Property Hunter Magazine Issue 62 by Victor

COVER STORY

The Robertson Everything Revolves Around You HOT TOPIC

PROPERTY MARKET OUTLOOK 2015 Gloom, Boom and Doom by Charles Tan Retirement Homes And The Malaysian Culture by Dr. Daniele Gambero Mortgage Financing 2015 by Michael Yeoh Projection For Property Market 2015 by Christ Tan

JAN

2015

ISSUE 62 RM8.90

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Property Hunter Present Three Agencies With Top Agent Award How Does Gst Affect Ordinary People Property Market To Boost Up In 2016 Four Question To Ask Before Buying Property Habitat For Humanity Commerates 10Th Anniversary

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CO N TE N T ISSUE 62 10

Cover Story The Robertson: Everything Revolves Around You

Feature Property Showcase Tee Land

Feature Property Showcase The Gardens

Feature Property Event Newfields

Feature Property Event Homesign

Feature Property Event PH Annual Dinner 2014

Hot Topic Property Market Outlook 2015

Contributor: Chris Tan Projection For Property Market 2015

Contributor: Charles Tan Property 2015: Gloom, Boom and Doom

Contributor: Michael Yeoh Mortgage Financing 2015

10 18 Sneak Peek of February 2015 Issue 22

HOT TOPIC Investing in Student Accommodation We look at the most popular education cities in Malaysia and overseas where investment in student accommodation is trending.

Contributor: Dr. Daniele Gambero Ageing Malaysia Retirement Homes And The Malaysian Culture Coffee Talk: kopiandproperty.com • Guaranteed Rental Return Buying Whole Block 85% Tenanted • Buying A Property Four Questions To Answer • Descriptive Or Deceptive Words Used? • Spending More Than Earning First Half Of 2014 • Selling Condos Of Rm 500,000 Or Higher With One Desk And Two Plastic Chairs • Malaysian Homes Are More Expensive Than Perth? I Agree

Australia Property Market Outlook Australia has remainded one of the top overseas destinations for Malaysian property investors. Find out where to put your money in Australian properties this year

The Sabahan Migration and Education Destination A brief study on the pattern of student migration overseas and the top cities they are heading to.

Sabah Property News

44 52 56 62 66 70 81

Sarawak Property News West Malaysia Property News International Property News Banking and Investment News Sabah Property Listing Sarawak Property Listing

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COVER STORY | The Robertson

Everything Revolves Around You A new era has begun in the heart of Kuala Lumpur where all your lifestyle expectations are fulfilled. Centrally located within a thriving hub of new mega developments, The Robertson will indulge you with the finest in living, dining, shopping and entertainment.

The Robertson in the heart of KL City Centre.

Actual show unit â&#x20AC;&#x201C; Living room Scan For EXTRA Content

eralding a new standard of city living is The Robertson, a coveted address for those in pursuit of the finest things in life. The Robertson is a mixed development with residential suites, 3-storey shop lots and commercial retail mall spread across 3 acres of prime land in the heart of Kuala Lumpur. The imposing towers of The Robertson will be a mark of class and distinction for discerning clients looking for a prestigious address and a world-class lifestyle. The transformation of Jalan Pudu has brought about a perceptive change to the area surrounding The Robertson. With the refurbishment of Pudu Sentral, new hotels are mushrooming along this stretch of road and in the pipeline are new mega developments that will change the future landscape and lives of those living within the vicinity. Located on the site of former Pudu Jail will be the redevelopment of Bukit Bintang City Centre consisting of residential towers, a one-million square feet retail mall, and entertainment and transit hub with an 88-storey signature tower. Vying for air space will be the 118-storey Warisan Merdeka, a residential, hotel and commercial property that will rival the iconic Petronas Twin Tower in both height and stature.

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The Tun Razak Exchange is also designed to create one of the most livable financial districts in Asia with Grade A office space, and world-class residential and leisure offerings that will incorporate digital connectivity and enhanced environmental management systems. The Robertson is ideally located within close proximity of these mega projects in a transforming neighbourhood designed for the future where ultra-modern and chic conveniences pave the way for an unparalleled standard of living.

THE ROBERTSON

Wrapped by a glittering facade, the interior of The Robertson is the epitome of sophistication and quality where every aspect of its design has been meticulously thought out to provide a new benchmark in lifestyle living. Residents are greeted with a sense of spaciousness and exclusivity as hallways lead to elegantly designed units and cabanas. There are 375 units in the North Tower and 418 units in the South Tower with sizes ranging from 527 sf to 807 sf for a typical unit and 1,162 sf to 1,227 sf for a cabana

01 01 unit. The interior of each unit is inspired by modern minimalist design to create a space that is functional yet stylishly furnished to meet even the most discerning taste. The Robertson is also well connected to the pulse of Kuala Lumpur city with its close proximity to a network of public transportation services such as the MRT, LRT, monorail and the proposed High Speed Rail (HSR). A link bridge is also in the works to connect The Robertson wholesale retail mall to the proposed covered walkway leading to the Bukit Bintang area, thus providing even more connectivity to the central shopping district of Kuala Lumpur. Excellent infrastructure development around The Robertson has placed it within walking distance of central business and entertainment hubs while still maintaining the relaxed and tranquil ambience of home within.

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COVER STORY | The Robertson

The Robertson is located within easy access to trendy shopping centres such as Pavilion KL, Sungei Wang Plaza, Lot 10, Starhill Gallery, Fahrenheit 88, Berjaya Times Square, Low Yat Plaza & Suria KLCC. Tourist attractions abound with award-winning restaurants offering palate-tempting cuisine, luxury 5-star international hotels, street food at Jalan Alor, visits to KL Tower and various walking tours to explore the historic landmarks of Kuala Lumpur. For night owls at The Robertson, the nightlife in the city will charm you with its vibrant night spots and buzzing cafĂŠ culture. Parks and green spaces nearby create an oasis of calm to rejuvenate the mind from the hectic buzz of city life. Within a few kilometres are the Bukit Nanas Forest Reserve, Taman Tasik Perdana Lake Gardens, The Royal Selangor Gold Club and KLCC Park. Gamuda Land has taken its environmental commitment to a new level by attaining the GBI Gold certification for The Robertson. Acquiring GBI Provisional Gold certification, which is more common for commercial and office buildings, is a monumental task. Various features have to be incorporated into the building infrastructure such as rainwater harvesting,

architectural design to maximize natural lighting and ventilation, and disposal facilities for recyclable items. Being one of the first residences to attain this environmental certification is acknowledgement of the significant responsibility Gamuda Land places in protecting the environment. The Robertson is a perfect example of how to integrate eco-friendly building practices while delivering on a promise of luxury accommodation that fulfils the highest expectations of its residents.

LUXURY INDULGENCE

Perfectly framed against the city skyline is the magnificent free-form dip pool fringed by meandering pathways and lush trees on the rooftop. Other facilities include Jacuzzi, Sky Garden and Sky Lounge. On the Podium Level, recreational and entertainment facilities include infinity lap pool, wading pool, childrenâ&#x20AC;&#x2122;s playground, reflexology path, gymnasium, BBQ deck, putting green, pool lounge, table tennis room, snooker room, reading room, dance & yoga studio, chess garden, entertainment room, and function room.

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The pace of life at The Robertson is gentle and refined, safeguarded with superior security features and 24-hour CCTV surveillance for your peace of mind.

GAMUDA LAND

Established in 1995, Gamuda Land is the property development arm of Gamuda Berhad, and has over the years attained recognition as a farsighted developer that builds not just homes, but a living experience beyond mere roofs. Synonymous with holistic lifestyle developments, Gamuda Land places incredible emphasis on superior infrastructure to ensure that each and every project represents the true values of Gamuda Land. With the goal to design unrivalled living environments, Gamuda Land undergoes stringent workmanship assessments to benchmark its homes against the highest standards in structural integrity and craftsmanship. By adopting the strict Construction Quality Assessment System (CONQUAS), Gamuda Land ensures that all it delivers is of absolute excellent quality.

Gamuda Land sets the bar as the country’s leading developer by offering amplified living essentials and quality designs for a healthy, safe and secure lifestyle. With several architectural awards under its belt which includes Institute of Landscaped Architects Malaysia’s Excellent Landscape Planning and Development (2009 – 2011) and Malaysia Landscape Association’s Best Landscaped Township (2004), Gamuda Land has created a wonderland of nature inspired features at The Robertson that will last a lifetime. Gamuda Land has a proven track record of award-winning projects that have been recognized for its excellence. These include Kota Kemuning township which was bestowed the Best Maintained Township Award 2003 from the Ministry of Housing and Local Government, Bandar Botanic in Klang Valley with Malaysia’s National Landscape Award 2004, Jade Hill in Kajang with the Malaysia Landscape Architecture Award 2010, and Horizon Hills in Iskandar Johor with The Edge Malaysia Property Excellence Award for Value Creation Excellence (2012, 2014). Gamuda Berhad (Property Division) was most recently awarded the Top 5 in The Edge Top Property Developers Award 2014.

Putting Green at Podium Level facing the future tallest tower in Malaysia – Warisan Merdeka

Actual show unit - Living and dining area

Actual show unit - Master bedroom

Tel: +603 - 2148 6668 Fax: +603 - 2143 8881 www.therobertson.com.my

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FEATURED PROPERTY SHOWCASE | The Gardens

Artist’s Impression

THE GARDENS Scan For EXTRA Content

Contemporary Luxury Lifestyle Concept And Spacious Design Combine In The Gardens @ Polo Park

estled comfortably amidst a lush green backdrop of meticulously planned landscaping is a veritable paradise known as The Gardens @ Polo Park. The upscale residential gated community development is a premier contemporary lifestyle concept from veteran property developer, Hua Yang Berhad and brings together elements of luxurious and spacious living, combining them with a sense of enclave exclusivity. The project is comprised of 28 units of 2 ½-storey semi-detached homes and 3 units of bungalow lots measuring no smaller than 44ft x 86ft.The entire development is spread across 5 acres of freehold land and has an estimated Gross Development Value (“GDV”) of RM64 million.

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Prospective buyers have a choice of two different bungalow designs as well as three equally well designed layouts for the semi-detached homes in the following configurations: •

Semi-Detached A1: 4,587 sqft in size with 5 bedrooms

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Semi-Detached A2: 5,813 sqft in size with 5 bedrooms

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Semi-Detached A3: 4,497 sqft in size with 5 bedrooms

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Bungalow B1: 5,500 sqft in size with 7 bedrooms

•

Bungalow B2: 5,667 sqft in size with 7 bedrooms

CLEVERLY DESIGNED TO MEET ALL YOUR NEEDS All the units come with spacious and lavish master bedrooms, separate master bathrooms and shower areas. For added convenience all the bedrooms come equipped with en-suites, and are serviced by hot water systems with water pumps. Shielding the homes from the oppressive heat that comes with living in the tropics are Monier cool roof systems, which also create a comfortable setting for entertaining guests in the dedicated lounge area available in each unit. Selected balcony units also serve up breath-taking views of the riverside, lending residents the comfort of evenings spent watching sunsets. Cognisant of the need for digital connectivity which is a must have for the modern generation, two years’ worth of UniFi connectivity is offered free of charge.

EXPANSIVE LAYOUT AMIDST LUSH LANDSCAPING Designed around wide open green spaces, The Gardens @ Polo Park features 1,208 sqm of lush green landscaping spiralling out from its impressive central garden. Strategically placed facilities complement the natural ambiance and include a children’s playground, workout equipment, wooden benches and a unique walkway with a granolithic finish. Working in harmony, they are intended to facilitate and foster a community spirit between the residents of the development. The integrated aspects of nature and serenity, offer a welcome escape from the hustle and bustle of city living.

SECURITY AND PEACE OF MIND ENSURED 24-hour security services, frequent patrolling and CCTV surveillance ensure security and provide peace of mind for the residents. Automatic gates, alarm systems and walls with high fencing meanwhile, increase the safety aspects within the

development itself. As it is a gated and guarded premier community, entry-point security is further enhanced through smart access cards.

CONVENIENT AMENITIES WITH AN ACCESSIBLE LOCALE The Gardens @ Polo Park is just a stone’s throw away from the Johor Bahru City Centre and the Custom & Immigration Quarantine (“CIQ”). The Eastern Dispersal Link (“EDL”) and Coastal Highway are just three minutes away from the residential area and 10 minutes to reach the North-South Highway. Additionally the Senai International Airport is just a 25 minute drive away. The development is also closely located to the upcoming Singapore –Johor Bahru Rapid Transit System (“RTS”) which is set to be up and running by 2018 as well as the Singapore-Malaysia High Speed Rail (“HSR”). Among the many nearby facilities that are within easy reach of the development include various

commercial centres such as AEON Permas Jaya, Danga City Mall, KSL City Mall, Berjaya Water Front and JB City Square. Nearby infrastructure amenities consist of a number of Primary and Secondary schools, Colleges and Universities, International Schools as well as hospitals. Adding to this, two of the biggest tourist attractions in the state of Johor, Legoland Malaysia and Puteri Harbour Theme Park are only a 20 minute drive away. The Gardens @ Polo Park truly embodies an exquisite luxury lifestyle concept set in a premium location, and is designed with sophisticated style and flair. It is the perfect choice for the discerning buyer who demands the best of both worlds, a relaxing escape clothed in luxurious green yet with all the amenities and accessibility of central city locale. The development is slated for completion in August 2015. Price starts from RM1.6 million onwards (Bumi Lot).

Artist’s Impression

For further information: The Gardens @ Polo Park, kindly head over to http://www.huayang.com.my/ and browse through our sales gallery. Alternately we can be reached at 07-559 1388. Act now, to book your unit in this exclusive residential development before they are all sold out!

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FEATURED PROPERTY EVENTS | Newfields

NEWFIELDS Scan For EXTRA Content

Barefoot Luxury Homes Showcase

he exclusive KL/PJ Property Showcase held from 18 – 19 October at the Magellan Sutera Resort impressed visitors with the latest luxury development by Newfields Property.

Homes at Maisson are developed based on the theme ‘barefoot luxury’ that focuses on the luxuries of living simple and going back to basics; where Barefoot Living is a Luxury. Potential investors and buyers were briefed on the qualities that define Maisson at AraDamansara as a much sought after residential address with exceptional location, facilities and services. Freehold and situated within an upscale neighbourhood of luxury bungalows, Homes at Maisson is ideally located within a matured growth area with reputable landmarks such as Subang

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Homes at Maisson appreciates the simple things in life with style and sophistication

Visitors being briefed on the investment potential of homes at Maisson

Excellent location and connectivity appeals greatly to potential buyers

Airport Terminal, Tropicana Golf & Country Resort, Saujana Golf & Country Resort, Glenmarie Golf & Country Resort, Japanese School and wonderful centres and leisure : Ikea, The Curve, IPC Shopping Centre and One Utama Shopping Centre which provides discerning investors with an address that offers both exclusivities and exceptional connectivity to major highways and inter-city roads that provide links to major towns and cities. It also has easy access to KL city centre which is only a 20-minute drive away. The nearest LRT station is located within walking distance (approx. 1.2km) and forms part of the extension for the Kelana Jaya LRT line. Maisson will be providing free shuttle service to few designated areas such as the LRT station, Subang Airport and Shopping centres around the neigbourhood. Homes at Maisson are designed to feature the stylish collaboration of indoor and outdoor living spaces, where residents are encouraged to enjoy the green outdoors as part of an extension of their personal living space. Each home reflects a modern contemporary layout, designed to suit the lifestyle of individuals who value generous areas dedicated to family living and privacy. A host of attractive features and facilities have been added to this development to cater to those seeking a lifestyle of serenity, style and luxury. A 2.3 acre landscaped deck seamlessly blend indoor and outdoor spaces for children and adults to experience nature while retail conveniences such as lifestyle boutiques, food and beverage outlets and enrichment centres provide opportunities to enjoy an unparalleled quality of life.

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FEATURED PROPERTY EVENTS | Homesign

Minister of Special Tasks Datuk Teo Chee Kang witnessing the signing by Homesign Network Sdn Bhd Managing Director Lee Chee Kiang and General Manager Kua Say Yong, who is signing on behalf of New World Hotel And Resorts

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omesign Network has appointed New World Hotels & Resorts to manage New World Kota Kinabalu Hotel scheduled to open in 2018. The hotel is part of the RM2.5 billion Skycity mixed-use development in Karamunsing which features a 5-star hotel, Grade-A offices, a shopping mall and two towers of residential suites. The contract signing ceremony was held on 1 December 2014 with Minister of Special Tasks YB Datuk Teo Chee Kang JP as the guest of honour. Skycity is a joint-venture between Homesign Network Sdn Bhd and the Ministry of Local Government and Housing Sabah (KKTP) Sdn Bhd

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Homesign Network Inks Deal with New World to Manage Kota Kinabalu Hotel

sited on a 6-acre plot of land in close proximity to business and leisure facilities in Kota Kinabalu. The city centre is within easy reach and it’s only a 30 minute drive to more than 10 surrounding golf courses and five minutes’ drive to the Jesselton Pier which connects to all the outlying islands. The complex tower will become a striking landmark in Kota Kinabalu when it is completed with the hotel occupying the top 16 floors offering unobstructed views of the city, the South China Sea and Mount Kinabalu. The property will feature 400 guestrooms and suites. The brand’s signature Residence Club Living Room will offer exclusive benefits such as complimentary breakfast, all-day refreshments and dedicated concierge service for Residence Club and hotel suite guests.

Dining options will include two restaurants, a lobby bar and a sky bar. Meeting facilities will total 3,883 square metres (41,796 square feet) while recreational facilities will encompass a sky pool, spa and gym. “Sabah is an ideal location for New World Hotels & Resorts to embark on its expansion into Malaysia – not only is it amongst the top three domestic tourism markets but Kota Kinabalu is also the fastest growing Malaysian state capital,” says YB Datuk Teo Chee Kang JP. “Skycity will be a good location for professionals and businesses due to its location in the city centre. Other developments and transport expansion in the area are expected to grow and

this would be the most bustling area in the near future,” he added. “Kota Kinabalu’s vibrancy and natural charm, as well as its easy accessibility from the key feeder markets of mainland China and Hong Kong, will set up New World Kota Kinabalu Hotel for success,” says Sonia Cheng chief executive officer of Rosewood Hotel Group, the parent company of New World Hotels & Resorts which currently manages 49 hotels in 17 countries with nearly 30 new hotels now under development. “We are very grateful to Homesign Network for the opportunity to introduce our modern Oriental hospitality to local residents, domestic and international travellers.” Mr. Lee Chee Kiang, managing director of Homesign Network remarked, “We believe New World Kota Kinabalu Hotel will be the crowning achievement in our Skycity project and we look

forward to working with the brand’s team to create a landmark to welcome guests to the city for years to come.” Meanwhile, the shopping mall and residential components of Skycity will offer lifestyle options that will appeal to Kota Kinabalu’s growing population of sophisticated residents. The shopping mall is designed to be familyoriented with dining options, children centres and retail outlets and the two towers will offer serviced apartment and boutique apartments.

Mr Lee Chee Kiang, MD of Homesign Network and Mr Nevius Glussi, Corporate Director of Development, Asia Pacific of Rosewood Hotel Group - signing the hotel management agreement for New World Kota Kinabalu Hotel on 2 December 2014.

Guests at the signing ceremony

Homesign Network Sdn Bhd Managing Director Lee Chee Kiang delivering his speech

The serviced apartments will comprise three types of fully-furnished one-bedroom and twobedroom apartments with unit sizes ranging from 709 sq ft to 902 sq ft while the boutique apartments will feature four unit types offering 1+1, 2 and 3 bedrooms with sizes from 776 sq ft to 1,908 sq ft.

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FEATURED PROPERTY EVENTS | PH Annual Dinner 2014

Property Hunter directors Elson Kho (second left) and Jack Wong (right) with property analyst Dr Daniele Gambero (second right) and guest

Datuk Yeo Boon Hai, Director General of Kota Kinabalu Citiy Hall (centre) was all smiles as he chatted with other guests at the dinner

Venue for the first Property Hunter Annual Dinner

A BIG ‘THANK YOU’ Scan For EXTRA Content

FROM PROPERTY HUNTER

It was a lively evening of good food and even better company when Property Hunter hosted its first annual dinner to thank all its supporters and sponsors for helping them bring 2014 to an eventful finale.

ore than 140 guests attended the evening’s festivities which celebrated the opening of Property Hunter’s new show gallery at Heritage Plaza on 11 December, and for being recognized for Outstanding Promotion of the Sabah Housing Market by The Malaysian Reserve in association with the International New York Times. The Malaysian Reserve Press Award was presented to Property Hunter on 28 November in Kuala Lumpur.

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SHAREDA president and council members were presented with a token of appreciation from Property Hunter From left: Michael Hiew, Sr. Chua Soon Ping, Datuk Francis Goh, Dato’ John Chee and Elson Kho

Guests having a great time

Edna sharing a light moment before dinner

Director Elson Koh was enthusiastic in his praise and acknowledgment of the many people who had supported Property Hunter through the last two and half years and hopes to see the continuation of this excellent partnership to promote Sabah’s property industry.

Enoch Khoo from ENK Ventures (right) and guest

Among the outstanding contributions made to Property Hunter’s success is the collaboration with Sabah Housing and Real Estate Developers Association (SHAREDA) led by its president Datuk Francis Goh. A framed photo of SHAREDA Council Members taken by renowned local photographer Louis Pang was presented to Datuk Francis as a token of appreciation.

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FEATURED PROPERTY EVENTS | PH Annual Dinner 2014

01 1. 2.

Mary Yu of Marico Realty Donald Dunstan Wong of KK Soo and Co

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Eric Chong of LB Realty It was a fun-filled and entertaining evening with excellent company

Elson also thanked all those present in helping make Property Hunter the current leading property magazine in East Malaysia. From property experts and analysts to developers, advertisers, local city planners, associates, suppliers and the media, their support have been the cornerstone of Property Hunterâ&#x20AC;&#x2122;s continued development and success. As acknowledgment of this support, the first Property Hunter Awards 2014 were presented to the Top 3 Property Listings on Property Hunter website, one of the four business platforms offered to clients. LB Realty, represented by Eric Chong, KK Soo and Co. by Donald Dunstan Wong and Marico by Mary Yu were on hand to receive the awards.

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The evening’s Grand Lucky Draw prize was won by Ellen Tang of HomesignNetwork who went home with a fabulous 4D/3N Puerto Princesa Cruise in a Star Suite Cabin for 2 persons sponsored by Star Cruises.

1. 2. 3.

Sales Manager of Star Cruises, Cindy Lee with Ellen Tang, winner of the Grand Lucky Draw prize Ken Fu, Sylvianna Phua and Eric Wong Getting acquainted

4. 5. 6.

Ellen Tang and Louis Pang Elson Kho welcoming guests and supporters to Property Hunter’s annual dinner Diary of Us provided the evening’s entertainment

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HOT TOPIC| Property Market Outlook 2015

PROPERTY MARKET

OUTLOOK

Property investors were kept on edge in 2014 with soaring property prices, high loan rejection rates and cautious sentiments by property developers in launching new projects. The new year is expected to bring another wave of change as anticipation levels reach fever pitch before implementation of the Goods and Services Tax (GST) in April 2015. Our panel of experts weighs in on the property market outlook for 2015 with a comprehensive look and interpretation of visible indicators in the current market. We also take a look at what some of Malaysia’s property leaders had to say about expectations and challenges in the property market in 2015.

2015

2015 SABAH PROPERTY MARKET OUTLOOK IS OPTIMISTIC

atuk Francis Goh, the President of Sabah Housing & Real Estate Developers Association (SHAREDA) revealed that the outlook for Sabah property market is an optimistic one. While attending the Malaysia Institute of Estate Agents (MIEA) Sabah Branch Annual Dinner, Datuk Goh commented that in view of the upcoming property launches in Sabah, the 2015 property market is indeed positive.

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According to him, the local property industry is expected to see an increase in property supply with a forecasted Gross Development Value (GDV) of RM15 billion, with RM5 billion of this forecasted GDV to be derived from government initiated developments such as the recently launched KK Convention City (KKCC) by Mah Sing Group. A further RM5 billion is expected to come from the supply of affordable homes by agencies such as PR1MA. Finally, the private sector will be launching projects worth an aggregate GDV of RM5 billion in 2015. RELEASE OF SABAH PROPERTY ANNUAL REPORT SHAREDA will once again publish the Property Annual Report on Sabah property market in mid January of 2015. According to Datuk Goh, the highlights of 2015 will be on the development of affordable homes.

SHAREDA members have committed to construct 5,000 units of affordable homes with a selling price of no more than RM250,000, whilst various government agencies are expected to deliver a further 5,000 units of affordable homes.

by any means.” Instead of curbing prices from soaring high, the measures failed to lower prices as the supply also was reduced.

In 2014, many factors affected the progress of the local property industry. Datuk Goh stressed that the market was not “slow”, but rather developers were reacting sensitively towards the cooling measures implemented by the government during the 2014 budget.

Datuk Francis Goh also revealed that SHAREDA has decided to venture into West Malaysia by bringing local projects over to be sold in the Klang Valley. “ Is it a chance for east Malaysian product to be sold in West Malaysia, especially in KL.” According to Datuk Goh, the entry cost for investors in KL is high, ranging from RM1000 – RM1500 per square feet at prime locations. In Kota Kinabalu, the price per square feet is still kept at RM400-500 at locations of 8km radius. Therefore, properties in Sabah should appear as a very affordable investment option for investors in West Malaysia.

“There is a 50% drop is GDV in 2014 as compared to the previous year (RM7.56 billion in 2013, as compared to RM3.62 in 2013), which is equivalent to a drop of 6,000 units of properties, “ said Datuk Goh. He added “One of the main influencing factors was the curbing measures implemented by the government in 2013. However, market force cannot be distorted

SABAH PROPERTIES TO VENTURE INTO WEST MALAYSIA

PROPERTY MARKET TO BOOST UP IN 2016 AND 2017

alaysia Institute of Estate Agents (MIEA) president Siva Shanker believes the property market will not witness a downturn next year despite the slowdown over the last three quarters. In fact, he expects the country’s property market to gain momentum in 2016 and 2017. “The favourable outlook is due to a healthy national economy and low foreign investment exposure of five percent compared with Singapore’s 40 percent. We believe the property market will be consolidated in 2015 before peaking again in 2016 and 2017 based on the property cycle over the years,” said Siva in his talk at the Annual Malaysian Market Outlook – Rounding Up 2014. Aside from Siva, the outlook on three major property segments of Penang, Johor and Klang Valley was presented by other MIEA representatives as well as Y Y Lau from JLL Property Services (Malaysia) Sdn Bhd. Over in Penang, Juru, SimpangAmpat and Tambun on the mainland are expected to witness increased activity coming from the second bridge

which provided additional access to and from the island, industrial areas and Penang airport. MIEA Penang state branch chairman Mark Saw expects investors to capitalise on the improved infrastructure. The Johor property market is expected to be healthy in 2015, with investments supported by positive economic growth in Singapore and Malaysia, said MIEA Johor state branch chairman S Vadeveloo. However, he is cautious of the sustainability of Iskandar Malaysia’s property prices, particularly for retail space and high-rise apartments. “Ample supply and whether demand can keep pace with incoming supply is causing concern [over prices] of condominiums and retail spaces,” he said. Meanwhile, Vadeveloo expects landed homes to continue to remain popular. In the event that prices in the primary market continue to increase, buyers are expected to turn their attention to the secondary market, where prices are 20 percent to 30 percent cheaper. In an interview with Property Hunter, Siva Shankar said that while the number of transactions has been contracting, the value has

been going up partly due to the cooling measures imposed by the government. After the 2013 Budget was announced, the removal of DIBS (Developer Interest Bearing Scheme), freebies and perks caused the market to contract and go into a tailspin because people were worried about how it would impact them. “The trend continued in 2014 with the number of transactions coming down a little bit but the value still went up. We expect 2H2014 to improve a little where the market will remain flat or if it increases; it will increase by 2% - 4% which is very good because for the first time in three years, the market is starting to turn a little bit. We think 2015 will remain quite neutral in the sense that there will not be any big growth nor will there be any great fall,” says Siva. Asked to comment on MIEA’s main concerns for 2015, Siva had this to say, “Some sectors of the market are overbuild especially in the high-end luxury condominium sector. This overbuilt is perhaps more evident in places like Iskandar Johor, Penang and KL.”

“We are also concerned about the number of shoe box units (SOVO and SOFO) which are less than 400 sf ft that have flooded the market. When they are completed in the next 2 – 3 years, we are not sure they will be able to find the tenants or buyers so easily. They won’t be able to sell at a higher price and will end up occupying the units. The rental yield is not very good for these types of properties. The terrace house and semi-D house market will remain very steady, with no over-supply in those markets and we believe that residential land will be the main driver for the market for the next two years,” concludes Siva in the interview.

HOUSE PRICES WILL ONLY GO UP BY 2% TO 3% AFTER GST says Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan. “But, it could help mitigate the cost of home ownership by giving buyers incentives.”

utrajaya cannot prevent housing prices from increasing because Malaysia practiced an open economy,

“This is a free country, the government cannot determine prices. “We can, however, help to reduce the cost of home ownership through incentives. The property price increase phenomenon is not only

happening in Malaysia, but all over the world. And, the government has responded with programmes such as PR1MA,” he said, referring to Putrajaya’s home ownership scheme. He also said research showed that house prices would only go up by between 2% and 3% when the goods and services tax (GST) was implemented in April 2015. “If it goes up beyond 3%, action will be taken under the Anti-Profiteering Act,” he told reporters in Putrajaya. He added that if house prices were raised beyond 3% by developers citing the

GST, they could be referred to the GST monitoring committee under the Ministry of Domestic Trade and Consumer Affairs. “My concern is that prices are hiked up not because of the GST but due to excessive profiteering. According to our calculations, the increase should only be about 3%. “If it goes higher than that, then report it to the GST Monitoring Committee. We can manage it from there,” he added.

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CONTRIBUTOR| Chris Tan

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

PROJECTION

FOR PROPERTY MARKET

2015 2

015 is a buyer market at large. Those who have the cash and the credit plus long-term holding power will be spoilt with the options and opportunities ahead.

Property investment is a different game now, and the winning strategies of the last 5 years are no longer applicable particularly the more mature hotspots like Kuala Lumpur and Penang. Price appreciation will no longer be in leaps and bounds but rather more reasonable as the nation is on the last lap towards developed nation status. This is a stern test to investors to let go of their past experience and adjust themselves to the thinner margin as well as the sophistication in property selection to the details of preferences within the same development. The trader mindset of “buy low sell high” can no longer be sustainable as the paradigm is shifting towards adding values to the property to improve yield thus appreciation. Tenant management has emerged as the most important trait if you want to continue your trade in property investment. Not many can fully appreciate the real impact of the silence on the rate of the Real Property Gain Tax (RPGT) in Budget 2015. It was muted naturally as the Finance Act has effectively replaced the schedule in the RPGT Act to reflect and adopt the applicable rate of 2014 moving forward instead of the “filters” approach through the ministerial power used since 2007.

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With the highest bracket of 30% and the lingering 5% after 5 years for company and foreigners plus the more realistic value appreciation, sellers will be more cautious in planning their disposals. The resulting hidden values will ultimately affect the valuation of property in general and that in turn will affect the bank in granting the loan. We could see a situation where asking price is higher than what the valuer is prepared to value. Therefore, the interested buyers would have no choice but to pay the higher difference between the asking price and what the Bank is prepared to lend based of the valuation. There will be an array of reactive solutions to address such issues should the sellers be motivated to sell.

IMPACT OF GST ON HOUSE PRICES An honest assessment of 2015 can never be complete without taking into consideration the impending implementation of the Goods and Services Tax (GST). While residential property is categorized as exempt supply, it merely suggests that the homebuyer is not required to pay GST in transacting the same but the developer still pays GST for all the supplies and services during construction that are all recognized as standard rated supply. As the developer will not be absorbing the GST by compromising its profit, the same will indirectly pass on to the eventual homebuyer. For non-residential property that is recognized as standard rated supply, it has a direct impact on the

To many, 2015 is a year to wait and see. To the disciples of â&#x20AC;&#x153;Buffetologyâ&#x20AC;?, they need no reminder that when everyone is cautious, itâ&#x20AC;&#x2122;s the best time to seize the many opportunities ahead. Happy hunting, Property Hunters!

pricing as buyers would be required to pay GST that has already been encapsulated in the offer price. While GST is a contributing factor in pricing, pricing is still a function of supply and demand. The investing public will observe its impact on the market in Q2 while the hottest quarter would likely be Q3 2015. It is also worth mentioning that the banks and financial institutions will not be funding the GST portion of the price. This will certainly have an impact on the cash flow of the investors of non-residential property. GST also has an impact in the lease and rental market too. While non-residential rental is subject to GST, the collection of the same is still subject to whether the landlord is required to register with the Royal Malaysian Customs for the same purpose. Mandatory registration is for those landlords who have revenues more than RM500,000 per annum and while one could ask for voluntary registration, approval is still discretional. As a result, there are two categories of Landlords with those with GST and those without GST. Reactively, there are also tenants that prefer landlords with GST (to gain the set off in the input/ output tax regime) and tenants that prefer landlords without GST. In terms of collection of rental deposits, the security value has also been compromised as a result of the contractors charging GST in proving maintenance work on the subject premises from time to time.

THE FUTURE POST-DIBS For investors that started with DIBS and have invested in more than one unit in the last few years, 2015 is the year that these units are to be delivered. It would be challenging for their cash flow, as the need to pay monthly installments is now a reality especially when the market is competing for tenants and buyers. Price reduction is an easy way out of any competition and that represents an opportunity to the long-term property investors. There is a call for the return of DIBS in the market to ease the stringent borrowing guidelines by the banks. However, this call should be treated with caution and should be limited to the affordable housing category only. The challenge remains that affordable housing has never been universally defined and the agenda in housing the nation seems to be a stop gap measure at best at this very moment. Once affordable housing can be defined, perhaps the Government should consider affordable housing to be zero rated supply under the GST thus benefiting the qualified first time homebuyer. Banks should play a stronger role in the affordable housing effort with perhaps more lenient borrowing guidelines in this sector.

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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CONTRIBUTOR | Charles Tan

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.

PROPERTY 2015: Gloom, Boom and Doom

any are still buying. Even more are waiting by the side. Real estate agents are complaining that servicing a buying customer needs lots of patience these days. Even my lawyer friend said that the number of transactions have really slowed down for 2014 compared to previous years. She was still very busy but I think she wanted to say that she can be busier if need be. Yes, we are talking about the property market of Malaysia. On one hand, there are groups urging the government to help them buy their first property which the government is trying through various incentives such as PR1MA. However, in certain hotspots in KL / Selangor, the prices are very strong and there’s no sign of it declining even with the current slowdown. Of course for the newer property markets like Iskandar, it has shown a downtrend but my personal thinking is that if Singapore’s property market is on a downtrend, it’s hard for Iskandar to maintain its uptrend momentum. On a country basis, Singapore is still the largest investor within Iskandar today. Thus, it is not entirely due to just the demand and supply equation which is never applicable for newer areas. For new areas, it’s all about expectations. If the expectations are met, the prices and the demand go up as well as the other way around. The beginning was indeed tough for Iskandar and then it got easier and suddenly it got hotter with the entry of the China based developers and these days, it has the ‘oversupply’ cloud hanging above it.

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Are gloomier days coming? Most of the time, economic growth underpins the property market. Good growth means more income and this translates into higher property transactions. Well, Malaysian economy will still be growing but according to one latest analysis, this growth is on a downtrend. Projection by UBS Investment Bank Senior ASEAN and India economist Edward Teather is that the causes include a slowing domestic and investment growth due to the current fiscal restraint, prudent monetary policy and a maturing credit cycle. For 2014, Malaysia would grow by 5.5 percent, dropping to just 5 percent in 2015 and a further drop to 4.7% in 2016. Not everything is negative though. Fortunately, the fiscal deficit is expected to decline to just 3.5% of GDP in 2014 and by 2016, dropping to just 2.7%. This means that the route towards a balanced budget is on track. Consumer Price Index would however grow to 4.2 per cent before dropping back to 2.5% in mid 2016. In fact the policy rates are expected to be maintained from now till 2016. With the current volatile economic environment, I think UBS may be right. Bank Negara may have to continue the current accommodative stance until the growth is quite certain. Booming is not likely but I think consolidation has started. I hope you noticed the last few sentences above? Actually, the overall prediction by UBS points to a CONTINUOUS economic growth. For the property market to start moving again and the prices to be moderate instead of going down, the economic growth must be continuous. The economy must be resilient enough and the central bank must continue to play a very

prominent role, especially as Malaysia is a small country. Any bad news around the world would affect us easily. I seriously think the days of sudden property price growth of the past few years have stopped and I hope it will be maintained from now onwards. It has always been said that comparatively, Malaysian property prices are cheap versus neighboring countries and I do agree but within our own country, I have not seen sufficient evidence that our overall incomes are growing in tandem. In other words, should the prices be growing indiscriminately due to a minority of greedy speculators, we are looking at a bursting property bubble soon. Affordability is on a severe loading test today. Fortunately, these days, many huge developer names are saying that their focus is now on affordability. Remember the days when high-rise projects with over 500 units were considered high density? Today, projects with over one thousand units are not considered that abnormal anymore. With the huge number of units being offered, prices should moderate moving forward and the rises should be capped. Since the Malaysian property market is now focusing on affordability instead of luxury or for the greedy, would it be safe then? This depends on what would the effects be when the ‘Doom’ predictions come true from outside of Malaysia. IMD Business School’s Professor, Arturo Bris has predicted a crisis by April 2015. He gave many reasons for his predictions. The Jerome Levy Forecasting Center said that its half dozen analysts have attached a 65% possibility of a worldwide recession by end of 2015. David Cameron, Prime Minister of the 6th largest economy in the world tells the world that the next crisis will be coming soon. The ‘soon’ would be 2015. Meanwhile, using the stock market as a benchmark, Jeremy Grantham, chief investment strategist at Bostonbased money-management firm GMO said that the

stock bubble will burst when the S&P 500-stock index reaches 2250. Please google for the latest number. As of 15 December, it’s only slightly above 2,000 points. This means that the bubble is safe unless the index rises another 10% or more. All these predictions are from prominent personalities who have access to far more data than many of us would. Thus, their research and analysis would definitely carry much more weight than the majority of what your friend is saying. Does it mean that ‘doom’ is indeed the flavour of the day in 2015? Tell me, if all these predictions were to come true, what would happen to the property market? I cannot answer what you should do but this is what I am doing. Fixed deposits? I did not increase my fixed deposits. I think I have enough there already. Please do note that it is a must to have sufficient fixed deposits to last you 6 – 12 months. Properties? For 2014, I have decided that unless the new property is way too attractively priced, I would only be buying secondary properties and the focus is on easy to rent out type of properties. At least even if rentals fall, I should still be able to afford the mortgage for some time. I have also sold two of my properties which have given me gains and both have passed the RPGT periods. I am not a speculator as you can see. Stock market? I have bought more units of a few defensive stocks. No idea if these would be affected but I prefer to be cautiously optimistic. Unit Trusts? No changes. I am still buying on a monthly basis. Bad times do not last forever and it is what you do during bad times that will determine if your good times are coming after the bad times. Whether it’s gloom, boom or doom, make the best of it. The worst action one can ever do would be, ‘oh dear, the bad times are coming, I think I’d better not do anything now’. Happy preparing!

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CONTRIBUTOR | Michael Yeoh

Michael Yeoh The Mortgage Expert

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. 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.

Mortgage Financing

2015

How Base Rate will impact your loan repayment?

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

ith the blink of an eye, we will reach the year 2015. I am sitting in front of my desk now and it’s already 11.30pm on 15th December and I’m trying to figure out what will happen to the mortgage industry in 2015. Well, I have come to a conclusion that every year is different and with each year that we mature so does the industry. You have also witnessed how the mortgage industry has evolved through time. In 2003, you saw the birth of Central Credit Information System (CCRIS) where banks can check the borrower’s credit history with a tap of a button. With that in place it changed the whole lending landscape. Getting a loan was not as easy as before as the banks can now view the borrower’s debt and payment record. Until today, this has hindered many loan borrowers in getting their loan approved by the banks. We as human beings will, and have adapted to CCRIS over time. Now, coming to 2nd January 2015, a new interest rate framework called Base Rate (BR) will replace the old

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Base Lending Rate (BLR) which was introduced way back in 1983. According to Bank Negara Malaysia (BNM), BLR is already obsolete and less relevant today. I have a lot of enquiries about what the base rate will be like. The closest prediction I can give right now is that it will be similar to Klibor rates in the region of 3% and it will fluctuate more often than BLR. Now, don’t expect to have a negative spread as low as – 2.4% below BLR. Well, it will be plus maybe 1% instead. I think both types of interest rates will have a similar average rate about 4.45% - 4.6%. For those of you who have taken a loan before 2nd January 2015 you will still pay your loan instalments based on BLR. A word of caution and I think most of you are not aware that some banks have already incorporated a clause which states that the bank has the right to change the current interest rate which is BLR to the new interest framework which means BR in the loan letter of offer which you signed with the bank when your loan was approved. If you have taken a new loan from March or April 2014 onwards, go back and check your loan letter of offer. You might see the clause.

I hope my article will shed some light into what’s coming up in the mortgage industry. If you want to know more about mortgage planning, do sign up for my 2-day mortgage intensive class. For more enquiries, write to me at drmortgage@golden-millennium.com or to read my past articles go to www.michaelyeoh.com.my.

The next question on your mind will be how banks determine base rate. According to BNM, base rate would be determined by the financial institutions’ benchmark cost of funds and the Statutory Reserve Requirement (SRR). The interesting part is this, how low your interest rate actually is depends on the spread which will be determine by the bank’s profit margin, liquidity risk, operational cost and ultimately the borrower’s credit risk. It’s very normal that borrowers worry about the hike in interest rate and sometimes it dampens the hope of new property owners. Well, part of how low your interest rate can go also depends on the borrower’s credit risk. If the bank categorised the loan borrower as high risk, the interest spread will be higher. Be it BLR or BR, both interest rates have a spread at the end. Whether it is plus or minus, it all depends on the borrower’s credit rating. This leads us to the next interesting topic. What determines or what is a good credit rating? Banks use Debt Service Ratio (DSR) to determine whether you have a poor, good or excellence credit rating. In Singapore, if

the borrower is rated AA by the Central Credit Bureau then the loan will easily be approved and the borrower will also get a very favourable interest rate. In Malaysia, DSR is calculated by taking the debt divided by the net income multiplied by 100. If your DSR is high it means you are a high risk borrower and your interest spread will be higher. If your DSR is as high as 70% and above, you will have less bargaining power with the bank for a lower interest spread. If you want a lower interest rate or even loan approval, you need to start your mortgage planning now. Plan at least 6 months ahead before you submit your loan to the bank. I will not go any further into this here as plaining involves learning and understanding the basic mortgage to looking into in-depth individual analysis before charting a mortgage plan.

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CONTRIBUTOR | Dr. Daniele Gambero

Dr. Daniele Gambero

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.

AGEING MALAYSIA retirement homes and

the malaysian culture

he world population is rising and urbanizing at a fast rate, by 2050 the world heads count will be not too far from 10 billion and an average of 76% of us will live in urbanized areas. Most of the world nations are also moving towards the status of fully developed countries where the urbanization rate is foreseen to be even higher; by 2050 it should touch 86%. World Population Growth 1950 - 2050 10

Billion People

9 8 7 6 5 4

Malaysia is also moving towards the “Wawasan 2020” dream and it looks like it will make it to become a fully developed country by then. Becoming a fully developed country brings along a different, in a better way, aging trend for the population and the chart below shows quite clearly how the “aging Pyramid” might change in the next few years. Malaysian third age group, 50 years and above, is going to double its size within the next thirty years. This is a common phenomenon happening in developing countries and driven by a generally speaking better quality of life, higher quality of health care services and higher income.

3 2 1 0

If we look at the Malaysian population numbers, this growth driver only, will bring in the market a demand for more than 4 million houses within the next few decades. For sure the type of product that will have to be offered should be something completely new in terms of sizes, facilities and fittings. GenY and GenZ members are mostly looking for high speed connectivity, conducive environment and modern design with wide offer of facilities: here we talk about “hardware” only. The third age group will need instead a good mix of purposely designed facilities, medical care and a specially studied “software package” which comes along with

MALAYSIAN DEMOGRAPHIC - FACT FILE 20,000

1950 1975 2000 2030 2050

18,000

Source : UN

16,000 14,000

Malaysia is following the trend and the forecast are to have more than 82% of its population residing in urbanized areas by latest 2025. If we look at the population growth projections, this means that almost 27 million Malaysians will have dwellings in the Country’s cities.

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12,000

0-19 20-49

10,000

50 and above

8,000 6,000 4,000 2,000 0

1990

2000

2010

2020

2050

it. Let’s be practical, elderlies will hardly look for huge houses as the biggest is the house the hardest will be to keep it clean and functional. Once an old couple will have 800 to max 1,000 square feet of floor space they will be very comfortable with it. What they will look for, beside the space, is how far or better near their family is, how easy will be for the old folks to get along and “sayang” a bit their grandchildren and see the whole family reunited on a weekly or fortnightly basis.

members (parents and one or two children) can use the bigger portion of the house and accommodate a tenant, a grown-up child or their grand-parents in the smaller unit.

CURRENT PRODUCTS AND OFFER FOR TWO/THREE GENERATIONS’ HOMES

process as the subsequent range of services offered and, above all, the professional management of these services on long term basis and high quality delivery will be strategically important and a key factor for the project. Few examples of what will be normal features and fittings for these projects are: •

No staircase and steps up or down on the way into the property

•

Mostly these houses should be designed on a single storey and with sizes of maximum 9001,000 square feet

•

Bathroom should have wide doors designed for the possible use with wheel-chairs

•

Features shall be: a third age gymnasium with specific tools designed for users aged 50 years and above, swimming pool depth maximum 3 feet, a “water filled” walkway with Jacuzzi water jet at the sides and cold water (handrails at both sides to ease walk through), common hall with library, table games and sofas for community use, shaded garden walkways and outdoor spaces for gymnastic practicing

•

All units should be fitted with a panic button and smart home system to ease emergency communications between the house and the security guard/ Doctor and nurse postings.

THE WAY FORWARD

Malaysian developers, quite attentional to the changing needs of the market, have started proposing, less than few years ago, dual-key houses. The main concept here is to have quite a “upper” sized condominium unit of 1,800 to 2,200 square feet and separate it into two “connected but independent” units. Below a couple of proposed lay-out which are showing the practical design of it, one for a condominium unit while the other has been used for a Australian dual-key landed houses project.

Having defined the above and by looking into the grown interest for “retirement homes” professionals from all around the world have come to South East Asia in the last 12-18 months and started sharing their experience for this new type of product. They have been clearly explaining thatretirement homes should be looked at as “development cum service” type of product. Ageing people can be mostly divided into three main categories: fully independent, partially independent and fully assisted. Developers should only concentrate on the first two ones as the third is normally handled by highly specialized professional health-care organizations which are very similar to long staying hospitals.

Beside the interesting offer and concept designed for multiple generation families, these lay-out are flexible enough to allow a positive “recycling” to small rentable unit for short term rentals or for students. In Australia, US and European countries, this concept has been quite successful as allows a multiple and flexible choice on its use and get families to stay together for a longer time. The main family normally composed by two up to four

Those projects offering the type of product as above should carefully choose their location based on: proximity to hospital (within 10 to 15 minutes reach), available space for recreational activities, an on-site first medical and nursing service, specific features purposely designed for activities typical of people aged 55-60 and above and so on. In other words the design of the product and its costs are possibly the minor component of the decision making

The above are just few simple examples of what developers should supply within a retirement home project and what purchasers should absolutely looking for. Without the above the huge added value of “retirement homes software” will not be there and the return on investment will be hardly reaching the expected values.

one, teaches to respect and care about the elderly in the family and keep the family as much as possible together. Well Malaysian developers are having here a golden opportunity to come out with innovative ideas such as condo-link or mini-link house closely combined with professional management system to tackle the growing demand of third age houses and preserving the family unity as much as possible. The Local authorities should also do their part in cooperating with the private industry and helping where needed with proper technical support. It is a great opportunity already in the making but has to be done right and smart house purchasers and investors will surely know how, where and when choosing their “dual-key” / “retirement home” and how to profit out of it.

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

The typical Malaysian culture, very similar somehow to the European

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COFFEE TALK | kopiandproperty.com

Guaranteed Rental Return Buying whole block

85% TENANTED

friend asked me about buying an apartment with guaranteed rental return. I think the majority of anyone who has read many articles on this would understand that these guaranteed rental returns MAY also mean that the buyers are paying for it and getting back the rental return on a monthly basis. Of course there is nothing wrong with this because if you really calculate, you would notice that the guaranteed rental rate is definitely

higher than if the buyer were to deposit their money into fixed deposits. Some are offering up to 6% which is considered attractive. I told my friend that if she has understood everything that the developer is selling and she likes it, by all means go for it. She invited me to buy one unit and I politely declined, saying it is not my cup of tea. My reason is because I already have my next property in mind and am still saving for it. A secondary unit which is easy to rent out, even IF the rental return is next to nothing. If someone were to offer me a unit with tenant and a seemingly attractive selling price, I would grab it. However, when its one whole block, then I may not be their target. Perhaps REIT funds may be interested? Or alternatively a very rich businessman who just wants to buy a recurring income for his son? I am none of both. The offer

was for a 10-storey high-end residential block in Ampang Hilir which is considered a prime area in Kuala Lumpur. The said property is known as 7 U Thant and it comprises of 24 apartments ranging from 500 to 4,600sf. It is a 4 year old block and the guide price is RM131 million or about RM1,343 psf. The successful bidder is required to honour all existing tenancies. Currently, 85% is rented out, which means an immediate recurring income, as long as the tenants do not move out within this period of it being offered to market. Facilities includeÂ gymnasium, BBQ pit, Jacuzzi, skydeck and a rooftop infinity pool, in addition to its 24-hour security and generous parking space. In terms of location, itâ&#x20AC;&#x2122;s considered pretty exclusive, opposite the US Embassy and just a 10 minute drive to Kuala Lumpur City Centre (KLCC). Interested buyers are advised to submit their bids by 26 November 2014. Its marketing agent is SLP International. I have no idea whatâ&#x20AC;&#x2122;s the final decision of my friend but I hope she understand her risk profile and buys accordingly instead of asking me. Over many years, I have learnt that her reasoning and mine are totally opposite. Its ok, anything that makes sense would give you returns. I have never been pressured to follow any property guru and I feel that no one should be forced to follow me either. Reading and understanding, why not but following is another matter altogether.

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BUYING A

PROPERTY Four questions to answer

ecently, a friend told me that she reads my blog quite frequently these days. Quite a lot of interesting articles and her goal is to buy a few properties within a short period of time. When I asked her, ‘when?’, she just laughed. She asked me to teach her. I told her honestly, if she wants to get up to speed fast, she needs to spend some money and go for those workshops by some property gurus. There are so many of them in the market. These property gurus would teach you how to maximise your property investment by using the little resource that you have; money. I told her though that instead of answers, I could give her four questions. Sort of a guide to how soon she should start her property investment. 1.

Would our salary increment be negative? I mean for the majority of us. You can say whatever you like about inflation being higher than your increment but the fact remains that today, you are ever willing to spend RM10 for a cup of Italian brewed coffee versus the usual RM1.20 Kopi-O that your parents said is expensive because it all started with a few cents. If your answer is, ‘my salary would continue to increase’, think what would happen to the stuff that you would need to buy, including property.

she is lucky? And your answer is, of course not. They would try their best to climb the corporate ladder here in the city, whether it is Klang Valley or Penang or Iskandar or even Singapore. What would happen to the property price when all these people flock to the city, all without a home? 3.

Even if you do not include the periods of 2010 onwards? My parents bought their Ipoh house at RM85,000 and it was considered very high then. Today, our neighbour’s house was sold for over RM350,000. Yes, it’s true, if you count the 25 years that they have owned the place, RM350,000 does not seem a lot but hey, that’s Ipoh! I repeat, ‘has property prices stayed the same, ever?’

Would urbanisation stop? Would graduates, after they left their hometown for their higher education be flocking home to their small hometowns and work as, well, as, well, I don’t know, perhaps a bank executive and retire 35 years later as a branch manager, if he/

Has property prices ever stayed the same, ever?

stay at the same place that everyone wants to stay? Yeah, sure. If that’s the case, why are prices in popular areas jumping faster than those further ones? Do you know why new launchings in popular places are always condos? That’s because there are no available large pieces of land for landed properties anymore. Yet, everyone wants to stay there, so developers build condos to cater to the location demand. The answer is, LAND cannot be increased or made available once it’s used. There are a lot more questions I can ask but if you can answer these four, you have already started on your journey. At least the mindset is now correctly tuned. Note, never ever be a speculator because you may lose everything and may even cause many others to lose everything.

Can more land be made available? Answer is YES. You can stay further and further away, right? Surely no one needs to

The advice is, buy if you can and buy early because buying a property has never been easy and as you get older, it gets even harder.

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COFFEE TALK | kopiandproperty.com

DESCRIPTIVE or Deceptive words used?

hese days articles in the newspapers are getting pretty descriptive and perhaps flowery. Some of these articles were written as part of the advertisement package and thus it must be something which meets the expectations of the developers. FYI, I hate it when developers cannot even afford to pay the usual writing fee to have a good article to support their development.

‘Exclusivity’ - Unless the total units are less than 50, this word may not be that correctly used. Let’s be very clear, are you sure 100 units of condo, each with 4 persons staying and a total of 400 pax sharing most of the time a pretty small swimming pool is called exclusive? Hope everyone understands that if YOU are the developer and you have a huge piece of land today, you would maximise the number of units to make it affordable and easier to sell.

At the very least before launch, during launch and after launch as well as one more additional article should accompany the project? No? Okay, maybe my standards are just too high but I do notice many developers do this extremely well. From the mass media newspapers to the business magazines to online portals and even PR agencies, they take every opportunity to highlight their projects and them. This should be the right way to go because today, I have yet to find one media which can claim to have every single property investor reading only them. Today, let’s just browse through some of the nice terms used and their potential meaning(s).

‘Luxury Condo’ – I saw this ‘Luxury Condo only RM299xxx’ on my way to office everyday. It’s on a wooden signboard next to the road on a lamp post. Wow, this is truly ‘luxury’. RM299xxx is already a ‘luxury’ price and the way the advertisement is done, you can immediately understand the ‘luxurious’ treatment you are getting.

‘Close to / Next to Nature’ – whenever this is used, rest assured, it would not be in a matured neighbourhood. It may be next to a secondary forest or even at a place which is slightly out of the usual routes. Nothing wrong ok, in fact I like this word better than ‘next to MRT’ station. Just a personal choice.

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‘NEAR’ to the city – Please do not ask how many km. Ask how long does it take to be in the city during the usual working days. In developed countries, they are now using the duration instead of km which is very misleading because 20km away does not mean that it would take a longer time compared to an area which is just 6.5km away from the city. Surrounded by greenery – Most of the time, this means that there are going to be a few more trees than usual and there would be a garden for everyone to walk etc. Do not think of this as that resort style kind of environment. Reason is, if it is truly resort-like, they would use ‘resort-like’ instead of surrounded by greenery.

Exquisite – I have no idea what this word would want to say for the property. Haha.Low density?Luxurious?Special or customised design? If these might be its meaning, then it’s best to use these words instead. Eco-friendly – There are standards for this, those Green awards? The words should be ‘Green Certified’ followed by what’s the award they got for the development. So, if the development is not a certified one, eco-friendly simply means they included one or two features into the development and would call it ‘eco-friendly’. Does not mean much actually. Oh yeah, I also do not mind that my development is not ‘eco-friendly’. I just want it to be equipped with good facilities, that’s all. There are lots more of these terms being used. Nice to read. Just try to understand what they mean by asking the sales person. No assumptions because even low-density developments these days may mean 500 units while a high density development can be 2,000 units or higher. Gone are the days when car parks of 5 levels are considered high. Today, 8 levels may just be the usual. Oh yeah, if the brochure says, ‘multiple award winning developer’, take a look at how many and when did the developer win them. It might have been won a few years ago or one older project might have won many. It still does not mean that the development you are buying is the award winning one. Happy searching and buying.

SPENDING more than EARNING

s reported in a business weekly, according to the Department of Statistics Malaysia’s Housing Income and Expenditure Survey 2014, the average monthly total household expenditure is increasing faster than the household income. The survey covers a total of 42,000 households within the first half of 2014 and will eventually cover a total of 83,456 households by the end of the year. The median monthly household income rose 8% yearly to RM4,258. This is considered a healthy growth but the average monthly household expenditure increased by 8.8% yearly to RM3,496. Note that I quoted MEDIAN numbers for income and average numbers for expenditure. The reason is because the average income may not correctly reflect the average family due to the huge numbers for the higher income households.

The main contribution to expenditure include housing, water, electricity, gas and other fuel categories (22.8%), followed by food and nonalcoholic beverages (18.1%), transport (15.4%) and restaurants and hotels (12.3%). All states also recorded incidences of poverty below 2% except for Sabah at 6.4%. These numbers are hardly surprising because subsidy is gradually being reduced, especially that of petrol. Typically for an average household, this takes up the biggest portion. In a normal month, a Viva owner driving around 1,500km per month would already incur a minimum of RM200 – RM250 easily. Drivers of

cash to actual vouchers for food etc by 2016. I welcome this. As for petrol subsidy, somehow it has to reach those who need them until public transportation is convenient and affordable enough. As for housing, I think the Budget 2015 was everything about affordability for first time buyers. The only concern is how soon can these low cost housing be made available. It should also be a minimum of 850sf and above and not those 650sf flats like previously. The standard of living is just not there for these extremely small units, especially for families with small kids.

higher capacity cars would definitely be paying more. I am also driving around 1,500km per month and my monthly petrol expenditure comes to RM350 – RM400. REASON FOR DEFAULT

Source by AKPK Now you know why help is needed especially for the lower income households because otherwise, it would be extremely tough to even get by on a monthly basis. I feel that BR1M which was given needs to be targeted at the actual item, for example, food and non-alcoholic beverages. There are plans to change the BR1M from

The above is mostly about households but I think if we look at the youths of today, the expenditure would be even higher. Smartphones, gourmet coffee, fancy restaurants and expensive clothing and accessories would form the biggest percentage of their monthly expenditure. Most of the time, this is financed by their credit cards and thus not sustainable. After a few years, when they want to buy their first home, they suddenly find out that they do not have sufficient downpayment and prices are a little too high for them. This is where all these affordable housing schemes come in. To help them manage their finance, ‘force’ them to use it for their mortgage payments. At least, these become theirs and continue to appreciate and would turn into an asset instead of liability in the future. In short, good debts.

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Selling Condos of

500,000

Or Higher With One Desk And Two Plastic Chairs

ave you ever bought a new iPhone from a stall in a departmental store? Have you ever bought a new car from a roadside stall? iPhone is RM2,500 and you expect to buy it from a nice authorised Apple Store. Regardless of the car brand, you expect a showroom as well as a test drive. Reason being, the cheapest new car is RM25,000 for a 660cc Viva. However, today, there are developers selling a condo worth over half a million ringgit using just one desk and two plastic chairs! Oh yeah, plus two pieces of leaflets which are stapled together and given to you, hoping that you will take up a mortgage loan of over RM500,000. I know, many of you would buy from such developers but as a principle, I would not buy from such a developer if they are selling their ‘luxury’ or ‘low density’ condo by having a desk and two chairs in a departmental store. Worse still, it’s in a hypermarket! The typical marketing budget for any developer is between 2-5% of the GDV. This means that they have more than enough to do real marketing. In

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fact, they have enough to build a real showroom of the condo for you to see the concept in real life. This is what they do in overseas markets or by the more established developers in Malaysia. Do you know that buyers from the UK or Australia commented that Malaysians are really awesome because we are able to buy by just looking at a few pieces of paper?! If all buyers continue to accept this sloppy attitude from developers, of course even more developers would do the same. If the profit margin is way too little, no developer would build. Thus, please help to set minimum expectations and ensure all developers do their best to attract us, their buyers and not the other way around, where we are persuaded to buy so easily without them doing any real effort. Some developers are known to cut corners. Actually, the act of using just a desk and two chairs is normally what started this attitude of ‘never mind, they will buy’. Imagine, all buyers would only buy if the developers build showrooms to scale. Imagine, all buyers would visit many show rooms before deciding. Imagine all buyers asking them lots of questions and

visit many developers before making their decision. FYI, until today most of the established developers would ensure that most if not everything is done right. Established developers do not need to be the top 10 largest developers. I have known many smaller developers who take development seriously and build actual units and when their actual units were built, it was even better than their showroom unit! Perhaps I am in the minority but think seriously, united we can make things better. United we can help the developers to be more competitive, to pour more effort into what they do. After all, if they intend to be in the property development business for a long time, they should do the right thing and not cut corners or cost. This is the reason why I visit property fairs. Oh yeah, some would then argue that due to this, the developers may increase their cost and pass them to buyers. This is definitely not true because their budgets have already included this when they planned the development. Would Malaysian developers be world class in the near future? Decision lies with buyers’ actions.

MALAYSIAN HOMES are

more expensive than PERTH?

here have been a few recent reports about Malaysian properties being much higher priced in terms of affordability when compared to developed countries. I think there are truths to this as I happened to have just visited Perth. Note, I said some truths because it is not all truth as well. In Perth, I was staying in Belmont which is considered an established area. I rented a one storey home with a back yard and a front porch able to fit two cars side by side. Two living rooms, three bedrooms and a backyard huge enough for a BBQ session for 15 pax. The price of the said property I believe is around AUD$500,000. Currencies aside, are we able to buy such a property for such a price in Malaysia? Answer is Yes and No. Yes if you buy a little further away and No if you are talking about the majority of any popular area. For some, even two times 500,000 may not yield you the same home. So, yes, there are really some truths to these reports and I have to agree. However, having said that, have you ever been to any Australian property fair in Malaysia in

recent years? Or even recent months? I am very sure you can see AUD$350,000 properties being bandied about. It includes even guaranteed rental schemes. Well, the units are most probably a one bedroom type of unit and the rental would be to students. Why are they targeting us (Malaysians)? Well, in Australia, foreigners cannot buy from the secondary market and even the thought of buying must first be preceded by the act of getting approval for you to buy one. The few situations which foreigners are most probably allowed to buy is in the chart shown. Now do you know why they target us Malaysians? Well, truth is, for around AUD400,000 there are still quite many secondary choices that Australians have. Just take a look at their dominant property site, realestate.com. au and search for the AUD400,000 homes. Yes, the choices are aplenty and itâ&#x20AC;&#x2122;s almost certainly a landed property instead of the usual high rises that they are selling to us in Malaysia. So, yes, the property prices in Malaysia really do seem high in comparison to even Perth which is already lower priced than Sydney or Melbourne. Sorry, the last time I was in London was over 15

years ago, thus I can only rely on news reports for London property prices. I think for London, they are higher than us. So much so that some London population is putting the blame on foreigners for pushing up their property prices. Well, truth is, locals always have a choice. They know the area well, or perhaps too well and thus they refused to believe it when property prices started to rise and when they realized it, it was a little too late. This has happened in many local cities, not just overseas. I had a very good time in Perth for one week. Visited nothing less than 10 different parks, reserves, beaches and all of them were less than 15km from one another. All of them, clean and well maintained. I think even when prices are similar, are we able to have these public spots which are clean, refreshing and well maintained? One day, perhaps. For now, if we compare just on the basic stuff, Malaysian (KL) property prices in general are considered more expensive than a developed city like Perth. I agree. Happy comparing.

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SABAH PROPERTY NEWS

SABAH

PROPERTY NEWS

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

Home Prices In Six States Severely Unaffordable stands at RM576,991, but the annual median income is only RM70,164. The capital is followed by Selangor (5.88), Penang (5.83), and Kelantan (5.54), but home prices in all the six aforementioned states are considered as severely unaffordable.

esidential properties in Sabah cost 11.41 times a family’s median annual income, making them the most expensive homes in Malaysia, according to Institut Rakyat, a think tank run by Pakatan Rakyat. Based on the federal government’s data for Q4 2012, houses in Sabah were pricier than the national average of RM251,731, said Institut Rakyat’s Executive Director Yin Shao Loong, The next most unaffordable residential properties are found in Sarawak (9.04 times) due to a huge

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gap between home prices and annual household income. For instance, the average price of houses in Sarawak is RM330,594, but the median income of a family is merely RM36,564. “Sabah and Sarawak suffer from a combination of weak household incomes and house prices that are far higher than the national average, with average prices comparable to Selangor,” he explained. The third most expensive place for houses is Kuala Lumpur (8.22), where the average price of such properties

On the other hand, residential prices in Terengganu (4.93), Pahang (4.84), Perak (4.67), Kedah (4.40), Perlis (4.37), and Johor (4.20) were categorised as seriously unaffordable. Only Negeri Sembilan (3.71) and Malacca (3.16) were deemed as moderately unaffordable. “However, average house prices for these states still exceeded three times the annual income of each state’s median household,” Yin noted. For middle-income families, they can only afford residential properties priced at RM153,000 and below, he added.

Build-Then-Sell Concept Will Not Be Implemented in 2015

Government Has No Plan To Pass Legislation To Fix Property Prices In Sabah

he Sabah government has no plan to pass a legislation that will fix and address the high property prices within the state, says Local Government and Housing Minister Datuk Hajiji Haji Noor.

Time is not right to implement build-then-sell concept

he Urban Wellbeing, Housing and Local Government Ministry has decided that the plan to compel housing developers to adopt the concept of buildthen-sell will not be implemented in 2015. Its minister, Datuk Abdul Rahman Dahlan, said it was to a prevent shortage of houses in the market, which will cause a hike in housing prices. “Our study showed that if we compel housing developers to adopt the concept starting 2015, it will contribute to the hike in housing price, and the small-scale housing companies or developers will not be able to develop any project as they have to bear all the cost,” he told a press conference after chairing the National Housing Committee meeting at his ministry. Abdul Rahman was commenting on the issue, which became a hot topic of debate among developers and house buyers, following the announcement made by the former Minister of Housing and Local Government Datuk Seri Chor Chee Heung that all housing developers would be compelled to adopt the buildthen-sell concept starting 2015. Under the concept, which aimed to stem the abandoning of housing

projects, house buyer will only have to pay 10% deposit, while the balance of 90% would only be paid after the houses are completed. Commenting further, Abdul Rahman said he had studied Chor’s speech regarding the matter, which he made in Parliament in 2012, and found that Chor had just said that the government was planning to introduce the buildthen-sell system in 2015 if the time was right. “...and right now, we are of the opinion that the time is not right for the concept to be implemented, especially with the Goods and Services Tax set to be imposed in April,” he added. The minister, however, said the ministry did not reject the concept but would really encourage any housing developer to adopt the concept voluntarily. “It’s a marketing tool for them, we congratulate and propose they should continue with that but it cannot be enforced yet because we fear that the price of houses will continue to go up.”

“Not yet because it is a free market. We have to be careful on this matter,” he said during the launch of the 2014 World City Planning Day on 20 November at Sutera Harbour. However, he explained that the government will address the matter by building more affordable homes via developers in Sabah. He noted that the government will find ways in order to ensure the property prices will not be high, adding that the government will monitor property prices in Sabah once the Goods and Services Tax (GST) takes effect. Representing Chief Minister Datuk Seri Musa Haji Aman at the event, Hajiji revealed that the construction of the Kepayan Ridge People Housing Project featuring 500 affordable homes will start early next year and is expected to be completed by 2017. Aside from this, four new People’s Housing Projects in Kudat, Lahad Datu, Tawau and Kota Kinabalu, comprising 3,108 homes, have also been approved. Private developers from Sabah Housing and Real Estate Developers Association (SHAREDA) have also been building 4,088 units of affordable homes in Sabah.

homes within the state. Notably, the state government via the Sabah Housing and Town Development Authority (LPPB), aims to build a total of 10,778 affordable homes at various locations near the city centre and other districts in Sabah.

Minister Datuk Hajiji Haji Noor Of these, around 1,206 units have already been completed. The government, through the Local Government and Housing Ministry, will also ensure that 30 percent of the city’s middle and high cost housing programmes will include affordable housing programmes.

SHAREDA has agreed to undertake 21 affordable housing projects as part of its Corporate Social Responsibility to contribute to the construction of 10,000 affordable

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SABAH PROPERTY NEWS

Kinsabina Judged Best Employer At The Star Business Awards 2014

Property Hunter Wins “Outstanding Promotion Of The Sabah Housing Market” Award

roperty Hunter has won the ‘Outstanding Promotion of the Sabah Housing Market’ award at the Malaysian Reserve Property Press Award (PPA 2014) held on 29 November 2014 in Kuala Lumpur.

Kinsabina Group Sdn Bhd winning two awards during The Star Business Awards (SOBA) 2014

insabina Group Sdn Bhd has once again received recognition in the development field by winning two awards during The Star Business Awards (SOBA) 2014 held in Kuala Lumpur recently. The company collected Gold for the Best Employer and Platinum for Best in CSR awards after facing stiff competition from the other competitors. Both awards fall under the category of Top-of-theClass-Awards which comprises of seven award titles including Best in Marketing, Best Brand, Best Green Initiative, Best Innovation, and Best Global Market in addition to the two won by Kinsabina.

The awards were presented by Minister in the Prime Minister’s Department Datuk Dr Wee Ka Siong who was also the guest-of-honour at the prestigious event. For the record, Kinsabina first won the Platinum title for Best Employer back in 2013. The Star Business Awards is all about recognising the best in Malaysian businesses. The award presentation ceremony has been held annually for five years to honour local non-public listed

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organisations that have led the way with excellent business principles, ethics and practices. Participation is open to all local enterprises that are not part of a multi-national or listed group, and incorporated in Malaysia with foreign equity not exceeding 50%. The Star Business Awards winners are also a testament of high achievement and serves as a benchmark for others to emulate. Guest-of-honour Minister in the Prime Minister’s Department Datuk Dr Wee KaSiong said in his speech that a good way for a country’s economy to remain resilient and competitive was to continually nurture the growth of local and fast emerging companies.

Now in its third year, the Malaysian Reserve business daily, in association with the International New York Times, hosts the annual event to recognize the outstanding achievements of industry players via the unique perspective of the media. Theawards is the only one that is judged by senior members of the Press. The selection process takes into account positive market impact, performance, quality of products, calibre of services and the scope of corporate social responsibility. The winners were also selected based on positive feedback from readers of the newspaper.

the recipe for the company’s success as well as partnering with SHAREDA, led by its President, Datuk Francis Goh.

“The partnership unquestionably boosted our exposure of property developments in Sabah,” he added. “We are so honoured to be recognised for our two and half years of hard work, from the initial team of three to now 16 with offices established in Kota Kinabalu (HQ) and Kuala Lumpur,” said Michael cheerfully. The award will certainly mark a new chapter for Property Hunter in the Sabah property industry for many more years to come.

Founder and Director of Property Hunter, Michael Hiew revealed that dedicated team work was

“Awards and events like these enrich our nation – by inspiring and challenging Malaysians to go forth and grab the chance in making their dreams a reality,” Wee said. Star Publications Bhd group managing director and chief executive officer Datuk Seri Wong Chun Wai said that there had been a big jump in applications for the awards this year. “The participants’ business maturity and dedication are clearly seen in the submissions,” he added.

Award presented by Minister in the Prime Minister’s Department, Dato’ Sri Abdul Wahid Omar to Michael Hiew, Founder and Director of Property Hunter

MIEA Sabah Branch Hosts 13th Annual SESB Is Paying Property Owners For Dinner Gathering Using Solar Panels

alaysia Institute of Estate Agents (MIEA) Sabah Branch hosted its 13th Annual Dinner Gathering on 13 December at WismaKinsabina. The event was attended by national council members, management and representative from various branches. Mr Siva Shanker, President of MIEA graced the event together with members from the national council. In his speech, Siva encouraged more people to join MIEA as negotiators or estate agents, including the staff of agencies. In the fight against illegal brokers, Siva insists that it is MIEA’s role to conduct more training and registration of negotiators. Meanwhile, those who have been registered are strongly encouraged to wear their negotiator’s tag with pride as it is the only and most effective way of differentiating them against illegal brokers. President of Sabah Housing & Real Estate Developers Association (SHAREDA) Datuk Francis Goh was the VIP of the night. Apart from supporting the MIEA through monetary sponsorship, Datuk Goh

also asserts that the real estate agency industry is one of the best careers to embark on. According to Datuk Goh, when the primary housing market slows down, the secondary market will pick up and transactions will increase. Likewise, when the economy is good, developers will be launching more projects and buyers will be more active in buying. Therefore, real estate agencies’ business will thrive regardless of the economy. One of the evening’s highlight was the announcement and presentation of the MIEA Youth Committee members by Siva. In delivering his note, Siva said, “The young people are our future, the youth are important, the leaders of tomorrow, and I am confident that the youth committee members are capable of taking over and leading the MIEA in Sabah”. The Chairman of MIEA Sabah Branch Mr Victor Wong as also present together with this year’s organizing chairmanMr Steven Wong. Property Hunter was one of the sponsors at the event, sponsoring lucky draw prizes of RM1000 and RM500 in cash.

MIEA President Siva Shankar introducing the MIEA Youth Committee headed by Donald Dunstan Wong (second left)

id you know that supporting green energy is not solely about conserving the environment? In fact, by helping to save the earth you will find your wallet padded with extra cash at the end of the month and in the long run. As reported in Borneo Post, most people living in Sabah are still not aware that the state electricity board (SESB) will pay home owners with rooftop solar panels up to RM1500 per month or RM1088 per kWh electricity generated from solar panels. Easy Solar SdnBhd director Dave Ang, spoke to the local newspaper at his home in Menggatal to give a clearer explanation on the 2015 solar Feed-in Tarif (FiT) Programme. According to him, individuals who install the solar panels would be paid by SESB, based on the electricity used from the solar energy for 21 years. “Based on the Renewable Energy Act 2011, the home owners will have an agreement with SESB to ensure payment is received by owners,” he said. The logic behind it is the government has allocated 1.6 percent of renewable energy fund collected nationwide to residents with solar panels. People who are interested in green technology are also encouraged to install the solar

Photo Illustration by Solar Panel panels on their property as early as they can as the rate giving by SESB is decreasing every year. During the interview, it was also revealed that the cost of installation of solar panels varies depending on size, which could range from RM38,000 to RM100,000. Yes, it doesn’t come cheap but if you did some calculations, you will know that you are going to earn up to three times from the initial cost. According to Ang, a total of 299 applicants successfully applied for the quota for solar panels (individual category) for this year, and he is looking for about 450 applicants for next year. “The quota for Sabah has yet to be confirmed. However, we are expecting it to be at 3MW, which is about 450 houses,” he explained, adding that the quota allocated this year was 2MW. “People in Sabah find this technology new, but we are confident that we will find more customers here for next year. Customers will get passive income and support green energy at the same time,” he added. He also said that Sabah was the perfect place for solar panels as we receive the highest solar radiation in the whole of Malaysia.

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SABAH PROPERTY NEWS

Kimanis Centro Making Good Progress

The Kimanis Centro commercial project

he Kimanis Centro commercial project located along the proposed Pan Borneo highway is making excellent progress with roofing works already started in December 2014. Focus will now be on the façade and interior works. A representative of Kimanis Centro expressed his satisfaction that most of the key oil and gas projects

around Kimanis are nearing completion including the first phase of the Sabah Oil and Gas Terminal, the Sabah-Sarawak Gas Pipeline, the Kimanis Petroleum Training Centre and the Kimanis Power Plant. The Sabah Ammonia and Urea Project in the nearby town of Sipitang has also been progressing well.

These developments signal the long term commitment of the State government and Petronas to transform the area into a major energy hub. As a result, many industrial, commercial and residential developments have also sprung up in recent times. There has also been news of the Pan Borneo Highway being tendered out, in order to facilitate

earlier completion. This will further cement Kimanis’ position as a logistic hub in Sabah. Kimanis Centro will be the first collection of shops to be completed in the area. With its integrated approach, highway access, extensive frontage and generous provisions, the project will be one of the prime developments in Kimanis.

Habitat For Humanity Commemorates 10th Anniversary

Property Hunter team presenting a cheque to representatives from Habitat For Humanity

he inspiration behind the creation of Habitat for Humanity was to develop “partnership housing”, a concept that centered on providing adequate shelter to those in need while working side by side with volunteers to build these simple, decent houses.

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The concept that grew into Habitat for Humanity began in the 1940s and started to expand worldwide in the 1960s. Money that is raised from generous sponsors and donors are used to build houses that are sold at no profit or interest to the poor and underprivileged. The new home owners will be

required to pay back the loan within a stipulated time to enable other recipients to benefit from the programme.

In total, the partnership between Property Hunter and Habitat for Humanity Kota Kinabalu manage to raise RM23,623 in 2014.

In the last ten years, Habitat for Humanity has built about 40 houses in Sabah with each costing between RM25,000 – RM35,000. Apart from financial assistance, the organization also receives support in terms of machinery and manpower to build the houses.

Habitat for Humanity Kota Kinabalu, under its president George Chong is targeting to raise RM350,000 for the construction of 10 new builds for year 2015. This programme will be the construction of completely new homes or the repair of homes of eligible needy applicants.

In 2013, Property Hunter partnered with Habitat for Humanity Kota Kinabalu to raise funds for its housing programme. For every unit sold during its series of property expos in 2014, Property Hunter would pledge RM50 to the building fund. Expo visitors and members of the public were also encouraged to donate during the events.

The partnership with Property Hunter will continue with the 2015 Property Hunter Expo Series starting in March through October with the hope of reaching the targeted funds.

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SABAH PROPERTY NEWS

Shareda Youth Kicks Off Shoebox Giveaway Campaign

Public-Private Partnerships For Pan Borneo Highway

major part of the Pan Borneo Highway project may be constructed and managed by the public-private partnerships (PPP) through the Private Public Cooperation Unit under the Prime Minister’s Department.

SHAREDA Youth has launched its Shoebox Giveaway campaign to benefit the less fortunate

o celebrate this season of giving and sharing, SHAREDA Youth has launched its Shoebox Giveaway campaign to benefit the less fortunate. The campaign encourages generous members of public to donate gifts packed in a shoebox and drop them off at Ground Floor Information Counter Suria Sabah Shopping Mall between 15 November and 13 December, 2014. Gifts can be for a boy or girl aged between 13 and 18 years old with school supplies, toys and gifts, and hygiene items being the preferred items in the wish list. Pre-loved items are also acceptable but only if still in good condition. SHAREDA Deputy President Chew Sang Hai, who was representing its president Datuk Francis Goh at the launch, said that SHAREDA wants to be seen as a professional organization and not a nongovernmental organization with narrow self-centred objectives. “We, including SHAREDA Youth, share this vision of an organization that provides leadership in the industry, is a worthy partner of development with the government and voluntarily fulfil our corporate social responsibility,” he said.

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“We believe in giving back to society from which our business operates.” Datuk Yeo Boon Hai, DirectorGeneral of Kota Kinabalu City Hall was guest of honour at the event representing Mayor Datuk Abidin Madingkir to official launch the Shoebox Giveaway campaign. He expressed his appreciation for the efforts of SHAREDA Youth to put together this charity event.

He said, “This is a noble motivation at a time when our society is being overwhelmed by selfseeking materialism. To see a group of young people thinking of and devoting time and resources to host this event is truly heartwarming.”

Works Minister Datuk Seri Fadillah Yusof said that only a small portion of the project would be carried out by the Works Ministry. “The project will be implemented by the private concession company and will only be handed over to the government upon its completion,” he said. He said that his ministry would only be providing its technical views. However, this was presently still at the discussion stage. Fadillah said works to upgrade the Kepayan-Lok Kawi road at the Putatan district on the outskirts of Kota Kinabalu are expected to be completed by the middle of next year.

The RM132 million project to upgrade the road from the Petagas bridge to the Lok Kawi exit would be done in two phases. The first, a 3.4km stretch is expected to be completed next June, while the other, a 2.6 kilometre stretch, by next October. “For the first phase of the project, we have extended the time (expected completion date October, 2014) because of issues such as illegal structures and nonfinalisation of compensation, as well as moving of utility structures,” Fadillah told a press conference. Earlier, he visited the site, and the upgrading site of the Donggongon to Simpang Papar Spur road, along with his deputy, Datuk Rosnah Abdul Rashid Shirlin. He said the Donggogon to Simpang Papar Spur road upgrade works which began in April 2013 at a cost of RM75 million, was expected to be completed by next October

Datuk Yeo later presented shoebox gifts to 26 children of JIREH Home Tuaran while gifts collected at the end of the campaign will be distributed to orphanages on Sabah’s west coast. Illustration Photo of highways

Australian Property ‘Fusion Apartment’ Exhibited in Kota Kinabalu

wo prominent real estate agents in Malaysia, Property Hub and Laurel Capheld a three-day showcase at the newly opened PH (Property Hunter) show gallery at Heritage Plaza, Jalan Lintas from 12 – 14 December. The showcase offered a glimpse into the most talked about residential development in Perth, Australia and aimed at giving prospective buyers and investors more specific details about the property. The property in question is Fusion Apartments, which is nestled at the junction of Perth’s most useful traffic artery, promising you personal space yet still very close to where the real action is taking place.

How Does GST Affect Ordinary People

and the new Sport Stadium and even connected to the Perth CBD, Swan River, universities, freeway and airport. All these elements are combined in a perfect Fusion.

Meanwhile, on the second and last day of the event, Enoch Khoo, Vice President of Property Hub,gave an hour talk to guests on ‘Perth Property Market Outlook and Why Invest in Perth’.

The combination of strikingly contemporary exterior, to the clever options for customising your apartment interior, no details has been overlooked to create the ultimate urban living space. Beyond all of those, you will still be close to the Crown Entertainment Complex

Richard Oon, a real estate taxation expert, presented a talk on GST

ichard Oon, a real estate taxation expert, presented a talk on GST and its effects on the general public particularly those in the property investment market at the Kota Kinabalu Convention Centre on 6 and 7 December, 2014.

He says that the usual train of thought is to buy and renovate, then rent or sell. But with the onset of GST, having a solid long-term plan that takes into account all the variables that come with the GST will be crucial to ensure the best return on your investment.

The talk aimed to clear many doubts that are still lingering about the effects of the GST after its implementation in April 2015. And, as Richard pointed out, there are some who are also still hoping for a deferment of the GST.

Richard adds that there is no right time to buy but if the property feels right, buy it now. Having a clear understanding of how GST affects property developers, purchasers and renters will go a long way to determining the best investment strategy and making the right decision.

“When the government announced the GST, they had set the target of 100,000 businesses registering for it. As of December 2014, a total of 170,000 businesses have already registered so the chances of it being deferred are very slim to none,” he said. Fusion Apartments

Richard Oon is the national tax director of TY Teoh International, a member firm of the MSI Global Alliance, which is one of the largest independent associations of accountancy and law firms. He has more than 20 years’ experience in the taxation industry and is a much sought after speaker on this topic.

On property investment, Richard opined that many people decide on purchasing or investing in property without paying enough attention to planning.

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SARAWAK PROPERTY NEWS

SARAWAK

PROPERTY NEWS

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

HDC To Build 3,508 Affordable Housing Units In Next Three Years Tebas, Kuching (404 units); Curtin, Miri (749 units); Kidurong, Bintulu (868 units); Sourabaya, Kuching (250 units); Matang Batu 5, Kuching (757 units); Tondong, Batu Kawa (60 units); Lutong, Miri (51 units); Matang-Malihah, Kuching (195 units); Petanak, Mukah (152 units) and Betong (16 units).

Housing Development Corporation (HDC) Official Website

he Housing Development Corporation (HDC) under the Ministry of Housing will develop and construct 3,508 affordable housing units at several main locations throughout the state within the next three years. Housing Minister Datuk Amar Abang Johari Tun Openg said this was to ensure that the house prices can be controlled indirectly through the regulation of house prices

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which were lower than market prices based on the locality of the particular project. “It is also to cater to the demand and needs from middle income groups who face difficulties in purchasing a house in the open market,” he told the august house when delivering his winding-up speech. He said 10 locations have since been identified for this project; namely at Muara

On a related matter, Abang Johari said three ‘My Beautiful Neighbourhood’ and Housing Maintenance Programme (PPP) projects in Sarawak have been approved by the Ministry of Urban Wellbeing, Housing and Local Government this year. “The projects will be implemented at Taman Ixora, Rancangan Perumahan Rakyat (RPR) Kapit (seven blocks – 192 units), Taman Susur Jambu, RPR Sarikei (seven blocks – 224 units) and People’s Housing Programme (PPR) Sri Wangi (ten blocks – 200 units) with a total cost of RM7.8 million,” he elaborated.

According to him, the three projects, which will comprise upgrading of infrastructure facilities and landscaping as well as repainting and maintenance of the buildings, are expected to commence in December once the procurement process is completed. He also said HDC had proposed to the federal government to allocate grants for a project in Permyjaya, Miri (47 blocks – 2,372 units) be implemented with ‘My Beautiful Neighbourhood’ while five other projects be given PPP namely PPR Bandaria Park, Bintulu (17 blocks – 1,000 units), PPR Rantau Panjang, Sibu (six blocks – 500 units), PPR Taman Dahlia, Kuching (11 blocks – 816 units), RPR Sibu Jaya (16 blocks – 1,280 units) and RPR Sungai Plan, Bintulu (18 blocks – 1,440 units).

PR1MA House Buyers To Enjoy 110% Of Housing Loan

SMC-Sheda Synergy For Property Industry their sights, ventilation path or open spaces with illegal extensions.

atuk Seri Najib Tun Razak said loan offers as high as 110% will be extended to 1Malaysia Housing Project (PR1MA) house buyers by selected financial institutions. He said the move was a continuance of the Government’s effort to help the people.

“Likewise, nobody will tolerate illegal fencing up of open spaces, five-foot-ways or government land,” he said, adding that SMC had received many complaints from the public with regard to illegal extensions of residential and commercial units.

“This is to enable all house buyers to own houses while the extra 10% is to pay additional costs such as legal fees and insurance.” “The rentto-own scheme is also offered as an assistance to the middle-income group,” he said in an entry in his blog najib.razak.com.

On this, he urged all developers and property buyers to refrain from doing such illegal extensions, adding that the council would demolish these structures.

Najib, when tabling the 2015 Budget themed “People Economy” in Parliament in October, had announced that the government would address the issue of house ownership through the construction of 80,000 units of houses under PR1MA with an allocation of RM1.3 billion. Najib said the Government aimed to build 500,000 units of PR1MA houses within five years under the PR1MA programme which covers all states except Labuan. He revealed that the projects in the pipeline are in the southern and northern regions, Sabah and Sarawak with prices of houses ranging from RM118,000 to RM335,000. The areas include Bukit Bintang in Kuala Lumpur (RM275,000), Tebrau (RM180,000), Kuala Ketil (RM215,000), Sandakan (RM280,000) and Kuching (RM235,000). Najib said steps to apply for PR1MA houses were very easy and urged those who met the criteria to register for application and surf the official website at www.pr1ma.my.

Datuk Tiong Thai King

Source: BorneoPost

he Sibu Municipal Council (SMC) will continue to partner with Sarawak Housing and Real Estate Developers’ Association (Sheda) in boosting the property industry. Council chairman Datuk Tiong Thai King said his side had assured consultants and developers of friendly and speedy buildingcontrol processes, adding that occupation permits (OP) would be issued within two working days once the consultant had submitted Form F to the council.

“We will conduct a series of demolitions to be carried out before the end of the year. “Notices have been issued to property owners concerned and I hope that they would remove the illegal extensions before council moves in.” Tiong also hoped that Sheda would continue to play a key role in promoting the property industry in the region.

“We will also ensure that the provisions under the Sarawak Building Ordinance 1994 are being strictly complied with, while facilitating the development of new properties,” he said at the opening of Sheda Home and Property Roadshow Sibu 2014 in Wisma Sanyan.

Meanwhile, Sheda president Ahmad Zaidi appealed to the government to defer the implementation of the new Housing Development Ordinance.

Tiong noted that as buyers made tough decisions in investing their hard-earned money into their dream properties, they would want to have a say in their choice of location, ambience and surrounding environment.

“If (there are) too many regulations, there would be imbalance in supply and demand. When there is imbalance, prices will go up,” he said, adding that Sheda had always been meeting and holding discussions with relevant authorities.

He said the industry had many challenges in the market due to government restrictions.

Tight Measures Affect Property Mart

he property market in Sibu may be affected by tightening measures put forward under Budget 2014 to control speculation and the impending implementation of the Goods and Services Tax (GST). Sarawak Housing and Real Estate Developers Association (Sheda) vice-president Dato Sri Joseph Ting said measures included upward adjustment in the Real Property Gain Tax (RPGT), cancellation of Developers Interest Bearing Schemes (DIBS) as well as stiffer lending policy implemented by financial institutions. “As for residential properties, especially affordable homes below RM400,000, I believe it is still moving forward strongly with Sibu located in the central zone surrounded by many smaller towns which could sustain the demand for residential properties,” he told a press conference on Tuesday to announce the 2014 Sheda Home and Property Roadshow in Sibu Ting said residential property prices in Sibu outskirt were still comfortable compared to other hotspots in the town. “As the population spreads out, new areas are opening up for development with the upgrading and improvement of roads and infrastructure such as those experienced near University College of Technology Sarawak and Tun Zaidi Adruce Road. “The houses in the new areas are priced quite competitively and comparable to those in the primary market,” he said.

“Nobody wants to find out later that their neighbours will block

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SARAWAK PROPERTY NEWS

China Institute Wants To Develop Eco-City In Sarawak

Ibraco Offers Viewing Of Stutong Heights Apartment 3

Ibraco’s Stutong Heights Apartment 3

Kuching Riverside View

he North China Municipal Engineering Design and Research Institute is very keen to collaborate with Sarawak government to develop an eco-city in the outskirts of Kuching. Tourism Minister Datuk Amar Abang Johari Tun Openg has led an entourage to pay a courtesy call on the institute’s Chief Executive Officer (CEO) Xu Qiang to further discuss this project.

“This is the second meeting and negotiation after the first in the beginning of this year,” said Abang Johari, who is also Sarawak Housing Minister. “We want to introduce a modern and sophisticated neighbourhood in which the design- and-build will consider the natural surrounding and blend into the environment,” he said, while emphasising that Sarawak was heading towards the green direction. If this pilot project can be successful, he said it will be a model for future property development and town planning in the state. “We want to focus on conserving the environment in the outskirts and rural areas through this concept,” he

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said. “Moreover, it will bring investors in besides making it into another attractive tourism product,” he added. However, he said the technical committee would need to do a proper study before drawing out a blueprint which could possibly be ready by the first quarter of next year and finalising this collaboration. Meanwhile, Xu assured that the institute was willing to provide technical knowledge and expertise support to ensure that the project materialise. “We are confident with this collaboration between China and Sarawak. Based on our experience, we believe Sarawak has better criteria to build any design and achieving its intended outcome,” he said. “We also really encourage Sarawak to apply the eco or green concept to building and planning in order to protect the environment for a better living. We hope to see a direct collaboration between the parties involved under the leadership of the minister (Abang Johari) in order to ensure its success,” he added. Xu together with other Chinese officials plan to visit Kuching next year.

ot on the heels of the fastselling Stutong Heights Apartment 1 & 2, Ibraco will be launching its latest apartment series, the Stutong Heights Apartment 3. Tucked inside Lorong 24 of Jalan Stampin Baru, Stutong Heights Apartment 3 is situated a stone’s throw away from Kuching International Airport, and yet remains a quiet distance from the main bustling access road. Nevertheless, convenience in accessibility is bolstered through a future proposed access road linking directly from the main road to the apartment. “Everyday amenities are also easily available with a myriad of commercial centres, including the popular Stutong Market within a short distance of less than 10 minutes away,” the company said in a statement yesterday. “ Its ideal location is also boosted by its close positioning with various specialist government and private hospitals, as well as local and international educational institutions.” With no sinking fund required, Stutong Heights Apartment 3 not only provides lift access but also gated and guarded with 24 hours security.

The unit sizes for Stutong Heights Apartment 3 are also larger compared to its previous forerunners, providing additional comfort space to its owners. Available in choices of 2+1 bedrooms, at 861 ft2 each or 3 types of 3-bedrooms units, ranging from 1,065 ft2 to 1,108 ft2 per unit, each one is allocated free covered car park. The master bedroom of all types comes with ensuite bathrooms. Each block are built by giving owners the choices of selecting units facing the car parks or the nicely landscaped internal courtyard. The new apartment is available at only 126 units in total, and purchasers are advised that all units will be offered on a First Come First Serve basis. Interested parties can call Ibraco’s office at +6082 361 111 for further information and for registration purposes.

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WEST MALAYSIA PROPERTY NEWS

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

First 1Malaysia Transit Home to Be Occupied Soon

Khairy Jamaluddin (centre) discussing about the transit homes with Datuk Abdul Rahman Dahlan (right) and other officials

ore than 400 young, married couples aged below 30 have been identified as the first group to qualify to rent homes under the 1Malaysia Transit Home Program in Bukit Jalil. The 1Malaysia Transit Home project, which consists of

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two blocks at the People’s Housing Project (PPR) in Bukit Jalil, can house 632 couples. The project is for young couples below 30 who are working in the Klang Valley and have a combined household income of less than

RM3,000. It allows the couples to stay in the 650sq ft units – each of which has three rooms and two bathrooms – for a maximum of two years while paying only RM250 in rent each month. To be eligible for the housing, the couple cannot own any other property in the Klang Valley as reported in The Star Online. Youth and Sports Minister and Umno Youth chief Khairy Jamaluddin said the project, which the wing mooted at the Umno general assembly last year, was open to all races. He also stated that although the concept was a short-term solution, it would provide some relief to newly-wed young couples to build a life. “It gives them a place to live while paying very low rent for two years until they manage to find a permanent home and are more financially stable,” he said. Khairy

said Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan had agreed to make the transit homes a Government policy. “He has agreed that in any PPR project, at least 10% of the units will be allocated as transit homes. “There are now PPR schemes being developed in Kepong, Kuala Terengganu, Johor Baru and Kota Kinabalu,” he said. Abdul Rahman, who also inspected the units, said that over 4,000 couples had applied for the transit homes. “We will soon be announcing another major collaboration with the Youth and Sports Ministry – the Youth City. “We have had our preliminary meetings to determine the locations and concept and will be announcing the locations early next year – one in the peninsula, one in Sabah and one in Sarawak,” he said.

New Step-by-Step Guide to Property Investment Hits the Market

Chris Tan has come out with his latest publication, “The Wholly Book for Homebuyer”

Dr Dolf de Roos, Dr Daniele Gambero, Mr KK Wong, Mr Enoch Khoo and Mr Ishmael Ho being presented with a copy of the book

ell-known Malaysian real estate lawyer and speaker Chris Tan has come out with his latest publication, “The Wholly Book for Homebuyer”, which was officially released at the recent PRISM 2014 property summit and expo. The book is aimed at helping the reader navigate the intricacies of property investment in a simple yet complete step-by-step guide. Wrapped in a glittering gold cover, “The Wholly Book for Homebuyer” is a treasure trove of information that addresses the many concerns of one of the biggest decisions in life – investing in property. The book launch was witnessed by notable property gurus and authors including international

real estate investment guru and best-selling author, DrDolf de Roos; originator of the ‘propenomic’concept, Dr Daniele Gambero; the man who built the iconic township of Seri Austin, Mr KK Wong; marketing maestro Mr Enoch Khoo from Sabah and Gen-Y mapping expert Mr Ishmael Ho were present during the launch and were each presented with a copy of the book. Chris spent time after the launch to sign copies of his book for his fans and aspiring property investors.

The Affordability of Landed Properties in Malaysia

he Khazanah Research Institute recently released a report, The State of Households, which underscored concerns of house prices and affordability in Malaysia. The institute reported that houses on average cost 5.5 times annual median income, when it should be just three times annual median income. The report further states that “in median income terms, our houses are more expensive than those in Ireland, and even Singapore,” as reported by The Star Online. This issue of affordability is being revisited with the impending goods and services tax (GST) to be introduced on April 1. Nevertheless, there is something positive in today’s housing market. There is a general consensus among property consultants that the market has stabilised. To a great degree, speculation has been weeded out. In a project located in Kota Damansara, Selangor when the first block was launched in 2012, all the 400-odd units were sold in less than a week. When the second block was launched, the next 400-odd units took a longer time to sell. The developer has launched the third and final block at about RM1,200 per sq ft but there were only 80 buyers after its launch early this month. PA International Property Consultants (KL) Sdn Bhd managing director Jerome Hong says that a lot of the speculators have been removed with the various cooling measures and stringent banking requirements. “Prior to this, developers took care of their own marketing and do not need the services of marketing agents,” he adds.

The second positive in today’s market is that buyers are “more genuine” with the majority of them purchasing for own occupation or to upgrade. The next two largest groups are people who are buying for their children and those who are buying to rent out the units. Investors buy to rent out, while speculators buy to flip. “While we continue to see speculators, they are considerably few,” says Jordan Lee & Jaafar managing director P. Tangga Peragasam. On the current concerns with regards the GST, Tangga says there are other issues looming ahead. He draws attention to a promotion by a local commercial bank which is offering fixed deposit (FD) rates at 4.15% per year for tenure of six to ninemonths. He is of the view that at 4%, there will be more interest in FDs rather than big ticket items like buying a house. Therefore, the two motivating factors in property investments yield or capital appreciation - are no longer as attractive as before the run-up in property prices. The rise in interest rates also mean larger mortgage payments and in today’s weak salary market, coupled with stringent lending conditions, many have been deterred, or have their applications rejected, says Tangga. “Our salaries have not grown in tandem with property prices,” he says. In order to overcome this issue, Jerome Hong says developers will generally do two things – give more freebies or build smaller units.

The book goes on sale at major bookstores nationwide at the end of December 2014 or you can order your copy online now at www.christan.my.

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WEST MALAYSIA PROPERTY NEWS

BCB Berhad Celebrates Momentous 25th Anniversary

Malaysian Developers Hit by Singapore Cooling Measures

A Recent Property Exhibition Held In Singapore

It was a glittering affair at the BCB 25th Anniversary celebration

CB Berhad celebrated its 25th anniversary in grand fashion recently with a host of prominent guests including YB Dato’ Wee Ka Siong, Minister in the Prime Minister’s Department in attendance. The event held in Kuala Lumpur acknowledged the significant changes BCB Berhad has undergone since its humble beginnings in Johor to become one of the most established developers in Malaysia. BCB Group Managing Director Dato’ Tan Seng Leong credits the company’s slogan, ‘Building Communities and Beyond’ as the cornerstone of its success. “Building Communities and Beyond seems like a simple phrase but for it to work, we need the involvement and concerted effort of all in the organization to showcase that BCB is worthy of its purchasers in all aspects,” commented Dato’ Tan. He emphasized the four key points which have contributed to the transformation of BCB over the last 25 years which are innovation, comfort, security and quality. In recent years, BCB has ventured further afield from its stronghold in Johor with projects in the Klang Valley, namely Concerto

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North Kiara, Home Tree Kota Kemuning and Taman Yarl which have received encouraging sales response. BCB will continue to play a major role in Johor, particularly in Batu Pahat where it has approximately 65% of the market share and 1,500 acres of landbank.

Dato’ Tan is confident that BCB will not only continue to keep pace with the external changes in the competitive property market and business environment but also stay on course in pursuing its internal transformation to help BCB balance between financial performance, customer satisfaction and employees’ well-being.

alaysian property developers that have ventured into nearby Singapore are feeling the bite of its sluggish property market and the government’s stringent curbs, according to media reports. Developers that have entered the republic’s housing market include YTL, Sunway, SP Setia IOI Properties and Selangor Dredging Properties Bhd (SDB). But those that have failed to sell more than half of their residential units are the most severely affected, said experts. In particular, SDB has a total of five projects there with a Gross Development Value (GDV) of about S$700 million (RM1.81 billion), revealed its Communications & Corporate Affairs Head Lina Othman. Of these, Jia and Gilstead Two are completely sold, while between 95 to 99 percent of the units at Okio, The Village and Hijauan on Cavanagh have been taken up. As for SP Setia, it has Eco Sanctuary and 18 Woodsville at Upper Seranggon. The former has moved 80 percent of its last three blocks, while only five units are up for grabs at 18 Woodsville. Similarly, YTL’s 13unit Kasara and 18-unit Sandy Island on Sentosa Cove found buyers for all of its landed villas a few years ago, noted SLP International’s Executive Director David Neubronner. However, the company decided to postpone the 2015 launch of its project at Orchard Boulevard as it would be hard to sell the units at a good price. The site for the

development consisting of 78 luxury condos was purchased for S$435 million (RM1.12 billion) or S$2,498 (RM6455) per square feet per plot ratio (psf ppr) in 2007. As for IOI Properties, it is saddled with two projects with low take-up rates. For instance, less than 30 percent of the 755 units at The Trilinq in Jalan Lempeng were moved by its subsidiary Clementi Development at a price range of S$1,190 (RM3,075) to S$1,850 (RM4,780) psf. The 262,828 sq ft site for the project was purchased for S$408 million (RM1.05 billion) in January 2012. “That worked out to a cost of S$554.4 (RM1,433) psf ppr. Analysts had estimated a break-even cost of S$854 (RM2,207) to S$974 (RM2,517) psf ppr,” said a source. The development is under construction and is expected to be ready by 2017. The group also teamed up with Singapore’s Ho Bee Investments Limited for the construction of Seascape, an exclusive project comprising 151 units with views over the South China Sea. Both their 50:50 joint venture bought the site for S$459 million (RM1.19 billion) or about S$1,360 (RM3,514) psf ppr in March 2007. The project was subsequently completed in 2010, but only onethird of its 151 units have been taken up since they were released in 2011 at an average price of S$2,600 (RM6,719) psf.

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WEST MALAYSIA PROPERTY NEWS

IOI Properties To Expand Mall In Putrajaya

Eastern And Oriental Receives Green Light For STP2 Reclamation

astern & Oriental Bhd (E&O) has obtained approval from the Penang authorities to start reclamation works for phase 2 of its Seri Tanjung Pinang (STP2) development.

IOI City Mall in Putrajaya

t has been announced that IOI City Mall in Putrajaya will be expanded by a further 1 million square feet as occupancy rate at the new mall has hit 85 percent. IOI City Mall SdnBhd General Manager Chris Chong said during the soft launch of the project recently that they are looking at the possibility of expanding the mall under phase two of the project. He added that once the second phase of the mall was completed, the IOI City Mall in Putrajaya will be the largest mall in Malaysia.

“We have already built the bridge to connect with the second phase of the mall,” he stated. The group expects the mall, which is located in a large catchment area that includes Puchong, Kajang, Putrajaya, Seri Kembangan and Cyberjaya, to be fully tenanted by February 2015. He also revealed that the group is lobbying for the opening of a mass rapid station within its vicinity in order to boost customer traffic.

“The planning permission approval is conditional upon, amongst others, TPD in due course surrendering 191.09 acres of reclaimed land to the Penang State government,” it said. “Out of this, 110 acres thereof shall be the net area of land available for

It was reported that upon its completion by the end of next year, it will be the first world’s fastest intercity bullet train. The meter-gauge electric units will run at a set speed of around 160 km per hour, said Zhou Qinghe, president of CSR ZELC. The trains will also be used on a 900-km railway line being planned between Johor Bahru on the southern tip of the country, and Padang Besar on the Thailand

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border, according to the train manufacturer. After the first batch of 10 trains produced in China is delivered, Zhou said trains of the same type will then be manufactured at a new manufacturing base being built in Malaysia. The company announced in April it was spending $131 million on the building of a manufacturing and maintenance base to serve the needs of the country, as well as the whole ASEAN region. It has signed five contracts to supply 98 trains and carriages, the first phase of which will be completed by the end of this year.

With this, E&O is inviting qualified contractors to take part in a pre-qualification exercise for the reclamation project. It noted that the main scope of works include land reclamation works, dredging works, soil improvement works, marine piling works, coastal protection works and other associated marine works.

Beijing Wants Its State-Owned Enterprises To Invest In Malaysia

Malaysia To Have World’s Fastest Inter-City Bullet Train

he 200-kilometer highspeed rail line between Kuala Lumpur and Ipoh to the north will be built by China’s firm, CSR Zhuzhou Electric Locomotive Co.

development made up of 60 acres on the man-made island and 50 acres at Persiaran Gurney,” it said.

Tiananmen Square, Beijing, China

eijing wants more of its state-owned enterprises to invest in Malaysia as both countries strive to achieve US$160 billion (RM528 billion) bilateral trade by 2017. Deputy Prime Minister Tan Sri Muhyiddin Yassin said Chinese Vice-Premier Zhang Gaoli mentioned this when they met during a bilateral meeting at the latter’s office at the Great Hall of the People, here recently. Both countries were committed in enhancing their trade and investment as China continued to be Malaysia’s largest trading

partner, he told Malaysian journalists after meeting his counterpart. The Malaysian leader said Beijing also supported and would help Malaysia when it becomes the chairman of Asean next year as the region turned into an Asean Community by then. On the tourism front, Muhyiddin said Kuala Lumpur hoped to attract some of the projected 500 million Chinese tourists, in the years ahead, adding that the meeting also touched on efforts to combat terrorism.

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INTERNATIONAL PROPERTY NEWS

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

Foreigns To Be Allowed Owning Properties In Vietnam With this newly amended law, foreigners with a valid visa, as well as foreign companies and international organisations operating in Vietnam will be able to own houses and apartments. In the past, only foreigners married to Vietnamese nationals and those making contributions to the country were allowed to purchase property. Ho Chi Minh City, Vietnam

ave you ever dreamt of owning properties in Vietnam? Well if you did, we have some good news for you. Previously off-the-radar for foreign property buyers buyer, the Vietnam government has finally approved the legislation to allow limited ownership of property by foreigners starting from July 1, 2015. The new law, to take effect from July 1, 2015, removes many of the previous restrictions on foreign individual buyers.

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Many are hoping that the significant move could herald the start of more foreign ownership laws change throughout the region ahead of the ASEAN Economic Community (AEC 2015) which comes into force in oneyear from now. The law is finally changed as the Vietnamese government is aiming to inject action in what has been a broadly stagnant real estate sector whilst boosting economic growth at the same time.

Meanwhile, CBRE Vietnam confirmed there is no limit on the number of dwelling units a foreigner can buy, but the total number of dwelling units owned by foreigners must not exceed 30 percent of the total units in one condominium complex, or not exceed 250 landed property units in one particular administrative (or the equivalent of) ward. Previously an eligible foreigner could buy only one condominium in Vietnam. Properties owned by foreigners can be sub-leased, traded, inherited and collateralised, where previously the owner could only use the property occupying purposes.

CBRE Vietnam also confirmed the tenure allowed to foreign individuals buying homes is a 50-year leasehold with renewal possibility upon expiration. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure. “This recently passed Law makes the market more attractive to Vietnambased expatriates seeking an investment in residential properties in Vietnam, and clears away the initial barriers to create a level playing field,” said CBRE Vietnam as reported by Property Guru. “This long awaited change in the Foreign Ownership Law will help create a more balanced, transparent and sustainable residential property market in Vietnam, and is expected to play a major role in correcting, to some extent, the above-mentioned issues, but the participation of the private sector players will also play a big role,” it added.

How Property Prices Are Controlled In China’s Major Cities

Design For ‘Malaysia Square’ In London Is Revealed

Strict cooling measures imposed to control overheated property market

he major cities in China namely Beijing, Shanghai and Guangzhou are currently implementing strict property cooling measures as part of a central government crackdown on the overheated property market. The move comes as the central government faces renewed pressure to stabilize skyrocketing home prices in several major cities, thus resulting houses tagged in unaffordable prices to its residents. Under the new measures, single Beijing residents will be prohibited from buying second homes.

The central government also implies that in areas where property prices are rising too quickly, local governments must strictly enforce a 20 percent capital gains tax, except for those who only have one property and sells it after five years.

Meanwhile in Shanghai, local residents are only allowed to own up to two properties and similarly to the measures implemented in Beijing, 20 percent capital gain tax is impose on home sellers. It is also outlined by the government that foreigners have to reside in Shanghai for at least a year before they can purchase a property there. They are also not allowed to own a second property in certain areas. In the financing term, the bank is adjusting loan-to-value ratio and interest rates for second home purchase loan and prohibit any loan for third house purchases for the house buyer. In the city of Guangzhou, apart from allowing the residents to own only two properties, the government also emphasizes that non-residents are only allowed to buy property if they have resided in the city for 12 months consecutively as a measure to keep the property’s prices in control.

Malaysia Square At London’s Battersea Power Station

rime Minister Datuk Seri Najib Tun Razak and the Mayor of London, Boris Johnson unveiled the undulating design for Malaysia Square, the winning design for a public space within London’s Battersea Power Station for ‘Malaysia Square’ as reported by Bernama. The design for the Malaysia Square centres on a two-level urban canyon with integrated bridges and stairways that were inspired by Malaysia’s landscape and geology. The Prime Minister in his speech said the plan for the Malaysia Square was not only a grand plan but one that would be a masterpiece in London that becomes Malaysia’s contribution to the city.

“Yet the Malaysian connection runs deeper still. Rocks quarried from every state throughout Malaysia will be blended with material from the original chimneys of the Power Station to build the Malaysia Square,” he added.

“For Malaysians, a visit to Battersea will bring a new sense of belonging, as the bond between our nations is given a physical form,” Najib said. The Battersea Power Station site is project undertaken by a consortium of Malaysian investors comprising SP Setia, Sime Darby and the Employees’ Provident Fund.

“Drawing their inspiration from the famed Mulu Caves in Sarawak, the designers have created an outstanding public space,” said Najib, adding that the interior galleries would showcase Malaysian culture and at the centre of the square was an interactive fountain in the shape of the national flower, ‘Bunga Raya’.

On top of that, in the year 2013, minimum down payment for second home purchases rose to 70 percent of the property value.

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INTERNATIONAL PROPERTY NEWS

UEM Sunrise’s First Aussie Home Project Selling Fast

IOI To Buy 37.17% Stake In Taipei 101

OI Properties Group plans to purchase a 37.17 percent stake in the iconic Taipei 101, Taiwan’s tallest building, for NT$25.14 billion (RM2.74 billion). According to an expert who wishes to remain anonymous, “IOI Prop’s move to seize the rare opportunity in the global iconic building is justified by the estimated rental yield of more than 5 percent, which is decent.”

Artist Impression Of Aurora Melbourne Central

ne of Malaysia’s leading property players, UEM Sunrise has sold more than 95 percent of all the residential units at its first project in Australia in just two weeks. Known as Aurora Melbourne Central, the 92-storey skyscraper features residential units, serviced apartments, offices, hotel rooms and retail spaces.

Touted as the largest mixed-use project in Melbourne, the development is located strategically located along La Trobe Street within the heart of the city’s central business district (CBD).

“We are honoured with the overwhelming support from the purchasers and vote of confidence from the investors in UEM Sunrise’s properties. Aurora Melbourne Central is a clear testament to our ongoing commitment to building high-quality and unique homes in the markets we operate in,” said the Managing Director and CEO of the company, Anwar Syahrin Abdul Ajib.

In comparison, average prime yield of Grade A offices in Taipei currently stands at 2.25 percent, said Knight Frank Research in a recent report. The opportunity to buy the stake emerged after Taiwan’s food giant Ting Hsin International Group pledged to create a food safety fund after it was embroiled in a scandal for selling substandard oil. In line with this, a significant portion of the proceeds from the sale will be used for the fund.

Ting Hsin is the second biggest shareholder in Taipei Financial Center Corp (TFCP), the building owner, after Taiwan’s governmentowned corporations which control about 44.35 percent. Aside from IOI, financial company CTBC Financial Holding Co, was also keen on acquiring the stake to enlarge its existing 7 percent interest in TFCP. But the former beat it to the punch. Subject to the approval of Taiwan’s Investment Commission, the transaction is expected to be completed in Q1 2015. Based on market chatter, the acquisition is the first step in IOI’s long term plan to create a real estate investment trust. However, analysts are neutral on the deal due to its negligible impact on the company stock prices in the near term.

“The potential comes from the long-term prospects of Taipei 101 but the risk is that the group is entering a new market,” added one expert.

Green-lighted by Victoria’s Planning Minister in September 2014, Aurora Melbourne Central is expected to be fully completed by 2019.

In addition, the development enjoys direct underground access to the rail network, Melbourne’s Central Station and the CBD’s retail precinct, which comprises Myer, GPO, Emporium, David Jones, Bourke Street Mall and the Melbourne Central Shopping Centre. The project also has many conveniences at its doorstep, including Victoria’s State Library, RMIT University and two tram super stops. Taipei 101 Tower

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Except for the RM303.45 million IOI Palm City in Xiamen, China, the majority of IOI’s investment properties (RM2.46 billion) are located in Malaysia. Additionally, its investment properties are valued at RM2.84 billion, while sites held for property development are collectively worth RM3.09 billion.

Knight Frank Launches Chinese Outward Real Estate Investment Report

night Frank has published a report titled “Chinese Outward Investment, After the Initial Waves, What’s Next?” There has been tremendous surge of Chinese outward investment in overseas real estate in recent years. From 2009 to 2014, the total value of Chinese overseas investment volume has skyrocketed from US$0.6 billion to hit an estimated US$15 billion. So far the thrust of this investment has been focused in gateway cities of Australia, the US and the UK. In 2014, Australia has seen the strongest growth in inbound real estate investment from China at over 60% increase year on year. Neil Brookes, Head of Capital Markets for Asia Pacific at Knight Frank, says, “Investors today are shifting their focus towards sustainable returns in the long term. The key factors for Chinese investors are the policy push from the Chinese government to diversify into other countries; a softening domestic market; and the pull from higher returns achievable in overseas markets.

“Australia, the US and the UK are the top three markets most Chinese investors are looking at. We saw five times as much capital outflow from China into these three markets in 2013 alone compared to the previous year. We expect the transaction volumes from Chinese investors into these three markets this year will match or even exceed that of last year.”

In this report, Knight Frank investigates the key drivers and new development for these Chinese outward real estate investments, with the following key findings: The softening of Chinese market conditions (with its low yield, lack of investable stock and depressed residential markets) continue to impact Chinese investors and developers. With Government policy encouraging firms to expand overseas, we continue to see active investment activities by Chinese institutional investors, banks and developers. However, due to the policy-driven nature of the Chinese market, there remains a risk that China’s outward investment could be impacted by policy adjustments. The first wave of Chinese capital outflow saw sovereign wealth funds investing in trophy assets and banks acquiring property for owner occupation. Large developers followed, looking to diversify with an overseas presence. In this current third wave equity investors and insurance firms are seeking core and yield-driven opportunities. We are now seeing the formation of fourth wave of investors who are harder to predict and track. These investors consists of ultra-high net worth Individuals (UHNWIs), small- to mid-cap state-owned enterprises (SOEs) and private developers who are increasingly evaluating their overseas strategy and exploring overseas growth. David Ji, Director, Head of Research & Consultancy of Greater China at Knight Frank, highlights, “Many provincial capitals and key cities Australia, the US and the UK have now presented a better yield spread (i.e. the gap between yield return from property investment over bond returns) than gateway

cities of London, New York, Sydney and Melbourne.” “From our knowledge on overseas investment activities, only four out of the top 20 Chinese insurance companies have made significant offshores investment, while 40% of them are considering overseas expansion. Chinese developers are more aggressive with half of the top 20 player have already made offshores investment. If we look into small to mid-cap investors, the potential pool of investment will be significant,” says David Ji. Having invested heavily in gateway cities, Chinese investors are diversifying by moving from core office and residential development into leisure to industrial assets. Investors are also looking to diversify geographically moving from gateway locations into higher yielding leading provincial capitals. Thomas Lam, Senior Director, Head of Valuation & Consultancy at Knight Frank adds, “Whilst the Chinese HNWIs investors become more mature, many of them begin to explore new investment opportunities hot spots around the globe, such as Johor Bahru in Malaysia, Gold Coast in Australia, Los Angeles and Miami in the US. All these hot spots presented investors with higher yield than traditional overseas investment locations like London, New York or Sydney. “Comparing with key Chinese gateway cities such as Beijing and Shanghai, a number of recent investment hot spots have shown a discount in prime residential prices. For example, Los Angeles and Miami prime apartment prices are both about 25% lower than Shanghai, drawing significant interest from HNWIs in China.”

Singapore’s Concerns Over Our Land Reclamation In The Straits Of Johor

ingapore’s Minister for the Environment and Water Resources Dr Vivian Balakrishnan emphasised concerns over Malaysia’s land reclamation projects in the Straits of Johor. Dr Balakishnan led a delegation to Kuala Lumpur on November 25 and met with Malaysia’s Deputy Minister of Natural Resources and Environment Dr. James Dawos Mamit in Kuala Lumpur for the 27th Annual Exchange of Visits between the environment ministries of those two neighbouring countries. At the meeting, Dr Balakrishnan reiterated Singapore’s request for such reclamation works to be suspended until Singapore has received and studied all the relevant information from Malaysia, including the Environmental Impact Assessments, and established that there would be no transboundary impact on Singapore from these projects. Dr Balakrishnan stressed that both Singapore and Malaysia are obliged under international law, in particular, the United Nations Convention on the Law of the Sea, to undertake and share Environmental Impact Assessments on all works that could have transboundary impact, before starting work. He said Singapore looked forward to Malaysia’s expeditious reply to requests on this issue, as reported in Chanel News Asia. Other issues discussed include the control of vehicular emissions, the joint monitoring of water quality in the Straits of Johor, and the emergency response plans for chemical spills at the MalaysiaSingapore Second Link and at the East Johor Strait.

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BANKING AND INVESTMENT NEWS

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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

Malaysians Among Third-Largest Buyers In Central London

sians and UK buyers tied as the third-largest buyers in central London, according to Black Brick Property Solutions LLP. Out of 35 nationalities, Africans formed the majority of buyers at 43.7%, followed by Middle-Eastern buyers at 17.1%, Asians and the UK (10% each). “New developments such as The Lancaster’s opposite Hyde Park have been popular with Malaysian clients who like the security and facilities offered by these types of new luxury developments,” said Camilla Dell, founder of Black Brick. Malaysian investors’ favourite postcodes include W8 and W14 Kensington, and W2 Bayswater.

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Bayswater appeals to Malaysians due to the high concentration of Malaysian restaurants. It’s also near Heathrow Express in Paddington, allowing residents’ convenient access to the London Heathrow Airport.

them to buy several smaller units rather than invest a large sum into one property as it is too high a risk with fewer tenants for large family homes compared with one- and twobedroom flats,” said Dell.

Some 68% of Black Brick’s Asian clients are Malaysians, followed by Singapore (25%) and Hong Kong (6%). Half of the Asian clients are investors, and the rest house buyers.

“This investment trend] is also to keep out of the higher stamp duty bracket and possible mansion tax next year. However, over time, some of our investment clients are buying entire freehold residential blocks for between £5 million and £20 million. This allows complete control over the way a building is managed as well as flexibility on future exit strategies such as [a combination of] of selling, renting and retaining some units.”

This year, the average budget for investors is a little over £1.4 million (RM7.54 million), while the average owner-occupier budget is £2.92 million. “It’s not surprising that our PCL property investment clients have chosen to stay under the £2 million threshold. We have always advised

Bank Negara May Raise OPR In 2015 at least until the middle of 2015 when it becomes clearer whether the second round effects of inflation will be manifested,” it said in a statement yesterday.

Bank Negara Malaysia

arket players are not discounting the possibility of another 25-basis-point hike in the overnight policy rate (OPR) by Bank Negara in 2015. RAM Rating Services Bhd said the increase could be warranted in the second half of next year if secondary inflationary effects were evident and poses significant downside risks to the sustainability of domestic economic growth. “With

the full list of goods and services tax (GST) zero-rated items now confirmed and a better indication of the Government’s subsidy rationalisation plans next year, our inflation forecast has been revised marginally upwards to 4.1% this year and 4.3% next year. “This will pose a risk to the resilience of domestic demand, hence we expect the OPR to hold at its current level of 3.25%,

Meanwhile, UOB Global Economics and Markets Research said while Malaysia’s moderate growth prospects for next year and the expansion of Japanese monetary easing could shift market expectation away from another rate hike in the first quarter 2015, the OPR hike could not be totally discounted. “This is in consideration of the negative real interest rates next year arising from the GST implementation, albeit a temporary one. “The weaker ringgit could also contribute to a higher inflationary environment. As such, we still see some risk of a 25-basis-point interest rate increase in the first half of next year,” it said

Property Price Hike May Also Depend On Other Factors

he implementation of the Goods and Services Tax (GST) by April 2015 may see residential property prices increase by one to three percent, reiterated Ernst & Young (EY) executive director Koh Siok Keat. However, he underscored that the price hike will also depend on many other factors. “This (property prices) is hard to predict as we have to take into account things such as demand and supply, valuations, and many other aspects,” he said after chairing Sarawak Timber Association’s GST Seminar.

Johor Rejects Applications For Serviced Apartments

he state government of Johor rejected new applications to build serviced apartments in order to prevent the property market from being flooded with such units, reported the media.

Notably, reports showed that around 86,000 serviced apartments had been approved for the country’s first economic growth corridor until 2025. But the Iskandar Malaysia Comprehensive Development Plan 2006-2025 indicated that only around 26,000 units were considered necessary for south Johor.

“All new applications have been frozen…Those who have received their approval can continue with their projects,” said Menteri Besar Mohamed Khaled Nordin at the groundbreaking ceremony of affordable homes by state-linked PIJ Holdings SdnBhd at Jalan Datin Halimah. He noted that the construction of serviced apartments was not subject to housing development conditions like the providing of basic amenities such as multipurpose halls, places of worship and schools.

Menteri Besar Mohamed Khaled Nordin Mohamed Khaled said developers should provide these amenities since serviced apartments nowadays are no longer rented out but owner-occupied.

“We have directed the Township Development Planning Unit to review the need for such an excessive number of serviced apartment projects,” stated Mohamed Khaled. “It is better for developers to focus on building apartment units in Iskandar Malaysia instead of serviced apartments.”

Ernst & Young HQ “The Royal Customs Department expect a one percent increase, while the Real Estate and Housing Developers Association expect it to go up to three percent. We think prices may fluctuate in between.” With this, it would be wise for construction and property players to stock up on supplies like steel bar, sand, cement and the like in order to save up to six percent in costs before 1 April, said Koh. “In bulk, this could amount to major one-off savings for companies. All these items are without sales tax, so it would be wise to stock up before GST.”

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BANKING AND INVESTMENT NEWS

Be Cautious Of Rent Guarantees

Rental Promotions

or some property investors it can look like the ideal solution; a rent guarantee scheme that will protect investors when a tenant fails to pay the rent, but it can leave investors out of pocket and stuck with a tenant that does not pay the rent. Traditionally these schemes have been used by public housing associations, but more recently private landlords all over Southeast Asia and around the world have been signing up to the schemes in the belief that their rental income will be guaranteed. Under a guaranteed rent arrangement, generally the landlord is required to sign over the property to a company or letting agent for a specified period of time in return for a guaranteed monthly income. The agent then sublets the property and manages the tenancy.

Rent guarantee firms make their money on the difference between the rent they pay the landlord and the rent they receive from the subtenant. Most schemes promise to cover any void periods and maintenance costs. Mish Liyanage, Managing Director of The Mistoria Group, explained that things can go wrong if the rent guarantee firms do not have the financial resources to back up the guarantee.

Large Portion Of Household Debt In Malaysia Due To Housing Loans, Says Najib

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“There are many firms out there offering guarantee rent schemes, many of them very small companies or sole traders,” says Liyanage. “The risk to landlords and investors lies in the financial security of the rent guarantee provider. If they get into financial difficulty or go bankrupt, the landlord many not be able to recoup any monies paid to the scheme.” “Landlords and investors who are considering using a rent guarantee scheme should read the contract very carefully. The only way they can really protect themselves is by having a commercial lease between the landlord and the company and an assured short-hold tenancy agreement (AST) for tenants.” While guarantees can and do provide reassurance for nervous investors, experienced and knowledgeable buyers will know that purchasing a decent property in a good location will never need any kind of guarantee. It will rent regardless. If you are considering buying a property with any kind of rental guarantee, do your due diligence about the company providing the guarantee. Your guarantee is only as strong as the company offering it.

Prime Minister Datuk Seri Najib Tun Razak

he bulk of household debt in Malaysia is due to housing loans said Prime Minister Datuk Seri Najib Tun Razak.

than other countries.

Najib acknowledge while household debt amounts to 80%, these houses will continue to appreciate in value.

“Yesterday, when I met the Netherlands Prime Minister, he praised Malaysia’s economic position.

“This means that the loans are supported by strong asset backing.

“In his own words, he said ‘I envy your economic performance’,” said Najib.

“However, the Government must ensure that household debt does not increase higher and that it can still be managed while trying to help increase the income of the rakyat,” Najib said during question time Thursday. Najib, who is also Finance Minister, was answering a supplementary question from Dr Tan Seng Giaw (DAP - Kepong) who asked how could the high national debt and cost of living be solved. On the Government’s debt, Najib said it remained at a level of about 53% of the gross domestic product, which was much lower

“I don’t see it as a threat to our country’s economic standing.

TROPICANA

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