealth held by Asian UHNWIs in real estate, compared with just eight percent of wealth held by UHNW Europeans, and six percent of wealth held by North American UHNWIs.

“The reality is that most ultrahigh net worth individuals in China are probably making money in China right now. So, for business reasons, they need to be relatively close,” said Liam Bailey, head of research at real estate consultancy Knight Frank.

One city that has benefited from this property buying spree is London. “Much of what’s behind London’s property boom is mobile wealth, and most extremely wealthy people have a place in London that they may use for one month a year,” explained James Faulconbridge, Professor at Lancaster University.

“For business reasons, they need to be relatively close. That might prevent some of them going further afield,” he said. Canada is among the most desirable places they say they’d like to go. Among Chinese who were planning an exit, Canada was the second-most popular destination, favoured by 23 per cent of people. That figure was just behind the 30 per cent who said they planned to go to Hong Kong, and just ahead of the 21 per cent who said they planned to go live in the U.S. Other regions with a disproportionately high percentage of rich people planning to leave include Latin America (where more than a third say they plan on leaving) and Qatar and the United Arab Emirates, where between a quarter and a third of people say they’re going to get out. Generally speaking, cities in North America and Europe are a top destination choice for the world’s wealthiest — especially English-speaking locations like the U.S., Canada, New Zealand, Australia, the UK, and then Singapore and Hong Kong. “Whether the attraction is to do with the legal system, the English language or high quality professional services, the English-speaking world still dominates these patterns,” Bailey said.

Singapore First Link Toll Charges for Inbound Vehicles From Oct 1

“So it’s a means for them to deploy their wealth and use it as an investment, as well as a functional tool,” he added. Orchard Road, Singapore

A growing number of the world’s super-rich are choosing to live in more than one country, with many of them parking their substantial wealth in overseas real estate, according to new findings from the Barclays Wealth Insights report, which looked at where the wealthy prefer to live, work, invest and retire. Around 43 percent of high net worth individuals (HNWIs) have lived in more than one country, revealed the report, adding that they prefer to reside in a small number of destinations. “At the top of the tree when people look for second homes or citizenship, it tends to be the US, Canada, New Zealand, Australia, the UK, and then Singapore and Hong Kong,” said Liam Bailey, Head of Residential Research, Knight Frank.

Specifically, Singapore has emerged as one of the top destinations for Chinese HNWIs, due to the ease of doing business in the citystate. Bailey added: “The reality is that more UHNWIs in China are probably making money in China right now. So, for business reasons, they need to be relatively close – that might prevent some of them going further afield.” The report also noted that many global UHNWIs are putting their faith in property, as they believe it offers more security and better gains. Recent analysis by Savills showed that between 2008 and 2012, the amount of global private wealth invested in the large-deal (above US$10m) real estate market increased by 111 percent to US$308 billion from US$146 billion, while corporate investment in this

Barclays shared that policy changes in markets such as Hong Kong and Singapore, where new taxes have been imposed on second and third properties, are driving individuals to buy homes abroad. “As a consequence, investors are looking to divert this investment into real estate assets in other markets, like London and New York,” said Didier von Daeniken, Head of Wealth Management for Asia Pacific, Middle East and Africa, Barclays. The Barclays report surveyed more than 2,000 HNWIs worldwide, all of whom have more than US$1.5 million in total net worth. This story was first published by www.propertyguru.com. my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

Singapore will start imposing new toll charges for all vehicles, except motorcycles, leaving the republic through the Causeway beginning Oct 1. The new charges will be increased to match the new Malaysian toll.

For foreign-registered cars, Singapore’s Causeway entry toll (entering Singapore from Johor) will be recorded in the LTA’s toll system and displayed to motorists upon entry into Singapore.

A new matching Causeway toll will also be implemented for all vehicles (except motorcycles) entering Singapore.

Payment will be deducted only upon leaving Singapore (whether through the Causeway or Second Link), together with the exit toll, Vehicle Entry Permit (VEP) fee and Electronic Road Pricing (ERP) charges (if any).

There are no changes to the toll charges at the Second Link.

This will be the same as the existing practice for the Second Link entry toll.

In a statement today, the Singapore Land Transport Authority (LTA) said the new rates were in tandem with the republic’s long-standing policy of matching toll charges at the Causeway and Second Link to those set by Malaysia.

For all other vehicles that do not pay VEP fees, i.e. all Singapore-registered vehicles and foreign-registered goods vehicles, buses and taxis, they will pay their Causeway entry toll upon entry into Singapore and their exit toll upon leaving Singapore.

“In view of Malaysia’s recent revision in toll charges at the Causeway, from 1 October 2014, Singapore’s toll charges for all vehicles (except motorcycles) leaving Singapore through the Causeway will be increased to match the new Malaysian toll.

This will again be the same as the existing practice for the Second Link tolls. The LTA statement noted that Singapore will follow suit should Malaysia reduce or do away with the toll charges.

“A new matching Causeway toll will also be implemented for all vehicles (except motorcycles) entering Singapore. There are no changes to the toll charges at the Second Link,” the statement read.

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52  53 |

Contributor

/// Banking and Investment News

$₤ € BANKING & $ INVESTMENT

The Young Find It Difficult to Afford a Home 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.

NEWS

The banking and investment industry has a crucial role to play when it comes to property. Read about the most recent news and trends in this trade

National House Buyers Association (HBA) Honorary Secretary-General Chang Kim Loong

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.

Your Financial Health Too Needs Annual Screening on your age and financial commitments,save up at least three to six months’ worth of regular expenses.

Identifythe “latte factor” in your cash flow. Eliminate the little expenses you do not need, e.g. unused gym membership will increase your ability to save.

Next, do a “Chest X-Ray”. Your liquid assets together with life and critical illness insurance benefits should cater for at least a minimum of three years of your family living expenses in case of unfortunate events. Ensure that you have sufficient hospitalisation coverage to protect yourself and family against hefty medical expenses.

Debt Management: Cholesterol Level

Estate Planning: Liver Function

Debt-to-Income ratio is one way to checkon the “cholesterol level” of your financial health. Your monthly debt obligation should not be more than 30%of your income. Always avoid having “bad cholesterol”, i.e. bad debts that are costly and not productive, e.g. credit card debts.

Last but not least, check your “Liver Function”. Upon death event, all assets are “frozen” until the grant of probate is obtained, which may take months.

Cash Flow Management: Blood Count

Annual medical health screening is important to pre-empt potential health issues before they happen or become life threatening. Likewise, financial health screening is also as important to check on the health of our finances so that our life goals are well supported financially. Let’s examine the key tests in our financial health screening.

The Piggy Bank: Heart Scan Start with a “heart scan” to gauge how much fund is available to take care of unforeseen events such as job loss and medical emergency. Depending

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Risk Exposure and Management: Chest X-ray

Wealth Creation: Blood Pressure Do you save for your short and long-term life goals, e.g. marriage or retirement? What isthe “blood pressure” of your savings? It should be kept in portfolios which grow in order to generate a weighted-average return that is aligned with your life goals and corresponding inflation rate.

Effective estate planning ensures that our dependants have sufficient liquidity to fund for their living expenses until your assets are transferred to them. Your financial planner should be able to conduct a comprehensive financial health screening for you. Do this as soon as you can. Health is wealth. The writer can be contacted at info@successconcepts.biz

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. “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

“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.” MyFP Services Sdn Bhd’s Managing Director, Robert Foo notes that it is difficult for young adults to buy a house these days, unless their parents “chip in”.

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. “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.” Siva Shanker, President of Malaysian Institute of Estate Agents (MIEA) 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.

BLEAK HOUSE

“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.

National House Buyers Association’s (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 everrising property prices coupled with the rising cost of living.

“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 RM1.6 million. How can the price jump 100% in just five years?”

“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.

Siva says this is a classic case of “unnatural growth fuelled by unnatural demand”.

“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 mindnumbing daily commutes.”

A CHANGE IN STRATEGY

“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.”

“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 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.”

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.

“Greed has pushed the market up to unreasonable levels,” he says.

Siva believes that today’s young adults, especially the Gen-Y group of individuals, need to “re-strategise” and “change their psyche”.

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/// Banking and Investment News

Malaysia an Ideal Retirement Location, Says MM2H Agent

Everything You Should Know About CTOS experiences with their customers. Information here is only open to the subscriber’s own personnel. No other subscribers have access to this information Section C – Directorships and Business Interests • Record a subject’s directorships and shareholdings in Malaysian incorporated companies and businesses. • Banks use this section to help verify the true nature of a subject’s ostensible income, especially for company shareholders and business owners.

The number of participants approved under the Malaysia My Second Home (MM2H) programme has been increasing annually since 2010, reaching a total of 26,063 as of July 2014. According to a MM2H agency, Aubella (MM2H) Sdn Bhd, a total of 24,105 participants were approved from 2002 until 2013, including 3,675 last year alone. Aubella general manager Vincent Fong said Malaysia makes an ideal retirement location with good healthcare in place and low cost of living. Housing prices in Malaysia are the lowest among Southeast Asian countries, and besides the low fuel prices, government subsidies on controlled goods, fresh air, nice food and low medical fees, there are no natural disasters, he said. The MM2H agency signed a joint venture agreement with Rainbow Credit Union, Hong Kong yesterday to offer a new retirement soulution and property investment in Cyberjaya. “We believe that retirement should be sustainable and stress-free. “This joint venture is a sign of us constantly innovating our business model to meet the market needs. “This is a step forward in MM2H offerings from Malaysia,” he said in a statement. Aubella also signed a memorandum of understanding with the Malaysia Healthcare Travel

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Council (MHTC) to unveil this new package to retirement investors. The development offers investors and retirees a 10-year social visit visa as well as a unit of freehold property in Cyberjaya at an affordable RM500,000 (US$168,000) for a fixed period of five years. Named ‘Roppongi @ Cyberjaya’ after a district in Tokyo, the concept integrates work, dining, shopping, entertainment and education all within a high-density, high-intensity yet green urban environment. Meanwhile, BND Global Development Sdn Bhd Chief Technology Officer Seow Gim Shen, the project developer’s representative, said an existing medical university, Cyberjaya University College of Medical Sciences (CUCMS), will relocate to the development site. “We will have a senior living facility supported by a medical and sports science centre and a technology hub supported by Hyirox, details of which will be announced in due time,” Seow said.

What is CTOS?

CTOS is a lead information system widely used by the majority of the country’s Financial Institutions, Commercial Companies & Businesses, Legal Firms and other institutions. Unlike CCRIS, which is under Bank Negara Malaysia (BNM), CTOS is owned and managed by a Malaysian company, in business for over 20 years, collating information on Individuals and Companies from various sources found in the public domain. The information is formatted into an electronic database which provides for an easy, quick and efficient checking process for loan applications, trade and business credits and for decision making by credit grantors and lenders. The sources of CTOS information include amongst others: • •

• • • • • •

Legal notices in Newspapers Searches at the Companies Commission of Malaysia (CCM) or Suruhanjaya Syarikat Malaysia (SSM) Government Gazettes & Publications Searches at the Malaysia Department of Insolvency (MDI) or Jabatan Insolvensi Malaysia National Registration Department (NRD) or Jabatan Pendaftaran Negara (JPN) Searches at the Registrar of Societies (ROS) Contact information provided by creditors / litigators / trade referees Information voluntarily provided by subjects themselves

•

Only CTOS subscribers can access the CTOS Information Database.

What CTOS is Not?

CTOS is not a blacklist. It does not provide opinions, ratings, rankings or recommendations on an Individual’s or Company’s credit worthiness. All lending policies, loan approvals and decision making are determined by the lenders or credit grantors themselves, not CTOS. Another misconception about CTOS is that it does not update its records. It is important to note, CTOS is like an electronic library of historical information captured from publicly available sources and archive as such. Updates are carried out by CTOS whenever it captures case settlements from parties involved namely the plaintiff, defendants, their lawyers or new information from related source documents.

•

own information not CTOS. Therefore, communication of the trade reference is done directly via email between the trade referee and the inquirer. Subject’s Comments – This is a facility provided by CTOS to allow parties involved in a case to present their “side of the story”. Comments should be objective and confined only to the case.

How long are the records kept?

Unlike CCRIS where records are kept only for 12 months, CTOS records are kept indefinitely as an historical archive of one’s history and experiences.

Because of how CTOS operates, if you have had legal actions taken against you, it becomes your responsibility to provide updates to them, especially if the outcomes are in your favour. This can be done by contacting CTOS service centre.

I have been a victim of identity theft, which has resulted in many unjustified lawsuits against me. The cases have not been resolved. What can I do?

If you are able to provide proof of fraud (eg. police reports, letters of support from relevant banks/lawyers/ litigators), CTOS will remove the relevant records from their system after verification.

Section D – Legal Actions Against • Record the legal information. It helps one to have a better insight and understanding on a subject’s background, history and business experience. • Banks use this section to look out for bankruptcy information, legal actions, and case statuses.

Will CTOS update the information in their database? Yes, the CTOS database is updated with new information collated from the various sources on a daily basis. Information contained in Section C is periodically updated to reflect the latest directorship and shareholdings of the subject at that point in time.

You may also provide subjective comments in defence of yourself to be added to your CTOS file. This ensures that all enquirers to your CTOS file will see your explanations. These will appear in Section E of your file.

Section E – Trade Referees and Subject Comments • Trade Referees – Listed here is the name of Trade Referees. They are CTOS subscribers who may want to share their business experiences known as “Trade References” on subjects and their companies or businesses that they have dealt with. The trade references are the subscribers’

Information in Section D – As a rule, in this section, information is never deleted except in cases of (1) Fraud OR (2) Mistake. The relevant supporting documents must be provided to CTOS for their checks and verification before a deletion can take place.

I was discharged as a bankrupt / paid off my creditors 6 months ago and have updated CTOS regarding my case? Why do banks still reject my loan applications, citing “CTOS issue”?

I have settled a legal action against me / been discharged of Bankruptcy. But banks still

Most likely, the issue is not with CTOS not updating your records, but with the bank’s internal credit approval policies.

Most banks have internal policies that are not friendly to past delinquents. The more time that has passed between your last delinquency versus your loan application, the higher the chance of approval. A general rule is to have at least 1-2 years in between.

I do not owe any banks any money. And to my knowledge, I have never been sued. How can it be that I have “CTOS issues”? Subscribers to CTOS are able to provide their contact details as “Trade Referees” for a subject. This appears in Section E of the CTOS report. As explained above, trade referees may want to share their business experiences known as “trade references”. It is likely the trade referee could have dealings with you and/or your company or business. Telco and utility companies have been known to put themselves as trade referees for subjects who have long-standing uncollectible debts with them, even for small amounts. In such instances, it’s advisable for you to contact the CTOS Service Centre to conduct a CTOS Self Check Report. From the report, you will know whether such is the case.

Malaysia Ranked Second Most Attractive Market for Infrastructure population growth rate of 1.4 per cent, investment in new infrastructure will be imperative.

What categories of information does a CTOS Report contain?

“Combined with its goal of achieving high-income nation status by 2020, plans are already underway for specific cities and urban clusters under Greater Kuala Lumpur/Klang Valley to be developed into vibrant, productive and livable cities that are comparable to other major cities in the world,” he said in a statement recently.

A CTOS report is split into 5 sections containing different categories of information: Section A – Identity Verification • Helps to identify and verify the subject’s by Identity Number, Full Name, Company or Business Registration Number. This section helps to detect and prevent fraud and identity theft. Section B – Internal List / Group Exposure • This is for the subscriber’s own information and reference. It relates to their own business

reject my loan applications, citing “CTOS issue”. What can I do?

Malaysia has been ranked second among 41 countries as the most attractive market for investment in infrastructure, according to the Arcadis Global Infrastructure Investment Index.

Arcadis head of Infrastructure, Asia, Richard Warburton said infrastructure is the backbone of a country and a catalyst for its longterm economic development. “With Malaysia’s annual average

As revealed by local media, Malaysia was the only Asian country after Singapore to clinch a top 10 spot in the global ranking, with Malaysia ranked seventh, ahead of the USA, Australia and the United Kingdom.

“A key differential that we have seen in Asian markets like Malaysia and Singapore is that they have clear integrated strategies that tie the infrastructure development plans to business and economic objectives,” he said. The 10th Malaysia Plan sets the stage for a major structural transformation that a high-income economy requires which gives long-term clarity to investors, Warburton added. This story was first published by www.propertyguru.com.my and is reproduced as part of an editorial partnership between Property Hunter and PropertyGuru Group.

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/// Banking and Investment News

Has Home Ownership Dream Become More Attainable?

Everything You Should Know About CCRIS applications you made, the more “desperate” you seem to banks.

needs of all income groups. Can the people expect some effective measures to be proposed in the coming budget to address this?

Any tips to improve my CCRIS record to improve my chances of successfully applying for a loan? 1.

If you have high credit utilization, pay down some your credit lines before submitting a loan application.

Your CCRIS information is updated on the 15th of every month e.g. information for Jan 2013 will only be updated on 15 Feb 2013. So if you have paid down your credit lines anytime from 1-31 Jan, time your loan application submissions on the 16th of Feb

A consistent string of 1’s in your repayment behaviour could indicate payment due dates that are earlier than your pay day. Try to get your bank to delay the billing cycle.

What is CCRIS? CCRIS stands for Central Credit Reference Information System. It is a system created by Bank Negara Malaysia (BNM) which synthesizes credit information about a borrower or potential borrowers into standardized credit reports. The information is available to financial institutions (Banks) and the individuals (or company directors) themselves upon request. Individual banks’ systems are typically already tightly integrated to the CCRIS system and automatically extract an individual’s / entity’s credit report during the credit approval process. Every participating financial institution (Includes all licensed commercial banks, Islamic banks, investment banks, development banks, some of insurance companies, payment instrument issuers and rehabilitation institutions) is required to submit their customer’s credit conduct to this centralised system.

What CCRIS is Not? A black list.

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What categories of information does a CCRIS Report contain? There are 3 major categories of information: 1.

Outstanding loans - Housing loans, hire purchase, credit cards, personal loans, overdraft etc. - Includes information on Outstanding Amount, Limits, Payment Behavior, and Legal Status if any.

Special Attention Accounts Usually accounts deemed Non-Performing Loan (NPL), or under special debt management schedules such as those negotiated by AKPK

F is the repayment behaviour. The number indicates the number of missed payments. (In the example CCRIS report, the ‘1’ means there was 1 missed payment in the month of July 2012)

How long are the records kept? CCRIS shows repayment records of the last 12 months only, after which the oldest data is expunged.

What do banks typically look out for that give a bad impression? 1.

A, B and C are the categories of information explained above D is the total outstanding amount E is the total limit, or the original loan amount

Accounts under legal status (legal action being taken) or special attention accounts.

Missed or late repayments.

Utilization of credit limits e.g. A high utilization of Credit Card or Overdraft limits is an indicator of poor finances.

Loan or credit facility applications made in the past 1 year

How many were approved / rejected?

If you have known late payment records, wait 12 months from your last known late payment record before submitting a loan application Limit your amount of loan and credit applications. If shopping around, shop around first, then selectively apply for the best products. Make use of Malaysia’s most accurate loan comparison tool for this purpose. Contrary to popular practice, too many loan/credit applications actually hurt your chances of getting the best deals. It hurts your credit score if you don’t have any visible credit history (no loans / credit cards / overdraft facilities). In most cases, banks would not offer full margin of finance where a person’s credit profile is blank. Have at least 1 active credit facility and pay on time.

Impending Good And Services Tax (Gst)

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 RM1 billion 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 RM300 million. 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.

High Debt Servicing Ratio (DSR). This is done via comparing your income documents against the total outstanding credit.

As Malaysia is blessed with abundant land, hopefully we will see more land and fund allocated for affordable housing in Budget 2015.

Multiple active loan or credit applications. The more you

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

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.

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 RM1.5 million in value, the portion in excess of RM1.5 million 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. Written by Yee Wing Peng, Country Tax Leader of Deloitte Malaysia.

From 23 February 2013, Hong Kong, while doubling its stamp duty on properties to 8.5%, has provided

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Thumbs Up for Budget 2015 From Public Bank

Mixed Developments Poised to Gain From Budget 2015 properties worth RM400,000 and below as lobbied by Real Estate and Housing Developers’ Association (REHDA). “The floor price of properties accessible to foreigners could also potentially be raised and providing cheaper funding for first-time buyers,” Annuar said. In the meantime, MIDF Research does not expect another round of hike in Real Property Gains Tax (RPGT) in Budget 2015. The research firm recalled that the government had introduced various cooling measures for the property sector in the past few years.

Public Bank welcomes measures taken under Budget 2015, believing it to be pragmatic and all-encompassing as reflected by the various significant strategies and initiatives to further strengthen the fundamentals for sustaining longer-term economic growth, reinforcing a firm stance on fiscal reforms over time, optimising the allocation of the government’s resources, and further enhancing the various aspects of the wellbeing of the rakyat. “We support the various measures in Budget 2015 to accelerate Malaysia’s economic growth through domestic and foreign investments, and in particular in enhancing the contribution of the services sector to the economy,” says Tan Sri Dr Teh Hong Piow, founder and chairman of Public Bank. “These comprehensive measures are well formulated to provide impetus and linkages within the economy ecosystem to achieve higher impact towards a sustainable economic growth path. We further noted the favourable increase in the development expenditure of about 15 per cent in the Budget 2015 as compared to the year before. “We welcome the refinements made to the implementation of the Goods and Services Tax (GST) in 2015, as well as the Government’s commitment to implement further subsidy rationalisation.” Teh also said the refinements – which include the wider scope of items not to be subjected to GST, and the restructuring and the reduction in the individual income tax rates – should reduce the impact of the GST implementation on the rakyat at large.

Mah Sing’s Icon City

Property players with mixed development projects under their belt are poised to benefit from housing measures slated to be announced during Budget 2015. The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said amongst the key beneficiaries would be companies with good mix of medium to low-end pricing properties such as Mah Sing Group Bhd, IJM Land Bhd and LBS Bina Group Bhd. To a lesser extent, the research firm said UEM Sunrise Bhd could also benefit from their product mix and landbank sale . On the flip side, companies with sizable exposure to high-end properties such as Eastern & Oriental Bhd, S P Setia Bhd and Sunway Bhd could face some setbacks. Thus, the research firm has a mixed view on the property sector currently as the Goods and Services Tax (GST) imposition next year could dampen consumer sentiments in the near term. Following the rationalisation in petrol subsidy recently and the imposition of GST next year, the research firm expects measures more focused towards affordable housing in Budget 2015. MIDF Research analyst Annuar Rahman anticipated some of the measures introduced a few years before to make a comeback. “(Those include) for instance full loan facility under Skim Rumah Pertamaku or extended of 50 per cent exemption in stamp duty for first time buyers of houses worth RM400,000 and below and broadened.

It noted the RPGT was re-introduced in 2010 at a rate of five per cent against the zero to 30 per cent under the RPGT Act 1976. Subsequently, the research firm observed the RPGT rate has been broadened and increased to limit speculative property purchases – one of the key factors in driving up property prices while various affordable housing schemes were introduced to benefit the middle income segment. “To some extent, we believe those measures have been effective as property transaction declined 10.9 per cent in 2013 while transaction value grew by 6.7 per cent to RM152.37 billion according to the Valuation and Property Services Department Property Market Report for 2013. “While the impact from the hike in RPGT rates tabled during Budget 2014 is still inconclusive, initial signs have started to show with some of the property developers holding back launches in the first half of 2014 (1H14) and cutting back revenue target for financial year 2014 (FY14). “Notwithstanding, the latest House Price Index (HPI) reading for the first quarter of 2014 (1Q14) period saw a gain of 9.6 per cent year-on-year (y-o-y) growth,” Annuar noted. Hence, given the focus on affordable housing in Budget 2015, MIDF Research expects small to medium market capitalisation companies to be among the beneficiaries for the property sector. The research firm explained that the rationale is due to their product mix of medium to-low pricing properties which is largely seen as favourable to sustain healthy demand admist rising house prices and slower take up rates.

“(Likewise), measures such as better incentive to encourage private developer participation to build low to medium cost properties and more units of 1Malaysia People Housing Programme (PR1MA) and People’s Housing Program (PPR) to be built in 2015. “We also expect further relieve targeted at first-home buyers such as zero-rated GST for

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Property Prices in Malaysia: Can You Afford Them? RM45,922 on hand and being left with RM2,039.23 for the rest of the month after paying off her monthly loan obligation. What this means is that by and large; a person earning can RM4,000 can actually purchase an RM300,000 property... if they are able to foot the down-payment!

IS RM300,000 A REALISTIC PROPERTY PRICE POINT?

As many Malaysians bemoan the prices of property and the demand for affordable homes grow: we look to find out just how high the prices are and how much it will take for you to own your home. Can you afford a house? Are you planning to buy your first bachelor pad or a home for your family? We didn’t mean to throw cold water on your property dreams but you might want to think about whether you really can afford it. For the past few of years, property prices have bloated beyond high. In the first quarter of 2014 alone, prices increased by a staggering 8%.With such numbers, we like everyone else, wondered if we could truly afford to buy a house. Millennials (those who are born in the year 1980’s to 2000s) are now known as “homeless generation” because stagnant wages and sky-rocketing property prices render it almost impossible for them to afford a down payment much less qualify for a home loan. Although last year Malaysians were promised measures that would eradicate the problem; one year on and a day away from the new budget; the situation appears unresolved as property flippers and speculators continue to buy out cheaper new developments the minute they go on sale. But even if you could find a lower priced property could you really afford it? RinggitPlus.com did some number crunching.

THE FIRST TIME BUYER CASE STUDY At 30 years old, Irene has an RM4,000 take home salary. She has been hunting for a new home. She prefers to live within the vicinity of Kuala Lumpur so it would be convenient for her to go to work. After browsing a few properties recommended by an agent, she is deciding between two options: a low cost flat and a middle range condominium. Flat A costs RM130,000 whereas Condominium B costs RM340,000. Discounting other loan obligations, we sought to calculate which would be a better option in terms of affordability.

FLAT A Downpayment Legal fees MOT* Stamp duty Valuation report fees

: RM13,000 : RM1,300 : RM1,600 : RM700

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Loan Agreement and Stamping fees

: RM1,950

Total initial payment

: RM18, 550

Monthly loan repayment (at interest of 4.65% 20 years tenure) : RM749.41 Affordability

: RM4,000-RM749.41 = RM3250.59

CONDOMINIUM B Downpayment Legal fees MOT Stamp duty Valuation report fees Loan Agreement and Stamping fees

: RM34,000 : RM2,830 : RM5,800 : RM700

Total Initial Payment

: RM45,922

: RM2,592

Monthly loan repayment at interest 4.65% with 20 years tenure : RM1,960.77 Affordability

: RM4000-RM1960.77 = RM2039.23

Based on the example above, regardless whether Flat A (low cost flat) or Condominium B (a middlerange) is chosen, Irene will need to have enough cash on hand to pay the initial down-payment and miscellaneous fees. MRTA/ MLTA is not included in the calculation as it is optional coverage. However, a larger number of homeowners choose to take it rather than forego it. For those of you who didn’t know, MRTA/ MLTA are two types of mortgage insurance policies which provide protection on your loan sum should you pass on. This means that should you pass away before completing loan payments; the insurance will cover the remaining amount for you as per the terms of the policy. The premium payable varies and it is possible to include the sum into your loan amount should you find you don’t have the extra cash to pay for it (this is of course subject to loan approval based on available income). Looking at the figures above, if Irene chooses flat A, she will have an additional RM3,250 to spent on household expenses. On the flipside; choosing condo B means having a down-payment of

As compared to 10 years ago, you wouldn’t get a middle-range terrace in the Klang Valley for less than RM200,000 today. But what if you were willing to live elsewhere in the country? After all, prices do vary and a middle range terrace in Penang would be double the price of one Kedah, for example. In order to get somewhat of an idea about prices around Malaysia; we took 6 states and three types of property to compare.

CAN YOU AFFORD TO BUY A HOUSE? Research showed us that there are still some properties one can buy without the RM10,000 salary but the place may not be as strategically located nor the house itself as aesthetically pleasing (meaning nice looking!) as some might like. But if we’re asking the simplistic question, “Can you afford a house?” The real answer is actually very subjective and dependent on many other factors like the availability of a down-payment and number of dependents. Someone in Irene’s position could easily afford the mid-range condo but the same wouldn’t be said if say, she had 2 children to single-handedly feed and care for. What cannot be denied is that even if people are able to afford the payments on paper - it’s evident that inflation and the reduced spending power of Malaysians due to inflation and subsidy cuts will have a serious impact on if you are able to continuously meet your loan payments. And the most important question in the test of home ownership affordability should essentially be “can YOU; considering your financial responsibilities and income; meet all payments thereonafter?

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APARTMENT FOR SALE

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

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TERRACE FOR SALE

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

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Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

/// Property Listing

SEMI-D FOR SALE

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

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Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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CONDOMINIUM FOR SALE

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

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RESIDENTIAL LAND FOR SALE

Extracted from PropertyHunter.com.my

AGRICULTURAL LAND FOR SALE

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my