Moderately-priced houses in trend

The trend of developing residential properties priced between RM200,000 and RM400,000 is picking up in Penang, a state where property prices are second highest in the country after Kuala Lumpur.

Tambun Indah Land Bhd, PLB Engineering Bhd, Ideal Property Development Sdn Bhd, and Belleview Group are some of the Penang-based developers with plans to launch moderately priced projects on the island.

With the exception of Belleview, Tambun Indah, PLB, and Ideal Property are taking advantage of the plot ratio guidelines introduced in 2010 which allowed developers to build 87 units per acre, with a total built-up area of 122,000 sq ft per acre and priced at between RM200,000 and RM300,000.

Under the revised guidelines, developers have to allocate 5% of the total units in a development scheme to be priced at RM200,000, 10% to be priced at RM300,000, and 5% not exceeding RM500,000.

Tambun Indah’s Straits Garden in Jelutong, PLB’s Sungai Nibong Residences and Ideal Property’s Valencia Park are the new projects using the revised guidelines.

The layout plans of the projects have been approved and the company is now waiting for the go-ahead for the building-plans.

Previously, the plot ratio guideline for high-rise was 60 units per acre or 42,000 sq ft per acre or 30 units of 1,400 sq ft apartments.

The revised plot ratio guidelines are applicable in areas where it is allowed to develop 30 units per acre and above and in areas designated as commercial/tourism areas under MPPP’s structural planning and development control plan.

They are not applicable for prime residential areas such as Jalan Tunku Abdul Rahman (popularly known as Ayer Rajah Road), Jesselton area, existing established housing zones and general housing areas, George Town Heritage Site (which includes the buffer zone), certain areas in Tanjung Bungah and Tanjung Tokong.

Real Estate and Housing Developers’ Association (REHDA, Penang) chairman Datuk Jerry Chan said the new plot ratio guidelines for the island was a win-win situation for both the developers and the state government.

“The guidelines make the developers supply affordably priced properties and in return the developers get to better utilise the land for development,” Chan said.

Tambun Indah is proposing to develop a RM180mil high-rise residential project called Straits Garden in Jelutong on a 1.69ha site, the north-east district of the island, with 15% of the total units priced between RM200,000 and RM300,000.

Tambun Indah managing director Teh Kiak Seng said the project’s layout plan had been approved and was now waiting for the building-plan approval from the relevant authorities.

“The project located in the heart of the island and would feature modern apartments, office suites and shop lots to meet the demand for commercial and lifestyle properties in the central business district.

“We anticipate to commence development in the fourth quarter of the year. Targeted completion is by the fourth quarter of 2014,” he added.

In Sungai Nibong, which is close to the Penang International Airport, PLB plans to launch the Sungai Nibong Residences, comprising 98 units of medium-cost apartments on an over 0.4ha site.

PLB executive chairman Datuk Ong Choo Hoon said the project has a gross development value (GDV) of RM70mil and was expected to be launched in the third quarter this year.

Some 15% of the total units would be priced between RM200,000 and RM300,000 in accordance with the conditions of the revised plot ratio guidelines.

The lay-out plan of the project had been approved and is now waiting approval for it’s building plan.

Ideal Property also plans to launch 788 apartment units called Valencia Park on a 9.1-acre site in Relau, south-west district of the island in September.

Ideal Property managing director Datuk Alex Ooi said the project, which had a GDV of RM330mil, comprised apartments with built-up areas of 1,000 sq ft and 1,200 sq ft.

In the past two years, Ideal Property had developed and sold over 500 units of apartments priced between RM300,000 and RM400,000 in the south-west district.

Belleview’s RM100mil Autumn Tower project, comprising 220 condominiums at All Seasons Park in Bandar Baru Air Itam, does not come under the new plot ratio guidelines.

“The project is scheduled for launch in May 2012.The pricing for the units ranges between RM350,000 and RM400,000”, said Belleview managing director Datuk Sonny Ho.

Meanwhile Raine & Horne Malaysia director Michael Geh said the sub-sale transactions of high-rise properties priced between RM300,000 and RM400,000 were very active in the south-west district of the island in Relau, Bukit Jambul, Bayan Baru, Bayan Lepas, and Sungai Ara.

“Properties in these locations have been steadily rising at about 10% per annum,” Geh said, adding that there was strong take up for newly-launched properties in the first two months of 2012.

“We observed that the demand came from newly-weds, families that want to upgrade their lifestyle, and retired couples looking for smaller high-rise properties in prime locations,” he said.

In Seberang Prai, Asas Dunia Bhd is undertaking some 1,357 units of landed properties this year with a GDV of RM226.7mil in Central and South Seberang Prai.

Group managing director Chan said the price ranged between RM120,000 and RM580,000, depending on the type of property and the location.

The properties comprised largely single-storey terraced, single-storey semi-detached, and single-storey bungalow houses.

Over the past two years, the prices of residential properties have increased from 10% to 15% per annum on the island, making properties in the RM200,000 to RM400,000 price range increasingly rare.

Prime Minister Datuk Seri Najib Tun Razak had last July launched the first phase of 1Malaysia Peoples’ Housing (PR1MA) programme, under which residential properties priced between RM150,000 and RM300,000 would be developed.

PR1MA is specifically for first time house buyers and moderate-income Malaysians earning not more than RM6,000 monthly regardless whether they work with the government, the private sector, or self-employed.

Some 42,000 houses under PR1MA have been identified for 20 sites in the Klang Valley, Rawang and Seremban, and companies like Sime Darby Bhd, SP Setia Bhd and Putrajaya Corp have been invited to participate.

In the last budget announcement, the federal government also raised the ceiling price for first home scheme buyers to RM400,000 from RM220,000 with 100% loan financing and stamp duty exemption to promote home ownership among the middle-income groups.

As Sime Darby owns a large bulk of land bank in Penang via Eastern & Oriental Bhd, the state could be a site for moderately priced housing projects under PR1MA.

Eastern & Oriental Bhd is reclaiming 740 acres for the second phase of the Seri Tanjung Pinang project in Tanjung Tokong to develop two islands for mixed development projects, which will have a GDV of RM12bil. - The Star

Housing starts rise for first time in seven years

KUALA LUMPUR (Mar 1): Housing starts are marginally higher in 2011, compared to levels seen in 2009 and 2010 — a first in seven years reported, data supplied by the Valuation and Property Services Department (JPPH).

The data, published in a report by CB Richard Ellis (Malaysia) Sdn Bhd (CBRE), mentioned that although the numbers are higher, the growth is still only 40% of 2007 starts at the end of 2011.

The report stated that the Klang Valley's total existing housing stock registered about 1.72 million units — the equivalent of an annual growth rate of 1.4% from 2010 — while new completions stood at 39,400 units. Serviced apartments, apartments and condominiums account for 21.5% of the total existing housing stock in the Klang Valley.

Landed residential properties — such as terraced houses, cluster houses, semi-detached houses and bungalows — accounted for 746,300 units, or 43.4% of the total supply. Serviced apartments and condominiums stood at 369,700 units, or 21.5% of total residential accomodation.

About 75.6% of the total residential units in the Klang Valley reside in Selangor, with the remaining 24.1% located in Kuala Lumpur. Putrajaya accounts for 4,500 units, primarily housing civil servants.

The total residential supply in the Klang Valley since the end of 2008 has grown by 8.8% (approximately 118,200 units), with Selangor growing 9.2% (92,200 units), and Kuala Lumpur growing 7.6% (25,400 units).

Incoming supply (ie, units for which construction permits have been approved) amounts to 177,317 units, while units under contruction stood at 167,367 units — which implies that construction has begun on 94.4% of units with approved construction permits. From this amount, a total of 128,259 units, or 76.6%, are located within Selangor. The new housing starts outnumber the total for 2009 and 2010, but not significantly.

It was reported that out of the nearly 37,200 condominiums and serviced residences in Kuala Lumpur valued at RM350 psf and above, only 24% are considered "luxury" (ie, valued at RM800 psf and above). The remaining supplies are split almost evenly between the mid-range market (at RM350 psf to RM499 psf), and the high-end market (RM500 psf to RM799 psf).

The high-end subsale is less attractive than the new launches, as it has to compete with the attractive incentives offered by developers of new launches. Comparing the prices year-on-year (y-o-y), high-end condominiums have increased slightly in the KLCC, Bangsar and Mont'Kiara areas, ranging between 0.80% to 2.47% since 4Q2010. However, the report further states that there is a decline in capital values for some properties in KLCC and Mont'Kiara of anywhere between 1% to 3% quarter-on-quarter (q-o-q).

The average asking rental rates of luxury condominiums in KLCC, Bangsar and Mont'Kiara declined slightly during 4Q2011 to RM3.42 psf — a decrease of 1.6% q-o-q and 1.4% y-o-y. The average rental rates in KLCC stood at RM3.94 psf/month, while Bangsar and Mont'Kiara stood at RM3.25 psf/month and RM3.08 psf/month respectively. The report said the weak elasing market for larger residential units — especially of the type commonly seen in KLCC and Mont'Kiara — is partly to blame for the decline in asking rental rates.

Several new projects were launched or previewed during the quarter under review. The developments include The Sentral Residences at Kuala Lumpur Sentral (average price RM1,100 psf); Rimbun Condominium at Jalan Ampang Hilir (RM1,100 psf); The Residence Suites of M-City at Jalan Ampang (RM1,000 psf); and the G Residence at Desa Pandan (RM600 psf). Interest is still strong in new launches, the report said, especially for units priced below RM1 million.

Mirage Residence and The Face Serviced Apartment in the KLCC area were soft-launched, the report said. Mirage Residence offers 102 units priced at RM1,200 psf to RM1,600 psf. It offers buyers units with sizes ranging from 850 psf to 3,100 psf, with an average size of 1,400 psf. The Face Serviced Apartment has a price of RM1,350 psf, with units ranging from 850 psf to 1,400 psf. It reportedly has a take up rate of 70%.

Mah Sing Group Bhd secured the sale of 96 units of its serviced residences in Icon Residence Mont'Kiara in October 2011, for a total of RM220.8 million (or RM1,200 psf). The purchaser was a mainland Chinese corporation. Icon Residence Mont'Kiara comprises 260 units in three towers, housing between two to six units per floor, with take-up exceeding 60%.

The report also included that Bank Negara Malaysia (BNM) had revised lending guidelines, leading to more stringent guidelines on loan approvals. This means that the maximum allowable debt service ratio for a loan applicant will be based on net income instead of gross income, to better reflect funds available to the applicant for loan repayment. CBRE expressed fears that this will lead to slower launches and take-ups of more affordable properties, as well as uncertainty regarding how banks would interpret the guidelines in the short term, although it stated that the revision was a sensible measure. - The Edge Property

Rehda looking for alternatives in financing projects

KUALA LUMPUR (Mar 2): Real Estate and Housing Developers' Association of Malaysia (Rehda) president Datuk Seri Michael Yam announced that Rehda along with the ministry are currently in talks with various financial institutions to discuss further initiatives for the financing of projects.

Speaking at a press conference during the official opening ceremony of Malaysian Property Expo (Mapex) 2012 in Mid Valley, Yam mentioned that Rehda already had a meeting with the Islamic banking institutions to understand whether there is a scheme to fund developers.

"It's still in progress, but we are trying to understand whether they have a scheme to fund developers from ground zero to completion," he said.

Yam said they are meeting up with Bank Negara Malaysia (BNM) next week to understand better the issue of gross income and net income, following bank borrowings for property purchases.

"There's a little vagueness with income, and we want to understand it better," he explained. "The worst thing to happen is uncertainty and no clarity when dealing with this issue."

Yam raised the issue of the 3% of the total estimated development cost excluding land costs in order to obtain the developer's license.

"In order to apply for an advertising permit, you used to only have to put down a payment of RM200,000. There are groups out there that say that is too small probably because it is not enough to salvage an abandonement. Now, instead of RM200,000, they are now asked to pay 3% of the gross development cost and the land cost," he explained. "If you have a RM50 million gross development cost (GDC) project, 3% is like putting down RM1.5 million as opposed to the original RM200,000."

Yam added, "To a bona fide property developer, this is RM1.5 million in working capital locked in an idle account. If you have 10 of these projects with RM50 million GDC each, obviously the cost becomes higher."

Yam lamentsed that in the future, this will become a pass-through cost. This will affect the supply into the market.

"Instead of RM50 million, developers will probably split it into five phases of RM10 million. It's the only way you can afford it,"

The Mapex 2012 property exhibition was officiated by Datuk Arpah Abdul Razak, deputy secretary-general of the Ministry of Housing and Local Government.

During her opening speech, Arpah — on behalf of Datuk Seri Chor Chee Heung, Minister of Housing and Local Government — mentioned that their department was working closely with the Ministry of Natural Resources and Environment (NRE) to repeal Act 663 (the Building and Common Property (Management & Maintenance) Act of 2007), and replace it with the Strata Management Act together with amendments to Act 318 (the Strata Titles Act of 1985) to provide a more conducive environment for those living in high rise buildings. She added that these acts will be tabled in Parliament in June 2012.

In October 2011, Chor had announced the ministry's plans to replace Act 663, the reason being that the move was to overcome problems that always arose; eg, owners not paying maintenance fee, and taking the repair and maintenance of buildings lightly. -

Arpah also mentioned that the government has been looking at improving the delivery of the housing system, which would have the country adopt the Build-Then-Sell (BTS) model.

However, she said, "The effective mechanism for financial institutions to finance housing developments under the BTS must first be sought and implemented, failing which the BTS system may not be implementable."

Mapex 2012 features 89 property developers (Rehda members) and five international developers, showcasing over 7,500 units of properties worth more than RM5.9 billion. Also present were seven financial institutions.

Yam, commenting on the fact that nearly RM6 billion worth of properties up for sale, saud "If we can achieve 10% of sales it is still pretty good. RM600 million worth of sales is good."

Mapex 2012 is held at the Mid Valley Exhibition Centre in Mid Valley Megamall Kuala Lumpur in Hall 1, 2 & 3 from Mar 2-4. Admission is free. - The Star

解读乔治市密码

（槟城2日讯）将一天的乔治市走马看花变成3天深度旅游，文化遗产保护工作者林玉裳，建议州政府教游客读懂乔治市密码。
尽管乔治市在2008年获得了联合国世界文化遗产的桂冠，不过，很多前来游览世遗的游客，在用半天时间看过邱公司等几个重点古迹后，就匆匆离开世遗区，前往其它景点。一些慕名而来的游客甚至经常抱怨乔治市没东西看。
林玉裳说，之所以会发生游客主观性地认为乔治市没看头，是因为乔治市缺乏文化遗产导游，大部分游客都看不懂乔治市的人文历史密码。
她说，到世遗区的游客，大部分是自由行或者是从吉隆坡或其它旅游景点连接过来槟城的，他们的随团导游多缺少古迹历史及人文方面的知识，因此，一般只会把他们的游客带到邱公司、张弼士故居、康华丽堡等重点古迹，并不会带他们去看老街和街屋，更不可能跟他们介绍老街的历史和人文故事。
隐藏文化历史密码
林玉裳说，乔治市历史建筑物，从宗庙、会馆到民宅（店屋），从建筑物本身到装饰都隐藏着文化和历史密码。
她说，从建筑物外观设计，可以看出不同的年代，可以看出中华、印度、伊斯兰教、欧洲的影响及风格。
例如没有骑楼底（五脚基）的老屋，很可能就是19世纪20年代前兴建的，因为建筑物预留骑楼底是新加坡开埠者莱佛士于1822年时在新加坡颁布的指令。
她说，再深入细看，建筑物的气窗、门眉上的匾额、楹联、大门的雕花、屋顶、屋角可以看到的更多，里面诉说着主人的姓氏、行业、五行属性、文化及修养。
她说，通过门眉上的堂号，我们可以看出有关古迹主人的姓氏，屋子的山墙可以看出屋主的金、木、水、火、土五行属性。
她说，进一步深入则可以看到文化的东西，以华人的宗庙或民宅建筑来说，门窗等装饰都有很多故事。比如“五福临门”、“喜上眉梢”、“五福奉寿”、三国故事等。
她说，除了这些文化密码乔治市老厝，还有各族遗留下来的名人事迹和民间故事，会看的人甚至3天都看不完。
非物质文化遗产有吸引力
林玉裳也是槟城古迹信托会财政。她说，乔治市世遗区范围很大，古迹建筑物有4665间，其中大部分都是民宅（或称街屋或店屋），其最吸引人的地方也不是只有历史建筑物，更多的内涵是隐藏在里面的非物质的文化遗产部分。
她说，这个部分普通游客需要有人解说或者看过资料才看得懂。她认为，乔治市古迹区是一本厚厚的故事书，有来自世界五大文明在这里互相交汇蹦发出的火花，有不同民族的故事，更有影响世界历史事迹。
“如果没有人解说，可能游客走过打铁街，也不知道中国革命之父孙中山先生曾在这里运筹帷幄，改变中国历史。”因此她建议州政府设立一个古迹解说中心，教游客怎样看我们的古迹，特别是老屋。- 光华

相关照片

■ 有骑楼底的建筑一定是1822年后才兴建的。

■ 屋子或宗庙里的彩绘也有深厚的文化含意，这幅图是吉庆图。

■ 五只蝙蝠围绕着寿字吉祥图，说的是五福奉寿。

■ 大门上的花瓶雕刻，有着出入平安、四季平安的寓意。

Developer reveals upcoming project complete with park

PLB Engineering Berhad is launching, via its subsidiary PLB Land Sdn Berhad, a RM270mil mixed-development project on a 20.2ha site in Balik Pulau, Penang.

It is called Prestige III Central Park City and the project will commence in the second quarter of 2012.

Group executive chairman Datuk Ong Choo Hoon (pic) told a press conference that the project comprised 919 units — 322 single and double-storey terrace homes, 40 double-storey semi-detached houses, 57 double-storey shop offices, and 500 medium and low medium-cost apartments.

“The project, comprising three phases, will be completed in 2016.

“The first phase should be completed in 2014.

“We will kick off the project in April or May with the launch of 242 units,” he said.

The prices of the single-storey terrace and double-storey terrace houses are RM360,000 and RM460,000 respectively.

The double-storey semi-detached houses cost RM600,000.

The highlight of the project is a 1.2ha park for the residents to enjoy the greenery, the river and streams.

“The project has received overwhelming response,” Ong said.

He said the group would also launch 98 medium-cost apartments on a site larger than one acre in Sungai Nibong this year.

“The project is planned according to the new density guidelines of the state government which allows for 87 units per acre. Under the new ruling, 15% of the units have to be priced between RM200,000 and RM300,000,” he said.

“We are also targeting to launch a RM1bil township project in Paya Terubong on a 28.3ha site in two years,” he said.

The group is also planning a RM45mil low density medium-cost apartment project in Teluk Kumbar later this year.

“We have also submitted plans for light industry factories in Juru Auto City and Mak Mandin.

“The estimated sales revenue for these projects is around RM115mil,” he said. - The Star

Skills and expertise needed when marketing foreign property

EARLY last week, one of London's largest lettings agency gave a presentation to a small but eager group of investors who have either bought, or about to complete negotiations to invest in a property in London.

Most of them are buying foreign real estate for the first time while a few of them have been landlords for several years. Despite that, they still had questions about various issues like taxation and rights of landlords/tenants.

Many of them have formed an attachment with Britain because of their student days. Some have children studying there. Yet, there are others who bought into that market to take advantage of the favourable currency exchange rate as it has dropped quite a bit since 2008 and because of the drop in real estate prices.

Most, if not all of them, have bought off-plan. While some of them have visited the location of their future property, many of those who were present at the presentation have not. So it was a rather enlightening evening for most of them.

Anita Mehra and her team from Benham and Reeves Residental Lettings gave a bird's eye view of the London rental market as many of them are keen to see some sort of yield from their investments while being an absentee landlord. She answered questions about yield for the different areas, the popularity of some areas over others, the advantages of one and two-bedroom units versus three-bedroom units, the benefits of buying in central London versus one located on the fringe of the city.

Mehra says yield will not be all that attractive and instead suggested that capital appreciation will be a better option for investors to consider.

As the evening wore on, it became obvious that while rental yield was important to the investors, it was the issues related to property ownership in a country they are unfamiliar with which brought them out for the evening.

Being a student tenant in their younger days and now being the landlord means they are now sitting on opposite sides of the fence. They are driven by different forces.

Many of them have questions about taxation. This includes taxation from UK's Inland Revenue Department, local council taxes and the issue of the 40% inheritance tax.

There were questions about insurance, length of leases and what recourse they have when a tenant defaults on rental or reduces the duration of a lease. Because everything is governed by laws and rights, they are also concerned that in the event of a default, the services of a lettings agent may no longer be adequate and there may be the need to engage legal help. There were also many questions whether it was better to take a loan, or to pay cash and why.

It is obvious that being a landlord in Malaysia and a landlord in Britain present two sets of challenges. Mehra answered all these questions with patience but the fact that such questions were posed indicates the fact that they were generally unaware of or have little information when they bought the properties and the implications of that investment.

Foreign property ownership is something that is relatively new to many of these middle-income investors.

Says an investor who bought a property two days before attending the presentation: “I was not able to sleep the day I signed on the dotted line. Many of these presentations were very property oriented. The girls who attended to us told us the property was X minutes from the subway, has X number of rooms and what the price includes and what discount they can give us. I have no idea what the tax issues and property ownership is going to be like.

“At many of these presentation, I was serviced by young personnel who passed me from one colleague to another simply because they cannot answer my questions. Sometimes the property developer and a lawyer are present. But they were unable to give me their single-minded attention. So it was good to have Anita (Mehra) here to answer all our queries,” he says.

Having to glen information from one person to another is troublesome and frustrating. So why did he buy? “There were no competition (from other agencies) and if we wanted to invest in UK and take advantage of the weak Sterling and hope for capital appreciation for a £200,000 investment, we had limited choice.”

At the minimum, a property in London would cost about £200,000 or thereabouts. With an exchange rate of RM4.80 to £1, that works out to about RM1mil.

That is a lot of money in exchange for a property located in another country whose cultural and legal environment we are unfamiliar with despite the fact that our legal system is pretty much British-based.

At the same time, the people who sold them the property need to upgrade the skills and expertise of their personnel because selling a property located in Malaysia to Malaysians and promoting foreign real estate to Malaysians pose two different sets of challenges. Selling foreign properties requires a deeper knowledge of the culture and laws of that country. Those who promote foreign properties need to put themselves in the shoes of their investors to understand their concerns. - The Star

Assistant news editor Thean Lee Cheng thinks marketing personnel need to be very familiar with a foreign market and that includes legal issues before marketing a project there.

Slower subsale market, challenges ahead

PETALING JAYA (Feb 24): The subsale housing market in the Klang Valley which has generally slowed down in the past six months is expected to face more challenging times ahead and prices may soften due to a variety of factors, said real estate agents.

"It will soon be a buyers' market. Prices won't plunge, but they will gradually soften," said Kim Realty CEO Vincent Ng.

The secondary housing market in certain areas is due for a price correction and prices are expected to come down to a more reasonable level.

"There is a gap between asking prices or what people are willing to pay and the valuers' valuations," he said.

Sellers have to eventually reduce their asking prices because their properties are now being valued lower as property valuers are unable to justify the prices without at least two or three transactions to back them up, Ng explained.

As banks will only give out loans according to valuations, buyers will have to fork out more in cash to bridge the gap between what is covered by the bank loan and the rest of the purchase price.

"Let's say the asking price for a house is RM900,000, but the valuers find that it is only worth RM800,000, the bank will only give out a 90% loan based on the RM800,000. There is a RM100,000 differential which is a lot of money," said Ng.

This would dampen sales and eventually some sellers will just withdraw while most will gradually lower prices, he added.

Metro Homes director See Kok Loong said newer properties in the secondary market usually receive more attention as they come with features such as 24-hour security.

See believes such landed homes in the subsale market will continue to do well.

"Buyers may opt for these properties because they are already built, with no 'history' and offer features unavailable in older homes. These homes are also usually located closer to the city centre compared with current launches that are further away. Besides, with limited new launches, buyers may turn to the subsale market, giving it a boost," he said.

"Prices and yields of older properties may drop (due to incoming supply) but there are other factors to consider. The Klang Valley is a strange market as there is always demand due to migration. Demand might lag behind supply by six months to a year, but it will always be there," See added.

However, Malaysia Institute of Real Estate Agents president Nixon Paul said although most prospective purchasers have adopted a wait and see approach in anticipation of selling prices going down, "property prices coming off are highly unlikely".

There will, however, be less demand for certain types of property such as condominiums, office spaces, retail spaces and shops in non-prime locations, bungalow lots in outlying areas and high-end bungalows in prime locations.

Paul said the subsale market will continue to be active in selected areas and selected property types. For instance, bungalows in Petaling Jaya with prices ranging from RM1.5 million to RM2.5 million, and shopoffices in densely-populated areas such as Cheras and Puchong will still see active sales.

"However, if prices of property in an area keep escalating to levels where the returns on investment fall below 4% annually, then we can anticipate investors and end users to shy away from these locations," he pointed out.

As for new launches, the agents expect a slowdown in the first half of the year as Bank Negara Malaysia's stricter rules on bank loans kick in and cautious sentiment is expected to prevail due to the uncertain global economy.

According to See, this year will be less exciting as the local market has come off a good three-year run.

"The big developers are still very healthy financially and they still have a lot of unbilled sales whereby they may delay launches if the market is less attractive and hold back new supply. With that, prices will be stable," he said.

However, he said the pent-up demand built over these few months may push up the market in 4Q.

Ng said although sales may drop slightly, the market will still be sustainable.

Paul pointed out that "sales will be sensitive to price, location and property type".

High-end and luxury-styled properties will see slower sales due to an oversupply situation in the Klang Valley, he added.

"Launches in the outlying areas such as Rawang and Kajang have done reasonably well due to the fact that these developments are affordable. Most terraced houses, semi-detached bungalows and bungalows with prices ranging from RM350,000 to RM800,000 have enjoyed brisk sales," he noted. - The Edge Property

Foreign direct investments hit RM33bil, surpassing pre-crisis level

PETALING JAYA: Despite prevailing global economic uncertainties, Malaysia's total foreign direct investment (FDI) inflows sprung a surprise and climbed to RM32.9bil last year, eclipsing the pre-crisis level of RM29.1bil achieved in 2007.

International Trade and Industry Minister Datuk Seri Mustapa Mohamedsaid the manufacturing sector accounted for the largest share of FDI inflows, comprising 50.1%, followed by the services sector with 27.3%, and mining and quarrying at 22.2%.

Brazil's Vale Group, the world's second-largest mining company, Agilent Technologies Inc and Infineon Technologies are among the foreign companies that expanded their operations in Malaysia last year.

Mustapa: Manufacturing sector accounted for the largest share of FDI inflows last year.

About 72% of FDI came from Asian countries, with Japan topping the list with RM10.1bil, followed by South Korea at RM5.1bil and Singapore RM2.47bil, while US contributed RM2.5bil, and Saudi Arabia RM2.17bil.

With the intensified efforts to attract investments, he hoped the country could achieve similar numbers this year.

Data released by the Malaysian Industrial Development Authority (MIDA) showed total investments approved in the manufacturing, services and primary sectors leaping by 40.7% to RM148.6bil on the back of 4,964 projects, compared with RM105.6bil (4,368 projects) in 2010.

Mustapa also said the domestic investments in 2011 continued to dominate the approved investments, accounting for 55.4% or RM82.3bil of the total approved investments, while foreign investments totalled RM66.3bil.

The manufacturing sector accumulated a total of 846 projects valued at RM56.1bil, an increase of 18.8% from RM47.2bil recorded in 2010, while the services sector recorded investments totalling RM64.4bil, surging by 75.5% from RM36.7bil previously.

Sarawak attracted the most approved investments at RM14.35bil, followed by Penang with RM14.04bil and Sabah at RM13.68bil.

Meanwhile, he said the country had surpassed targets for realised private investments by achieving RM94bil in realised investments in 2011, exceeding the RM83bil target set previously. He said he hoped the country could achieve the target of RM115bil in annual average realised private investments set under the 10th Malaysia Plan.

Bank Islam chief economist Azrul Azwar Ahmad Tajudin said it was a good thing to see a revival in private investments with the country surpassing targets set.

“However, the private investment share to gross domestic product (GDP) ratio is still at low levels despite the revival of private invesments,” he said.

He said before the Asian financial crisis, share of private investment to GDP took between 20% to 30%, and just before the crisis hit, it was at a peak of 35%, however currently it was hovering at about 11% only.

“Although the data presented is very clear, I would like to see data that shows FDI inflows by state,” he said.

RAM Holdings Group chief economist Dr Yeah Kim Leng also echoed the same sentiments and said the fresh data should help boost investors' sentiments given that FDI inflows were still present despite the perceived economic slowdown.

“This points to Malaysia's ability to attract foreign investments, however we still have to see in relation to the overall FDI inflows of other countries, and compare the share with them,” he said. - The Star

S’pore house prices to drop in next 6 months

SINGAPORE: PropertyGuru, Singapore’s leading property site, revealed its fourth quarter 2011 survey results on the property market sentiment in Singapore.

The survey indicates that home buyers and investors expect the new government measures to lower the cost of property, compared to third quarter 2011.

Largely due to the impact of ABSD (Additional Buyer’s Stamp Duty), 52% believe that property prices will decrease in the next six months.

The government has imposed an ABSD for private property of between 3% and 10% for Singaporeans, Permanent Residents and foreigners to moderate investment demand for private residential property and promote a more stable and sustainable market since Dec 8, 2011.

Rentals were also expected to fall in the same period as a reaction to the availability of future supply. — Bernama

Market makeover

ONE of the oldest markets in Penang — the Chowrasta Market — will be transformed into an iconic landmark in the state under a proposed major facelift project costing up to RM12mil.

Well-known for its stores selling second-hand books, preserved fruits and other titbits, the run-down three-storey building is set to undergo a major makeover since it was last upgraded in 1961.

Arkitek LLA Sdn Bhd director Ong Jin Cheng said the market would sport a refreshing new look under the project which is expected to cost between RM10mil and RM12mil.

Ong: Creepers would be grown along the side of the walls

The firm has been engaged by the Penang Municipal Council (MPPP) as the project’s architect.

The original Chowrasta Market was built in 1890 by the George Town Municipal Council.

The market faces Penang Road and is flanked by Lebuh Tamil, Jalan Chowrasta and Jalan Kuala Kangsar.

Ong said there were plans for an urban farm on the rooftop where hydroponic plants could be grown.

In the heart of George Town: File photos of the Chowrasta Market viewed from the back (above) and the front facing Penang Road (below)

“We have proposed that an escalator be built for easier access to the upper levels.

“The first floor will also be equipped with amenities for the public,” he said at a press conference in Komtar yesterday.

He said creepers would be grown along the side of the walls of the multi-storey car park at the back portion of the building under the proposed new look.

MPPP secretary Ang Aing Thye said the project was still at the designing stage and the council was getting more feedback from the public.

Chief Minister Lim Guan Eng, who was present, said the upgrading of the market would be helmed by heritage architect Laurence Loh from the same firm.

“The traders can continue to operate their business there in a cleaner, greener, safer and healthy environment,” he said.

Lim added that the contractor for the project would be chosen through an open tender.

When contacted, Komtar assemblyman Ng Wei Aik said the project design was almost ready.

“Now we need to know the actual cost for each element of the project,” he said adding that the upgrading works were expected to begin within the next few months.

It was reported in December last year that a multi-storey car park and travelators were among the proposals to rejuvenate the market.

It was proposed that one third of the back portion of the market be demolished to build a five-storey car park with 153 parking bays. - The Star