Protecting house buyers’ interest


I REFER to the reports “Court: No power to grant extension” and “A fair and right judgment, says housing developer” ( The Star, Feb 28 – Developer has to compensate buyers for delays of projects, Court says).

The High Court decision declaring as ultra vires (beyond one’s legal power or authority) the Housing and Local Government Minister’s granting of a one-year extension of time (EOT) to developers to complete a delayed housing project and thus denying house buyers liquidated and ascertained damages (LAD) provided for under the sale and purchase agreement is timely, sound and indeed meritorious. It is hoped that the decision would be maintained should the minister decide to appeal it.

The Housing Development (Control and Licensing) Act 1966 was enacted for the protection of home buyers.

The long title of the Act (paragraph stating Parliament’s intent for the Act) says: “An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers…” This makes clear that the housing development business is regulated to ensure that the protection of home buyers’ interest is paramount.

Two eminent judges, the late Tun Mohamed Suffian, former Lord President of Malaysia, and the late Tan Sri Lee Hun Hoe, the longest serving Chief Justice of Borneo, stated this in two landmark cases respectively.

Suffian LP (Sea Housing Corporation v Lee Poh Chee): “To protect home buyers, most of whom are people of modest means, from rich and powerful developers, Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act.”

Lee Hun Hoe CJ (Borneo) (Beca (Malaysia) Sdn Bhd v Tan Choong Kuang & Anor): “The duty of observing the law is firmly placed on the housing developers for the protection of house buyers. Hence, any infringement of the law would render the housing developer liable to penalty on conviction.”

Respectfully, it is submitted that the decision to grant the developer of a housing project extension of time and thus deny the home buyers’ statutory rights to LAD ought to be exercised with diffidence. The decision, if any, ought to be made with the Act’s long title in mind, namely, “for the protection of interest of purchasers”.

In doing so, some aspects to consider are:

> In granting EOT, how will home buyers’ interest be protected?

> LAD is agreed monetary payment for home buyers’ losses for delay in completion of a housing project. Is denying home buyers’ the LAD by the EOT tantamount to protecting their interest?

Although Section 11(3) of the Act states that the developer under “special circumstances” may apply to the Controller of Housing for EOT, it is submitted that Parliament and the long title of the Act surely did not intend LAD to be wiped out by “a stroke of a pen”.

To avoid doubt, “special circumstances” would mean act of God or natural disaster, for example earth quake or tsunami, and not business or economic related challenges or hardship.

The above view would make legal sense of Section 11(3).

Again, the High Court decision is lauded.

Home buyers’ interest is of paramount importance under the Housing Development (Control and Licensing) Act 1966. The Controller of Housing’s or Minister’s decision, although seemingly made “by a stroke of a pen”, must materialise or recognise this intent. Failing to do so would be ultra vires the Act.

May the redeeming light of the Housing Development Act (Control and Licensing) 1966 continue to shine effervescently and protect effectively home buyer’s interest for many years to come.

This letter is dedicated to the National Housebuyers Association, its great team of lawyers, professionals and volunteers for their sterling and pro-bono efforts to speak up for and preserve home buyers’ interest.

Source: ROBERT TAN,  Home buyer and author of Buying Property From Developer: What You Need To Know And Do, Petaling Jaya

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Developer has to compensate buyers for delays of projects, Court says


 

 
Take them to task: According to the liquidated damages clause, condo buyers can claim 10 per annum of the purchase price for the delay

KUALA LUMPUR: The Housing Controller has no power to grant an extension of time to developers who delay the completion of housing projects, the High Court has ruled in a landmark judgment.

This means a housing developer has to pay compensation to the affected buyers for delays in the delivery of vacant possession.

High Court (Appellate and Special Powers) judge Justice Hanipah Farikullah also held that the regulation which empowers the Controller to modify terms of the contract of sale was ultra vires the Housing Development, Control and Licensing Act.

The judge said this in allowing an application for judicial review by 71 buyers of the Sri Istana condominiums in Old Klang Road against the Housing Controller and Urban Well-being, Housing and Local Government Minister.

Their lead counsel Datuk Wong Kok Leong told The Star the judge held that the minister’s decision to grant the developer an extension of time to complete the project via a letter dated Nov 17, 2015 was invalid.

In the letter, the minister had granted the developer a 12-month extension to complete the project.

“This means that the Housing Controller has no power to grant an extension of time to housing developers for any delay in completing their projects,” Wong said.

“Now, the developer has to pay the liquidated damages (a pre-determined sum) for late delivery of vacant possession of those condominium units.”

Wong called the decision a landmark judgment as many project developers seek extensions to complete their projects in Malaysia.

“This is a victory for all house buyers. With this ruling, the housing developer can’t just go to the Housing Controller for an extension of time to complete the project in order to avoid paying the liquidated damages to house buyers.

“This is because if an extension of time is allowed, house buyers lose their rights to claim damages for late delivery of vacant possession,” he added.

Wong explained that according to the liquidated damages clause, the condo buyers can claim 10% per annum of the purchase price for the delay.

In their application for judicial review, the condo buyers stated that they wanted to quash the decision allowing BHL Construction Sdn Bhd an extension of time for the delivery of vacant possession from 36 months to 48 months.

They also asked the court for a declaration that Regulation 11(3) was ultra vires of the Housing Development Act (Control and Licensing) Act.

Wong said the judge has ordered the parties to address the issue of costs on the next date for case management.

When contacted, SFC Mohamad Rizal said the judge also allowed a similar application involving another group of condominium buyers involving the same developer and project.

Source: By  m. mageswari, royce tan, thean lee cheng, eugene mahalingam, The Star

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When will the property market pick up?


Affordable living: The history of Stuyvesant Town, Manhattan New York dates back to 1943. In October 2015, Blackstone Group LP led a deal to buy New York’s Stuyvesant Town-Peter Cooper Village, a transaction that would 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.

 

Experts predict between 2018 and 2019

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.

Healthy demand

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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PBA in a fix over Penang water cut; billion litres water waste via leaky pipes


Water letdown: Residents waiting for their pails to be filled by a PBAPP employee during the water cut.

Buckets of frustrations

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.

Jaseni (centre, with umbrella checking out the welding work to reseal the leaking section of the pipeline at the repair site at Medan Pantai Jerjak, near to Sungai Dua Besar.

Users left high and dry as rain delays repair works on leaking pipeline

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 kyuan@thestar.com.my

Billion litres water waste via leaky pipes

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



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Penang low cost housing gone awry?


https://www.youtube-nocookie.com/embed/oLDMm9NsLLs

https://www.youtube-nocookie.com/embed/tJG2cAQaJLQ

https://www.youtube-nocookie.com/embed/N_V48-7vG0c

Probe into housing bribery case

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 Loh Tan Sin Chow The Star

Lim clarifies video comment

DAP rep forced to explain alleged bribery video statement

https://www.youtube-nocookie.com/embed/rxtjM3qK8Eo

//players.brightcove.net/4405352761001/181a3f95-f084-4110-a145-d308d1fb1ede_default/index.html?videoId=5111141629001

http://www.thestartv.com/episode/lim-clarifies-video-comment/

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 rsekaran@thestar.com.my

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Penang property prices move sideways in Q1 2016


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.”

Image result for Penang Transport Master PlanHe 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.

Image result for Penang Transport Master Plan

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.

Image result for Penang Transport Master Plan“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.
Penang LRT map route masterplan

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.

 As for creating jobs, the state government is making a concerted effort

to develop new business sectors so that Penang can stay relevant to the
global economy.

“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.”

Terraced houses

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.

The Edge Property

Soaring house prices worry Penangites below 30

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.

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