Malaysia - Housing

[winston]

Investors in Malaysia starting to tread cautiously

DTZ Research house is expecting a more cautious approach from investors. towards property due to the current economic climate.

High end properties in Kuala Lumpur could suffer from a downturn in prices, if the property market struggles next year.

The last quarter saw 2,278 condominium units completed in Kuala Lumpur and 52 condominiums are expected to be completed by the end of the year.

In 2012, about 5,384 units are expected to enter the market with about 92 per cent or 4,952 units located in the city centre.

The average capital value of high end condominiums is stable at RM626 (US$200) per square foot, with properties in the Kuala Lumpur city centre averaging RM902 (US$288) per square foot.
The rental value of condominiums is also stable at the moment but the new completions expected the end of this year and next year, will keep the rental rate competitive, according to The Star.

The office sector could also suffer in 2012. Three office buildings are expected to be completed by the end of the fourth quarter and two of these will be owner occupied.

The office market is expecting 7.4 million square feet of office space to be completed by the end of 2012. Compare this with 2.5 million square feet completed so far this year. The third quarter did not witness any new completions which kept the rental value stable at RM 6.22 (US$ 2) per square foot a month.

The main leasers of office space in the third quarter were oil and gas companies, information technology companies and the financial sector.

The financial value of office buildings stayed at RM600 (US$192) to RM700 (US$ 224) per square foot in the third quarter.

The investment property market increased 39 per cent in the third quarter from the second quarter. Ten deals were made in the third quarter compared to eight in the second quarter.

The biggest deal in the third quarter was the RM513.9 million (US$16.4 million) sale of The Puntra Place to Sunway REIT.

The majority of properties sold were located in and around Kuala Lumpur. Local investors are expected to move the market forward as foreign investors are becoming more cautious due to the current economic climate.

http://www.property-report.com/site/inv ... usly-17082

[winston]

Malaysia property sector remains buoyant
by June Ramlee

Despite talk of a recession, the Malaysia property scene is still buoyant with many people wanting to buy homes, especially in the city centre and in Johor.

HomeGuru.com.my country manager Steven Tan said there is a lot of interest among overseas investors to buy homes in Malaysia via the Malaysia My Second Home programme, especially in places like Sabah, Kuala Lumpur and Johor.

“As for Penang, the trend is different as many locals are snapping up properties there, mostly luxury condos,” Tan said in an interview with Business Times.

He added that another emerging trend in the Penang property market was that in recent months, there has been a lot of interest among Singapore investors to snap up heritage buildings on the island.

“You will be surprised that after Malaysians and Singaporeans, the third most visits we get for our website are the Europeans,” he said.

On HomeGuru’s recently concluded survey, in which some 2,800 people were interviewed on the local property market, Tan said 63 per cent of the respondents felt that properties across the board in Malaysia were expensive.

The survey also revealed that 78 per cent of the respondents felt that bungalows were the most expensive type of property.

Tan added that some 18 per cent of the respondents also indicated that they were planning to invest overseas in the coming months.

HomeGuru is a Singapore company which has been in Malaysia for slightly under a year.

Its 11-month-old website has about three million visitors a month, Tan said, adding the Malaysian HomeGuru website has over 10,000 agents with more than 70,000 properties to buy and sell.

HomeGuru is the second most popular property portal in the country, but it holds pole position in three other countries, namely Indonesia, Thailand and Singapore.

http://www.btimes.com.my/Current_News/B ... index_html

[winston]

Poll: Buyers bullish on property affordability

HomeGuru’s country manager, Steven Tan discloses, “HomeGuru, via the third quarter (Q3) Sentiment Survey, has discovered that compared to second quarter (Q2), there is a 10 per cent decline in respondents who believe that property in Malaysia are too expensive, indicating that buyers are more confident about being able to afford property purchases.”

http://www.btimes.com.my/Current_News/B ... index_html

[winston]

More S'poreans looking to buy property in Malaysia By Lynda Hong

SINGAPORE: It appears that more Singaporeans are looking at buying private residential properties in Malaysia, according to some real estate agents.

Malaysia-based developer Eastern & Oriental, for instance has seen a 20 per cent increase in enquiries on its project in Penang from home hunters in Singapore.

Fifty-six-year-old retiree Soh Poh Neo has been investing in properties in the US and Singapore for the past 20 years.

Last year, she turned her attention to Malaysia and bought two luxury apartments at Andaman at Quayside condominiums in Penang.

"I don't think I can find this sort of project in Singapore. With the unblocked seafront, you can only find it in Sentosa," she said.

Her apartments won't be completed till 2013, but she said prices have already gone up by over a third.

Apart from attractive prices, Madam Soh said she was also drawn to Penang's economic prospects.

Developer Eastern & Oriental said 30 per cent of the units at Andaman at Quayside have been sold after just two previews.

Currently, a third of the buyers are foreigners with 70 per cent of them from Singapore.

Aileen Han, Singapore country manager for E & O Property Development, said: "Affordability, investor-friendly policies, and the opportunity to own your own freehold property... A lot of them actually come for a long-term purpose."

Market watchers said Kuala Lumpur and Penang are the top property investment destinations in Malaysia.

But they warn that the high-end residential property segment in Asia may remain lacklustre, as investors look to the West for cheaper assets.

Donald Han, vice chairman of Cushman & Wakefield, said: "Asia certainly will have its measures being felt, because of continuous cooling measures by the governments.

"While we saw very strong activity by high networth investors, particularly coming from the Asia Pacific region, I think the course might change in the next 12 months, where we see more outflow in terms of money going into markets like in Europe and the US by high networth Asian investors."

Experts said this diversion of funds to the West will affect demand for luxury homes and could weigh on high-end home prices going forward, especially in markets like Singapore, Shanghai, Beijing and Hong Kong where prices have risen by some 25 per cent in recent years.

Source: CNA/cc

http://www.channelnewsasia.com/stories/ ... 73/1/.html

[winston]

And would you be so smart to be speculating in Malaysian properties just before a General Election ?

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Malaysia housing market to pick up steam in first half By Roziana Hamsawi

THE local housing market is expected to gather steam in the first half of this year, after cautious consumers shunned buying at the end of last year due to global economic uncertainties.

Datuk Seri Michael K.C. Yam, president of the Real Estate and Housing Developers' Association Malaysia (Rehda), said people are more confident on the Malaysian economy now despite uncertainties in developed countries.

Yam said the Economic Transformation Programme, the Government Transformation Programme and projects like the mass rapid transit and River of Life have garnered confidence in the market.

"They will have spin offs, creating jobs and business opportunities," Yam said yesterday, at the Rehda property market update for the first half of the year.

A Rehda survey found that 79 per cent of the 148 developers who responded were optimistic of the first six months of this year compared with 81 per cent in the second half of 2011.

Some 63 per cent said they will launch new projects in the first six months of this year, against 58 per cent in the preceding six months.

Seventy-four per cent of the respondents said they will increase their selling prices by five per cent to 20 per cent this year.

"This is due to the high costs of building materials and labour, which continues to be major challenges for the industry. Land cost is also increasing and we have no choice but to pass it on to customers as our margins are eroding," Yam said.

The survey showed that 38 per cent of respondents are facing challenges with building materials, particularly the pricing of bricks, cement and steel bars, and it is having an impact on their cash flow.

Meanwhile, the first Malaysia Property Exposition (Mapex) for 2012, organised by Rehda, will be held from March 2 to 4 at the Mid Valley Exhibition Centre here.

Rehda immediate past president Datuk Ng Seing Liong said Mapex is expected to generate property sales of up to RM100 million, slightly more than last year. Some 60 developers, including a small portion of foreign players, will showcase over 200 housing developments.


http://www.btimes.com.my/Current_News/B ... 9/Article/

[winston]

Property market to see 10% growth this year

KUALA LUMPUR: The property market is expected to see 10 per cent growth in transaction value this year from over RM40 billion last year, according to property consultant CH William Talhar & Wong Sdn Bhd.

Managing director Foo Gee Jen said the growth is slightly lower compared to 11 per cent last year, adding the appreciation in market value is mainly driven by cost rather than demand.

"The higher land value, shortage of labour and rise in building material prices rather than buyers' demand prompted our forecast value," he said.

He said the property market would stay buoyant on the back of the strong housing property segment, with the growth mainly contributed by demand from the young population.

Speaking at a media briefing on the outlook for the property sector today, he said office rentals would remain stagnant or decline for older buildings but there would be higher asking rentals for newly completed buildings with green certification and Multimedia Super Corridor status.

With over 0.74 million sq m of new office space expected to enter the market this year, there will be a very competitive office leasing environment, he said.

"Hence, older buildings will face pressure from declining occupancies as tenants seek newer, better quality offices," he added.

For the condominium sector, Foo said luxury condominiums could face the threat of oversupply in the future. On new non-landed developments, he said a total of 13,716 units in 47 developments are currently under construction, with about 2,900 units to be completed this year.

"With the average occupancy rate at 68 per cent, this gives some pressure on the developers, whose current focus is more on smaller and more affordable unit sizes of 46.5 to 93.0 sq m," he said.

Selling prices range from RM9,136 to RM21,520 per sq m in the KLCC area, and RM7,532 to RM10,760 per sq m in the Mont' Kiara/Sri Hartamas and Kenny Hills areas, he added.

However, he said, sales of new housing developments are expected to be sustained this year due to the low interest and unemployment rates and attractive financing packages.

He said the take-up rate will be maintained at last year's rate, with the House Price Index at 11.4 per cent for Kuala Lumpur and 9.6 per cent for Selangor.

"Last year, the landed residential sector showed strong movement on the supply side while demand was correspondingly positive, with most new launches recording high sales rates of between 60 and 70 per cent," he added.

Source: BERNAMA

http://biz.thestar.com.my/news/story.as ... c=business

[winston]

Malaysians still keen on buying homes but fear bubble By Yow Hong Chieh
February 20, 2012

KUALA LUMPUR, Feb 20 — Lack of affordability stemming from rising house prices, continues to be the main concern of property buyers in Malaysia, a survey by a property group has found.

The online poll by iProperty, which owns Asia's largest network of property sites, found that 85.8 per cent of respondents thought the high cost of buying a home was the biggest concern facing the local property market.

Errant developers and build quality was also an issue, with 57.2 per cent saying it was of “high concern”, with worries over home financing policies and interest rates coming in a close third at 53.6 per cent of those polled in the Asia Property Market Sentiment Report 2012.

Only 31.4 per cent felt economic and political uncertainty would affect their decision to buy or invest in property in the coming year.

Despite this, Malaysians were bullish on the local property market and expect it to continue growing despite lingering doubts over the health of the global economy.

Nearly 60 per cent said the market was holding up well despite the threat of a worldwide recession, compared to just 19 per cent who felt otherwise.

Likewise, 55.6 per cent of those polled felt the current economic and political climate was conducive to investing in property, while 29.1 per cent did not.

“The majority of people are still confident that the property market will continue to grow... The love affair continues,” Shaun Di Gregario, chief executive of iProperty, told reporters here today.

Interestingly almost an equal number do believe or fear that Malaysia is heading toward or on the cusp of a property bubble.”

At the same time, some 58 per cent of respondents said they were wary of the possibility that Malaysia was close to a property bubble, compared to 23.4 per cent who felt such an event was unlikely.

The survey nonetheless found that 62.3 per cent were keen on buying property in the next six to 12 months, with 71.3 per cent indicating a budget of under RM500,000.

Motivations for purchasing property were fairly evenly divided. About 40 per cent desired to own their own property, 31.3 per cent were looking for rental income investment and 28.2 per cent wished to buy property for resale — more than in any other country canvassed.

The poll found that a “surprising” 41.4 per cent owned two or more properties, second only to neighbouring Indonesia in the four-nation survey.

Di Gregario attributed the findings to Malaysia's low mortgage rates, 100 per cent financing, stamp duty exemptions and long repayment periods of up to 30 years or until age 75.

A sizeable minority of Malaysians were also keen to invest in properties abroad, with Australia, Singapore, the UK and US being the most popular destinations.

Nearly half (45.1 per cent) of them cited migration or retirement plans as the reason for buying overseas properties.

Most, however, were not in a rush to do so, as 71.7 per cent admitted they did not plan to buy any properties outside of Malaysia for at least another one year.

A total of 8,499 respondents were polled from 29 November, 2011 and January 17, 2012 for the survey, which examined buyer sentiment in Malaysia, Singapore, Indonesia and Hong Kong.

http://www.themalaysianinsider.com/busi ... ear-bubble

[winston]

Condo market challenging By ANGIE NG

PETALING JAYA: With close to 2,600 high-end condominiums scheduled for completion in Kuala Lumpur this year, the outlook for the luxury condominium market in the capital city is expected to be challenging.

“Bank Negara is keeping a close eye on the mortgage loan market on concerns of rising household debt-to-gross domestic product levels and has issued new guidelines to further tighten lending with effect from Jan 1,” said property consultancy Knight Frank, in its Second Half 2011 Real Estate Highlights report.

“This will inevitably have a negative impact on this sector as demand turns cautious with further pressure expected on prices and rentals of high-end condominiums in selected locations and schemes.”

Concurring with the bearish outlook is DTZ Research. In its Property Times Kuala Lumpur fourth-quarter 2011 report, DTZ pointed out that the sizeable number of new condominiums entering the market about 5,004 units in 2012 and another 4,502 units in 2013 was expected to put downward pressure on the rental market, especially in the Kuala Lumpur city centre, as a majority of them are in this location.



“The rental market will continue to feel pressure from the significant new supply that will be completed in the next two years. In addition, the economic uncertainty and tightening of credit by banks will contribute to the cautious demand for luxury residential properties,” Property Times added.

The Knight Frank report said during the review period, prices and rentals of high-end condominiums in selected schemes in Kuala Lumpur and the city fringe continued to face downward pressures due the high number of existing supply and new completions as well as a weak leasing market emanating from low occupational demand from local residents and expatriates.

The projects that are scheduled for completion this year include Residensi Kia Peng, The Pearl @ KLCC (formerly known as Stonor 16), Crest Jalan Sultan Ismail, Setia Sky Residences Phase 1A (Boheme Tower), St Mary Residences, Verticas Residensi (Towers A, B and C), Suasana Bukit Ceylon, 9 Madge, Amarin Wickham, Gaya Bangsar, and Matahari Desa Sri Hartamas.

Recent upmarket condominium projects that have been launched included Verdana @ North Kiara (Phase 1), Icon Residence Mont'Kiara, Mirage Residence, Laman Ceylon, 188 Suites, St John Woods Residence, Rimbun Condominium (formerly known as Amphill Residence) and Platinum Suites Phase 1 of Platinum Victory Face project.

Other projects in the pipeline during the first half of this year include serviced apartments project KL Trillion, Royce Residence, SoHo units @ Arcoris Mont' Kiara (formerly known as MK 20) and Damansara City 2 serviced apartments.

In the primary market, developers continued to offer attractive incentives such as rebates, discounts and a limited period of free maintenance fees to drive sales.

There was also a notable shift with more sales and leasing activities in the city fringe and suburban areas evident from several successful previews and launches of high-end condominiums at new benchmark prices commensurate with higher building specifications and improved level of facilities.

http://biz.thestar.com.my/news/story.as ... c=business

[winston]

You may have to splash out more for that Malaysian property By Pauline Ng

Malaysia is mulling a two-fold increase to the floor price of residential properties purchased by foreigners in a bid to prevent prices from spiralling too rapidly.

The possibility of a revision to existing guidelines to raise the minimum price to RM1 million (S$417,000) from RM500,000 was flagged by The Star.

In a report yesterday, the local daily cited unnamed sources as saying that the measure was 'in the pipeline', with a forthcoming announcement to be made by Nor Mohamed Yakcop, minister in the Prime Minister's department heading the Economic Planning Unit.

It did not say when it would be implemented.

One of the sources told The Star that selected growth corridors such as Iskandar Malaysia might be less affected by the proposal, in that a lesser minimum threshold might be applied - RM800,000 for example - to assist with their development success.

The government has continued to come under pressure over affordability issues despite recent measures to cool the property market.

Pushing the floor price up for foreign buyers - especially in landed properties - could be a welcome move in the eyes of young middle-class Malaysians frustrated with soaring real estate prices when starting salaries have advanced little in two decades.

Many believe that foreigners have little difficulty stumping out RM500,000 for homes because their currencies tend to be much stronger.

Property consultants say they were aware of the possibility of the new rules, but believe that the move is still at the proposal stage. 'It's a flyer to check public response. Not all states will agree,' Malaysia Property Inc chief executive Kumar Tharmalingam told BT.

Foreign buyers of Malaysian property come mainly from China, Singapore, Japan and South Korea, the newspaper said.

Even so, foreigners only account for an estimated 2 per cent of the residential market which saw robust growth last year.

http://business.asiaone.com/Business/My ... 39073.html

[winston]

Oversupply of Residential Property May Slow Down M’sian market

Petaling Jaya (The Star/ANN) – The secondary residential property market in Malaysia could face a slowdown in transactions within the next six to 12 months due to oversupply of properties caused by speculative buyers.

Malaysian Institute of Estate Agents (MIEA) deputy president Siva Shanker said “secondary properties in secondary locations”, namely apartments within the 150,000 ringgit (US$48,340) to 300,000 ringgit price range, could be difficult to sell as an oversupply situation has resulted.

“A lot of these properties were sold in the last two to three years and developers made a roaring business out of it. However, they’re now struggling a bit,” he told StarBiz in an interview.

“A lot of people in the past would have bought these properties for speculation,” said Siva.

He said many people bought these properties with the sole intention of selling them immediately once the development was completed.

“The buying public in Malaysia are like sheep. A few people buy, and then everyone will rush in to do the same!

“However, when everyone tries to flip it (sell for a higher price) at the same time, that’s when you create an oversupply situation.”

Siva cites an example of a 300-unit apartment block, where half, for instance, are placed on the market simultaneously by the initial (speculative) buyers.

One seller will lower the price because he can’t hold it, and then the prices start coming down.”

Siva pointed out that because transactions start slowing down, there is a misconception that property prices will crash.

“It’s not what people think – that property prices are crashing. A person buys an apartment for 300,000 ringgit and after two years, wants to sell for 400,000 tinggit and puts it on the market. But then, others also start doing the same and the buyer gets spoilt for choice.”

He said because everyone puts the property on the market, the 400,000 ringgit price-tag would not be achievable.

“Perhaps at the end of the day, instead of 400,000 ringgit, you sell it for 350,000 ringgit and in the eyes of the buying public, prices have fallen!

“But in actuality, prices didn’t fall. You bought at 300,000 ringgit and sold it at 350,000 ringgit. You tried to flip the property, but you didn’t get the level of profit you thought you could get. But you walked away with a profit nevertheless.”

http://www.loansafe.org/oversupply-of-r ... ian-market