Archive for the ‘Property News’ Category

PR1MA home details out soon

February 12th, 2014 3 comments

THE 1Malaysia People’s Housing (PR1MA) projects will be developed in Penang soon.

State Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said he had met Perbadanan PR1MA Malaysia chairman Datuk Seri Jamaluddin Jarjis to discuss the projects.

“Jamaluddin was in Penang on Saturday and he called up to ask for a meeting to discuss PR1MA projects for Penang.

“During the meeting, Jamaluddin confirmed that they were identifying suitable sites for development.

“It was a fruitful meeting,” Jagdeep Singh told the crowd at the Datuk Keramat Chinese New Year open house held in Taman Free School on Sunday.

He said Jamaluddin was informed that the state government was eager to assist in developing PR1MA projects.

“But I told him that in order for the state government to assist, the government needs to know the plans,” he added.

According to the state housing committee chairman, Perbadanan PR1MA would give details of the projects sometime in June.

“This is good news indeed,” Jagdeep Singh said.

PR1MA is an affordable housing scheme by the Federal Government for those earning between RM2,500 and RM7,000 monthly.

On another matter, Jagdeep Singh said developers should not force low medium-cost (LMC) unit buyers to accept an ‘upgraded’ unit complete with renovations and car park.

“A low medium-cost unit costs RM72,500 and unit buyers can decide whether to get car park lots,” he said.

It was reported earlier that 77 upset buyers who bought their LMC units in Bukit Gambier were forced to accept and pay RM168,000 for an ‘upgraded’ unit.

Jagdeep said the state housing officers were settling it on a case-by-case basis.

“A meeting on the progress of the issue has been scheduled with the developer next week,” he added.


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Property Outlook 2014

February 10th, 2014 No comments

* Article by FREEMEN *

It’s the year 2014 and the year of the horse. If you are like most of us, we were greeted with mostly bad news at the start of the year. Daily necessities are costing us more – groceries, toll hike, hawker food, and all types of vegetables (well, except for kangkung, that is). With everything else on the increase, what are your thoughts about the property price in the coming months?

To know more about the Property Outlook 2014, click here to know more

And while the cost of living is increasing, our salary remains the same with little or no increment at all. Not only this, for the engineers working on Penang island, they were greeted with a double whammy – restructuring (layoffs) of company, in other words, retrenchment or voluntary separation scheme.

Let me quote two examples; Dell has announced 20% – 30%of its sales and marketing staff worldwide (Source: CNet News) and Intel, world’s largest semiconductor chip maker announced plans to reduce its global workforce of 107,000 by about 5 percent this year which is equivalent to 5350 headcounts worldwide (Source: Reuters).
We’ve always been told to “be prepared” in any situation and “to make hay while the sun shines”; how many of us actually do that? I personally have heard of engineers being given only 24 hours notice that their service are no longer required and asked to leave on the spot. So, we do need to be prepared and one of the ways to “be prepared” is to create passive income, where we have income coming in without us having to work.

Property or real estate has always been known to build and to grow wealth slowly but surely. We have known individuals and close friends who have become property millionaires in the past 2 years when the properties that they bought have doubled in price. Not only has the price of the properties doubled, these individuals are also collecting positive cashflow on a monthly basis.

But of course, just like everything else in Malaysia now, the property price has also shoot up to a new high. The price has gone up so high that it is said there may be a property bubble. To add to property investor’s despair, the government has introduced cooling measures to cool the market such as the higher RPGT rates and disallowing the DIBS package by developer.

To know more about the Property Outlook 2014: In Pursuit of Financial Freedom click here to know more

This is how I look at the property market this year.

The government has given out a lot the goodies in the past years, prior to the elections. They have taken a shallow stand in withholding policies for better economic reforms, replacing them with campaign friendly policies; focusing on nationwide spending and investment initiatives, despite years of ongoing budget deficits.

Though they succeeded in painting a picture of a robust economy with positive growth figures for the past 3 years or so, most of these exhibitions of growth came at a steep price.

As of the 2nd quarter of the 2013, a global rating agency, Fitch Ratings cut its credit outlook on Malaysia’s A-minus sovereign debt to negative from stable in July, citing a lack of reform to tackle rising debt.

This is a wake up call for the government to look at things under the hard light and take steps to better ensure the stability of the nation on a mid to long term basis. The ultimatum given to our government to regain a neutral standing (-A) were to correct 3 areas of focus:

a)    Reforms to fix it’s budget deficit,

b)    Have the country perform better in the next 12 – 24 months, with revenue exceeding expenses; and

c)    Reduce the current national dept to GDP ratio, from a regional high of 81% to 55%.

Therefore, it is my prediction that the following 3 key areas of reform will take place, within the immediate interim, if not already implemented.

1) Rationalization of nation building mega projects

There are indications of the government to slow down on big budget projects, such as rescheduling of the high speed railway (HSR) from Kuala Lumpur to Singapore and the refinery and petrochemical integrate development (RAPID) in Pengerang, Johor, from initial 2016 to 2017.

There are also reports stating the government’s initiative to space out infrastructure development in Malaysia as well as to privatize as many of these projects to reduce the nation’s burden.

2) More cooling down measures for the property market

There is already two cooling down measures introduced after the elections. The first, debt to service ratio (DSR) is reduced from 70% to 60%. With a DSR of 70%, an individual with a RM10,000 nett income, can take a loan with an installment up to RM7,000. So, if this individual were to use his credit line to take a home loan, with a 30 year tenure at 6% interest rate, he could potentially loan up to RM1,167,000

However, with a DSR of only 60%, the same individual can take a loan with a only a RM6,000 monthly installment, which means, his home loan value is now a mere RM1,000,000 instead of RM1,167,000.

The second cooling down measure introduced is the limitation of property refinancing up to only 10 years, from 30 years. This means, if you have an existing property which you would like to refinance , the maximum tenure for repayment of the refinanced amount is only 10 years.

Let’s take a look at the effect of this measure if an individual were to refinance a RM100,000 property at an interest rate of 6%. Under the old guidelines of 30 year tenure, the installment is only RM600. However, under the new guidelines of 10 year tenure, the installment is a whopping RM1,110 per month!

All these measures are focused on reducing the debt to GDP ratio and rest be assured that there will be more measures introduced in the near future, to directly curb the borrowings in real estate market.

3) Increase in revenue generating policies by the government

Our government is very sensitive when it comes to revenue-generating policies directly impacting the livelihood of the common man of the street

While many countries implement long term, gradual introduction of such policies, our government has a far more efficient way of introduction in the short term tenure.

It’s called, “Shhhh… don’t tell the public we’ve already increased prices!”

Quietly but surely, the government will be implementing subsidy reduction strategy almost immediately. Already, petrol prices have increased by 20 cents for RON95, which is a significant 10.1% overnight. Cigarettes prices have seen 14% increase in excess duties. Both were implemented in September. More of such stealth increases are scheduled within the year.

The introduction of GST is imminent.

The transport ministry has announced no uplifting of import car duties; something, which was promised during the election campaign, within the next 5 years. Reason cited – the country’s budget deficit status.

Double digit inflation growth rates are set to follow, in similar fashion as the government’s method of implementation – quietly but surely.

Does this signal the end of good times?

No. We are still fortunate to be in the “right” side of the globe at the moment. The illusion of an economic robust future is still largely painting the skies blue for the time being. However, dark skies are emerging from the horizon and one would need to be more cautious in their investment moves.

So, why still invest in property?

What other choice do we have?

With the government busy working on their own economic well-being and the world economic downturn at hand, the worst thing you can do is to sit and wait out the storm. Strong DIY investment habits must be cultivated to make us better prepared for the potential stormy seas ahead. I have been saying this for the longest time, the men on the street needs to know how to protect their own financial well being, and work together with like minded people to make our own nest eggs.

If I am right, you will safeguard your savings and nest eggs, if I am wrong, you will end up being a very wealthy person and retire rich. So, what is the worst that can happen?

Come join us this Saturday, 15 Feb 2014 is Evergreen Laurel where we share with you about the Property Outlook in 2014. We will also zoom in to talk about the property outlook for Penang and how all the market forces will affect and impact the property market and to you, as a property investor and property owner.

Happy investing,

Michael Tan

Michael is Property Coach and Lifechanger from FREEMEN will be in Penang on 15 Feb 2014 (Saturday) to share his views on the Property Outlook  2014 and the impact to the property market. In addition, he will also guide you in knowing your personal financial freedom number and from there design your property portfolio.

Come and join us on the 15 Feb 2014 in Evergreen Laurel Hotel, Penang. Book early as we will be expecting a full house.

To find out more on about the Property Outlook 2014 and the impact to property market, please click here

About Michael Tan:

Michael has been sharing with many since 2008 how to invest into properties safely and profitably through the FREEMEN™ courses, coaching classes and investment club (Real Estate Tycoon Club; RTC).

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Second bridge setting stage for property ‘boom’

February 10th, 2014 No comments

THE expected opening of the Second Penang Bridge in the first quarter of this year is creating a buzz in the property sector, with the potential entry of new players and growing interest in areas close to Batu Kawan and Batu Maung, which are the landing points for the bridge on the mainland and island, respectively.

The buzz is driven by the better connectivity and access to property developments that were once deemed far away.

Apart from Batu Kawan and Batu Maung, which are yet to be developed to their fullest potential, locations further inland on the island, like Sungai Ara, Teluk Kumbar and Gertak Sanggul, will also appeal to developers and investors.

The spillover effects from the opening of the new bridge are expected to enhance the appeal of Mah Sing Group Bhd’s Southbay development at Batu Maung, which is a mixed project with retail shops, high-end residential suites, resort bungalows and three-storey super link houses.

On the mainland, development is likely to be accelerated in areas such as Sungai Bakap, Nibong Tebal, Bukit Tambun and Batu Kawan, which is known for the state stadium and houses developed by the Penang Development Corporation (PDC).

Landowners in areas on the mainland close to the bridge include Asas Dunia Bhd, Tambun Indah and PDC.

New entrants include Aspen Vision Sdn Bhd, which is partnering Ikano Pte Ltd to bring the first Ikea store to the northern region.

Ikano is the franchise holder in Southeast Asia for the Swedish home furnishing store.

The entry of Ikea is bound to fast-track Batu Kawan’s development and boost the retail and tourism sectors. Aspen-Ikano Sdn Bhd will carry out a mixed-development project comprising offices and residences on a 99ha site.

The land, which is strategically located at the landing point of the Second Penang Bridge, will be developed over 10 years.

It will also include an Ikea store and a shopping mall.

Eco World Development Group Bhd is also eyeing a piece of the action in Batu Kawan. It is believed the group will emerge as the biggest landowner in Batu Kawan if it wins a bid being carried out by state-owned PDC.

The company is said to be eyeing a 190ha plot there. If it wins, a mixed-development project and a golf course are likely to materialise.

Bidding for the land is rumoured to open at RM45 per square foot.

Its location on a hillock close to the landing point of the bridge will serve as a bonus.

Commercial land in Butterworth is currently tagged at between RM120 and RM150 per sq ft and developers often find themselves constricted by surrounding developments, especially brownfield developments.

The open space at Batu Kawan and its surrounding areas will appeal to those looking for greenfield areas and allow for better planning of satellite townships and retail and recreational spaces.

While hopes are high that the opening of Southeast Asia’s longest bridge (at 24km) will ease traffic congestion on the first Penang Bridge, property developers and buyers will now be spoilt for choice as they look to what were once less-than-fashionable residential locations.

Source: Business Times

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Project enters final lap

February 10th, 2014 5 comments

In progress: Work has started on the third phase of the Tun Dr Lim Chong Eu Expressway.

WORK has started on the third and final phase of the Tun Dr Lim Chong Eu Expressway which has been delayed for about four years.

Penang Works, Utilities and Transportation Committee chairman Lim Hock Seng said work began in November last year and was expected to be completed in October.

The project, known as the Jalan Tan Sri Teh Ewe Lim Extension, is 700m in length and costs RM30mil.

The extension begins from the junction of Jalan Perak-Jalan Tan Sri Teh Ewe Lim and connects to the expressway through Lintang Hajjah Rehmah.

Lim said although the project was supposed to be 34% completed as per the schedule, it was now only 29% completed.

“The five per cent delay is due to the relocation of utilities cables and the installation of a main water pipe by the Penang Water Supply Corporation (PBA) along Jalan Tan Sri Teh Ewe Lim.

“But, we believe work will be on schedule once the installation is completed,” he said when contacted yesterday.

Lim also said workers had cleared the project site and were carrying out soil treatment.

“Drainage works are also in progress,” he said.

He added that a total of 181 squatters in the area had been relocated to low-cost and low medium-cost units in Sungai Pinang and Macallum Street.

“The Land Office is also negotiating and looking for a suitable location for some 10 stall owners along the site.”

Once completed, the extension is expected to help alleviate traffic congestion in Jalan Perak and Jalan Jelutong.

In the 1990s, the IJM Group obtained approval from the previous state government to develop 136.7ha (338acres) of land in exchange for the construction of the 4.7km expressway, formerly known as Jelutong Expressway (JE).

The expressway project, undertaken by IJM Land’s subsidiary Jelutong Development Sdn Bhd, was scheduled for completion by 2012.

The first 3.1km stretch of the expressway was opened to the public in 2003, while the second phase was opened in 2008.


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TSR Capital in land swap with govt

February 7th, 2014 8 comments

Property developer and builder TSR Capital Bhd, together with Lembaga Tabung Angkatan Tentera (LTAT) and bumiputera-owned Pembinaan Bukit Timah Sdn Bhd (PBT), will redevelop the existing 1,007-acre (407.52ha) air force base in Butterworth, Penang into an integrated mixed-use project with a potential gross development value (GDV) of more than RM10 billion.

TSR said in its announcement to Bursa Malaysia yesterday that it had received the government’s approval in principle to set up a joint-venture (JV) company to enter into negotiations with the latter to redevelop the Royal Malaysian Air Force (RMAF) base as part of a proposed land-swap deal with the federal government.

The three companies will also develop a new RM3 billion air force base for the RMAF near mainland Penang. Under the partnership, TSR Capital will have a 51% stake in the JV, while LTAT and PBT will hold the remaining 30% and 19% respectively.

“The government will be able to participate in the redevelopment of the government land through LTAT’s equity interest in the JV company,” said TSR Capital in the filing.

Under the deal, the JV will undertake to relocate the existing air force base and reconstruct it on land to be identified. “The JV company will [also] design, build and finance the development and construction of the new air force base. The government will pay the JV company for the new air force base through a land swap at current market value of government land.

“The government land includes, but is not limited to, a tract measuring 1,007 acres where the existing RMAF Butterworth is situated,” it added.

According to TSR Capital group accountant Ng Kim Keong, the location of the new air force base will be “not far from mainland Penang” and the JV company will serve as the master developer of the redevelopment of the government land.

Ng told The Edge Financial Daily yesterday that negotiations on the deal are expected to be finalised in a year. “All this is subject to approval by all parties. We need to get approvals on the cost, design and so on before we can start construction,” he said, adding that construction of the new air force base will take about four years.

On the land where the existing air force base is located, Ng said the proposed mixed-use development is estimated to have a GDV of more than RM10 billion, and that project will only start after the new air force base has been completed and the existing RMAF Butterworth base, which remains operational for now, is relocated.

On the reasons for the relocation, Ng said the existing air force base is near residential areas and the RMAF equipment as well as buildings are not up to date and need fixing.

The company added that it will provide further details after definitive and conclusive terms have been agreed upon and a formal agreement has been entered into by the parties.

Source: The Edge Property

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