Demand in secondary property market slow in H1

THE demand in the secondary property market is expected to remain slow during the first half of this year, a reflection of last year's trend due to Bank Negara's responsible lending guidelines, says Property Hub Sdn Bhd resident manager Wan Choy Heng.

He says that the situation is expected to remain slow as house buyers prefer project launches that come with a developer's interest bearing scheme (DIBS) There is also the general sentiment that the property market is due for a price correction.

“Many have committed to a property with a DIBS package to hedge against the market in three years, as most condominiums or service apartments take three years to complete,” Wan says.

Property Hub is among 30 real estate agencies participating in the Malaysian Secondary Property Exhibition (Maspex) 2013 held from April 12-14 in Petaling Jaya. It is organised by the Malaysian Institute of Estate Agents.

Despite the general preference among house buyers for new projects, Wan says the secondary property market will remain healthy as there is a sizeable group of buyers looking for homes to occupy or to upgrade from their current properties.

The secondary residential market in the RM500,000 to RM1mil range will remain active, subject to the availability of financing, he says. This group of buyers are unaffected by the 70% loan-to-value ruling, the stringent bank loan approving process because they are mostly first-time home buyers, or upgraders.

The traditional hot spots where demand exceeds supply include landed terrace houses in Bangsar, Hartamas, Cheras, Puchong, Petaling Jaya and Subang Jaya/USJ. Both landed and strata developments, near MRT and LRT stations are expected to enjoy high demand.

Transactions are buoyant in Kota Damansara, Cheras Perdana and Kajang since the construction of an MRT station began a year ago, says Wan.

“As our society is getting more affluent, and our city more globalised, we will need more housing projects which emphasise on lifestyle and security. Undoubtedly, guarded and gated developments will be the common trend in the years to come.”

Dynamic Penang

Wan says transactions are buoyant in Kota Damansara, Cheras Perdana and Kajang since the co nstruction of an MRT station began a year ago.

As one of the most dynamic real estate markets in the country, Penang's outlook remains stable and positive (in the medium to long term), despite the global uncertainties, Henry Butcher Malaysia (Penang) director Jason Teoh says.

“This will be sustained by a healthy core demand, manageable mortgage rates and positive economic growth.

“An active residential sub-sector will continue to spearhead the market, although it may experience less buzz compared to the previous year. On the island, the hot spot or corridor of opportunities are Batu Maung, Bayan Lepas, George Town, Tanjung Bungah and Teluk Bahang.

“On the mainland, the investors would be able to get residential properties that are relatively cheap with low density in strategic locations.

“A new enabler the second Penang Bridge will appear in the third quarter of this year. Opportunities may arise not only on the island but on the mainland as well. Investors could consider land around the intersection of the North-South Highway and the second Penang Bridge,” Teoh says.

Areas around the five new proposed highways under the Recommended Penang Transport Master Plan Strategy, 2013, could be potential hot locations for the property market, he says. Some of the areas included the George Town Outer Bypass, North Coast Pair Road, Air Itam Relau Pair Road, North-South Expressway Link Road and Third Sea Crossing.

Teoh says the volume and value of property transactions grew at a cumulative average growth rate of 8.4% and 13.2% respectively, from 1999-2011. These were even higher from 2009-2011, reaching 20.1% and 26.0% respectively.

Of all property types, prices of terraced houses have increased the most over the last few years. The price index from 1999 to the third quarter of 2012 have increased more than other type of properties.

Another property that is in demand, with potential capital appreciation, is the pre-war heritage shophouse. The price index of pre-war properties in George Town started to soar after 1999.

Teoh believes the demand for properties in both the new and secondary market will continue to grow and appeal to a wider segment of local and international buyers.

“Furthermore, more than one-third of the Penang's 1.61 million population are aged between 25 and 44. This means we will need a fairly large number of houses or residential properties each year. Nevertheless, the developers have to be more versatile and build according to the changing trends and needs of the market.”

Increasing land prices Shah Alam

In Shah Alam, Selangor, Reapfield principal Norashikin Kamarudin recommends new developments such as Bukit Bayu, Kayangan Heights, Sunway Alam Suria, Bandar Nusa Rhu, Greenfield, Saujana Utama and Taman Seri Pristana.

Central Shah Alam's section seven, nine and 13 are also in demand with a limited supply of houses for sale, says the head of this agency which focuses on sale and rental of residential properties.

“Ninety per cent of our deals are in bungalows, semi-detached, bungalow land, linked houses, apartments and condominiums. However, we also deal in commercial shop houses, office space, factories and land,” she says. The price of bungalow land has increased from RM60 per sq ft in 2011 to RM110 per sq ft now.

Freehold townships such as Alam Impian, Bukit Jelutong and Denai Alam, have seen good capital appreciation and will continue to be in demand.

“The residential market segment of below RM1mil is resilient and unaffected by market sentiments. Clients in this segment are made up of first-time buyers, small investors and young couples upgrading from apartments to double-storey linked or semi-detached houses. Most of the purchases in this segment are based on need rather than a desire to make money through speculative investments,” she adds. - The Star

Plenitude plans 5 projects with GDV of RM1.3b

KUALA LUMPUR: Small-cap developer Plenitude Bhd is planning to launch five developments with a total gross development value (GDV) of RM1.27bil in financial year 2014.

Among the projects the group intends to roll out are semi-detached houses and service apartments in Taman Desa Tebrau, Johor Baru with a GDV of about RM740mil and link houses with a GDV of RM250mil in Taman Putra Prima, Puchong.

Up north, semi-detached and link houses are being planned for the new township of Bukit Bintang beside Plenitude's existing Bandar Perdana in Sungai Petani with a GDV of RM90mil.

There will also be a condominium launch in Penang with a GDV of RM190mil.

Plenitude, however, expects to record lower revenue for its financial year ending June 30, 2013 in light of deferred project launches.

Executive chairman Elsie Chua said the group was “not too near the RM300mil sales target for financial year 2013 but was doing its best to play catch-up.” “We think we would finish the financial year with decent figures, but it would not be at the same level as last year, largely due to the launch deferments, as there were delayed approvals and changes in plans,” she said at a press conference after signing a partnership agreement with Starwood Hotels and Resorts for its hotel called Four Points by Sheraton.

Last year, Plenitude achieved a revenue of RM205.96mil and a net profit of RM72.35mil. As for its parcel of land near Komtar, Penang, Chua said it was under planning but would not be an office block or hotel. She said the group continued to look for land in the Klang Valley, Iskandar and Penang. The group currently had 687.97ha of undeveloped land bank.

The property group recently converted its Tanjung Bungah Hotel to the 220-room Four Points by Sheraton, in partnership with Starwood Hotels and Resorts, to be reopened in August.

The hotel was Plenitude's sole hotel development and had been closed since July 2012 for RM35mil worth of renovation and upgrading works. - The Star

MIEA to expand property exhibition

PETALING JAYA: The Malaysian Institute of Estate Agents (MIEA) is targeting to expand the Malaysia Secondary Property Exhibition (Maspex) again next year and replicate it to other major cities Johor Baru, Penang, Ipoh, Kota Kinabalu and Kuching.

MIEA president Nixon Paul said: “If this event is a huge success, then our immediate plan is to take Maspex nationwide. We are confident that within the next five to six years, the number of exhibitors would grow about five times more.”

At the Maspex launch, Paul said the whole event cost about RM200,000, with RM150,000 being spent on advertising and promotion through an integrated set of publication elements, including radio interviews, e-mail blasts and print and online advertisements.

Maybank is the main sponsor of Maspex 2013, while The Star is the official media partner.

Paul said this was the first-ever exhibition tailored for secondary properties in the country.

MIEA vice-president and Maspex 2013 organising chairman Erick Kho, meanwhile, said: “The making of Maspex took more than five years of planning.

“Previously, all property exhibitors in the country focused on primary properties, marketed by developers.” - The Star

Iconic streets locally known by numbers

IT IS still regarded as a rough, working class neighbourhood. The image of the iconic seven-street precinct has remained very much the same despite development in its vicinity.

The mainly Chinese-educated and Hokkien-speaking residents — who are mostly wage earners, traders and small businessmen — continue to make up the majority here.

According to one report, the houses along the streets were built in the late 19th century as a result of the “the spillover effect from the Francis Light Grid and Carnarvon Street/Prangin area.”

Thus, vegetable farms and wooden houses were soon replaced with brick houses, saw mills, foundries and cottage industries.

When Penang embarked on its massive urban renewal plan in the 1980s, which included the Komtar project that was right at the doorstep of this precinct, the area still remained somewhat of a no-man’s land, where triad activities thrived.

When I started out as a cub reporter at The Star office in Penang, I had to first earn my stripes on the crime beat.

Heart of town: Noordin Street residents live in the shadow of Komtar.

Racing to crime scenes and visiting the mortuary in the middle of the night were part and parcel of work.

But there was also the routine morning press conference at the state police headquarters in Penang Road where the officers would brief us on the crime statistics.

It was common to see small-time thugs being made to squat in the room of an investigating officer attached to the anti-vice and gaming division while the officer chatted with us nonchalantly.

The gangsters, with their tattooed bodies, were more often than not, from one of the streets in the seven-street precinct.

There was always much excitement in the area. We would occasionally get calls from our police sources who tipped us off on clashes that broke out between rival gangs.

If we were quick enough, we would be at the crime scene to actually witness street fights before the cops arrived.

But in all fairness, many of the children of the original residents have done well in their lives. Often, with good education, they were able to move up the social ladder and lead transformed lives when they moved out of the area.

On a trip to Penang two weeks ago, I took a drive around the area. It is really a safe area despite the tough neighbourhood image of its past.

It has emerged as a popular tourist spot with its many colonial pre-war homes and shophouses. Although they are not included in the Unesco World Heritage Zone, these houses can fetch the same prices as those in Chulia Street and other surrounding areas.

Pieces of history: Presgrave Street (above) and Tye Sin Street (below) are two of the many areas where pre-Independence architecture still remains.

Apart from sightseeing, foodies can find great food here as well. The duck meat koay teow soup at the Cecil Street food court is easily one of the best in Penang.

All the streets here retain their original names but the fact of the matter is that the locals only know them by their numbers.

Cecil Street, for example, is the seventh street which the Hokkiens callchit tiau lor and I doubt if even the residents know the history behind the person it was named after.

Fortunately, many Penangites and history buffs have taken it upon themselves to write extensively about this iconic precinct on the Internet.

According to blogger Boon Raymond, the seven major streets within the triangular grid or block borders Magazine Road, Jalan C.Y. Choy (formerly Bridge Street) and Jalan Gurdwara (formerly Brick Kiln Road).

The first of the seven main streets is Magazine Road, which was named after the government gunpowder depot formerly located at the present Gama Supermarket. In Hokkein, it is called thau tiau lor or the first road.

Then, there is Noordin Street or the second street, which is named after H.M. Nordin, an Indian Muslim merchant. He is said to be one of the founders of the Kapitan Keling mosque.

The third street is Presgrave Street — named after Edward Presgrave, who founded the law firm of Presgrave and Matthews at Beach Street in 1898.

Presgrave & Matthews is one of the oldest legal firms in the Straits Settlement. According to the firm’s website, Presgrave was educated at the Edinburgh Academy and University.

In Penang, he was the solicitor-general and the president of the Penang Municipal Commission.

Today, Presgrave Street has gained a name for its street food and is within walking distance from Traders Hotel.

The fourth street is Tye Sin Street, which is named after Foo Tye Sin, a commissioner into the 1867 Penang Riots, which saw clashes between the Hai San and Ghee Hin gangs.

Foo was an unusual man of his time. The Hakka tin miner and businessman could speak English fluently as he was schooled at St Xavier’s Institution and Penang Free School. He was even a Justice of Peace.

Colonel Sir Henry McCallum has a road named after him at the fifth street. The colonial engineer of the Straits Settlement also has a street named after him in Singapore. After his stint in Penang and Singapore, he went on to become the Governor of Lagos, Newfoundland, Natal and Ceylon.

The sixth street or lak tiau lor is named after the importing agents, Katz Brothers Ltd which was set up in 1864 by Hermann Katz and his brother.

The brothers supplied pepper and other goods to ships. They did so well that they opened branches in Penang, Sumatra and even London and Frankfurt, according to local historian and publisher Khoo Salma Nasution.

The Katz Brothers brought in safe, locks and even sewing machines from Europe, among others, for sale in Penang.

The seventh street is named after another colonial officer, Sir Cecil Clementi, the Governor of the Straits Settlements between 1930 and 1934. He was a governor in Hong Kong prior to his posting in the Straits Settlement. In Singapore, Cecil Street is located near Raffles Singapore.

The Cantonese-speaking official was born in India to Colonel Montagu Clementi, a judge advocate general and his wife Isabel Collard. An Oxford graduate, he studied Sanskrit and classics to prepare himself for a role in the East.

Without doubt, there is plenty of history in the seven-street precinct and it is sad that it remains largely unknown to the residents and Penangites who pass by the area daily.

Just outside the precinct is the eighth street or Herriot Street — named after Stuart Herriot, a British merchant who stayed in Penang since the 1830s while ninth street — Sandilands Street — is named after another British businessman G.M. Sandilands.

According to Boon Raymond, the Ang Bin Hoey triad society had its headquarters in Sandilands Street.

At the end of December 1945, it was moved to 55, Maxwell Road. The triad society was dissolved in May 1946, but it continued its activities underground as a secret society.

According to an entry in Wikipedia, the Ang Bin Hoey, which is the Hokkien pronunciation of Hung Meng Hooi, was originally a society of the Ang people which was started during the Qing dynasty and was famed for its anti-Manchu activities.

In Penang, it evolved into local triads which gained notoriety for less noble pursuits.

Penang has become a magnet to many tourists because of its history and heritage.

It is history that has made Penang such a unique tourist destination.

The federal and state governments should work together to ensure that this heritage is preserved to help Penangites keep history alive, and to remember those who have made the state what it is today. - The Star

Get to know new Act, developers told

DEVELOPERS should familiarise themselves with the Strata Management Act 2012 which is expected to come into force soon, says a legal expert.

“The Act imposes very stringent punishment on developers who fail to comply,” said Tan Gek Im of Lee Hishammuddin Allen & Gledhill, one of the biggest law firms in the country.

Describing the Act as “pro-purchasers”, she said purchasers who were unhappy with unreasonably high sinking funds and maintenance charges imposed by the developer could have them reviewed by the Commissioner of Buildings under Section 12(7).

“However, the review is only possible if a management corporation (MC) has yet to be formed because once there is an MC, the purchaser becomes part of the management,” she said.

She said when the new Act and the amendments to the Strata Titles Act came into force, residential and commercial unit owners would be able to apply for a separate subsidiary MC.

This would prevent disputes, which were common under the old law, between residential and commercial unit owners, she said.

“The new Act also provides for the setting up of a Strata Management Tribunal to resolve many types of disputes commonly experienced by apartment owners including claims for the recovery of service charge and sinking fund and claims to nullify a resolution passed in a general meeting,” she said.

Housing and Local Government Minister Datuk Seri Chor Chee Heung had earlier reportedly said the Strata Management Act 2012 would be enforced bet­ween the middle and third quarter of the year.

Tan was speaking during a free ‘Corporate Clients’ Day’ talk in Wawasan Open University on Thursday.

The event was organised by Lee Hishammuddin Allen & Gledhill.

Some 150 participants who attended the talk were also treated to a cocktail reception.

In his speech, the firm’s senior partner Datuk D.P. Naban said the Corporate Clients’ Day had been successfully held in Kuala Lumpur for the past several years.

“This is the first time we are having it in Penang and we hope to make it a regular event here,” he said.

Partner Chia Loong Thye, who was also the moderator, said the talk, comprising four presentations by the firm’s partners, touched on areas of the law that were current and relevant, namely taxation issues, intellectual property rights as well as Islamic and conventional financing. - The Star

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