PETALING JAYA: Overall price appreciation for residential properties is expected to range between 5% and 10% this year, according to CIMB Research.

In a report, the research unit said residential properties’ price appreciation could be even higher but it believed that the Government would continue to remain vigilant on “runaway” property prices.

CIMB Research said in terms of house price appreciation, despite the slower real GDP (gross domestic product) growth projection of 3.8% compared with 5.1% in 2011, it believed that 2012 would be another good year due to several factors.

“Buying momentum continued to be strong, driven by inflationary fears.

“Supply growth should remain depressed as developers have only just started to focus more on affordable homes costing not more than RM500,000 in the Klang Valley.

“Major infrastructure improvements in the Klang Valley such as the MRT (My Rapid Transit), River Rehabilitation and covered walkway projects will help boost property prices.”

CIMB Research said although the residential property market would continue to set new records in 2012, it was expected that there would be a slowdown in the increase in overall transaction values in 2012 after two years of high growth that averaged around 30%.

“In view of credit-tightening measures by the central bank, we believe that the growth in transaction value should slow to 10% to 12% this year.”

CIMB Research noted that in 2011, the growth of residential property supply in Malaysia fell to 1.5%, which was the lowest on record.

The slowdown in supply growth was most pronounced in the big three markets (Johor, Penang and Klang Valley), which recorded an average growth of 1.2%.

The only states to buck the slowing trend were Terengganu, Kelantan and Perlis.

“If supply growth continues to lag behind population growth, house prices can only head in one direction.”

It was noted that major developers such as SP Setia Bhd, UEM Land Holdings Bhd, Mah Sing Group Bhd and UOA Development Bhd were all gunning for sales records this year and growth rates ranging from 10% to 35%.

It was also pointed out that the risks to CIMB Research’s volume and price projections for 2012 included the global economic outlook and the local stock market performance.

However, CIMB Research is not optimistic about the commercial property market in the Klang Valley as oversupply will plague the sector for many years to come.

It noted that occupancy rates for the office and retail sector had started to drop.

Meanwhile, future supply of hotel rooms (under construction) in the Klang Valley is likely to depress occupancy rates in the coming years.

According to CIMB Research, UOA Development would be the biggest winner in a Klang Valley property boom as the company has no exposure elsewhere.

The research unit is also optimistic about the prospects for Johor, particularly Nusajaya, as 2012 would see the completion of various catalyst projects.

“The biggest beneficiaries of a property boom in Johor would be UEM Land due to its vast holdings in Nusajaya and SP Setia which is the dominant developer in the state.”

CIMB Research maintained its “trading buy” call on the property sector, but pointed out that property stocks could be sold down heavily in the event of an unfavourable general election outcome.

Source: The Star

PEARL City integrated township in Simpang Ampat, Nibong Tebal, is another landmark in mainland Penang that is gearing up for more growth.

This complements the opening of the Second Penang Bridge and the Ipoh-Padang Besar electrified double track project.

The mixed residential and commercial township on a 445ha project site by Tambun Indah Land Bhd will be fully developed in eight years and so far, 161.8ha is already developed with residential units.

The company opened its Pearl City Sales Gallery at the project site on Sunday to serve the customers better.

Tambun Indah executive director Teh Theng Theng said the project would include a hotel, private hospital, college, food and beverage outlets as well as a retirement village when completed.

“We are currently focusing on the RM131.3mil Pearl Indah and RM181mil Pearl Residence projects and the opening of the sales gallery at the project site.

“We are confident of selling about 50 units in the first two weeks of the projects.

“We have noticed that more island residents are buying units on the mainland,” she said at the opening of the sales gallery.

Also present were Tambun Indah executive director Thaw Yeng Cheong and financial controller Steven Neoh Sze Tsin.

The company also donated RM100,000 to the proposed SMJK(C) Jit Sin building fund in south Sebeang Prai.

Teh added that the people on the island preferred to buy property on the mainland as prices of landed property on the island had shot up sky high.

“They can buy a double-storey terrace unit for RM320,000 in our project, whereas it would cost more than RM800,000 on the island,” she said.

The project is strategically located about 15 minutes away from the North-South Expressway, about 20 minutes from the Second Penang Bridge and about two minutes from the Ipoh-Padang Besar electrified double track station.

It is also close the Batu Kawan Industrial Estate, Science Park and the Bukit Minyak Industrial Estate.

“It is an ideal residential choice for modern families as we have innovatively designed units for people who want a quality lifestyle,” said Teh.

Pearl Villas with 335 units is an exclusive gated community.

It has double-storey terrace homes on a land area of 1,430sq ft each, double-storey semi-detached homes with a land size of 2,660sq ft each and double-storey bungalow units with a land area of 3,240sq ft each.

Pearl Residence with 485 units is spe- cially designed for those wanting a luxury lifestyle.

It has double-storey terrace homes with a land area of 1,452sq ft each and double- storey semi-detached houses with 1,032sq ft each.

Both Pearl Villas and Pearl Residence have a swimming pool, gymnasium, children’s playground, community hall, games room and reflexology path with 24-hour security including CCTV facilities.

Source: The Star

The Clovers, a freehold residential development by Asia Green Development. Strategically located within the established township of Sungai Ara, few minutes away from the Penang International Airport, factories, Queensbay mall and etc. It comprises 892 units with size ranging from 699 sq.ft. onwards, 180 units of which is categorized under affordable housing.

Highlight:

• Private lift direct access to unit
• Largest rooftop garden with lifted gym overlooking 3 different infinity pools.
• Forest track luring with perfectly manicured landscape
• Double volume hotel-like drop-off lobby

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Location Map:

Victoria Bay, an upcoming freehold waterfront mixed development by Asia Green Group at Queensbay. Strategically located next to Queensbay Mall, just a stone’s throw away from Bayan Lepas Free Trade Industrial Zone.

This development will offer a mix luxury condominium, retail, hotel and offices. Some unique features of the condominium including private lifts and viewing deck with infinity swimming pool.

The project is still in its planning stage. More details to be available upon official launch.

Project Name: Victoria Bay
Location : Queensbay, Penang
Property Type : Mixed development
Land Tenure : Freehold
Developer : Asia Green Group

INCREASING the floor price of residential property for foreign buyers from RM500,000 to RM1mil will be a positive development for the housing market, according to analysts and consultants.

Many quarters are in favour of the move to raise the floor price as it would protect the housing market for the masses.

They say the move is timely due to the continued uptrend in home prices which are forcing financiers to start providing “second-generation” type of home loans which extend the servicing of the debt to the purchasers’ children.

Property consultancy Knight Frank’s executive director Sarkunan Subramaniam says the increase in floor price for foreigners would be positive as it would benefit the local buyers as the foreigners have been pushing up house prices.

“I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil. However, there could be some slight impact on foreign purchasers in Johor who choose to stay in Johor Baru but work in Singapore,” Sarkunan tellsStarBizWeek.

Hong Leong Research’s property analyst Sean Lim says that the move is “positive for the domestic buyers who have been frustrated by the rise property prices over the last two to three years”.

Lim says in a report that the impact on the overall property market will be minimal as “less than 5% of all transactions is by foreign buyers”.

Lim also states that the RM1mil floor price could be irrelevant as most foreign buyers are buying in the KL City Centre area and the Golden Triangle in Kuala Lumpur with valuations in excess of RM1,200 per sq ft.

“In the greater Klang Valley area, channel checks indicate that majority of foreigners are renting instead of buying houses,” Lim says.

Lim maintains his overweight rating on the property sector.

DTZ Debenham Tie Lung executive director Brian Koh says that the latest measure that is being considered by the Government will help protect the mass segment of residential properties from foreign speculation.

“A limit on foreigners which allow them to buy only houses that are priced above RM1mil would protect the mass market segment of residential properties and see less competition,” Koh says.

“There may be some impact on the foreign buyers of houses that are priced RM800,000 and above.

“But most foreigners normally buy properties above RM1mil so there will be limited impact on the property sector. These foreigners are from Hong Kong and Singapore,” Koh says.

CB Richard Ellis Malaysia’s managing director Allan Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.

CIMB Research says in a research note that it is “not entirely surprised by the proposed ruling as house prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang”.

“We believe the impact on developers with significant foreign buyers such as Eastern & Oriental Bhd would be minimal. Only 2.4% of residential properties transacted in 2011 were priced above RM1mil and foreigners typically chose higher-end properties,” it adds.

Should this higher floor price be approved, it would also mean protection for the mass market segment of property purchasers.

The Government intervention into the property market with the objective of eventually cooling down house prices to more realistic levels is also in line with the current trend by governments in Singapore, Indonesia and China.

Analysts say that the move shows how much property prices have spiralled locally and that the move is proactive amid growing fears of a property bubble.

An economist with RHB Research Institute says that sustained high property prices and news about financiers starting to offer second generation loans show the seriousness of the non-affordability issue.

“These financiers need to stretch the loans to the second generation which only indicate that houses are becoming unaffordable for a normal salaried person,” RHB Research said.

“From an economic point of view, if affordability issue continues to deteriorate it would not be a good feeling for the people. Moreover, these second generation loans may have legal implications as the financiers don’t know the credit rating of the children of the current buyers,” the RHB spokesperson added.

A senior analyst with a foreign research house observes that property prices have sky-rocketed and reckons that the current prices are unrealistic.

“I think the Government should implement the measure immediately.

“There is no doubt that looking back, prices were more realistic in the past without people having to extend the loans to their children.

“The trend is for developers to offer small-sized units nowadays as the prices keep going up. The houses are becoming smaller and smaller because of the rising cost factor,” he adds.

According to statistics of the Valuation and Property Services Department, the number transactions for properties priced up to RM150,000 decreased year-on-year by an cumulative average of 30.6%.

Source: The Star