Archive for the ‘Property News’ Category

Nadayu plans RM800m projects in Klang Valley, Penang

June 21st, 2013 No comments

Nadayu Properties Bhd aims to launch three projects worth over RM800 million in the Klang Valley and Penang within six to 10 months to grow the group and build its brand.

The developer will be launching Nadayu 99 in Cyberjaya, Superlinks@Nadayu Melawati in Ampang and Nadayu 290, Bukit Gambir in Penang.

Nadayu 99 comprises 13 units of three-storey shoplots and 132 units of superlink houses, while Nadayu Melawati comprises 46 units of superlink houses.

Nadayu 290, meanwhile, features 279 units of service apartments and hotel.

These projects worth a combined RM851.5 million, its chief executive officer Mohd Farid Nawawi said.

The company also has on-going projects worth about RM1 billion, which are being launched in phases.

This year, the company expects its property sales to hit RM300 million this year, led by its latest launches in the Klang Valley.

Farid said the targeted sales will be driven by its on-going property projects, namely Nadayu Melawati, Nadayu 92 in Kajang and Nadayu 28 in Bandar Sunway.

“The take up rate for the three projects is looking healthy at the moment and we are upbeat on the market,” he told reporters at the company’s shareholders meeting here yesterday.

Also present was its chairman, Hamidon Abdullah.

Hamidon said Nadayu has about RM250 million in unbilled sales, which will be recognised for the next one year.

“We will look at all opportunities to grow the business and also look for more strategic land banks for future development,” he said.

He added that Nadayu brand is becoming acceptable, where people are starting to identify the name and associate it with the level of quality and delivery.

Currently, the company has a land size of 334.67 ha, mainly in the Klang Valley and Penang, worth about RM5.9 billion.

Commenting on the second quarter performance, Hamidon said that the company is expecting to do better than the first quarter.

Source: Business Times

Categories: Property News Tags:

Tambun Indah plans RM200m capex to expand landbank

June 19th, 2013 21 comments

GEORGE TOWN: Property developer, Tambun Indah Land Bhd, plans to spend RM100 million to RM200mil in capital expenditure (capex) this year to buy more land.

Managing Director Teh Kiak Seng said the group was actively scouting for land in Penang especially in Seberang Perai.

“We will spend to expand our landbank based on the opportunities that arise,” he said at its AGM on Wednesday.

Teh said the group planned to add about 200 acres to 300 acres of land to the current 562 acres of undeveloped land in Seberang Perai Selatan.

“We’re currently talking to a few landowners in Seberang Perai but so far nothing has been confirmed,” he said.

Teh also said the group had secured about 70 per cent take-up rate on its ongoing projects.

“We’re expecting our projects Taman Bukit Residence, Camellia Park and Seri Permai with a total gross development value of RM114 million to be completed by this year,” he said.

He said the group’s unbilled sale totalled RM425 million as at March and it is expected to contribute to the group’s earnings over the next two to three years.

Teh said the group was poised for better growth this year, driven by Penang’s booming property market.

He said the property market in Penang’s mainland is expected to grow, boosted by the completion of the Penang Second Bridge project.

“Following the skyrocketing property prices on Penang Island, many Penangites have opted to buy properties on the mainland, this has increased our property sales, especially our current projects in Seberang Perai Selatan,” he said.

Tambun Indah Land’s pre-tax profit rose 32.1 per cent to RM23.98 million in the first quarter ended March 31, 2013 from RM18.15 million in the same period last year.

Its revenue increased 18.7 per cent to RM78.32 miilion from RM65.99 million previously.

Teh said the revenue growth was mainly derived from newly launched projects Pearl Residence and Pearl Indah 3 on Penang’s mainland and Straits Garden on Penang island. – Bernama


Categories: Property News Tags:

Does DIBS benefit buyers?

June 15th, 2013 No comments

I recently went to a SOHO launch where the developer offered a 10% rebate and DIBS (developers’ interest-bearing scheme) package. With regards to the rebate, 10% of the selling price will be waived provided the sale and purchase agreement (SPA) is signed within a certain period.

I understand that the rebate is not included in the SPA and is only given upon vacant possession. This looks unfair, what happens if there is no “vacant possession” where the developer does not complete the construction?

The developer would have collected progress claims and there is no guarantee there is vacant possession since it would have to await completion and since the DIBS and rebate were the attractions to such a launch, it would be a fair deal only if the buyer gets the discount upfront, right?

The above is a letter to StarProperty portal.

That 10% rebate is just an inducement to buy. Either way, whether the buyer gets the discount upfront, or upon vacant possession, this may not be a fair deal to the buyer. Here is the long explanation.

Close to five years now, a majority of developers have been offering DIBS for different types of projects landed, condominiums and serviced apartments irrespective of pricing.

While these financing schemes may seem an easy route to own a property, buyers who opt for a DIBS package may really need to consider if they want to take this route in order to own a property.

The issue of DIBS is brought up once again because according to a developer who declined to be quoted, DIBS packages are not in favour of the buyer.

“DIBS packages effectively push up the selling price by between 5% and 15%,” he says.

A property consultant who declined to be named says there is a difference of as high as between 20% and 25% for a DIBS and a non-DIBS package.

“On a per sq ft basis, the current market value for a property may be RM300 per sq ft. Because the developer is offering a DIBS package, somebody has to fork out the interest. So instead of selling the house at market value of RM300, he ups it by 20% and sells it at RM360 per sq ft.

“The buyer is, therefore, paying future prices today. The prevalent attitude today is, in the event prices do not reach RM360 per sq ft, he will forgo the commitment. But he is still committed to the loan. If he does not pay, the bank will take action to auction off the property. But let’s assume he decides to keep the property, the DIBS package is still not in his favour because if the price does not reach RM360 per sq ft – that being the price he paid on a per sq foot under DIBS – the buyer will have to top up the balance,” the consultant says.

Generally, there are two common misconceptions among buyers. The first is that this is a built-then-sell (BTS) scheme. This is not a BTS scheme.

“In a BTS scheme, the buyer pays 10% to 15% initially but he has not locked himself into a loan agreement. Although he has paid a commitment fee, that commitment hinges on the completion of the house, according to what the developer has promised him. He effectively can walk away from the purchase,” the consultant says.

In a DIBS package, the buyer is locked into a loan agreement, the consultant says.

“The common public perception is Don’t worry, nothing to be paid. only 5%, or 10%’. The reality is that, they cannot walk away because they have committed themselves to service the loan. The only way to walk away from it is to flip it.”

The consultant says if the project is abandoned, the buyer is still committed to the mortgage.

Besides buyers paying future prices, the consultant says DIBS packages encourage speculation, that is, to buy with the intention to flip. It was this that prompted the Singapore government to ban interest bearing schemes even as far back as in 2009, followed subsequently by other measures to curb speculation.

“They are gambling that prices will go up. If a buyer has already paid future prices of between 20% to 25% , what is there to make, unless they expect to charge the next buyer another 25% to 30%? It is this sort of attitude, when enough people do it – the massess so to speak – that push up property prices,” he says, adding that the buyer can only flip when he has a margin of more 15% to make (as profit).

He says the authorities should enforce developers to put in big fine print what DIBS packages involve.

“If we overdo the DIBS, there is a snowball effect. Over time, it distorts prices,” he says.

As per the last budget, effective Jan 1 this year, the government raised the RPGT from the previous 10% to 15% on all properties sold during the first two years from date of purchase, and 10% (previously 5%) for those sold between the third and fifth year. There is no tax on properties disposed after the fifth year.

Because the effective date begins on the signing of the sales and purchase agreement date, and it generally takes two to three years to build a landed and a condominium property respectively, the buyer will be taxed 10% of his gains on the third or fourth year (the first two years being the construction stage). There are mixed views how effective the real properties gains tax (RPGT) may be to deter speculation. A total of RM1.09 billion RPGT revenue was collected in 2011 and RM 1.248 billion in 2012.

The other alternative is to ban DIBS for housing that is below a certain value, for example RM1mil, he says.

The second option is to opt for the normal progressive payments. There is a third option, and that is to buy a completed project. But many buyers do not want to do that because the seller would have made a profit.

Moreover, not many developers are offering this built-then-sell (BTS) route, which continues to be promoted by the National House Buyers’ Association (HBA) today.

In a previous column for StarBizWeek, HBA honorary secretary-general Chang Kim Loong writes: “… the buyers truly do not make any payment except for the deposit of 10% until vacant possession because the end-financing loans do not kick in until the houses are completed with all the certifications obtained and keys with vacant possession are available.”

Elvin Fernandez, the managing director of Khong & Jaafar group of companies says while the debate for austerity versus monetary expansion policies continues, the fact remains that there is a flood of money rushing throughout the global economy in search of higher yields. This pushes up prices of bonds and shares to unrealistic levels. Much of these money have gone into alternative investments like properties.

“We are concerned about this flood of money, particularly in this region which may not have suffienct regulatory infrastructure to absorb this money, or to deal with it,” Elvin says.

He says governments in the region, for example Hong Kong and Singapore, whose economies are more open to this flood of money have instituted a range of regulatory measures, known as macro-prudential measures to try and stem the ill effects that this flood of money can cause in property markets.

How does this affect the Malaysian property market or Malaysian housing market?

He says in order to prevent the property market from stalling, developers in early 2009 rushed in with a lot of 5/95 schemes and other incentives in order to maintain interest in the market. These incentives include DIBS, absorption of stamp duty and legal fees, rental guarantees, cash-back payments and early bird discounts. These incentives essentially bring prices down.

“But what is important is, if the discounts through incentives are not quantified and made known to all market participants, then the headline price – the price with the incentives – will be taken as the real market price, which it is not. The real market price would be the price after quantifying and deducting the incentives. This real price can then be also compared with prices in the secondary market.”

Elvin says this is important because “banks give loans on the market value and, in many cases, loans for purchases from the primary market”.

“Banks do not need professional valuations from independent valuers when buyers buy directly from the developers. Consequently, the lending is based on the headline price. In the event of a default and foreclosure, the bank will not be able to recover the full loan as it was based on a headline price with the incentives. And at the point of foreclosure, the price anyone will bid is certainly not a price with the previous incentives. In the event of a market downturn, and bearing in mind now that the percentage of primary sales have dramatically increased in the past few years, questions of financial stability may arise,” he says.

Secondly, Elvin says the National Property Information Centre (Napic) has been building up over the years a robust property index including a house price index. It is important for this price indices to reflect the real prices.

While it is fair for developers to give discounts by way of incentives, developers should state clearly in their documents and brochures the price or value of the incentives given. The real price should be transparently known to the buying public, he says.

This measure of transparency has been introduced in Singapore, he says.

Because of the incentives, the primary housing market, where buyers buy directly from developers, which used to hover around 12% of the total market has now shot up to 21% in 2011, and 22% in 2012. Consequently, the secondary market has receded.

“In other words, people now buy from the primary market because of the incentives. And this could also signal that the market, as a whole, which is usually and still is heavily biased towards the secondary market, is showing signs of slowing down.

Elvin says according to Napic, total residential transactions in the secondary market has come down from 214,044 in 2011 to 212,428 in 2012.


Categories: Property News Tags:

Council slaps stop work order on developer of Paya Terubong housing project

June 12th, 2013 No comments

The hill-slope housing project in Paya Terubong caused mudflow to the houses nearby.

GEORGE TOWN: The Penang Municipal Council (MPPP) has issued a stop work order on a hill-slope housing project in Paya Terubong with immediate effect.

The construction site behind the residential area in Lebuh Rambai 6, has been the cause of mudflow to the houses nearby.

MPPP said the notice was handed over to the developer and architect yesterday .

The developer is required to carry out mitigation work to prevent such incidents from recurring by cleaning up the affected roads and its surroundings as well as proposing new ways in tackling the mudflow.

MPPP also ordered the developer to make sure the construction site would not cause any harm to the residents.

“They (the developer) must meet with the residents to identify the houses affected by mudflow and give them compensation on the cleaning works,” MPPP said in a statement.

The council added that the developer would have to clean up the muddy roads, carry out mitigation by covering the exposed slopes and prepare more sediment ponds and drains.

It was reported that residents of Taman Lau Geok Swee, situated in front of the construction site, were fed up with the tedious work of washing mud from their porches every time there is a downpour.

A resident who gave her name only as Chin, claimed that the mudflow incidents started about two years ago after work at the construction site took off.

When contacted, Paya Terubong assemblyman Yeoh Soon Hin said he was glad that MPPP had taken immediate action.


Categories: Property News Tags:

Jit Sin High gets the green light for branch school

June 10th, 2013 14 comments

Teoh said the RM30mil building plan was unanimously passed and endorsed in a full council meeting.

THE Seberang Prai Municipal Council (MPSP) has given the necessary clearance for the construction of the Jit Sin High School Bukit Mertajam’s branch school in Valdor, south Seberang Prai.

Municipal councillor Teoh Seang Hooi said the RM30mil building plan was unanimously passed and endorsed in a full council meeting at the MPSP headquarters in Bandar Perda, Bukit Mertajam, recently.

“The council’s One-Stop Centre (OSC) had on May 8 given its preliminary approval to the project’s building plan after receiving the application on March 14.

“This was carried out through a fast-track approval that took less than two months to process,” he told reporters after council president Maimunah Mohd Sharif chaired the full council meeting.

He said the project developer could start construction any time as it was given three years to complete the project, noting that in most cases, it could be completed in two years.

Teoh said the school project in Jalan Valdor, would feature five main structures — three four-storey buildings, a five-storey building and an eight-storey building.

“There will be a total of 63 classrooms, 14 science labs, a multipurpose hall, a co-curriculum room, library and administration office.

“There will also be a separate courts for basketball, netball, tennis and handball as well as a football field,” he said.

Teoh said the council would closely monitor the project’s construction work to ensure necessary safety measures were taken to protect those living in the neighbouring area.


Categories: Property News Tags: