Archive for the ‘Property News’ Category

An Insight into Penang’s Economy and the Impact to Penang’s Property Market

August 7th, 2014 No comments

* Article by FREEMEN *

My view on the outlook for Penang property market is, moving forward, cautiously optimistic. Why do I say that?

Increase in investment in the State

Penang’s total approved capital investment from January to May 2014 totalled RM3.13 billion, as compared to RM3.91 for the whole year of 2013. In the year 2012, a housing boom was evidence of the increase in private investment in the state.

Big name developer is positioning themselves for this increase in demand and is increasing their land banking in the state. In Dec 2013, one major developer, through its subsidiary, had successfully bid for a parcel of development land measuring approximately 24.458 acres on the island. The purchased price is analysed to be at approximately RM251 psf. Other major developer are also jumping into bandwagon and buying land in Jawi and Batu Kawan.

Penang’s economic reposition

In addition, Penang is repositioning it’s economy, moving away from labour intensive industries to that of high end services industries such as Shared Services and outsourcing (SSO). This would mean creation of high income job opportunities for the people of Penang.

There are three types of SSO: information technology outsourcing (ITO), business processing outsourcing (BPO) and knowledge processing outsourcing (KPO). Employees of both ITO and BPO on average earn a monthly salary that ranges from RM4,000 to RM5,000 whilst the average KPO employee earns RM8,000 a month.

In promoting the SSO industries, the Penang state government announced in September 2013, plans to set aside approximately 17 acres of land in Bayan Baru and Bayan Lepas for its next BPO hub. Office buildings will be available within three to five years. Thus, Penang’s strong reputation and architecture will undoubtedly attract more foreign investors to set up their SSO centres here.

Employment outlook and in-migration of job seekers

The manufacturing and services sectors accounted for approximately 40% of total employment in Penang between 2001 and 2011 and will likely remain the biggest employers over the next few years. In 2013 it was projected that a total of 3,500 jobs will be created from the approved capital investment projects. More jobs are expected as FDI flows to Penang improve over the coming years.

As the number of jobs increased, there will be an increase of in-migration of job seeker into the state. The size of Penang’s labour force grew by 11% between 2009 and 2012. The unemployment rate in the state has fluctuated around two per cent since the global financial crisis of 2008. According to Chief Minister Lim Guan Eng, Penang is short of some 20,000 workers in various industries.

What about the property outlook?

With capital investments still coming into the state, coupled with the creation of high income job and in-migration of job-seekers, demand for housing is set to be on the uptrend.

The question then falls back to where we, as the investors are buying in order to capitalise on the demand for housing.

Come and Meet Us

On the 16 Aug, 2014, my Mentor and I will be sharing with you in more details about the property outlook in Malaysia. For me, I will talk more on the investment and employment outlook for Penang. I will also share with you how my team and I analyze an area of interest before we decide to make a purchase.


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Housebuyers cautioned against syndicate collecting deposits

August 4th, 2014 1 comment

“I have written a letter to state police chief Senior Deputy Comm Datuk Wira Abdul Rahim Hanafi to look into the matter.” – Jagdeep Singh Deo

Housebuyers here need to be more cautious not to fall victim to a syndicate which is going around securing payments for units at an affordable housing project developed by the state.

Penang Town, Country and Housing Committee chairman Jagdeep Singh Deo said there were claims that the syndicate was promising and guaranteeing affordable units at a project in Tanjung Tokong.

He said the developer’s company which was developing the project at the site had received several complaints from the public that there were members of a suspected syndicate going around promising affordable units at the project by taking a payment of between RM10,000 and RM30,000.

Speaking after launching a corporate social responsibility programme by KDU College Penang at Cheshire Home here on Friday, Jagdeep said the developer had lodged a police report about the matter on July 22.

He said he had also written a letter to state police chief Senior Deputy Comm Datuk Wira Abdul Rahim Hanafi to look into the matter.

“I have received a reply from his office dated July 25 that they received my letter and the matter was under investigation.

“I hope the problem can be resolved as soon as possible,” he said.

Jagdeep assured the public that the state government’s low-cost and affordable housing units could not be secured by any agent or syndicate.

“The public must apply directly to the state and the application will be processed before they receive an approval letter from the developer if they are eligible for the units,” he said.

He added that the concerned project in Tanjung Tokong has 390 units of low mediumcost apartments and 859 units of affordable condominiums located on a 4ha site.

Jagdeep said that about 50,000 applicants had applied for affordable housing units in the five districts and the selection by the Selection Process Enhancement Committee (SPEC) would soon take place.

“The housing units will go to those truly deserving.

“So, I hope the public will be aware and not fall prey to such syndicates,” he urged.


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Boost for Penang Sentral project

August 1st, 2014 1 comment

Malaysian Resources Corporation Berhad (MRCB) has entered into a share sales agreement with Pelaburan Hartanah Berhad (PHB) to acquire the latter’s 51% equity interest in a joint venture firm.

The firm, Penang Sentral Sdn Bhd, was set up to implement the Penang Sentral project.

Under the recent agreement, PHB agreed to sell its stake in Penang Sentral Sdn Bhd to MRCB for a total consideration of RM50.75 million.

With the agreement, Penang Sentral Sdn Bhd will become a wholly owned subsidiary of MRCB.

MRCB Group managing director Tan Sri Mohamad Salim Fateh Din said in a statement that this initiative would give the Penang Sentral project a boost.

“It will help us come up with a definite timeline and completion period,” he said.


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SP Setia plans more projects in Penang

July 30th, 2014 21 comments

SP Setia's general manager Khoo Teck Chong told StarBiz that over the last couple of years, the pricing of properties in Penang, on the island in particular, had grown out of proportion with the income levels of the population.

SP Setia Bhd plans to build more varieties of affordable houses over the next five years on Penang island that are within the income levels of Penangites.

Its general manager Khoo Teck Chong told StarBiz that over the last couple of years, the pricing of properties in Penang, on the island in particular, had grown out of proportion with the income levels of the population.

“Due to the stringent loan policies of banks, it has become even more difficult to sell high-end properties,” he said.

In the south-west district, Khoo said the group had about 63 acres which would be used for the development of properties priced within the RM600-RM700 per sq ft range.

“Next year we plan to develop the RM350mil Sky Vista, comprising 426 condominium units, priced at about RM600 per sq ft, which is the current pricing in the market for the properties in the south-west district.

“In 2016, we will introduce the RM350mil Sky 8 and RM150mil Sky Peak projects in Sungai Ara and Sungai Nibong respectively in the south-west district.

“Our feedback shows that properties priced between RM600 per sq ft and RM700 per sq ft are in demand as they are still affordable for Penangites,” he said.

Khoo said the last couple of years had seen the group launching high-end properties in prime locations that were priced from RM1mil onwards.

“Thus, there is a shift in our strategy moving ahead,” he added.

Khoo said the group was targeting to achieve about RM200mil in sales from Penang for the financial year 2014 ending Oct 31.

“We have so far roped in about RM150mil in sales, which is very close to the target.

“This target is down from the RM300mil achieved last financial year. We are lowering our expectation because of the softening property market which started late last year in the country,” he added.

Meanwhile, Eco World Development Bhd chief operating officer Datuk S. Rajoo said the group’s strategy was to focus on landed residential properties in the central, south and northern region.

“We are focusing on strata-titled super-linked properties with built-up of 3,600 sq ft, which were still in demand in the country.

“In Penang, we will launch the RM350mil Eco Terrraces project, comprising strata-titled linked villas with built-up area of 3,600 sq ft in Paya Terubong at the end of this year.

“This is a very unique project as conventional landed strata-titled projects comprised small size linked properties,” he added.


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Worry not over leasehold property

July 28th, 2014 52 comments

Owning a leasehold property should not be a concern for first-time housebuyers if they intend to stay there.

Lawyer Chris Tan says chances are high that these buyers will ‘upgrade’ by moving into a bigger house in the next 10 years.

He said houseowners could just renew the lease by paying a certain amount of premium.

“Rather than worry about the leasehold status, housebuyers should instead be concerned over the ‘longevity’ of the building structure.

“Do you know that a building structure by Malaysian standards can only last for 60 years?

“If a building structure is of bad quality and meant to be taken down for reconstruction after 50 years, then what’s the difference between owning a leasehold and freehold property?

“The key here is, nothing is built to last forever. All housebuyers will still have to pool in the resources to rebuild the place if it has to be demolished.

“Don’t let it hamper your decision making,” said Tan, who is the founder and managing partner of Chur Associates during his talk ‘My First Home Seminar’ at G Hotel.

Tan was touching on the topic ‘Back to Basic: Watch What You Sign, Housebuyers’.

While acknowledging that purchasing a freehold property was still the wise move, Tan said there were other aspects which should be looked into. Among them was the lifelong payment for the service charges.

He added that most people were still hopeful that their properties could be passed on from one generation to another.

“The world is evolving rapidly. The amenities and facilities of a building might not be suitable in 20 years to come.

“For example, buildings built 20 years ago won’t have fibre-optics for Internet connection. Some even do not come with air-conditioning.

“But today, we can’t live without it.

“So, you can just forget about leaving behind a ‘legacy’ (houses) for your children. Your house probably won’t be up-to-date for them when they grow up.

“They will find their own home,” he said.

Tan added that one must be aware over the documents they signed after purchasing a house.

“Buying a home is a lifelong commitment. Never take it lightly.

“You will be signing a lot of documents. It is very important to know what you get yourself into.

“Try to get your lawyer to explain to you on clauses which you do not understand,” he said.

Another speaker Timothy Law, in his topic ‘Better Late than Never in Owning Your First Property’, said first time homebuyers could always source for information online in securing their ideal homes.

“With just a click on the mouse, one can easily find their dream homes via online.

“Once you know about your choice, you must act fast.

“Otherwise, it will remain just one of the items on your unfulfilled wish lists.

“Once you get your research done, the next step is, you must leverage on the experts around you to close the deal.

“Networking is the key here.

“You can always seek advice from lawyers, property agents and bankers,” he said.

GM Training Academy chief executive officer and founder Michael Yeoh said first-time housebuyers would have difficulties securing a 100% loan from banks although such a package existed.

He lamented that Bank Negara had failed to look into the plight of the lower income group in getting affordable homes.

According to Yeoh, those buying houses priced between RM100,000 and RM400,000 could actually secure 100% loan financing from the banks.

He said the banks would finance 90% of the loan, while Cagamas Holdings Sdn Bhd, the national mortgage corporation, would finance the remaining 10%.

“But to my knowledge, it is almost impossible to secure the loans.

“We are happy with the policy introduced by Bank Negara but the problem is, the mechanism to safeguard it, is not there,” he said in his talk ‘Financing for First Home Buyers’.


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