Property Market Outlook 2012 by Ho Chin Soon

Rapid speed transportation linking key growth areas of Malaysia will propel demand for properties in locations currently deemed less desirable or accessible.

Speaking on “Property market outlook 2012” and “Why you should buy now,” at the recent Star Property Fair in Kuala Lumpur, well-known map maker, research consultant and author Ho Chin Soon pointed out key indicators to detect locations where demand for properties would likely to go up.

The foreseeable and probable factors that could affect the property market next year, include:
-the proposed high speed rail link between Greater KL to the southern tip of the peninsula
-the proposed MRT link between Singapore and Malaysia
-the stock market

 
Ho Chin Soon presenting his talk on "Property Market Outlook 2012 & Why You Should Buy NOW"at Star Property Fair 2011

MRT link
Ho highlighted the Entry Point Project (EPP) under the Economic Transformation Programme ( ETP) which will focus on new MRT lines and MRT stations.

With the completion of such transport facilities, residents will have access to almost every major development site of Greater KL where you are not able to enjoy for the time being.

The proposed MRT line will not just pass through major residential developments to your work place but will also be connected to major commercial and entertainment centres such as 1Utama shopping centre. However, such details have yet to be confirmed.

This development will be made possible when MRT Co, a government-linked company under the Ministry of Finance - overseeing the proposed MRT line - finalise details.

Citing from his book, Greater KL: The Rise of Bukit Bintang, Ho was optimistic of the further growth of Bukit Bintang, due in part to the proposed MRT stations to be built at:
Bukit Bintang-Pudu (West Bukit Bintang )
Pavilion (East Bukit Bintang)
and most importantly, an interchange station in the Kuala Lumpur International Financial district.

According to Ho, with a more convenient mode of transportation, property prices in those areas will be “healthy”.

High-speed rail
Another key factor under the Entry Point Project is the reduction in travelling time to Singapore from Greater KL via the high-speed rail. Ho envisaged that with a train travelling up to 350km per hour, one would be able to reach Johor Baru in 70 minutes.

He said high speed rail transportation will be crucial in the development of a mega region comprising Greater KL, Iskandar Malaysia in Johor and Singapore. Such a region will have a combined population that could reach 20 million. Formerly known as the Iskandar Development Region and South Johor Economic Region, the Iskandar Malaysia site is the main southern development corridor in Johor.

With charts to illustrate cross-border traffic data, Ho pointed out that up to 126,000 vehicles cross the Johor-Singapore Causeway daily where 70% of them are Singapore-registered cars.
He highlighted the fact that Singaporeans own up to 40% of the properties being constructed in Iskandar Malaysia.

Malaysia will likely experience greater spillover effects from Singaporeans travelling here, especially when the proposed rapid transit system linking Tanjung Puteri in Johor Baru to Singapore commences operations in 2018.

Compound Annual Growth Rate
On determining property value, Ho said a useful tool would be the Compound Annual Growth Rate (CAGR) calculator, essentially to calculate the annual growth rate of an investment over a period of time.

Using the calculator and the housing price index spanning 10 years - provided by Valuation and Property Services Department - Ho concluded that the best Compound Annual Growth Rate last year was surprisingly registered in Sabah with 8.06% and not Kuala Lumpur, which only came in second place, with 4.75%.

The lowest growth rate tabulated was in Johor, with minus 0.2% due to an oversupply situation in the south which depressed property prices.
In Sabah and Sarawak, it was a different scenario because people there benefited from their respective state government policy that emphasised cultivating agricultural land that brought good returns. Another factor was due to the increase in palm oil prices, and astute Sabahans used the money to invest in property.

Crash
On the price levels for various types of property in Malaysia, Ho found that condominium prices were mostly flat and stable due to ample supply. But landed property prices continued to increase and if this situation continues in 2012 than a crash in landed property prices could likely occur.

Ho said property prices would normally be on the rise if the stock market was doing well and vice versa, citing the 1997 Asian Financial crisis as an example.

Property sector to correct

The steep increases seen in the last two years expected to sputter to a halt on weak global sentiment

THE overall weak global sentiment is expected to cast a pall over the property sector, which is expected to undergo some downward correction next year, agents, property consultants and developers say, with the steep increases seen in the last two years sputtering to a halt. Virtually all segments of the property market will be affected.

International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang says the slowdown, though gradual, will be seen in the pricing and take-up rate of all housing segments, particularly more so in the high-end category.

“Whether it is Penang or the Klang Valley, we don’t have that many multinational companies coming in to occupy some of our high-end properties. Rentals with yields of between 6% and 8% are no longer achievable,” he says.

This slower rate of growth is expected to be more apparent after the new ruling by Bank Negara kicks in. Effective Jan 1, new lending guidelines require banks to use net income to calculate the debt service ratio for loan approvals.

The new guidelines cover all consumer loan products including housing loans, personal loans, car loans, credit-card receivables and loans for the purchase of securities.
While this latest round has the objective of reducing overall household debt, it will affect the property sector, a branch manager of a local bank says.

Previous lending guidelines capped monthly mortgage repayment at 1/3 of net pay instead of gross pay. This new ruling, and the requirement to have a 30% downpayment on the third and subsequent property, introduced in 2010, will result in the banking sector being more stringent when it comes to mortgage loan approvals. The re-imposition of the real estate property tax, at 5% flat within five years of purchase, was another measure to curb speculation.

These measures, together with the global concerns over the United States and the eurozone, will affect sentiment. However, there will be opportunities in the affordable housing segment, which is part of the Government’s Economic Transformation Programme.

Says Ireka Corp Bhd executive director Lai Voon Hon: “We see strong growth potential in these ‘under-served’ sectors such as mid-market residential and commercial as well as ‘green’ developments located close to infrastructure nodes. Market movement in recent months had observed major developers acquiring parcels of land outside the Klang Valley such as in Kajang, Semenyih and Nilai which are destined to be the next “hot spots”.

“With 65% of the Malaysian population falling under 35 years old, we trust that the demand will pick up as consumer confidence recovers. Close to 10 million people are expected to work, live, learn and play in the Greater KL metropolis by 2020.

“Burgeoning young and middle-class population also means the demand for mid-market properties will remain steadfast,” Lai said, adding that the mid-market will receive strong support in terms of demand, and this will be Ireka’s primary focus in 2012.

Other developers to move into affordable housing include the Sime Darby group and Mah Sing group. Sime Darby recently launched affordable housing in Bandar Ainsdale in Seremban. Mah Sing Group Bhd, too, is moving away from high-end housing to go into the affordable housing segment.

Mah Sing group managing director and group CEO Tan Sri Leong Hoy Kum says: “The high-end sector, both landed and high-rise, will be more challenging with the RM4mil and above units taking longer to sell.”
Ireka’s Lai says the company will be developing a 28-acre freehold land in Bandar Nilai Utama, Negri Sembilan into a trendy mid-market neighbourhood, consisting of landed houses and apartments. Another five acres of prime land in Kajang will be developed into a mixed development. consisting of two mid-market apartment blocks and a retail precinct.

Ireka will also embark on a modern industrial park development on its 21-acre freehold land in the established Sungai Chua industrial area near Kajang.

Aside from these three mid-market developments, in the pipeline is the launch of its boutique hotel and serviced residences project in Jalan Kia Peng, within the Kuala Lumpur City Centre (KLCC). This 30:70 joint development project between Ireka and Aseana Properties Ltd is slated for launch in the second half of next year.

On the overall market, Lai says launches and sales take-up rate will be generally slower. However, Malaysia’s property sector (will be) resilient, he says.

Property consultant DTZ Debenham Tie Leung’s executive director Brian Koh says “properties will have to be sensibly priced” with smaller units (if they are condominiums), selling better than larger ones. DTZ will be launching Naza TTDI Sdn Bhd’s Platinum Park around the KLCC area next year.

Over in the office segment, the current glut is expected to persist into next year which will put pressure on rentals.

The overall view of property professionals is that the office market in Kuala Lumpur will remain soft next year unless the global economy recovers sufficiently to spur business expansion to take up the current supply in the city. With the eurozone the way it is, that seems unlikely.
Y. Y. Lau of YY Property Solutions expects Grade A office buildings in KL (existing and new) to face intense competition to secure tenants next year.

“Demand for prime Grade A office buildings held up well last year. But we are expecting an estimated five million sq ft of office space to come onstream in the Kuala Lumpur Commercial Business District and city fringes by end-2012, with KLCC and the Golden Triangle area providing over 90% of the new supply in the first half of next year. “In the second half, the bulk of the supply will be coming from the fringes of Kuala Lumpur.

“We opine that KL Sentral, Bangsar South and Mid Valley City will play a catch-up game in attracting eminent companies seeking MSC status and green building features, as well as conveniences in terms of availability of public transportation, ample eateries and amenities, and upgrading of corporate image. Good building quality and property management services provided are expected to attract companies to set up its businesses here,” Lau says.

Star property

Property market welcomes new group of buyers

BEGINNING tomorrow, new guidelines from Bank Negara Malaysia to curb rising household debt are going to kick in. The guidelines cover all consumer loan products including housing, personal and car loans, credit card receivables as well as loans for the purchase of securities.

Instead of loan approvals being based on gross pay, they will be based on net pay, after income tax, social security deductions and the Employees’ Provident Fund contributions. These are the three main items. The objective of this ruling is to reduce the household debt which has been on the rise.

In all likelihood, property sales will be affected but what is interesting is, how this ruling will affect an increasingly younger generation of buyers who are entering the market for the first time.
In the last 24 months, developers have seen a new group of buyers. They are young and aggressive, upbeat and have a huge appetite for risk. Many of them are in their 20s or early 30s. Many buy with joint names and they are not related to each other. They buy studio units and two-bedroom condominiums, with a built-up of between 600sq ft and 800sq ft with a price tag of averaging RM500,000. When the mortgage payment kicks in, that RM450,000 loan (based on a 10:90 scheme) will equate to a monthly repayment of about RM2,500.

A developer says this scenario is due to a combination of factors. The steep rise in property prices the last two years, coupled with the gains, have spurred this young group of buyers to take on the responsibility of shouldering this long-term commitment.

More than 10 years ago, during the stock market bull run of the 1990s, the market was on an uptrend for a good number of years before the Asian Financial Crisis hit the region. At that time, many young people, including college students, began dabbling in the stock market. Just as that period prompted young people to learn about stocks, the last two years have introduced them to another investment instrument. The difference between the two is the outlay, and the duration of that commitment with stocks needing a smaller capital and more liquid.

Developers say there are essentially two groups of young people who have entered the market in the last two years. The first group are those who, seeing the gains made by earlier purchasers, enter the market with the objective of making a quick gain. Another group ventures into the market before prices go up further and they plan to hold the property for the longer term.

A major factor that encourages this group of aggressive young buyers is the availability of easy credit. The introduction of the 10:90 schemes induces them to make the decision. Many of them hope they will be able to flip that property on completion and make that 25% to 30% gain.

For this group who are buying to flip, they may find the gains not worth the while for the simple reason that the premise of making a 25% to 30% gain is based on a rising market. Prices are today stabilising and there is a glut of high-rise condominiums.

Lawyers and property professionals say investors are unlikely to make that 20% gain going forward. Furthermore, the 5% real property gain tax will also shave off gains. In the event they are unable to off load their units fast enough, they will have to rent them out, but they may encounter another problem – a glut of condominiums and few tenants.


Star Property

BLand to buy land from Penang Turf Club

PETALING JAYA: Berjaya Land Bhd (BLand) has entered into a conditional sale and purchase agreement with Penang Turf Club to acquire 57.3 acres of prime freehold land for RM459mil cash for high-end residential property projects.

In a filing with Bursa Malaysia yesterday, BLand proposed development that includes (but not limited to) the construction of bungalows, semi-detached houses, condominiums and apartment units on the newly acquired land.

“The salient features of the development are a low-density exclusive guarded and gated-up housing development comprising bungalows, semi-detached houses, condominiums and low medium cost housing (as required by the local regulations) cum abundance of landscape and greenery,” it said.

BLand added that estimated GDV of the project was RM1.52bil, However, the total development cost and the source of funds for the development would only be ascertained once the development plans were finalised. The property development is expected to be developed over five years.

Prime land: Tan says the development on the 57-acre site will not affect the turf club horse-racing activities.

Upon the execution of the sale and purchase agreement, BLand has to pay a deposit of RM20mil to Penang Turf Club while the balance of the deposit of RM25.9mil to be paid within 14 days after obtaing the planning approval. Subsequently, BLand will make the first payment of RM137.7mil within 12 months from unconditional date of the sales and purchase agreement while second payment to be paid within 12 months after the first payment followed by a third payment at a 12 months interval from the second.

BLand said the purchase price at about RM8.01mil per acre or RM184 per square feet.

“The purchase price will be funded through the internally generated funds of the BLand group and borrowings. The actual mix will be decided at later stage after taking into consideration the BLand group's gearing, interest costs and other working capital requirements,” it said.

Meanwhile, Bernama quoted Berjaya Corp Bhd founder Tan Sri Vincent Tan as saying: “We've won the bid to buy 57 acres of land and we're now planning to develop the land into an exclusive residential area comprising bungalows, semi-detached houses and low-rise condominium.”

Given the strong demand for high-end landed properties in Penang, Tan hoped the exclusive homes could further boost value of suburban housing in the area.

“In fact, at first, I wondered whether we've overpaid the price for the land, but we believe in the long term, it will turn out to be a good investment. We're confident that with Berjaya's commitment, this property will be developed into an important residential landmark in Penang,” he said.

Tan said Berjaya established its first property and hotel development in Penang in mid-1990s. “We're happy to be back here again and to be associated with an established and reputable name like Penang Turf Club,” he said.

He said development of the 57 acres would not affect the turf club horse-racing activities which would be held on the newly repaired and rejuvenated main racing track.

Tan also said BLand was looking for other strategic and attractive places in Penang for investment.

In 2004, BLand has won the bid to relocate the Selangor Turf Club in Sungei Besi for RM640mil, and in return BLand gets the club's land in Sungai Besi and plans to carry out a mixed development project valued at RM6.3bil.

By TheStar

THE LIGHT Waterfront Penang

THE LIGHT Waterfront Penang

Designed as Penang’s first integrated leisure, retail and cultural destination within an upmarket and luxurious waterfront enclave, THE LIGHT Waterfront Penang promises a totally new experience for its residents and visitors.


Location
Located along the eastern coastline of Penang island, the project is easily accessible via Lebuhraya Tun Dr Lim Chong Eu. This exclusive development is also ideally located beside the Penang Bridge.

It is a mere 15 minutes drive to Penang Free Trade Zone and Penang International Airport, 10 minutes to George Town and 15 to 20 minutes to mainland Penang via the Penang Bridge.

PHASE II consists of shopping malls, waterfront alfresco dining, hotels, Cultural & Performing Arts Centre, marina, corporate gallery offices with office naming rights, grade A offices, a high tech business park and an IT Precinct which consists of an IT Mall, IT offices and IT incubators.


Built-up area
THE LIGHT Residential, featured under PHASE I, is a semi-furnished development with tastefully done fittings. It consists of six projects as follows:

THE LIGHT LINEAR comes with inverter air condition units, water heaters for all bathrooms and a centralised water filtration system while THE LIGHT COLLECTION (THE LIGHT POINT, THE LIGHT COLLECTION I, II, III & IV) come complete with fittings such as kitchen cabinets with hood, hob & oven, centralised vacuum system, inverter air condition units, water heater for all bathrooms and a centralised water filtration system.

The indicative price starts from as low as RM639,800.


Facilities and amenities
THE LIGHT LINEAR offers a comprehensive range of special amenities and facilities to suit a luxurious lifestyle, including a swimming pool, wading pool, jacuzzi, tennis court, gymnasium, games room and study area. Other facilities include a sky lounge, putting green, reflexology path, jogging and cycling path, and a children’s playground.

For those who enjoy entertaining guests, there’s a BBQ area and community hall to cater to various functions and events.

Facilities for THE LIGHT COLLECTION (THE LIGHT POINT, THE LIGHT COLLECTION I, II, III & IV) comprise of 8 swimming pools, 5 gymnasiums, marina facilities, tennis and squash courts, basketball court, children’s pool, and sauna and steam bath.

Additionally, it also has games room, kid’s play room, children’s playground, coral waterways, reading rooms, multi-purpose halls, sky lounge and a linear park.

Launch
The soft launch for THE LIGHT LINEAR was held in August 2009. Approximately 80% of the units were sold within the first two days of launch. THE LIGHT POINT saw over 65% of the units sold within the first few hours of its soft launch in December 2009 .

Launched in May 2010, THE LIGHT COLLECTION I which consists of 24 units of Water Villas was the talk of the property market in Penang. So far, 65% of the units have been sold.

The most recently launched project is THE LIGHT COLLECTION II. The uniqueness of the Pier Apartments was a hit with buyers. Within the first day of soft launch in December last year, 60% sales was achieved.

THE LIGHT COLLETION III is scheduled for soft launch in August this year while THE LIGHT COLLECTION IV is scheduled for soft launch in early 2012.

The first series of residences is targeted for completion in the third quarter of 2012, and the rest will be staggered for completion every six months after that. The last phase featuring THE LIGHT COLLECTION IV will be ready in early 2015.

There will be a 5% rebate for Bumiputra purchasers.


The Developer
The RM6.5bil project is undertaken by Jelutong Development Sdn Bhd - a subsidiary of IJM Properties Sdn Bhd. THE LIGHT represents IJM’s pioneering challenge to showcase the biggest and the best integrated waterfront living, with residential, recreational, entertainment, business, hospitality, education and commercial components all in one dynamic hub.

IJM Land Bhd is the listed property development arm of IJM Corp Bhd. It is a product of a merger between IJM Properties and RB Land, and now stands as one of Malaysia’s leading property developers with a presence in prominent locations in Penang, Klang Valley, Negeri Sembilan, Melaka, Johor, Sarawak and Sabah. IJM Land is a reputable developer of a wide range of property products including integrated developments, townships, residential projects, offices, retail and recreational facilities.



--------------------------------------------------------------------------------

Developer Information :

Jelutong Development Sdn Bhd ( a subsidiary of IJM Properties Sdn Bhd)
THE LIGHT Sales Gallery
16-01, Menara IJM Land,
1, Lebuh Tunku Kudin 3,
11700, Gelugor,
Penang, Malaysia.
Tel: +604 - 2961 333
Email: tansh@ijm.com
Website: http://www.thelightwaterfront.com/




Disclaimers:
All information contained in this website are subject to change by the property developer and/or amendments as required by the relevant authorities without prior notice and cannot form part of an offer or contract. While every reasonable care has been taken in providing the said information, this website or the property developer cannot be held responsible for any inaccuracies. All illustration are artist's impression only. Please contact the property developer for more details.

By http://www.starproperty.my/

Foreign firms keen to build major roads in Penang

INTERNATIONAL contractors from several countries have indicated that they are interested to build four proposed major road projects in Penang.

Chief Minister Lim Guan Eng said the contractors were from China, Singapore, Hong Kong, Japan and Korea.

He said the state government would invite those interested to bid for the projects via request for proposals (RFP) at the end of the year.

“The RFP will be out at the end of the year. It will take another six months before the contracts can be awarded to the successful bidders,” Lim said in an interview on Friday.

He said the time was needed for the state to evaluate the bids and for the bidders to conduct feasibility studies for the projects.

The proposed projects are the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu by-pass, the 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam bypass, the 6.5km Penang-Butterworth Tunnel, and a 12km proposed road connecting Tanjung Bungah and Teluk Bahang.

The Beijing Urban Construction Group (BUCG) is now carrying out a study for the 6.5km Penang-Butterworth Tunnel project that will connect Gurney Drive on Penang island and Bagan Ajam in north Seberang Prai.

Lim has said earlier that BUCG had stated that they had secured RM10bil in funds should the project move forward.

The Penang-Butterworth Tunnel project stemmed from a memorandum of understanding between BUCG and the state government signed in Putrajaya in April.

It was one of eight agreements signed between Malaysia and China in the presence of Prime Minister Datuk Seri Najib Tun Razak and Chinese premier Wen Jiabao.

Lim had earlier also said that while the state welcomed all proposals, the project would be awarded by open tender.

BUCG is an established state-owned company in China whose projects included the Bird’s Nest Olympic Stadium in Beijing.

By TheStar

'Property bubble burst unlikely in Malaysia'

A property bubble burst is unlikely to happen in the Asia Pacific, including Malaysia, as there are no signs to indicate such a trend in the next two years, says AmInvestment Bank Group.

Director for Retail Funds Ng Chze How said real estate investment trusts (REITS) would also not experience a burst including those acquired by the group.

"I don't see a burst or a crash in the property market. "You have high wages, ample liquidity, small percentage of non-performing loans and these plus steps taken by the government to prevent the economy from
overheating, augur well for the property market.

"I don't see a property burst (happening) in the next six months, one year or two years down the line," he told reporters at the launch of Malaysia's first


Asia Pacific REITs fund, AmAsia Pacific REITs, here today.

He said with these factors in place coupled with an economic recovery, there
would be more upside in the market. AmAsia Pacific REITs invests in a diversified portfolio of REITs listed in the Asia Pacific region.

Ng was optimistic the REITS selected by the group would see high occupancy
rate and increasing rental.

"Selected Asian properties have yet to reach their previous peak, as such,
there is room for potential growth," he said, adding that properties were seen
as a good hedge during the current inflationary period. -- Bernama

By Business Times