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Wednesday, November 12, 2008

Property market to perk up next year

PETALING JAYA: More activities are expected in the property market next year when buyers’ confidence returns and more projects come onstream, industry players said.

According to Real Estate and Housing Developers Association (Rehda) president Datuk Ng Seing Liong, the local market has not been much affected by the US subprime loans debacle and the global financial meltdown.

“Although the market has been rather quiet with fewer project launches, property prices are sustained at previous levels. Developers are being extra careful and are deferring new launches because of the prevailing weak market sentiment,” Ng told StarBiz.

To help stimulate greater buying interest, he said Rehda had urged the Government to provide incentives such as a a one-time grant of RM10,000 and full stamp duty exemption to first-time house buyers and to allow interest paid on housing loans be offset against personal income in income tax calculation.

Ng said the Government’s decision to invite the private sector to participate in developing government land through open tenders would open up new development opportunities for industry players.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin concurred that the Government’s economic stabilisation plan to kick-start priority projects would pump prime the economy and create more confidence in the market.

“Malaysia is in a good position to withstand the global financial crisis. Our financial institutions are well insulated against the global financial meltdown as they have learned well from the last regional financial crisis,” he said.

One way for developers to ride out the current challenging market conditions is to create demand for their products. “That calls for more creative product development and marketing strategies,” Liew said. “Of course, having a broad product base and good geographical spread will also help to mitigate a slowdown in any particular sector.”

Mah Sing Group Bhd group managing director and chief executive Datuk Sri Leong Hoy Kum said that while the outlook was challenging, projects by branded developers would still do well.

“It all depends on the marketability of the products, as well as the supply and demand dynamics in the area. There will always be pent-up demand for housing as it is a fundamental necessity. For developers, it is a matter of good concept and product, location, branding and timing.

“We believe a lot of developers will start launching projects early next year as material prices will come down further in the next six months,” he added.

For this year, Mah Sing is scheduled to launch a substantial amount of properties worth about RM614mil, with a sales target of RM560mil.

Leong said the company’s edge was that it had pre-constructed a lot of its properties last year at old construction costs, and today, the buyers could enjoy the completed or soon-to-be-completed properties at very competitive prices.

Meanwhile, Sunway City Bhd (SunCity) managing director for property development Ngian Siew Siong said developers were more prudent and managing their cash flow better after learning from the lessons of the last financial crisis.

“SunCity is looking at attracting more foreign buyers, especially en bloc sales to South Koreans, Japanese and Chinese buyers. These are mainly for medium to high-end residences priced from RM500,000 to RM600,000.

“The company’s unbilled sales of close to RM1bil will be realised over the next two years. This is also a good time to look at clearing the unsold stock.”

Ngian said “clearer directions” would emerge after the first quarter of next year after the power transition in Umno and the Cabinet reshuffle.

By The Star (by Angie Ng)

Fewer houses built in Sarawak

KUCHING: Property developers in Sarawak have drastically cut down on the construction of new houses due to poor demand.

State Housing Minister Datuk Abang Johari Tun Openg said some 5,300 new houses had been built this year, about half of the 10,800 units constructed for the whole of 2005.

Last year, just over 8,400 houses were built statewide.

“There has been a marked decrease in the number of houses built this year and the entry of housing developers into the market,” he told the State Assembly during Question Time.

Johari said the ministry only issued 56 new licences to housing developers this year, down from 153 in 2005.

He said the increase in house prices (between 5% and 10% per annum in the past three years) due to higher production cost had dampened demand.

He said that more than 18,100 houses built by private developers since 2005 were single- and double-storey terrace units priced between RM140,000 and RM300,000.

Also built were some 3,299 double-storey semi-detached units priced between RM280,000 and RM480,000.

“An average of 25% stock remains unsold each year, and this is added to next year’s stock,” Johari said.

On the proposed state housing tribunal, Johari said Sarawak was now studying the Sabah model.

Once a suitable model was found, he said the state government would amend the Housing Developers (Control and Licensing) Ordinance 1993 and the Housing Developers (Control and Licensing) Regulations 1998.

By The Star (by Jack Wong)

Las Vegas Sands to stop parts of Macau project

MACAU: Las Vegas Sands said yesterday it was halting part of its huge development in the gambling haven of Macau due to trouble accessing credit amid the global financial crisis.

The firm, which operates two casinos in Macau including the giant Venetian, said in a statement that work on parts of a US$12 billion (US$1 = RM3.58) resort and casino development on a reclaimed strip of land - called the Cotai Strip - would be stopped.

"Sites five and six on the Cotai Strip will be temporarily suspended until conditions in the capital markets improve," the Las Vegas-based firm said in a statement.

It said it would continue to seek financing that would allow it to complete the project, which includes a 1,800-room Sheraton hotel and three casinos.

"Our temporary suspension programme will enable us to recommence development in an efficient fashion, should sufficient capital to complete phase one of our development plans become available on reasonable terms," the statement said.
It said work on the Four Seasons private apartments in Macau and its Marina Bay Sands project in Singapore would continue.

The company, whose US-listed share price has plummeted from US$148 last October to around US$8 this month on worries about its debt burden, said it was "in the process of" raising an additional US$2 billion in funding commitments.

The firm has invested heavily in Macau, spending US$2.4 billion on the giant Venetian casino-resort.

Its aggressive expansion in the United States and abroad and the credit crunch have left Las Vegas Sands struggling to service its US$10 debt.