Malaysia - Housing

[winston]

The lure of Cyberjaya By Thean Lee Cheng

During a drive around in Cyberjaya and visits to the sales and marketing offices of three developers there, several things came to mind.

The first is that there are quite a number of on-going residential developments there, in terms of both landed and high-rise units.

There are also quite of unoccupied units with For Sale/Rental signboards displayed on gates and windows.

The second thing is that some of the projects, both completed and work-in-progress, are really quite innovative and appealing.

There is a fresh new look at housing from developers. All three offered units planned around landscapped gardens, or overlooking pools and man-made ponds with their offerings conceptualised around resort-living.

Henry Butcher Marketing Sdn Bhd Chief Operating Officer Tang Chee Meng says these new concepts and better planning standards adopted by the developers, coupled with good infrastructure, offer a better quality living environment, factors that could possibly result in “a constant upward progression in terms of pricing.”

There is certainly a great sense of space in Cyberjaya, with most of its sprawling low-rise projects spread over acres of land, and it is the vision of those who are already there that over time, a great sense of place will emerge as more move over there to work and to live.

Comprising about 7,000 acres, Cyberjaya was initially viewed as a place for students and where call centres set up shop.

Tang says Cyberjaya could see ‘a constant upward progression in terms of pricing’.

The last couple of years, this perception has changed.

The prices of Mah Sing group's Garden Residences have risen considerably compared to three years ago.

Link houses in Garden Residences were launched three years ago with prices averaging RM600,000 for a 24 ft x 80 ft double-storey house. They are priced from RM1mil today. On a per sq ft basis, prices average RM591 per sq ft for 2-storey and RM522 per sq ft for 3-storey today.

Close to 900 units are being planned in Garden Residences.

Its SoHo units at Garden Plaza located in the same vicinity was launched a year ago at RM500 to RM600 per sq ft. Now they are priced at RM600 plus per sq ft.

Garden Plaza has 1,049 units of serviced units targeted at the student population and are sized between 400 and 1,000 sq ft. The most popular are the 700 sq ft units which come with four rooms. The 400 sq ft has three bedrooms. Units are fully furnished inclusive of electrical items.

Mah Sing general manager in charge of Cyberjaya projects Michael Lee says each room can be tenanted at RM500 a month, which explains why these student units are popular among investors and parents. The SoHos are 70% sold since it was launched a year ago.

Incidentally, Cyberjaya has four educational institutions.

The Mah Sing group was among the first larger developers to buy land there in 2009. They have 115 acres there known as Garden Residences.

The attractive feature of Gardens Residences is its landscaped features coupled with the fact that a 50-acre gazetted open area straddles the development.

Other large scale landed developments include UEM's Symphony Hills and Paramount Property Development Sdn Bhd's Sejati Residence which are located adjacent to each other.

The past and the present

Cyberjaya was not all that popular as a residential area before. Henry Butcher's Tang says in the past, Cyberjaya was regarded as a place to work or to study.

“The perception is that it is far away from KL. It was not considered as a place where they can actually stay and commute to work in KL or PJ.

“When developers launched projects there three years ago, people began to realise that with the MEX highway, travelling time to and from Cyberjaya and KL / PJ is actually not that long.

In fact, with lower traffic volume, they could actually reach KL even faster than they would if they stayed in say, Subang Jaya,” says Tang.

Secondly, those who worked in Cyberjaya in the past treated the place as where their offices were located.

“To them, it was a sterile city without soul. There were no big shopping centres and limited places to go to for food, leisure and entertainment and there was a big difference between the day and night time population, as well as weekday and weekend population,” Tang says.

This has been addressed and there are now food and beverage and retail options available.

There are also many developers who have bought land there and have launched or have announced plans to launch new townships there.

Some of them include UEM Land, Mah Sing, SP Setia, OSK, Paramount, Glomac, says Tang.

“This has led property investors to believe that Cyberjaya is set to take off in a big way, (which has resulted in a) lift (in) property values in the area,” says Tang.

He says the F&B and retail amenities coupled with the infrastructures and pleasant landscaped environment have made Cyberjaya an attractive and viable place to stay, even if one does not work within Cyberjaya.

This explains why those in the Klang Valley are seriously considering options there.

For those buying a commercial shop lot, they can look forward to an increase in the population when the new projects are eventually launched and completed.

However, the exact location as well as ease of accessibility and visibility of the shoplot are other factors that need to be considered when buying a commercial lot, Tang cautions.

“There has to be a sufficiently large immediate catchment to support retail activities; otherwise, the investor will find it hard to rent out his shop lot,” he says.

For sale/rent signs can be seen in both in residential and shops. Tang says the high number of unoccupied units could be an indication that there are many investors who bought with the intention of renting them out or to resell for capital gains.

Still early days

A source from master developer Setia Haruman Sdn Bhd says most of the units were completed last year and the keys were just given to buyers.

“More than 1,000 residential units and 300 shop units were handed over late 2012 by various developers such as EMKAY group, Mah Sing group, Shaftsbury and SunTrack.

“Owners are in the process of moving in. Once all these development projects are completed, there will be more than 28,000 built up residential units and 1,800 shop units here in Cyberjaya,” he says.

The source says there are currently 16 developers there.

He says at the end 2011, there were only 3,200 residential units there and about 200 shops. This was insufficient to cater to Cyberjaya's growing day population which is currently about 53,000 comprising of Knowledge Workers and students.

More units were added and by the end of last year, residential units and shops totalled 4,394 and 566 respectively, the source says.

Today, Cyberjaya has 16 developers with on-going residential, commercial and retail projects.

The OSK group has two projects there, Mirage by The Lake, a resort style development with landed and condominium unis, and Pangaea, a mixed development project.

Mirage by The Lake is innovatively designed around a few circular pools of water. There are 410 units of condominiums and 68 units of two and three-storey villas on 12 acres. Its first block of condominiums was fully sold at RM600 per sq ft about 18 months ago. Its second block now averages about RM900 per sq ft.

The developer is offering a 17% rebate. About 20% of its second block of condominiums and 60% of its villas are yet to be sold.

Because of the large number of unoccupied units, a source from Setia Haruman says there is currently a lid on selling land to have some sort of “control”.

Although there is a perception that Cyberjaya comprises mainly condominum projects, he says there are several landed projects there which include SummerGlades (by SunTract Developments Sdn Bhd), Symphony Hills (UEM group), Mirage by The Lake (OSK group), Eco Glade (S P Setia Bhd), Sejati Residence (Paramount group).

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

[winston]

New record for KLCC property prices By TEE LIN SAY

PETALING JAYA: A new record for property prices in the heart of Kuala Lumpur is close to being set after two penthouses of the world-class Four Seasons Place were reserved at a whopping RM37mil each, sources said.

This works out to a princely price of RM3,026 per sq ft based on the 11,900 per sq ft size of each penthouse, outpacing the RM2,900 per sq fe record held by The Binjai On The Park based on a transaction last year involving 4,000 sq ft in Tower A of the development.

However, the Binjai project would still hold the record for the highest absolute price transacted for a residential property at RM38mil for one of its triplex penthouses sold in 2010.

The size of that Binjai penthouse was, incidentally, 14,300 sq ft, giving it a price of RM2,660 per sq ft.

The buyers of the two Four Seasons Place penthouses had reserved the units “a few years ago”, when the project was in its planning stage, the sources told StarBiz.

They added that when the project was launched by Prime Minister Datuk Seri Najib Tun Razak in early February, the same buyers had quickly reaffirmed their seriousness in purchasing the penthouses.

The Four Seasons Place is being developed by Venus Assets Sdn Bhd, with a gross development value of some RM2.8bil. It is a joint venture between tycoon Datuk Ong Beng Seng, the Sultan of Selangor, Tan Sri Syed Yusof Syed Nasir and Venus Assets director Datuk David Ban.

Venus Assets bought the prime 1.05ha site for RM90mil in 2003 from the estate of the late Khoo Teck Puat, the former major shareholder of Standard Chartered plc.

The sales office of the Four Seasons Place is in the process of securing the booking and down payment for these units.

The company had yet to respond to StarBiz's queries as at press time.

Situated side-by-side on the 63rd and 64th floors, the penthouses are shell units, the property lingo for units minus any developer-built fixtures.

The sources said that one of the eight duplexes in the Four Seasons Place had been sold at RM2,750 per sq ft at an absolute price of RM20.3mil. The remaining seven duplexes have all been reserved.

There are 65 storeys in the Four Seasons Place, with a “height premium” of RM25,000 to RM30,000 for every floor going up.

“Some 50% of the 242 residential units of the Four Seasons Place have been booked. They payments are coming in now, with 20% of down payments having been collected so far. It would be open to the public for sale from the third week of April,” revealed the sources.

The sources added that surprisingly, most of the buyers were well-heeled Malaysians. The smattering of foreign buyers included Japanese, Hong Kong nationals and Taiwanese.

The Four Seasons Place in Kuala Lumpur is the first Four Seasons Place in South-East Asia. It consists of 11 storeys of hotel space, beginning from the eighth floor to the 18th floor. It also has five floors of retail outlets, three floors of serviced apartments, three floors of private carpark and four basement storeys.

A 65-storey luxury hotel, residential and retail project in the vicinity of the Petronas Twin Towers in Kuala Lumpur City Centre, it will house the 231-room Four Seasons Hotel, 242 units of private residences and 300,000 sq ft of upscale retail space.

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

[winston]

‘Many buyers believe property market due for price correction’

Market activities and property prices have been active in areas like Kota Damansara, Cheras Perdana and Kajang, since construction of MRT stations began.

In the wake of last year’s slower secondary property market due to Bank Negara’s cautionary measures as well as election uncertainties, the secondary property market is expected to remain slow for the first half of this year, suggests Property Hub Sdn Bhd resident manager Wan Choy Heng.

“At least, it will remain slow until the GE13 is over, and the aftermath sentiment subsides. I think that the investors will shy away from the secondary property market during this period as most of them feel that property prices have risen quite substantially in the last three years, and have the opinion that the market is due for a price correction.

“Since late last year, buyers have opted for developer launches at populated location. Many have committed a developer launch unit likely with a DIBS package to hedge against the property market in three years’ time, as most condominium or service apartment take three years to complete,” explains Wan.

Having said that, Wan believes that the secondary property market will remain cautiously healthy as there is still a sizable group of genuine end-user buyers actively looking for a suitable home to move in to or to upgrade to.

The secondary residential market in the RM500,000 to RM1mil range will remain active, subject to the availability of financing. This group of buyers are unaffected by the 70% loan-to-value ruling as they are mostly first-time home buyers or upgrading from their existing property.

They are undeterred by the stringent bank loan approving process, and they are less concerned about the GE13 factor.

Other than the traditionally hot areas for the residential market where demand constantly outpaces supply such as landed terrace houses in many parts of Bangsar, Hartamas, Cheras, Puchong, Petaling Jaya and Subang Jaya/USJ, Wan shares that the residential market, both landed and strata, near MRT and LRT stations that have already begun construction have been very active.

“Both market activities and property prices have been very active in areas like Kota Damansara, Cheras Perdana and Kajang since the construction of proposed MRT station began construction about a year ago,” said Wan.

He added, “As our society is getting more affluent, and our city gets more globalised, we will need more housing which emphasises on lifestyle and security. Undoubtedly, guarded and gated developments will be the common trend of development in the years to come.”

As the recipient of the Best Residential Agency Award (Medium-size Category) for 2012 by MIEA, Property Hub Sdn Bhd’s strength have been in the residential sector although they are gradually gaining ground and breakthroughs in commercial sector and development land deals.

With approximately 30 full-time real estate agents and negotiators focusing on the secondary residential market, Property Hub Sdn Bhd have different teams covering most of the established medium and high-end residential areas such as Hartamas/Mont Kiara area, KLCC, Bangsar/Damansara Heights area, Bandar Utama/Mutiara Damansara/Taman Tun Dr.Ismail area, Kota Damansara and Subang Jaya/USJ area.

Property Hub will join around 30 other agencies to exhibit its secondary properties at the upcoming Malaysian Secondary Property Exhibition (Maspex) 2013, to be held over the weekend of April 12 to 14, at the concourse of Tropicana City Mall, PJ. Organised by the Malaysian Institute of Estate Agents (MIEA), it will feature booths by 32 real estate agencies with photos and presentations of previously owned properties for sale.

Other participating agencies include Reapfield Shah Alam (which talks to StarProperty.my about hot spots in Shah Alam) and Henry Butcher (Penang) which talks to us about upcoming areas surrounding five new proposed highways.

http://www.starproperty.my/index.php/ar ... y%2BWidget

[winston]

S&P: No property bubble developing in Malaysia

KUALA LUMPUR: Standard & Poor's Ratings Services does not see a property bubble developing in Malaysia, as several factors support borrower repayment ability.

Credit analyst Ivan Tan said on Tuesday one factor was the resilient economy.

“With that comes low unemployment. The prevailing low interest rate environment also is a factor,” he said in a report entitled “Rising property prices could expose vulnerabilities in the Malaysian banking system”.

Tan pointed out household indebtedness levels have remained relatively constant even as property prices have gone up.

He said these showed household borrowings had remained broadly in line with rising household incomes and stable employment.

The report said property price increases in Malaysia in recent years have placed the credit quality of home loans in the spotlight.

The report, titled “Rising Property Prices Could Expose Vulnerabilities In The Malaysian Banking System," pointed out a resilient economy and low mortgage rates have spurred buyer demand.

With supply growth lagging behind the rise in demand, price increases have accelerated.

However, Tan cautioned that borrowers, who earned below RM3,000 a monthly, had weaker financial buffers.

He said in an economic downturn, these borrowers are more vulnerable to rising unemployment and they faced greater risk when interest rates increase.

“That said, the Malaysian government is aware of the growing risk from household debt and rising home prices and has taken steps to address weak links in the system,” he pointed out.

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

[winston]

Mistakes to avoid when buying a house By EUGENE MAHALINGAM

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

[winston]

KL fights high household debt

KUALA LUMPUR - Malaysia's central bank has imposed maximum terms for mortgages and personal loans, joining Singapore in moving to limit risks from rising household debt.

Household indebtedness levels have been increasing at an average of 12% a year for the past five years, Bank Negara Malaysia said in a statement on Friday.

Malaysian households are the most indebted in Asia relative to what they earn, at 182% of annual income, according to a report released by Standard Chartered Bank this week. The figure for Thailand was 95%, the report said.

Bank Negara said lenders could not offer mortgages longer than 35 years, compared with 45 years previously.

There has been a growing trend in the offering of financial products that are not in the long-term interest of consumers, Bank Negara said. Such practices encourage excessive debt accumulation by households and increase the vulnerability of this sector, it added.

The latest move adds to controls imposed since 2010 that included limiting the loan-to-value ratio for people taking out third mortgages, as the regulator sought to pre-empt property speculation.

Singapore's central bank last month introduced a new framework that required lenders to take a borrower's total debt into consideration when granting property loans.

Bank Negara put a cap on personal loan terms at 10 years and banned the offering of pre-approved personal financing products. All measures are effective immediately.

"Key credit providers are required to observe prudent debt service ratios in their credit assessment to ensure households have sufficient financial buffers to protect them against rising costs and unexpected adverse events," Bank Negara said.

The Bank of Thailand said in February it would closely monitor risks stemming from high credit growth, particularly in consumer financing.

In the Standard Chartered report, household debt in Singapore was second highest in Asia at 151%, a figure that mainly reflects high property debt, amounting to 111% of household income. However, Singapore households also have high savings, so their debt levels are relatively low compared to assets.

http://www.bangkokpost.com/news/asia/35 ... ehold-debt

[winston]

New rules for property buyers By DANIEL KHOO and NICHOLAS CHENG

PETALING JAYA: Property buyers will no longer have the option to take loans for longer than 35 years. Anyone taking a personal loan can now only do so for a period of up to 10 years.

These are new rules set by Bank Negara with the aim of helping to reduce household debt in the country.

Before the new caps, property buyers could take loans for up to 45 years, while personal loans could be paid back over a period of up to 25 years.

Bank Negara is acting because Malaysia’s household-debt-to-Gross Domestic Product (GDP) ratio is a high 83%. It is the highest in emerging Asia.

The stricter lending guidelines also saw the central bank prohibiting the offering of pre-approved personal financing products.

These new measures to tackle household debt will also be extended to all financial institutions and credit cooperatives regulated by Bank Negara, the Malaysia Co-operative Societies Commission, Malaysia Building Society Bhd, and Aeon Credit Service (M) Bhd.

All these institutions will also need to follow responsible lending limits. New borrowers, especially those with lower incomes, can only take on debt amounting to 60% of their monthly take home pay.

The new limits will not affect loan applications made before yesterday.

Bank Negara governor Tan Sri Zeti Akhtar Aziz, in a briefing yesterday, said the household debt was not yet at an alarming level, but based on present trends it would eventually be so.

Extremely long property loan periods “encourage excessive debt accumulation by households and increases the vulnerability of this (the household) sector,” she said.

Industry players said the measures would have a limited impact on the property market because the older generation of Malaysians had already bought into the property cycle.

They said the latest caps would mainly affect the younger generation.

“They are the ones who will need loans with the extra tenure, not the older generation who are mainly able to afford (higher monthly repayments),” said IOI Properties’ director Teh Chin Guan.

“In the short term, the level of affordability for the younger generation will be lower at today’s prices,” he added.

Elvin Fernandez, managing director at property consultant Khong & Jaafar, said these moves by the central bank should be applauded because property loans with a tenure of more than 40 years was not advisable.

Real Estate and Housing Developers’ Association of Malaysia president Datuk Seri Michael K.C. Yam believed the measures were a “good pre-emptive move because Malaysians are not very disciplined when it comes to these matters”.

“In other countries the maximum tenure is usually 25 years or until the person reaches the retirement age of 55,” he added.

Federation of Malaysian Consumers Associations president Datuk Marimuthu Nadason also supported the new measures.

“But I urge Bank Negara to work with civil societies like us on financial literacy education, which Malaysians sorely lack,” he said, pointing out that 51 people were declared bankrupt daily in the country.

Korisatan Karu­ppiah, Penang Consumers Protection Asso­ciation president, said borrowers should be allowed to repay their loans ahead of schedule, without penalty.

“The lenders argue that they have already made plans with your money over the tenure you agreed with, and that paying back the sum early affects their plans,” he said.

He said the penalty was a fine, of between RM10,000 and RM35,000, depending on the size of the loan.

http://www.thestar.com.my/News/Nation/2 ... ing-g.aspx

[winston]

Young professionals in Malaysia struggle to own property

By Christina Chin

Previously, property buyers could take loans for up to 45 years, while personal loans could be paid back over a period of up to 25 years.

Under the new Bank Negara Malaysia rules, property loans are capped at 35 years while personal loans are limited to 10 years to help reduce household debt in the country.

Meanwhile, CIMB Research, in a report, says supply growth in residential properties in Malaysia in 2012 was only 1.6 per cent, the lowest in 10 years.

"We believe the cause of strong price increases in recent years is mainly due to supply constraints as opposed to excessive demand.

Source: The Star


http://www.asiaone.com/News/AsiaOne%2BN ... 37011.html

[winston]

Malaysia weighing hike in property gains tax to stabilise housing prices-report

KUALA LUMPUR Aug 27 (Reuters) - Malaysia's government is exploring the possibility of hiking the real property gains tax (RGPT) to rein in rising housing prices and curb speculation in the market, state news agency Bernama reported on Tuesday.

http://in.reuters.com/article/2013/08/2 ... MW20130827

[winston]

Malaysia Mulls Hike In Property Gains Tax by Mary Swire

In order to rein in excessive speculation in the increase to house prices in the country, Malaysia's Government is said to be considering a hike in the real property gains tax (RPGT), which is imposed on the profits from the sale of properties within certain periods after their purchase.

Currently, the RPGT is imposed at a rate of 15 percent (raised from 10 percent last year) and 10 percent (raised from 5 percent) on properties sold within two years and two to five years of purchase, respectively.

It was indicated by the Housing Minister Abdul Rahman Dahlan to the Malaysian National News Agency Bernama that, as the existing RPGT rates appear to have been unable to reduce speculation in property prices, the Government is studying an RGPT rate increase, but could not say if the measure would be included in the 2014 Budget, to be announced in October.

It has been suggested within the sector that, as the present RPGT rates are indeed too low to have a real effect on speculation, the tax should be levied at 25 percent (up from 15 percent) on properties sold within three years (rather than two years) and that the Government could also target, in particular, those taxpayers who have made multiple sales and purchases over a certain period.

http://www.tax-news.com/news/Malaysia_M ... 61903.html