Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Friday, April 23, 2010

Concern over rising prices of houses

Speculators believed may be taking advantage of easy financing

PETALING JAYA: The jump in home prices lately has raised concern that speculators may be taking advantage of the easy home financing scheme.

Since the introduction of the scheme early last year, property sales have improved considerably while prices in some locations in the Klang Valley and Penang have edged up by between 10% and 20%.

Under the housing facility, buyers only need to fork out a small deposit of 5% or 10% of the property price and do not need to make any further payment until after their property has been delivered to them.

Developers are absorbing the stamp duty, legal fees and interest cost during the construction stage.

While some industry players agree that there is cause for concern, most feel the housing facility is still needed at least over the next 12 months until the market is back on a stronger footing.

Ireka Development Management Sdn Bhd chief operating officer Lim Ech Chan said easy-payment schemes had its pros and cons.

With the low entry cost, such schemes enabled those who have difficulties buying a house to put down the initial 5% or 10% downpayment and have their own roof over their heads two to three years later.

“When SP Setia first came out with the scheme, it helped the mass market a great deal,” Lim said.

He said the drawback was that since buyers did not have to pay anything for the next two to three years, they may sell their units when the project was completed.

“If the project is handed to them during a boom, they can sell it. But if the project is handed to them during a weak economic environment, they will have to pay for the mortgages.”

ECM Libra head of research Bernard Ching said the recent 25 basis point increase in overnight policy rate had prompted more buyers to buy and lock in at the current interest rates as they might expect the cost of fund to rise further.

“This is the best time to buy a property for own occupancy as entry cost is at an all time low. As seen in the high buying interest in the past six months, many buyers are buying to hedge against rising inflation down the road,” Ching told StarBiz.

According to Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector president James Wong, developers need to catch up with “lost time” when launches had to be deferred for more than a year as a result of the global financial crisis.

“Buyers were facing cashflow problems then and needed to watch their spending. Buying big-ticket items like a house is the last thing on their mind. There are merits in the scheme as it has lowered the entry cost and make house purchase more affordable for buyers.

“Such financing schemes require a lot of resources and only the big developers with strong financial resources can afford to adopt them. In a way, it is a variant of the build-then-sell concept,” Wong said.

He said there was still no risk of overheating in the market as the double-digit rise in property prices was registered only for very niche projects in very-sought-after locations where demand far surpassed supply.

“Property prices on the whole are still much lower compared with those in other countries. While there is still upside potential, prices will not spiral out of control,” Wong said.

Since buying interest recovered in the past few months, developers are no longer offering the housing facility across the board but only for selective projects.

“Besides, Bank Negara is very stringent and only eligible buyers who have the required minimum income level will be able to sign up for the housing packages,” Wong added.

On its downside, he said while the scheme might had drummed up sales, it could give the wrong indication of the real or effective demand for houses.

Admitting that there would always be speculators in the market, SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin said as long as speculation was not rampant, it was actually good for the market as it demonstrated confidence and would improve market liquidity.

“The key is for banks to be vigilant in their credit assessment to determine the borrowers’ ability to service the loan. They should also be selective in terms of the projects and developers to whom they extend the scheme.”

Liew said the higher prices reflected insufficient supply to meet the strong demand for projects in good locations and there was ample room for further price appreciation for good landed residential property.

Since the scheme was launched early last year, SP Setia’s monthly sales averaged more than RM190mil between January and July 2009, which was a new sales benchmark for the company.

Mah Sing Group Bhd president Tan Sri Leong Hoy Kum said of the company’s RM727mil sales recorded last year, 51% of the buyers signed up for the easy financing facility. The sales was much higher than its target of RM453mil.

By The Star

'2010 prospects for property sector positive'

Prospects for the property sector this year are positive due to the healthier performance of the domestic economy and further stabilisation of external economies, Deputy Finance Minister Datuk Wira Chor Chee Heung said today.

For the first three months of the year, the total number of property transactions was 91,979 valued at RM25.294 billion, up from 79,024 transactions worth RM16.922 billion in the first quarter of 2009, he said.

The Malaysian property market recorded a modest performance last year, with a total of 337,859 transactions worth RM80.997 billion compared to 340,240 transactions valued at RM88.34 billion in 2008, he told reporters after launching the Valuation and Property Services Department's publications in Kuala Lumpur.

Among the publications were "Property Market Report 2009", "Laporan Status Pasaran Harta Tanah Suku Keempat Tahun 2009", "Laporan Stok Harta Tanah Suku Keempat Tahun 2009" and "Laporan Indeks Harga Rumah Malaysia Suku Ketiga-Keempat 2009".
"The government has introduced various measures under the recent budget to stimulate and promote the property market and there is also a need to attract foreign direct investments (FDIs)," Chor said.

He said with a high level of FDIs, the demand for housing, office and retail space in terms of sales and revenue would also increase.

Asked about Islamic Real Estate Investment Trusts (I-REITs), Chor said the government had been engaged with other government agencies to look into Islamic REITs.

"We have started to see many investors, especially from the Gulf Region, investing in REITs," he said.

By Bernama

New auction date, Putra Place price lowered

The auction price of Putra Place, which houses The Mall shopping complex, Legend Hotel and an office tower, has come down by a tenth to RM571.05 million

The auction price for Putra Place, located opposite the Putra World Trade Centre in Kuala Lumpur, has come down by a tenth to RM571.05 million as there have been no bids to date.

On Wednesday, the Kuala Lumpur High Court set June 28 as the new auction date.

Putra Place, which houses The Mall shopping complex, Legend Hotel and an office tower, failed for a second time to attract a buyer, resulting in the price cut.

Commerce International Merchant Bankers Bhd (CIMB) is selling Putra Place to recover loans given to property owner Metroplex Holdings Sdn Bhd.
When it first went up for auction in April 2008, the price was set at RM705 million.

In the absence of bids, the price was reduced by 10 per cent to RM634.5 million.

Another auction date was set for January 20 2009, but the auction did not take place as the judge felt that a wider net ought to be cast to attract more interest in a property of that size.

Apart from Malaysia, advertisements were to have been placed in Canada, Los Angeles in the US, Indonesia, Hong Kong, Taiwan, Japan and Singapore.

A new auction date was later fixed for August 20 2009, which also failed to attract any bidders.

The previous order on advertisement will apply in the up-coming auction.

The Mall comprises eight levels of podium retail/shopping units. The Putra Place office tower covers the tenth floor to the 33rd, while the 25-storey Legend Hotel includes serviced apartments and penthouses.

The freehold property with 193,621 sq ft space has 1,323 parking bays.

By Business Times

Guocoland upbeat on China property

BEIJING: Guocoland Ltd, the developer controlled by Malaysian billionaire Tan Sri Quek Leng Chan, plans to double investment in China property to more than US$9 billion (US$1 = RM3.20) on confidence government efforts to avert a bubble will work.

Guocoland, whose projects include shopping malls, apartments, offices and hotels, said a year ago it planned to invest 33 billion yuan (100 yuan = RM46.93) in new commercial properties in China.

"We should very easily double that," Violet Lee, head of Guocoland's China operations, said in an interview in Beijing.

"We have much more confidence now because we can sense the central government is taking things very seriously."
The Chinese government in March ordered state-owned companies to pull out of property development if it's not part of their main business, creating an opportunity for foreign developers.

The nation last week increased the size of downpayments, raised interest rates on second homes and barred banks from funding purchases of third homes after property prices surged by a record 11.7 per cent in March from a year ago.

"The recent policies focus on curbing demand, but China's urbanisation and the rising demand for housing are still there over the long term," said Dai Fang, a Shanghai-based analyst at Zheshang Securities Co

"With the expectation of a yuan appreciation, it also makes sense for foreign companies to build up investment in China."

Guocoland shares closed 4 cents higher at S$2.36 (S$1 = RM2.33) in Singapore trading yesterday.

Guocoland's new investments will focus on integrated projects in major cities like Beijing and Shanghai as well as provincial centres, Lee said. The company is considering expanding its land holdings.

The Singapore-based developer, part of Malaysia's Hong Leong Group, aims to increase its investments over about two years, Lee said. She also sees a "big, big opportunity" in the Chinese government's demand that 78 state-owned companies exit the property market because real estate isn't their main business.

The company plans to take advantage of the move through "mutually beneficially working relationships," she said.

China this week ordered developers not to take deposits for sales of uncompleted apartments without proper approval and barred them from charging "abnormally high" prices.

Real estate prices in Haikou, capital of the southern island of Hainan, jumped 53.9 per cent last month.

The average cost of land in 105 Chinese cities rose 8.1 per cent in the first quarter from a year earlier to 2,700 yuan per square metre, the Ministry of Land and Resources said yesterday.

By Bloomberg

F&N sells project to Star Residence

FRASER & Neave Holdings Bhd plans to sell its “Ampang Hilir 233” project on Jalan Ampang, Kuala Lumpur, to Star Residence Sdn Bhd for RM53.8 million.

F&N, via its unit Elsinburg Holdings Sdn Bhd, yesterday entered into a sale and purchase agreement with Star Residence for the 1.44-acre 0.58ha development, which comes with approved building plans for two blocks of serviced apartments, signature offices and retail outlets.

Upon completion of the proposed disposal in the second half of the financial year ending September 30 2010, the F&N group is expected to derive a gain of RM21.98 million.

By Business Times

Mah Sing buys land for RM53mil

PETALING JAYA: Mah Sing Group Bhd has acquired a 058ha plot of freehold commercial land in Ampang, Selangor, from a unit of Fraser & Neave Holdings Bhd for RM53.8mil cash.

“The land will be developed into serviced residences, M Suites@Jalan Ampang, with an estimated gross development value of RM257mil,” it told Bursa Malaysia yesterday.

The project is expected to commence by the second half of this year for completion in three years.

By The Star

Encorp to buy land in Pulai for RM26m

ENCORP Bhd, a property developer, plans to buy a piece of freehold land in Pulai, Johor, from UEM Land Bhd for RM26 million to build commercial and residential properties.

It plans to build properties with an indicative gross development value of RM330 million, Encorp said in a statement to Bursa Malaysia yesterday.

Work is due to start in 2011 and span five years. Encorp will use internal funds, borrowings, or both for the deal.

By Business Times

Encorp to buy land in Johor

PETALING JAYA: A wholly owned unit of Encorp Bhd has entered into an agreement to acquire a parcel of freehold land in Johor Baru from UEM Land Bhd for RM25.89mil.

Encorp plans to develop the 13,362 sq m of land into a commercial and residential project with a gross development value of RM330mil over a period of five years, the company told Bursa Malaysia yesterday.

In a separate statement, F&N said it will derive a gain of RM21.98mil after deducting all fees, costs and expenses related to the proposed disposal.

By The Star

HK may raise duty to avoid property bubble

HONG KONG: Hong Kong may hike a transaction tax on homes valued at or below HK$20 million (HK$100 = RM41.26) to avoid the possibility of an asset bubble.

A spokesman for the city’s financial secretary John Tsang said the government was considering an increase in stamp duty similar to the one announced in February for homes over HK$20 million.

The earlier measure, which raised stamp duty from 3.75 per cent to 4.25 per cent, came into effect at the start of April.


AmFirst REIT records higher profit

Am ARA REIT Managers Sdn Bhd recorded a higher post-tax profit of RM41.9 million, up by 11.6 per cent, for the financial year ended March 31, 2010 compared to RM37.5 million recorded in the previous financial year.

AM ARA REIT manages the AmFIRST Real Estate Investment Trust.

Its Chief Executive Officer, Lim Yoon Peng, attributed the better performance to prudent cost management, active asset management strategies and six well located assets in the Golden Triangle of Kuala Lumpur, Petaling Jaya, Kelana Jaya and Subang Jaya.

The company has proposed a final income distribution of 4.88 sen per unit for the six-month period from Oct 1, 2009 to March 31, 2010.

In a statement today, Lim said the company with its enhancement programmes will position the properties to remain competitive in the market and increase the current occupancy levels.

Meanwhile, the revaluation exercise on all of its six properties in the final quarter of financial year 2009/2010 has been completed.

Based on the unaudited results as at March 31, 2010, the net asset value per unit of AmFIRST REIT (after provision for distribution) will be RM1.35 upon incorporation of the revaluation surplus of RM12.142 million.

By Bernama