BANK Negara Malaysia said slightly less than half of the applicants for My First Home Scheme were unsuccessful in obtaining loans under the scheme as they failed to meet the eligibility criteria.

These applicants amounted to 505, or 47.5 per cent, of the total applications of 1,062 as at the end of January, said the central bank in a statement yesterday.
The participating banks received a total of 1,624 applications as of January, but 562 were subsequently withdrawn due to multiple applications to various banking institutions.

Bank Negara said from a total of 1,062 actual applications, 389 (36.6 per cent) have been approved by banking institutions, of which 280 have obtained guarantee from Cagamas Bhd, the national mortgage corporation, while 168 (15.8 per cent) are currently being processed by banking institutions, said Bank Negara.

My Frist Home Scheme, launched in March 2011, aims to allow young working adults to obtain 100 per cent financing from banking institutions to purchase their first home valued at a maximum of RM220,000 (for single applicants) or a maximum of RM400,000 (for joint applicants of husband and wife with household income below RM6,000 per month cumulatively).

Applications are made to participating banking institutions and upon approval Cagamas will provide a guarantee for the first 10 per cent of the loan.

The statement was issued following news reports yesterday claiming that the success of the scheme had been hampered by the unwillingness of banks to risk giving loans with monthly repayments that come up to more than half of the applicants’ salary.

In fact, a Chinese daily even reported on March 5 that not a single loan under the scheme has been approved.

Bank Negara said that to qualify, applicants should have the capacity to meet their debt obligations, provide the evidence of a sustainable income stream, good credit history and able to meet the basic eligibility criteria of the scheme.

“The intention is to ensure that young borrowers are not over burdened by debt obligations that may lead to bankruptcies or foreclosures,” said the central bank.

Source: Business Times

Autumn Tower, the forth and final tower of All Seasons Park residential development by the Belleview Group. Prominently located along Lebuhraya Thean Teik, a major road on the island city, this residential project is accessible via Lorong Batu Lanchang. It is only a short drive to hypermarkets such as Giant Farlim and Sunshine Hypermarket Farlim.

The development is anchored by a 3-level podium “strip mall” – All Seasons Place, that includes key tenants such as Hero Market, MR DIY, Maxis, Guardian, Sushi King, Summer Bakery, Starbucks and Black Ball.

There are several schools less than 600m away, including Chung Ling High School, SMK Air Itam, SK Seri Indah, SJK Chiao Nan, SK Batu Lanchang and others.

Property Project : Autumn Tower @ All Season Park
Location : Lebuhraya Thean Teik, Penang
Property Type : Condominium
Built-up Area: 856 sq.ft. – 1,323 sq.ft.
Land Tenure : Freehold
Developer : Belleview Group
Indicative Price: RM 400,000 onwards
Latest Price (2019): RM825,000 onwards (Penthouse)

GEORGE TOWN: Car toll for the Second Penang Bridge has been set at RM7, said Jambatan Kedua Sdn Bhd managing director Datuk Dr Ismail Mohamed Taib.

“Tolls will match those of the first Penang Bridge. We want it to be lower, but if we are lower, the first bridge management will complain and sue for compensation.

“The first Penang Bridge was supposed to increase (the car toll) to over RM9, so we were ready to follow them.

“However, now they have confirmed that they are staying at RM7, so we will also charge the same,” he said after witnessing Treasury secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah cast the second bridge’s 292nd and final pier marking the end of foundation works.

Asked how long the RM7 toll would remain, he said at least until 2038.

It was first announced in June 2010 that car toll for the first Penang bridge would be hiked from RM7 to RM9.40 in 2013.

In November last year, it was reported that the concession period for the Penang bridge had been extended to Dec 31, 2038 in exchange for a freeze on toll hikes.

On the progress of the Second Penang Bridge, Dr Ismail said works were 73% completed with some 3.5% ahead of schedule.

If all proceeded well, he added, the bridge could be completed two months ahead of the September 2013 target.

Upon completion, the Second Penang Bridge will be 24km long 10.5km longer than the first bridge which will make it the longest bridge in South-East Asia.

Source: The Star

PETALING JAYA: Policymakers at Bank Negara followed the lead of their regional peers by holding the key policy rate steady, as growth momentum moderated amid a slowdown in trade activity while upside risks to inflation remained.

The central bank, which maintained the overnight policy rate (OPR) at 3%, said in a statement that while global financial conditions had improved, downside risks to the global economy remained.

“The high global commodity prices continue to pose risks to inflation,” it said.

Bank Indonesia kept rates unchanged at 5.75% while Bank of Korea maintained the key interest rate at 3.25% for the ninth consecutive month on Thursday.

The move by Bank Negara was not a surprise to economists, who before the release of the statement, had said policymakers would continue to weigh growth concerns against inflationary risks.

Citigroup Inc senior economist Kit Wei Zheng said in a report that with emergency conditions that triggered the 2008/09 rate cuts not materialising, a rate cut did not seem to be under serious consideration now.

He pointed out that policymakers expect inflation to remain below 3%, assuming no adjustment to subsidies even after the elections.

“Household debt seems to be a more important factor driving rate decisions, as policymakers reiterated that macro-prudential measures will be ineffective if rates are not normalised,” Kit said.

Bank Negara noted that growth in the advanced economies remained subdued although concerns over the European sovereign debt crisis had abated while there were tentative signs of improvement in North America.

“In Asia, while growth continues to be supported by domestic demand, the growth momentum has moderated amid a slowdown in trade activity,” it said, adding that overall growth momentum was expected to moderate largely due to the weaker external environment.

The central bank said while headline inflation was expected to moderate in 2012, there were still upside risks to inflation emerging from supply disruptions as well as higher energy and commodity prices.

“The monetary policy committee will continue to carefully assess these evolving conditions and their implications on the overall outlook for growth and inflation,” it said.

Kit said triggers for a rate hike would be met on US economic data continuing on the upside for another two to three months, faster-than-expected implementation of the Economic Transformation Programme projects and if core inflation picked up.

“We maintain our view that the OPR will be kept on hold through 2012, with a possibility that the next rate move, which is likely in 2013, could be upward,” he said.

It said latest indicators and surveys of businesses pointed to continued expansion in private consumption and business spending in the local economy with domestic demand continuing to drive expansion.

“Private consumption will be supported by stable employment conditions, income growth and public sector measures. Investment activity will be supported by the domestic-oriented industries, the commodity sector and the public sector,” it said.

Source: The Star

THERE was a lot of talk late last year that property prices will tumble in 2012 after the steep rise in the residential sector over the past few years. So far, we have not seen any of that.

What we are seeing is:

● Bank Negara’s tightened guidelines on consumer lending have started to work. Loan applications and loan approvals have fallen in January;

● In certain locations, house prices and rental have started to ease; and

● Developers are offering very enticing terms since the beginning of this year.

Keep your finger on these three factors and let us now take a look at today’s launches. In some of these launches, buyers need only to pay about 1% downpayment of the property price instead of the required 10% on signing of the sale and purchase agreement. The stamp duty and legal fees are also waived and they need not pay anything else until after the property is completed. Such schemes have attracted many buyers.

The question to ask is: If the market is as good as many claimed it to be, why are developers offering such schemes? When a property is sold, it is registered as a sale. But the absolute revenue of the unit is yet to be paid.

For easy calculation purposes, 10% of a RM500,000 property is RM50,000. If the first 10% is paid, this RM50,000 is registered as revenue by the developer, but in the sales column, a sale of RM500,000 is recorded. That is why the sales and revenue figures vary considerably.

If a developer allows a buyer to pay only 1% of the purchase price, this does not mean he “loses” that other 9%. He will get it back after a certain period of time. The same goes for the waiver of the stamp duty and legal fees. The developer has to pay the lawyers for services rendered. All these charges and fees are packaged into the deal which the buyer will have to bear in due time. In this case, later rather than sooner.

Developers are offering such attractive terms in order to make a sale. Many of these schemes are offered in condominium projects because there is generally a glut in this segment. While such schemes may attract genuine buyers who need a roof over their heads and who are thankful that they can defer payment, it also attracts those who have no problem forking out that 1% downpayment and take a gamble that they will be able to offload it when the project is completed.

If one were to drive around certain parts of the Klang Valley today, there are some completed high-rise with large mobile numbers plastered on windows. It may not be so easy to offload units when there are so many of them.

What is noticeably absent, and which many would like to see are more launches of landed housing. But this is unlikely to happen. Only the secondary market is offering landed units, which may explain to a certain degree why the secondary market was rather robust last year. It applies not only for the Klang Valley, but for Penang as well and is a reflection of strong domestic demand despite the many negative predictions for this year.

When a developer considers a piece of land, he thinks of how much he can make from it. If he were to build a condominium and throw in various facilities, he can sell more houses than if he were to build landed units. That is why most of the launches today are high-rise projects, be it condominiums or serviced apartments.

Developers are also limited by what they have. Increasinlgy, land in city centres and popular areas are getting smaller. Which explains why in highly dense areas, condominium projects continue to be sprout up in the most congested of areas.

The development of landed units can only take place when there is large tracts of land, which also explains why the big boys like Mah Sing and SP Setia are venturing further away from city centres.

The other obvious factor in today’s launches are the size and price of the condominium units. Most of the units are small. Studio apartments may be in the 500 sq ft range or thereabouts while those targeted at families may be three-bedroom units with built-up areas of 1,200 sq ft onwards. Most of the launches today are priced close to RM700,000 onwards. On a per sq ft basis, the price is still going up, whether it is a Petaling Jaya address or a Bukit Jalil one.

So, while sales volumes may stagnate in newly-launched projects (which explains why developers are offering units for sale with a 1% downpayment), on a per sq ft basis, prices does not seem to be stabilising. Developers are trying to maintain affordability by having smaller units, deferring payment and leveraging on low interest rates.

Assistant news editor Thean Lee Cheng is glad that Bank Negara is monitoring the household debt and lending in the property sector closely as this year promises to be an exciting one.

Source: The Star