Sunday, October 28, 2012
Realtors rubbish CM’s claim of decreasing house cost
PETALING JAYA: Real estate agents are shocked over Penang ChiefMinister Lim Guan Eng's claim that the price of a detached residential unit in Penang had decreased to RM415,000.
Malaysia Institute of Estate Agents (MIEA) Penang chairman Danny Ooisaid the figure quoted by Lim was far below the actual price of detached property on the island.
“It is surprisingly far below than the current price on the market, which is about RM2mil on average,” he said, adding that it was possible to get such prices on the mainland but not on the island.
He said this in response to Lim's claim that the price of a detached unit had fallen from RM469,000 to RM415,0000.
Lim had quoted the figures when denying reports in The Star that the property price of condominiums or apartments had increased by as high as 499%, flats by 339%), low-cost flats (157%) and detached units (103%) within a year.
The Star had reported that property prices shot up three-fold in Penang because of an increase in surcharges imposed by the state government.
Former Penang Municipal Council's Town Planning Department actingdirector Khoo Boo Soon said the additional cost imposed on developers were eventually passed on to buyers, hence the drastic increase in property prices.
A real estate agent, who only wanted to be known as Chong, said even a semi-detached unit was priced at over RM900,000.
“Even the cheapest single-storey terrace unit in Bayan Baru is above RM450,000. And that is leasehold property,” said Chong.
Another agent, who wanted to be known only as John, also said it was impossible to get detached units on the island at the price quoted by Lim.
“We don't know where Lim got the figures from. On the ground, we cannot find detached units on the island at that price,” he said.
Another agent, who declined to be named, agreed that the price on Penang island had skyrocketed.
“The price of property on the island is crazily high. People have been talking about a burst in the property bubble for years but it never materialised.
“People continue to snap up properties although the price is steep as it keeps going up within months.” - The Star
Saturday, October 27, 2012
Let the house buyers beware!
To not educate yourself and learn from the mistakes of others only sets you up to be at best, disappointed and at worst, being house poor'
FOR many people, the purchase of a home is the most important financial decision of their lives. Therefore, it makes sense to approach the decision carefully.
The purchase of a home is unlike any other consumer product as it covers a lot of ground including legal, financial, technical and emotional considerations. To not educate yourself and learn from the mistakes of others only sets you up to be at best, disappointed and at worst, being “house poor”.
Caveat emptor! Let the buyer beware! The idea is that buyers take responsibility for the condition of the items they purchase, and should examine them before purchase. How true is this for the property buyers? It works well for buyers of completed units but not if you are buying an abandoned house to call it a home.
What happens if you have paid for your house and discover defects later which cost thousands of ringgit to repair? This would not have happened if you had used the services of a building inspector. His duty and responsibility is to give you a report on the condition of the house, and to check for permitted renovations, against shoddy renovations, before you buy.
The report would have given you room for negotiation with the seller too.
Most people are under the mistaken belief that the local council issuing the Certificate of Fitness for Occupation (CFO) will discover problems such as defects and shoddy workmanship when they issue it. They do not. Their job is strictly to ensure that there are no by-law violations or safety issues. They are not quality assurance officers and nor do they have that authority.
Furthermore, there could be problems with the house that are not necessarily related to by-law violations, yet have serious consequences for the new owner.
We believe that it takes three types of know-how to make a wise decision on a purchase: financial know-how; legal know-how and technical/engineering know-how.
In the first two, consultations with financial or legal experts are not a problem as those professionals, namely “buildings/home inspectors” are already in the market.
However, when it comes to the technical part, there is a lot of tension from the layman's point of view and the vendor's as getting a professional home inspection report has yet to be practiced by house buyers as one important process of the purchase. These building/home inspectors are themselves professionals like architects, engineers and surveyors.
The layman is only guided by his untrained eyes (to inspect), naivety assumptions. When it comes to quality and workmanship, new homeowners' problems are compounded by the fact that there is no degree of benchmark on buildings and its components for the layman to rely on.
In countries like the United States and Canada, home inspections are a standard practice in the purchasing process. Home inspectors conduct inspections of newly built or previously owned homes. Prospective home buyers hire home inspectors to inspect and report the condition of a home's systems, components, and structure.
They typically are hired either immediately prior to a purchase offer on a home, or as a contingency to a sales contract.
In addition to structural quality, home inspectors inspect all home systems and features, including roofing as well as plumbing, electrical, and heating or cooling systems.
After you have known what you are purchasing, the legal issue of sale and purchase contracts are the usual conveyancing routine in buying and selling transactions.
Checks will be made by the lawyers as to the arrears of quit rent and assessments rates at the land office and local council, respectively.
The potential buyers could also made checks at the utilities companies as to outstanding charges for service provided to the property.
Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, checkwww.hba.org.my or e-mail info@hba.org.my - The Star
Land – the bread and butter of housing developers
INCREASINGLY, the number of new developments being advertised and marketed of late are located further away from Kuala Lumpur closer to Rawang, Cyberjaya and Putrajaya with the projects undertaken by some of the larger Bursa-listed property developers.
The trend of such developers moving into periphereal locations started a couple of years ago due to the scarcity of large pieces of land between 50 acres and 100 acres close to or in the city which explains why there is so much interest in the Sg Buloh Rubber Research Institute of Malaysia (RRIM) land.
If the core business of a company is property development, then land is virtually gold to them. Without land, they will not be able to develop anything which means no sales and no revenue. This is why, every year, developers have to launch new projects.
The replenishing of land bank has be to be done consistently and constantly, unless they already have a large land bank. This objective to have steady revenue year after year can be a challenge when there is a property downturn, which also explains why it is extremely important to avoid a property bubble.
In the last several years, developers have had multiple launches in order to cater to demand. The need to show a consistent stream of income may explain why some of our larger developers are also involved in the plantation sector. Plantation land can be converted into property development if and when the need arises.
Besides the availability of land, the next important issue is land price.
Some of the larger players which have purchased land in the Kajang, Semenyih and Bangi areas over the last couple of years include S P Setia Bhd, Mah Sing group and Dijaya Corp Bhd.
Last year, S P Setia bought 272.5ha, or 672 acres, of freehold land in Semenyih for RM381.26mil or about RM13 per sq ft.
A couple of years ago, Dijaya bought the 200-acre Kajang Hill Golf Club for RM228mil or about RM26 per sq ft. The price a developer pays for his land is important because at the end of the day, this will be reflected in his selling price.
Mah Sing Group Bhd is the other new player in the Bangi area. In May, it bought about 400 acres in Bangi for RM333.25mil or about RM18.50 per sq ft.
When a developer buys land that is not slated for property development, there is conversion cost. For example, if a piece of agricultural land is bought for RM10 per sq ft, it has to be converted into land for development. The land office will consider the price of other development land in the area. If the market price is RM20 per sq ft, there is a difference of RM10. The developer will be charged a premium of 25% of RM10 which is his conversion cost.
That means, in order to change the land status from agriculture to development land, he will have to pay an extra 25% multiplied by his land size. There are various factors that determine the cost of conversion.
The price Mah Sing is paying is benchmarked against rival developers. In this case, S P Setia's RM13 per sq ft versus the current land price of between RM25 and RM28 per sq ft in Kajang, according to RHB in May. This takes us back to the 2,330-acre RRIM land, which was sold to theEmployees Provident Fund for RM2.28bil, or RM22.46 per sq ft. This is unconverted agricultural land compared to S P Setia's and Mah Sing's land in Semenyih and Bangi respectively
A developer who wants to build on the RRIM land will have to first convert it to development land. There is a different price range for commercial and residential land, with commercial land being more valuable.
Apparently, Mont'Kiara land is already between RM600 and RM700 per sq ft, and the Tropicana land is RM200 to RM300 per sq ft.
Because some parts of RRIM land is next to Tropicana, when the land was parcelled out, the price may be rather prohibitive to smaller and less capitalised property developers.
Considering that large-scale developers have been land-hungry and have been buying into places in Semenyih, Kajang and Bangi, and the RRIM land being far more strategic, it is hoped that the Government, by virtue of the fact its cost of funds is cheap, will parcel a considerable portion of it for affordable housing.
The Government could also help by releasing other land under its plan to provide affordable housing for the people but as it stands today, it may, in all likelihood, also be further away from the city with places like Kajang, Semenyih and Nilai mentioned, among others.
Deputy news editor Lee Cheng is of the view that housing issue can become a social problem if not dealt with expediently. - The Star
恢复《屋租统制法令》？ 有人欢喜有人愁
（槟城26日讯）马来西亚房地产发展商会顾问拿督庄友明强烈抨击，建议恢复《屋租统制法令》是开倒车之举，不只对屋主不公平，也会吓跑投资者，败坏槟州经济发展。
近期，乔治市世界遗产机构（GTWHI）及一些议员，建议恢复过去政府所推行的《屋租统制法令》（Rent Control Act）来严格管理屋租上涨幅度，并且可以重新吸引人潮回流乔治市，借以恢复市区的人气。
对此，庄友明不表认同，他揭露，过去30多年实施《屋租统制法令》时，许多二房东私下将房子以翻倍高的租金转租出去，套取更大的私人盈利，因此如果恢复《屋租统制法令》，这种情况一定继续发生，受惠的不是一般小市民，而是这些躲在《屋租统制法令》保护伞底下收取翻倍租金的人士。
庄友明：企图捞取选票
“最终吃亏的终究是那些屋主及那些可怜的租户；我认为提议恢复《屋租统制法令》者，根本是政客或受到政客利用的人，说穿了只是要企图赢取选票。” - 光华
近期，乔治市世界遗产机构（GTWHI）及一些议员，建议恢复过去政府所推行的《屋租统制法令》（Rent Control Act）来严格管理屋租上涨幅度，并且可以重新吸引人潮回流乔治市，借以恢复市区的人气。
对此，庄友明不表认同，他揭露，过去30多年实施《屋租统制法令》时，许多二房东私下将房子以翻倍高的租金转租出去，套取更大的私人盈利，因此如果恢复《屋租统制法令》，这种情况一定继续发生，受惠的不是一般小市民，而是这些躲在《屋租统制法令》保护伞底下收取翻倍租金的人士。
庄友明：企图捞取选票
“最终吃亏的终究是那些屋主及那些可怜的租户；我认为提议恢复《屋租统制法令》者，根本是政客或受到政客利用的人，说穿了只是要企图赢取选票。” - 光华
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