Nineten is part of Permai Village development located at Tanjung Bungah, Penang. It comprises 3-storey semi-detached house with a total 40 units. The semi-detached house come with 5+1 bedrooms and 5 bathrooms with a gross built-up area of 4,835 sq.ft. The land size of each 3-storey semi-detached house measuring from 3,218 to 12,712 sq.ft.

Property Project : Nineten
Location : Permai Village, Tanjung Bungah
Property Type : 3-Storey Semi-Detached
Tenure : Freehold
Built-up Area : 4,835 sq.ft.
Land Area : 3,218 – 12,712 sq.ft.
Total Units : 40
Developer : BSG Property
Indicative Price: RM 2,000,000 onwards

The Penang Malays Association (Pemenang) is planning to build 5,000 apartment units with a built-up area of not less than 1,000sq ft each in George Town.

Its president Datuk Seri Mohd Yussof Latiff said the units would be built on 11.33ha of land, among others in Kampung Makam, Kampung Dodol, Jalan Datuk Keramat, Jalan Perak, Jalan Sungai Pinang and Jalan Patani.

It was reported last year that the association, through its property arm PIEMPIPI (Pemenang) Bhd, was holding discussions with Amanah Raya Bhd (ARB) to develop the land in George Town and turn it into a Malay heritage area.

He said Pemenang would seek the cooperation of the state Islamic Religious Department and the state Islamic Religious Council to implement the project.

“The state government is also supportive of the plan. We will soon hold talks with the Federal Government on this.

“We are planning to recover land which have been mortgaged. This way, the Malay community would be able to live comfortably in the city with sufficient amenities,” he said at a press conference to commemorate Pemenang’s 84th anniversary.

At the function, he handed over a framed photograph featuring the country’s nine Rulers and the ‘7 Wasiat’ that was articulated in the The Federation of Malaya Agreement on Aug 5, 1957 to the association.

He said the photograph was an enlarged version of a similar one from his personal collection.

SOURCE: The Star

The residential property market has been experiencing an upturn since the fourth quarter of 2009 as demand rebounded by 7.1% (2009: -2.3%) following improved consumer sentiments. Meanwhile, the increase in housing stock moderated in 2010 as housing started a declining trend.

The widening gap between supply and demand has kept property prices elevated, although at the national level, the Malaysian House Price Index rose only moderately by 6.2% up to the third quarter of 2010. Substantial increases in house prices had been observed in selected locations within and surrounding the urban areas where price increases were up to four times higher than the national house price index.

Price increases in these locations have in turn resulted in prices of properties in the surrounding locations to increase, making homeownership increasingly less affordable for the average Malaysian. There have also been incidents of applications for financing of multiple residential units within a single development project from a single borrower.

To address this development, borrowers are subjected to a loan-to-value (LTV) ratio of 70% for the third and subsequent house financing facilities with effect from Nov 3, 2010. This measure aims to promote a stable and sustainable property market by deterring speculative activity through higher equity requirements for transactions of these nature.

In January 2011, Bank Negara revised the risk weights applied under the capital adequacy framework from 75% to 100% for housing loans with LTVs exceeding 90% to further reinforce prudent underwriting practices.

While a large fraction of household borrowings was collateralised (45.3% was for the purchase of residential properties), personal financing had increased significantly as outstanding personal financing grew by 17.5% to account for 14.6% of household debt last year (2006: 9.6%).

Development financial institutions (DFIs), cooperatives and building societies accounted for the bulk of this growth, with almost 80% granted under salary-deduction schemes. The absence of robust credit and affordability assessments will result in households being more at risk of becoming over-indebted, while the risk of defaulting on financing obligations, including those obtained from other banking institutions, will be higher for borrowers who have over-borrowed.

Excluding the DFIs, personal financing exposures of commercial banks increased at a lower rate of 13% to account for 8.6% of banking system household loans.

Despite a reduction in the number of cards owned by households following the imposition of a RM50 fee by the Government on credit cards in 2010, outstanding credit card balances increased by 15.2% to RM30.8bil as at end-2010 to account for 5.3% of household debts. Similarly, outstanding balances per credit cardholder rose by 15.1% to RM9,516 as at end-2010. The number of credit card holders with revolving balances (excluding defaulters) accounted for 47.9% of total credit cardholders.

More than half of credit cardholders with revolving balances were those earning an annual income of RM36,000 and below. Meanwhile, the level of non-performing loan (NPL) ratio for credit cards issued by banks and non-banks remained low at 1.7%. To ensure that credit card debts are maintained at manageable levels, a number of pre-emptive measures have been introduced, including raising minimum income eligibility, limiting the number of credit card ownership and aggregate credit limit for those with annual income of RM36,000 and below.

Loans-in-arrears across most categories of household debts remained stable, while loans-in-arrears for personal financing, which drifted upwards in the early part of last year, started to come down in the fourth quarter of 2010. As at end-2010, the NPL ratio for household loans was 2.3%. The ratio of household loan repayment-to-disbursement increased marginally to 87.8%.

The highly-competitive environment and the increased indebtedness of households have called for pre-emptive measures to preserve the resilience of the household sector going forward. Although personal bankruptcies and relapse rate among borrowers under AKPK’s Debt Management Programme have been manageable, they have been on the increase since 2007.

Several initiatives have been implemented during the year to ensure the continued resilience of the household sector, including a programme to educate younger and first-time borrowers on responsible borrowing, tighter standards for credit cards and enhanced requirements on the conduct of business by financial institutions in retail financing.

Bank Negara will also issue new guidelines by April on the conduct of business in retail financing, which set the minimum standards to deliver a more responsible approach to lending by the financial institutions.

SOURCE: The Star

It turned out that South Korea plunged into a crisis that year because people got carried away and spent money they did not have. Millions defaulted on their payments, the government had to rescue its biggest credit card company and the economy slowed down significantly.

A crucial aspect of the story is that regulators tried to enforce stricter measures to get a grip on the situation but they were too late.

Without trying to sound too boastful, this is where our central bank, Bank Negara Malaysia, has done well. It has been able to learn from the experience of others and applied the necessary preventive measures.

Last year, after slashing interest rates to a record low of 2 per cent to spur the economy amid a global recession, it quickly raised borrowing costs. Keeping rates too low for too long was one of the reasons that led to the financial crisis in the US.

It was also last year that BNM introduced limits on mortgages for those wishing to buy more than two houses, to curb speculation in the property sector. It was evident that prices in selected locations, the Klang Valley, for instance, were too high. Once again, similar measures were adopted before in countries like Singapore and Hong Kong to cool a red-hot property market. But in fact, BNM was dusting off its old playbook and applied what it had already done way back in the mid-1990s.

Last week, BNM announced new rules, making it harder for people to get a credit card while at the same time capping loan limits and the number of cards they can hold.

Now, we can expect more rules for banks to adopt what is called responsible lending practices. What this means is that banks must carry out tests to see if a person can afford the loan that's being applied for. Banks must also be more forthcoming with information and tell customers how much they have to pay when interest rates go up.

This would happen in cases where a loan comes with a promotional cheap rate that's only for a certain time. Then, the higher rate would kick in, meaning higher monthly payments.

What does it mean to the man in the street? It means that the average Ali will have some measure of protection against taking up loans he cannot afford. It also means the consumer will be better informed.

But the bigger picture is that the country hopefully would be able to head off potential problems with household debts in the future with these measures. This means not having to spend taxpayers' money for bailouts, something that South Korea had to do in 2003. A more recent experience is what the US had to go through with its subprime debt crisis.

The fact remains that household debt, while high, is not a major concern for now because the rate of bad loans has been falling since 2007 to about 2 per cent now.

Also, the bulk of household debt comprises mortgages that use property as security, therefore reducing the risk of losses for lenders.

SOURCE: Business Times

THE banking sector is well-positioned to make assessment of affordability and the creditworthiness of borrowers under the "My First Home Scheme".

Bank Negara Malaysia (BNM) governor, Tan Sri Dr Zeti Akhtar Aziz, said there would be no risks to the quality of household loans from the scheme as the focus was on affordability.

"The verification of affordability is very important and for the banking sector it is well-positioned to make the assessment, and it knows also the credit exposure of the borrowers," she said.

Zeti said this at a media briefing on the release of BNM Annual Report 2010 and Financial Stability and Payment Systems Report 2010 here Wednesday.

She said there were many young people who had job security, good prospect and income stream, a combination of husband and wife, who were in position to enter loan agreement to purchase property under the scheme.

Under the scheme, young people that earned less than RM3,000 a month could obtain up to 100 per cent financing to buy houses costing between RM100,000 and RM220,000 with a repayment period of up to 30 years, she said.

On the lending guidelines to banks on household debts, Zeti said, it would be introduced soon as BNM has issued the concept paper.

Zeti said the guidelines were not issued now because banking institutions had to put in place the mechanisms within their systems to facilitate the new guidelines and at the same time not cause any delay in processing of loans.

She expected the guidelines to be introduced in the second half of this year. – BERNAMA


SOURCE: Business Times