Monday, April 16, 2012

Offers of cheap homes


KUALA LUMPUR: Beginning today, about 7,000 public housing tenants in the federal capital will receive offer letters under the People's Housing Programme of the National Economic Action Council and Dewan Bandaraya Kuala Lumpur Public Housing.
Federal Territories and Urban Well-being Minister Datuk Raja Nong Chik Raja Zainal Abidin said the offer letters would be sent by the DBKL Housing Department to their homes.
He said those who received offer letters would be given a month to reply if they took up the offer to buy the houses as the purchasing process would take between three and six months.
“We will not force them to accept the offer letter,” he told reporters after opening the Federal Territory 2011 Excellent Students Awards here yesterday.
The financing scheme was announced by Prime Minister Datuk Seri Najib Tun Razak on Jan 28 to assist the lower-income group currently renting units of People Public Housing and DBKL public housing to obtain loans to buy the units they are already residing in.
According to Raja Nong Chik, the 7,000 involved were the first group of tenants under the first phase of the loan from the Employees Provident Fund totalling RM300mil.
Earlier, he presented the Federal Territory Caring Scheme payment of RM2,500 each to the first 20 recipients.
At the ceremony, he also presented certificates of appreciation and cash to 320 excellent students of Ujian Pencapaian Sekolah Rendah (UPSR), Penilaian Menengah Rendah (PMR), Sijil Pelajaran Malaysia (SPM) and Sijil Tinggi Persekolahan Malaysia (STPM) in Kuala Lumpur.
Meanwhile, Federal Territory Foundation executive director Datuk Mohd Idris Mohd Isa said all the students were selected by the Federal Territory Education Depart-ment, community leaders and schools.
He said for Labuan Federal Territory, 54 excellent students in PMR and SPM would receive similar incentives today.
He said about RM600,000 had been allocated for the programme this year. - Bernama

Sunday, April 15, 2012

Bungalow at Minden Height - Try to Beat It!




* Best with its location
* Near all amenities such as schools, shopping malls, restaurants, hypermarkets, banks, wet markets and etc.
* Near Penang Bridge & Tun Dr Lim Chong Eu Expressway
* Quiet neighbourhood
* One of the most sought after property in Penang





Rare Opportunity! Going, Going, Gone! 
* Land Area: Appx. 6,800 square feet
* Move in condition
* Tastefully renovated
* Plaster ceilings
* Fully air conditioner
* Big garden & big car pouch
* 6 big rooms + 1 maid room (5 rooms with attached bathroom)
* 6 bathrooms
* Priced to sell quickly at RM3mil only

What are you waiting for? View to appreciate!





Saturday, April 14, 2012

Residential overhang units fall 15%

KUALA LUMPUR: The volume of residential overhang units in the country declined 15.2% to 19,607 units with a total value of RM4.92 billion in 2011 in tandem with the better performance of the property market.

According to the Property Market Report 2011 by the National Property Information Centre (Napic), the volume of residential overhang was 23,133 units in 2010.

Overhang units are defined as completed units that have obtained certificates of fitness for occupation (CFO) but have not been sold for more than nine months after the official launch for sale.

Putrajaya remained overhang-free while nine states posted lower residential overhang numbers in 2011 against 2010. Among them were Penang (2010: 311, 2011: 332), Perak (2010: 1,091, 2011: 1,263) and Kedah (2010: 1,270, 2011: 1,316). Kuala Lumpur however has the highest number of overhang residential units and saw a rise of 19% to 2,871 units in 2011 from 2,400 units in 2010.

By price range, 55.7% of the overhang units were priced below RM150,000. Condominium and apartment units were dominant in the overhang category making up 26.1% or 5,118 units of the total.

The report also revealed that construction activity was positive in the residential sector. New starts rose by 36.6% to 115,448 units compared with 84,486 units in 2010.

Identically, supply of new planned projects grew 44.4% to 117,291 units compared with 81,238 units in 2010 while completed units in 2011 posted a softening with 64,538 units from 99,866 units in 2010.

In terms of housing completions Selangor was the most active state with housing completions at 23.8% of the national total or 15,377 units in 2011 while starts and new planned supply stood at 24,612 units and 23,899 units.

States that posted a higher number of completions than the previous year were Perak and Johor which recorded 8,117 units and 7,995 units respectively.

As for construction starts, Johor and Penang were the leading states with Johor’s construction starts increasing by 16.8% to 19,369 units while Penang grew 8.9% to 10,274 units respectively.

At the end of 2011, there were 4.51 million existing residential units with another 584,546 units of incoming supply. Incoming supply is defined as units where construction works are in progress including construction starts and where the CF/TCF have not been issued during the review period.

Meanwhile, overhang for shop units showed slight improvement to 5,482 units (valued at RM1.59 billion) in 2011 from 5,550 units (valued at RM1.67 billion) in 2010. Johor recorded the highest number of unsold shop units making up 48.4% or 2,652 units of the total overhang number of shops in the country.
Predominantly, 2 and 2 ½ -storey shops accounted for 30.8% of the total.

The industrial segment also saw an improvement in overhang volumes. In 4Q11, there were 625 overhang units worth RM317.43 million compared with 655 units worth RM353.38 million in 2010, translating to a decline of 4.6% and 10.2% in volume and value respectively.

Selangor had the highest overhang figures in this segment making up 29.8% or 186 units valued at RM101.78 million of the total industrial overhang units. - The Edge Property

New attraction on hill


WORK on a 200m-long Penang Hill zigzag canopy walk and 1.6km-long educational nature trail will commence early next month.
Access to forest: An artist's impression of the canopy walk which will be constructed in a zigzag fashion.
The eco-tourism project, estimated to cost over RM3mil, was awarded to local engineering firm Creative Quest Sdn Bhd (CQSB) after the open tender closed on Nov 30, 2010.
CQSB director Harry Cockrell said a project team had been assembled and was waiting to start work.
Chief Minister Lim Guan Eng said work on the project would start once the agreement was inked between the state government and CQSB in “a week or two”.
The project will be undertaken in two phases and is expected to be completed in 10 months.
Phase one consists of renovation of buildings and the construction of the nature trail and canopy walk.
The second phase is to complete the nature trail and build the ‘heli-pad plateau’ rest area, giant swings and remaining rest areas.
Eco-tourism consultant Frederick Walker said the project would leverage on the hill’s heritage and the use of green materials for construction.
The ‘heli-pad plateau’ is located halfway along the nature trail and will be designed with an English-style botanic garden concept. There will be creeks and water features with benches and sitting areas.
“Water will be re-circulated from the hill stream,” he told a press conference yesterday.
Other features include solar-powered lighting and interactive informative signage.
He said the existing canopy walk located along Summit Road would be dismantled with the component parts reused.
He said flora indigenous to the hill would be replanted where soil erosion had occurred.
“There is already an existing path so there won’t be any massive clearing or tree cutting for the nature trail,” he said.
Cockrell said ticket prices had yet to be determined but assured the public that it would be affordable especially for locals.
Lim said out of five companies which attended the site briefing, only CQSB submitted a development proposal.
“Cockrell is a long-term resident on the hill and we are confident that CQSB will deliver an eco-tourism attraction that is of international standards,” he said, adding that the project’s concession period was 30 years.
Penang Hill Corporation is the agent for the state government in the project to be fully financed by the firm.
The canopy walk was closed in 2006 due to a termite problem but reopened in July 2007 after repair work.
It was closed after being partially destroyed by falling trees during a thunderstorm in September 2008. - The Star

Transport master plan up for public viewing


THE public can view the Penang Transport Master Plan draft copy which will be displayed at various places in the state from Monday until the end of the month.
State Local Government and Traffic Ma­­nagement Committee chairman Chow Kon Yeow urged the public to give their input by completing a questionnaire during the public display.
He said the draft copies would be displayed at Komtar level three concourse and Seberang Prai Municipal Council headquarters in Bandar Perda from Monday until April 20 and from April 23 until April 27 from 9am until 5pm.
“The public can also view the draft at malls including Sunshine Farlim in Bandar Baru Air Itam and Sunway Carnival Mall on April 21 and Gurney Plaza and Jusco Perda Mall on April 28 from 10am to 5pm.
“Penangites can also give their feedback via the Penang Transport Council website www.ptc.penang.gov.my before the end of this month,” he said at a press conference at Level 52 Komtar yesterday.
There will also be two workshops open to the public on May 3 and May 5 at Caring Society Complex.
Chow said the state government, when appointing consultants through tenders, had stipulated that public consultation was one of the terms of references and the public views must be taken into consideration in the final report.
“The consultants of the Penang Transport Master Plan have applied for six weeks’ extension to review the public engagement,” he said.
On Tuesday, The Star had quoted Halcrow Consultants director Dave Turner as saying that the master plan consisted of several proposals to ease traffic congestion in the state.
They include the Highway Improvement-Based Approach and the Balanced Approach Vision.
Both approaches consist of the Core Package — improvement on high ways, public transport and implementation of policy intervention.
The Highway Improvement-Based Approach that costs RM12.5bil encompasses the Core Package with the Third Crossing, Cross City Link from Jelutong to Air Itam bypass, North Coast Pair Road, Air Itam to Relau Pair Road and the North-South Expressway Link.
The Balanced Approach Vision that does not require the third link consists of the Core Package along with the Penang Outer Ring Bypass, the North-South Expressway Link, trams, ferries, commuter rail and George Town/Butterworth Access chargers.
Consumers Association of Penang president S.M. Mohamed Idris had complained about the lack of public consultation by the state government on several mega projects in the pipeline.
He was referring to the proposed construction of a 6.5km Gurney Drive-Bagan Ajam undersea tunnel, a 12km road connecting Tanjung Bungah and Teluk Bahang, a 4.2km Gurney Drive-Tun Dr Lim Chong Eu Highway bypass and a 4.6km Tun Dr Lim Chong Eu Highway-Bandar Baru Air Itam bypass. - The Star

Queen of crafts


QUITE a number of guesthouses and cafes have mushroomed in the heritage enclave of Penang, but only a handful preserve the original features of the pre-war houses.
The interior should not be altered where preservation is concerned, but restoration is often required especially when the buildings, more than 200 years old, are falling apart.
Over at Queen Street in George Town, an unassuming sign of “Chai Diam Ma” is displayed outside a pre-war building that houses a cafe and a shop for handmade crafts.
From passion: Lee started the business with less than RM5,000 in capital.
The building is well preserved although it is almost 200 years old, thanks to Queen Lee.
Lee, 35, was a kindergarten teacher and part-time tuition teacher before venturing into this business. She initially carried on with the stable work of teaching but the thought of having her own business never left her mind.
“The time spent with the kids was simple and joyful, but I felt I was only doing it for the bosses, regardless of how good and hardworking I was.
“I didn’t want to continue doing that, so I left the kindergarten and spent a year concentrating on making crafts. I met a few fellow hobbyists from Kuala Lumpur and sold my products in Kuala Lumpur occassionally,” she said.
Rustic pieces: Almost every piece of furniture at Chai Diam Ma was salvaged from the streets, or given to Lee by her friends.
In Malaysia, the market for handmade crafts is limited mainly because there is a lack of supporters of arts and crafts.
People also generally think that handmade items are more expensive, so artists can hardly make a living from it.
But Lee did not give up. She believed that she would eventually carve a path for herself if she knew how to respond to the circumstances.
She constantly thought of a way to strike a balance between earning a living and pursuing her interests.
Just as she was seeking an answer, she came across a “For Rent” sign on a intermediate-lot pre-war house on Queen Street.
It was love at first sight. She immediately called the real estate agent and made an appointment to visit the house the very next day.
“I was thrilled when the agent said the rent was around RM1,000, because I could afford it with my savings.
“The deposit, rent, and the costs for a customised bar and some basic kitchen utensils came up to less than RM5,000,” she revealed.
Because she did not have much money left, “renovations” were not included in her checklist. Almost every piece of furniture in the building was salvaged from the streets, or given by her friends.
“I used some of them as dining tables for the guests, while the rest as racks to display the handmade crafts.
“My first fridge was actually given by a friend, and I just replaced it with a new unit recently,” she said.
It has been a year since she opened the cafe, but she still operated the business in a prudent manner.
When the cafe is closed for four hours in the afternoon, she gives tuition to primary school pupils to generate more income to make her other dreams come true. Travelling is one of them.
There are probably very few people who still keep a part-time job after opening their own business, but she is not complaining. In fact, she finds her busy life fulfilling. Lee told Red Tomato that she spends weekday afternoons rushing from one student’s house to another.
“I will not be an employee of others anymore. Although my current life is tiring and busy, I am doing all this for myself.
“I have always wanted to have my own business. Coming from a fine arts background, I have a deep affection for pre-war house. All my dreams are coming true one by one.”
However, her biggest worry now is rent, which has skyrocketed over the past 12 months.
People in the northern states often refer to grocery store as chai diam ma.
As the name suggests, Lee’s cafe offers assorted creative and interesting handmade crafts such as dolls, accessories and T-shirts, in addition to coffee and simple meals.
Lee revealed that most of the handmade items were crafted by fellow hobbyists because she is too occupied with the business.
“It’s very difficult to make a living out of selling handicrafts. I do a small part to help them by offering a small space to sell their products. I don’t charge rent, but get a commission when the items are sold,” she said.
Lee said most people patronise Chai Diam Ma to have a peek of the centuries-old pre-war house. Coffee only comes second, nevermind the handmade craft items.
Therefore, it is her earnest wish that people pay as much attention to the crafts at Chai Diam Ma as much as they treasure the pre-war architecture. There are a lot of local talented artists but very few people appreciate their work.
“Handmade crafts are different from handicrafts. Not only are the quantities limited, they are lively and unique. It takes the artists long hours and a lot of efforts to make them, while handicrafts can be mass produced.
“Compared to Kuala Lumpur, the market for these crafts in Penang is still small. I hope my small shop can contribute a small effort to help the artists,” she said.
Chai Diam Ma is located at 15, Queen Street, Georgetown, Penang.
*This feature is translated from an article in Red Tomato. Get your copy of Red Tomato, the country’s first free Chinese weekly, every Friday at most RapidKL LRT and Monorail stations, as well as selected convenience stores and shopping centres nationwide.

Stopping foreign property purchases


RECENT reports of the Government considering doubling the minimum price of houses that foreigners can buy to RM1mil is positive for it is a step in the right direction. But you probably need something more drastic than that.
It's a strange thing, property. As much as it can keep the economy going and get prosperity levels up and up, it can send them all crashing down at other times. As much as property developers and banks contribute to societal well-being, they can just as well destroy it.
It's a basic human necessity when you call it shelter and every society aspires for a minimum standard of comfort. But it is more than shelter it's a lifestyle, it's luxury, and it caters to the rich, the poor, the middle class and the working class.
It's a workplace, it's a production facility, it's a place to go for entertainment, to shop, to stay for short periods of time and it's big business. So, when do you allow foreigners to own a property or not own one?
Hard facts: The notion that allowing foreigners to buy high-end properties will not affect other properties is false. When Malaysians are squeezed out from that sector by rising prices, they will move down the line and house prices will be affected all the way down.
That's not an easy question to answer for you have to think about prices, crowding out, demand and supply, dreaded bubbles and the like.
The trick may be to allow foreign purchases in some areas and not in others.
If property is purely for commercial purposes when it is used for offices, factories, shopping complexes, hotels and so on, by all means let those be open to foreign purchases, not to encourage speculation, but to facilitate business.
But if it is for residential purposes, it is best to keep the foreigners out for two reasons one, our currency is probably still undervalued which will enable them to buy residential property cheaply from their point of view, driving up the prices of residential property to all Malaysians.
Two, this along with schemes such as 5/95, which allows payment of 5% of the property price and nothing more for two years, simply encourages speculation in property, encouraging a boom-bust scenario in property which we can ill afford.
One will do well to remember the United States' sub-prime crisis when, incredibly, purchasers could get loans of more than the value of the house. And then incredibly too, many such mortgages were pooled together and given investment grade rating.
That basically enabled loan originators to simply pass on their loans to others in the United States and throughout the world who were blissfully unaware of the risks they were really taking because they believed the rating agencies who did not know their work.
When the crash came, as it inevitably does under such circumstances, the US economy shuddered to a halt and threatened to go under and take the whole world economy along with it. It took a lot of printing of money to stop that, something only the US could do because other countries lent it money in US dollars!
But, coming back to Malaysia, the notion that allowing foreigners to buy high-end properties will not affect other properties is false. When Malaysians are squeezed out from that sector by rising prices, they will move down the line and therefore house prices will be affected all the way down.
Ask Singaporeans they know that well. Because there is such a lot of foreign demand for houses from foreigners, most Singaporeans are stuck to their Housing Development Board flats with no chance of moving higher up in more ways than one.
In fact, there is a school of thought that this allowed the opposition to make inroads in the last Singapore elections following which Mentor Minister Lee Kuan Yew left the Cabinet and his son, the Prime Minister, made an apology to the Singaporean public.
There is only so much land and therefore so many houses that can be built. Houses should be reserved for those who stay in this country residents. Period. That way, developers can meet genuine demand from those who want to stay here, not those who want to buy property to make a quick buck.
Developers are the wrong people to ask whether foreign buying of houses should be permitted. They will say yes, because they want greater demand for their products. But ask them how they are doing now when they marketed their high-end products in areas in and around Mont Kiara and the twin towers of KL, first to foreigners and only then to locals.
Some of them are finding out that it is better to cater to genuine demand people who want to stay there rather than those who speculate on house prices. If speculators outnumber those who want to stay there, then you are going to have a problem and a property bubble that will burst.
Even if you don't allow the foreigners in, this can happen. So why let them in the first place when you deprive residents from decent places to stay.
Yes, property prices appreciate in the longer term but let them appreciate in terms of local conditions, according to local income levels. Then, the vast majority of Malaysians who don't have a house can still afford to purchase them at a reasonable price.
The lack of lights in many high-end condominiums as dusk settles on Kuala Lumpur should be a stark, dark reminder to the Government that speculative foreign purchases of residential property do nothing for Malaysia, raise property prices for Malaysia and create eerie places. - The Star
Independent consultant and writer P Gunasegaram continues to hope that the authorities will see the light of day sooner rather than later.

Should we park and ride?


RECENTLY, one of my long-serving staff decided to give up her job. In most cases, people leave a job for greener pastures. Her case was different.
She lives at one end of Kuala Lumpur (KL) and works at the other end of KL. It would be reasonable to believe that travelling within KL should be a breeze. Yet, on average she spends up to three hours each day on the road to travel to and from work. While she loves working with the company, the tiring years of spending many hours on the road has worn her down and her family time has been greatly shortened.
To many, the announcement of the Klang Valley My Rapid Transit (KVMRT) project is like a timely rain to ease the drought. The development of public transportation dictates the ease of mobility and connectivity in a city, which is a key factor for KL to become a world-class city, and for Klang Valley to elevate to the next level.
Attractive line
Being an architect and a developer, creating quality lifestyle has always been my keen interest, and I do look forward to the development of KVMRT. The first Sungai Buloh-Kajang line that has 51km in total length is expected to generate great benefits along the route once it is completed.
It will attract more people to move into Klang Valley, achieving the mission of growing the Greater KL's population, and eventually spurring the development of the country.
As the MRT project shoulders the important role of changing lifestyles of a huge population, it is important to be prudent in every single detail right from the planning stage to ensure the desirable outcomes are achieved, to the benefit of all, including the owner and operator of the MRT, as well as its end users.
Serving its purpose
Based on the plan, the Sungai Buloh-Kajang line is targeted to serve a catchment of 1.2 million people with 31 stations in total. Thirteen of these stations are expected to have the park-and-ride facilities. How viable are these facilities? Will they do more harm than good in solving the issue of traffic congestion, scarcity of land for housing and preservation of environment?
Before we delve further, let's ask ourselves this question: “How far are we prepared to walk under Malaysia's tropical weather?”
Answers may vary but the average acceptable distance will be 300m to 500m. If this is the comfortable distance for people to walk to the MRT stations, how many cars can we accommodate within the neighbourhood of this radius? How big a space should be allocated as parking bays next to the stations?
If one acre is allocated, it can only accommodate 150 cars, which is too few to satisfy the demand.
If the car park area is increased to three acres for 450 cars, it will be a huge waste of valuable space as the land next to the MRT station is a prime property. The construction and maintenance costs of these car parks will result in high parking fees for the users. Unlike shopping complexes which can charge reasonable parking fees to attract more shoppers and in turn, subsidise its car parks' maintenance cost.
In some developed countries, the same piece of land would be used to develop high rise dwellings or commercial buildings.
For example, instead of constructing a car park, the same three acres can be utilised to build 450 units of apartments of 1,200 sq ft each.
The idea of constructing 1,200 sq ft apartments will also attract more middle income group who can afford to own cars to use MRT instead. This will generate more volume to the MRT stations, increasing the economy of scale and thus lowering the price of ticket.
These stations will eventually become centres of attraction for commercial activities, creating more business and employment opportunities for the areas.
In addition to constructing high-rise buildings nearby the stations, feeder buses can be used to increase the accessibility to the MRT station. The MRT operator must ensure the feeder buses are frequent and timely in delivering reliable services to MRT commuters. Another option is to build covered walkways to encourage more people to use the MRT facility.
Riding quality
In order to attract people to stay near the MRT stations, noise and pollution from the MRT system should be reduced. One of the most effective ways of doing so is to go underground.
We should have more underground stations to ensure the quality of living for those who stay around the stations. Such areas can later on be expanded to become commercial hubs, complementing the existing business activities on the ground, such as what have been practised in Singapore, Hong Kong and Taipei.
Going underground may be expensive. Nonetheless, one has to consider the economic and social impacts of MRT stations in the long run. If it is not viable to go underground, are there any other options that are worth considering? What about building an elevated tunnel enclosed with fiberglass (similar to our KLIA's Skytrain) to cut down noise pollution?
There are many possibilities that can be explored with the development of MRT system. With proper planning, MRT system can ease the traffic flow and enrich quality of life for the people living in Klang Valley. However, with park-and ride stations, the concern is, does it serve the purpose of easing traffic congestion within if MRT commuters still need to drive to MRT stations?
Datuk Alan Tong is the group chairman of Bukit Kiara Properties. He was the FIABCI world president in 2005-2006 and was named Property Man of The Year 2010 by FIABCI Malaysia.

Investing in foreign property seems harder now with changing rules and economic climate


WITH the permission from my friend, and with her thoughts on investing in London, this piece is about her considerations when buying into a unfamiliar foreign market.
For quite a while, she and her husband have been considering the option of buying a residential property in London. She attended seminars on properties and lettings, spoke to other potential investors and those who have already invested.
After a long deliberation with her spouse, they both decided to keep their money closer home.
It was not the 2012 Budget announced on March 22 by the Chancellor of Exchequer, equivalent to finance minister, and the slew of changes that govern foreigners buying British properties that made them change their minds. They had made up their mind to drop the idea before that.
They had other considerations. The first was the distance and they questioned the practicality of having to deal with long distance administration issues, be it ownership or tenancy. The second was the uncertainties that govern the world today. Uncertainties and instability exist all the time, but the last several years, the vagaries of the changing world seem to be coming fast and furious. Added to that were the changing rules and regulations by governments.
Foreign ownership, at one time welcomed, may cease because of national considerations. They also reasoned that at this point in their lives, if they did not sell the property, it would be left to their children.
This couple was not hoping to make lots of money with their overseas investment. Neither were they speculating. They just wanted to diversify while at the same time, preserve the value of what they have.
There are many who have invested abroad. And their reasons for doing so may be well justified. But there is something about changes in rules and regulations, at national level, that add to the current load of global economic, financial and political uncertainties that govern the world today.
“Just as there are changes in Malaysian government rules and regulations about what residential properties foreigners can buy, so are there changes in the United Kingdom,” she says.
She was referring to a report early this week that the Malaysian government was mulling over raising the minimum floor price of houses that foreigners were allowed to buy from the current RM500,000 to RM1mil. The move is to control the rise in property prices.
In the same way, other governments around the world too would make changes to suit their national agenda.
Last December, the Singapore government imposed a 10% additional buyer's stamp duty applicable to all foreign purchasers, bringing it to 13%. Foreigners were snapping up about 9,300 private homes last year making it a record one-third of total sales.
Early this month, Singapore government announced that it would end a programme that allowed wealthy individuals to gain permanent residence quicker by putting money in the island, after an influx of foreigners in recent years spurred property prices and fueled voter anger, Bloomberg reported.
Back in 2010, Australia tightened rules on foreign investment in real estate, and introduced penalties to enforce the changes, to ensure pressure was not placed on housing availability for local residents. Temporary residents required approval from the Foreign Investment Review Board to buy property, and had to sell them when leaving Australia.
About three weeks ago, the British government introduced a new Stamp Duty Land Tax (SDLT) rate of 7% for residential properties over £2mil, applicable from March 22 this year.
London-based property consultant Knight Frank in an initial note on the changes says there would be a new 15% SDLT application from March 21 this year for residential properties over £2mil purchased by “non-natural persons”, such as companies.
The British government is also consulting on the introduction of an annual charge on residential properties valued at £2mil owned by “non-natural persons” (that is, properties bought in the name of companies). The intention is to legislate this in the 2013 Finance Bill and if this goes through, this annual charge will commence April 2013.
A fourth issue is an extension of the capital gains tax to gains on the disposal of UK residential properties by non-residents, non-natural persons, such as companies, commencing from April 2013.
In other words, says Knight Frank, the British government was saying that if you bought expensive residential properties as individuals, rather than a company, you would pay 7% and not 15% SDLT, and avoid a future annual charge.
The rationale is to target rich individuals who buy in the name of a company. However, property consultants and lawyers say individuals may come using a company vehicle because they wanted to protect their privacy and not to avoid paying a hefty 40% inheritance tax.
Whatever it is, to avoid all that hassle, my friend has decided to just keep her money closer home. - The Star
Assistant news editor Thean Lee Cheng thinks the vagaries of today's global outlook, coupled with changing national rules and regulations, make any investment a colossal consideration.

Protecting local house buyers


INCREASING the floor price of residential property for foreign buyers from RM500,000 to RM1mil will be a positive development for the housing market, according to analysts and consultants.
Many quarters are in favour of the move to raise the floor price as it would protect the housing market for the masses.
They say the move is timely due to the continued uptrend in home prices which are forcing financiers to start providing “second-generation” type of home loans which extend the servicing of the debt to the purchasers' children.
Property consultancy Knight Frank's executive director Sarkunan Subramaniam says the increase in floor price for foreigners would be positive as it would benefit the local buyers as the foreigners have been pushing up house prices.
Out of reach: House prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang.
“I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil. However, there could be some slight impact on foreign purchasers in Johor who choose to stay in Johor Baru but work in Singapore,” Sarkunan tellsStarBizWeek.
Hong Leong Research's property analyst Sean Lim says that the move is “positive for the domestic buyers who have been frustrated by the rise property prices over the last two to three years”.
Lim says in a report that the impact on the overall property market will be minimal as “less than 5% of all transactions is by foreign buyers”.
Lim also states that the RM1mil floor price could be irrelevant as most foreign buyers are buying in the KL City Centre area and the Golden Triangle in Kuala Lumpur with valuations in excess of RM1,200 per sq ft.
Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.
“In the greater Klang Valley area, channel checks indicate that majority of foreigners are renting instead of buying houses,” Lim says.
Lim maintains his overweight rating on the property sector.
DTZ Debenham Tie Lung executive director Brian Koh says that the latest measure that is being considered by the Government will help protect the mass segment of residential properties from foreign speculation.
“A limit on foreigners which allow them to buy only houses that are priced above RM1mil would protect the mass market segment of residential properties and see less competition,” Koh says.
“There may be some impact on the foreign buyers of houses that are priced RM800,000 and above.
“But most foreigners normally buy properties above RM1mil so there will be limited impact on the property sector. These foreigners are from Hong Kong and Singapore,” Koh says.
CB Richard Ellis Malaysia's managing director Allan Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.
CIMB Research says in a research note that it is “not entirely surprised by the proposed ruling as house prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang”.
“We believe the impact on developers with significant foreign buyers such as Eastern & Oriental Bhd would be minimal. Only 2.4% of residential properties transacted in 2011 were priced above RM1mil and foreigners typically chose higher-end properties,” it adds.
Koh: ‘A limit on foreigners which allow them to buy only houses that are priced above RM1mil will protect the mass market segment of residential properties and see less competition.’
Should this higher floor price be approved, it would also mean protection for the mass market segment of property purchasers.
The Government intervention into the property market with the objective of eventually cooling down house prices to more realistic levels is also in line with the current trend by governments in Singapore, Indonesia and China.
Analysts say that the move shows how much property prices have spiralled locally and that the move is proactive amid growing fears of a property bubble.
An economist with RHB Research Institute says that sustained high property prices and news about financiers starting to offer second generation loans show the seriousness of the non-affordability issue.
“These financiers need to stretch the loans to the second generation which only indicate that houses are becoming unaffordable for a normal salaried person,” RHB Research said.
Sarkunan: ‘I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil.’
“From an economic point of view, if affordability issue continues to deteriorate it would not be a good feeling for the people. Moreover, these second generation loans may have legal implications as the financiers don't know the credit rating of the children of the current buyers,” the RHB spokesperson added.
A senior analyst with a foreign research house observes that property prices have sky-rocketed and reckons that the current prices are unrealistic.
“I think the Government should implement the measure immediately.
“There is no doubt that looking back, prices were more realistic in the past without people having to extend the loans to their children.
“The trend is for developers to offer small-sized units nowadays as the prices keep going up. The houses are becoming smaller and smaller because of the rising cost factor,” he adds.
According to statistics of the Valuation and Property Services Department, the number transactions for properties priced up to RM150,000 decreased year-on-year by an cumulative average of 30.6%. - The Star