Archive for the ‘Property News’ Category

Contractors with possible links to triads corner Penang’s condo jobs

August 12th, 2013 24 comments

Runners for the ‘in-house’ contractor manning their counter near the elevator entrance of a newly completed apartment project in Penang.

GEORGE TOWN: Contractors, some with links to triads, are forcing buyers of high-rise property here to carry out renovation works.

Many of them charge a premium, sometimes up to 20% more than normal contractors.

If the buyers insist on hiring contractors from outside, they are compelled into buying materials such as sand, bricks, cement and steel cages.

Alternatively, the buyers can pay a “settlement” to bring in outside contractors.

Most buyers dare not lodge complaints with the police for fear of retaliation from triad members.

With developers turning a blind eye to the issue, the so-called “in-house” contractors have become more brazen in intimidating buyers.

Although such practices could be traced back to the 1990s, the mushrooming of condominium projects in Penang has made matters worse.

It has been estimated that more than RM10bil worth of projects had been undertaken on the island over the past 18 months.

During a check by The Star at several newly completed apartment blocks in Relau, a man was seen manning a makeshift counter near the lifts.

He said his “company” was selling sand, bricks, cement and steel cages, and providing other services such as hacking and electrical wiring.

When told that the unit owner wanted to bring in his own contractor to carry out tiling works, the stern-looking man said: “You can still buy the steel cages or other materials from us. We will handle your waste as well.”

Another in-house contractor, who declined to be named, claimed that he could offer better prices for construction materials.

“We get bulk discounts from suppliers. If we buy 100 steel cages and you buy only one, who will get a better price?

“Besides, we also know the unit layout better than anyone else. We know where the electrical wiring is hidden in the wall. We also know where to hack inside the house,” he said.

Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi said his group had encountered numerous cases of such triad activities in its projects in the South-West district over the past few years.

“This is because the district is a hot spot for the development of reasonably priced properties (read more here). Whenever we have such problems, the police are very quick to come in to arrest the culprits. We have also tightened the security for our projects in the district and this has reduced such incidents,” he added.

SP Setia Bhd property (North) general manager Khoo Teck Chong said the group’s projects in the South-West district had never faced such problems because of its tight security system.

Penang police chief Deputy Comm Datuk Abdul Rahim Hanafi urged unit owners to lodge reports or call the police hotline at 04-269 1999.

“We do not condone such actions. We need unit owners to provide us with information so that we can act.

“Everyone has the right to choose their own contractors or material suppliers,” he said.

DCP Rahim gave his assurance that the identity of whistle-blowers or affected victims would be protected.


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State wants proposals for theme park and golf resort in Batu Kawan

August 6th, 2013 65 comments

Top planners: (From left) Rosli, Lim and Deputy Chief Minister II Dr P. Ramasamy briefing the press on developments in Batu Kawan, Penang.

THE Penang Government will hold a Request For Proposal (RFP) for the purchase, lease and development of an international theme park and golf resort in Bandar Cassia, Batu Kawan.

PDC general manager Datuk Rosli Jaafar said those who submit tenders are allowed to propose other developments to ensure the viability of the overall project.

PDC has allocated 87ha for the international theme park while another 190ha is set aside for the 18-hole golf course and other developments.

“The developments should be social based and not a product they can impose a charge such as public swimming pool, outdoor amphi-theatre for performing arts or a sports complex, just to name a few.

“With the second Penang bridge due for completion at the end of the year, it is the right time to embark on the project that will benefit the region.

“This will also give a boost to the people on the mainland as well as promote the tourism sector,” Rosli said in a press conference here yesterday.

Rosli said the request for the proposal will be open from Aug 14 and the closing date is on Oct 31.

The theme park and golf course must be built and completed within four years from the date of signing the agreement for the project.

Penang Chief Minister Lim Guan Eng said the state needs to leverage on the services and manufacturing sector.

“This is especially in view that the manufacturing sector is experiencing a slow growth on the first quarter this year,” said Lim.

The manufacturing sector last year in the first quarter experienced a growth of 4.4% while it only experienced 0.3% this year.

On the other hand, the services sector fared better with a growth of 5.9% in the first quarter this year compared to 5.7% last year.

Lim added that it is important to have a balanced growth of the tourism sector not only on the island but also the mainland.


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Homes priced beyond new grads

August 4th, 2013 87 comments

At current rates, fresh grad workers cannot afford to buy a house

It was one of those long eye-opening conversation between father and his soon-to-graduate son.

“What are you going to do when you graduate?”

“Get a job, buy a car.”

“Don’t you want to buy a house?”

“It’s too expensive. I can always live with you and mum,” says Sonny.

There was a long silence.

“Dad, I went into environmental studies because I believe I can do my little part for the world we live in today. I am not looking for a fat salary,” says Sonny.

“But you need to have a decent salary in order to buy your own house one day. You can’t live with mum and dad forever, although I know your mum would like that,” says Dad.

“I read somewhere that it is possible for young people to buy their own house without taking a two-generational loan. And I am trying hard to be independent. I just need to get around some puzzling issues.

“Like what?”

And so begins the little lesson in house ownership.

What sort of loan tenure will be suitable for a young person?

A 35-year loan is more than adequate. If he needs a loan tenure longer than 35 years, it just means that he is buying something that is far beyond his current income levels.

What sort of loan tenure do most banks provide?

Most banks only give housing loans up to 30 years. Selected banks previously gave loans up to 45 years. These are two generational loans. Most people are against two generational loans as the second generation is born into debt – “Slave into debt”.

How much of my salary should go towards housing loan repayment?

The rule of thumb is always the following:

(a) Any single loan repayment should not exceed a third of the borrower’s income

(b) All combined loan repayments should not exceed half of the borrower’s income

(c) The price of the house ideally should be three times that of the borrower’s annual household income to be deemed as affordable based on a study by Harvard University and World Bank. A young couple with RM10,000 between them is equivalent to RM120,000 a year. The value of the house that this young couple should be looking at is RM360,000 at the most.

Does a young person need help from parents to buy a house today?

It has become almost impossible for a fresh graduate to buy a property without parental support. Many condominiums are now launched in excess of RM500,000 even in suburban areas and landed properties in areas such as Kota Damansara are almost RM800,000 and above. How is a fresh graduate with a starting salary of RM3,000 ever going to afford such properties?

Here are some numbers to chew on. The monthly repayment for a housing loan of RM450,000 (average condo price of RM500,000 less 10% downpayment) for 30 years is RM2,175. This is 72% of the fresh graduate’s monthly income of about RM3,000.

Fresh graduates will have to continue staying with their parents until both the parents and the borrower have saved enough money for a larger downpayment, or for the parents to withdraw their own EPF funds to help their children.

What about young people applying for government-linked projects like Perumahan Rakyat 1Malaysia (PR1MA)?

Some quarters have commented that young professionals still have the option to do that. PR1MA has just raised the ceiling price of their properties to RM450,000 and the maximum household income eligibility to RM7,500. Based on a study by Harvard University and World Bank, the ratings of the Value of Property over Annual Household Income are as follows:

Based on the above study, the Value of PR1MA properties are actually not affordable by international standards. In fact, it is between “Seriously” to “Severely unaffordable”.

Under PR1MA, the borrower need not pay the 10% downpayment and can take a 100% loan for the RM450,000 property.

We have illustrated a typical household income vs expense of a prospective PR1MA buyer (see table above).

Hence, it would not be unusual for banks to reject PR1MA applicants for housing loans as many of them are buying far beyond their income eligibility. In other words, PR1MA properties are just too expensive. House Buyers Association (HBA) has suggested a price of between RM150,000 and RM300,000.

By this time, both dad and son are glad the conversation is coming to an end. There does not seem to be a happy ending though.

“What does this mean, Dad?”

“It means the Government must introduce further measures to reduce speculation in the property market. The Government must bring back the old formulae of real property gains tax, higher stamp duty for buyers of multiple properties, further reduction of loan to value ratio,” says Dad.

Chang Kim Loong is the honorary secretary-general of the HBA (, a non-profit, non-governmental organisation (NGO) manned by volunteers. He is also an NGO councillor at the Subang Jaya Municipal Council.


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Gurney Paragon ready to make a big splash

July 25th, 2013 No comments

MORE than 80,000 people visited the RM500mil Gurney Paragon during its first day of business.

Gurney Paragon director Lily Tan said 50,000 people were expected to visit Gurney Paragon each weekend from now till the end of the year as more stores opened up.

Among the top draws at the mall are a 30,000sq ft supermarket called Sam’s Groceria occupying the lower ground floor as well as Padini and Brands concept stores occupying 50,000sq ft on levels 2 and 3.

Diners can head to the Hokkaido Ichiba restaurant taking up 10,000sq ft on the sixth level.

Movie fans will have a good choice of shows at the nine Tanjung Golden Valley cinema halls at Level 8 which will open in December.

“More outlets such as Canali and H&M will open next month on level 1, while Debenhams, a UK fashion brand, will open in September,” said Tan on Tuesday.

“Level 1 and 2 feature mostly clothes and accessories.”

“Level 3 is dedicated to sportswear while furniture stores will occupy level 4. The fifth level will have a 13,000sq ft food court,” she said.

She added that IT shops could be found on level 6, and beauty and reflexology outlets on level 7.

“There is also a section on level 6 called Penang On 6 which features outlets selling locally made accessories and apparel,” Tan said.

Meanwhile, Hunza Properties Bhd executive chairman Datuk Khor Teng Tong said that some 140 outlets had opened at the mall.

“To date, over RM200mil has been spent on the renovation of the stores.

“We expect the mall to be 80% occupied by the end of the year,” he said.

Khor said it would take eight to 10 years for the group to recover the RM500mil investment on Gurney Paragon.

The mall has 700,000sq ft of floor area for leasing, according to Tan.

Moving forward, Hunza aims to repeat its success at Gurney Paragon for a commercial-cum-residential project on a 42-acre site in Bayan Baru in the southwest district, according to Khor.


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The Star Property Fair sees RM115mil in sales

July 22nd, 2013 4 comments

Visitors having a look at a property model at the SP Setia Berhad Group booth during the fair in Gurney Plaza.

GEORGE TOWN: About RM115mil worth of residential and commercial property was sold during the first three days of The Star Stylish Living Property Fair 2013 at G Hotel and Gurney Plaza.

Property exclusively marketed by Zeon Properties Sdn Bhd generated RM83mil in sales over the past three days.

Zeon CEO Leon Lee said Masmeyer Holdings Sdn Bhd generated RM30mil in turnover with sales from some 30 units of its Marinox condominiums in Tanjung Tokong.

“The Singapore-based UOA Group and Magna Putih each sold about RM15mil worth of property in Kuala Lumpur and Penang.

“UOA sold about 15 units of its Scenario@North Kiara Hills condominium project in Mont Kiara, while Magna Putih sold 10 units of its Mansion One serviced suites in Jalan Sultan Ahmad Shah.

“Other developers, including Mayland Universal Sdn Bhd, Mammoth Empire Holdings Sdn Bhd, Malaysian Resources Corp Bhd and Venn Properties Sdn Bhd, registered RM3mil to RM10mil in sales,” Lee added yesterday.

Three companies – SP Setia Bhd, Lone Pine Group and Bukit Kiara Properties Sdn Bhd – achieved RM32mil in sales during the same period.

SP Setia sales and marketing manager Susie Loh said it chalked up RM18mil in sales.

The sales were generated from the Setia Triangle residential-cum-commercial project and Setia V Residences in Gurney Drive.

“We also received enquiries and registrations for our forthcoming Setia Sky Vista project, a condomi­­nium development in Relau,” she said.

Lone Pine marketing and corporate affairs general manager Mabel Ooi said it had already secured RM10mil in sales.

She said many people sought information on 1Tanjong, a luxury super-condominium in Tanjung Bungah, and Phase 1 of the Pine Sanctuary in Paya Terubong.

“They looked keen on our projects. We expect to close a few more deals today. We are always here for the fair and the response has always been great,” she said.

Meanwhile, Bukit Kiara general manager Alex Chua said the company sold five units of its Verve Suites KL South project, generating RM4mil in sales.

“Our unique design of the scheme is the 60.96m sky bridge connecting two 24-storey tower blocks. The connecting bridge links to a theatre, gymnasium, lounge, and restaurant for the use of its residents.

“The scale model, which shows the connecting bridge, helped at-tract the crowd to our booth,” Chua said.

The fair, organised by The Star for the 11th year, is open from 10am to 10pm at Gurney Plaza and G Hotel. Admission is free.

The official event partner is Zeon Properties and Hong Leong Bank is the sponsor.


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