KUALA LUMPUR: Young Malay­sians eligible for housing loans under the My First Home Scheme will be charged an interest rate or profit rate of base lending rate (BLR) minus 1.8% for the duration of their loan.

A person has to be no more than 35 years of age when applying for the loan and their individual monthly income must not be more than RM3,000 a month.

The maximum duration of a loan under the My First Home Scheme is 30 years or up to the age of 65 years, whichever comes first.

Malayan Banking Bhd (Maybank) deputy president, head of community financial services Lim Hong Tat said the maximum loan amount under the new scheme would be 105%, with a loan covering the entire value of the house and an additional 5% for mortgage reducing term assurance (MRTA).

Home buyers would need to also take fire insurance for their new homes and have the option of taking either a conventional or Islamic loan when buying their house.

The loan will exclude refinancing, re-mortgage and a redraw facility.

Lim said the scheme was open to salaried and fixed-income earners and those applying need to be confirmed employees who have been working for a minimum of six months with the same employer.

Businessmen, the self-employed and non-fixed income earners are not eligible for a loan under the scheme.

“The repayment amount is 1/3 of the monthly income or up to a maximum of 50% margin of repayment on a case-by-case basis,” said Lim in an e-mail response.

The Government on Tuesday launched the My First Home Scheme for young Malaysians to buy their first house.

Source: The Star

Gevanantham Marimuthu (Geva) has been waiting for over a decade to move into his Lembah Beringin home he bought in the late 1990s, 50km from Kuala Lumpur. Today, Geva, alongside some 2,000 others in that area, have not moved into their dream homes because the project has been abandoned. Geva started paying his mortgage in 1998. He stopped in 2006.

“Why should we pay for something we did not own. In fact, I want them to take me to court!”

Geva is also the chairman of the Lembah Beringin House Buyer’s Association, a group comprising the victims of that project. He is currently living at rented premises.

The project’s developer was a subsidiary of Land & General Bhd (L&G), Lembah Beringin Sdn Bhd. L&G was badly hit during the Asian financial crisis in 1997/98 while Lembah Beringin has been under receivership since 2005.

For decades, the sell-then-build (STB) delivery system has managed to deliver homes to meet the housing needs of Malaysia’s young and growing population. But along the way, due to unforeseen circumstances, this model of buying houses has met with undesirable outcomes.

Projects have been delayed, stalled or worse still, abandoned. National House Buyers Association (HBA) secretary-general Chang Kim Loong feels that the STB system is the crux of the “abandoned project” problem.

“Buyers are exposed to the business risks (and are at the) mercy of developers. Why should the buyers share in the developer’s business risk through this progressive payment mode?” he asked.

Chang admits that any housing project can fail, regardless of the type of delivery system, adding

that no amount of legislation can guarantee the success of any housing project.

“Only the Government can institute a system that to a large extend, insulates house buyers from risks and uncertainties,” he says.

Consumers Association of Penang (CAP) president S.M. Mohamed Idris believes that non-enforcement of the Housing Developers Act is the problem .“If projects are detected when they are ‘delayed’, or ‘sick’, they may not be eventually ‘abandoned’. We have the laws but not the enforcement.

“In a 10:90 BTS model, buyers get to see the actual product. A house is the biggest purchase that a buyer will make. It is not right that he cannot see what he will be committing himself to for the next 30 years.” Mohamed Idris says.

Federation of Malaysian Consumer Associations secretary-general Muhammad Shaani Abdullah says given the failure of respective authorities to improve the current delivery system, it is justifiable to implement the 10:90 build-then-sell (10:90 BTS) system.

An absolute BTS system would be too big a paradigm shift for the local players. Six years ago, the House Buyers Association, under the stewardship of Chang, proposed a variant to the STB system, namely the “BTS 10:90” model. Buyers pay a 10% deposit, sign the sales and purchase agreement and pay the rest when the house is completed and occupiable. Chang says the BTS 10:90 concept has become a reality with the amendments to the Housing Development (Control & Licensing) Regulations, 2007 which was implemented on Dec 1, 2007.

“The Government proposed to let the two systems (STB and BTS 10:90) run concurrently and was supposed to review the situation after two years from August 2006, which has long lapsed. Nevertheless, it remains an option,” says Chang.

Perdana ParkCity Sdn Bhd marketing and sales director Susan Tan believes that both systems should co-exist to provide buyers with a choice.

“Generally, property investors will prefer the STB to reduce their commitment and they can quickly flip the property for a gain when it is completed.. Only the seasoned ones with sufficient capital will invest in completed properties and will look at yields instead of capital gains,” she says.

Chang believes that the quality of houses will improve with the proposed “BTS 10:90” system as developers will not risk dispute with buyers over quality, come full payment time.

“With the 10:90, developers have to seriously focus more on building better quality houses and execute greater care and responsibilities to ensure that the houses are constructed in accordance with specification and proper workmanship manner if they harbour hope of their ‘finished product’ being saleable upon completion of the house.”

Chang says the risk faced by developers that buyers may refuse to complete the sales when property prices have dropped at the time of hand-over is negated by the forfeiture of the initial 10% paid upon the signing of the SPA, as well as other possible specific performance liabilities.

“Today due to the prevailing system in the housing industry, house buyers are facing serious risks when they make purchases. Indeed, even car buyers have more protection than house buyers.”

SOURCE: The Star

KUALA LUMPUR: The average prices of newly developed residential property this year is expected to grow by 13% against last year in line with the increase in raw materials cost, according to a survey by Real Estate & Housing Developers’ Association Malaysia (Rehda).

The survey showed that the average terrace house in Malaysia last year had gone up to RM176,590 in the third quarter from RM168,667 in the first quarter.

High-rise property price in the same timeline had gone up to RM165,530 each from RM163,300.

Rehda president Datuk Seri Michael Yam said since a year ago, raw materials prices such as steel and cement had increased significantly.

“Generally, the majority of the survey respondents are optimistic of the property market for the next six months as the overall sentiments governing the market are positive,” he said at a media briefing yesterday.

Meanwhile, for new properties in the Klang Valley, Rehda national treasurer Teh Boon Ghee said they might rise around 15% this year.

“But, it is also interesting to look at this price increase from a different angle as 88% of the transactions in 2009 were from the secondary market and only the remaining 12% came from new development. The 13% and 15% expected increase only applies to new homes while the momentum for secondary market is slower than that,” he said.

On the new home loan guideline by the Government under My First Home Scheme, Yam said although Rehda supported the move, it would be challenging to develop houses priced between RM100,000 and RM220,000 in the Klang Valley and Penang.

“In these developed urban areas, it would be impossible to develop anything below RM200,000.

“This is because the land costs in these areas are very high. The land component out of the total development cost in these areas may be around 40% to 50%,’’ he said.

For comparison, the land cost per sq ft in Sungai Petani is RM1.30, Cyberjaya RM36 while in Kuala Lumpur, it could be as high as RM2,000.

But due to the new guidelines, Yam said developers might have to relook at their unit size if the development was in the Klang Valley.

“At the average price of about RM400 per sq ft, they can develop a 500 sq ft studio unit or a one-bedroom apartment. This is actually the trend in most developed cities around the world. But to enable developers to embark on this, the Government must encourage local authorities to review their Planning Act as it is now based on number of units per acre.

“Let’s say, the authority allows a developer to build only 50 units per acre. Would it build 50 units of 500 sq ft houses or 50 units of 2,000 sq ft houses?” he said.

The survey were answered by 135 or 14% out of 972 Rehda members that comprises of housing and property development companies from all 12 states in Peninsular Malaysia.

SOURCE: The Star

BANK Negara Malaysia is widely expected to leave borrowing costs unchanged but economists said it may carry out other measures to let some hot air out of the financial system and deal with rising prices of consumer goods and services.

The monetary policy committee will make a decision on the Overnight Policy Rate (OPR) today that stands at 2.75 per cent now.

So far, Thailand raised rates on Wednesday, and has indicated more tightening with the rise in consumer prices, a decision which follows China which did the same last month.

Bank Indonesia kept rates unchanged last week but indicated it would raise interest rates gradually.

Almost 90 per cent of those polled by the Business Times expect the central bank to stand pat with the current rate but they expect it to hike the Statutory Reserve Requirement (SRR) ratio this week.

Under the SRR, banks must keep part of their capital as reserve at the central bank. Raising this means banks would have less money to lend.

Credit Suisse economist Wu Kun Lung expects the SRR to be raised by 1-2 per cent to reduce the amount of money sloshing around in the financial system.

This excess liquidity could result in banks giving out easy loans, which could fuel speculation in certain parts of the economy.

Last year, BNM already put a cap on mortgages to deal with speculation in the properties.

"Loan growth rose to a decade-high 13 per cent in January and the momentum remained strong. More worrying was the strong rise in loans for property purchases (both residential and non-residential properties) and construction.

"We would not be surprised to see some macro-prudential measures such as reducing the loan-to-value ratio, on the property sector," he said.

The SRR ratio was cut to 1 per cent in March 2009 from as high as 4 per cent in October 2008.

OCBC Bank economist Gundy Cahyadi said raising the SRR is more likely as it was indicated by the last monetary policy statement in January.

"A rise (in SRR) arguably has little impact on the economy other than potentially affecting the commercial banks' profitability.

"We expect the BNM to continue asserting inflationary risks to the economy, which suggest that rate hikes may still be on the cards going forward," Gundy said.

While Malaysia continues to benefit from rising commodity prices, especially crude oil and crude palm oil, it also adds to rising prices and a heftier subsidy bill, notes Standard Chartered Bank.

"Even as we expect reforms on the subsidies to continue in Malaysia at a more measured pace, a sustained surge in oil price may force the government to accelerate the reform timing and increase the magnitude of the price hikes," remarked economist Alvin Liew.

He expects BNM to raise the OPR today and do another hike in the second quarter.

SOURCE: Business Times

The Golden Triangle is strategically positioned in the middle of three essential locations – Sungai Ara, a bustling residential hub, Relau,  which is a natural green lung and Bayan Lepas, Penang’s vibrant international free-trade zone. Another distinctive advantage that the Golden Triangle enjoys is the vastness of green surroundings as it is located directly opposite 1.9 acres of open space.

It also enjoys the coveted position of being in a new growth area that gives residents a place to call home where they can retreat to while the commercial owners have the luxury of a ready catchment of potential customers. The Golden Triangle’s integrated two-in -one commercial/residential concept and social viability make it the perfect place to hangout not only for young adults but also for families as a whole.

Phase 2 – Golden Triangle 2

Property Project : The Golden Triangle
Location : Relau, Penang
Property Type : Shop Office & Condominium
Tenure : Freehold
Total Units : 80 (Type A & A1), 20 (Type B – Penthouse)
Developer : GSV Development Sdn. Bhd.
Indicative Price: RM 387,000 onwards

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