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Consultants say intervention in property prices should be done gradually

WITH residential prices continuing to rise and and currently standing at 61%, 52% and 108% above the post Lehman troughs in China, Singapore and Hong Kong respectively, do interventions really help? And what are their effects on Malaysia?

In the April issue of Asia Pacific Residential Review, Knight Frank brought into focus how these markets have tried to cool property prices.

Singapore instituted seven rounds of cooling measures, ranging from increasing downpayment, rising stamp duty to property tax. The recent budget has also set out an increase in property tax for high-end residential real estate, set to be phased in over 2014-2015.

Cooling measures were also introduced to the non-residential sphere for the first time, with an exit stamp duty introduced on industrial property sold within four years from the date of purchase.

In Hong Kong, the stamp duty for property over HK$2mil was doubled to 8.5%, putting the brakes on volumes transacted in the local market. China, too, sent out strong signals, which include a capital gains tax of 20%. Buyers are looking to exit before these measures are enforced, most notably in Shanghai, which saw an increase in volumes transacted in March.

Bloomberg reported on April 24 that Beijing and Shenzhen have submitted tax plans to their central government.

The aims of the interventions are broadly the same across all of the key markets; control price inflation, reduce the role of speculators and help support first time buyers. The tools vary. It could be a mixture of fiscal policy, supply side intervention, home buyers regulations and financing restrictions, the Knight Frank report says.

Government intervention in the property markets is not a sudden new phenomenon. Policy-makers, to varying extents, have always found it necessary to intervene by exercising some element of control over market participants, along with two key factors of production; land and finance.

They do so because they desire “stable and sustainable growth”. Property consultants contacted say they prefer a gradual increase in prices rather than a steep hike.

While the recent increase in prices are fueled by high liquidity, urban migration, and economic growth, especially in China, questions on sustainability have arisen.

Their conclusion is that, interest rates – at their lowest today – coupled with speculative activities are fuelling prices beyond this “sustainable” barrier.

The various measures taken so far were a result of significant price rises that have brought into focus issues of affordability and the risk of potential asset bubbles.

Effects of cooling measures

The Knight Frank report says as a result of these measures, Singapore saw a reduction in annual price growth, but not perhaps the reduction policy makers expected. China saw prices drop in 2011, but they rebounded in 2012.

Hong Kong continues to see very strong price inflation, buoyed by low interest rates (the HK dollar is pegged to the US dollar) and tight supply.

Knight Frank is of the view that prices will soften in Singapore by an average of 5% and Hong Kong by 10% over the next 12 months. In China, prices will likely continue to appreciate in Tier-1 cities, while there may be drops in some of the Tier-2 and 3 cities.

The protectionist measures introduced into Singapore and Hong Kong have led to a reduction of purchases by foreign buyers. Singapore saw a drop of 23.5% in 2012 from 2011 (for permanent residents and non-permanent residents). Hong Kong also saw the proportion of mainland Chinese buyers drop from around 30% in October 2012 to only 9.4% in January 2013 (in the Hong Kong luxury market).

What is the impact of these various measures on Malaysia?

Knight Frank Malaysia’s head of project marketing Herbert Leong expects the additional cooling measures in competing Asian markets to lead to further interest in the Kuala Lumpur, Penang and Iskandar Malaysia property markets.

Leong also says that overseas investors have viewed Malaysia as an attractive alternative investment destination for some time and expects further activity in 2013, particularly post-election.

While prices in Hong Kong, China and Singapore have risen considerably, annual price growth in the major markets in Malaysia has flattened considerably over the last 12 months. Perhaps, this may be due to the “wait and see” attitude in light of the general election (GE). Malaysia is likely to see a rebound in activity following the GE.

Says Leong in an email: “Malaysia has always been favoured by investors from Singapore, HK/China, Indonesia and Middle East, though not as much as the countries (Singapore, Hong Kong and China) mentioned. The cooling measures will encourage investors from these countries to buy Malaysian properties as our prices are much cheaper and the returns (capital appreciation/rental returns) are reasonable.” - The Star

Analysts see huge potential in the palm oil industry for small-time players

INTEREST in oil palm cultivation in Malaysia remains strong despite issues of land scarcity and limited human capital.

Many small-time local investors are continuously eyeing pockets of idle land in Kedah, Perak, Kelantan and Pahang to venture into the thriving palm oil business.

While the local oil palm plantation big boys may have extensively expanded their land bank abroad in Indonesia, Laos, Cambodia, Vietnam and Africa, small-time investors find opportunities in upstream and downstream activities in Malaysia.

According to data from the Malaysian Palm Oil Board (MPOB), as at December 2012 the number of smallholders has grown almost 47% to 177,046, from 120,437 in 2007; as at February this year, smallholders have exceeded 180,000. (Smallholders own less than 40.46ha of oil palm plantation.)

Many have deemed it a profitable business, encouraged by the good times when crude palm oil (CPO) prices hit RM3,000 to RM3,300 per tonne.

One such small investor with serious intention to invest in palm oil here is the Malaysia India Entrepreneur Cooperative Ltd (MIEC).

Founded in 2010, the MIEC plans to allocate between RM20mil and RM30mil for its maiden venture into the palm oil industry in Malaysia.

“The cooperative is aware of the tough challenges in the palm oil business, but we remain optimistic given the increasing global demand for edible vegetable oils on the back of decreasing supply,” says itschairman Madhu Marimuthu.

“We hope to mitigate the risk issues through smart partnership. In fact, some of our members and several interested parties that are keen on a joint venture with the cooperative have expertise in the palm oil industry. It is also good that several of our members are already established in the industry.”

Start-ups

Chellam Plantations Sdn Bhd group managing director Venkata Chellamcautions investors about the long cultivation period, especially for new oil palm plantations.

“New investors have to be patient because it will take time to see even a marginal profit over a minimum period of 10 years.”

Chellam Plantations, which is a member of the MIEC, owns about 25,000ha and considers itself a medium-sized plantation player.

Venkata says the plus point for small-and medium-sized plantation companies with smallholdings of about 100ha would be lower operational costs compared to that of other bigger players who own plantations over 1,000ha which require a bigger number of higher management employees and headquarters.

“Similar to most industries, small- and medium-sized players have lower overheads, a more lean structure, are closer to the ground and tend to have a faster decision-making process,” says Chellam, adding that 40.46ha of land would be a good start.

On bank loans for small-time investors, Rabobank International country business director for Malaysia Kao Chee Ming says even though the palm oil industry provides a good margin, the banks will not depend on margin alone. The benchmark for granting loans will always be on the 5Cs – capacity, capital, collateral, conditions and character.

SME opportunities

“The oil palm industry is one of our strengths,” says SMI Association Malaysia president Teh Kee Sin.

Malaysia is the world’s second largest palm oil producer after Indonesia. “If more small and medium enterprises (SME) venture into the industry, they can generate further growth for the country’s economy,” he says.

SMEs form the backbone of Malaysia’s economy as they make up 97.3% of the total business establishments in the country.

Despite limited human capital issues, Teh says the use of fruit-cutting machines, enhancing road infrastructure, and, intensive research and development could reduce labour dependency and further attract small- and medium-sized planters to venture into the industry.

On possible business activities that could further spur the industry, Teh highlights several downstream activities suitable for SMEs, such as logistics, packaging, fertiliser, cosmetics, food substitutes and animal feeds.

Malaysia Estate Owners Association president Boon Weng Siewidentifies two scenarios for new investors.

One is green field development that would give some 22.5% return on investment (ROI) subjected to several factors – CPO prices at RM2,500 per tonne, capacity to produce five tonnes of CPO per hectare per year, cost of land and other related infrastructure at about RM30,000 per ha.

The other is to look at established plantations, complete with infrastructure that would give some 9.64% ROI, with market price around RM70,000 per ha.

Look abroad

Industry expert M.R. Chandran says Malaysia has vast marginal lands to be developed with a potential to generate 24 tonnes of fresh fruit bunches (FFB) per hectare per year.

“With the technology improvement in breeding and selecting as well as advancement in cultivation and management practices, it is possible to achieve that kind of yield,” he says.

According to Chandran, while high land prices and limited human capital continue to persist in Malaysia, there are still plenty of growth opportunities in Africa and South America for oil palm plantations.

“Oil palm trees can grow best in the rainforest climate with warm and wet climate and year-round rainfall exceeding 1,800mm. As such, oil palms can grow in South-East Asia, West Africa as well as in Central America which have the same climatic conditions as ours.”

He says the African and South American regions have great potential to grow oil palm as an “industrial” plantation crop because of the availability of vast tracks of arable land and good source of labour. The population in Africa is estimated to double in the next 35 years. Coupled with subtantial economic growth and rising affluence, the consumption of oils and fats for food, fibre and fuel are expected to double.

“Malaysia is today one of the biggest investors in the African region ahead of China,” says Chandran.

According to a report by CNBC, Malaysia’s biggest spenders in Africa include Petroliam Nasional Bhd and Sime Darby Bhd. In 2011, Malaysia was the third biggest investor behind France and the United States, pushing China and India into fourth and fifth positions respectively.

Chandran says the main driver for palm oil is mainly due to the increasing world population growth, predominantly in the developing world as well as the rising per capita income.

“We expect the world’s population to hit almost nine billion by 2050,” he adds.

Versatile crop

Of the world’s 17 oils and fats, palm oil and soybean oil account for 51% of the total world production. Palm oil alone accounts for nearly 28%.

At the same time, oil palm is a dynamic annual tree crop that produces not one, but two competitive vegetable oils with proven benefits. Oil palm is a versatile crop that produces the most economical oil which is used in various products – from margerine, shortenings, cocoa butter-like fats to infant formula. It is also used for oleochemical applications and in the biofuel industry.

Chandran expects demand for palm oil to increase from 50 million tonnes now to 60 million tonnes in 2015, and 80 million tonnes by 2020.

To meet the challenges of such big demand for oils and fats, palm oil production needs to increase without adverse impact in terms of environmental and social disturbance, to ensure food security, he says.

According to Oil World’s publication, consumers worldwide will be highly dependent on palm and palm kernel oils in the second half of this 2013-2014 season.

“Given such a high demand for palm oil, there is no choice but to increase production to meet the demand, especially from the boom in China and India’s economies.

“I believe the rise of China and India will have enormous business implications during the first half of this century,” says Chandran. - The Star

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5% to 10% property price correction seen

KUALA LUMPUR: Luxury condominiums and even landed property may face a 5%-10% price correction this year in response to a slower occupancy rate last year.

This does not, however, mean that property prices would start to tumble as overall mass market housing would be able to sustain slower growth.

According to real estate services provider CH William Talhar & Wongmanaging director Foo Gee Jen, the occupancy rate among luxury condominiums in Kuala Lumpur registered only 67% last year, which was “not a very healthy sign”.

That said, the property market outlook for 2013 is flattish, with fair opportunities in prime locations and more focus on areas near public transport lines and affordable housing.

“The occupancy rate has been under pressure, but sales has been surprisingly strong,” Foo pointed out after releasing the Property Market Report 2013.

“If the scenario continues, then the occupancy rate could fall as low as 60%,” he said, noting that the high-end category now encompassed condominiums above RM700,000 in prime locations.

With the lower occupancy being the issue, Foo believes the market needs to re-evaluate its holding power, “How long can you hold an empty building without tenants?”

As for mid-range residential properties, which Foo said the price was hovering around RM400,000 now, there would not be any price correction as “the demand for these is always there”.

Separately, prices in the secondary property market would remain in tandem with the primary market. “The secondary market always benchmarks its prices against the new property within the locality,” he said.

Foo believes that the total transaction value for the sector would be lower, as there would be more affordable housing entering the market, although volume is unlikely to drop.

“I believe this year would be the reverse of last year, when transaction value was higher, because the market was focused on developing properties worth RM500,000 and above in 2011 and 2012,” he said.

Going forward, Foo saw the emergence of new high-density residential developments along expanding public transport lines, such as the MRT, LRT or new highways.

“The market for affordable houses is those who rely on public transport, (therefore) developers won't go into such housing projects unless the area is supported by infrastructure,” he said, noting that these projects need to be government-driven.

“The Government would need to give the green light to build high density, only then would it be viable for the developers.”

Following the same line of thought, Foo opined that low-cost housing should not be the main focus in property development as the country moves towards a high-income nation status.

“I think we should move away from building boxy houses as we move towards becoming a high-income nation,” he said.

As for office buildings, Foo said there would likely be an oversupply in the Klang Valley with upcoming mega projects, and the vacancy rate could go up a further 2.5% from 14% in 2012.

He believes rental would be under pressure on landlords competing for tenants who may prefer to pay only slightly higher rent at newer buildings with facilities.

“Old building owners would suffer more and many landlords are prepared to negotiate early with current tenants to lock in their tenancy instead of waiting for the tenancy to expire,” he said, adding that these landowners needed to upgrade their facilities, bring in retail components like upmarket cafes or find a niche market to appeal to. - The Star

Tycoon Robert Kuok's record payment for land in Johor is talk of the town in M'sia-S'pore

PETALING JAYA: The price that tycoon Robert Kuok is paying for a piece of 5.06ha freehold land in Puteri Harbour, Johor, has become the talk of the town and even across the causeway, where the Singaporean media is hailing it as the “new price benchmark” in Nusajaya.

The views on the transaction are varied, though. While Singapore'sBusiness Times wrote that it was a record price for the Nusajaya land, substantiating it with the toppish RM334 per sq ft (psf) price paid by Kuok, there are others who are claiming that the billionaire is getting the land on the cheap.

Robert Kuok

To recap, Southern Marina Development Sdn Bhd (which is 70% owned by Kuok-related companies and the remaining byKhazanah Nasional Bhd) is paying RM182mil (or RM334 psf) to UEM Land Holdings Bhd for a 5.06ha parcel of land in Puteri Harbour.

This price works out to a significant 58% premium over what a consortium of corporate tycoons Tan Sri Surin Upatkoon, Tan Sri Lee Oi Hian, Tan Sri Wan Azmi Wan Hamzah, and Wee Ee Chao had paid for a 17.81ha plot also in Puteri Harbour. The vehicle the tycoons used, Liberty Bridge Sdn Bhd, paid UEM Land RM401mil, which works out to only RM211 psf.

Real estate investment consultant Gavin Tee Swee Heng told StarBizthat the land was considered a good purchase due to the vast potential in that prime area, but noted that it was definitely “not cheap.”

An analyst pointed out that the land had been appraised by property valuer Messrs Assetz Sdn Bhd at RM330 psf, so Kuok is paying 1.21% higher than the valued price, and it was justified by the fact that it was one of the rare parcels of land that was facing the marina.

However, to be noted is the fact that another recent transaction in Iskandar Malaysia was done at a higher price than what Kuok is paying. Last December, mainland Chinese firm Country Garden Holdings Co Ltdpaid a total of RM900mil, or RM376 psf, for a 22.26ha land in Danga Bay.

The analyst explained that there was generally a price difference between land in Danga Bay and Puteri Harbour.

“Danga Bay sits in flagship zone A or Johor Baru, while Puteri Harbour is situated in flagship zone B under Nusajaya. Furthermore, Danga Bay is reclaimed land, and, hence, carries higher infrastructure cost,” said the analyst.

Tee is bullish on the development around Puteri Harbour.

“Puteri Harbour will be the number one play (in the region) in terms of class,” he said, adding that its value should be the highest in the vicinity due to the marina lifestyle conceptualised and target market which consisted of the international business and corporate population.

Meanwhile, concerns arose in the social media arena as some commentators claimed the land was cheap based on the projected development value.

Recall that the proposed development by Southern Marina would comprise a mix of residential and commercial development with a gross floor area of more than two million sq ft, at an estimated gross development value exceeding RM1bil.

Said Tee: “The land is definitely not considered cheap. There are many unforeseen costs that the developer might have to bear, as it takes time to develop the area.

“There is also a fair bit of holding cost that would incur over the period of time.”

Another consideration of the valuation of the land would be the plot ratio approved by the authorities, he added.

Besides that, he reckoned that there would definitely be some form of risk that developers had to take, as the development in Nusajaya was still considered at its initial stage and it would entail extra costs for them to hold until the area matured. - The Star

Malaysian home prices to rise 10-15% this year: WTW

KUALA LUMPUR: Residential property prices in the country will continue to rise 10 to 15 per cent this year, according to real estate services firm C H Williams Talhar and Wong Sdn Bhd. Managing Director Foo Gee Jen said sales for new housing developments will sustain this year driven by high demand for residential properties in the country.

"Areas of high demand will be close to the high-level infrastructure projects such as Mass Rapid Transit (MRT), Light Rail Transit (LRT) and Komuter train lines," he told reporters at the launch of the company's Property Market Report 2013 here on April 24.

"A big volume correction will be seen this year. House prices will remain generally flat but prices could face upward pressure from rising materials prices and other cost-push factors," said Foo.

The landed residential market is expected to continue to be in resilient mood with stable growth although fewer new units may be launched, he said. Developers are also trying to sustain profit margins by raising the new launch prices and testing new grounds for affordability.

"In tandem with that, they are putting in more eco-friendly and green building features as an added value to the projects.

"We have seen developers veering away from high-end niche devlopements and swtiching to more mid-range products in tandem with the government's PR1MA scheme," he said.

Foo said the outlook for the affordable housing segment is very positive. "We can expect units in this segment to continue to find a ready market. High-end residential properties continue to sell well in the major cities of Johor Baharu, Kuala Lumpur, Kota Kinabalu and Penang.

"We can expect with the seemingly strong demand, prices may be pushed upwards," he added. - Bernama

ARREIT to buy factory in Penang

KUALA LUMPUR: Amanahraya Real Estate Investment Trust (ARREIT) has entered into a sale and purchase agreement with Precico Electronics Sdn Bhd to acquire a factory in Penang for RM41.6mil.

Arreit ventured into the agreement via trustee CIMB Islamic Trustee Bhdin a bid to acquire the factory buildings located at Lorong Perusahaan, Prai Industrial Estate Mukim 1 Seberang Perai Tengah. - The Star

CapitaMalls M’sia Trust awards RM7m job for enhancement works to Gurney Plaza, Penang

KUALA LUMPUR: CapitaMalls Malaysia Trust (CMMT) has awarded a contract worth RM7mil to CapitaLand Retail Malaysia Sdn Bhd (CRMSB)to undertake the asset enhancement initiative works to Gurney Plaza, Penang.

In a filing with Bursa Malaysia, CMMT said CRMSB will be the project manager for the asset enhancement initiative works, which is to create additional retail space and enhance Gurney Plaza's retail offering.

The asset enhancement initiative works would include reconfiguration of space to improve the trade mix and sightlines, the company added.

The company also said that the asset enhancement initiative works would commence in the middle of next month.

The asset enhancement initiative works are slated for completion by the first quarter of next year.

CRMSB is a related party of CapitaMalls Malaysia REIT Management Sdn Bhd, the manager of CMMT. - Bernama

Real estate investment trusts losing lustre, investors opting for more aggressive strategies

PETALING JAYA: Local real estate investment trusts' (REITs) allure for investors may be waning on a combination of factors including lower returns due to REIT prices approaching target prices pegged by analysts.

Analysts said that while the industry's longer-term prospects remained positive, REITs were now downgraded to “neutral” as unit prices approached targets.

Maybank Investment Bank Bhd analyst Wong Wei Sum said the average gross yield for Malaysian REITs was a trough of 6.4% compared to 6.6% in January 2013 and 7.4% at January 2012.

She said in a report that investors might be adopting more aggressive strategies post-general election (GE) as some of them had used defensive strategies after close to two years.

“Investors may adopt a more aggressive approach for the property sector favouring the high-beta developers post-GE,” she added.

Other reasons for the change in weighting included competition from business trust and potential higher overnight policy rate (OPR) in the fourth quarter, which was expected to see a 25 basis-point hike in anticipation of a higher inflation rate, she said.

Meanwhile, two other analysts told StarBiz that OPR estimates by their respective research houses were maintained at healthy levels, which would not pressure the profitability of REITs.

Wong also said: “DiGi.Com Bhd, the third-largest telco in Malaysia, is mulling over setting up a business trust, we understand. If it were to materialise, DiGi's net dividend yield would be even more attractive than the current level of 5.3% (financial year 2014) and more competitive than large-cap Malaysian REITs' 4.4% (net yield).”

She added that competition could also stem from asset-rich developers like WCT Bhd, Dijaya Corp Bhd and Malaysian Resources Corp Bhd to unlock their assets value through REITs.

A general view of Mid Valley City. Maybank Investment Bank has downgraded IGB REIT to ‘hold’ while it has a ‘buy’ call on CapitaMalls Malaysia Trust.

An Affin Investment Bank Bhd analyst said competition posed by business trust in the near term would be minimal as investors might need time to understand its structure.

An RHB Research analyst said REIT sponsors had to inject at least RM1bil worth of assets to the instruments to achieve decent viability and liquidity.

She said that judging from the current completed assets that some of the developers had, it might take them a few more years to grow the asset sizes before listing them as REITs.

Thus, she did not see stiff competition from the REIT universe in the near term while KLCC Stapled REIT, which was en route to be listed this year was already on investors' radar.

Nonetheless, she was also neutral on the sector.

“Having said that, we will not see a selldown and a steep decline in REIT prices as the sector remains a good dividend play backed by asset value. Besides that, interest rates in the region are considered low,” she said.

The Affin analyst said she maintained an “overweight” for the sector this quarter but might tweak her computation following the financial results REIT players would announce in the coming weeks.

She said yields from REITs had been compressed to historical low and might look to downgrade the sector.

Maybank Investment has, in the report, downgraded Pavilion REIT,KLCC Property Holdings Bhd, Sunway REIT and IGB REIT to “hold” while it had a “buy” call on CapitaMalls Malaysia Trust.

The analyst from RHB Research said the brokerage's top pick was Pavilion REIT due to its location, asset quality and long-term growth prospects.

“When the mass rapid transit is ready, the Golden Triangle (in Kuala Lumpur) will be more vibrant and its growth will be even more attractive,” she said. - The Star

House buyers want interest waived

SOME 150 people who bought houses in an abandoned project in Taman Topaz in Dengkil, Selangor, held a peaceful demonstration after receiving bank notices over unpaid loans.

One of the buyers said the project, which was started in 2000, was only half completed, Malaysia Nanban reported.

He said most had been paying their loan instalments but stopped in 2003 after realising that the project had been abandoned.

“Most of us have agreed to pay the principal but we want banks to waive the interest charged from 2003,” he said yesterday. - The Star

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The retail space of Suiwah’s RM50mil Sunshine Bertam mall is fully-booked

GEORGE TOWN: Suiwah Corp Bhd's new RM50mil shopping mall in Bertam, Kepala Batas, is expected to open in June.

Group executive director Cynthia Hwangsaid the tenant-control mixed shopping mall, Sunshine Bertam, located on 2.43ha, would have some 200,000sq ft of lettable area.

“The hypermarket, called Sunshine Bertam, would occupy approximately 50,000 sq ft.

“The remaining floor space would be leased out to shops. The retail space is fully-booked,” she added.

Hwang was speaking at a press conference attended by Suiwah directors Datuk Ahmad Osman and Datuk Radzali Hassan, Sunshine Amanjaya's Datuk Rafique Abdul Karim, and Bertam Properties Sdn Bhd's Datuk Roslan Ibrahim.

Hwang said there would be four cineplexes and some 500 carpark bays.

“The size of each retail lot ranges between 200 sq ft and 1,000 sq ft.

“There will be goldsmith, florist, telecommunications, and food and beverage outlets.

Roslan says the company has sold most of the 70 units of shop-offices in the third phase.

“There would also be a karaoke and reflexology centre,” she added.

Bertam town has a population of around 100,000 people, upon which the shopping mall could depend for support.

Roslan, meanwhile, said that Sunshine Bertam was in the Bertam Perdana township. “The township is now in the third phase of development, located on a 6.47ha site, which is 60% completed.

“We have sold most of the 70 units of shop-offices in the third phase.

“The third phase should be completed in September 2013,” he said.

Roslan said Bertam Properties still had 32.37ha to 36.42ha in Bertam for commercial development, where the plan was to develop some RM200mil worth of commercial properties over a period of eight to 10 years.

“As for residential properties, we still have 202.34ha in Bertam.

“The plan is to develop some RM300mil worth of residential properties over the next eight to 10 years,” he said.

Listed in 1995, the group owns Sunshine Square, a pioneer department store and supermarket in Bayan Baru, Sunshine Farlim Shopping Mall, and Sunshine Lip Sin, a supermarket in Gelugor.

It also owns a chain of convenience stores in multi-national companies such as Kobe, Agilent, Lumileds and ASE.

The group has also diversified into manufacturing, property development and international trading. - The Star

Penang property expo sales exceed RM100m

The Malaysian Property Expo (MAPEX) 2013 in Penang raked in over RM100 million in sales, says iProperty.com.

In a note today, the country's number one property website said with expectation of closing more property sales in coming weeks, the three-day expo, which showcased 26 reputed real estate developers and property builders, attracted thousands of property buyers and investors.

iProperty said the record expo sales figures are testimony that the appetite for properties remained strong and even far exceeded expectations in some cases.

"Among the developers that generated high sales were IJM Properties Sdn Bhd, Katana Developments Sdn Bhd, Sayang Realty and Tambun Indah Land Bhd who collectively sold close to RM50 million," it added.

iProperty Group Chief Executive Officer Shaun Di Gregorio said: "With property developers reporting over RM100 million in closed deals, and thousands of visitors within three days, MAPEX 2013 was certainly an astounding success.

"Despite the upcoming elections and the uncertainties of the market, MAPEX 2013 proves that the love affair for property still continues," he said.

He added that this was the second time iProperty.com Malaysia has partnered with the Penang Real Estate and Housing Developers' Association (Rehda) to organise MAPEX and the confidence that regional property developers, local
estate realtors and consumers have in the iProperty.com brand is a testament to the company’s strong brand presence.

Echoing the same sentiments, Rehda Penang Chairman Datuk Jerry Chan said: "I am thrilled by the response we had at MAPEX 2013.

"Rehda Penang and iProperty.com Malaysia both share the same vision, to help home buyers find their dream homes at the most affordable prices.

"Judging from the sales that our participating developers had, we certainly achieved that vision in Penang."

Leading property experts in the industry gave tips, tricks and advice on making sound property investment decisions at the expo's seminar sessions.-- Bernama

Property market up in 2012 with 427,520 transactions worth RM142.84b

PUTRAJAYA, April 18 — The property market activity in 2012 recorded 427,520 transactions valued at RM142.84 billion, compared with 430,403 transactions worth RM137.83 billion in 2011, according to Malaysia Real Estate Market 2012. According to the report, the number of transactions decreased by 0.7 per cent while the value of transactions increased by 3.6 per cent. 

"As in previous years, the residential sub-sector continues to lead the market activity, contributing 63.8 per cent of the total market," said Finance Ministry Secretary-General Datuk Seri Mohamad Irwan Serigar Abdullah after the launch of the report here today. 

The report said in 2012, a total of 272,669 residential property transactions worth RM67.76 billion were recorded. "In the fourth quarter of 2012 , the All House Price Index increased to 175.3 points from 161.9 points registered in the same period in 2011," the report added. 

It said the market segments by price indicated a changing scenario, whereby transactions of the lower price range properties had softened. 

Compared with 2011, the transactions of houses within the price range of RM25,000 to RM150,000 declined between 3.5 per cent to 8.3 per cent. Similarly, transactions of houses in the price bracket of RM200,000 to RM250,000 dipped by 2.5 per cent. 

Houses priced between RM250,000 and RM500,000 were the most active, capturing the largest share with 18.2 per cent or 49,515 transactions. 

For the past four consecutive years, the demand for high-end units priced above RM500,000 continued to expand, recording 26,484 transactions in 2012 compared with 21,905 transactions in 2011. 

By property type, housing units made up the majority with 82.9 per cent of the residential sub-sector's market share, whereby terraced houses remained the most popular, registering 36.4 per cent or 99,381 units of the residential transactions. 

The shops sub-sector was the main contributor to the commercial sub-sector, contributing 54.5 per cent of the volume or 22,389 transactions and 49.2 per cent or RM13.67 billion of the value of transactions. 

Across the board, all types of shops recorded a downturn in volume of transaction, with one to one-and-a-half storey shops recording the lowest contraction at 2.8 per cent and the highest was pre-war shops at 18.6 per cent. 

Two to two-and-a-half storey shops were the most active, controlling 52.3 per cent of the shops' market share. For industrial property, the industrial sub-sector remained the least active market registering 9,984 transactions worth RM12 billion while the agricultural sub-sector recorded 80,679 transactions valued at RM14.28 billion. 

The leisure property sub-sector showed further improvement, with the national average occupancy of one- to five-star hotels improving to 53.6 per cent. Irwan Siregar said 2013 was expected to be a good year for the property sector as the latest economic indicators showed that the country's growth would be able to overcome the uncertainty in the global economy. 

"The implementation of various projects under the Economic Transformation Programme, 2013 Budget and 10th Malaysia Plan, will bring positive impact to the country's property sector. 

"The overall performance of the property sector is expected to continue to be led by the residential sub-sector," he said. 

Asked on the latest development on civil servants' housing loan, Irwan Siregar said the government was still studying the loan procedures before making the announcement at the end of this year. — Bernama