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Property market to continue strong growth

April 9th, 2011 No comments

Despite  the move by Bank Negara last November to introduce a maximum loan-to-value (LTV) ratio of 70% for the third and subsequent house financing facilities to curb speculation on property prices, property consultants and analysts are convinced that there will only be a temporary setback for the property and banking industry.

Hwang DBS Vickers Research, in its recent report, says the property market this year could still see 10%-15% growth, driven by scarcity of land and higher input costs.

“While we believe the 70% LTV cap managed to control speculative activities to a certain extent, the strong underlying demand from first-second home owners and upgraders continued to support property sales, even at new benchmark prices,” it says.

It adds that this can be seen with the recent launches that saw strong takeups such as Capers @ Sentul East condos where more than 90% of the units been booked at RM600 per sq ft and Sime’s USJ Heights Indigo zero-lot bungalows with 75% sold at RM2mil to RM3.3mil per unit.

“The others are Gamuda’s Ambang Botanic, Klang where semi-D and bungalows are sold more than 90% at RM1.5mil to RM1.8mil per unit and Glomac Damansara serviced apartments (70% sold at RM600 per sq ft),” it says, adding that this supports its view that property demand should remain resilient, supported by positive macro factors (young population, robust economy, inflation hedging, urbanisation, shrinking household size, accommodative bank lending).

The research house says another factor helping to boost property sales this year is the mass rapid transit (MRT) project.

“While MRT completion may still be a while away, in 2016-2020, property prices (especially land) tend to move ahead as developers scramble for projects near potential stations (given the typical 5-year lead time to negotiate, plan, obtain approvals, sell and construct). Developers such as SP Setia have started pricing in potential of MRT interchanges in their launches (KL Eco-City commands ~30% premium),” it says.

“While track record is important, we see owners of large land bank near potential MRT interchanges (or strong deal-makers) having an upper hand given scarcity of prime land in KL, and there should be no shortage of suitors to minimise execution risk. Strong overseas track record may give an added advantage in attracting foreign demand (e.g. YTL’s Sentosa Cove, Guocoland group’s following in Singapore and China). MRT and plot ratio expansion will strengthen the case to speed up development of raw landbank,” it says.

A property consultant tells StarBizWeek that generally, there will be some impact on the mid-level to high-end property market due to the LTV.

“Property developers may feel a slight impact on sales of mid-level to high-end property products as a result of the LTV. The impact can be expected as these markets (mid-level to high end property) are normally the playgrounds for investors and speculators. As LTV imposes those who are buying the third property, the Government is taking steps to curb the property price increase based on speculation. So, there will be less speculation in the property market,” he said.

Bank Negara in its Financial Stability and Payment Systems Report 2010 says house prices in selected locations within and surrounding urban areas have shot up to four times that of the national house price index.

It also says there have been incidents of applications for financing of multiple residential units within a single development project from a single borrower.

“To address this, the LTV ratio is aimed at promoting a stable and sustainable property market by deterring speculative activity through higher equity requirements for transactions of this nature,” the report says.

Maybank Investment Bank Research said in its recent report that housing loan applications had declined for the last three months on a month-on-month basis, partly due to recent measures to curb property lending.

“Loans applications for residential purchases fell 3.8% month-on-month from December 2010 to January 2011, 7.1% from November 2010 to December 2010 and 9.6% from October 2010 to November 2010,” it said.

However, analysts say they are optimistic the LTV will not hamper residential mortgage loans growth this year or even reduce residential property prices significantly.

“Residential home loans growth might see a slight slowdown as the measure by the regulator would curb speculative investment activities but it will

not be drastic, as up to 90% of banks’ mortgage loans are held by homeowners, who are not speculative investors but have purchased residential properties to live in,” an analyst says.

Another analyst says the decline in housing loan applications can be seasonal and can pick up as the year progresses.

“I still think it is early days to attribute the decline to the LTV imposition only. Generally, I do not see this new measure having much of an impact on residential housing loans growth this year,” he says



SOURCE: The Star

Categories: Property News Tags:

Focus on real home buyers

April 8th, 2011 No comments

GEORGE TOWN: Developers in Penang should focus on selling homes to genuine house buyers and not speculators, said Raine & Horne senior partner Michael Geh.

He said that due to speculation, house prices had increased beyond the affordability level of wage earners who made between RM3,000 and RM4,000 a month.

?In the property market today, affordability is the key issue and should be addressed by developers.

?Last year, developers were targeting bulk buyers for their property which are priced from more than RM300,000 to above RM400,000. These buyers are speculators willing to buy three to 10 units each,? Geh said during a talk yesterday on the state of property in Penang for this year at the i-Property Talk organised by the Red Tomato Penang Free Newspaper.

He said he had noticed efforts by developers to reach out to genuine home buyers since the beginning of this year.

On property prices for this year, Geh said the rise would be more gradual this year as last year?s appreciation in prices had been ?phenomenal?.

?There is anticipation that the interest rates for housing loan will increase soon,? he added.

Geh also said the present heritage guidelines for Penang island were too restrictive and not conducive for healthy development of the property sector.

?The guidelines are too concerned with density suppression.



SOURCE: The Star

Categories: Property News Tags:

Capri Park

April 7th, 2011 31 comments

Capri Park is a new project by Tambun Indah located along Heng Choon Thian road in Butterworth. It is strategically located with easy access to Penang Bridge, North-South Highway and Sunway Carnival Mall.

Capri Park comprises a single 15-storey condominium block with a total of 150 units. Each unit come with spacious built-up area from 1,334 sq.ft to 1,539 sq.ft. The facilities at Capri Park include swimming pool, wading pool, gymnasium, playground, reading room, games room and multi-purpose hall.

Property Project : Capri Park
Location : Heng Choon Thian, Butterworth
Property Type : Condominium
No. of Blocks : 1
No. of Storey : 15
Total Units : 150
Built-up Area : 1,334 sq.ft – 1,539 sq.ft.
Developer : Tambun Indah Sdn Bhd
Indicative Price: RM 240,000 onwards

Categories: Butterworth, Property News Tags:

Batu Ferringhi Residences

April 6th, 2011 4 comments

Nestled at the fringe of Batu Ferringhi and within walking distance to a hosts of international hotels, restaurants and tourists enclave. Batu Ferringhi Residences offers the ultimate in luxury and wonderful pleasures of living with an uninterrupted view of the Andaman Sea.

Project Name: Batu Ferringhi Residences
Location: Batu Ferringhi, Penang
Building Type: 17 units Boutique Villas, 48 units Condominiums
Site Area: 3.34 acres
Total Built-Up Area: 417, 403 sq ft
Developer: MRCB Land

Categories: Batu Ferringhi, Property News Tags:

Mandarin Quarter

April 6th, 2011 56 comments

Madarin Quarter is strategically located in the heart of the matured neighbourhood of Raja Uda in Butterworth. This is a secure gated & guarded community comprises 38 units 3-storey terrace houses with two modern design layouts. Each unit comes with 4-bedrooms and 4-bathrooms.

Property Project : Mandarin Quarter
Location : Raja Uda, Butterworth
Property Type : 3-Storey Terrace
Tenure : Freehold
Total Units : 38
Developer : Asia Green Construction Sdn Bhd

Indicative Price: RM 420,000 onwards

Categories: Property News, Raja Uda Tags:

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