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Saturday, March 15, 2008

Enhancing professionalism among real estate agents

“FOR the year 2008, we want to be vocal, to say things, to take action. We want to enhance professionalism, to develop the business further, to be dignified,” says K. Soma Sundram, president of the Malaysian Institute of Estate Agents (MIEA).

The longstanding unresolved issue of illegal real estate agents is becoming quite a frustrating issue for MIEA. With 10 to 15 unregistered real estate agents for every registered agent, the loss of revenue to the real estate industry and the government is tremendous, he says. Nevertheless, MIEA is relentless in efforts to deal with the problem.

“Illegal agents have always been an issue, but the Customs Department has agreed to work with us to educate the public and also to act on the illegals,” says Soma. According to him, the illegal agents do not pay service tax and as such, Customs are interested to act on them. “It is also a good thing for the public to know that estate agents are liable to collect service tax of 5% of the service fee, payable to Customs. Before, only those who have reached a certain threshold of RM150,000 in transaction and above have to pay service tax. Effective January 1 this year, there will be no threshold and every agent is liable to collect the 5% service tax,” he says.

“Now, every agent has to pay as long as they collect a professional fee. In the past, we used to pay it with our own fees. This is a good move for agents. Those below the threshold had 0% service tax, so they didn’t have to compete with the rest. Now that it is standardised, it has become a level playing field,” says Soma.

On behalf of MIEA, Soma had written a letter to Prime Minister Datuk Seri Abdullah Ahmad Badawi last year, highlighting the plight of the real estate agents and requesting for a meeting to discuss the issues and to take the necessary steps to eradicate the problem. The letter was also
forwarded to several other governmental departments. However, it failed to stir any response from the authorities.

Estate agents are governed by the Valuers, Appraisers and Estate Agents Act 1981 (Act 242) and illegal agents caught can be slapped with a RM25,000 fine and/or jailed for three years. However, until this day, not a single illegal agent has been brought to court. “The courts have the authority to penalise these people, but no one is really concerned with resolving the issue and as such we have taken the matter into our own hands,” says Soma.

“This year, we will also raise issues, such as the representation of estate agents in the Board of Valuers, Appraisers & Estate Agents Malaysia, issues affecting estate agents in practice, talking to the public about the profession itself, educating our members to ensure that the level of professionalism goes up, and discussing whether real estate agents should be involved in property management,” says Soma.

“We want to reinvent the real estate agency profession,” he says. “Another one of our frustrations is the representation of estate agents in the board,” says Soma, adding that one of the things he hopes for MIEA to achieve is to set up a Board of Estate Agents to better represent those in the profession.

Having said that, he feels that the outlook for the real estate market is good. “I’m very confident that the market will be very good for the next 1 ½ years. There are no complaints from real estate agents, which is an indication of the market doing well, and the government’s focus over the last two years on incentives such as the Real Property Gains Tax (RPGT) and the launching of the various economic corridors, all encourage the market tremendously,” he says.

As the year 2008 unfolds, there will be a slew of new things coming in for MIEA. “We have purchased our own building, located at 3 Two Square. It is about 2,100 sq ft and costs around RM600,000. We settled our payment in February and by May, we plan to move in. We’ve been wanting to have our own building,” says Soma. The premise is located at Section 19, Petaling Jaya.

Also for the first time, MIEA has formed a strategic alliance with OCBC and AIA for a year. “OCBC will be providing us with training on the loan packages and they will work with the real estate agents to promote that. AIA has come out with a Mortgage Reducing Term Assurance policy.

It’s a new policy which we feel our clients will benefit from,” says Soma. According to him, the alliance will help enhance the professionalism of real estate agents and provide added value service to the clients.

“OCBC has given us RM100,000 sponsorship while AIA has given us RM50,000,” he adds. In line with its goal to increase the level of professionalism, the institute will be introducing the MIEA Industry Awards of Excellence this year. “We want to recognise agents who have excelled in their profession, who have done well in their fields whether it is residential, commercial or industrial.

We will also give recognition to the top real estate negotiators,” says Soma. According to him, the awards will be presented during the MIEA annual dinner scheduled for June 20. Nominations will begin after its annual general meeting (AGM) in April and an independent judging committee will be appointed.

Soma says MIEA also intends to officially take on the role of training and certifying real estate negotiators by introducing a government-recognised course.

“Negotiators are people employed by estate agents. They’re not required to be registered at the moment, and we feel that the training is inadequate. Things work more or less in-house, and not all negotiators are sent for the currently running negotiator’s course,” he says.

“In order for industry standards to go up, it must start from the guy who meets the client. And it’s not the estate agent. We want to take over the role of training the negotiators, certifying them and registering them under the board,” says Soma. Certified real estate negotiators will be issued a card, which is renewable every year. They would also be required to go through courses in order to renew the cards, a move made to maintain industry standards.

“MIEA has, over the last many years, registered some 2,000 negotiators and certified them as Certified Real Estate Negotiators (CREN). We have suggested to the board that MIEA should be doing the registration and we are in the midst of presenting them a working paper,” says Soma.

He also wants agents to extend their horizons overseas. According to him, a lot of foreigners have been entering the country due to government incentives such as the changes done to the Malaysia My Second Home (MM2H) programme. However, only 10 out of 300 real estate agents are involved in the programme, says Soma.

“The real estate agents are the best people to go out there and talk about Malaysia, to talk about the programme itself, and to talk about property. All this while, real estate agents have been quite inwardly focused and this has been the attitude for a long time.

“Some agents have taken the opportunity and some of them are doing very well. They know about the programme, but we need to educate them, show them exactly how they can ‘exploit’ this for their benefit. Agents must go overseas to talk to people, we can’t be expecting them to come over and knock on our doors,” says Soma.

Last but not least on MIEA’s plate is the introduction of a multiple listing service, where a central database would be set up and all properties listed by estate agents who are members of MIEA would be published, in hopes for a more organised system and fair competition for agents. It is currently sourcing for avenues to publish the listed properties.

“We hope to introduce this as it will totally open up the market. It is viable and it can happen. Holding cost is expensive; the system would also speed up sales. The turnover of agents would improve too,” says Soma.

By theSun (by Yeong Ee-Wah)

IJM’s new unbilled sales in Penang at RM160mil

The Nautilus Bay project

PENANG: IJM Properties Sdn Bhd has about RM160mil of unbilled sales from its new property launches in Penang since November 2007.

The amount was part of its total unbilled sales of some RM580mil, managing director Teh Kean Ming told StarBiz.

“In Penang the contribution comes from Nautilus Bay, a landed residential scheme located off the Jelutong Expressway, and Platino, a luxurious condominium project in the MetroEast mixed-development scheme next to the Penang Bridge,” he said.

The RM190mil Nautilus Bay project, completed recently, comprises 78 three-storey terrace houses with built-up areas of 2,600 sq ft.

Priced between RM780,000 and RM1.2mil, the Nautilus Bay is about 85% sold.

“The buyers are mainly locals and Singaporeans,” Teh said.

He added that Nautilus Bay was IJM’s first project in Penang to employ build-and sell concept and having obtained certificate of fitness.

On Platino which was launched last November, Teh said the scheme comprised two tower blocks of 228 detached condominiums.

“There are five units on each floor with built-up areas ranging from 1,800 to 2,800 sq ft.

“We have sold about 60% of the units, which are priced from RM700,000,” he said, adding that the project was scheduled for completion in 2010.

By The Star - StarBiz - (by David Tan)

New Strategies

Dijaya lays foundations to move ahead

DIJAYA Corp Bhd is on the threshold of further growth under the helm of MD Tong Kien Onn, who took over from P.K. Koh.

Tong is currently putting down new foundations to move ahead. He is taking on a more aggressive move as competitors have sprouted and managed to establish themselves as major players in the property sector.

“We were (well) known at one time. We still are but compared to these several competitors who have marched on, I would like Dijaya to be a name that people can identify with,” he says. The completion of the Tropicana City at the end of this year will help but Tong is laying down other strategies to propel the group forward.

The completion of the Tropicana City at the end of this year will help Dijaya

The group has property launches totalling some RM890mil planned for the first half of this year. Over the last year, Tong has been buying up land to replenish its depleting land bank. He has paid RM96mil for three pieces of land outside the inner city development, which he refers to as the second tier.

Located in Balakong, Sg Long and Jenjarom in Banting, the land spans some 190 acres.

Analyst Kevin Khoo from Insider Asia says the company is “aggressively expanding its land bank at low prices.”

Besides its land purchase and launches of close to RM900mil in Tropicana and Sg Buloh for the first six months of this year, it is also excited about its move to India soon.

“When I took over, I spent the first six to nine months looking for land and exploring opportunities overseas. We hardly bought any land the last 15 years. Tropicana and Damansara Indah kept us busy for a while. Today, we are at the tail end. We have four pieces of land, of which only one is for residential development in Tropicana itself, near the Lien Hoe building,” says Tong.

He says the company will adopt the concept of a guarded and gated community for these projects. The company has 93.4 acres in Jenjarom, 66 acres in Balakong, Selangor and 26.7 acres in Sungai Long, Cheras.

“We aim to have some elements of Gita Bayu and Desa Park City in Jenjarom and Balakong but have not worked out the concept for Sg Long yet. We are still looking for more land in Sungai Buloh. The focus of development will be around Sg Buloh area over the next five to eight years,” he adds. He opines that there is a market for such developments in the second tier townships.

“There are people with a lot of money out there,” he says.

“In property development, it is crucial to have good pieces of land and this is becoming scarce and expensive. The second thing I did was to look overseas ... my focus is India and Vietnam.”

Tong says while he is keen to go abroad, he is cautious because it is not as simple as it sounds or as many make it out to be. The company has teamed up with a local partner in a 54:46 joint venture to build a high-rise residential project in India.

Phase 1 will be launched in the second quarter of this year. The total gross development value is RM800mil. They are still exploring in Vietnam.

In addition, another step taken by him over the year is to have a bigger budget for landscaping in their projects. In Villa Green 3A semi-detached units, the budget was increased from RM200,000 to RM600,000. A total of 50 out of 80 units were sold. These will be ready by the end of March.

“When a company offers lifestyle homes, there is a certain ambience that is needed. Having more trees, and more mature ones, lends a new feel to the place and this is what people want. If they are going to part with millions, it is our part to do the necessary.”

For the newer developments, the landscape architects will be brought in at an earlier stage instead of at the tail end of a project.

Along with this new emphasis, the company will continue with its bread and butter projects, which is middle to upper end residential development and lifestyle commercial projects.

In the next several months, it will launch its condominium Tropicana Grande, a contemporary 300-unit condominium of 39 storeys. Average size is about 3,000 sq ft, priced at around RM500 per sq ft. The project has a GDV of RM390mil.

It will also launch Tropicana Avenue, which comprises nine to 11-storey shop offices on 2.8ha, priced at RM300 to RM350 per sq ft for office space and between RM600 and RM700 per sq ft for the shops (GDV: RM210mil)

On the cards is Tropicana Gardens, a six-storey lifestyle shop offices project fronting Persiaran Surian on a 17.6 acres. It will have 80 units of shops and about 140 units of offices. This will be launched at the end of 2008.

On its up and coming Tropicana Mall which fronts the LDP in Petaling Jaya (opposite Dijaya’s headquarters), Tong says they will keep the 12-storey office block for leasing purposes at about RM4 per sq ft. The office block has a floor plate of about 8,000 sq ft so it is quite unlike some of the new projects that have come up around Petaling Jaya.

“We need something that will give us a recurring income. We will also be leasing out the mall and after paying off the loan, I get RM20mil to RM30mil annually from the mall. We will sell all the 600-odd apartment units, which is currently 75% sold,” says Tong.

By The Star (by Thean Lee Cheng)