KUALA LUMPUR: Mah Sing Group Bhd is confident the local property market is sustainable as the current buying activities are backed by economic fundamentals and genuine purchasers.

“Despite Bank Negara’s measure to cap the loan-to-value ratio at 70% for third and subsequent house purchase, the prevailing low interest rate, healthy employment market and the fact that property investments have proven to be a reliable asset class will continue to sustain and drive the sector,” group managing director and chief executive Tan Sri Leong Hoy Kum said.

The Government’s Economic Transformation Programme to pave the way for the country to become a high-income nation will also boost demand for properties in economic hot spots that include the Greater Kuala Lumpur, Penang and Johor.

Leong said careful market studies to match supply with demand was necessary to make sure that the products offered meet market needs in terms of concept and design.

“It is important to invest in research and development to continuously create a healthy, sustainable and eco-friendly lifestyle. Other attributes include good locations, unique concepts and on-time delivery of quality products,” he told StarBiz.

Leong said gated and guarded landed properties seemed to be the most sought after, both for new launches and the secondary market.

“Besides a good location, buyers today place more importance on security, concept, design and lifestyle.

“The current price trend for link homes in good locations are approximately RM700,000 onwards for double-storey link homes and RM1mil onwards forthree-storey link homes,” he added.

Leong said Mah Sing was confident of chalking up sales of more than RM1.5bil this year after having turned in RM1.02bil for the first seven months this year from projects in the Klang Valley, Penang and Johor.

As at June 30, the company had unbilled sales of RM1.17bil, nearly twice the revenue recognised in 2009.

“Our landed properties generally attract local buyers, and our serviced residences have a higher quantum of foreign buyers due to ease of maintenance,” Leong said.

As part of the company’s marketing strategies, Mah Sing takes part in property exhibitions locally and overseas as they are good brand-building campaigns.

“We look forward to the upcoming Star Property Fair on Nov 19-21 at the Kuala Lumpur Convention Centre, and will be showcasing some of our latest projects at the fair,” he added.

The company currently has 15 ongoing projects while 10 projects are at various stages of planning. Its existing projects include One Legenda and Hijauan Residence in Cheras, Garden Residence in Cyberjaya, Perdana Residence 2 in Selayang, Icon Residence Mont’ Kiara, Aman Perdana in Meru-Shah Alam, Southgate, StarParc Point, iParc@Bukit Jelutong and iParc 2@Shah Alam in Kuala Lumpur and Klang Valley, Legenda@Southbay and Residence@Southbay in Penang island as well as Sri Pulai Perdana 2, Sierra Perdana and Austin Perdana in Johor Baru.

Those in the drawing board include M Suites @ Jalan Ampang, Kinrara Residence and Kinrara joint venture project, Garden Plaza in Cyberjaya, Star Avenue@D’Sara in Sungai Buloh, Icon City in Petaling Jaya, iParc3@Bukit Jelutong, and Bayu Sekamat in Hulu Langat in Kuala Lumpur and Klang Valley as well as Southbay Plaza and Icon Residence in Penang island.

Mah Sing is previewing its second project in Cyberjaya, namely Garden Plaza comprising Garden Suites (residential) and Garden Retail which are lifestyle retail shops.

The project-awareness exercise has attracted more than 2,000 registrants for the Garden Suites. Comprising fully-furnished small to medium-sized units that will be furnished and in move-in condition, the units are targeted at both users as well as investors looking to tap the vibrant student population in Cyberjaya which is currently in excess of 17,000.

The indicative price for the smallest unit of 500 sq ft starts from RM236,800 and there are flexible sizes to meet various requirements.

Leong said the company’s medium to medium-high end properties, including M-Suites@Jalan Ampang, received overwhelming response during its preview. M-Suites offers freehold apartments from 502 sq ft to 1,630 sq ft which are designed specifically to provide easy ownership and ensure long-term rental demand – criteria which appeal to both investors and residents alike when investing in the city.

The residential landed projects in Cyberjaya, Selayang and Bandar Kinrara had also attracted positive response. Garden Residence in Cyberjaya comprises two- and three-storey superlink and semi-detached as well asthree-storey bungalows. The gated and guarded project has been very successful, with sales hitting RM419mil as at July this year. Meanwhile, Perdana Residence 2, a gated and guarded project in Selayang, achieved more than 98% in take-up rate since its launch in March.

Kinrara Residence, a mixed residential development comprising super links, semi-detached units and executive bungalows priced from RM708,800, has also garnered positive response.

The gated and guarded development offers a communal lifestyle living with a clubhouse equipped with facilities such as swimming pool, wading pool, changing rooms, gymnasium and a community centre.

SOURCE: The Star

FORMER Kampung Buah Pala residents can expect to move into their new homes by early next year, ahead of schedule.

Deputy Chief Minister II Dr P. Ramasamy said that construction of the houses would be completed in January and the families could expect to move in after the occupancy certificate is obtained.

The group, evicted from their century-old village in Gelugor in Penang last year, had opted for compensation of double-storey houses estimated at RM500,000 each.

Dr Ramasamy said this after giving the 15 families RM500 each for Deepavali yesterday.

Representatives from the 15 families were present and some shed tears after receiving the aid.

M. Velavan, 18, who came with his father and grandmother, said they would use the money to buy food and clothing to celebrate the festival.

He said they were glad to hear that the houses would be completed ahead of schedule.

He said he and his parents and siblings were living in a rented two-room flat in Jelutong.

SOURCE: The Star

KUALA LUMPUR: Malaysians have to fork out more money from today to buy more than two houses after Bank Negara slammed the brakes on property speculation.

The central bank announced with immediate effect the implementation of a maximum loan-to-value (LTV) ratio of 70% for people buying their third or more house, meaning those wanting their third property onwards have to come out with their own cash amounting to 30% of the value of the house.

“Financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies,” Bank Negara said in a statement yesterday.

The central bank said at the national level, property prices had increased steadily and remained manageable compared with the historical trends but for certain hot locations, particularly around the urban areas, faster growth in prices and transactions had been seen.

“This is further supported by an increase in financing provided for multiple unit purchases by a single borrower, suggesting increasing investment activity that is of a speculative nature,” it said.

SOURCE: The Star

PETALING JAYA: Bank Negara’s imposition of a maximum loan-to-value ratio (LVR) of 70% for a third and subsequent housing financing facility taken by a borrower is seen as a timely pre-emptive measure to avert unhealthy speculative activities and a potential property bubble, industry players concurred.

With the latest measure that takes immediate effect, people buying their third and subsequent house would be required to pay a higher down-payment than the current standard minimum of 10% of the value of a house.

In a statement yesterday, the central bank said financing facilities for purchase of first and second homes would not be affected and borrowers would continue to be able to obtain financing for these purchases at the present prevailing LVR level applied by individual banks based on their internal credit policies.

Real Estate and Housing Developers Association president Datuk Michael Yam said the association supported the measure as it would ensure a healthier and orderly housing market.

“There are some hot spots in the housing market where prices have appreciated higher than the average price increases in other locations. As financing for the first and second housing properties will not be affected by the ruling, the move is not expected to dampen the performance and growth of the housing property sector.

“Meanwhile. the LVR cap on those buying their third and subsequent house should stem speculative buying and ensure a more sustainable housing market,” Yam added.

Mah Sing Group Bhd group managing director cum group chief executive Tan Sri Leong Hoy Kum said the move was not surprising as Bank Negara had given earlier indications of such a move.

“The move should not significantly affect the overall sentiments of the market which comprises mainly first-time buyers and upgraders.”

Leong said there was no property bubble as price increases were only for properties with good concepts in good locations.

“As long as developers offer quality properties with good concepts in prime locations, there should still be takers due to our strong employment market, low interest environment and good liquidity in our financial system,” he added.

National House Buyers Association honorary secretary-general Chang Kim Loong said the measure would help curb speculative buying in the local housing market.

“Prices of landed residential properties have increased substantially over the last five years.

“We are glad that the Government has heeded HBA’s call with regards to the LVR. We will next seek to make housing more affordable for middle-income households and have pricing control for this group of buyers.

“HBA has urged the Government to set up a Special Task Force with such an objective and aspiration,” he said.

RAM Ratings head of financial institution ratings Promod Dass said: “Given this LTV measure only applies to the third home loan onwards, there should still be ample opportunities for banks to focus on first-time home buyers and perhaps to finance the purchase of a second home for lifestyle upgrading purposes.”

“All said, the level of prevailing interest rates would be an important factor too for the health of home loans, given that the bulk of outstanding home loans are based on floating interest rates,” he said in an e-mail interview.

The Association of Banks in Malaysia (ABM) chairman Datuk Seri Abdul Wahid Omar said while the banking sector supported house ownership, ABM agreed that appropriate measures should be adopted to avert unhealthy speculative activities which could lead to a property bubble.

Abdul Wahid, who is also Malayan Banking Bhd president and CEO, said: “In my view, the application of the measure is clear and specific and the LTV ratio itself, optimal.

Given that financing for first and second housing properties will not be affected by the ruling, the move is not expected to dampen or have an adverse impact on the growth of residential property development sector as well as the banks’ house financing business.

“Affordability of homes for genuine buyers will be preserved as banks continue to lend prudently under their respective risk management framework.”

On the Financial Capability Programme, he said it underscored the view shared by ABM that education was paramount in the promotion of sound financial and debt management.

Details of the implementation of the programme would be announced next month.

SOURCE: The Star

Malaysia’s central bank placed a limit on the loan-to-value ratio for people taking out third mortgages to buy homes in a bid to moderate “excessive” investment and speculation in urban areas.

A maximum lending limit of 70 per cent will take immediate effect, Bank Negara Malaysia, the country’s central bank, said in a statement today. Banks typically provide loans of as much as 90 per cent of the value of the property.

Malaysia joins Singapore, Hong Kong and China in introducing measures to cool their property markets on concerns that asset bubbles are forming as home prices surge. Singapore in August increased down payments for second mortgages and imposed a stamp duty on property held for less than three years.

“Specific locations, particularly in and round urban centers, have experienced faster growth, both in the number of transactions and in house prices,” the central bank said. “This is further supported by an increase in financing provided for multiple-unit purchases by single borrowers, suggesting increasing investment that is of a speculative nature.”

The Kuala Lumpur Property Index, comprising 88 developers’ shares, has surged 28 per cent this year, outpacing an 18 per cent gain in Malaysia’s benchmark stock index.

The targeted implementation of the loan-to-value ratio is expected to moderate the “excessive” speculation in the property market, it said, without providing supporting data.

Malaysian home sales may rise 26 per cent to a record RM52.9 billion (US$17.2 billion) this year, boosted by low lending rates and liquidity, Yeow Yeonzon, an analyst at Kenanga Investment Bank Bhd., said in a report on Oct. 14. Loans applied for purchasing residential properties rose 32 per cent in August from a year earlier to RM15.4 billion, according to central bank data.

The government in January imposed a 5 per cent capital gains tax on property sold within five years of their purchase. — Bloomberg

SOURCE: Business Times