AT a recent property seminar organised by Asian Strategy & Leadership Institute, several developers and property consultants had a debate predicting when the property market will pick up.
Real Estate and Housing Developers’ Association Malaysia (Rehda) patron Datuk Jeffrey Ng Tiong Lip reckoned the residential sector should recover next year or in 2018.
Ng was the moderator for the session on The Future Outlook and Challenges of the Housing and Property Sector.
Property consultants Savills Malaysia managing director Allan Soo, who specialises in the retail malls, expects a 2019 recovery.
Office market specialist Jones Lang Wootton executive director Malathi Thevendre declined to make any predictions. “It all depends …,” she says.
Ng says the current slow housing market is actually good over the long term, although it is painful in the short term. It all depends on how we manage “the noise”, he says.
There are lots of noises at present, both on the national and international level.
“If next year is election year, the recovery – if there is one – will be after that because between now and then, there are so many uncertainties.
“There is a lack of clarity at the moment,” says Ng.
His reading of the property crystal ball of a 2017/2018 turnaround is by far the most positive and contrasts with Kenanga Investment Bank Bhd equity research head Sarah Lim Fern Chieh.
Lim expects house prices to be flattish or slightly weak depending on locations “over the next four to five years, if there are no major policy changes”.
Her rationale for a longer down-cycle is simple. If your destination is Genting Highlands, but you are driving in the opposite direction, you will need a longer time to arrive there when you finally realise you are driving in the wrong direction.
Although it is widely accepted that the property cycle is between eight to 10 years, within this cycle are “mini two-year cycles. There were two-year up-cycle in 1999-2000 after the Asian Financial Crisis, and another in 2003-2004 and 2007/2007.
But after the 2008 Global Financial Crisis, Malaysia had an extended five-year up-cycle between 2010 and 2014 with prices peaking in 2013, and this was largely due to quantitative easing (QE).
She is, therefore, expecting a longer consolidation period of between four and five years, starting from 2015, before the next up-cycle, barring any policy changes and the global economic climate.
She is also expecting the property market to experience structural changes due to affordability and liquidity factors, among others.
More realistic pricing
Notwithstanding the fuzzy horizon, there are nevertheless a few certainties which may well put the sector on a better footing.
First, home ownership has become a national issue.
Second, the government, at both federal and state levels being landowners, are stepping up on affordable housing.
Third, prices are expected to be more realistic going forward.
Rehda president Datuk Seri FD Iskandar Mohamed Mansor is seeking government cooperation to reduce or waive development charges and other charges, collectively known as compliance costs, in order to bring down prices as this is “too challenging” for private developers to go it alone, considering today’s high land prices.
“If the Government wants developers to build more affordable housing, give us cheaper premiums or don’t charge at all.
“We will then see more stability in prices, or even a reduction, if development charges and all sorts of other charges imposed on developers come down,” said FD Iskandar at a Rehda first half-year review recently.
He says property development and land matters have been the biggest revenue earner for every state. Both federal and state governments own large tracts of land. Although FD Iskandar had made this call before, he was very passionate and firm this time around. Other developers, previously silent, are also quite vocal about the various land and development charges they have to fork out.
This is probably the first time developers are coming together to make a collective public call to seek a waiver or reduction of development and other aspects of compliance cost. The effectiveness of that call depends on the Government’s will to act.
While developers can clamour for such waivers, what is facing the market today is weak sales and this in turn is forcing developers to tweak pricing and strategy a bit, hence the drop in the number of launches as they try push unsold stock.
Andaman group managing director Datuk Seri Vincent Tiew says developers will be offering “more realistic pricing” from now onwards with location being a paramount factor.
There will be more affordable housing and this can be seen from the various affordable housing projects being planned by both the federal and state government although the end-products are slow in coming.
This, says Tiew, can be seen in the various agencies under the federal and state governments, among them being PR1MA Corp mandated to build 500,000 units of affordable housing units by 2018, as outlined in Budget 2013.
A total of 240,000 houses were due by end-2015, with an annual mandate for 80,000 between 2013 and 2015. The number of completed units was 883 at the end of 2015, says Tiew. By the end of this year, 10,000 units are scheduled to be completed. The number of units approved to date are 232,807 against 1.24 million PR1MA registrants as of February 2016. All eyes will be on the affordable segment in the coming Budget 2017.
The demand for housing has always been there. The issue is affordability, says Kenanga’s Sarah Lim.
“Of late, developers are beginning to price units at RM500,000 and below,” she says.
The current change in direction is attributed to societal and government pressure. Unsold stock and government pressure forced developers to relook their pricing strategy.If developers keep building RM1mil homes, when the threshold is RM500,000 and less, they will be left holding unsold stock. In order to move stocks, creative marketing/financing strategies are employed to move these stocks.
Lim says if developers were unable to meet at least 40% of their sales target by mid-year, they would be unable to meet this year’s targets.
More than two-thirds missed their sales targets last year.
“Prior to this, what was booked was considered sold. Now, this is no longer true,” Lim says.
Lim says there are two issues here, the pressure on the sector as the rate of aborted sales crept up and the people’s demand for realistic prices.
“What we are seeing today is the government’s influence. It is actually steering the market in the right direction,” she says.
Renting the way forward
The other certainty is observed in the rental market, which is expected to continue to be soft next year.
There will be “low occupancy rate” for projects completed last year (2015) and this year, with rental yield at less than 3% a year, says Andaman group’s Tiew.
It is cheaper to rent than to buy. There is so much supply going around and the purchasing power of the ringgit is shrinking.
Selangor State Development Corp (PKNS) senior manager (corporate planning and transformation) Norita Mohd Sidek advocates renting.
She says if there is a 50% loan rejection rate for affordable housing, and considering the limited supply by private developers, renting may be the only option.
She suggests building affordable housing cities the likes of Stuyvesant Town’s Peter Copper Village, Manhattan New York and counters the argument that there is no money to be made from affordable housing.
In October 2015, Blackstone led a deal that put Manhattan’s biggest apartment complex in the hands of the world’s largest private equity firm and maintain some affordable housing at the property.
Blackstone and Canada’s real estate company Ivanhoe Cambridge Inc acquired the 80-acre enclave for about US$5.3bil. Rent is kept below market rates for some 5,000 units. Public transport and other amenities must be part of the development for it to succeed. “Government grants and resources are needed to identify the right location to built more council homes,” she says in her paper.
In today’s low yield environment, pension funds around the world are looking at other ways to generate dividends besides equities and fixed income securities. They are buying into infrastructures and large township developments where there are economies of scale for maintenance.
Malaysia’s national housing dilemma cannot be solved by profit-oriented private developers alone. The golden property years between 2010 and 2014 have been intoxicating, having resulted in expectations of 20% to 30% rise in sales year-on-year, like the manufacturing sector. But the property sector is quite unlike manufacturing. The reflection point was seen in 2014 after the government introduced certain cooling measures and anti-speculation sales gimmick.
Going forward, the emphasis on housing priced RM500,000 and below means developers have to sell more units to make the same sales value as previous years.
“They have to sacrifice some of their margins. Higher profit margins can be had from the mid- to high-end segments,” says Lim. They will have to work harder to help buyers secure loans.
This search for some form of cohesion in the national housing arena has taken a bit of time. Hopefully, the coming Budget 2017 will pave the way for more positive action.
By Thean Lee Cheng The Star/Asia News Network
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Delay in repairs on a leaking pipeline at Medan Pantai Jerejak causes a host of problems for folk in the southern part of Penang island as unexpected water cuts disrupt their daily activities.
MORE than 80,00 people from Bukit Dumbar to the southern areas of Penang island were fuming over the delay in the return of water supply.
A reader called The Star claiming that he could not get through to the Penang Water Supply Corporation Sdn Bhd (PBAPP) hotline for an explanation after the water supply to his condominium was cut off on Monday morning.
Peter Lee, 58, a manager, said his friends in Batu Uban faced a similar problem.
Housewife K.L. Lim, 63, from Sungai Nibong said her family ran out of drinking water and had to buy water from shops.
“We did not stock up on water since we did not know about the matter. There is still water for showers but not enough for drinking,” she said.
At SJK (C) Kwang Hwa in Jalan Sultan Azlan Shah, Sungai Nibong, the water disruption resulted in the school using water from fire hydrants in the school premises.
A representative from the school said the water cut began on Monday afternoon and only resumed at 1pm yesterday.
“We needed water for the toilets and canteen.
“We had to use pails to collect water from the three fire hydrants in the school to deal with the disruption until the water supply resumed,” said the representative.
During a press conference that was also attended by state Works, Utilities and Transportation Committee chairman Lim Hock Seng, PBAPP chief executive officer Datuk Jaseni Maidinsa apologised for the water disruption.
He said PBAPP detected a leak on a 900mm diameter pipeline at 9am on Monday at a river crossing at Medan Pantai Jerejak, near Sungai Besar.
The pipeline was then shut down for repair work, and a cofferdam built quickly to isolate the repair site.
Jaseni said they were ready to proceed with the repairs on the pipe at 9.45pm on Monday and had expected work to be completed by about 6am on Tuesday but “work was held up by 10 hours due to the heavy rain, high river water and high tides”.
“The welding work to reseal the leaking section of the pipeline could only commence after the site was finally drained at 7.45am on Tuesday.
“The challenge was to gain access to the leaking section of the pipeline overnight. We managed to meet the standard requirement by finishing the work in about 29 hours, as we are allowed up to 48 hours for repairs to pipes that are more than 600mm in diameter.
“It would have taken us only 19 hours without the delay, and we apologise to consumers. On-site work has been finalised and water supply should resume from 2pm,” he said at Komtar yesterday.
Jaseni said four water tankers were deployed to provide water to residents living on higher grounds.
He said PBAPP optimised the pumping of water from Bukit Dumbar via the two other key pipelines to all the southern areas of the island, including the Bayan Lepas Free Trade Zone and the Penang International Airport during the shutdown period.
It was reported that a new RM11.9mil water station at Bukit Dumbar could pump up to 270 million litres of water per day (MLD) to serve 315,000 people living in the southern parts of the island.
Its service areas cover Gelugor, Batu Uban, Sungai Nibong, Bayan Baru, Relau, Sungai Ara, Batu Maung, Bayan Lepas, Permatang Damar Laut, Teluk Kumbar, Gertak Sanggul, Genting and Balik Pulau.
By CHONG KAH YUAN and N. TRISHA email@example.com
PETALING JAYA: More than 4.27 billion litres of treated water – enough to fill more than 1,700 Olympic-sized swimming pools or keep Perlis going for 53 days – are leaking out of the country’s ageing pipe system every day.
Experts warn that more will be wasted unless drastic measures are taken.
If saved, that amount of water could ease stressed water supplies in the Klang Valley, as fears of a shortage and rationing loom dangerously.
According to the National Water Services Commission (SPAN), non-revenue water (NRW) accounted for 36.6% of all water pumped out of treatment plants in 2013, or about 5.69 billion litres a day.
This was higher than 2012, which saw a 36.4% NRW.
Of this amount, at least 75% was due to problems like leaky asbestos-cement pipes and other infrastructure problems.
Association of Water and Energy Research (Awer) president S. Piarapakaran said that unless the pipes were fixed, more water would be lost even with state governments rushing to build treatment plants to meet a growing local demand.
“When the Langat 2 plant is completed (in 2017), it will pump 1,130 million litres a day (mld). If things don’t change, 300mld will be just lost in the system,” he told The Star.
While a number of states have seen their NRW levels fall in 2013, others such as Selangor saw more water lost.
Malaysian Water Association (MWA) president Syed Mohamad Adnan Alhabshi said more than RM20bil had to be spent to replace the country’s 43,890km-long asbestos-cement pipes.
“You need to spend RM500,000 to change 1km of these pipes,” he said, adding that state governments did not have the money.
He said water operators were unable to invest in stopping NRW as tariffs were low, giving them low revenue.
This was also reflected in SPAN’s statistics – a deficit of RM429mil was incurred by all states combined last year.
MWA council member Hairi Basri said it was not easy to stop NRW as many of the problem pipes were underground.
MWA further estimated that if the country were to keep to SPAN’s NRW target of 25% today, the potential revenue operators could have made in 2013 was RM809.4mil.
SPAN executive director Mohd Ridhuan Ismail said combating NRW was more than just fixing or replacing leaky pipes.
Measures, he said, included mapping pipe networks, setting up district metering zones and a constant pressure management and maintenance of the system.
“It is not a one-off effort and the entire exercise requires huge investment,” he told The Star.
He said state governments were hampered by low water tariffs and could not invest in NRW reduction measures, adding that human capital in this was also a challenge.
Mohd Ridhuan said many states had migrated their assets over to the Water Asset Management Com-pany (PAAB) to ensure their interests were protected.
He said states that had done so had managed to reduce their NRW substantially.
“SPAN believes that the remaining non-migrated states will be able to improve on their NRW once migrated,” he said.
By Patrick Lee The Star 4 September 2014
MACC investigating Penang rep’s father for allegedly soliciting money
GEORGE TOWN: The father of Sungai Pinang DAP assemblyman Lim Siew Khim is being investigated by the Malaysian Anti-Corruption Commission for allegedly soliciting money from applicants for low-cost and affordable housing.
It is learnt that MACC has begun calling up several people after a video clip purportedly showing Lim’s father, Keat Seong, was posted on social media on Sunday explaining to some people how to “cut queue” in the state’s housing schemes by paying RM260 for the application form and a few thousand ringgit to one “Uncle Lim”.
Penang MACC director Datuk Abd Aziz Aban could not be reached for comment but it is learnt that the commission had begun gathering information yesterday from the so-called victims, those featured in the video and several Gerakan leaders who held a Monday press conference on this.
Penang MCA deputy chairman Tan Teik Cheng said the case may just be the tip of the iceberg.
He said the Penang government should take action over the alleged soliciting of bribes by Lim’s father, a 68-year-old retiree.
“The state government proudly proclaims its ‘ Competent, Accountable and Transparent’ (CAT) policy, hence it should address the case instead of playing up the drama to divert public attention.
“After all, the demand by Penangites for low-cost housing is still high in view of the exorbitant property prices,” he said in a statement yesterday.
State DAP chairman Chow Kon Yeow has also posted on Facebook the photograph of headlines in three Chinese dailies and The Star, which all referred to Lim’s father.
The caption read: “We are politicians and public figures. What we do matters. Unfortunately, what our parents, spouses, in-laws, and even distant cousins do, also matters.”
Penang Gerakan Anti-Corruption and Land spokesman H’ng Khoon Leng said the party would be seeking an audience with the Penang Yang diPertua to ask for the setting up of a Commission of Inquiry into the matter.
State Housing Committee chairman Jagdeep Singh Deo said there was no need to form a commission as it came under the purview of the police.
By Arnold LohTan Sin Chow The Star
GEORGE TOWN: Sungai Pinang DAP assemblyman Lim Siew Khim has been forced to clarify her earlier comments on her father’s alleged corruption case involving affordable housing units after the release of a second video clip on the issue.
“I did receive a call from a youth leader from another party sometime last year but when I confronted my father, he denied any involvement,” she said after opening a Youth Empowerment programme in Sungai Pinang yesterday.
Last Sunday, a video clip purportedly showing Lim’s father, Lim Keat Seong, soliciting bribes to help obtain low-cost housing units in the state as early as June 2015 went viral after being posted on social media.
Siew Khim was then quoted as saying: “All this (in the video) was without my knowledge and I only knew about it on Sunday night.”
Now, a second video clip, which lasted about three minutes, was released yesterday.
This time it shows a screen-grab of a Whatsapp conversation between a mediator and a victim.
“I contacted her and gave her (Siew Khim) one day to reply and find ways for her father to return the money,” the mediator was heard as saying to the victim.
In another conversation, a man, who is said to be Siew Khim’s stepbrother Ong Hock Hin, was heard saying that his sister (Siew Khim) had asked for a meeting to be arranged with the aggrieved parties.
Siew Khim refused to comment on the contents of the second video, urging the person who released it to lodge a police report.
“Why release bits and pieces? They should report it to the police with their evidence,” she said.
Siew Khim also denied asking her stepbrother Ong to arrange for a meeting with any of the victims.
Asked why she only confirmed she had confronted her father when the second video surfaced, she said she could not remember it.
While her father has been remanded for seven days, Siew Khim was grilled for two hours by the Malaysian Anti Corruption Commission (MACC) on Friday.
When contacted, Penang MACC director Datuk Abdul Aziz Aban said he was not aware of the second video but would direct his officers to investigate it.
Siew Khim’s counsel Ram Karpal said it was an offence to withhold information on the case as it was now investigated by the MACC.
“I urge anyone with information on the matter to pass it to MACC,” he said in Air Itam yesterday.
Penang DAP chairman Chow Kon Yeow said the uploading of the two videos showed it was a politically motivated move against Siew Khim, the state government and DAP.
Source: The Star Malaysia 4 Sep 2016By R. SEKARAN firstname.lastname@example.org
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THE Penang housing market moved sideways on both the primary and secondary markets in the first quarter of the year, says Michael Geh (pictured), director at Raine & Horne International Zaki + Partners.
“I noted active transactions on the secondary market with prices staying flat,” he says in presenting the 1Q2016 Penang Housing Property Monitor.
Banks, he adds, only provide loans of up to 70% to 80% of a property’s value and serious first-time homebuyers have to make up the difference in order to sign the sales and purchase agreement.
Michael Geh“A few primary market projects have obtained the Advertising Permit and Developer Licence (APDL) and moved into the stage of processing loans from commercial banks and signing the S&P.” These projects include I-Santorini, SummerSkye and ForestVille, all under Ideal Group.
Will the prices of Penang houses, considered expensive, drop because of the soft market conditions? Geh says prices have come down to more realistic levels, especially with the government pushing the developers to build properties priced from RM300,000 to RM400,000 in the last two years, specifically for owner-occupiers.
Some of these properties, in areas such as Sungai Ara, Patani Road and Relau, have been taken up and are currently under construction, he adds.
Elsewhere in the country, some developers are pushing sales by providing financial assistance to the purchasers. Will those in Penang follow suit?
Geh says such a practice is not widespread for now. “Besides Sunway Bhd and S P Setia Bhd, I don’t see any other developer providing financial packages at the moment. I believe there are plans for such assistance but so far, nothing has been announced.”
He believes a catalyst for the state’s housing market would be the much-talked-about RM27 billion Penang Transport Master Plan (TMP). The ambitious plan will not only benefit the people but also bring about a more equitable housing situation and help retain local talent.
The TMP, he feels, will lead to equitable home property prices as areas that are not in prime locations will become more accessible, boosting demand for homes and resulting in higher prices. Properties in prime areas, which normally fetch higher prices, should see some price correction as demand is more evenly distributed across the state.
Apart from that, Geh opines that the TMP will help retain talent, which will subsequently impact the property market as the pool of workers seek to rent or own residential properties.
“Penang needs the TMP to grow in the next 10 years. We need to stem the migration of youths to the Klang Valley, Iskandar Malaysia and Singapore in search of better job opportunities. We need to create jobs and make conditions more liveable for our youth to prosper,” he says.
At present, two light rail transit lines have been approved under the TMP — one from Prangin Canal to Penang International Airport in Bayan Lepas and the other from Prangin Canal to Straits Quay.
to develop new business sectors so that Penang can stay relevant to the
“An industry that has been highlighted by the state is the knowledge economy, such as apps and animation,” Geh says. This has been identified as a key economic sector for the next decade.
There is a proposal for three reclaimed islands in the southern part of Penang island to locate businesses for this sector, he says, and for the islands to be connected by an LRT line that extends from Penang International Airport.
However, it has not been plain sailing for the TMP because one of its components — the Sky Cab or cable car system — has been rejected by the federal government. The 4.8km cable car system, according to the Penang government’s TMP website, was to have connected Butterworth on the mainland to Jelutong on the island. While this is a blow to the state government’s plans, Geh does not believe it will affect property prices.
“Cable car systems are generally more for tourists and not meant to move high volumes of people. I don’t think there will be a large negative impact on the property market. High-volume, high-frequency vessels that travel on water may be a better solution,” he says.
Another component of the TMP is an undersea tunnel linking the island with the mainland. However, further details are not forthcoming at present.
A development that will have an indirect impact on the Penang housing market is the much-debated Gurney Wharf. This 3km-long reclamation project lies just off the shores of popular tourist spot, Gurney Drive.
Geh believes this project has great potential to benefit the island. “I believe Gurney Wharf is an exciting development because it creates recreational activities for Gurney Drive. I think it is a boost to the area.”
The prices of landed properties did not rise much compared with those of high rises, the data compiled for the monitor reveals. This is due to “stagnation” as there were very few transactions during the quarter under review, compared with the high-rise sector where there was much more activity, Geh explains.
Nevertheless, property values have increased compared with a year ago.
For 1-storey terraced houses, some areas surveyed showed activity year on year but little movement quarter on quarter.
On the island, properties in Jelutong showed the highest price growth, rising 5.88% to RM900,000 from a year ago, followed by houses in Tanjung Bungah (up 5.26% to RM800,000). Houses in Sungai Dua, Sungai Ara and Bandar Bayan Baru saw slight price increases of 2.56%, 2.04% and 1.96% respectively while those in Green Lane and on the mainland saw no changes.
For 2-storey terraced houses, there was no activity q-o-q but prices rose y-o-y in some of the areas surveyed.
The prices of houses in Pulau Tikus rose 6.67% to RM1.6 million, followed by those in Sungai Ara (5.26% to RM1 million) and Sungai Nibong (4.55% to RM1.15 million). Prices remained unchanged in Green Lane and the mainland.
Semi-detached and detached houses
The 2-storey semidees in some areas saw more activity in 1Q2016 than in the previous quarter and last year. Prices in Sungai Dua and Minden Heights rose 6.67% to RM1.6 million q-o-q, followed by those in Sungai Nibong (up 5.71% to RM1.85 million) and Island Park (up 2.27% to RM2.25 million). Prices in Sungai Ara remained unchanged.
There was no q-o-q increase for 2-storey detached houses but 50% of the units surveyed in the monitor saw y-o-y activity.
Island Glades bungalows saw a 3.57% increase to RM2.9 million y-o-y , the prices of Green Lane houses rose 2.86% to RM3.6 million and Pulai Tikus houses were up 2% to RM5.1 million. House prices in Tanjung Tokong, Tanjung Bungah and Minden Heights remained unchanged.
Flats and condominiums
Three-bedroom flats in Green Lane and Bandar Baru Air Itam showed price increases q-o-q as well as y-o-y .
In Green Lane, prices rose 5.26% to RM400,000 q-o-q and 17.65% y-o-y. Units in Bandar Baru Air Itam rose 4.35% to RM240,000 q-o-q and 20% y-o-y.
Compared with a year ago, the prices of flats in Paya Terubong were up 12.5% to RM180,000, followed by Sungai Dua and Lip Sin Garden (6.06% to RM350,000) and Relau (3.45% to RM300,000).
Among the 3-bedroom condos, the biggest gainers were properties in Pulau Tikus, which rose 4.62% q-o-q and 9.68% y-o-y to RM680,000.
In Island Park and Island Glades, prices rose 4.17% q-o-q and 6.38% y-o-y to RM500,000 while condos in Batu Ferringhi rose 2.22% to RM460,000 q-o-q and y-o-y.
Batu Uban condos rose 5% to RM420,000 from the previous year but there was no activity q-o-q. The prices of Tanjung Bungah units remained unchanged.
By Wong King Wai The Edge Property
GEORGE TOWN (June 21): Despite the affordable housing programme by the state government, Penangites, especially those below the age of 30, are worried that they are unable to own a house in the future.
This is because housing prices in Penang island have risen by about 50% for the last five years and even for houses that was built under the affordable housing project.
A Bernama survey showed that several affordable housing projects that were completed less than 10 years ago in Bandar Baru Air Itam was originally priced at about RM175,000 but currently being resold at RM300,000 and above.
State Housing, Local and Town and Country Planning Committee chairman Jagdeep Singh Deo, said the state government had no power to control the price of houses being sold by house owners.
At present the state government had set a moratorium of five years for affordable housing and 10 years for low cost housing before it could be sold in the open market.
“There’s nothing that can be done by the state government to control the price but, what we can do is to provide more affordable housing so that the people can buy at a lower price,” he said.
Muhamad Amir Amin, 26, who worked as a graphic designer, said he earned about RM2,300 per month and could not even able to buy a low cost house with that wage.
“A low cost house costs RM42,000, which I cannot even afford to buy and from my observation, there is no low cost housing in Penang any more.
“All are either low medium cost or affordable housing which cost RM75,000 and above,” he said.
Universiti Sains Malaysia (USM) Social Science senior academician, Zainab Wahidin said that building more houses to tackle the increase of property price was not a solution given that Penang’s land was limited, especially on the island.
“If the state keeps building houses as an effort to provide affordable housing there will be more empty houses than those being occupied.
“There must be a regulation to control the housing price as a house is a basic necessity. Everybody needs a house to live in,” she added.
CBRE|WTW managing director Foo Gee Jen (pic) said that in spite of confidence issues among property buyers, there was still good demand for “the right products,” especially for landed units.
PETALING JAYA: Demand for landed residential units is still promising despite the current property glut, said an official from a local real estate services provider.
CBRE|WTW managing director Foo Gee Jen (pic) said that in spite of confidence issues among property buyers, there was still good demand for “the right products,” especially for landed units.
“Despite the issue with the confidence levels, some developers are still registering good sales for landed and affordable homes. High rise developers meanwhile are having to offer a lot more freebies, with some even offering their own financing.
“But you don’t see that for landed property as the demand is still there,” he said at a press conference announcing the joint venture (JV) between real estate agencies CH Williams Talhar & Wong Sdn Bhd (WTW) and CBRE last week.
He emphasised that one of the biggest issues facing the current property sector is not oversupply, but instead a mismatch of supply and demand.
“Developers are putting the wrong products in the market and this is not what the masses want. The demand is there but it’s not the correct product. So the question is, how long will the market take to absorb (these products)?”
As an example of a mismatch between demand and supply, Foo cited low-cost housing in areas that were not accessible to the proper target audience.
“For instance, there are low-cost properties built in Bukit Beruntung. But the daily toll and fuel cost of travelling to Kuala Lumpur for work is heavy for the type of people living in such homes.
“Also, there are so many high-end shoebox units now and Malaysia is unlike Singapore or Hong Kong. We still have plenty of land. If you’re putting the right property in the right location – you’ll still see a long queue of people attending the launches.”
CBRE, the world’s largest commercial real estate services firm and a Fortune 500 company, announced yesterday that it had acquired a significant interest in Malaysia’s largest real estate service provider, WTW, WTW Real Estate Sdn Bhd and WTW Property Services Sdn Bhd.
The business will rebrand as CBRE|WTW effective immediately, with WTW holding a 51% stake in the JV. WTW network of 13 offices in Peninsula Malaysia.
CBRE Asia Pacific chief executive officer Steve Swerdlow said the collaboration was consistent with the firm’s strategy to grow in South-East Asia.
“At a time when planning is underway to link Malaysia and Singapore via high speed rail and with the Asean Economic Community and the Trans Pacific Partnership facilitating greater collaboration for both countries and their wider partner countries, this offers many opportunities for cross border activities when they arise.”
With CBRE as a strategic partner, Foo said the firm can now help its clients expand their activities beyond Malaysia, providing them with more options through a diverse means of expertise. “Conversely we can be a party to help bring greater meaningful inbound investments into the Malaysian market via the CBRE global network.”
By Eugene Mahalingam The Star
|Top Story -market insights|
|An outlook on Malaysia’s property market
May 26, 2016
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May 7, 2016 … Lim expected property prices to plateau for the next few years before the next upcycle. … Labels: 25 years economic cycles , investments , Malaysia …..
May 10, 2016 … Malaysia’s Q3 Property Market Update Check your risk appetite and start …correction to continue in 2016, its economic cycles the past 25 years …..
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Check your risk appetite and start investing as this is as good a time as any to invest in real estate be they physical assets, property stocks or real estate investment trusts (REITs).
Industry experts held this view during a panel discussion entitled “Where to put your money – real estate, stocks or REITs?” at The Edge Investment Forum on Real Estate 2016 (REIF 2016) on April 30.
For housebuyers especially, this is a good time to buy as the market correction which started last year will continue this year, said panellist Sunway Bhd managing director of the property development division for Malaysia and Singapore Sarena Cheah.
She said the banking sector is well-capitalised while non-performing loans are declining, which means borrowers still have the ability to service their loans.
Cheah noted that property prices have been on the uptrend for the past 10 years with an average capital appreciation of 8% to 9% from 2005 to 2015, buoyed by a healthy employment rate and low interest rate.
“Property price growth for 2015 had dipped 2% compared with 2014, but the compounded annual growth rate (CAGR) of capital appreciation had achieved 12%,” she shared.
“Property investment is a safe investment as it is one of the basic necessities. Strong demand will continue to support the capital appreciation of properties,” she added.
However, she advised investors to study the location, the developer and the future growth potential of a property or project before buying.
Also on the panel were Kenanga Investment Bank Bhd head of equity research Sarah Lim and Axis REIT Managers Bhd chief executive officer and finance director Leong Kit May. The Edge Communications Sdn Bhd and The Edge Property Sdn Bhd managing director Au Foong Yee was the moderator.
Lim expected property prices to plateau for the next few years before the next upcycle.
“The big rally in transaction volume and prices in 2010 to 2012 was supported by the baby boomers who were in their late 30s or early 40s. The next upcycle will depend on the next generation which would be the Millennials,” she explained.
In the near term, Kenanga Investment Bank has placed an “underweight” rating on the property sector as it expected property stocks to be volatile and eventually be range-bound due to the absence of catalysts, while earnings risks remain.
However, steady defensive big-cap players such as UOA Bhd and S P Setia Bhd have light balance sheets and high exposure to areas in the Klang Valley while Sunway Bhd and Eco World Development Group Bhd are worth looking at, she said.
Among the small to mid-capital players to look out for is Hua Yang Bhd – it is undervalued and has high yields.
Lim also noted that Malaysia’s residential supply is outpacing demand in the wrong segment as there is insufficient supply for residential properties priced between RM250,000 and RM500,000.
“Residential developments priced below RM500,000 constitute less than 35% of most developers’ upcoming projects,” she said.
Meanwhile, REITs could be the cornerstone of a portfolio of quality assets for investors who are looking for lower risk and stable income from rental properties.
“A REIT is a listed vehicle that invests in a portfolio of income-generating properties. Rents collected from tenants, less expenses, are distributed on a regular basis to provide stable yields to unit holders,” said Leong.
She noted that the current dividend yield for Malaysian REITs is at 6.69%, compared to fixed deposits which is at 3.31% and the Employees Provident Fund’s yield of 6.40%.
“The benefits of investing in REITs include the predictability in income stream in the form of distribution income, having a liquid proxy to physical property investment, transparent daily pricing, high level of disclosures and transparency, low entry cost and professional management,” she added.
On the future performance of MREITs, Leong said the company foresees no future interest hikes which augurs well for REITs as a higher interest may affect the trust companies’ ability to pay higher dividends. – The Edge Property
was pretty much the norm over the last decade. Credit Michael..
Jan 29, 2016 … Other countries too, are affected by the uncertainties,” he said, adding the drastic
decline in world crude oil prices had a significant effect on