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Thursday, June 19, 2008

US commercial property investment off 69.5pc

WASHINGTON: Investment in commercial real estate in the first four months of the year was off 69.5 per cent from the same time in 2007, the National Association of Realtors said yesterday.

At the end of April, investments totalled US$48.2 billion compared to US$157.8 billion at the same point last year, the trade group said in its monthly report.

“Slow economic growth is lowering demand for commercial space, mostly in the office and industrial sectors,” NAR chief economist Lawrence Yun said in a statement.


Woes of abandoned housing projects

To have a home of one’s own is every person’s dream. But, for thousands of families in Selangor, their dreams have turned into nightmares after the houses they bought using big long-term bank loans were left incomplete and the developers disappeared.

Many of them have been waiting for years, some even decades, for their houses to be completed, but in the end, they were left with shattered dreams and in a dire financial state with huge long-term loans to service.

The initial joy of booking and then signing the sales and purchase agreement for the house, followed by the granting of a bank loan, slowly turns into dreadful and dismal feeling of fear, anger and sadness as the time passes and work on their dream home is stopped.

All that they see is an incomplete skeletal structure left to rot by the building contractors on a piece of idle land overgrown with lallang and construction rubbish all over the place.

According to Selangor state housing, building management and squatter committee chairman Iskandar Abdul Samad, there are 141 abandoned projects in the state, 108 of them housing projects.

Overgrown: This abandoned project in Kajang has almost been reclaimed by nature.

“Most of the abandoned projects are located in the urban areas, with Klang and Shah Alam on the top of the notorious list,” he said.

“We understand the financial burden the house buyers are facing and we are doing our best to help them,” Iskandar said.

According to Iskandar, the state government has no legal ground to take action against any party involved in the sales and purchase of a private property.

He said the sales and purchase agreement of a property was signed between a purchaser and the private developer.

Iskandar said that as the contract was signed between both parties, any breech of the contract should be settled in court.

“So when a housing project is abandoned, a buyer has to take private legal action to seek remedy from the court. The state government does not have any locus standi to take any legal action against any parties involved in the matter,” he said.

“But, on humanitarian grounds, the state government through the Selangor Property and Housing Board has taken several measures to help ease the burden of these buyers,” he said.

“Our top priority is to ease the financial burden faced by the affected families and help them find a solution to the problem,” he said.

According to Iskandar, about 30 abandoned projects have great potential of being revived.

He said the state government was closely monitoring these projects, hoping to have them revived.

Iskandar: Most of the abandoned projects are located in the urban areas.

Iskandar said the Selangor Property and Housing Board would work closely with the Local Government and Housing Ministry on the matter.

He said regular meetings had been held with the developers, contractors, local councils, technical departments and representatives of the purchasers to seek solutions to revive the projects.

“The state government is all ready to help if assistance is needed for fast approval of permits or on matters pertaining to land,” he said.

“We will cut red tape and impose minimum conditions so that the projects could be revived if the matters do not involve security and safety issues,” he said.

Iskandar said that talks were also being held with the developers whose projects were under liquidation.

He said regular talks were being held with the Malaysian Insolvency Department to see if the Selangor Property and Housing Board could help in reviving the affected projects.

“The state is also studying whether it is possible for it to repossess the land of the abandoned or problematic projects so that it could be revived by a new developer,” Iskandar said.

By The Star (by Salina Khalid)

UEM is still the contractor: Minister

SECOND Finance Minister Tan Sri Nor Mohamed Yakcop today said that UEM Builders Bhd remains the contractor for the second Penang bridge project but declined to comment on reports that the company will not manage and collect tolls.

An online news provider recently reported that the government was overhauling the project by breaking up the key elements, namely, the construction and concession to collect tolls.

Citing unnamed government officials, the report said the toll concession portion would be decided through an open tender, and the winning party would have to share revenue with the government.

It also said the move could save the government up to RM18 billion over 45 years, and lead to greater flexibility in levying toll charges.

Speaking to newsmen after delivering his keynote address at the Malaysia Islamic Capital Market Conference 2008, Nor Mohamed said he would discuss the issue with the Economic Planning Unit (EPU) of the Prime Minister’s Department.

“I will discuss with the EPU and will issue a proper statement soon, but on the issue of the bridge’s contractor, at this point in time certainly UEM is on as a contractor,” he said.

He also stressed that construction of the Second Bridge, which connects Penang to the mainland, was still on.

“I don’t think the project will be cancelled and UEM is still the contractor,” he said.

Earlier this month, UEM Builders said the government has approved an increase in the construction cost for the bridge above the original cost of RM4.3 billion due to rising prices of oil and building materials.

It also said preliminary work on the construction of the bridge had started and the project was on track to be completed as planned by 2011.

The 24-km bridge project is being undertaken by UEM Builders, in a joint venture with China Harbour Engineering Co Ltd.

By Bernama