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Actual sale of residential properties declining

PETALING JAYA: The residential property market may be cooling down in terms of actual sales due to credit-tightening measures by banks, according to real estate consultants and Bank Negara data.

Bank Negara's website showed loan approvals' percentage for residential properties in the country declined to 46.8% in the first half of this year from 50.1% during the same period in 2011.

The number of loans applied for purchases of residential properties increased by 2.9% year-on-year in the first half of this year to RM96.7bil.

However, the number of residential property loans approved during the six-month period declined to RM45.26bil from RM47bil in the same period in 2011.

It is also worth noting that the loan approval percentage for non-residential properties was stable at 52.3% in the first half of this year, compared with 52.4% during the same period in 2011.

The number of loans applied (RM50.35bil) and approved (RM26.35bil) for purchases of non-residential properties was also stable in the first half of this year.

CB Richard Ellis (Malaysia) Sdn Bhd executive director Paul Khong said if the housing loan approval rate continued to decline, it will affect residential property prices.

“In order to conclude transactions, residential property sellers may now need to realistically adjust their selling prices as many of the buyers cannot get their loan applications approved,” he said.

KGV International Property Consultants director Anthony Chua said although the demand for residential properties continued to be high, the credit-tightening measures by banks had resulted in the market “cooling somewhat”.

“We are still monitoring the situation. There is less transactional activity in the market this year for both new property launches and the secondary market compared with last year,” said Chua.

Property consultancy CB Richard Ellis (M) Sdn Bhd had, in its recent report on the Kuala Lumpur residential market for the second quarter of 2012, also noted that there was a significant decline in the loan approval percentage this year.

“The loan approval rate was as high as 60.5% during the first five months of 2008, and has declined steadily since,” said the report.

The CBRE report said that the lower rate of loan approvals this year could be attributed to the implementation of new lending guidelines by Bank Negara.

Effective this year, banks have started using net income instead of gross income to calculate the debt service ratio for loans.

“Anecdotal evidence from real estate agents suggests that transactional activity has also declined as a result.”

The property consultancy also pointed out that despite the lower loan approval rates, buyer interest in new property launches, typically of smaller housing units in secondary locations, during the second quarter remained strong with developers continuing to offer attractive incentives to the purchasers such as the developer interest bearing scheme (DIBS), early bird discounts, free built-in cabinets and free legal fees.

“We expect 2012 to be a period of stabilisation especially within the luxury residential market, with transactional activity depressed by uncertain economic conditions and the reduction in loan approval percentage, which remains well below 50%.”

The CBRE report also said speculative property purchases were expected to be reduced for the rest of this year, as a result of tighter lending conditions, uncertain economic outlook, and concerns about the outcome of the upcoming general election.

Meanwhile, another property consultant said the tighter lending conditions had taken a visible toll on the secondary residential property market.

“Newly-launched properties are selling well thanks to better financing access, especially with the DIBS offered by many property developers.”

The consultant said slower sales activities in the secondary residential property market had resulted in innovative offers from marketing agents.

“This includes transactions where buyers sign the sales and purchase agreement but take the bank loans only a year or twolater. In effect, the buyers lock in the unit price now (perhaps in anticipation of further increases in market prices) and defer payment until much later. This works just like an informal DIBS,” he said.

In a recent report, Kenanga Research also said based on its channel checks, the secondary market appeared to be very weak and prices of secondary and primary products have diverged further.

The research unit opined that buyers were more focussed on new launches due to financing and promotional schemes.

“From a bank's perspective, we think there is a preference to lend to the primary market as it means better asset quality whilst banks can get all-in' deals with developers (for example, end-financing to bridging to land financing) to ensure a more balanced systems loans growth.”

Kenanga Research also opined that as a result, property developers can continue to grab greater market share and chalk-up high sales, although it expected Malaysia's overall residential transaction value growth to be relatively unexciting at 5% year-on-year.

It was noted that despite the tighter lending criteria, Malaysia's total residential transaction values have remained stable in the first quarter of this year.

It said buying interest remained strong, due to residential property buyers hedging against inflation and the lack of alternative investments, but this will be reigned in by more prudent lending criteria and the banking system's fear of real-estate tightening measures such as higher real property gains tax. - The Star

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Time to impose stronger policies to weed out property speculation

WE have heard all the reasons for the increase in property prices. Land is getting expensive, building materials are costlier and interest rates are low and so on.

Now, Syarikat Perumahan Negara Bhd managing director Datuk Dr Kamarul Rashdan Salleh has said the buying of homes by non-Malaysians was pushing up the price of homes.

There is truth to that but we should not be putting the blame solely on foreigners for the hike in property prices.

Rich foreigners, like their Malaysian peers, will buy luxurious condominiums, sprawling bungalows and expansive semi-detach homes. Those with money will know that property prices in the hot urban areas have surged in recent years and over the long-term, they will stand to make a pretty decent capital return from their investment.

There had been stories of people buying multiple units of homes when they were launched.

Those at the back of the queue would just have to find a house somewhere else after being told the units on sale had all been sold. Urban migration means that this issue will get amplified in the years ahead.

All of this has led to frustration as the dream of owning a home is increasingly escaping most of the low and middle-income segments. Not helping matters is the crawling pace in the construction of affordable homes.

There are homes to be bought in places most of us now will be shaking our heads with disbelief if told that is where we have to live given the price of homes these days.

But why blame foreigners for pushing up home prices and forcing more Malaysians to live in the fringes of big cities when policies do nothing to stop that from happening? Do the number of expatriates and work permit holders mirror the purchases done by foreigners? Or are foreigners buying homes as an investment?

It comes as little surprise that foreigners and Malaysians share the same hurdles when buying a home. Yes, there is a floor price for houses foreigners can buy and the price of most new luxurious homes foreigners might want to buy are above that limit anyway.

If policy makers are serious about at least putting some brakes on foreign money flowing into homes in Malaysia, they should just see what other countries are doing. Singapore has a 10% additional stamp duty on foreigners buying homes and only allows a small number of foreigners to buy landed properties.

Doing that in Malaysia will have its repercussions though. Imagine what will happen to demand for the new upmarket homes being built in southern Johor, especially Iskandar Malaysia, where the focus is on building homes for Singaporeans and other foreigners.

An exemption can be granted for certain projects but on the whole, policies should be strengthened to weed out excessive speculation in home buying.

The real property gains tax should be punishing and maybe there should be a limit to the number of houses a person, Malaysian or foreigner, can buy at a new launch to just one.

Acting business editor (features) Jagdev Singh Sidhu wonders why people can't buy homes in established neighbourhoods instead of paying the same price for a new home so far away from the city centre.

发展商新关仔角加盖超级公寓单位 套现发展密度料多赚千万

槟城21日讯）承建引起争议的“槟州地下国际会展中心计划”（sPICE）发展公司初尝“甜头”，获槟岛市政局提供的额外发展密度已套现在新关仔角一项5亿令吉计的超级公寓发展项目上，发展商在计划下“加盖”上百个公寓单位，从计划中料额外赚取上千万令吉。

天 下没有白吃的午餐，知名产业发展商实达集团有限公司（SP Setia）为槟岛市政局打造槟州地下国际会展中心，而市政局作为回馈，为对方提供额外的1500个额外发展密度，而实达集团也已将其变现在新关仔角的V Residence公寓计划，成为该集团因承建地下国际会展中心下，首个受惠的高档房屋项目。

实达北马区（产业组）总经理邱德忠接受本报记者访问时指出，在新关仔角的V Residence计划原本发展密度为56个单位，唯公司已将其承建地下国际会展中心所享有的1500额外发展密度下的优惠套现在该计划下。

“我 们已将密度从56个增至166个，即增加了110单位，估计公司将从单位获利至少30万令吉”。他说，公司在承建地下国际会展中心耗资3亿令吉，若以市政 局提供的1500单位计，那公司须从每个单位获取至少20万令吉，而在V Residence以每单位获利30万令吉计，获利并非很高。- 光华

PKR leaders speak out against excessive development in Balik Pulau

BALIK PULAU: Two state PKR leaders have lent their voices to a growing chorus of people here objecting against excessive development in Balik Pulau.

Penang PKR vice-chairman Datuk Abdul Halim Hussein said development of luxurious houses in the green lung area of Balik Pulau should be stopped.

“The conversion of agriculture land to housing in Balik Pulau should also be stopped. I feel the development here is excessive.

“Whatever plans that have been approved, it should just stop now. We should look at how to cater to the low-income group by constructing low-cost and low medium-cost housing here,” said Abdul Halim, who is also the State Speaker, during his Hari Raya open house at the Balik Pulau Sports Complex yesterday.

Another state PKR leader, Balik Pulau MP Yusmadi Yusof, lauded the call, saying that Balik Pulau development must take the environment into consideration.

“Development must be environmentally-friendly in which we must preserve our living heritage and the rustic lifestyle of the people here — for example, the Malay villages, the Chinese fishing settlements as well as the mangroves and hills.

“The real challenge is to introduce a relevant urban planning model for Balik Pulau,” he said.

Tanjung Bungah assemblyman Teh Yee Cheu, who is from DAP, had previously spoken out against hillslope development, especially the proposed 49-storey “super-condo” in Batu Ferringhi.

Many Barisan Nasional leaders had also demanded that the state review its development policies, particularly those related to hillslope in view of the dangers to the environment. - The Star

SPNB boss: Foreign buyers pushing up house prices

IPOH: More foreigners are investing in property in the country and this is pushing up the price of houses, making it unaffordable to the average Malaysian.

Syarikat Perumahan Negara Bhd (SPNB) managing director Datuk Dr Kamarul Rashdan Salleh said foreigners had purchasing power and were able to fork out RM500,000 to buy a property, causing developers to mark up prices.

“This creates a kind of false alarm and impression that there is demand for these houses. The middle-income group, especially young adults who need houses to start a family, is facing problems because of this,” he told reporters at his Hari Raya open house here yesterday.

Dr Kamarul noted that many foreigners had invested in property in the Klang Valley, Johor and Penang, resulting in escalating prices.

“The current trend also shows that foreigners are starting to buy property in Malacca and Negri Sembilan.

“However, there should be a balance between offering such high-end property and houses that are affordable to the people,” he stressed.

On the idea of setting a higher minimum price for foreigners, Dr Kamarul said this would be unfair.

“It could also upset the market, and make them lose confidence in the country,” he said.

Dr Kamarul said the Federal, state and local governments should work together to build quality and inexpensive homes, while controlling property prices.

“They can also consider re-developing idle land or increasing the number of areas for building affordable homes.

“They can do it as a joint venture or with SPNB or under Projek Perumahan Rakyat 1Malaysia which are more social-oriented,” he said. - The Star

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