More trees to be planted in George Town

THE Penang Municipal Council (MPPP) is turning George Town into a green lung with several tree-planting projects lined up. State Local Government and Environment Committee chairman Chow Kon Yeow said that the inner city lacked trees. “We must plant trees not only for our generation, but also for many generations to come,” he added. He said this at a press conference in Weld Quay where he proceeded to plant a tree along the newly upgraded road divider. MPPP president Patahiyah Ismail said 101 trees from four different species had been planted along a 550m stretch costing RM127,470. “We have also raised, widened and deepened the kerb for effective growth of the trees,” said Patahiyah. She added that the next projects were the Friendship Park in front of City Bayview Hotel and the stretch along Jalan Datuk Keramat from Gama to the junction of Jalan Perak.- The Star

Precursor to property market outlook

THE Global Financial Crisis (GFC) of 2007/2008 is a watershed event that calls into question the robustness of the global financial system. The system itself, to take a long view,is a continuously evolving system. Crises and events in the past have aided in the evolution of the system and this recent crisis ought to spur even greater evolutionary improvements and that includes down-the-line restructuring of real estate markets (clearly central to any modern economy) and the valuation profession (central to a modern and efficient real estate market). What caused the crisis? Roberts Samuelson in his book The Great Inflation & Its Aftermath takes a board view, spanning 40 years, as he builds up to the crisis. He focuses on the rise of inflation in the 70s (the oil shocks being symptoms rather than causes) to heights of 13% per annum in the United States and the subsequent taming of it by Paul Volcker (Federal Reserve Chairman) as an important background setting for the subsequent, extraordinarily low interest rates regime (easy money) that enabled the unusual economic conditions, among other parallel frameworks, for the tech bubble to form and burst, in 2000, and then shift into the housing bubble, that also burst, in 2007, and which precipitated the global financial crisis. Completed houses at Austin Perdana, Johor Bahru. Anti-speculative devices such as the Real Property Gains Tax for real estate are necessary to arrest undue speculation, control property prices and contain emerging property bubbles, timely. Root cause Joseph Stiglitz in his book Freefall identified that a root cause of the crisis was the stagnant household incomes of the United States and said that house prices began running in parallel with increasing household debt. Is the crisis over? Yes, by many who point out that the synchronised actions taken by central banks in 2009 averted “a depression greater than the Great Depression”. No, by many others who feel that the loose monetary and fiscal policy engendered by QE1 (quantitative easing) and QE2 and other measures, may have saved the world from a depression greater than the Great Depression, but the measures are temporary stop gap measures that have not restored underlying aggregate global demand on a more permanent basis and more importantly have not solved many of the ills in the global financial system for it to go forward on a more sound footing. Standing at this point in time, post a few months of heightened turmoil caused mainly by the Euro Zone debt crisis, and the US credit rating downgrade and anaemic recovery and growth, there are very serious concerns about the global outlook. The outlook for Asia looks more promising but that too must be viewed with a jaundiced eye as the global economy is more linked that most admit or know and the majority of final demand still emanates from the west. Real estate plays a complicit role in financial crises. In the Japanese decades-long economic downturn, it began with the bursting of a highly inflated real estate bubble. Twenty years later house prices have retreated from highs of 18 times household income to a benign six times. The Asian Financial Crisis of 1986/97 was one which afflicted this region and we in Malaysia have very personal and clear memories as to the role played by real estate in the build up to the crisis and the subsequent bust. Luckily for us, taking the cue from the formation of the Resolution Trust Corporation in the United States Savings and Loans crisis, we formed Danaharta which acquired bad loans from banks and financial institutions, timely, and restored the banking system and put the economy back on track, quicker. Real estate's role As for the GFC itself, there would be few who will not be able to appreciate the complicit role of real estate. As the Federal Reserve cut interest rates after the Tech bubble burst, the final run up to the housing bubble began. By late 2005 and early 2006 there were many who saw that the peak was at hand (those who saw it coming) but who could not stop the process because the bigger system had a life of its own. One must acknowledge that it is not possible for smart people to stand in the way as bubble go on self-sustaining, aggressive build up when “the herd is in a full run”. When the bubble burst in 2007, fingers initially pointed to the “sub-prime” mortgage market with the suggestion that that was a small part of the housing market in the United States and that it was not a very serious problem. But the so called sub-prime mortgage crisis rolled on and morphed into a full blown housing crisis which went on to affect the huge edifice of structured securitised products that were built upon the housing market (collateralised debt obligations) and these markets froze, which resulted in a credit crisis, so big, and which reverberated around the world, in a way that suggested a global depression, greater than the Great Depression. When the tech bubble burst in 2000, the world was not brought to the edge of the financial cliff. But when the housing bubble burst, that was exactly what happened. When asked, the Nobel Prize winning economist, Paul Krugman said that the stock market bubble burst was not as impactful as the subsequent housing bubble burst because it was “widely diffused”. Seven years later, when the property market bubble burst, the impact was substantial because it was concentrated in the financial sectors and there were large edifices of new financial products built upon it, the tentacles of which were global in reach and the cascading knock-on effects, global in extent. To prevent or tame the emergences of financial crises, we ought to also better understand the fundamentals that drive property prices and contain emerging property bubbles, timely. Is this possible? Monetary policy by itself it is said is not good enough to control the formation and development of real estate bubbles. Arresting speculation In this connection, the Federal Reserve Chairman of the United States, Ben Bernanke himself has said that “Monetary policy is a blunt tool; raising the general level of interest rates to manage a single asset price would undoubtedly have had large side effects on other assets and sectors of the economy.” We need, instead or additionally, permanent, anti-speculative devices such as the Real Property Gains Tax for real estate so that its rates can be adjusted timely to arrest speculative fervour, as well as administrative devices such as directives that tweak property rules appropriately to derive the desired result. Many East Asian countries, fearing the flow of speculative funds into their markets from carry trades have tweaked loan-to-value ratios, introduced sellers stamp duties, required banks to stress test based on percentage increases in interest rates as to their mortgage portfolios and so on. For residential properties the generally recognised key fundamentals that drive house prices are household income levels since residential properties are largely bought for owner-occupation. In most matured economies, when they are not inhabited by undue speculation, they reflect an average household income to house price ratio that revolves around three times. In many emerging markets, for various reasons, the ratio can be higher and even more than ten times is evident today in some hot spots around the globe. In Malaysia, the long term ratio is four times. When the ratio moves up it is an indication of a bubble formation in the market and market participants and regulators should stand alerted. A second fundamental that drives the residential market is rental returns, because apart from owner occupation, houses are also purchased for investment purposes. Net returns from residential property usually occupy a lower value, in the hierarchy of returns. In Malaysia the residential rental returns are 3% to 6% net depending on whether it is a landed property or a strata property and depending on a number of other factors. The range itself moves glacially over time depending on risk levels in the general market, and again, in Malaysia, over the past few decades yields have been moving downwards in sympathy with the era of easy money worldwide and its effect on asset returns generally. With the coming to the end of this long period of easy money, post the global financial crisis, the trend should be for the entire spectrum of residential yields, other property yields in general and global asset yields to be moving north. Valuers, who undertake professional valuations on a day to day basis in the residential market are well placed to upload information on the property market to market participants and other stakeholders in the property market, including regulators, and this upward flow of information into the market helps to stabilise the market and alert all involved when the market is in need of tweaking towards fundamentals. Rental is fundamental The fundamentals that bear watching for the office market are rents, but rents are a function of business profitability. Ultimately the profitability of businesses in any city sets the sustainable level of rents for that city and it also explains the different levels of rents that prevail in different cities. In Kuala Lumpur the long term yield for Grade A office space has been about 7% net. From time to time this yield has compressed to lower numbers, as low as 5%, but over the long term the market seems to return to the equilibrium level of 7% when the exuberance dies. The fundamentals that drive the retail sector are also rents but rents for this sector are driven in turn by retail turnovers and it is this that bears closer monitoring. Turnovers depend on the multitude of shoppers including tourists. In Kuala Lumpur the long term rental return on average for the Grade A, downtown shopping centres used to be about 8% but this is, I believe, on a structural transit towards 7% as shopping centres become more mainstream assets. Real Estate Investment Trusts or REITS have helped and are continuing to help in this re-rating. The fundamentals that drive the hotel industry are usually a combination of sustainable average room rates and average occupancy rates. This business income can be translated to an equivalent yield that usually sits on the higher end of commercial property yield spectrum. By understanding the workings of the property market through the key driving fundamentals and by the dissemination of that market information to market participants and other stakeholders in the property market, we can prick real estate bubbles. Professional Valuers who operate in the market on a day to day basis, can help enormously in bringing about stability in the market. The greater use and appreciation of valuations help in diffusing real estate bubbles and bring about financial stability. Elvin Fernandez believes in the free market and timely nudging by policy makers and key market participants to iron out any, and only where needed, imperfections in the system. To do this, and over time, they need a steady stream of in-depth market knowledge and insight. - The Star

Five MNCs in negotiations to invest in Kulim Hi-Tech Park

KULIM: Kulim Hi-Tech Park is negotiating with five multinational corporations to bring in over RM3bil in investments in the next six months. Kulim Technology Park Corp (KTPC) president Muhamad Sobri Osman told StarBizWeek that the five companies were from Europe, the United States and Japan and were involved in solar-related and electronics industries. “We are in preliminary and advanced stages of negotiations with the five companies,” he said. “Their investments should create some 5,000 job opportunities.” For 2011, KTPC has drawn about RM6bil for Kulim Hi-Tech Park. “These include new investments from Saint-Gobain Solar of France, Fuji Logistics of Japan, QT Technology of Singapore and Whizz Systems of the United States. “Then there are also additional investments from existing MNCs such Infineon for its second phase. “These investments should generate some 4,000 jobs,” Sobri said. Saint-Gobain Solar manufactures glass for the solar panel industry, Fuji Logistics is a logistics solutions provider, QT Technology provides wafer fabrication training and Whizz assembles printed circuit board products. On another note, Sobri said: “We will start the infrastructure development for the phase four, which is about 400 acres, in the first quarter of 2012. Works should be completed in seven to eight months. “We are investing about RM220mil for phase four, of which RM120mil is for land acquisition.” He said since 1995, KTPC had spent more than RM500mil to develop the first three phases of Kulim Hi-Tech Park, spanning 1,432 acres. Sobri said KTPC was exploring opportunities to bring in more investments from Japan and Thailand, in view of the natural disasters that had damaged their manufacturing industries. “The rental to lease the land in KHTP is very competitive, currently being priced at about RM23 per sq ft, compared with RM18 a year ago,” he said. On the recent RM1.85bil investment by Panasonic in KHTP, Sobri said the solar manufacturing facility would employ some 1,500 workers. The Kulim Hi-Tech Park currently had 24 MNCs and 37 small and medium-scale enterprises, employing some 26,700 workers. - The Star

槟中小型企业中心即起开放申请 州政府提供租金津贴

（槟城2日讯）槟城中小型企业中心（Penang SME Centre）即日起，开放予州内中小型企业者申请；而州政府将每月提供每平方尺80仙的租金津贴。 槟首长林冠英周五召开记者会，指该中心预计于2012年3月竣工，并在明年首季结束前启用。这项计划由槟城发展机构承建，耗资4000万令吉，占地逾16万平方尺，坐落在峇六拜自由工业第4园区。这栋共4层楼高的建筑物备有13个单位，每平方尺的租金为每月1令吉80仙（第一层）及1令吉50仙（第二层至第四层）。 大马首创租金极具优势 林冠英说，该中心的建成是大马首创，主要通过提供极具租金竞争优势的场地，培养及孕育创新的中小型企业，同时提供本地中小型企业展示自家产品及服务的场所，促进发展及完善供应链以推广槟州工业。 他说，这是州政府推广中小型企业所采取的3项步骤之一，以提升本地中小型企业的产业价值链及打造槟城品牌或拥有“槟城实力”的产品及服务。其他2项步骤则是2010年6月推展的中小型企业市场咨询、资源及训练中心(SMART)及在武吉敏惹、峇都加湾及北赖所建立的中小型企业村。 该中心将由槟州科学理事会5大支柱中的科技企业指导部、投资槟城机构及槟州发展机构组成的中小型企业中心管理委员会所管理。中心单位租用期为2年，可选择性续约1年。承租人在合同生效时需付3个月按金、12个月租金的银行担保、1个月预付租金及印花税，而免租金期限为1个月。 有兴趣者可至投资槟城SMART中心或槟州发展机构工业部索取表格，或致电04-6409988或04-6340111。录取名单将于明年3月公布。 林冠英：每平方尺80仙津贴　让中小企业茁壮成长 林冠英指出，槟州政府将提供每月每平方尺80仙的租金津贴。 “在获得津贴后，通过比槟岛市场上还要低廉的租金，中小型企业中心将让中小型企业从这里开始获得培育发芽成长。这是受到槟州硅谷各重要电子大厂围绕着的策略性地点，在提供支援及推广工业上获得便利，如发光二极管(LED)或固态照明(SSL)工业、医药器具工业、飞航工业、半导体工业及太阳光电工业等。” 透过槟州科学理事会，新开发的创新与创意，将获得提供技术支援与租金津贴。同时，成功的工业领袖将指导他们如何成为一个成功的行政总裁。 丘光宪：创造更多“槟城品牌” 拿督斯里丘光宪说，这是存在他脑中多年的概念，终在槟州政府的支持下落实。他希望这项在日本、韩国、台湾及美国等取得成功的计划，在槟城也有同样的成效，希望借此协助需要协助的中小型企业，创造更多“槟城制造”的品牌。 出席者尚包括槟州第二副首长拉玛沙米、刘镇东国会议员、槟州发展机构总经理罗斯里、槟州供水机构总经理查瑟尼及槟州政府投资促进机构总经理吕丽莲等。 伊斯兰断肢法及升旗山停车场课题　林冠英今记者会回应 针对记者提及马华智囊团策略分析与政策研究所的邀约（辩论伊斯兰断肢法论坛）及升旗山停车场相关问题，林冠英以“今日记者会课题繁多”为由拒绝回应，并表示明日课题较少，明日才召开记者会回应。 记者在林冠英周五记者会尾声时，提出以上的这两道问题。林冠英表示周五是伊斯兰教祈祷的时间，而今日课题较繁多，因此明日才回答。他补充，他将在周六特别召开记者会，针对记者的问题做出回应。 针对记者询及，巫统主席兼首相拿督斯里纳吉暗示大选已近，林冠英说，他们确实已感受到山雨欲来风满楼的大选前夕，并已对此准备就绪。而在周四已通过的国会遴选委员会，他表示会确保中央政府实际执行。否则，第13届大选将会是“最肮脏的选举”。 诺贝尔经济学奖得主詹姆斯教授　9日莅槟专题演讲 1996年诺贝尔经济学奖获得者詹姆斯莫利斯教授将于12月9日，莅临槟城开讲“槟城在亚洲：金融与当前的经济衰退”专题演讲。 槟首长林冠英在记者会上表示，这项活动主要是配合槟州社会经济及环境研究所（SERI）的更名仪式。该研究所将于12月9日更名为槟城研究院，协助州政府发展相关与研究政策，带领槟城前进，在符合能力、问责和透明度（CAT）原则下，实现长期和符合可持续发展的制度。而槟州政府是全马首个成立自主公共政策研究院的州属。 他说，借此，该院将在当天举办一天的论坛和演讲，包括由诺贝尔经济学奖得主詹姆斯莫利斯教授主讲的“槟城在亚洲：金融与当前的经济衰退”。主讲人尚包括世界各地顶尖大学的学术界著名讲师和马来西亚领导人等。 刘镇东： 助槟立足世界版图 刘镇东国会议员说，在欧债危机下，槟州社会经济及环境研究所的任务是协助槟州在世界版图寻求一个举足轻重的区域位置，并在国际舞台上占有一席之地。这项演说论坛于12月9日（周五）上午8时至下午5时45分，在槟岛市议厅举行。入门票分为50令吉（公众）及20令吉（学生），有兴趣预约者可在12月7日之前，电邮syedmikael@penanginstitute.org或致电04－2283306。 出席记者会的尚包括槟州第二副首长拉玛沙米、槟州发展机构总经理罗斯里、槟州供水机构总经理查瑟尼、槟州研究院执行员思亚米卡尔及威省市议员沈志强等。 冀明年易名“槟岛国际爵士音乐节”　吸引更多国内外者参与 第8届槟岛爵士音乐节已于周四在海湾沙滩酒店开唱。由于参与演出的乐队及观众有60%来自国外，因此，林冠英希望该活动在明年易名为“槟岛国际爵士音乐节”，借此吸引更多国内外爵士爱好者前来槟岛参与其盛。 音乐节总监保罗说，每届音乐节，他们皆确保至少要有一支来自槟城的本地乐队，借此提拔及提供本地乐队曝光及表现的机会。他相信，这也是大马最大型的爵士音乐节。- 光华

恐吉灵万山多层巴刹设计难引人潮 部分贩商宁在外营业

（槟城2日讯）吉灵万山周边部分贩商，宁愿向市政局缴税希望可继续在外营业，也不愿迁进吉灵万山内，因担心多层巴刹的设计无法引进人潮，恐影响生计。 吉灵万山周边贩商参加光大区州议员黄伟益举行的提升计划汇报会时，向他反映以上观点。Arkitek LLA董事翁仁清向贩商们解说初步概念设计时，根据早前的调查报告指出，贩商希望当局增加停车位、68%贩商希望重组肉类、海鲜、蔬菜档口、50%贩商赞成小贩中心设在1楼，而75%顾客希望肉类、海鲜、蔬菜档口在吉灵万山内底楼、50%顾客赞成小贩中心在1楼、30%顾客希望地上不会潮湿或积水、28%希望停车场在附近。 概念计划中，当局将会从1楼至2楼抽出三分之一的空间，建造5层停车场，共153个停车格。新设计中，也会去除吉灵万山后部围墙，让巴刹内更透光及通风。斜坡式电梯也会重新装上，类似霸级市场，让顾客可从底楼逛到最高层，也方便行动不便者。 底楼将集中肉类、海鲜及蔬菜档口，地面不再潮湿及积水，1楼及2楼将计划引进公共服务机构，如邮政局、银行或自动提款机，杂货店也会安排在1楼。目前底楼比路面高，计划中将会与路面保持同样水平，方便老人家到巴刹内购物，而顶楼将会实现目前国外流行的城市内务农计划，栽种蔬菜。 一名贩商认为，该区街头小贩已形成一种文化，如果要全部贩商搬进吉灵万山内，恐令游客失望，因游客曾向他表明，这文化吸引对方到当地一游。另对服装业贩商在计划中没阐明驻进哪一楼时，有关贩商也向黄伟益反映。 质疑古迹文化现代化设计 另一贩商则质疑当局称吉灵万山是古迹文化，但却大费周章花1100万令吉提升为现代化设计，与此说法有出入。他建议市政局仿效北海阿波罗市场，为吉灵万山周边贩商装置遮阳伞就行了，而吉灵万山则整座改装为停车场，因计划中的153个停车格，可能连贩商车辆都无法满足。也有一名贩商以峇央峇鲁巴刹为例，他认为无论如何花巨额装修多层巴刹，顾客也不会到内购物。 是日，出席汇报会者包括吉灵万山贩商公会主席纳斯莫希登、槟岛市议员戴良成及王耶宗。 符国明：妥当安排　绝不让贩商自生自灭 槟岛市政局卫生及执照组官员符国明强调，当局重整吉灵万山绝不会让贩商自生自灭，他认为，家庭主妇欲烹饪料理，除买了肉类蔬菜，也需到1楼杂货店购买调味料等用品，当局将会使用这样的店铺档口设计，让顾客到1楼或2楼。 黄伟益：现代化设计　重整计划耗逾千万 黄伟益指出，基于吉灵万山拥超过50年历史，就算原本设计不良也不可拆除古迹，所以当局计划以现代化设计，重整吉灵万山，整个重整计划需1100万令吉，但市政局只拨款100万令吉。基于卫生考量，海鲜、肉类及蔬菜的贩商得驻进吉灵万山内。 保留部分贩商周边营业 当然当局也可保留部分贩商继续在周边营业，因目前只是一个初步概念，往后当局还会委派各小组与相关业者讨论，但保留的贩商只限花卉植物小贩、水果业者等，其他贩商则需迁入。对于服装业贩商的反映，黄伟益促请有关业者无需担心，当局委派各小组与相关贩商讨论后才有最终结果。 他补充，如果吉灵万山顶楼不作城市内务农计划，贩商有更好的意见也可以告诉他，如建造社区中心或其他。他说，把吉灵万山夜市场当作新旅游景点也是当局的其中一项计划，把该地活络起来，同时让游客或本地人，夜间有个好去处。 相关照片 ■ 概念设计图中，吉灵万山更加绿化。- 光华

Be ethical, Chor urges property sector

KUALA LUMPUR (Dec 1): Housing and Local Government Minister Datuk Seri Chor Chee Heung has urged all parties in the property sector to always put the interests of the buyers first, by ensuring quality and timely delivery of their developments. Chor said all stakeholders, from bankers to project consultants and property consultants, should uphold their professional code of ethics in executing their respective responsibilities. "I urge all professional bodies involved directly or indirectly in the property segment to remind their members to be ethical at all times on their exercise of responsibilities. "Bankers who provide financing should only disburse funds based on actual work carried out on site, while developers should only use the funds from the banks and their project accounts for legitimate and allowable expenses," he told reporters after launching the official website of Rimbun property project by Amphil Corporation Sdn Bhd, here on Thursday. Chor said project consultants, on the other hand, should only certify payments when real work has been properly carried out, and at the same time provide true and fair property valuations and market trends to house buyers. "These measures will address the current shortcomings in the industry and ensure continuous and sustainable growth of the property sector," he said. Chor said the government can always regulate the property players and relevant bodies by means of a bill in Parliament. "However, as the world is moving towards liberalisation and deregulation, any act of over-regulation would stunt the growth of any business activity including the housing sector. "It would also drive away potential investors," he said. — Bernama

E&O: Hot property in Penang

Eastern & Oriental Bhd (Dec 1, RM1.41) Maintain outperform at RM1.39 with revised target price of RM2 (from RM1.98): Although annualised 1HFY12 core net profit was only 30% of our forecast, it is in line as future quarters should be stronger. We make no change to our target basis of 30% realisable net asset value (RNAV) discount or "outperform" call. But we adjust our target, RNAV and earnings per share for housekeeping and ICSLS conversion. E&O sold RM380 million worth of properties during 1HFY12, 52% more than its RM250 million sales in 1HFY11. Unbilled sales leaped from RM650 million a year ago to RM880 million. The bulk of 1HFY12 sales came from Penang, with the remainder coming from unsold units of St Mary Residences in Kuala Lumpur. As expected, E&O did not propose a 2Q dividend, in line with last year's practice and our expectations. Take-up rates for both the St Mary Residences and Phase 1 of the Penang Quayside condos have reached 80%. Phase 2 of the Penang condos will be launched this month and indications are that demand should be strong. Although minority shareholders may be disappointed that there was no general offer, we view positively the recent emergence of Sime Darby Bhd as a 30% shareholder of E&O. This provides E&O with a strong parent which could come in handy for the upcoming Phase 2 of Seri Tanjung Pinang. Also, we would not discount the possibility of joint ventures between the two companies as Sime Darby has 37,000 acres of undeveloped land with an estimated gross development value of RM100 billion. E&O's expertise in high-end residential projects will provide a good fit with Sime, especially for its landbank in the Klang Valley. — CIMB Research, Dec 1

Chua slams Pakatan govts over high rates for land conversion

SEPANG: Property prices in Selangor and Penang will keep escalating if Pakatan Rakyat continues to impose high land conversion premiums on housing developers in these states. MCA president Datuk Seri Dr Chua Soi Lek said the state governments in Selangor and Penang had placed high premiums on land conversion. He added that people should not assume that this only affected developers because they would in turn transfer the cost to housebuyers. “Because of this, property prices will continue to increase. If this goes on, only the rich will be able to live in these states,” he said, adding that sand price in Selangor was the highest in the country. “In reality, Pakatan has done nothing for Selangor and Penang this past three-and-a-half years. If there has been any development, it is due to efforts by the previous state governments,” he said after a 1MCA Medical Foundation fund-raising dinner in Sungai Pelek here on Wednesday. Earlier in his speech, Dr Chua criticised the Selangor government for not handing out scholarships equally among the races. “Last year, 1,500 scholarships were given out under Yayasan Selangor. Out of these, only two recipients were Chinese and three were Indians. “This year, 240 student loans were given out. However, only two Chinese and 11 Indian students were offered the loans,” he said. He said in comparison, 1,648 of the 4,000 scholarship recipients this year under the Public Service Department were Chinese. - The Star

Ministry to come down hard on errant developers

KUALA LUMPUR: Housing and Local Govern­ment Minister Datuk Seri Chor Chee Heung has vowed not to be lenient on developers who abandon projects. He said with the passing of the Housing Development (Control and Licensing) (Amendment) Bill 2011 in the Dewan Rakyat on Wednesday, all errant developers would be taken to task. “In the past, some local authorities were slack in the inspection of housing projects and some projects were carried out without approval of the ministry or relevant government agencies,” he said after the launch of Rimbun by Amphil Corporation Sdn Bhd’s website here yesterday. He added that there were 195 cases involving unlicensed housing developers due to this reason. Another milestone: Chor launching Amphil Corporation Sdn Bhd’s new website in Kuala Lumpur yesterday. Looking on is the company’s chief executive officer and director P. K. Poh. So far, 54 errant developers have been taken to court. Chor hoped the amendments to the Act would serve as a deterrent to developers seeking to make a quick buck by collaborating with professionals and bankers to cheat house-buyers. “Some bankers simply issued loans, before the certificate of completion, without checking properly the necessary documents and this allowed some developers to run away with the money without completing their projects,” he said. He said bankers who provided the financing should only disburse funds based on actual work completed on site while project consultants should only certify payments when real-time work had properly been carried out. It was reported by The Star recently that as of Nov 15, 1,308 developers and 4,703 directors of the companies concerned had been blacklisted by the ministry. These developers were involved in offences that fall under four categories – failure to pay compound fines, abandoning of projects, involvement in “sick” or problematic schemes and non-compliance with the judgment of the Tribunal for Homebuyer Claims. Chor said that previously, developers were allowed to ask for discount when they were fined but this would become “a thing of the past” with the amendments to the Act. “Previously, those who made genuine mistakes would be gi­­ven discounts but they will now have to pay the full amount,” he said. - The Star

Greater protection for buyers with new housing Bill

KUALA LUMPUR: The Housing Development (Control and Licensing) (Amendment) Bill 2011 with a new provision that developers who abandon their projects can be jailed has been passed in the Dewan Rakyat. Housing and Local Government Minister Datuk Seri Chor Chee Heung said that Section 18A provides for errant developers to be fined not less than RM250,000 but not more than RM500,000 or jailed not more than three years or both. Currently, Section 22(1) of the Housing Development (Control and Licensing) Act 1966 only provides for housing development company directors to be jailed not less than 12 months but not more than three years as well as fined not less than RM50,000 and not more than RM250,000. “The amendments passed involved eight existing provisions, one new provision and one abolished provision,” he said during the second reading of the Bill yesterday. Chor said the ministry had successfully revived 83 housing projects and was in the midst of reviving 61 projects while another 22 were at an early planning stage of being revived. Another amendment to the Bill was the term “housing developers” under Section 3 of the Bill which now includes private liquidators appointed by the court in the event it takes over the responsibility of failed developers. An amendment to subsection 6(1) set the deposit for a housing developer's licence at 3% of the development project cost, an increase from the current RM200,000 while changes to subsection 6(1)(a) and 6(1)(b) ensure that only developers with strong financial standing are involved in the industry. Section 8A allows individuals to apply for the sale and purchase agreement to be cancelled at any time if there was no continuing development at a project site for six months or more. With the amendment to Subsection 16N(2), the Tribunal for Home Buyers' Claims could now hear cases involving sale and purchase agreements signed between house buyers and unlicensed housing developers while subsection 16AD(1) increases the current penalty rate against developers who refuse to honour the tribunal's award from not less than RM5,000 but not more than RM10,000, to not more than RM50,000. - The Star