CAUCASIANS comprise the bulk of those purchasing the RM255mil Infinity Beachfront Condominium that recently clinched the FIABCI Malaysia Property Award 2011 under the residential (high rise) category.

Hunza Properties Berhad executive chairman Datuk Khor Teng Tong said the project attracted Caucasians because it had access to a 105m-long beachfront as well as a 136m-long river frontage.

“Beachfront accessibility is a key attraction for Caucasians as they prefer a beach resort lifestyle.

“While the project was still under construction in 2008, we adopted Sungai Kelian to beautify and maintain its cleanliness for the long term.

“Hunza and the FIABCI Penang Branch used the effective microorganism (EM) biotechnology to clean the river. It is now free of sludge and its water clearer,” Khor said.

“The Caucasians, forming about 65% of the buyers, are from countries such as Britain, the United States, Australia, Belgium, Switzerland and Canada,” he said.

He said other foreign buyers came from countries such as Vietnam, Hong Kong, Indonesia, Korea, Macau and Singapore.

Khor also said the company?s RM480mil Gurney Paragon condominium project attracted many purchasers from Singapore, Indonesia, Hong Kong, Korea and Macau as the project was close to shopping malls and lifestyle facilities.

He said this at a recent cocktail event in Penang to celebrate Infinity’s FIABCI award win.

The event was attended by business partners of the project and corporate leaders.

The project, comprising 119 condominiums units and penthouses, obtained the certificate of fitness (CF) in 2010.

It is all sold out except for four of the eight penthouses.

Initiated 19 years ago, the FIABCI Malaysia Property Award invites the best projects in Malaysia to contest in various categories.

The winning projects this year will represent Malaysia in the international competition FIABCI Prix d? Excellence awards which will be held in St Petersburg, Russia, in May next year.

FIABCI is the acronym for Federation Internationale des Administrateurs de Bien-Conselis Immobiliers (International Real Estate Federation).

SOURCE: The Star

That was ended when it roped in Dijaya Corp Bhd. They now plan to build residential and commercial properties on the land, estimated to generate sales of some RM10 billion.

This is not their first tie-up. Within the Batu Ferringi tourism belt, Dijaya has a joint-venture project called “10 Island Resort” with Ivory.

In Bukit Mertajam, Dijaya has a mixed development project dubbed Aston Villa, in which Ivory is the turnkey developer.

But that partnership has overshadowed an interesting fact. Penang has now seen the entry of two highly successful businessmen and both happen to be brothers.

Dijaya is controlled by Tan Sri Danny Tan Chee Sing, the younger brother of Berjaya Corp Bhd founder and chairman Tan Sri Vincent Tan Chee Yioun.

Barely three months ago, the senior Tan made a comeback to Penang as a property developer after a hiatus of nearly two decades.

The Berjaya Group – via Berjaya Land Development Sdn Bhd – signed a deal to buy 22.8ha of prime freehold land within the Penang Turf Club for RM459 million.

At the signing ceremony in Penang, Vincent did not mince his words in expressing his displeasure with the previous state government.

Vincent’s approval of the current state administration is a strong signal to other developers that the island state has plenty of potential.

And this probably explains Danny’s continued interest.

The latest alliance with Ivory is a very big undertaking and one which will ensure its presence in the state for many years to come.

Danny, the man behind Petaling Jaya’s Tropicana Golf and Country Resort, will have his hands full with the latest venture. As for Vincent, he did not discount the possibility of enlarging Berjaya Group’s footprint in Penang.

Together, the Tan brothers will be a force to be reckoned with in Penang. marinae@nstp.com.my

SOURCE: Business Times

ALONG-AWAITED dream has come true for sistes Yap Siew Bee, 41, and Siew Thoo, 26, who have received a new low medium-cost home.

“I am so happy today and I can’t wait to move into our unit when it is completed,” said Siew Bee.

Siew Thoo said that previously, their large family of 10 all stayed under one roof.

“Now, we will have two units for all of us to live in,” she said when they visited the soon-to-be completed Central Park project in Penang.

They were among 10 families living along Lebuhraya Batu Lanchang who were forced to move out in 2008 to make way for the project’s development.

The families were compensated with units at the project after the state government intervened.

Another resident who declined to be named said he was looking forward to moving in.

“The unit looks very nice and trendy,” he said.

Batu Lanchang assemblyman Danny Law met the affected families at Central Park and took them on a tour of their units.

Law said there were a total of 175 low medium-cost units at Central Park, with each unit measuring 16.25sq m.

“The families should be able to move into their units next month,” he added.

KUALA LUMPUR: The number of applications for property development licences is expected to be slightly lower in 2012, according to Housing and Local Government Minister Datuk Seri Chor Chee Heung.

“This year there is a very high number of applications. Also, the trend for the property market next year is optimistically cautious,” Chor said after the launch of the Star Property Fair 2011. Chor reiterated that the construction sector was expected to grow 3.4% this year compared with 5.1% in 2010.

He pointed out that speculative activities in the property market might be dampened in the first half of next year due to the recent measures such as the 5% increase in the real property gains tax to 10% for units sold within the first two years after purchase and Bank Negara’s guidelines on responsible lending.

However, Chor said he believed that demand in the housing market would be stronger in the second half of 2012.

“Towards the second half of next year, once purchasers are used to these measures, they would be back in the market.”

Chor said he was expecting a “rationalisation” in residential property prices although they were not expected to be lower due to increases in the cost of land, raw materials and wages.

“This is because the Federal Government has put in place measures to build affordable homes for first-time buyers or those with household incomes not exceeding RM7,000 a month. When the Federal Government starts to do this, property developers would invariably build homes at affordable prices.

“But they would not be right in the middle of Kuala Lumpur; maybe they would be in Rawang and Semenyih. The price of housing cannot go up every year; it has to reach equilibrium at some point.”

Chor said that one reason for the rise in property prices in Penang and Selangor was the high premium paid by developers for the conversion of land use.

The Star Property Fair is being held until Nov 27 at the Kuala Lumpur Convention Centre.

Developers such as SP Setia, IOI Properties, Naza TTDI and Mah Sing are exhibiting their property offerings at 130 booths.

SOURCE: The Star

Is there any equilibrium point in housing market, considering the many factors influencing demand and supply?

The main determinants of the demand for housing are demographic. Population size and population growth are the core demographic variables. However, family size, the age composition of the family, the number of children, net migration, non-family household formation, the number of double family households, death rates, divorce rates, and marriages are other demographic variables that would influence demand for housing. Other factors such as household income, price of housing, cost, availability of credit, consumer preferences, investor preferences, price of substitutes and price of complements all play a role in determining demand for housing.

Income is an important determinant of demand as shown by a study conducted by De Leeuw in 1971 that showed positive income elasticity of demand in North America ranging from 0.5 to 0.9, meaning the market demand for housing grew as real income rose. The price of housing is also an important variable influencing demand for housing, where in terms of elasticity just like any normal goods it is negative increase in price will result in decrease in demand.

As for supply, the quantity of incoming supply is typically influenced by cost, price of existing stock of houses, and the technology used in the construction, where material costs tend to contribute the largest share of the construction cost, about 30% to 40%. In the short run, supply tends to be very price inelastic increase in cost will have less effect on supply. However, over a longer period, it tends to be very price elastic increase in cost will lower supply.

A study conducted by Fallis in 1985 showed price elasticity of supply was estimated at 8.2, indicating increased in cost would lower supply significantly. The degree of elasticity depends on the elasticity of substitution and supply restrictions. For example, the use of capital intensive technology has been employed to reduce the rising labour cost, thus having less impact on the supply of housing.

As at first half of 2011, Malaysia had 4,466,062 units of housing, an increase of 1.7% from the total of supply in the first half of 2010. About 24,709 units were completed in the first half of 2011, a lower number compared to 50,611 units completed in the first half of 2010. Kuala Lumpur and Selangor accounted for 6,567 units or 27% of the total new stock. Kuala Lumpur and Selangor had 414,436 and 1,285,192 homes, reflecting an increase of 2.0% and 1.7% respectively from the total as of first half of 2010.

Other states which showed significant number of units completed are Sarawak (2,612), Penang (2,507) and Perak (2,184). The incoming supply in the country was recorded at 560,636 units, where Selangor is the largest contributor (134,143 or 24% of the total) followed by Johor (76,429 or 14%) and Negri Sembilan (65,227). Kuala Lumpur has 39,656 units coming on stream.

In terms of transactions recorded as of first half of 2011 for the country, there were 133,984 transactions in the residential category, out of which the largest transacted numbers were priced in the range of RM100,000 to RM150,000, which accounted for 22,857 units, followed by units priced between RM250,000 and RM500,000, which accounted for 21,559 units.

Selangor recorded the highest number of transactions at 38,424 units, followed by Johor (15,015 units), Penang (13,832 units), and Kuala Lumpur (11,522 units). The most popular units transacted in Selangor, Kuala Lumpur, and Penang were for units priced between RM250,000 and RM500,000, while in Johor, the highest transactions recorded were for units priced between RM100,000 and RM150,000.

This brief analysis gives an indication that the total number of units coming into the market needs to be in line not only with the level of affordability of potential buyers in the area the projects are to be launched but also the demographics of Malaysian population.

As of July 2010, total population was estimated to be 28.25 million and the population is expected to grow at a rate of 2.4% per annum, where about 65% of the population is urban population. Today, less than 4% of Malaysians live in poverty and it is estimated that about 2.0% of the total urban population in Malaysia lives below the poverty line, earning monthly household income of equal or less than RM750. Low income households (earning income equal or less than RM2,000 per month) represents 75% of the median income in Malaysia.

The national average household income is estimated at RM4,000 per month. It should also be noted that about 65% of Malaysia’s population is below the age of 35, thus there would definitely be strong demand for housing.

Due to continuous movement in the factors affecting supply and demand for housing, policy intervention is necessary to ensure that the majority of the population has equal access to own homes. Singapore’s public housing policy is often cited as the most successful example of affordable housing provision in Asian cities. A study conducted in 2000 estimated that about 85% of the total population lived in public housing with nearly 95% of them owning the flats they occupied.

By centralising its public housing effort under a single authority, Housing Development Board, Singapore has circumvented the typical problems of duplication and fragmentation of duties, and bureaucratic rivalries associated with multi-agency implementation. This centralised function also serves as a mechanism to ensure supply and demand are checked.

It is hoped that the provision of affordable homes as announced in Budget 2012 would achieve its main objective of increasing home ownership among the majority of the population.

Senator Datuk Abdul Rahim Rahman is the executive chairman of Rahim & Co group of companies.

Source: The Star