Property sales hit fresh record RM196.8 bil in 2023, Growth momentum set to continue


Tweet #Rightways

(From left): Director General of Valuation and Property Services Department Sr Abdul Razak Yusak, Finance Minister II Datuk Seri Amir Hamzah Azizan and Director of Napic Sr Norhisham Shafie during the launch of the property report. Photo by Mohd Izwan Mohd Nazam/The Edge

KAJANG (March 6): Malaysia’s property transaction value hit RM196.83 billion in 2023 — the highest ever recorded by the National Property Information Centre (Napic).

The figure was a 9.91% year-on-year (y-o-y) rise from the previous all-time high of RM179.07 billion logged in 2022, Napic said in a statement in conjunction with the release of its Property Market Report 2023 on Wednesday (March 6).

As for the number of transactions, it was largely flat at 399,008 in 2023, a 2.54% increase from 389,107 in 2022, with the bulk 62.8% or 250,586 units coming from the residential subsector.

Likewise, the residential sub-sector contributed the majority or 51.3% of 2023’s transaction value at RM100.93 billion, followed by commercial (19.5%), industrial (12.2%), agricultural (9.5%) and development land and others (7.5%).

“This positive growth trend is driven by a higher increase in transaction value in all subsectors, namely residential (up 7.1%), commercial (up 17.5%), industrial (up 13.1%), agriculture (up 4.6%) and development land and others (up 13.8%) compared wit 2022,” Napic said.

The Malaysian House Price Index (MHPI) — a measure of Malaysian home prices — stood at 216.5 points (RM467,144 per unit) in 2023 with a moderate annual growth of 3.2%.

“All major states recorded positive annual growth in [MHPI] led by Johor (up 6.2%), Penang (up 3.8%), Selangor (up 2.9%) and Kuala Lumpur (up 1.8%) respectively,” Napic said.

Cautiously optimistic property market in 2024

Napic said that with the national economy expected to expand by 4% to 5% in 2024, the property market’s performance is expected to remain cautiously optimistic.

Second Finance Minister Datuk Seri Amir Hamzah Azizan, who officiated the report’s launch, said that the property sector in 2024 is expected to continue its recovery momentum supported by government initiatives set out in Budget 2024, although the domestic economy is facing global challenges.

Outlining relevant initiatives, Amir Hamzah mentioned the RM2.47 billion allocation for affordable housing development, RM10 billion allocation to the Housing Credit Guarantee Scheme (SKJP), stamp duty exemption for first-time homebuyers who purchase a home valued up to RM500,000, and more relaxed conditions for Malaysia My Second Home (MM2H) programme.

“Accommodative policies, well-executed measures outlined in Budget 2024 and proper implementation of strategies and initiatives under the 12th Malaysia Plan (12MP) are expected to catalyse further growth in the property sector,” Amir Hamzah said.

Read also:
Shopping complex occupancy rises slightly y-o-y in 2023, office space remains flat
Overhang residential units down 7% in 2023, affordable housing the largest category

Growth momentum set to continue

Chester Cheng – Real Estate #malaysia2024 #malaysiarealestate #malaysiaproperty As the year 2023 comes to an ending, I wish everyone Happy New Year! This video sharing is my own personal opinions about the coming year 2024 for Malaysian real estate market.

The positive growth trend is driven by a higher increase in transaction values in all subsectors.

KAJANG: The Malaysian property market transaction values rose by almost 10% to a record of RM196.83bil in 2023 from the previous year, with its growth momentum expected to continue this year.

The property overhang situation had seen a slight improvement as the numbers continued to decline by 7% and 4% in volume and transaction values, respectively, from 2022.

 

Moving forward, the Valuation and Property Services Department (VPSD) said the property market performance is expected to remain cautiously optimistic this year. This is predicated on the healthy gross domestic product growth forecast for this year that’s supported by resilient domestic growth prospects.

Accommodative policies, well-executed measures outlined in Budget 2024 and proper implementation of strategies and initiatives under the 12th Malaysia Plan are expected to catalyse further growth in the property sector, the department said.

“The performance of the property market is encouraging with transaction values in 2023 having reached a record, which is an increase of 9.9% from 2022.

“The momentum of the property market will continue to be supported through Budget 2024 measures related to affordable housing and first home financing towards generating a stronger economic performance for the year 2024,” said Finance Minister II senator Datuk Seri Amir Hamzah Azizan.

The positive growth trend is driven by a higher increase in transaction values in all subsectors, namely the residential at 7.1%, commercial 17.5%, industrial 13.1%, agriculture 4.6% and development land and others at 13.8%, compared to 2022.

Newly launched residential units also saw an increase of 4.4% to 56,526 units with a better sales performance of 40.4% from 36% in 2022, the department said.

In his speech at the property report launch yesterday, Amir Hamzah also highlighted the reduction in the property overhang.

“The status for the overhang or unsold units have reduced to 26,000 units with a value of RM17.7bil compared with almost 28,000 units valued at RM18.41bil in 2022,” he said.

Amir Hamzah also said there will be an improvement in the requirements for applicants of the Malaysia My Second Home programme to increase its “flexibility.”

“This will encourage more interest into property transactions in the country that will also attract more tourists and foreign investors into the country,” he said.

This move is expected to help increase investments into the financial markets, of which also includes the national property market, he added.

The government’s present efforts to boost the property sector include the exemption of stamp duty on the transfer of documents for the purchase of a person’s first home up to RM500,000, which will be effective until December 2025.

On another matter, the minister also urged all data suppliers to ensure the data provided to Napic were always accurate and correct.

“Please continue the good working relationship with Napic and the VPSD as the data supplied has a big impact in the future formulation of government policies for the property market.

“I also ask all the others involved, especially the developers, planners or agencies that approve development plans to continue to refer to the data that is being published by Napic, which is accessible through a dedicated portal,” Amir Hamzah said.

Meanwhile, the report said the Malaysian House Price Index stood at 216.5 points or RM467,144 per unit in 2023, with a moderate annual growth of 3.2%.

All major states recorded positive annual growth, led by Johor at 6.2%, Penang at 3.8%, Selangor 2.9% and Kuala Lumpur at 1.8%, the report said.

Meanwhile the performance of shopping complexes witnessed moderate growth in 2023, as the occupancy rate increased slightly to 77.4%.

The available space reduced to four million sq metres, while the availability rate decreased to 22.6%, it said.

Commenting on the property overhang situation, Rahim & Co International Sdn Bhd real estate agency chief executive officer Siva Shanker said he expects the overhang will go down further this year as the market stabilises and improves.

“The biggest cause of overhang units is mainly due to oversupply.”

“A mismatch in location, pricing and developers not meeting the buyer’s demands” are causes of overhang and unsold residential units,” he added.

According to the property market report, the states with the highest rates of residential overhang and unsold units last year were Johor, Kuala Lumpur and Selangor respectively.

Meanwhile, Malaysian Institute of Estate Agents president Tan Kian Aun said the positive reduction in the overhang is a good sign, which shows the vibrancy of the market to be able to absorb the outstanding units in the market.

Tan said the Home Ownership Campaign (HOC) last year showed good progress in the overhang statistics.

“Hopefully the government can consider extending the HOC to further reduce the overhang situation,” Tan told StarBiz.

When asked on the property market’s outlook, Siva said the days of phenomenal growth in the property market are over and he expects a slight growth in the property market for 2024.

Siva noted that “organic growth is a good thing.

“We want a market that is stable and sustainable in the long run as it will not fluctuate with unpredictable highs and lows.”

Related articles:

Real estate sector well on its way to recovery | The Star

https://www.thestar.com.my/business/business-news/2024/03/08/real-estate-sector-well-on-its-way-to-recovery#:~:text=According%20to%20data%20released%20by,expected%20to%20continue%20this%20year.

WITH DRAGON COMES FIRE, SELLING AND BUYING PROPERTY IN A PERIOD OF CHANGE


Tweet #Rightways

 
Selling and buying property in a period of change 

 

Selling and buying property in a period of change 

As the economy continues its slow recovery, Feng Shui practitioners are embracing the dragon when it comes to the property outlook in the coming year. 

“For followers of Feng Shui, the anticipation of Period Nine‘s arrival has held a mystical allure, brimming with excitement and adventure. Finally, it is here yet there is fear and thoughts among the Feng Shui enthusiasts; particularly concerning its effects on individuals,” Feng Shui master Joe Choo said.

She pointed out that understanding the essence of Period Nine allows individuals to tap into its benefits with less worry and adapt to potential changes more effectively.

Period Nine spans from 2024 to 2043, Choo explained. It is a segment within Feng Shui that holds influence on energy shift patterns. The period is characterised by the fire element, symbolising expansion, transformation and passion. 

“During this period, it is expected to usher in an emphasis on innovation, growth and breakthrough across various aspects of life, including technology, culture and social structures.  Aligning spaces and activities with the energies of period 9 is believed to amplify opportunities and foster progress,” she said.

According to Choo, period 9 is associated with Li Gua (fire), and as such its location aligns with the South. This positioning indicates a more favourable economic trend in the southern geographical region, poised for significant development during Period 9. 

“For individuals seeking to tap into this energy, adherence to basic Feng Shui principles might suffice instead of relocating homes,” Choo pointed out.

From the perspective of property ownership, there are two groups of buyers; homeowners and investors. Their Feng Shui differs depending on their needs.

“Homeowners are advised to select properties with ideal landform which is Feng Shui compliant, aligning main entrances that is commensurate with the year of birth of the eldest earning male of the family,” Choo said.

“Kitchen and master bedroom should be in the ideal sectors based on the year of birth of the mistress of the house, then the rooms for other occupants should be based on their year of birth,” she added.

She pointed out that investors, on the other hand, are encouraged to consider properties in the southern regions of various areas, and anticipate extraordinary economic performance in the next two decades. For example, the southern region of Penang Region is Bayan Lepas, Batu Maung, Teluk Kumbar and nearby pockets. In Peninsular Malaysia, eyes should turn to Johor.  

“For business owners to have a prosperous year, you may apply 2024’s auspicious colours in offices or shops that attract positive events. Additionally, you may place living plants if the entrances of offices or shops are in the Southeast, which is the governing planet… to sail through the year smoothly,” Choo said.

“In terms of Feng Shui, each sector has a wealth area and you may place living plants, water features or crystals at the general area of the office or shop to further enhance the business,” she added.

To do this, business owners should identify the main entrance of their place of business, before they identify its wealth sector from the table. Turn the general area of the business into a square shape before standing at the centre of the space with a compass to identify the main entrance and wealth area.

Main entrances and their wealth sectors

Main Entrance Wealth Area Crystals
North Southeast(127.5° – 142.5°) White/Green Phantom
Northeast Southwest(217.5° – 232.5°) Citrine/Amethysts
East South(187.5° – 202.5°) Rose Quartz
Southeast North(7.5° – 22.5°) White
South East(97.5° – 112.5°) White/Green Phantom
Southwest Northeast(37.5° – 52.5°) Citrine/Amethysts
West Northwest(307.5° – 322.5°) Amethysts
Northwest West(277.5° – 292.5°) Amethysts

Source: Joe Choo

If you are planning to buy a property in 2024, it is beneficial to consider Feng Shui factors in order to harness the positive energy while living there, Choo pointed out.

“It is simply observing the landforms, for example, avoid having rivers, seas, ponds or big monsoon drains at the back of the house,” she said.

The decision to buy a property is ultimately based on need and financial means, Feng Shui master Stephen Chin added.

He agreed that as with Feng Shui principles, one should first consider the terrain surrounding the site. Alongside water bodies, he noted that one should consider the mountains, hills, roads and highways. 

“The most basic rule of thumb is to choose a property that has a higher back and a lower front. This applies to both high-rises and landed property. I co-wrote a series of articles some time ago with Professor Master David Koh that covered the Klang Valley and explained this principle of landform Feng Shui,” Chin said.

Once the area and orientation of the property are shortlisted, Chin explained that homeowners need to ensure that the main entrance to the property is compatible with the master of the house. 

“It is based on the male because it is Yang energy being introduced into the house. To determine this, calculate the Gua or Kua (personal energy) of each occupant – there are plenty of free online Gua calculators out there, so I’m not going to give out any formula!” he said.

From the Gua, one can determine if they are a West or East group person. All West group people have Northwest, West, Southwest and Northeast as their good sectors. North, East, Southeast and South are good for East group people.

“To determine the door’s location, stand in the centre of the house with a compass and after aligning the needle, look and see where the main door is located. That needs to be in the good sector of the master of the house. The kitchen and master bedroom should be in the good sector of the lady of the house. The other bedrooms should be matched to the respective occupants,” Chin said.

However, he pointed out that there are a few other things to consider, and one should engage a qualified consultant for ease of mind. 

Choo added that homebuyers are also encouraged to avoid properties which have a T-junction, convex of the road or a higher land mass in front of the house, such as hospitals, shopping malls, schools, high-tension cable and others. 

Knowing the sector of governing planets and Three-Killers of 2024, it is advisable to avoid buying the property having the main entrance located in the South and the Southeast.  

“It may be difficult for buyers who are living in condominiums or apartments because there is only one entrance, so you may place a pot of living at the sector mentioned above to prevent negative events from taking place,” Choo added.

Landed properties with two entrances offer more flexibility, allowing buyers to choose an entrance away from the southeast or south to avoid potential issues.

“After studying the external factors, matching the year of birth of the occupants with the main entrance, kitchen, bedrooms and others is very important to create harmonious energy,” Choo said.

The eye of the beholder

When asked how homeowners should decorate their homes this year, Chin pointed out that they should decorate it any way they wish. “If you want to create a festive mood, go big!” he exclaimed.

While he noted that interior design was not strictly related to Feng Shui, the Chinese are big on symbolism, therefore it’s natural to decorate the house with auspicious objects. 

He pointed to anything that symbolises good fortune, wealth, prosperity, longevity, productivity and creativity, as many of these came from Chinese myths and legends. Some symbols are newer inventions, such as the money ship, or the cat with a waving paw.

Chin noted that the cat was the Maneki-Neko from Japanese folklore, with several versions of the story. 

“According to our calculations, the dominant element in 2024 is Yang Fire. Hence, the auspicious colours for the year are light red, light brown or yellow, and light green. These are, respectively, representative of the elements of Fire, Earth and Wood,” he said.

Homeowners can decorate their house or give it a splash of new paint using these colours. However, Chin pointed out that the mileage may vary. 

“Every person has his or her own unique set of colour requirements based on the life profile, also known as the eight Character Stem-Root or Bazi. If your colour requirements match these colours, then they are especially good for you. If not, they may not be as good or may even cause some bumps along the road ahead,” he said.

He noted that it would likely be a good year for the property market as the element of Fire produces Earth. 

“There should be an uptick in earth-related industries which include real estate development and management, construction, civil engineering, and agriculture. The year 2024 is also likely to see a spurt of economic growth and development,” he said.

“However, this is likely to be temporary. One should make hay while the sun shines, but must not overcommit,” he added.

Tips to sell property

In the dynamic and competitive property market, selling can be challenging. For the Year of the Dragon, Feng Shui master Joe Choo offers a few tips for home sellers to expedite the process.

“Applying auspicious colours of 2024 to attract potential buyers to walk into the property. The auspicious colours of 2024 are light red, pink, orange, yellow, green and turquoise green.  You don’t need to repaint the property with such colours, you may apply them on the curtain, carpet or rugs, decorative items and others to enhance the luck,” she pointed out.

According to Feng Shui principles, the governing planet in 2024 is the Southeast sector and the Three-Killers is in the South. 

Choo pointed out that if a property has its main entrance in either the Southeast or South sector, it is advisable to place living plants in the living hall and kitchen to improve the luck of selling the property. 

If the property has a Southeast-facing main entrance, owners are encouraged to place living plants in the West sector, from 262.5° to 277.5°. If the property has a South-facing main entrance, owners are encouraged to place living plants in the Southwest sector, from 202.5° to 217.5°. 

“To find out the position of the plants for the living hall and kitchen, you may square up the place and stand at the centre with a compass to identify the sector mentioned above,” Choo said.

While more could be done to enhance the selling potential of a property, Choo noted that it would involve a much more complicated process. The tips she offered were simple and cost-effective.

Some of its principles could be compared to architectural principles, feng shui master Joe Choo said.

Some of its principles could be compared to architectural principles, feng shui master Joe Choo said.

“Decorate it any way you wish!” Chin said.

“Decorate it any way you wish!” Chin said.


Stay ahead of the crowd and enjoy fresh insights on real estate, property development, and lifestyle trends when you subscribe to our newsletter and follow us on social media

By Yanika Liew

 Source link

 

 

 

Related posts:

 

Make the right money moves: investing in a property is still best

 
Mind Your Money
By CHERMAINE POO

Chermaine Poo, a chartered accountant by profession, was trained in corporate finance. A former beauty queen, she has since gained popularity as an actress, TV host, commercial talent and emcee. If you have any questions on money matters, send her an email at info@chermainepoo.com or follow her on www.chermainepoo.comwww.facebook.com/chermainepoo and www.twitter.com/chermainepoo.

 

 

On the recovery path


Tweet #Rightways

 


Penang property market to rebound amid lingering challenges

`THE Penang property market, which had actually started seeing a rebound in transactions since last year, is expected to resume its recovery path into 2022.
`

CBRE|WTW director Peh Seng Yee says the Penang property market can expect a “rebound amid lingering challenges” this year.
`

“We do expect a recovery in market activity for 2022. Prices of landed properties will continue to remain resilient.
`

“For the high-rise sub-sector, it will continue to be a buyers market,” he says at the launch of CBRE|WTW’s 2022 Market Outlook Report, recently.
`

Peh adds that future launches will generally comprise self-sustained developments that will be on a smaller scale, while at the same time fulfilling the demand for affordable units.
`

Knight Frank Penang executive director Mark Saw also says the residential sub-sector in Penang has improved, posting higher volume and value of property transactions as of the third quarter of 2021.

`Prop cht

Prop chtProp cht
`

“The Penang state government’s commitment to increase home ownership with plans for a range of affordable homes in various strategic locations, extension of the Penang Home Ownership Campaign until June 2022 and enforcement of mandatory installation of fibre optic telecommunication infrastructure for all new developments, will spur the state’s residential property market.”
`


EPF payout 6.1% for 2021, Look beyond EPF for retirement 
EPF posts stronger performance amid economic rebound, focuses on rebuilding members’ savings
`

In terms of challenges, Peh says scarcity of sizeable land in Penang will still continue to pose development constraints.
`

“Additionally, the prolonging effects of the pandemic, especially with the new Omicron variant, could result in cautious spending and a wait-and-see approach.
`

“Stringent lending guidelines and concerns over job security could also potentially derail the market,” says Peh.
`

On the outlook of the Penang office market, Peh says the segment is expected to remain healthy this year, with stable rentals and occupancy rates.
`

“The prospects of co-working spaces still remain encouraging,” he says.
`

As for Penang’s retail sub-sector, Peh says the removal of movement restrictions since last year has been a boost to this sector.
`

“We see normalisation amid ‘freedom euphoria’. However, we expect rentals to be flattish and a widening gap between the newer and older shopper complexes.”
`

As for Penang’s hotel sub-sector, Peh says this segment is set for a steady recovery if the pandemic is significantly contained.
`

“The segment can be spurred further by travel bubbles and other government initiatives.
`

“We also see pent-up demand for medical tourism and intensifying market competition for the hotel sub-sector.”
`

Meanwhile, Knight Frank Malaysia in its real Estate Highlights for the second half of 2021, says the Penang residential market is expected to pick up this year, supported by a series of measures announced under various stimulus packages and Budget 2022.
`

“This will encourage people from various income levels to purchase their dream homes. The overhang of high-rise residential properties, especially in the category of condominiums and apartments, has also been growing.”
`

With limited new supply of purpose-built offices in the state (existing and future), Knight Frank says the occupancies and rental rates for better grade purpose-built office buildings are expected to hold steady.
`

“Meanwhile, with the growing work-from-home trend, some business premises have been converted into co-working space.”
`

Knight Frank noted that the country’s vaccination rate has continued to improve and with further easing of restrictions, the retail segment is expected to slowly recover.
`

“Selected retailers are expected to embrace the rise of eCommerce as they head down the path of recovery.”
`

It adds that Penang’s industrial segment has continued to remain strong and steady throughout the pandemic.
`

“This is especially with the Penang state government’s commitment to expand another two industrial parks in Batu Kawan, with focus on the logistics industry and the remaining phases for mixed industries.
`

“This industrial park is set to continue its history of the successful Bayan Lepas Industrial Park.”
`

Meanwhile, CBRE|WTW in its 2022 Market Outlook Report says property transaction activities in Penang increased for the period of January to September 2021.

`

 

“A total of 11,981 properties valued at RM7.23bil were transacted, reflecting 13.9% and 33.9% increase in volume and value, respectively, year-on-year.
`

“As more businesses are allowed to operate, the Penang property market has generally rebounded.”
`

CBRE|WTW is optimistic that the rebound will extend into this year.
`

“However, the rebound would be gradual as the pandemic lingers on, along with a sluggish economy and higher cost of living.”
`

CBRE|WTW also expects to see more bargain hunting for residential units this year.
`

“The overhang remains a concern. Prospective purchasers can negotiate for more discounts in addition to the incentives offered,” it says.
`

According to the National Property Information Centre (Napic), there were 30,290 unsold completed residential units (overhang) worth RM19.75bil as at September 2021, compared with 30,926 units worth RM19.99bil in the previous corresponding period.
`

Of the 30,290 overhang units, 18,829 units (or 62.2%) comprised high-rise units, while 6,803 units (22.5%) consisted of terrace houses.
`

The bulk of the overhang units were focused mainly in Johor (6,441 units), Penang (4,638 units), Kuala Lumpur (3,863 units) and Selangor (3,376 units).
`

Napic says 33.7% of the overhang properties consisted of units ranging between RM500,000 and RM1mil, while 28.4% comprised units ranging between RM300,000 and RM500,000.
`

Units below RM300,000 comprised 25.5% of the total overhang, while units above RM1mil (12.4%) consisted of the remaining unsold units during the period under review.
`

Knight Frank concurs that the overall property overhang status continues to remain elevated, especially in the high-rise residential segment.
`

“The performance of the residential sub-sector is improving gradually, registering higher volume and value of property transactions as of the third quarter of 2021,” it says.

Source link

 

 
`

Related posts:

 

All steady on the home front in Penang residential properties

 

 

Penang’s lively market

 

Many estate agents and developers generating interests in primary and secondary markets

 

Good time to invest in property now

 

 

Landed residential properties much sought after with resilent demand, Market insights

 

 

 

 

 

Penang property prices move sideways in Q1 2016

 

 

 

 

 

When will the property market pick up?

 

Penang Star Property Fair at Queensbay Mall 2016

Developers all smiles with results

 

China buyers eyeing Penang property in growing tourism

 

Young adults in developed countries rent, we buy houses for good

 

Singaporeans on buying sprees for Penang prewar houses; Residents see red

 

 

Better to buy a car or a house first?

 

 

 

 

 

 Flat property market seen for Penang

 

 

RCEP to boost our property market


Tweet #Rightways

RCEP will promote and facilitate international trade among the 15 participating countries in the Asia-Pacific region and the expected increase in free trade will have a significant impact on the Malaysian property market. -NST/file pic.

The signing of the Regional Comprehensive Economic Partnership (RCEP) signifies the world’s largest trade agreement and will contribute towards sustaining Malaysia as a preferred trading hub and investment destination.

RCEP will promote and facilitate international trade among the 15 participating countries in the Asia-Pacific region and the expected increase in free trade will have a significant impact on the Malaysian property market.

Higher trade and economic activities will impact on the occupation, investment and development sectors of the property market. Real estate space is a local input in the production and supply of goods and services. Increased exports lead to the expansion of domestic production.

Increased domestic production increases the demand for industrial space. Imports also have an impact on demand for real estate space. Goods imported need to be stored and distributed through warehouses and logistic properties.

These goods are then displayed and marketed at various outlets points thereby increasing the demand for retail spaces in retail malls.

Regional trading bloc and trade liberalisation will encourage foreign direct investments (FDI). These FDIs will create demand for industrial land and buildings. New capital investments will spur demand for more financing activities from the banks.

Once the plants and machines are in operations, it will create employment and demand on other factors of production. Higher economic growth will drive the capital market which will attract more foreign investment fund flows investing into local equities.

With increased economic activities, occupation demand for real estate space will cause rental increase. With inelastic new supply, potential future rental growth and prospective capital appreciation, investors will start to invest in real estate leading to an active investment market with the more participation from the institutional investors.

Developers will react to prevailing rents and capital values when they appear to signal a profitable opportunity. If prices rise, more developers will respond to these signals, the aggregate flow of supply into the market increases.

These new spaces will meet the requirements of the occupiers and investors e.g. floor plate size, specification and network connectivity requirements

Real estate service providers such as property consultants played an important role in the whole process by aligning their service standards to the requirements of the regional and global clients.

It is envisioned that the RCEP will open up markets and help in the recovery post Covid-19 pandemic. With increased economic activities, it will give rise to more derived demand for various real estate spaces thereby leading to an improved property market performance in the future.

DR. TING KIEN HWA

Professor of Property Investment

Centre of Real Estate Studies

Faculty of Architecture, Planning & Surveying

Universiti Teknologi MARA

Source link

You May Also Like

Foreigners Not Welcome as Malaysia Joins Property Clampdown


 

Malaysia Bans Foreigners From Project

https://www.bloomberg.com/news/videos/2018-08-28/malaysia-bans-foreigners-from-project-video

 

 

 

 

  • Mahathir’s planned crackdown taps into nationalist rhetoric
  • Housing affordability has driven restrictions around the world

Hanging a ‘foreigners not welcome’ sign on a giant real estate development, Malaysia’s prime minister this week appeared to add to housing curbs around the world fueled by soaring home prices and populist politics.

Describing the Chinese-backed $100 billion Forest City as “built for foreigners” and beyond the reach of ordinary Malaysians, Mahathir Mohamad tapped into the nationalist rhetoric that helped secure him an election victory — and global angst over housing affordability. Around the world, post-financial crisis property booms driven by low interest rates have left locals struggling to buy homes.

“The tension around foreign investment is always going to be much more acute when affordability is getting worse,” said Brendan Coates, a researcher in Melbourne at the Grattan Institute think tank. When locals get “priced out of the market,” foreign buyers may be blamed even when their effect is small, he said, commenting on the global picture.

Hanging a ‘foreigners not welcome’ sign on a giant real estate development, Malaysia’s prime minister this week appeared to add to housing curbs around the world fueled by soaring home prices and populist politics.

Describing the Chinese-backed $100 billion Forest City as “built for foreigners” and beyond the reach of ordinary Malaysians, Mahathir Mohamad tapped into the nationalist rhetoric that helped secure him an election victory — and global angst over housing affordability. Around the world, post-financial crisis property booms driven by low interest rates have left locals struggling to buy homes.

“The tension around foreign investment is always going to be much more acute when affordability is getting worse,” said Brendan Coates, a researcher in Melbourne at the Grattan Institute think tank. When locals get “priced out of the market,” foreign buyers may be blamed even when their effect is small, he said, commenting on the global picture.

A wave of restrictions or taxes on foreign purchases already stretches from Sydney to Hong Kong to Vancouver. Measures targeting foreign home buyers have included stamp duties, restrictions on property pre-sales to non-residents and limits on the types of homes that can be purchased.

‘New Colonialism’

New Zealand is banning foreigners from buying existing residential properties after Prime Minister Jacinda Ardern campaigned in last year’s election on pledges including affordable housing. Canada and Australia have rolled out one restriction after another, and Singapore just ramped up a tax on overseas buyers. Denmark and Switzerland have restrictions, a Grattan report shows.

The 93-year-old Mahathir’s comments came at a late stage of the game. Globally, property shows signs of cooling from the post-crisis boom. His concern seems to be sparked not by property market overheating but, rather, foreign investments that don’t benefit Malaysia and what he terms the risk of “a new version of colonialism.”

Late Tuesday, a statement from Mahathir’s office said the nation welcomes all tourists, including from China, as well as foreign direct investment that “contributes to the transfer of technology, provides employment for locals and the setting up of industries.” It didn’t refer to Forest City.

“Mahathir has never liked the idea of Forest City or the idea of many foreigners buying up property in Malaysia,” said Ryan Khoo, co-founder of Alpha Marketing Pte Ltd., a Singapore-based real estate consultancy.

Foreigners will be blocked from buying units at the project, on artificial islands in Johor, and refused visas to live there, Mahathir said at a press briefing on Monday. That left analysts and local officials parsing his words to guess at how bans might work. The Chinese developer, Country Garden Holdings Co., said his comments clashed with past assurances. The project’s targeted buyers have included people in mainland China.

With a wall of Chinese money blamed for pushing up prices around the world, local lawmakers, media and the public can
struggle to disentangle xenophobia from legitimate efforts to constrain inflows of capital. In Australia, “populist reporting” exaggerated the role of Chinese investors, according to Hans Hendrischke, a professor of Chinese business and management at the University of Sydney.

Read more on global property:

Chinese buyers had the “bad luck” of becoming overly visible in markets around
the globe, said Carrie Law, chief executive officer of Juwai.com, a Chinese international property website.

Foreign buyers get blamed for soaring home costs even when the evidence is minimal. More than 60 percent of Sydney residents cite foreign investment for price increases,
according to a survey from University of Sydney academic Dallas Rogers. That’s despite research by Australia’s Treasury showing only a marginal impact. Likewise, data suggest foreign buyers play only a small role in New Zealand’s housing market.

(Updates with Mahathir statement in seventh paragraph, chart on global restrictions.)

No Chinese belt, road or bedrooms for Malaysia

Construction works going on normally at the mammoth Forest City project in Gelang Patah in Johor

PERPLEXED, wounded, indignant or still optimistic. The Chinese developer Country Garden Holdings Co can put any spin it wants on its Forest City project, a US$100bil Malaysian township whose fate suddenly has been thrown into doubt after Tun Dr Mahathir Mohamad’s pointed refusal to let foreigners buy apartments or live in them long term.

One thing is clear, though: The prime minister is not acting impulsively. The project claims to be a “new global cluster of commerce and culture,” and a “dream paradise for all mankind.” However, in Malaysian political discourse, Forest City is just a gigantic Chinatown of 700,000 residents.

Taking on the developer is part of Mahathir’s broader plan to redefine Malaysia’s relationship with Beijing, pulling Kuala Lumpur away from the client-state mindset introduced by his predecessor.

Already, the 93-year-old leader has cancelled the Chinese-funded East Coast Rail Link, dealing a blow to China Communications Construction Co, which was building the US$20bil belt-and-road route. Datuk Seri Najib Tun Razak, ousted in May, claimed the link would bring prosperity to eastern Malaysia.

But Dr Mahathir, who spoke bluntly in Beijing this month against “a new version of colonialism,” took a very different view of the railway, which would have connected areas near the Thai border along the South China Sea to busy port cities on Malaysia’s western coast, near the Strait of Malacca.

He also shelved a natural-gas pipeline in Sabah, a Malaysian state on the island of Borneo. Dr Mahathir justified the cancellations on the grounds that they were too expensive.

However, the abrupt message to Country Garden, which is neither linked to the Chinese state nor would add a dollar to Malaysia’s national debt, shows that sovereignty – and Malaysia’s racial politics – are Mahathir’s real concerns.

Two-thirds of the homebuyers in Forest City are from China. Last year, as a trenchant critic of Najib’s policies, Dr Mahathir flagged the risk that anybody living in Malaysia for 12 years would be able to vote.

Country Garden should have seen the political risk in marketing the flats to mainland Chinese, who were separately lapping up long-stay visas under Najib’s Malaysia My Second Home programme. Najib’s generosity toward the mainland wasn’t the natural state of affairs. In 1965, the country expelled Singapore from the Malaysian federation out of fear that the peninsula’s majority Muslim Malays could lose their political dominance to the island’s ethnic Chinese.

If Country Garden misread the political tea leaves, it’s also wrong to bark up the legal tree after Dr Mahathir’s outburst. So what if Malaysia’s national land code permits foreign ownership? Approval of global investors may not matter all that much to a politician who has, in his previous innings, trapped their money at the height of a financial crisis.

The new prime minister isn’t as reliant on Beijing as his predecessor. If anything, he has to reward local businessmen and contractors for switching their allegiance from Barisan Nasional, the erstwhile ruling coalition that suffered its first loss of power in six decades.

It’s a given then that Malaysia under Dr Mahathir will have little appetite either for One Belt, One Road – or, for that matter, three- and four-bedroom apartments that could create a new political constituency.

Forest City could still be salvaged, but as a predominantly local project. If Donald Trump can unilaterally change the rules of game for China and Chinese businesses, so can, in his limited sphere, Dr Mahathir. As far as Country Garden is concerned, he just has.

Credit Aandy Mukherjee— Bloomberg

 

Related: 

 

 

Belt and Road envisions great win-win global connectivity

History will remember the Belt and Road initiative as one
of the most significant chapters in China’s history and a great
milestone in the development of human civilization.

BRI envisions great win-win global connectivity

History will remember the Belt and Road Initiative as one of the most significant chapters in China’s history, and a great milestone in the development of human civilization.

Leaving a legacy by buying a house first before a luxury car …


 

DURING big festive celebrations such as Hari Raya Aidilfitri, Deepavali and the recently celebrated Chinese New Year, it is common to see families with a few generations gathered together.

Our grandparents, parents, uncles and aunties would talk about the legacies left by our ancestors, and the stories often attract a lot of attention whether from the young or old.

Perhaps, the topic of leaving a legacy is something worth sharing as we embark on a brand new year.

For years, I have been touched by the catchy tagline of a renowned Swiss watch advertisement, “You never actually own a (the watch brand), you merely look after it for the next generation”.

While most of us can relate to the thought, not all of us can indulge in such luxurious watches or be interested in buying one. However, at some point in time, we may be looking at buying a property to pass down to our younger generations.

Whenever the topic of leaving a legacy is brought up, I would recall the lesson that I learnt from my late father. My father embarked on a long journey from China to Malaysia at the age of 16. With years of hard work and frugality at his peak, he managed to own a bus company, the Kuala Selangor Omnibus Co.

Other than his bus transport business, he only invested in his children’s education and real estate. He financed seven of his eight sons to have an overseas university education, and when he passed away, he also left four small plots of land in Klang and a company which had 34 buses.

As I look back now, what my late father invested in unintentionally was very beneficial to me when I came back from my studies as an architect. With the land he handed down and the knowledge he equipped me with, I intuitionally got myself involved in small real estate development, and later founded my property development company, Sunrise, in 1968.

Many people have thought of leaving a legacy. The crucial questions often asked are, when should we start planning for it, and how should we go about it?

For financial planning and investment, I always believe that the earlier we start, the better off we are. The same goes to leaving a legacy.

If you plan to buy a property, it is advisable to start earlier as it is more affordable to buy it now as compared to 10 or 20 years down the line especially with rising costs and inflation in mind. You can start with what you can afford first and focus on long-term investment.

It is proven that property prices appreciate over a period of time, especially when we plan to hand over assets to the next generation that easily involves a 20- to 30-year timeline.

As a developing nation which enjoys high growth rate, Malaysia’s property values will also appreciate in tandem with the economic growth in the long run.

Nowadays, we often hear youngsters comment on the challenges of owning a house due to the rising cost of living. I believe that besides starting with what you can afford, it is also important to plan your financial position wisely and to differentiate between investment and spending.

Investing in properties, commodities, shares, etc. is also a form of savings which can help to grow your wealth and to leave a legacy. On the other hand, money spent on luxury items may depreciate over time from the day you buy them. If we can prioritise investment over expenditure, it is easier and faster to achieve our financial goals.

So, if you haven’t already started to plan, do consider leaving a legacy by buying a house first before a luxury car, branded bags or expensive gadgets, as the latter are considered ‘luxury’, not necessity.

Even if you may not have a spouse or children at this point in time, it’s better to start now than later, as our financial commitments tend to grow bigger as we progress into the next stages of our lives.

Most of us hope our lives matter in some way that can make an impact on our loved ones. The idea of leaving a legacy can take many forms, such as equipping the younger generations with knowledge and values, or leaving them fond memories.

Those are all important to work on and they leave a footprint to those lives you touch. If you are also planning to hand over physical gifts, always remember to start earlier with what you can afford, and focus on long term investment.

By Food for Thought 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.

Related posts:

If it’s too good to be true, something’s wrong 

Cars are more expensive than houses? A house can buy how many cars? 

Bankers and lawyers should know better 

8 million more houses needed in Malaysia 

Can Malaysia’s household debt at 87.9% in 2014 be reduced to 54% ? 

Our cars are costing us our homes! 

A challenging year ahead

Rising tides of currencies globally cause inflation, money worthless!

Is having a car still a symbol of freedom?

Malaysian income: bread and butter, affordability of owing a house

Cars are more expensive than houses? A house can buy how many cars?


IN about 3 weeks’ time, we will be celebrating the New Year.

Each New Year comes with new resolutions and new goals. Some would plan to own big ticket items such as a house or a car as part of their resolution. If your plan is to own a new car, finish reading this article before nailing down that resolution.

Owning a car in Malaysia is expensive. In one of my previous articles, I highlighted that Malaysia was ranked second in the world where owning a car is expensive.

But what many do not know is by how much, relative to homes. Yes, homes in Malaysia are expensive too, but relative to Australian homes and cars, our cars are 10 times more expensive than those sold in Australia compared to homes. Let’s do some simple math together.

Khazanah Research Institute (KRI) reported that the median house price in Malaysia is about RM250,000. This is the cost of two Honda Civics (priced at RM110,000 per car).

In Australia, the median house price is A$660,000, while a Honda Civic costs about A$30,000. This means, a median-priced Australian house of A$660,000 can buy 22 Honda Civics, versus a median-priced Malaysian house of RM250,000 which can only buy two cars of the same model. Yes, our homes may not be cheap but our cars are more expensive in comparison.

I further compared Malaysia against the United States and United Kingdom. A median-priced house in US and UK can buy 12 and 16 Honda Civics respectively, which is still more affordable compared to the two which can be bought with a median-priced Malaysian house.

The story does not end here. In addition to the cost of purchasing a car, there are many other financial commitments that comes along with owning a car. These include petrol, parking, toll charges, maintenance, and repair costs. Then, there is the cost of depreciation which ranges from 10 per cent to 20 per cent per year. It does not help that most of these supplementary expenses are frequently being increased. Our cars are indeed costing us a lot.

It is undeniable that a car is a necessity to those who have limited access to public transportation. Until our public transportation system is good enough, people will still need private vehicles to move from one place to another.

Unfortunately our cars are so expensive that the rakyat, especially the younger generation, are forced to put off buying a home until they can afford it. In the meantime, that “wait” causes house prices to appreciate, thus making it even more unaffordable for these people to own a home. This vicious cycle will continue until the government has a permanent solution to address both public transportation and affordable housing.

Perhaps, it is also timely to revisit the rationale behind our National Car Project which was introduced in 1982 to bring a higher level of industrialisation in Malaysia. Since its inception, the price of national and non-national cars have progressively increased through increase in car taxes and excise duties.

The price of non-national cars in Malaysia generally cost 50 per cent to 100 per cent more than the price of the similar make of car in other countries. On the other hand, one of my managers came back from his Aussie trip and shared that a Proton Preve in Australia is RM11,000 cheaper than one that is acquired in Malaysia.

Originally, the National Car Project was a form of protectionism for the national car industry. After more than 30 years since its inception, it has now become a burden to the rakyat, by eating more and more into our disposable income. The National Car Project has served its original purpose, and it is time that we review it.

So now, instead of jotting down my resolution, my wish list for 2016 is for the Government to rationalise and reduce the taxes imposed on cars. This will put more money back into the rakyat’s pockets to start their home ownership journey much earlier. Concurrently, the Government can continue to channel and reinvest some of these funds to build a comprehensive and effective public transportation system in Malaysia which will greatly reduce the rakyat’s dependency on private vehicles.

And for those who still wish to buy a car, think twice as owning a car is too expensive and unaffordable – it may also cost you your home.

By Datuk Alan Tong Food for Thought
 
Food for thought  By DATUK ALAN TONG


> FIABCI Asia Pacific chairman Datuk Alan Tong has over 50 years of experience in property development. He was FIABCI World president in 2005/06 and was named Property Man of The Year 2010. He is also the group chairman of Bukit Kiara Properties. (email atfeedback@bukitkiara.com) 

Related posts:

Jul 14, 2012  Our cars are costing us our homes! WHEN I first started my job as an architect in the 1960s, I was on a three-year contract with a monthly salary …
Jan 12, 2013  Imagine that the highways, car lanes and open car parks that once filled the landscapes are now … Our cars are costing us our homes!
Sep 5, 2012  They can cut down on ownership of cars, and use public transport instead,” he said. Yam also … Our cars are costing us our homes! Posted by …
May 14, 2014  Cooling-off measures for the car industry that can be considered include shorter loan period, more … Our cars are costing us our homes!
Aug 11, 2014  So, how does this increase in interest rate affect us, the public? Most people generally only … Our cars are costing us our homes! Bankers and …

Save Penang Hill from the greedy


Uphill battle: A hiker passing by a vegetable farm on Penang Hill overlooking Air Itam.

Treasured heritage seems to be losing its charm to illegal farms and development

THE stall at the Air Itam market in Penang is said to offer the best asam laksa in Malaysia.

Rain or shine, it pulls in the crowd.

The ingredients for the dish such as ginger bud (bunga kantan), mint leaves (daun pudina), laksa leaves (daun kesum) and kalamansi limes (limau kasturi) come from Penang Hill, which is less than 200m away.

Farmers who cultivate the land at the hillslope sell their produce at the wet markets on the island.

The fertile hillslope from Air Itam to Paya Terubong is cultivated with vegetables and fruits.

Demand for the produce is so great that farmers are illegally clearing the hillslope to expand their farms.

About 2km from the market along Jalan Paya Terubong, there is a trail leading to a hillslope.

Lately, hikers and mountain bike enthusiasts have been using the trail to reach the 135-year-old Cheng Kon Tse Temple, nestled on the slope of the hill.

Travellers can see vegetable farms and fruit trees on both sides of the trail.

There are nutmeg trees, kalamansi lime trees, papaya and banana trees.

The vegetables include lemon grass, lady fingers and sweet potato.

As one continues walking up, a large swathe of hillslope which had been cleared near the telecommunication towers comes into view.

The bald patch can be seen from the Paya Terubong road below.

The slopes on Penang Hill have been cleared by farmers over the past few decades.

Such illegal hillslope clearing has been raised by environmental groups but there has been no firm action from the authorities.

A former Penang Island City Councillor claimed that he had provided pictures of the clearings to state leaders and that he had also raised the matter with the Consumers Association of Penang and Malaysian Nature Society.

“The press should continue to highlight the issue so that something is done finally,” said the former councillor who did not want to be identified for fear that the farmers might go after him.

“Penang Hill is our heritage. But no one seems to bother,” he said.

Besides Penang Hill, bald patches are also appearing on hills in several parts of the island.

Bukit Relau in Jalan Bukit Gambier has been dubbed “botak hill”.

There is also hill clearance in Bukit Kukus in Paya Terubong and Bukit Laksamana, a water catchment for the Teluk Bahang Dam.

More and more hillslopes are going bald because of developers and contractors who cleared the land without the authorities’ approval.

The clearings are done on weekends and smoke can be seen from far when the trees are burnt.

A large swathe of land has also been cleared at a place referred by hikers as level 45 station.

It should not be difficult to nab the culprits since there are cemented trails all over the hillslopes in Air Itam and Paya Terubong.

When The Star reported on Feb 14 last year that more bald spots could be seen, a state exco member said they had pictures of the illegal activity and that action would be taken against the culprits but till now, no one knows what the action is.

It is troubling that all this is happening under a state government which emphasises on Competency, Accountability and Transparency.

Penang Hill seems to be losing its charm.

Yet, the state government seems to be focused on mega projects and land reclamation.

At a state assembly sitting last month, Chief Minister Lim Guan Eng said the Penang Island City Council was using drones to check on illegal hill clearing and CCTVs would be installed next year to monitor illegal earthworks.

The spate of hill clearings has prompted the Penang Forum, a coalition of public interest NGOs, to hold a forum on Save the Hills of Penang tomorrow.

Hopefully, the outcome from the event will reach the right ears.

There is a compelling need to save the hills from greedy farmers and developers.

Comment by K. Suthakdar

Related posts:

Good plan needed to drain water from flood-hit areas PENANG’S drainage system is unable to cope with heavy rain falling within a short …

Errant hill clearing by developers causes of floods, sinkholes, seepages damaged houses!

 

Kuala Lumpur property: KSK Land ups the ante with iconic 8 Conlay


 
KSK Group Bhd chairman Tan Sri Kua Sian Kooi with daughter Joanne who is KSK CEO & KSK Land Sdn Bhd MD

Flexibility: 8 Conlay units have the flexibility that allows residents to live their story the way they desire.

Fresh from announcing that its branded residence for Tower A at 8 Conlay project will be sold at a record RM3,200 per sq ft, Kempinski Hotel Kuala Lumpur has now been recognised under the Government’s Economic Transformation Programme.

IF 8 Conlay’s RM3,200 per sq ft (psf)selling price has set tongues wagging for possibly setting a new pricing record in luxury living, here is another development to add to the several “firsts” the project has notched since it was announced some two-and-a-half years ago.

Kempinski Hotel Kuala Lumpur, which is a component of 8 Conlay, has been recognised as an entry point project under the Tourism National Key Economic Area (NKEA) of the ETP – the Government’s initiative to propel the economy into high-income status by 2020.

Kempinski Hotels, Europe’s oldest luxury hotelier, is the hospitality partner of 8 Conlay’s owner and property developer KSK Land Sdn Bhd.

The hotelier will provide services for the project’s branded residence towers as well as manage the hotel tower.

“We got it (the endorsement) recently,” declares a proud Joanne Kua, who is the managing director of KSK Land.

According to the 30-year-old, the recognition is a sign of “quality assurance” that will place 8 Conlay on the global map.

“Even though we are in the ETP because of Kempinski Hotel Kuala Lumpur, Kempinski is also servicing our branded residence.

“This means there is a level of service that we need to adhere to for the entire development. This has always been what we have been reiterating at KSK Land, where every development we undertake has to be of good quality, and the service we provide to customers is always on top of our minds,” Joanne tells StarBizWeek.

“Being the owner of Kempinski Hotel Kuala Lumpur, we are proud to be pushing the boundaries by bringing the Kempinski brand into the Malaysian market because we are one of the few – if not only – fully integrated branded residence developments in the KLCC area.”

Kempinski Hotel Kuala Lumpur is slated to open its doors in 2020, coinciding incidentally with the planned “Visit Malaysia Year” in that same year.

In terms of numbers, Kempinski Hotel Kuala Lumpur is projected to bring in RM19.8mil in gross national income or GNI in the year 2020, which is expected to grow in the following years. Job-wise, the hotel is expected to create some 780 employment opportunities when it opens its doors in January 2020, while committed private investments amount to RM360mil, shares Joanne. This RM360mil is the cost of developing the hotel minus the land cost.

Shedding more light on the ETP recognition, the KSK Group director for corporate strategy and investments Pankaj C Kumar says that these numbers have been audited by the panel of auditors at the Performance Management and Delivery Unit or Pemandu, the driver of the ETP initiative.

“We started engaging with them early last year. Under the ETP’s Tourism NKEA, the Government’s plan is to increase the number of four- and five-star hotels, as well as increase the room rate in Malaysia, which is still relatively lower as compared to the region. They also want to create more vibrancy within the KLCC and Bukit Bintang areas,” says Pankaj.

Kempinski Hotels chief executive officer (CEO) Alejandro Bernabé says the ETP recognition raises the profile of its upcoming hotel in Kuala Lumpur. “For us, this creates even bigger expectations not from the construction point of view, but from the deliverance of (service) expectations. With the opening of the hotel in 2020 coinciding with a planned Visit Malaysia Year, we have to ensure we get it right from day one, as we cannot afford to let the honour of the country down,” he says in the joint interview. Bernabé was in town for the launch of 8 Conlay’s signature sales gallery on Wednesday. During the launch, phase one of 8 Conlay’s branded residence units known as YOO8, serviced by Kempinski, was officially open for sale. A private viewing for a select few of around 200 comprising the who’s who of the corporate circle was held on the same evening of the launch.

With piling works having begun at the four-acre site, it seems to be all systems go despite the expected slowdown seen in the property sector by analysts.

And in what is seen as a “coup of sorts” in positioning and differentiating 8 Conlay, the company has teamed up with the crème de la crème of brand partners like internationally-celebrated design company YOO, local architect Ar Hud Bakar and Bangkok-based landscape design firm TROP other than the world-class hotel management services of Kempinski.

8 Conlay unveiled

8 Conlay owes its name to the auspicious address it sits on in Kuala Lumpur’s Golden Triangle. The development comprises of two YOO-interior designed branded residence towers of 57- and 62-storey blocks that will be connected via two sky bridges on levels 26 and 44. The development is complemented by a 68-storey five-star Kempinski Hotel, serviced suites and a lifestyle retail component.

YOO8 comprises two spectacular towers of 1,062 luxury branded residence, ranging from one to three-bedroom units.

Tower A of YOO8 will feature 564 units covering 700 square feet to 1,308 square feet selling at an average price of a whopping RM3,200 psf.

According to the company, 70% of Tower A has been reserved, with 80% comprising Malaysians.

Meanwhile, Tower B of YOO8 will feature 468 units to be launched some time next year.

Can 8 Conlay usher KSK into the competitive world of property?

8 Conlay’s selling price of RM3.200 psf, which is RM500 psf higher than the indicative RM2,700 psf it was only recently looking at, begs the question of whether it can sell in a soft market. Being the maiden venture for KSK Land, all eyes are on the company and its young and petite head honcho, Joanne. After all, 8 Conlay’s entry into the branded residence space is coming after a hiatus of similar launches in the city.

 

Joanne: ‘Price is reflection of interest.’

Joanne: ‘Price is reflection of interest.’

KSK Land is the property arm of KSK Group Bhd, which has insurance as its other core business. KSK Group was formerly known as Kurnia Asia Bhd that was privatised in 2013.

Joanne, who is also KSK Group’s CEO, is the daughter of the 62-year-old KSK patriarch and executive chairman Tan Sri Kua Sian Kooi.

While Joanne is playing a bigger role as the face of property in the KSK stable, it is no secret that senior Kua remains the driving force of the group.

KSK had sold its Malaysian insurance business in 2013 and diversified into property in the same year. It still operates insurance businesses in Thailand and Indonesia.

A quick check with property consultants indicate that the Banyan Tree branded residence is being transacted at prices between RM2,500 and RM3,000 psf, while St Regis was approaching the RM3,000 psf mark as at July estimates.

As for Four Season’s Place, a property consultant puts the going figure between RM3,000 and RM3,500 psf. “At RM3,200 psf, 8 Conlay is trying to position itself in the likes of Four Seasons. However, Four Seasons sold its units much earlier and it would be interesting to see if 8 Conlay is able to match Four Seasons, given the current market situation,” says the property consultant.

Joanne, however, remains optimistic that 8 Conlay would do well and prove the sceptics wrong.

“The price is a reflection of interest coming from the market. At the same time, if you were to compare what’s around the KLCC area, the pricing will justify the product.

“In terms of value, our location on Jalan Conlay is a strong point as in the branded residence market, buyers buy for location, which itself is capital preservation,” she says, pointing out that branded residences command a 30% higher value than luxury apartments based on a recent Knight Frank report.

Bernab: ‘Kempinski Hotel Kuala Lumpur in the ETP raises the hotel’s profile.’
Bernabé: ‘Kempinski Hotel Kuala Lumpur in the ETP raises the hotel’s profile.’

The disproportion between local and foreign buyers is due to the lack of marketing so far. “With the launch of the sales gallery, we are only now officially going out to market. We are eyeing all major cities like Singapore, Shanghai, Beijing, Taipei, Korea, Hong Kong, Japan and the Middle East.”

The project is eyeing an equal spread of local and foreign buyers.

Locally, she shares that interest has been coming from surprisingly “young professionals who are well-travelled and know of Kempinski”.

“A branded residence is something one buys for capital appreciation for the long term. The buyers are a discerning lot and yearn to have a certain lifestyle.”

In terms of benchmarking, Joanne says that 8 Conlay is being benchmarked with other similar branded residences around the world and that prices in Malaysia are still relatively on the low side.

“If you look at branded residences in London, they are really about infusing three components. One is a five-star luxury service provider which you cannot deviate from. The second is the design element. When you partner a good name for design, buyers feel “safe” knowing that what is to be given is of a certain quality and level.

“The third is the architecture component, which often tends to be overlooked. But people who buy a branded residence are discerning buyers who look for offerings that are limited and unique.”

A unique proposition

Joanne describes it as providing a seamless experience for buyers all the way from the outside to the inside.

“When the thought process began to develop 8 Conlay, we looked at the branded residence space around the world and asked ourselves what was really available here. This is when we decided that we had to differentiate ourselves from the rest and would be able to do it,“ says Joanne.

This in essence sealed the company’s partnership with Kempinski. “What is unique about Kempinski is that in every hotel in the different cities it operates, there is a combination of its heritage and the owner’s identity, which I think is a strength many hoteliers don’t have. That’s one of the reasons why we like Kempinski because of the flexibility that allows for both parties’ personalities to stand out. That makes a very good hotel,” says Joanne.

She shares that the affinity to Kempinski is not altogether a new idea to KSK.

“The (Kua) family has had experience with staying at different Kempinski Hotels as we travelled a lot. So, when we were looking to partner a hotelier, Kempinski naturally popped into our chairman’s mind fairly quickly,” she says.

At the same time, Kempinski was also scouting for opportunities in Kuala Lumpur as part of its expansion into this part of the region.

Water theme: A unit designed around the ‘water’ element. Upon entering, one is treated to the magnificent view of KL City Centre beyond the foldable doors.
Water theme: A unit designed around the ‘water’ element. Upon entering, one is treated to the magnificent view of KL City Centre beyond the foldable doors.

“Kempinski is quite exclusive. We choose our projects very carefully and make sure we work with partners that share the same common values.

“We are looking for exclusivity and authenticity and benchmark ourselves with the top residences in the world because customers who buy these residences have choices being well-travelled,” adds Kempinski’s Bernabé.

He reckons that having other branded hotel residences around 8 Conlay is not competition, but rather a good thing for the person who lives there because “if you live in a branded residence, you would want your neighbourhood to be of the same calibre”.

Drawing strength from brand partners

Joanne says 8 Conlay’s strength is the diversity of the international brand partners it has teamed up with, which would serve as an advantage as it markets overseas.

“Tower A is designed by Steve Leung and YOO. Steve Leung is akin to the “Andy Lau of design” in Hong Kong and China, while Kempinski has a strong presence in the Middle East and China,” says Joanne.

“For interior design, we have YOO which is not new to the branded residence segment. It knows what it means to take on the little details that people don’t see in space optimisation. This is why we market our residence fully furnished because that is the strength we want to show in one of our brand partners.

“And as far as the Kempinski name for service is concerned, you can only experience it if you have stayed in one of the Kempinski Hotels and understand the service standard it brings to the table.”

Incidentally, for Kempinski, YOO, Steve Leung and TROP, this is their first time in Malaysia. “The good thing about this is that it gives us a fresh pair of eyes, where we can innovate and do something different.”

Joanne says the company is also not strategising to compete with other players for its retail component. “In fact, we like it that Pavilion is close to us because it provides options for our buyers.

“We are not building a mall, we’re building a retail lifestyle quarter. We are going with the design first, as it needs to complement the whole development and be an attractive point on its own,” she says.

Taking a leaf out of its insurance book

Joanne believes that 8 Conlay’s unique concept will pan out as planned.

“When we conceptualised the project, our chairman Tan Sri Kua made it clear that he wanted to grow into a conglomerate. It’s not that we woke up one morning and decided that we wanted to go into property. The root of our business is in insurance, which is a long-gestation project. There is no denying that property is also for the long term, so there is no right or wrong time to go into this business.

“In insurance, we come from a base where it is all about customer service. So, when looking at property, we also looked at it from a completely different angle … we put ourselves in the customer’s shoes and decided what we could do differently.

“When we decided which direction we wanted to go into in property, the message was very clear – to make sure we added value to the customer.”

“Creating extraordinary living spaces is what we do. KSK Land is formed on this philosophy and our job here is to create something extraordinary for 8 Conlay.”

On her taking on a mammoth project at a relatively young age, Joanne says she does not see her role from a gender perspective. “Any CEO would face the same challenges as me. The important thing is mutual respect, and in KSK, we are a family. We work together and celebrate together.”

By Gurmeet Kaur The Starbiz

Related posts:

13 Apr 2014
New kid on the block: Singapore’s ‘shoebox king’ Oxley spices up Kuala Lumpur a record RM3,300 per sq ft. IN just 10 months, Singapore-listed Oxley Holdings Ltd has quietly amassed a gross development value (GDV) of …

High cost under new law may affect property investors’ profit margin


Strata regime: Return on investment will always be a consideration as higher cost would certainly affect the possible margin of profit in today’s buyers’ market.

Counting the cost: Investors’ profit margin may be affected under new law

PROPERTY has topped the list of investment options for those who have extra cash. Property investors and those who prefer other instruments, are trying to gain maximum returns on their hard earned money.

Property investment has gained momentum because of the price boom in the last 10 years as seen by the massive development and high take-up rate.

Because the bulk of these properties are stratified residential properties, legislations have been updated for a more efficient delivery of strata titles. Essentially, these new legislations provide more protection to house buyers.

Among these are the Housing Development (Control and Licensing) (Amendment) Act 2012 (“HDAA”), Strata Titles (Amendment) Act 2013 and Strata Management Act 2013 (both “Strata regime”). The Strata Management Act came into effect on June 1, 2015.

Return on investment will always be a consideration as higher cost would certainly affect the possible margin of profit in today’s buyers’ market. While having new legislations are good news for house buyers, these new legislations could also impact the cost of any investment in strata residential property.

For a start, there is now higher compliance cost for the housing developers, as there is an increase in the amount to be deposited in the housing development account.

There is also the new requirement to maintain the common property defects account prior to the delivery of the keys to the house buyers.

This means that under the new regime, developers will have a higher compliance cost, which may indirectly result in fluctuations of property prices. This means developers need to be financially strong and there is the possibility that they may incur financial costs as they try to maintain a feasible and sustainable cash flow.

This will discourage the smaller players. Having fewer choices is definitely not good news for the investors.

In addition, there is also a higher transactional cost for those who plan to flip their properties.

The earlier issuance of strata title upon delivery of vacant possession will require investors to fork out expenses related to the stamp duty before selling the completed property to the next buyer.

In other words, there is no longer savings on the stamp duty on transfer for those investors who bought directly from the developers. This lowers the return on investment, not to mention having to bear with the longer and complicated process of double transfers for those who are eager to dispose of the property on delivery of vacant possession.

The new template of the prescribed sale and purchase agreement HDAA (Schedule H) also requires that the payment shall be in compliance with the schedule of payment and no person shall act as stakeholder to collect such payment.

In simpler sense, the developer is no longer allowed to collect booking fee from the investors for their preferred unit and the unit they have selected is only secured upon the signing of the sale and purchase agreement with the 10% payment.

As such, there is no turning back once you have signed on those dotted lines and there is no way to secure your unit of choice with lower amount while you are working on the full 10% deposit.

Another cost that will burden property investors is the maintenance fees charged by the management office when they get their keys to their properties. The new strata regime has provided for the possibility of limited common property usage and the exclusive use of certain facilities – a privilege – which comes with a price tag. If the management adopts any limited common property, they are looking at a two-tier service charges and sinking fund, with one for those who have the use of one set of common properties and the other for the use of limited common property, to be enjoyed only by a selected few.

Despite monetary cost, time cost is also a factor for investors. A purchase into a strata development now calls for more involvement in the management as the management corporation of the development is formed much earlier now with the possibility of having the title and the keys delivered at the same time.

The new strata regime requires the active participation of all owners, as the tenure of the office bearer is limited. Other owners are required to sit in the management corporation committee on subsequent years. Despite the fact that taking up the responsibilities of committee members offers monetary gains, any misconduct or negligence may now result in a penalty.

The new restrictions on advertisement and representation by the developers also mean that the investors are required to spend time on research and do their own due diligence to better understand the investment. There is no longer permitted representation such as time/distance from a particular venue, projected monetary returns/gains and rental income. Thus, before making decision to invest, the consumers have to do more personal research on the investment.

While property investment remains feasible over the longer term, investors are advised to take these legislations into consideration to come out with a realistic projection of investment return.

By CHRIS TAN Real Legal

Related posts

  By-laws governing strata property management in Malaysia, part 1

  • Third Schedule of Strata Management Regulation 2015 WITH the demise of the Deed of Mutual Covenants, the Third Schedule of the Strata…
 
  • General duties of a proprietors according to the Third Schedule of Strata Management Regulation 2015 WHILE last week’s article cove…