UPCOMING: Bayan Lepas / Northern Gold Development

April 24th, 2017 No comments


Newly proposed landed residential development by Northern Gold Development Sdn. Bhd. at Bayan Lepas, Penang. Located along Jalan Dato Ismail Hashim, situated between the ongoing One Foresta affordable housing development and Mont Tierra Residences. It is less than 10 minutes drive from Penang International Airport.

This development will feature a guarded housing scheme offering offer 65 units of 3-storey terrace houses with a 2-storey community hall.

This project is still pending for approval. More details to be available upon official launch.

Project Name : (to be cofirmed)
Location : Bayan Lepas
Property Type : Guarded residential development
Built-up Size: (to be confirmed)
Total Units:: 65
Indicative Price: (to be confirmed)
Developer : Northern Gold Development Sdn. Bhd.

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Residential supply expected to recover in three years

April 22nd, 2017 No comments

napic-reportThe excess in supply of residential properties is expected to clear in three to four years, paving the way for a recovery in the property market, says housing industry experts.

The new National Information Property Centre (Napic) 2016 report shows that the incoming supply of residential properties has inflated to 94,124 units, compared to 82,837 units in 2015.

Incoming supply refers to those properties undergoing construction work to be completed in three to four years.

“The incoming supply figure looks alarming at first glance. In actual fact, however, about half of the amount has been sold.

“Developers would normally commence construction work only when they have sold at least 30% of a project.

“In 2016, the transactions of residential properties in Penang totalled 13,244 units worth RM5.36bil,” according to Napic.

“If the consumption per year continues at 12,000 to 13,000, it should take three to four years for the market to absorb the remaining 47,000 units,” Real Estate & Housing Developers’ Association (Rehda) Penang chairman Datuk Toh Chin Leong says.

Toh adds that the market could expect some signs of improvement in the second half of 2018.

Some 51,453 units of the 94,124 are in the higher price range category, comprising 2-3 storey terraces, 2-3 semi-detached houses, detached houses, and condominiums, indicating an excess supply of high-end properties.

There are 10,968 high-end units coming to the north-east district, while a further 12,833 are heading to the south-west district.

Some 27,652 units of similar high-end properties are coming to Seberang Prai.

The planned supply (projects with approved building plans), however, has decreased to 48,120 in 2016, compared with 54,840 in 2015.

On the planned supply, Toh says developers would normally hold back new launches if there is a glut in the market, even if the projects are already approved.

“The positive side is that due to the excess in supply, the days of rapidly escalating property prices are over.

“We can expect Penang property prices to remain stable in the years to come.

“Due to the choices for properties in the market, the pricing of the incoming supply will be very competitive.

“Bank interest rates, however, will need to be maintained at a low level to stimulate interest in the property market,” he says.

Raine & Horne Malaysia director Michael Geh concurs that the local property market could recover in three to four years, provided that the market continues absorbing 12,000-13,000 units per annum.

However, the surge of unsold completed residential properties in Penang is a cause for concern.

“The unsold completed units have doubled to 1,896 in 2016 compared to 992 in 2015.

“The market value of the 1,896 units is RM1.47bil, compared with RM801.88mil in 2015,” he says.

There were 5,646 new launches in the primary market in 2016, compared with 2,348 units in 2015.

“However, sales of the newly launched 5,646 units is low at 9.9%, compared to 48.2% in 2015.

“Apartments and condominiums formed the bulk of the new launches, accounting for 56.4% (3,187 units), priced between RM500,000 and RM1mil,” Geh adds.

Unless foreign funds help to absorb the high-end properties, the pricing in this segment will undergo a correction.

As China has restricted funds from flowing out to purchase overseas properties, the scenario of a price adjustment in the high-end property segment is very likely.

“The demand most definitely will not come from locals as the average household income in the country ranges between RM4,585 and RM6,141 per month, making ownerships of high-end homes a dream.

“We welcome a pricing correction scenario in the high-end segment, as prices in the high-end category has peaked.

“All eyes are now on how Bank Negara will tweak interest rates to deal with inflation and pressure on the ringgit.

“In January 2017, Bank Negara has said it will hold on to the current benchmark interest rates at 3%, on expectation that inflation will average higher this year due to stronger oil prices.

“We hope Bank Negara will continue maintaining interest rates at a moderate level to sustain the property market,” he says.

In contrast to the high-end segment, the transactions in the sub-sales market are still encouraging.

“About 80% of the transactions in the property market today come from the sub-sales market.

“In George Town, the values of older apartments, built in early 2000, have more than doubled.

“A 700-800 sq ft apartment, completed 12 years ago in George Town, is now selling for over RM400,000, compared to the initial selling price of about RM130,000.

“Given the competition from the sub-sales market, the pricing of properties in the primary market will eventually be adjusted to a moderate level.

“Residential properties in the primary market are currently priced about 25% above those in the sub-sales segment,” he says.

CA Lim & Co principal Lim Chien Aun says it is not unreasonable to expect the property market to recover in three to four years’ time.

Bank Negara, however, must keep interest rates low to prevent a fire-sale situation in the property market.

“Many people have forgotten that there was a property crisis in Penang in the second half of 1980s, which saw property prices dipped by about 50%.

“Those with little or no memory of the crisis don’t think that property prices in Penang can take a deep plunge.

“The downside of a low interest rate regime is that it will create new bubbles in the property market, making it difficult for prices to undergo correction, while there is little improvement in the real economy,” Lim says.

The state authorities should plan for residential projects in neighbourhoods where there are reliable transportation connections to their work place.

“There must also be sufficient utility infrastructure to support an increase in the population size of a neighbourhood.

“With the minimum of two adult persons to a house, there will be about 20,000 people coming to stay in the north-east district.

“Can the existing utility infrastructure support the increase?

“How many people can afford to buy high-end homes?” Lim asked.

Lim says that Penang cannot be developed as though it is a financial centre like Hong Kong or Singapore.

“The difference between Penang and HK and Singapore is that the return on investment over here is unattractive.

“The current rental yield per annum for properties in general is less than 5%, and for residential properties, it hovers around 2.5%.“The yield should be around 5% to 6% in order to be attractive, emphasising the need for studies and policies to be carried out to address this very important criteria.

“The participation of foreign buyers in the local market is also small, less than 8%,” he says.Ideal Property executive chairman Datuk Alex Ooi says the new higher density policy will give developers the room to plan different pricing properties to correct the imbalance in the high-end segment.

The local authorities has recently increased the density per acre to 128 units from the previous 87 units.

Developers with the landbank to develop creatively designed projects with moderate pricing stand a better chance of competing in the market, Ooi says.

“Our land bank in the south-west district will be used to develop properties of various sizes and pricing.

“We always need to ask… if we build large properties in a strategic location, can we sell them?

“What is the demand for these properties?” he asks.

Source: TheStar.com.my


Categories: Property News Tags:

UPCOMING: Bukit Mertajam / GTM Land & Property

April 21st, 2017 No comments


An on-going mixed development by GTM Land & Property Sdn. Bhd. at Bukit Mertajam, Penang. Strategically located along Jalan Kulim, next to the famous Roman Catholic church – St Anne’s Church.  It is just a mere minutes drive away from Maju Jaya Business Center in Kampung Baru.

This development will feature a mix of residential and commercial properties:

  • 3-storey terrace (20 units)
  • 3-storey semi-detached (8 units)
  • 3-storey shop office (28 units)

This project is still pending for approval. More details to be available upon official launch.

Project Name : (to be cofirmed)
Location : Bukit Mertajam
Property Type : Mixed development
Built-up Size: (to be confirmed)
Total Units:: 20 (terrace), 8 (semi-d), 28 (shop office)
Developer : GTM Land & Property Sdn. Bhd.

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Homebuyers to bear the brunt of rising building costs

April 20th, 2017 3 comments

construction3Property developers have warned that home prices may rise following the government’s recent move to slap a safeguard duty on the import of certain steel products for three years.

If the safeguard duty leads to a rise in steel prices, Real Estate and Property Developers’ Association (Rehda) president Datuk Seri FD Iskandar Mohamed Mansor said they will have no choice but to pass on the extra costs to homebuyers.

While the intention of the safeguard duty is to protect the local steel industry, the move is not good for the property industry, he said.

“At the end of the day if the contractors and developers can’t absorb the steel price increase, what happens? The increase will be passed on to consumers,” FD Iskandar told a media briefing to reveal the findings of the association’s Property Industry Survey 2H2016 and Market Outlook 1H2017 yesterday.

The government last week announced the implementation of safeguard measures, which see imports of steel concrete reinforcing bar (rebar) being slapped with a 13.42% duty and a 13.9% duty for steel wire rods (SWR) and deformed bar-in-coils (DBIC), starting April 14.

However, the duty for rebar will be reduced to 12.27% after a year and eventually down to 11.1% two years later, while that for SWR and DBIC will be cut to 12.9% after one year and eventually down to 11.9%.

FD Iskandar said the safeguard duty has resulted in a significant increase in raw material costs.

“We used to pay about RM1,700 per tonne for the smaller steel bars and now we are paying anything from RM2,300 to over RM2,500 per tonne,” he noted.

He also pointed to the price of steel bars, which used to cost an average of RM1,712 per tonne in Johor, RM1,847 per tonne in Selangor and Kuala Lumpur, and RM1,729 per tonne in Penang. However, contractors are now paying RM2,570 per tonne.

“Definitely this will increase the price of construction, and construction is the main cost in the gross development cost of a project,” said FD Iskandar.

Besides the rise in prices of steel products, he said the price of a bag of cement has also risen to RM18.40 compared with RM17.30 per bag in Selangor and Penang previously, while that of river sand — which is used in concrete production — has also risen.

According to Rehda’s Property Industry Survey 2H2016, developers have indicated that material and labour costs remain as the top cost components affecting their cash flow, especially with the increase in prices of certain steel products due to the safeguard duty.

Meanwhile, 29% of respondents said the overall increase in the cost of doing business due to higher material, labour and compliance costs, has been the main challenge in providing affordable housing.

In addition to higher raw material costs, FD Iskandar said contractors and developers are also facing higher labour costs. He noted that the labour cost index had risen to 117.4 as at December 2016 from 111.1 a year ago.

“It’s very hard for developers to lower prices [of properties] if costs keep going up. Obviously, developers’ margins are being squeezed,” he said.

FD Iskandar also urged homebuyers to be more realistic when it comes to choosing a preferred location for their potential homes.

“Wanting to own a home in the Kuala Lumpur city centre for less than RM500,000, that is not very realistic. That’s why we also urge the media, the National House Buyers Association and the government to help educate our buyers,” he said.

In Rehda’s inaugural house buyers’ survey that was carried out during the association’s Mapex Property Showcase 2016 held on April 14 to 16, Kuala Lumpur city centre topped the most preferred locations list for homebuyers, followed by Petaling Jaya-Damansara; Cheras and Bangsar; Puchong and Shah Alam; and Cyberjaya.

FD Iskandar also highlighted that accessibility trumps all other home features and facilities when it comes to buying a home.

“Our respondents said the light rail transit (LRT) or mass rapid transit (MRT) [44%] and distance to a transportation hub (30%) are important considerations when it comes to buying a home.

“This is why we urged the government to allocate 40% to 50% of lands near to a transportation hub to build affordable homes because people who are looking to live in these homes are the ones who will use the public transportation [the most].

“In Kuala Lumpur, we have KTM, LRT, MRT and monorail. But if you keep on selling lands near them for top prices, [developers] cannot build affordable homes. It’s great to build transportation hubs. But we also must be certain that the right target market stays near to these transportation hubs,” he said.

Meanwhile, Rehda once again called on the government to review its property cooling measures to boost property sales.

FD Iskandar added that based on feedback from Rehda members, loan rejections continue to pose a problem to potential buyers.

Source: TheEdgeProperty.com.my

Categories: Property News Tags:

UPCOMING: Tanjung Bungah / BSG Property

April 19th, 2017 No comments


Yet another proposed mixed development by BSG Property at Tanjung Bungah. Strategically located along Jalan Lembah Permai, adjacent to 2 Permai landed housing scheme by the same developer. It is only a mere minutes drive to Tunku Abdul Rahman (TAR) University College.

This development will feature a mix of condominium serviced apartment and shop offices:

Parcel A:

  • 1 block of 49-storey building with two residential towers (585 units)
  • 3-storey shop offices (34 units)

Parcel B:

  • 49-storey building with a mix of condominium (Tower B1) and serviced apartments (Tower B2).
  • 3-storey shop offices (34 units)

Parcel C:

  • 2-storey drive-thru restaurant

Parcel D:

  • 3-storey private clubhouse

This project is still pending for approval. More details to be available upon official launch.

Project Name : (to be cofirmed)
Location : Tanjung Bungah
Property Type : Mixed development
Built-up Size: (to be confirmed)
Total Units:: 58
Tenure : Freehold
Developer : BSG Property (BSG Property)

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Location Map: