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Crackdown on illegal real estate agents

June 24th, 2014 No comments

Homes available: Penang Town and Country Planning and Housing Committee chairman Jagdeep Singh Deo (second left) checking out secondary property on sale at the exhibition. With him are Maspex organising chairman Michael Geh (right) and Siva.

THE Malaysian Institute of Estate Agents (MIEA) will be waging a war against the country’s illegal real estate agents and property negotiators.

Its president Siva Shanker said the crackdown with the theme ‘Is Your Real Estate Agent Real?’ was in line with the new ruling requiring real estate agents to wear their practising tags issued by the Board of Valuers, Appraisers and Estate Agents Malaysia from tomorrow.

“Check whether your real estate agents are legitimate.

“Ask them to show their tags and if they refuse, don’t deal with them or you will risk being cheated or misrepresented.

“There is also a QR (quick response) code on each tag so customers can scan the code with their smartphones to find out the background of the agent such as his or her company and qualification,” he said.

Siva added that under the Valuers, Appraisers and Estate Agents Malaysia Act 1981, an individual was not allowed to sell property for a fee if they were not registered or working for a registered estate agent.

“So far, some 10,000 tags have been issued to registered agents. I estimate that there are approximately 20,000 illegal property brokers in the country.

“While we are bound to only take a maximum of three percent from transaction fees, these illegal brokers take up to six percent by marking up the property prices,” he told a press conference at Penang Times Square during the launch of the Malaysian Secondary Property Exhibition 2014 (Maspex).

According to Siva, anyone seeking to be registered as a real estate agent was required to study for three years and pass 12 papers before they were awarded a diploma.

Then, they have practise for two years under a registered real estate agent before he or she can obtain a practising certificate.

Source: StarProperty.my

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Home prices under pressure

June 23rd, 2014 No comments

Bank Negara says there are signs of prices moderating

Malaysia is seeing signs of a possible moderation in overall house prices, data from the central bank show.

The growth in the Malaysian House Price Index (MHPI) declined to 9.6% in the fourth quarter of 2013, compared with 12.2% a year earlier, according to Bank Negara.

This was the first time since the third quarter of 2011 that the MHPI was below 10%, and the improvements were recorded across most states and most types of dwelling.

It said sales and new launches slowed in the last quarter of 2013, possibly due to the various measures imposed to cool down the housing sector since 2010.

“It’s possibly due to the wait-and-see attitude of some developers and buyers following the prohibition on developer interest-bearing schemes in November last year, further increases in real property gains tax in January this year, higher minimum purchase price for houses by foreigners, and uncertainties regarding the potential impact of the goods and services tax,” Bank Negara said.

The central bank pointed out that there was no conclusive evidence of a housing bubble in the country. It added that analysts, rating agencies and international organisations, such as the International Monetary Fund, had lauded the pre-emptive and concerted measures taken by the Government and Bank Negara since November 2010 to curb excessive speculative activities in the domestic property market and promote a sustainable housing market. (See table)

It also said that the bulk of home purchases continued to be for own occupation or medium to long-term investment.

“This was corroborated by data that showed 84% of home loan borrowers only had one outstanding housing loan account,” it said in an email response to StarBiz.

The central bank said borrowers were less inclined to dispose of their properties in response to a downward movement in property prices as their loan repayment capacities were not depend on the home equity value or expected capital gains. This was considering the medium to long-term nature of their ownership and investment horizon.

This scenario could limit the potential for a sharp increase in default incidences and credit losses to banks in the event of a price correction in the property market.

Based on a single factor sensitivity analysis on the housing loan portfolio of banks with a stressed probability of default (PD) of up to 10% (about four times the current PD) and adverse correction in house prices of 40%, banks’ excess capital buffers stood at more than five times the estimated expected losses.

Bank Negara said although the MHPI had expanded annually by between 10% and 12% since 2011, outpacing income and rental growth, the rate of growth in house prices remained significantly below those observed in some neighbouring economies.

It pointed out that while elements and pockets of speculative activities were present, the upward pressure on house prices was largely explained by structural factors.

“Demand continues to outpace new supply of houses by a large margin, particularly in the low to medium-priced segments and in major employment centres,” it said.

Demographic factors, given Malaysia’s relatively young population and labour force, increasing urbanisation, and general inclination to own a house, are expected to sustain strong demand for affordable residential properties in major urban centres, likely outstripping supply over the near and medium-term.

“Part of the mismatch in the market was due to rising land prices and construction costs that increased the incentive for developers to build high-end properties where the margins are higher,” the central bank said.

On the part of the Government, a number of schemes have been introduced to increase the supply of and access to financing for the purchase of affordable housing via PR1MA, MyHome and My First Home schemes.

In addition, the National Housing Council was set up in 2014 to develop strategies and action plans in a holistic manner, coordinate legal aspects and property price mechanism, and ensure provision of homes in a more efficient and expeditious manner.

Bank Negara said the earlier Government measures had also resulted in reduced credit-fuelled speculative purchases of residential properties where the annual growth in the number of borrowers with three or more outstanding housing loans has declined substantially to about 4%, from a peak of 15.8% prior to the implementation of the measures, to account for only 3% of housing loan borrowers.

There are also improvements in banks’ housing loan portfolio quality and underwriting standards with impaired housing loans remaining low and stable at 1.4% of total bank loans to households (2013: 1.5%; 2012: 1.9%; 2011: 2.3%).

A similar trend was observed in the gross amount of impaired housing loans, which declined further to RM4.7bil from RM5bil at end-2013 (2012: RM5.4bil; 2011: RM6bil).

It said the proportion of outstanding housing loans with loan-to-value (LTV) ratio above 70% tapered to 46.6% (2012: 50.1%), providing a comfortable buffer for banks against a decline in the value of the underlying collateral relative to the outstanding amount of a housing loan in the event of defaults.

Banks have also demonstrated an increased rigour in the assessment of factors which support property valuations, such as the level of development in a specific location, population density, status of overhang, existing and potential demand, and the number and value of turnover of properties within the surrounding areas.

It was also observed that the lower margin of financing was applied by banks on new housing loans for properties in locations where price increases have been stronger. In the more recent period, valuations used for this purpose have excluded values inflated by incentives offered by developers to house purchasers, which can increase house prices by between 10% and 30% above the intrinsic values.

Source: StarProperty.my

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Expo offers 2,500 choices of secondary properties

June 18th, 2014 15 comments

MORE than 2,500 residential properties will be exhibited during the Malaysian Secondary Property Exhibition Penang (Maspex 2014) at the Penang Times Square this weekend.

Organising chairman Michael Geh said many of the properties, with prices ranging from RM300,000 to RM800,000, were in strategic locations.

“The prices are between 20% and 30% lower than the new properties sold by developers,” he said during a press conference yesterday.

State Town and Country, Planning, and Housing Executive Committee chairman Jagdeep Singh will launch Maspex 2014 which will be held from Friday to Sunday.

Geh said last year’s Maspex saw more than 7,000 people attending it with more than 500 leads for real estate agents.

“The secondary market is the biggest driver in the overall property sector in the country, taking up 70% of the market share,” he added.

Geh said there would also be property forums to disseminate information on what was happening in the housing industry in the country and in the region today.

“There will also be tips on interior design for affordable homes, property tax for the secondary property market, and the impact of the Goods and Services Tax on property,” he said.

Meanwhile, Jagdeep said the state government would also have a booth at the event to register first-time buyers of low medium-cost houses priced at RM72,000 and affordable housing projects, which are priced between RM200,000 and RM400,000.

“There are 10 affordable projects being developed in the state now. We expect to deliver 19,730 affordable units by 2018,” Jagdeep said.

Source: StarProperty.my

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PDC building to go

June 15th, 2014 78 comments

Artist's impression of the future BPO towers on current PDC's site

The Penang Development Corporation building will be demolished to make way for a Business Process Outsourcing (BPO) Prime project.

The project will be undertaken by a joint-venture company, formed by the Penang Development Corporation (PDC) and Temasek, in which PDC will take up a 51% stake.

InvestPenang director Datuk Lee Kah Choon said PDC was in the process of relocating to Mayang Mall in Bayan Baru.

“The PDC and its 415 workers will be shifted to Mayang Mall by the end of the year,” he told a press conference yesterday.

The four-storey PDC building, located on a 2.7ha site in Bayan Baru, will be replaced by a proposed 29-storey and 25-storey BPO towers, which are being planned to accommodate retail outlets, recreational facilities and open spaces.

“Together with the other Multimedia Super Corridor (MSC)-status buildings such as Suntech Tower, One Precinct and Mayang Mall in Bayan Baru, the area will form a BPO hub.

“The BPO hub is projected to create 4,000 jobs in three years,” Lee said.

He added that PDC had the option of moving to the BPO Prime when it was completed.

Lee said the demand for BPO offices was strong, especially if the building was MSC-certified.

The BPO Prime will be going for MSC certification.

“The global outsourcing market, of which BPO services are part of, is projected to grow to US$625bil in 2017 from US$458bil presently,” Lee said.

On May 23 this year, the PDC signed a memorandum of understanding with Temasek to undertake the development of the BPO Prime and Penang International Technology Park (PITP) in Bayan Baru and Batu Kawan.

“Both projects will have a RM11.3bil gross development value.

“0nce completed, the BPO Prime will be managed by the Economic Development Innovations Singapore Pte Ltd,” Lee said.

The PITP project located on a 83ha or 206 acres will be completed in five to 10 years, according to Lee.

The PDC moved to its present location in Bayan Baru in 1993 from the Penang Skills Development Centre.

Source: StarProperty.my

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Education group to open RM55mil international school in Penang

June 12th, 2014 22 comments

Ideal learning environment: Abdullah (second right) having a closer look at a model of the international school after the groundbreaking ceremony. Accompanying him are (from left) Leela, Teh, Ramasamy, Collin and Ong.

GEMS Education, the world’s largest kindergarten to secondary education group, will open a RM55mil international school in Bandar Tasek Mutiara in Simpang Ampat near Bukit Mertajam, Penang.

The Gems International School of Pearl City is a project undertaken by Gems Education and its local partner Maju Holdings Sdn Bhd via its subsidiary Gems Maju Sdn Bhd.

This is Gems Education’s first international school in Malaysia.

Gems Maju Sdn Bhd chief execu- tive officer Tom Collin said the school was scheduled to open in September 2015.

“It will have an initial intake of 300 pupils from kindergarten through to Year Nine under the tutelage of 30 education professionals,” he said at the groundbreaking ceremony which was performed by former prime minister Tun Abdullah Ahmad Badawi.

He said the school would cater to both local and international students from kindergarten to secondary education.

“We will offer a hybrid international and Malaysian curriculum including Bahasa Melayu, Islamic and Moral Studies, History, Art and Design, Music and Drama in a Malaysian context,” he said.

Collin said the company was also looking into building international schools in the Klang Valley, Johor Baru and in Sabah and Sarawak.

Present at the function were Deputy Chief Minister II Dr P. Ramasamy, Gems Maju Sdn Bhd chairman Datuk Alan Ong, Gems International School of Pearl City board of governors chairman Datuk Leela Mohd Ali, Tambun Indah managing director Teh Kiak Seng and Star Publications (M) Bhd executive director Tan Sri Kamal Hashim.

Source: StarProperty.my

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