Restructuring our household debt


NEW Year always come with new resolutions. Finance is an important aspect of most people’s checklists when it comes to planning new goals.

While it is good to set new financial targets, it is also vital to re-look at our debt portfolio to ascertain if it is at a healthy state.

At a national level, our country also has its financial targets matched against its debt portfolio.

According to the latest Risk Developments and Assessment of Financial Stability 2016 Report by Bank Negara, the country’s household debt was at RM1.086 trillion or 88.4% of gross domestic product (GDP) as at end 2016.

Residential housing loan accounted for 50.3% (RM546.3bil) of total household debts, motor vehicles at 14.6%, personal financing at 14.9%, non-residential loan was 7.4%, securities at 5.7%, followed by credit cards at 3.5% and other items at 3.6%.

Evidently, residential housing loan is the highest among all types of household debt. However, a McKinsey Global Institute Report on “Debt and (Not Much) Deleveraging” in 2015 highlighted that in advanced countries, mortgage or housing loan comprises 74% of total household debt on average.

As a country that aspires to be a developed nation, a housing loan ratio of 50.3% to total household debt would be considered low, compared to 74% for the advanced countries. In other words, we are spending too much on items that depreciate in value immediately – such as car loans, credit card loans and personal loans – compared to assets that appreciate in value in the long run, such as houses.

Advanced economies, which are usually consumer nations, have only 26% debts on non-housing loan as compared to ours at 49.7%.

In order to adopt the household debt ratio of advanced economies, our housing loan of RM546.3bil should be at 74% of total household debt. This means that if we were to keep our housing loan of RM546.3bil constant, our total household debt should be reduced from the current RM1.086 trillion to a more manageable RM738bil. This would require other non-housing loans (car loans, credit card loans and personal loans etc) to reduce from 49.7% of total household debt to only 26%. To achieve this ratio, the non-housing loan debt must collapse from the current RM539.7bil to only RM192bil.

Reducing total household debt from the current RM1.086 trillion to a more manageable RM738bil would also have the added benefit of reducing our total household debt-to-GDP ratio from the high 88.4% to only 60%, making us one of the top countries globally for financial health.

Malaysia’s household debt at present ranked as one of the highest in Asia. Based on the same 2015 McKinsey Report, our household debt-to-income ratio was 146% in 2014 (the ratio of other developing countries was about 42%) compared to the average of 110% in advanced economies.

Adjusting the debt ratio by reducing car loans, personal loans and credit card loans will make our nation stay financially healthy.

Car values depreciate at about 10% to 20% per year based on insurance calculations, accounting standards and actual market prices. Assets financed by personal and credit card loans typically depreciate immediately and aggressively.

The easy access to credit cards and personal loan facilities tend to encourage people to spend excessively, especially when there is no maximum credit limit imposed on credit cards for those earning more than RM36,000 per year.

If we maximised the credit limit given without considering our financial ability, we will need a long time to repay due to the high interest rates, which ranged from 15% to 18% per annum.

Based on a report in The Star recently, Malaysia’s youth are seeing a worrying trend with those aged between 25 and 44 forming the biggest group classified as bankrupt.

The top four reasons for bankruptcy were car loans (26.63%), personal loans (25.48%), housing loans (16.87%) and business loans (10.24%).

It is time for the Government to introduce more drastic cooling-off measures for non-housing loans in order to curb debt that is not backed by assets. This will protect the rakyat from further impoverishment that they are voicing and feeling today.

As we kick start the new year, it is good to relook into our debt portfolio. When we are able to identify where we make up most of our debts, and start to reallocate our financial resources more effectively, we will be heading towards a sound and healthier financial status as a nation.

By Alan Tong – Food for thought

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please e-mail feedback@fiabci-asiapacific.com.
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Moving forward with affordable housing


One way to solve housing shortage problem is to build more houses.

“If we take a look at countries with commendable housing policies such
as Singapore and Hong Kong, we notice that the government plays a very
important role in building and ensuring a sufficient supply of housing
for their people.”

THE issue of affordable housing has been a hot potato for many countries, especially for a nation with a growing population and urbanisation like ours.

In my previous article, I mentioned that there was a growing shortage of affordable housing in our country according to Bank Negara governor Tan Sri Muhammad Ibrahim. The shortage is expected to reach one million units by 2020.

According to Bank of England governor Mark Carney, one of the most effective ways to address the issue is to build more houses. There are good examples in countries like United Kingdom, Australia and Singapore, which have 2.4, 2.6 and 3.35 persons per household respectively.

In comparison, the average persons per household in our country is 4.06 person, a ratio which Australia had already achieved in 1933! To improve the current ratio, we need to put more effort into building houses to bring prices down.

If we take a look at countries with commendable housing policies such as Singapore and Hong Kong, we notice that the government plays a very important role in building and ensuring a sufficient supply of housing for their people.

For example in Singapore, their Housing and Development Board (HDB) has built over one million flats and houses since 1960, to house 90% of Singaporeans in their properties. In Hong Kong, the government provides affordable housing for lower-income residents, with nearly half of the population residing in some form of public housing nowadays. The rents and prices of public housing are subsidised by the government and are significantly lower than for private housing.

To be on par with Australia (2.6 persons per household), our country needs a total of 8.6 million homes to house our urban population of 22.4 million people. In other words, we need an additional 3.3 million houses on top of our existing 5.3 million residential houses.

However, with our current total national housing production of about 80,000 units a year, it will take us more than 40 years to build 3.3 million houses! With household formation growing at a faster rate than housing production, we will still be faced with a housing shortage 40 years from now.

Therefore, even if the private sector dedicated all its current output to build affordable housing, it will still be a long journey ahead to produce sufficient houses for the nation. It is of course impossible for the private sector to do so as it will be running at a loss due to rising costs of land and construction.

In view of the above, the government has to shoulder the responsibility of building more houses for the rakyat due to the availability of resources owned by the government. Land, for example, is the most crucial element in housing development. As a lot of land resources are owned by government, they must offer these lands to relevant agencies or authorities to develop affordable housing.

I recall when I was one of the founding directors of the Selangor State Development Corp in 1970s, its main objectives was to build public housing for the rakyat.

However, today the corporation has also ventured into high end developments in order to subsidise its affordable housing initiatives. This will somehow distract them from focusing on the affordable housing sector.

Although government has rolled out various initiatives in encouraging affordable houses, it is also important for the authorities to constantly review the original objectives of the relevant housing agencies, such as the various State Economic Development Corporations, Syarikat Perumahan Negara Bhd, and 1 Malaysia People’s Housing Scheme, to ensure they have ample resources especially land and funding to continue their mission in building affordable housing.

A successful housing policy and easy access to affordable housing have a huge impact on the rakyat. It is hoped that our government escalates its effort in building affordable housing, which will enhance the happiness and well-being of the people, and the advancement of our nation.


Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
By Alan Tong

Graft destroys nature as Corrupt officers see no evil as environment is being ravaged


Humans Are Destroying the Environment

PETALING JAYA: They are supposed to be guardians of the environment, and yet “certain enforcement officers” are found to be tolerating illegal activities that are detrimental to nature – all for personal gain.

Pollution and unauthorised felling of trees, for instance, could be traced to those working in cahoots with the culprits, according to sources.

Several recent cases such as the illegal bauxite mining in Kuantan, flash floods in Cameron Highlands and the illegal sawdust factory in Kampung Sungai Lembu, Penanti, Butterworth, were all linked to abuse of power and corruption.

“Some of them are more inclined to soliciting and receiving monetary gains in lieu of their responsibilities in protecting the natural surroundings.

“As a result, it has created greater problems to the fragile environment at the expense of future generations,” said a source.

The source added that stern action needed to be meted out against these irresponsible officers in order to put a stop to the wanton destruction.

If nothing was done, it could lead to adverse effects to the people in terms of public health and safety, the source said.

“All enforcement agencies tasked to preserve the environment must be serious in discharging their duties diligently.

“In this regard, the Malaysian Anti-Corruption Commission (MACC) has done its part to send out a stern warning with numerous arrests and prosecutions in court,” the source said.

Over the past few months, scores of enforcement officers including those from the Customs, Land Office and local councils were nabbed on suspicion of receiving bribes to turn a blind eye on illegal activities detrimental to the environment.

The MACC also held several dialogues with NGOs and environmental groups through an Environmental Protection and Anti-Corruption Caucus to share information on corruption issues.

With this strategic collaboration, illegal activities such as illegal logging, river pollution and clearing of land could be prevented from recurring.

By Simon Khoo The Star/Asian News Network

Authorities fighting an uphill battle against ‘rape of hills’

PETALING JAYA: The authorities are waging an endless war against illegal loggers, with some enforcement officers even labelling the wanton destruction of trees as “raping the hills”.

Cases of such destructive activities in recent years include uncontrolled logging and illegal farming in Cameron Highlands, which polluted several rivers.

In April this year, a former Terengganu Forestry Department director was charged with accepting RM60,000 from a timber contractor four years ago as an inducement to approve a logging application for Hulu Terengganu Forest Reserve.

Two men were detained in the Bukit Bauk Forest Reserve in Dungun in November last year for removing evidence of illegal logging during an ambush by the Forestry Department. Some 400 tonnes of logs were reportedly seized.

In August last year, a Datuk Seri and two others were arrested in connection with illegal logging in the Cerul forest reserve in Terengganu. They produced a letter from a “high-ranking officer” to evade arrest but failed.

In Pahang, 11 people were detained by the Forestry Department for trespassing into forest reserves with the intent to steal high-value timber.

The Auditor-General’s Report 2015 highlighted illegal logging and encroachment in Perak forest reserves and said it was due to the lack of monitoring and effective enforcement by the Perak Forestry Department.

Logging in Kelantan has also come under scrutiny following allegations of illegal and uncontrolled logging being a possible cause of the 2014 floods in Kuala Krai.

In 2013, Kelantan-based NGO Young People against Corruption (Ombak) discovered rampant land clearing and wanton destruction of virgin forests in Kuala Krai and Gua Musang, affecting at least five hills stretching from the Pahang-Kelantan and Kelantan-Perak borders.

Ombak president Wan Khairul Ihsan Wan Muhammad described the destruction as the “rape of the forested hills”, adding that the activities were stealthily done in the middle of forest reserves to avoid detection.

Anti-graft officers out to stop illegal timber business

PETALING JAYA: Illegal logging, which has cost the country billions of ringgit in losses in taxes and revenue, is the latest target of the Malaysian Anti-Corruption Commission (MACC).

Remote area: A file picture of a suspected illegal logging site in Bakun, Sarawak, that was raided by the MACC.

Anti-graft officers will be focusing on this issue after tackling illegal land clearing, bauxite mining and unlicensed factories.

It is learnt that incidents of illegal logging are “quite rampant and extensive”, causing a lot of destruction to the nation’s fragile eco-system and environment.

Some of the illegal activities are believed to be taking place deep in the jungle, including forest reserves and catchment areas, hidden from public view.

The problem is made worse when some enforcement officers tasked with taking action against illegal loggers are believed to have turned a blind eye and worked in cahoots with illegal loggers.

In return, the officers are said to be promised a certain percentage from profits from the illegal activities every month, paying no heed to the destruction of the country’s forests.

It is learnt that these unethical officers are raking in tens of thousand of ringgit every month as kickback and side income to finance their lavish lifestyle.

MACC deputy chief commissioner (operations) Datuk Azam Baki said such illegal activities must be nipped in the bud before they cause irreparable damage.

“We have received very reliable information from the public on illegal logging.

“It is not just in one particular area, but in several states throughout the country, including Sabah and Sarawak.

“We have set up a few flying squads and they are now collecting evidence on the ground,” he said when contacted yesterday.

He said illegal logging has caused serious pollution, while natural disasters, such as flash floods and landslides could occur more rapidly, endangering the lives of the people.

Azam said the main focus of investigations will be on elements of corruption and abuse of power involving several enforcement agencies, their officers and logging companies.

“Once we have gathered all the necessary evidence, a sting operation will be launched to nab the culprits,” he added.

He said MACC would be moving into several states “very soon”, adding that “we are pretty serious in tackling this issue”.

He welcomed tip-offs from the people to assist in putting a stop to illegal logging and other activities detrimental to the environment.

“We will also work closely with NGOs and environmental groups to collect information,” he added.

In November 2014, the then Sarawak chief minister Tan Sri Adenan Satem declared war on illegal logging, saying Sarawakians must not tolerate corruption anymore because millions in revenue had been lost.

The state, he said, had gained a bad reputation internationally because of “this robbery which is carried out in broad daylight”.

The MACC swung into action with a massive crackdown dubbed Ops Gergaji the following year, and together with several agencies, some 400 bank accounts belonging to companies and individuals with about RM600mil were frozen.

About RM1mil worth of illegally felled logs were also seized.

By Simon Khoo The Star/ANN
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IJM hill clearing & Trehaus construction damaged nearby houses since 2014 must be mitigated quickly!


Behind BJ Cove houses at Lintang Bukit Jambul 1 is an IJM Trehaus Project.
Approximate Coordinates : 5°20’38.47″N,100°16’52.82″E
Reported  in August 2016. Photos taken in November 2016 and 2014 by Penang Forum
PHW Report

 

https://hillclearinginpenang.ushahidi.io/views/map

Sources: Penang Hills Watch (PHW) | Penang Forum

Hill clearing activity by IJM Trehaus Project


Clearing and construction for a condo and semi-detached housing
project, Trehaus, reported in http://anilnetto.com/ 26 Aug 2016. Photo
taken in 2014 …
IJM sign-boards
Behind BJ Cove houses at Lintang Bukit Jambul 1 is an IJM Trehaus Project.

Two invalid pipe culverts formed sinkholes at BJ Cove houses

Originally, there were two natural rivers/streams from the IJM Trehaus site and a nearby pond. No proper drainage system was implemented when housing development started, only two invalid hidden underground pipe culverts were built to channel the waters from the Bukit Jambul hill to Relau district.

 

The invalid underground pipe culvert from the IJM Trehaus project directly converged at BJ Cove houses from another invalid underground  pipe culvert from a nearby pond were burst, caused soil erosion, house slabs collapsed, multiple wall cracks, PBA water pipe burst, floods, sinkholes (by two pipe culverts converged in red) and damaged  to  BJ Cove houses due to blockages of waters whenever rains and because of lack of drainage system there.  The sinkhole which later converted into a manhole by IJM,  is a clear sign of soil erosion under the ground.

 

Underground Pipe Culverts from IJM Trehaus site on the left and nearby pond on the right

It is a common sense that waters from the natural rivers or streams are natually running, seeped  through underground even the surface is covered by land-filled soil or with man made culverts.

 

Therefore, damages to houses were caused by severe soil erosion due to water movement under the road and buildings. 

 

The following is an invalid underground pipe culvert from the IJM Trehaus site behind BJ Cove houses at Lintang Bukit Jambul 1:

IJM modifying/constructing their underground pipe Culvert in 2014 to BJ Cove Houses

IJM modifying/constructing their underground pipe Culvert in 2014 to BJ Cove Houses

IJM Underground Pipe Culvert to BJ Cove Houses

 

IJM Underground Pipe Culvert to BJ Cove Houses
Waters gushing down from IJM Trehaus site to BJ Cove houses:
Waters flow from IJM Trehaus to BJ Cove houses

 

Waters gushing down from IJM Trehaus site to BJ Cove houses

Waters from IJM site stucked at behind BJ Cove houses

The nearby pond besides IJM Trehaus site:

IJM Hill cutting and hill Clearing 2014

Serious Drainage Issues

The Department of Irrigation and Drainage (DID or JPS) has just started in September 2017 constructing the drain from the pond to divert waters:
A drain under construction by JPS to divert waters from the nearby pond
Drain waters flow plan under construction by JPS to divert waters from the nearby pond

 

 Letter from Penang Dept of Irrigation and Drainage (DID or JPS) in 2015 blamed IJM  failure to comply with sedement control plan (ESCP) when its Trehaus started in 2014.

 

Clearly, the underground pipe culverts leaked and waters seeped through the  ground and multiple cracks,  as it did not happen immediately but over a period of time!

 

Developers dishonored directives/letters issued by Penang City Council (MBPP – Majlis Perbandaran Pulau Pinang) in 2015 to rectify the damaged house

 

Developers have not honored their committments to rectify the damages despite  acknowledged their liability as per letters from Worldwide Venture Sdn Bhd, an subsidiary of IJM Land since 2014!

 

Despite the underground pipe culverts declared invalid by JPS and the Penang City Council’s (Majlis Perbandaran Pulau Pinang, i.e. MBPP) issued stop work orders directing the developers, Worldwide Venture Sdn Bhd, a subsidiary of IJM Land to rectify the damages within 1 and 2 weeks time since 2015 (as per the above attached letters), multiple wall cracks, slabs collapsed, PBA water pipes burst, leakage charges, damaging ceiling, electrical DB board, and tiles fallen, broken/popped up,  are still pending settlement and remedial works to be carried out by parties responsible for the damages since 2014 !!

 

IJM Land only started in December 2017 constructing new drainage to divert waters from Trehaus Site to the pond:

Pictures show IJM only started in December 2017 constructing drainage system to divert waters to the nearby pond

 

It is important that the pond should be made a Dried pond instead of existing wet pond on the following reasons:

i) The area was originally a natural river/stream where waters will
still be naturally running, seeped through underground even when the
underground culverts are to be closed/abandoned later.

 

ii) More waters are being diverted from the IJM site to the pond

 


However, damaged houses are still pending, not being rectified to date !

Damages appeared after IJM began construction works in 2014, like hill clearing, rock-blasting, piling and digging culvert at Trehaus site.  As a result, sinkholes appeared, floods, waters seepage through multiple cracks on the ground, walls, tiles fallen from roofs and popped up from the ground due to vibration from rock-blasting and piling for the building.


Sinkhole converted to manholes (2 in cycles) at BJ Cove houses are visible from the top of IJM Trehasu site

Pictures showing floods, sinkholes at Lintang Bukit Jambul 1, 11900 Penang,  damaged to BJ Cove houses, cracks, waters leakages seeped through the cracks, slabs collapsed, ceilings & tiles broken & fallen, electrical DB board explosion, etc caused by severe soil erosion due to water movement under the road and buildings. The underground pipe leaked and waters seeped through the cracks!

Sinkhole at BJ Cove house no. 20
IJM converted the sinkhole into a manhole waters from their underground pipe culvert at Trehaus

 

Sinkhole at house 20 is covered up by IJM’s underground pipe culvert from  IJM Trehaus
IJM converting the sinkhole at BJ Cove no. 20

 

 

Truths Be Told:

 The truths be told,  as echoed, reinforced and justified by recent events in  Penang floods on 15th Sept 2017,  Landslides in Tanjung Bungah on 21 October 2017, the storm on Nov 4 & 5 2017, floods again on Jan 5, 2018 …. see more on links to following reports:

https://youtu.be/ooyXvqmxbvw GEORGE TOWN: Some 20 houses located on a slope in Hong Seng Estate in Mount Erskine were flooded due ..

Hills, landslides, floods and damaged houses …

Penang landslides & flooding are natural disasters man-made…  

Penang floods and landslides, looking beyound natural causes!

Penang landslide, whose faults?

Penang Paya Terubong Residents living under shadow of fear!

Penang landslide tragedy, why it happened?  


PAC blamed Penang Island City Council (MBPP) for failing to enforce laws on hillside development

 

We demand immediate enforcement & Actions:

 

1. The parties responsible must quickly without further delays, without condition to settle the claims and start the remedial works to the damaged houses, as both JPS has declared underground pipe culverts invalid and  MBPP has  issued stop work orders directed the  developers, Worldwide Venture Sdn Bhd, a subsidiary of IJM Land to rectify the damages within 1 and 2 weeks time since 2015!

 

2. Enforce IJM’s & MBPP’ Letters/Stop-work Orders (attached in above), and divert waters from the two invalid underground pipe culverts deemed illegal at the IJM Trehaus site and nearby ponds which must be closed and grouted as a long term solution to the problems. 

 

3. Enforce a fresh cease and desist to Stop Work of IJM Trehaus
construction project until the structural damages to house at 20
Lintang Bukit Jambul 1, BJ Cove have been resolved and settled the claim for damages and distress caused by the fear and danger of living in the house, without further delays and their suffering more than four years since 2014.  Repairs and remedial works must start promptly as more damages and suffering will fellow!

 

4. Beef up the enforcement and accountability not just in government agencies but also in professional bodies, like the Board Of Engineers Malaysia (BEM),  the Institute of Engineers Malaysia (IEM), etc to uphold the professional ethics, integrity and standards, to ensure public safety of the buildings and people life.

 

5. The pond must be made a Dried pond for waters to flow out smoothly, because there was originally two natural rivers/streams in the area where waters will still be running/seeping through naturally under the ground even if two culverts are closed as more waters are diverting from IJM Trehaus site to the pond. 

Findings from Penang Forum 

Dr Kam, a scientist, focused on expansion of impermeable surface area (caused by ill­ planned development and replacing natural ground cover such as hills, fields and trees that act as a water ­absorbing sponge) and soil erosion and landslides (caused by cutting and development in hill areas) as two factors that need special attention. She quoted Datuk Kam U Tee, the Penang Water Authority general  manager (1973~­90), as having correctly explained the Penang floods of October
2008, as follows: the floods were caused by conversion of the Paya Terubong and Bayan Baru valleys into “concrete aprons that do not retain water. The water immediately flows into streams causing flash floods even with moderate rainfall. Because of hill­cutting activities, the flowing water causes erosion of the slopes which carries mud and silt into the river beds”. ( The Star, Oct 24, 2008).


See more  ….   Penang floods and landslides, looking beyound natural causes!

Credits – Slides presented by Environmental, health and safety consultant Aziz Noor, and scientist Dr Kam Suan Pheng at the Penang Forum event on Oct 29, 2017

See more ….

Practise true CAT for Sustainable Development

  • Penang government must provide a COMPETENT flood mitigation plan for the state starting with a comprehensive Drainage Master Plan Study and not slogan.

  • The Penang government has to be ACCOUNTABLE to the people and not private developers. In other words, ‘Politicians should be ‘wakil  rakyat’ and not ‘wakil pemaju’. If certain waterways and catchment areas have to be gazetted as permanent drainage and storage areas, then so be it.

  • The safety and well-being of the Rakyat has to come first.  In the
    interest of  TRANSPARENCY, Penang has to launch an inquiry into how the local council approved property developments on slopes
    without adequate slope protection.

 See more …

1. Wanted: Leaders who listen !

2. Sustainable Development in Penang

3. Call to reassess Penang hillside projects, councillor addresses full council meeting of MBPP

4. Penang landslide, whose faults?

 

Related Links:

Watch “Slope Stability” on YouTube

Penang MP rapped for asking for allocation while rejecting Budget …

KUALA LUMPUR: A Penang Opposition lawmaker was rapped for voting … Budget 2018 yet seeking an allocation for flood mitigation projects.

RM150mil for flood mitigation projects – The Star Online

 

A tempest flays the north

GEORGE TOWN: When the storm hit, everyone in the north prayed it would soon blow over.Penang flood: Precautionary power cuts in place as waters rise



Penang paralysed by floods – Nation

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//players.brightcove.net/4405352761001/default_default/index.html?videoId=5635768537001

Irked residents to hold meeting with state representatives on Penang …

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Rep: Redevelop village to solve recurring erosion – Metro News

Residents prefer affected houses to be torn down manually

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Penang CM must stop blaming past govt for problems

Cracks in homes force seven Penang families to flee – Nation

Here’s the proof — federal govt gave only RM443mil for flood mitigation

Former councillors claim Penang government abuse caused floods

PAS claims graft caused floods in Penang | Malaysia

Penang pays high price in storm havoc – Nation

Up to the chest in water, up to the neck with the excuses – Nation

Dept: Typhoon Doksuri caused erratic weather across Penang …

Rapid development in Penang root cause of massive flash floods …

Admit failure in solving floods and stop giving excuses, Penang govt told

Deluge brings chaos to northern states – Metro New

Penang mayor Maimunah quits job to accept UN post

Hiking trail in awful condition – Metro News

 

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Too good to be true? Think twice


 

HAVE you ever grabbed an offer without any hesitation, simply because the price is too cheap to resist?

Many of us have this experience especially during sales or promotional campaigns. We tend to spend more at the end or buy things which we are uncertain of their quality when the deal seems too good to say no.

It may be harmless if the amount involved is insignificant. However, when we apply the same approach to big ticket items, it can cause vast implications.

Recently, I heard a case which reinforces this belief.

A friend shared that a property project which was selling for RM300,000 a few years ago is now stuck. Although the whole project was sold out, the developer has problem delivering the units on time.

The developer is calling all purchasers to renegotiate the liquidated and ascertained damages (LAD), a compensation for late delivery.

One of the homeowners said he is owed RM50,000 of LAD, which means the project is 1½ years late. When we chatted, we found that he purchased the unit solely due to its cheap pricing without doing much research in the first place.

The incident is a real-life example of paying too low for an item which can leave us as losers, especially when it involves huge sum of investment, such as property.

To many, buying a house maybe a once-in-a-lifetime experience, a decision made can make or break the happiness of a family.

A good decision ensures a roof over the head and a great living environment, while an imprudent move may incur long-term financial woes if the house is left uncompleted.

Nowadays, it is common to see people do research when they plan to buy a phone, household item, or other smaller ticket items.

Looking at the amount involved and implication of buying a house, we should apply the same discretion if not more.

It is always important for house buyers to study the background of a developer and project, consult experienced homeowners regarding the good and bad of a project before committing.

I have seen many people buy a house merely based on price consideration.

In fact, there are more to be deliberated when we commit for a roof over our heads. The location, project type, reputation of a developer, the workmanship, the future maintenance of the property etc, are all important factors for a good decision as they would affect the future value of a project.

Beware when a discount or a rebate sounds too good to be true, it may be just too good to be true and never materialised. If the collection or revenue of a housing project is not sufficient to fund the building cost, the developer may not be able to complete the project or deliver the house as per promised terms. At the end of the day, the “price” paid by homeowners would be far more expensive.

In general, the same principle applies elsewhere. It is a known fact that when we pay a premium for a quality product from a reliable producer, we have a peace of mind that the product could last longer and end up saving us money. Some lucky ones will end up gaining much more.

For instance, when we purchase a car, we should consider its resale value as some cars hold up well, while others collapse after a short period. Other determining factors include the specifications of the car, the after sales service, and the availability of spare parts.

Quality products always come with a higher price tag due to the research, effort, materials and services involved.

In addition to buying a house or big ticket items, other incidents that can tantamount to losing huge sums are like money games, get-rich-quick scheme, or the purchase of stolen cars or houses with caveats.

When an offer or a rebate sounds dodgy, the “good deal” can be a scam.

Years of experience tells me that when what is too good to be true, we should think twice. I always remind myself with a quote from John Ruskin (1819-1900) who was an art critic, an artist, an architect and a philosopher. “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.

“The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Food for thought by Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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The stalled building defects causing delays of relocation ..


Not ready: (Clockwise from top) The front view of the Batu Ferringhi market in Penang, exposed electrical sockets and cracked floor in the badminton court, and a leaking pipe in the washroom.

 
Defects causing delay of move to RM9mil Batu Ferringhi market

The scheduled relocation of traders to the RM9mil Batu Ferringhi market on Aug 14 is postponed to a later date until shortcomings such as leakage in the washrooms and cracks on the floor are fixed.

Lim checking on the condition of the market.- Photos: ZHAFARAN NASIB/The Star

SENIOR officers of the Penang Island City Council (MBPP) were left red-faced after Chief Minister Lim Guan Eng spotted several defects in the almost completed RM9mil Batu Ferringhi market during a site visit.

Lim, who was irked with the shortcomings, asked his officers to collect back copies of his text speech given earlier to reporters.

“Before I came in, I went to the washroom. I thought it would be ready.

“But the male washroom was locked and I had to use the unoccupied ladies washroom instead.

“If the market is considered ready (by the council), then it is unacceptable,” he said.

Washroom with missing taps
A leaking pipe pipe in the washroom

It is learnt that the ladies washroom was leaking and some of the taps had yet to be fixed.

Lim, who was walking to the dining area, was stopped by several traders who requested the council delay their relocation into the market which was earlier scheduled on Aug 14.

Speaking to newsmen, Lim said another date would be set.

“We cannot fix a date now until we are satisfied that the shortcomings have been rectified,” he said.

MBPP mayor Datuk Maimunah Mohd Sharif said she would hold discussions with the market contractor and architect.

“Cracks have also appeared on the floor of the badminton courts,” she said.

Maimunah said the council had issued the Certificate of Practical Completion (CPC) for the market but not the Certificate of Completion and Compliance (CCC).

The market was scheduled for completion by the end of last year.

There are 16 hawker stalls, 28 wet and dry market units, a multipurpose hall, a library, three badminton courts, playground, bicycle path, shower rooms and 90 parking bays.

Source: The Star/ANN by Intan Amalina Mohd Ali

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Wall and awning collapsed in house near construction site


Brought down: A view of the fallen backyard wall and awning of the house.

 

Penang MCA: Guan Eng must explain cause of incident in house near construction site

GEORGE TOWN: Penang MCA is seeking an explanation from Chief Minister Lim Guan Eng on the collapse of a perimeter wall and an awning of a house in Jalan Bagan Baru 1, Butterworth.

Its organising secretary Dr Tan Chuan Hong said the house owner believed the collapse could be due to nearby construction carried out by Penang Development Corpora-tion (PDC), of which Lim is the chairman.

The area is also under the Bagan parliamentary seat which Lim is the MP.

Dr Tan said the house owner had earlier complained to PDC after seeing cracks on the wall at his backyard about one year ago.

He said PDC was carrying out piling works then for its two affordable housing projects.

“Luckily, nobody was hurt in the incident but the authorities came forward only after the wall fell,” he said when contacted yesterday.

“That is against their ‘competency, accountability and transparency’ policy.”

Dr Tan urged the state to conduct a safety review on the projects.

When contacted, Sungai Puyu assemblyman Phee Boon Poh said the awning and wall collapsed due to soil movement during the construction of a drain at the projects.

He said that after being told of the incident, he went for a site inspection with Seberang Prai Municipal Council president Rozali Mohamud, representatives from PDC and the contractor.

“I told the house owner that the state would take full responsibility.He will be fully compensated and repairs will be done soon.”

He added that the council issued a stop-work order for the drain construction pending investigation.

“Our geo-technical expert will do a soil test while PDC and council safety officers will investigate the incident,” he said.

Source: The Star  by Crystal Chiam Shiying

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