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.

Thursday, September 23, 2010

Mixed reaction to possible increase in property downpayment

PETALING JAYA: The possible move to raise downpayment from 10% to 20% for the third and subsequent house purchases drew mixed reaction from housing professionals and a research house.

Datuk Michael Yam ... ‘The property market is still lukewarm.’

Real Estate and Housing Developers’ Association (Rehda) president Datuk Michael Yam said the capping of loans to 80% for the third and subsequent purchase would probably not discourage the wealthy from speculating because they could afford the 20% deposit.

“Investors would pull back on purchases after the third unit because of the higher deposit requirement. The impact of this is probably 10%-20% of the upmarket segment. Overall, the effect of the cap is minimal as the presence of speculators is small,” he said.

Prime Minister Datuk Seri Najib Tun Razak said on Tuesday that Bank Negara might impose a limit on financing for subsequent purchases after the second property while first time buyers can borrow up to 90%.

The property market has come under speculative pressure the past 12 months with double-digit rise in prices in some locations. Despite concerns that a bubble may be forming, Yam said “the property market is still lukewarm.” The number of launches by developers has also increased compared with last year, with developers offering 10/90 schemes or variants of it.

Yam, who is also managing director of property consultancy Impetus Partnership, said investors may purchase that third property, but nothing additional due to the deposit. “Those who buy for the next generation would buy it sooner if they see a capital upside as well.” Yam said the 20/80 move would have little impact on the secondary market.

“There are usually lower margins for secondary housing,” he said. He said the move needed to be further studied and evaluated in order not to dampen the activities of serious investors.

“At the moment, the property market is still lukewarm due to lower rental yields and capital appreciation compared to neighbouring countries. Placing such a restriction may take Malaysian property off the radar of foreign investors. As it is, the Government has already re-implemented real property gains tax (RPGT) and raised interest rates. Further restrictions may not bode well for Malaysian property.”

He said loan capping and other measures introduced in Singapore had not really slowed the property transactions in Singapore. This proved that it was ultimately market forces that decided what was best, he added.

Managing director of The Metro Kajang Group, Datuk Eddy Chen, said the move would have little effect on landed units. “It is fine to have a pool of properties for rental income. I don’t think there are many people who are buying to flip (to resell when the project is completed). There is always the 5% RPGT as a deterrent,” he said.

He said the 20/80 move would not affect landed units. The company launched 260 double-storey terrace and semi-detached houses last week in Semenyih, Selangor.

Mah Sing’s group managing director cum group chief executive Tan Sri Leong Hoy Kum said the proposal should not affect market sentiment.

“Property has long been viewed as a preferred vehicle to hedge against long-term inflationary pressure,” Leong said.

“The banks have in place stringent processes as well as check and balance in their loan approval process. These should be good enough to ensure the quality of loans in the market and market forces should be allowed to prevail.”

A source from a housing developer has a different view.He said that nine out of 10 buyers opt for the 10/90 scheme whether they were buying to stay or investing.

“If there is a 20% downpayment requirement for non-first time buyers, at least 30% of sales will be affected,” he said.

Should this move be implemented, he said Malaysia would be joining the ranks of Hong Kong and Singapore to curb property speculation.

Hong Kong requires buyers to have a downpayment of between 50% to 60%.

Singapore requires 70% to 80%.

Property consultancy Rahim & Co said government intervention was only warranted if there was overwhelming evidence of excessive speculative activity.

“Otherwise these actions may backfire and hinder recovery in one of the most important economic components. Interest rates have already been increased – it may be too early to slap more deterrents to investment at this fragile stage of the economy’s recovery,” a Rahim & Co statement said.

“It should be best left to the banks to decide on their own desired level of exposure, although it might be prudent for Bank Negara to direct the banks to cut back on their margin of lending to parties that are clearly speculators, no matter how good their credit.”

The statement said 10/90 was a happy medium.

Research house HwangDBS said the 20/80 move was “less onerous than expected as there was initial concern that the loan-to-value ratio at 80% cap may be imposed across the board.”

“Impact to the property sector should be insignificant as we believe there are not many buyers with more than two houses. Banks have been generally stringent on mortgage applicants with multiple properties and high monthly commitment, the report said.

“We are positive on the Malaysian property sector and expect demand to continue to be supported by positive macro factors like young population, urbanisation, shrinking household size, rising income, inflation hedging and infrastructure improvements,” HwangDBS said.

By The Star

More funds invest in offshore properties

PETALING JAYA: More Malaysian institutional funds, including Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF), are looking to raise their exposure in offshore property investments such as in Australia and the UK.

Last month PNB acquired its first property in Australia with the purchase of Santos Place in Brisbane for A$287mil (RM838.19mil). The 36-storey Premium A grade office tower with 34,338 sq m is said to be the largest six-star environmentally rated building in Australia.

Christopher Boyd ... ‘They are entering markets that offer higher income assets.’

Following on the heels of PNB’s foreign venture, the EPF had at the end of August announced that it would be investing £1bil (RM4.88bil) in European property markets, focusing on the UK.

The fund had said that the investments would be for the long term with expected annual yields of 6% to 7%.

Industry observers said another potential candidate for offshore property investment was Kumpulan Wang Persaraan (KWAP).

According to the fund in its recently upgraded portal, the objective of its property investment initiatives is to invest in strategic properties for steady income with growth potential on rents and capital values in order to achieve commendable returns that contribute well to KWAP’s overall goals.

“Prospective investments in property can be domestic or foreign based with a preference for locations in central business district and urban areas. Acquisition of the strategic assets can be via direct acquisition or partnership.

“The risk exposure of property investments should not exceed 30% of KWAP’s Strategic Asset Allocation. Moreover, the property portfolio itself shall be well diversified based on locations, types, sectors and sizes,” KWAP said in the website.

PNB’s acquisition of Santos Place is said to be the largest commercial property transaction in Queensland since the global financial crisis. It was brokered by CB Richard Ellis and Jones Lang La Salle.

According to CB Richard Ellis Malaysia executive chairman Christopher Boyd, who was one of the agents for the PNB deal, Malaysian funds are venturing offshore to diversify their risks and to go to markets where returns and capital values are higher.

“They are entering markets that offer higher income assets as they have a commitment to pay out dividend yields of 5% to 7% per annum,” he told StarBiz.

Santos Place is fully tenanted and more than 40% of the office space is leased to Australian oil and gas exploration and production group, Santos Ltd. Petronas is also one of the tenants.

“The vendor, Nielson Properties, has given a guarantee of an annual yield of just under 8% for the building. The yield is quite attractive considering that Malaysian properties are offering yields of only 6% to 6.5% a year,” Boyd said.

He added that the performance of office buildings in general “is a proxy for the country’s economy and how it fares is as good as the tenants that occupy them.”

“This is a good time for the funds to snap up good quality property for long-term investment. Investing in offshore property market is a cyclical play and it is important to get the timing right when the market is on the verge of an upturn,” Boyd added.

Most of the traditional buyers of investment property in Australia are institutional funds such as mutual and pension funds and REITs, but they are quite cash strapped now and are not active in the market.

He said the domestic buyers were expected to only start getting back to the market within the next 12 months and the valuation of the property assets was still quite attractive.

“Given that there is still room for capital appreciation for good quality investment property Down Under, it is a good time to leverage on the market. The quality of the tenants there is also highly rated and they usually sign up for long-term tenures of 10 to 15 years. The rental rates will be reviewed every three to five years,” he added.

Besides office buildings, investors Down Under are also keen on good retail centres as well as industrial and logistics buildings.

CB Richard Ellis executive director Paul Khong said there were also strong interests from Malaysian developers in Australian development projects especially in Sydney and Melbourne.

“They are looking at redevelopment of commercial and residential sites and also joint venture opportunities. Some have already set up shop there.”

Khong said Malaysians generally ranked very high on the investment list for Australia and UK properties as a majority of individual investors would have one of their children studying there or would be going abroad to pursue their studies soon.

“This is a natural push for our local investments to head this way. The investors will be looking at yields of 6% to 8.5% (initial yield) depending on property type, size of investment, location and country. Many projects have seen good or even double-digit capital appreciation over the last five years,” Khong added.

By The Star

Announcement on loan-to-value ratio for properties very soon

KUALA LUMPUR: BANK Negara is expected to make an announcement on the loan-to-value ratio for mortgages very soon, according to a source.

“Genuine home buyers need not worry as it will most likely be implemented on buyers making their third and subsequent house purchases, and be confined to specific locations and prices.

“These are only pre-emptive measures as currently there is no property bubble,” said the source, adding that genuine house ownership would still be encouraged.

By The Star

Three-day property seminar begin tomorrow

The National House Buyers Association is having three seminars from tomorrow to Saturday at the Mid Valley Exhibition Centre in Kuala Lumpur.

The sessions are ideal for house buyers, property investors, developers, financiers, architects, engineers, surveyors, valuers, contractors, real estate agents, lawyers, accountants, stakeholders, insurance professionals and interested parties.

The topic for the first seminar tomorrow is Pemudah Focus Group on Registering Property.

There will be presentations by the Inland Revenue Board stamp duty division director Teoh Ai Suan, Valuation and Property Services Department director Huan Cheng Kee and Federal Territories Land and Mines Office director Hasim Ismail.

On Saturday, the focus will be on Tribunal for Consumer or Housing — Claims, Jurisdiction and Award Enforcement.

The session will explain in layman’s terms the workings of the respective tribunals, common cases and enforcement and prosecution of non-compliance of tribunal awards.

The speakers will be Consumer Claims Tribunal chairman Pretam Singh, Homebuyers Claims Tribunal chairman Bhupinder Singh and National Housing Department deputy enforcement director Gunasegaran Naidu.

On Sunday, the issues that will be explored include Built-Then-Sell and Sell-Then-Build concepts, legal requirements on JMB and MC, strata titles, flaws in the Building and Common Property Act and absence of regulations, and more.

In conjunction with the 53rd National Day celebration, the session will also feature a short speech by former Perak police chief Datuk Seri Yuen Yuet Leng on Merdeka: My Experience and Yesteryears.

Participation fee for each session is RM80 or RM200 for all three sessions. An extra RM20 will be charged for registration after Sept 20.

A book titled Buying Property from Developers (What you need to know and do) by Robert Tan will be given free to participants who opt for the three-seminar package.

For details, call 012-3345 676 or email

By The Star

SP Setia 3Q net profit jumps 104% to RM87.25m

KUALA LUMPUR: SP SETIA BHD posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.

It said on Thursday, Sept 23 revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.

SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.

“The 10-months sales value has already exceeded the group’s highest ever sales value over one financial year of RM1.65 billion recorded in FY2009 by 18%,” it said.

SP Setia said sales had remained strong since the start of the year, with RM590 million achieved in the third quarter and cumulative nine-months sales of RM1.8 billion.

Projects that contributed to these numbers include Setia Alam and Setia Eco-Park at Shah Alam, SetiaWalk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.

SP Setia president and CEO Tan Sri Liew Kee Sin said the group’s proactive moves in 2009, aimed at capturing market share in the luxury high rise and integrated commercial sector, whilst further consolidating its lead in the landed residential segment, had borne much fruit.

By The EDGE Malaysia

Al-Aqar to buy Aussie properties for RM135m

KUALA LUMPUR: Al-Aqar KPJ Reit will acquire properties from Jeta Gardens Waterford Trust in Australia for RM134.91mil as part of plans to diversify its income sources and tenant base.

The acquisition would be satisfied with RM67.45mil in cash and the rest via the issuance of new units in Al-Aqar, said the real estate investment trust company in a filing with Bursa Malaysia yesterday.

The properties consist of an integrated gated premium residential estate for older people including an aged care complex with care facilities, 23 units of independent living villas and 32 units of independent living apartments as well as portions of undeveloped land.

By Bernama