Concern over rising house prices

KOTA KINABALU: Tan Sri Muhyiddin Yassin has expressed his concern over escalating prices of houses, which have made it increasingly difficult for people to own homes.

“House prices have skyrocketed. I often hear complaints that terrace houses can cost as much as RM500,000. Who can afford such houses?” asked the Deputy Prime Minister.

Muhyiddin said that due to family obligations, even those earning RM10,000 would have difficulty servicing loans for a RM500,000 house, which used to cost between RM140,000 and RM200,000 several years ago.

He was speaking to reporters after officiating at the ground-breaking ceremony for the People’s Housing Project (PPR), costing RM80mil, in Kepayan Ridge here yesterday.

Muhyiddin said a comprehensive approach was needed to address the demand for affordable homes, involving the federal and state governments as well as the private sector.

Muhyiddin said that while the Federal Government was willing to help fund the schemes, states needed to provide the land.

“We may need the involvement of financial institutions, such as the Employees Provident Fund and the banks as well,” he said.

Muhyiddin added that Urban Well-being, Housing and Local Government Minister Datuk Abdul Rahman Dahlan had been tasked to hold discussions with state governments to identify the sites and determine the funds required to build a million affordable homes nationwide.

He said the Federal Government was subsidising about RM88,000 for each affordable housing unit.

“The cost of constructing each unit is about RM130,000 while they were being sold at RM42,000,” he said, adding that those who rent the units pay RM124 a month.

In his speech, Muhyiddin said that although the Federal Government would provide allocations for affordable housing projects, the target might be derailed if the sites were not available or a huge sum was required to acquire the land.

“Thus, we hope that the Sabah government can provide suitable sites, not only in Kota Kinabalu, but also in other areas in the state,” he said, adding that Sabah was given priority for affordable housing projects to cater to the needs of the lower income group.

Meanwhile, Abdul Rahman said that nearly 70,000 affordable housing units had been built at 92 schemes nationwide. - The Star

Mastermind in real estate scam nabbed by police in PJ

SHAH ALAM: Two members of a real estate scam syndicate were nabbed by police while in the midst of “negotiating” a deal with a potential victim.

Police arrested the two men at a coffee shop in Jalan SS3/59, Taman Bahagia, Petaling Jaya, around 1.30pm last Friday.

Selangor Commercial Crime Investigation Department chief Asst Comm Chong Mun Phing said the men, part of a real estate syndicate, were meeting with someone on a “business deal” during the operation.

“We arrested the two men, both aged 58. One of them was the mastermind of the syndicate,” she said at the state police headquarters yesterday.

She said the group’s modus operandi was that the mastermind, posing as a senior agent from a reputable real estate firm, would approach his target looking to sell or lease a business property.

“He would then get an accomplice to pose as a buyer, who would pay for the property with a post-dated cheque.

“The mastermind would also receive a post-dated cheque for his commission,” she said.

However, the mastermind would falsify the date and cash out the commission cheque before the original cheque bounces.

The police seized ATM cards, photocopies of ICs and business cards belonging to the mastermind under multiple aliases.

ACP Chong said the syndicate has been linked to at least 18 cheating cases in Selangor involving RM80,200 from their victims, with more similar cases in Kuala Lumpur and Negri Sembilan. - The Star

Plight of kampung land owners

Where’s the prosecution against the 205 unlicensed housing developers?

ABOUT two years ago, an English daily highlighted the plight of land owners who had entered into joint ventures with unlicensed developers to build houses on their (home owners’) land.

Most of these deals involved land in the kampung (or villages). When these partnerships turned soured and were subsequently highlighted in the press, theHousing Ministry warned it was going to catch these businessmen, most of whom were small-time developers out to make a quick buck.

However, until today, no action seems to have been taken on these errant developers while the victims continue in their miseries and financial nightmares due to abandoned projects and botched joint ventures.

The Housing Ministry had warned that it was going to catch many businessmen, even small-time ones, as it was going to make it a requirement that all those who wished to develop a housing estate of only five houses should get a developer’s licence.

The Ministry seems rather proud of its wide-ranging powers and had a swooping determination (to weed out these unlicensed developers). It is really unfortunate nothing seems to have come out of that incident.

Swarms of entrepreneurs of the kampung variety, and some city slickers too, had invaded the countryside, and signed on owners of kampung land on the promise of turning them (the land owners) into developers. The wish was to turn idle kampung land into properly-built houses to sell to kampung people, usually by having joint ventures with the land owners.

“Give me your land to develop and I will give you X number of houses, and I shall take Y number of houses for my troubles; no cost to you, no hassles with government servants, no bank loans; no worries at all.” The current deal is 30:70; 30 % for the land proprietor and 70% for the housing developer.

Tricks of the trade

Kampung people as usual were wary; they were not going to buy till the project had got under way, and the proof to them was to give at least a house to the land owner and an enormous upfront deposit as the most convincing evidence of the developer’s sincerity. Perhaps, an upfront RM500,000 would be an ideal bait.

Firstly, said the developer, he needed the money to start building the land owners’ houses so it was not difficult to persuade them to charge their lands for the purpose. The other houses will have to wait including mine, said the developer most sweetly: no risk there you see, the land is still yours.

The developer then left for the city to apply for his licence which required the payment of a deposit to the Housing Ministry, and, of course, there were other payments to be made to various parties in the Government and arrangements had to be made with a construction company; all of which helped to collect the loan money from the land-owner-chargor.

However, the developer has not been heard from for some time now. The land owner/ would-be kampung entrepreneur/chargor went to the Housing Ministry to complain and demanded action to be taken and he was confident this will be done. You see, he knows the wakil rakyat.

Alas, said the legal officer to the kampong man: “So sorry, you had dealt with a person who has no license to be a developer. Under the law, we have no powers to prosecute an unlicensed developer who has abandoned the project.”

“Take action against him (the housing developer) for not having a licence; he has done all that a developer does including (entering into) contracts with intending purchasers and collecting deposits from them. There are at least 10 of them,” said the kampung man.

It is said, “the law is an ass” or that seems how we have made it out to be.

What the Housing Ministry’s legal officer could not bring himself to say is that the legal officers had tied their own hands by adopting a strange, restrictive reading of the law that to qualify as a housing developer, he should have undertaken to build and actually sell, at least, five houses, and to the legal officers it meant producing at least that number of house buyers to testify that they had indeed bought houses from a bogus housing developer!

The sale and purchase agreements and other documentary evidence and the evidence even of the developer’s own staff do not constitute evidence; the developer must plead guilty or there must be at least five buyers coming forward to give evidence; till then there is going to be no legal action against the bogus housing developer.

A request made by the Housing Ministry to the Bar Council for its advice on the professional liability of solicitors who act for unlicensed developers, sent more than a year ago, is still under consideration. At the latest count, there were at least 115 law firms, according to the records of the Housing Ministry, who did not seem to care to find out if their developer-clients were licensed or not.

The irony is it does not seem to matter whether the developer is licensed or not; they all abandon their projects with impunity.

Sadly, most of the lands in the rural areas are Malay Reserve Land which come under greater protection from the state but the banks are now gearing up to foreclose the only wealth the would-be kampung entrepreneur ever had, and had intended to bequeath to his children the way he had inherited it, coming from nenek moyang days.

Cry of the naive victims

Now, where do we go from here when the very people who initiated the housing laws shun their responsibilities? Shouldn’t buyers from unlicensed housing developers have the same protection as those buying from licensed ones? Where are the rescue plans for the naive victims of these Malay Reserve Land? Mind you, there are mostly current and retired civil servants.

Note: It has been two years since the list of the unlicensed housing developers has been unearthed.

Chang Kim Loong is the honorary secretary-general of the National House Buyers Association (www.hba.org.my), a non-profit, non-governmental organisation (NGO) manned by volunteers. He is also a NGO Councillor at the Subang Jaya Municipality Council. - The Star

Hunza plans to start RM7bil project in Bayan Baru in 2015

AFTER its Gurney Paragon project, Hunza Properties Bhd plans to focus on the development of commercial projects on the island and in Seberang Prai.

The group plans to start a RM7bil commercial city project in 2015 in Bayan Baru in the south-west district, a RM700mil commercial-cum-residential development in Juru, and a hotel in Tanjung Tokong.

Group executive chairman Datuk Khor Teng Tong tells StarBizWeek that the commercial city project, to be located on 16.1ha in Bayan Baru, would take 10 years to complete.

“There will be at least two four-to-five-star hotels, a shopping mall, college, high-end condominiums and office towers.

“We have engaged Australian and Singaporean architects to provide consultation on the design and concept of the project,” Khor says.

The shopping mall would be twice the size of the present Gurney Paragon shopping mall.

The project site is four times the size of the Gurney Paragon land.

“We are now building 690 units of flats to relocate the squatters on the site,” he adds.

While the group had expected the Gurney Paragon project to place Hunza in Penang’s development spotlight, the Bayan Baru project would propel Hunza to the national level, according to Khor.

The group expects demand for high-end schemes in Penang to rise, as the infrastructure on the island is improving with the completion of the second bridge, slated by October.

“There is also the RM8bil infrastructure package which includes the 6.5km undersea tunnel project linking Gurney Drive and Bagan Ajam, the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu bypass, the 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass and a 12km road connecting Tanjung Bungah and Teluk Bahang, which are being planned to take the infrastructure in Penang to the next level,” Khor says.

The group is also planning a high-end hotel project in Tanjung Tokong, according to Khor.

In Juru, the group plans to develop a RM700mil commercial-cum-residential scheme which will include a RM60mil to RM70mil four-star hotel on 14.9ha.

“This will be the group’s first hotel, which will have 250 to 300 rooms. The scheme also includes a hypermarket, leisure facilities, and commercial and residential properties,” he says.

Khor says the planning proposal for the scheme would be submitted to the local authorities soon.

“We hope to commence work by the third quarter of 2014. The whole project will take three to five years to complete.

“The hotel will be managed by professionals and will provide steady revenue stream for the group besides the Gurney Paragon Mall,” Khor adds.

On the group’s residential schemes, Khor says it will launch the RM500mil Alila 2 project on 4ha in Tanjung Bungah next year.

“There will be 270 condominium units. We will apply for the green building index and construction quality assessment system certifications for the project.”

In Seberang Prai, the group has launched in the third quarter some 173 two-storey terraced houses in Bandar Putra Bertam, Kepala Batas.

“The project has to date achieved sales of more than 50%,” he adds. - The Star

1MDB embarks on Penang affordable housing project

WHILE Penang’s soaring property prices have become a conversational topic, the federal and state governments have pledged to make affordable housing available on the island.

On Tuesday, 1Malaysia Development Bhd (1MDB), a government-owned development company, bought 9.5ha from Farlim Group (M) Bhd for RM112.5mil through one of its subsidiaries. The deal marks 1MDB’s first public land deal in Penang, and when contacted by StarBizWeek, the company says it is part of 1MDB’s plan to develop affordable housing in Penang as announced earlier.

During a visit to Penang in May, Prime Minister Datuk Seri Najib Tun Razakannounced that the federal government will build 2,222 low-medium cost houses and 1,111 affordable houses in Air Putih, Air Itam and Paya Terubong. It was a pre-election political pledge to the people of Penang by the federal government.

A property developer reckoned that the affordable housing scheme could cost about RM300,000 per unit, depending on the development.

“If assuming the plot ratio is four, then it will work out to RM50 per sq ft of gross floor area. Construction cost circa 200 per sq ft, and that would work out to a total development cost of RM250 per sq ft.

Therefore cost of a three bedroom 1,200 sq ft unit would be around RM300,000. This is just the cost price,” he says.

He, however, said development cost could come down to RM150 per sqft if its based on a lower cost structure.

If we scrutinise the deal more, the said land is strategically situated within an established township known as Bandar Air Itam (formerly known as Ayer Itam) and is sited at the north-eastern part of the island.

“This township is located along Jalan Air Itam and Jalan Paya Terubong, the main thoroughfares leading to the Kek Lok Si temple as well as the Penang Hill funicular railway station,” says Farlim in a filing on Tuesday.

But the main caveat for 1MDB is that the land is presently occupied by squatters and structures comprising residential units (semi-concrete, concrete, wooden and zinc houses), foundries, temples, a recycle centre, factories, workshops and shops.

Simply, that would mean more time and capital exhausted to relocate these squatters to other suitable areas.

The company might have to allocate a number of units as settlement, narrowing down the supply of units for eligible owners.

From past experience, dealing with squatters is a sensitive issue as people have a natural resistance to change and eviction notices aren’t welcome.

“This might just be the beginning of high density flats ala the Singapore Housing Development Board (HDB) flats style,” says a market observer.

Speculation is also that 1MDB could be snapping up remaining portion of the land from the other owners, as Farlim have just a fraction of ownership rights to the said three parcels of land.

Farlim did not respond to queries by StarBizWeek over the identity of the other owners of the said land.

The Penang state government has earmarked seven projects in August for affordable housing where 4,145 low-medium-cost, 3,148 medium-cost homes and six shoplots would be built.

Meanwhile, the federal government has also proposed to redevelop the Rifle Range flats, Penang’s first affordable housing project. However, this is still pending approval by local authorities.

When the Rifle Range flats were completed in the early 1970s, they were the tallest buildings in Penang.

The units in the nine blocks of 16-storey dwellings were only about 400 sq ft and provide housing for some 25,000 people.

Besides its property venture, 1MDB has also gone extensively into the energy sector, buying up power plants to beef up its cash flow.

It currently holds 100% of Powertek Energy Sdn Bhd and 75% in Jimah Energy Ventures Holdings Sdn Bhd and Kuala Langat Power Plant Sdn Bhd (KLPP), respectively, involving an investment totalling RM12bil.

1MDB had acquired Powertek and KLPP in a portfolio of power plants with a total generating capacity of 4,600 MW in Malaysia, Bangladesh, Pakistan, Egypt, Sri Lanka and Abu Dhabi.

1MDB is also known to be actively bidding for a 2,000MW coal-fired power plant, dubbed Project 3B, as well as other greenfield and brownfield developments in the region.

It is taking the lead in the development of government land in prime areas of Kuala Lumpur. Some 70 acres in Jalan Tun Razak, the project of which is likely to be delayed, will be shaped into a financial district called the Tun Razak Exchange, while the old airport in Sungai Besi, renamed Bandar Malaysia, is being converted into a mixed development. - The Star

谢诗坚：客家村将设各族文物馆 浮罗山背拟建土楼酒店

（槟城23日讯）马来西亚客联会署理总会长拿督谢诗坚博士宣布，浮罗山背客家村联委会将在浮罗山背设立一座具有现代化和符合酒店业需求的具有土楼特 色的酒店供游客住宿，以享受浮罗山背与众不同的自然美景和清新空气。这座圆形的土楼酒店，内部有浮罗山背各民族文物馆，用三语呈现，也有艺术走廊，供画家 展销精心杰作。

谢诗坚也是浮罗山背客家村联委会总策划，他说一个新的旅游景点，一个命名为“浮罗山背客家村”的宏伟计划，即将在浮罗山背离开双溪槟榔不远的大路旁的一块20依格的土地上建立起来。

首个海外客家村

“感谢热心客家文化的企业家，在知悉我们有一个客家梦后，便在年初与我们接头，希望我们能一起合作，把浮罗山背打造出第一个马来西亚客家村，也是世界上第一个海外客家村，以共同推动旅游业。”

“参考土楼结构只是因为土楼一望即知客家，无需再作解释，并不具其他用心。其中我们也将与台湾大学的客家学院合作，设立客家文化基地，为学者及学界提供文库资料。同时我们也会设立一间客家餐馆；也会设立槟城美食的小贩中心、土产销售中心、旅游产品及精品店等。”

“更为出色的是，我们保留了榴梿园、也会建立豆蔻、丁香和橡胶品种供参观者了解浮罗的特产。我们要让来自世界各地的人真正享受浮罗山背的自然生态和具有价值的文化生态。”

谢诗坚是在槟州客家公会周日举行74周年（客家情，浮罗梦），青年团33周年，妇女组15周年及浮罗山背客家村联委会5周年联欢宴上致词时这么表示。- 

产业投机有过热迹象 业界建议加强管制

（吉隆坡21日讯）最近，有关谈论房地产收益税（RPGT）可能会恢复在下月出炉的2014年财政预算案中讨论。房地产和住房开发商协会（REHDA）已书面向有关部门陈述它们的观点。国家银行也研究禁止发展商在建筑期间负担买家利息的可行性方案。

发展商的利息负担计划（DIBS）就是鼓励投机行动，因为购房者只需要支付5％或10％的首期，然后无须负担任何费用，直到该物业落成为止。

重新推出RPGT以及可能取消DIBS，显示房地产领域准备面对未来挑战的迹象，就好像东南亚股票市场出现动荡一样。

然而马来西亚在较大的经济框架中，必须解决一系列问题，例如有3个问题一直困扰着房地产领域，分别是泡沫、投机因素和负担能力。

发展商希望能够有一个温和的RPGT制度，而DIBS则维持不变，而有某部分希望返回旧的税制，即是在首年内出售产业就要缴交30%的产业盈利税。

购房者协会（HBA）兼Khong & Jaafar地产代理公司产业顾问埃尔文费尔南德斯说，RPGT是一项既反投机又能增加税收的措施。在过去两个预算案中，HBA所预期的税制改革令它大失所望。

曾经有一段时间，并不是所有发展商提供免收利息计划。今天，大多数都是受到这样压力下而做。REHDA主席拿督斯里任志刚称：“这个计划可以帮助购房者买入房屋。”

埃尔文指出：“不过，这也产生投机的趋势。”

顺便一提，新加坡政府是第一个国家实施取消免收利息计划，早在2009年因为当地的房地产投机活动过热，因此政府推行上述计划来冷却市场。

埃尔文表示，除了DIBS之外，最大的问题是透明度。当发展商提供DIBS加上其他奖励：例如租赁担保、现金付款回扣、附送家具，免收费印花税及法律费用，而银行和贷款机构提供抵押贷款是基于大型发展商的信誉以及这些折扣而订。

提供一个没有折扣的实际价格，正好反映房产市场真实的一面。

DIBS和折扣也会导致初级市场蓬勃发展。在2009年，全国房产资讯中心共录得21万1600宗楼宇成交个案，当中12.24％是从发展商购买，而87.76％则从二手市场购买。

此外，3年后的2012年，成交个案增至27万2669宗，当中从发展商购买的比率高达22.09％。

埃尔文透露：“这种情况从来没有出现过。这是一个不寻常的跳升，主要是发展商给予DIBS和折扣的关系。”

他说，市场的转变是明确的，而这也代表了风险。

住房问题非常复杂，因此无法达到许多人的要求，而国内大约有三分之一的房屋，其价格是15万令吉以下。其中一些房屋坐落在令人羡慕的地区，例如吉隆坡的孟沙。

但是这些房屋都没有得到适当的维修，而且年轻专业人士不希望在那里生活。它可以归结为一个整体的产业管理问题。

大马PR1MA机构首席执行员拿督阿都慕达立阿利亚斯说，超过2万家房屋将在大巴生谷、柔佛、槟城、沙巴和砂拉越的第1阶段15个可负担住房项目下建成。- 

Rehda sees rise in real property gains tax

KUALA LUMPUR: Real Estate and Housing Developers’ Association Malaysia (Rehda) expects the Government to increase real property gains tax (RPGT) by 15%-20% in the 2014 Budget to be tabled on Oct 25.

Its chairman of finance and investment committee, Datuk Ng Seing Liong, said buyers should not worry about the increase in RGPT as it would only affect buyers who disposed of their properties within five years after their purchase.

“At least when buyers buy property, they must hold it for five years before they let it go,” he told a media briefing.

According to news reports, the Government was considering an increase in RPGT to curb excessive speculation which has led to the increase in the prices of houses. — Bernama

RM1.5bil affordable housing project

PETALING JAYA: Construction company Pesona Metro Holdings Bhd is a frontrunner for a massive RM1.5bil housing project under the Government’s1Malaysia People’s Housing Scheme or better known as PR1MA.

Sources said the company, which was listed via a reverse takeover last October, is likely to be chosen due to its “expertise” and “track record”.

There were four other bids that were submitted for the job, which should take some 30 months to complete once it is awarded, a source noted.

An announcement on this will be made earliest in two weeks’ time.

Since its debut on Bursa Malaysia, Pesona has been relatively quiet until recently, that is.

In June, it announced that it had obtained an RM87mil job for the proposed construction and completion of the remaining and rectification works of a government office building.

Pesona had declared last October that it was bidding for construction projects under the PR1MA programme.

If this RM1.5bil job does go to Pesona, then it would more than triple its current orderbook of about RM570mil, making it a major construction concern.

Shares in Pesona ended 6% higher to 50.5 sen on a volume of 20.7 million shares at yesterday’s close.

It was announced last month that more than 20,000 homes would be built under 15 affordable housing projects in Greater Klang Valley, Johor, Penang, Sabah and Sarawak.

These 15 projects come under Phase 1 of the PR1MA programme, an affordable housing scheme announced under Budget 2013.

PR1MA Corp Malaysia chief executive officer Datuk Abdul Mutalib Alias had said last month that specifications of the houses, including pricing and floor plans, would be announced in the next few months.

However, it has been reported that the homes would be priced under RM350,000 per unit.

Recall, Pesona took over the listing status of financially-beleaguered Mithril Bhdlast year amid a restructuring exercise.

It had raised more than RM10mil for working capital via the issuance of 40 million new shares of 25 sen each then.

While Pesona may not immediately be a recognisable name, it has completed more than 30 projects valued at more than RM1.5bil.

Among its completed projects are a flood mitigation project in Sungai Kerayong, Kuala Lumpur, the construction of the Timah Tasoh Dam in Perlis and the Zehn Luxury Condominium at Jalan Bukit Pantai, Kuala Lumpur.

The company is also responsible for the construction of the Customs, Immigration and Quarantine Complex in Melaka, which it completed and handed over in the last financial year ended Dec 31, 2012 (FY12).

Citing internal projections, sources said the PR1MA project is expected to yield Pesona some RM202.5mil in net profit based on a projected 13% profit margin.

This is huge in comparison to its current earnings. For its six months ended June 30, Pesona’s net profit stood at RM8.39mil on a revenue of RM154.32mil.

For FY12, its net profit was at RM11.78mil on a revenue of RM220.78mil.

The group’s current net assets per share stands at 14.50 sen per share. It has cash and bank balances of RM25.5mil with minimal borrowings. - The Star

UK House Prices Rise Further, Sales Jump

British house prices recorded their fastest rise in almost seven years last month and a measure of sales volumes also jumped to a multi-year high, a survey showed on Tuesday.

The Royal Institution of Chartered Surveyors' seasonally adjusted house price balance climbed to +40 from a slightly upwardly revised +37 in July, staying at its highest since November 2006.

The balance reflects the percentage of property professionals saying that prices rose minus those reporting falls.

Britain's housing market has shown signs of a revival this year, spurred by a healing economy and help from the government and the Bank of England to ease access to finance. But the scale of the recovery has raised concerns about a new property bubble.

The RICS survey found that a net balance of +45 of surveyors expect further price growth over the next three months. Over the coming year, house prices are forecast to rise by 2.2 percent.

"Momentum is increasingly broad-based across the country; this isn't just a London story," RICS said.

The average number of sold properties per surveyor rose to 17.9 over the last three months, the highest since January 2010.

The number of properties going on sale also increased markedly in August, with the relevant balance jumping to +26 from 16 in July.

"With positivity starting to return to areas right across the UK, it seems those who may have been waiting for the right time to sell are choosing now to do so," RICS said.- Reuters