Malaysia - Housing

[winston]

Adjustment in house prices likely

KUALA LUMPUR: The adjustment of the market price of houses is expected to be seen in the third or fourth quarter of next year, after the implementation of the Goods and Services Tax (GST) in April.

Syarikat Perumahan Negara Bhd (SPNB) president Datuk Dr Kamarul Rashdan Salleh, said the adjustment would occur when the cost of building materials returned to normal or was cheaper a few months following the introduction of the GST.

“I am confident the reduction in prices of building materials would happen three or four months after the implementation of the GST, leading to the adjustment in market prices of houses to a more stable level or cheaper,” he said in an interview with BernamaTV.

Source: Bernama

[winston]

Are land prices too high?

4 October 2014

http://www.thestar.com.my/Business/Busi ... ?style=biz

[winston]

Demographia: Malaysia’s residential housing market ‘severely unaffordable’

By: ANGIE NG

Source: The Star

http://www.thestar.com.my/Business/Busi ... ?style=biz

[winston]

Property prices to continue uptrend By: WONG WEI-SHEN

PETALING JAYA: Property prices, which rose 8% in the first quarter of this year, will continue to head north, as developers pass on the rising cost of building houses to buyers, according to Credit Suisse.

But higher selling prices does not necessarily mean bigger profits for developers with Credit Suisse noting that developers’ cost of doing business has reportedly risen 20% in the first half of 2014.

“Margins are being compressed,” it said in a sector report on Monday. The firm is negative on the sector.

Property sales, especially in the affordable category, had slowed since the start of the year with measures to curb speculative purchases dampening sentiment in the property market.

The report indicated that the Government was considering additional measures to cool down rising prices with specific plans to address the issue of affordable housing.

Credit Suisse said it believed that measures to facilitate home ownership among the lower and middle income groups such as allowing developer interest bearing schemes for first-time house buyers or those below a certain income level, would be positive for the market.

“However, a blanket policy to stop the rise in property prices would be negative as sentiment is already so low,” it added.

According to the Real Estate Housing Developers Association’s first half of 2014 property industry survey, a majority of developers are either neutral or negative about the outlook for the second half of 2014.

This sentiment is expected to carry through to next year, with only 13% of respondents optimistic about the outlook in the first half of 2015. Developers have been holding back new launches this year, with only 39% of respondents launching in the first half compared with 52% a year ago.

Take-up rates fell to 49% in the period, the first time it dipped below the 50% level.

The main reason for slower sales was the difficulty for buyers in securing financing. Properties priced between RM250,000 and RM500,000 saw a 30% rejection rate, while properties prices between RM500,000 and RM700,000 experienced a rejection rate of 24%.

Additionally, growth in housing loan approvals has slowed since December 2013 and fell 13% year-on-year in July 2014. For the first seven months of the year, total housing loan approvals were up only 1% year-on-year at RM68bil.

But despite the soft market condition, Credit Suisse said it believed that prices would continue on an uptrend next year as input costs are pushed up by the Goods and Services Tax (GST).

“Residential properties are GST exempt, but developers would look to pass on the higher costs via higher launch prices,” it said.

Source: The Star

[winston]

not vested

MKH remains top pick among property stocks: Alliance DBS

KUALA LUMPUR: MKH remains the top pick for Alliance DBS Research because of its large exposure to affordable housing, while Sunway will benefit from its strong unbilled property sales and construction order book.

The research house said on Wednesday skyrocketing property prices have crowded out genuine homebuyers due to declining affordability in recent years.

“We understand developers have been re-calibrating launch pipelines to include more affordable homes (less than RM500,000 a unit) to cater to the still-robust demand for the same.

“Incentives for first-home buyers announced in Budget 2015, including the extension of 50% stamp duty exemption and 100% loan financing, will continue to support sales of affordable homes,” it said.

Alliance DBS Research pointed out that product differentiation is key.

Property sales have slowed down although township developments remain resilient. Despite banning developer interest bearing schemes (DIBS), several other incentives such as high cash rebates and deferred down payment have been employed to sell properties, the research house said.

“Differentiated products with strong brand name are critical to sustain sales as potential buyers/investors adopt a more cautious stance, especially given Malaysia’s high household debt at 87% of GDP,” it said.

Malaysia’s house price index rose 6.6% on-year in 2Q14, the slowest since 2010, reflecting the softer sentiment.

“While cost-push factors are expected to continue to increase inflationary pressure on property prices, the impact would be relatively subdued given the more challenging outlook,” it said.

Alliance DBS Research said unbilled sales remain strong for most developers under its coverage following overwhelming property sales over the last two to three years.

"We continue to like developers with large exposure to affordable housing and landed residential properties, which should continue to outperform," it said.

Source: The Star

[behappyalways]

Chinese Developers' Projects in Malaysia Run into Series of Snags
http://english.caixin.com/2014-11-13/100750831.html

[winston]

‘Property good to buy even after GST’

KUALA LUMPUR: The post-GST period will be a good time to buy properties, says IQI Holdings Sdn Bhd’s Alexander Woo, the first speaker at the Star Property Fair 2014.

“When GST comes into place, a lot of buyers would want to let go of their units, which means it’s then a buyers’ market,” he said in his talk, entitled The Mindset Of Savvy Investors.

According to REI Group of Companies’ CEO Dr Daniele Gambero, Budget 2015 opens more windows for property developments that focus on the economic stability and sustainability of our country.

“The infrastructure growth will further enhance the property development sector, and the property value is expected to either double or triple in the coming five years,” he said.

For Datuk Abdul Razak Abdul Ghani, Group First International Sdn Bhd’s managing director, the two main reasons for investing in real estate are for capital appreciation and residual income. In his talk, titled Better Business Inspired Investment, he cited self-storage units and car parks as two popular options that people in the United Kingdom could invest in, as these prove to be easy to manage and provide high yields in the long run.

Tropicana Corporation Bhd has an elaborate booth highlighting its prestigious developments.

Acc­ording to executive director of marketing and sales Pam Loh, the company’s DNA is the result of its experience from its Tropicana Golf & Country Resort.

The beneficiaries of its vision are Tropicana Metropark, a mixed high-rise development in Subang Jaya, Tropicana Heights in Kajang and Tropicana 128 Macalister in Penang.

UEM Sunrise, as the master developer of Nusajaya, is promoting four developments — Bayu Angkasa and Ophiria as well as Puteri Harbour’s Estuari and Almas.

Siti Mariam Mohd Desa, UEM Sunrise’s chief marketing officer, reiterated Nusajaya’s superiority as “the Asia Regional City”, which will also host a development called EduCity that brings together institutions such as Southam­pton University, Reading University and Newcastle University, along with Raffles University Iskandar and Marlborough College.

“Parents across Asia are registering their children at these colleges and universities, and this is set to boost residential property demand,” she said.

Areca Holdings’ sales and marketing general manager Jenifer Chow highlighted its recent launch in Cyberjaya.

“The key selling point for Areca Contempo Homes is the spot-on location in a place which is not only an IT hub, but also an education hub,” she said.

The final day of the fair at the Kuala Lumpur Convention Centre is from 11am to 7pm today.

Source: The Star

[winston]

Malaysian houses more expensive than some developed countries

Hong says the investors clubs are also no longer recruitings as aggressively as before.

Hong says the investors clubs are also no longer recruitings as aggressively as before.

OF late, there have been renewed concerns about house prices and affordability. The perennial question is: Will house prices ever come down? The concerns about affordability is underscored in the recently released report, The State of Households, by the Khazanah Research Institute.

The institute reported that houses on average cost 5.5 times annual median income, when it should be just three times annual median income.

The report further says that “in median income terms, our houses are more expensive than those in Ireland, and even Singapore.”

http://www.thestar.com.my/Business/Busi ... ?style=biz

[winston]

Local housing ‘way above affordable’
By LIDIANA ROSLI - 19 November 2014

KUALA LUMPUR: Khazanah Research Institute (KRiS) has indicated that property prices in Malaysia are way above affordable, with the average price being 5.5 times more than the country’s annual median income.

The house prices are more expensive than those in Singapore (at 5.1 times), the United States (3.5 times) and the United Kingdom (4.7 times), although it is behind Hong Kong, whose housing price is 14.9 times more than its annual median income.

KRiS noted this in its inaugural “The State of Households” report, which was launched on Monday.

Another interesting point in the report is: Malaysian property developers make more money than their peers in many developed and developing countries.

“At 21 per cent, the profit margins of our property developers are high, at almost two times of the US (12 per cent), 1.2 times those of the UK (17 per cent) and Thailand (14 per cent), although Singapore has higher margins (25 per cent).”

The report also found that Malaysians have limited savings.

The Amanah Saham Bumiputera (ASB) data obtained last year showed that the bottom 71.4 per cent of ASB holders had only an average of RM554 in their accounts, compared with the average top 0.2 per cent with RM725,122.

The latest 2014 Employees Provident Fund (EPF) data showed the total savings of the top 17,061 EPF members to be much higher than that of the bottom 44 per cent (2.85 million members).

The richest 5,446 EPF members have on average RM1.56 million in savings while the bottom 13.5 per cent have an average of RM3,580.

The report attributed low earnings and unbridled spending on consumer goods using loans or credit as the cause of limited savings for Malaysians, across all ethnicity.

Source: NST

[winston]

Promising property investments beyond Klang Valley

OVER the years, the property market has been especially robust and concentrated in the Klang Valley, which in turn has seen a surge in property prices.

As the investment seems rewarding, investors rarely look into other promising areas. However, the high prices of properties and land being increasingly scarce have made it increasingly hard to purchase properties.

Hence, more people are starting to explore other alternatives to the usual hotspots in the Klang Valley.

As land in Kuala Lumpur and the Klang Valley becomes increasingly scarce, coupled with the upward rise of real estate prices, many house buyers and investors are starting to seek for other viable alternative – that of looking for property in other locations.

Would-be investors are now looking at locations beyond the prime urban areas and the usual hotspots, moving outwards towards suburban areas and the outskirts of the city.

Kajang and Semenyih as well as Cyberjaya are now being developed by a pool of major developers. Not only are the projects being developed further away from the city, but now investors are also looking at buying properties in other locations such as Ipoh, Malacca and Seremban.

One such location is Upper East located in Tiger Lane, Ipoh. Known as the City of Millionaires, this town has been attracting investors including those who intend to retire here.

The Ipoh property market has not experienced the high growth like those in Johor Bahru and the Klang Valley. Property prices in Ipoh only started to pick up in the last 12 months. Even in comparison, the Seremban property market is 18 to 24 months ahead of Ipoh.

In Ipoh, land prices are still relatively affordable for now compared to land prices in Kuala Lumpur. This tends to result in better quality projects being offered to the buyers.

Interestingly, while the last two years witnessed weak demand for high-rise residential units, last year saw a pick-up in interest in this type of property as people favoured the security aspects offered by gated and guarded (G&G) high-rise developments. Therefore, property development opportunities are now moving from Klang Valley to Ipoh.

Applying the principle of smart investment in terms of buying shares whereby one buys at a low price to get a better profit margin, it makes sense to invest in Ipoh which is a relatively untapped market.

The new range of property developments emerging in Ipoh now will be able to cater to different types and levels of buyers, minus the scenario of supply exceeding demand.

Since the property prices in Ipoh is now starting to climb, investors will be able to enjoy good capital appreciation in the near future.

Therefore, it is logical to one to look beyond the Klang Valley to new potential markets away from the city or even out of state for investment opportunities.

Source: The Star