The Government through the National Economic Recovery Plan (Penjana) 2020 has lined up several initiatives to rejuvenate the property market and address the lack of affordable housing particularly for the youth.

According to the Ministry of Housing and Local Government, the initiatives included home ownership campaign (HOC) 2020 whereby housing developers accord house buyers stamp duty exemption and incentive in the form of at least 10% discount on the sale price.

In addition, it said the exemption of real property gains tax (RPGT) which is tax levied upon profit from the sale of property, and current tax reduction could stimulate the national housing market.

“The RPGT exemption is given to Malaysian citizens upon disposal of residential property, limited to three houses per individual, from June 1, 2020 until Dec 31, 2021,” the ministry said in a written reply at the Dewan Rakyat yesterday.

It was responding to Datuk Seri Mahdzir Khalid (BN-Padang Terap) who wanted to know about the ministry’s efforts to overcome the lack of affordable housing to meet the people’s needs, especially the youth, considering that the increase in house prices does not match household income, and how far the Covid-19 pandemic has affected market prices.

Further, it said the financing limit for housing loans which is the financing limit ratio offered by financial institutions for property borrowers who have two or more existing housing loans is subject to borrower risk management.

“Under Penjana, the financing limit for the third and subsequent home loans worth RM600,000 and above during the HOC 2020 period is no longer subject to 70% of the value of the house but subject to the internal risk management of financial institutions,“ it said.

On the effect of Covid-19 on house prices, the ministry said it does not have the precise information at the moment.

It said based on the Advertising Permit and Developer’s Licence registration record, the developer application trend is the same as in previous years without any decrease in developer’s licence applications.

However, it said there was a reduction in residential property transactions of 19% to 47,000 in 2020 compared to 56,000 in 2019, new licence applications totalled 263 (2020) in the first quarter compared to 256 (2019), and first-quarter licence renewal of 603 (2020) compared to 465 (2019).

The ministry attributed the reduction in residential property transactions to housing developers being unable to carry out sale campaigns; limited marketing approaches; and buyers being cautious in making financial commitments.

However, if looking at the trend in previous years, transactions in the first quarter were certainly less than in the previous quarter. In conclusion, programmes and schemes under the ministry as well as the government initiatives through Penjana may help revitalise the housing industry as well as meet the people’s housing needs including the youth,” it said.

Responding to a question from Lim Lip Eng (DAP-Kepong) on the government’s housing initiative to help new markets and secondary markets including foreign buyers during the economic crisis due to the Covid-19 pandemic, the ministry said the matter lay with the state governments.

“The initiative to sell houses to foreigners can be referred to the respective state governments as the prices, quotas and construction for housing including affordable housing and real estate are determined by them,” it said.

Source: Bernama

Penang has again topped the list of approved manufacturing foreign direct investments (FDI) for the first quarter of this year (1Q2020).

The state recorded a promising RM6.8 billion in approved manufacturing FDI for the period of January to March this year. Last year (the entire year), Penang took pole position in terms of approved manufacturing FDI after it attracted RM15 billion.

Chief Minister Chow Kon Yeow said the approved manufacturing FDI in the state accounted for 96% of Penang’s manufacturing investment inflows in 1Q2020.

“The remaining 4% or RM321.1 million were approved manufacturing domestic direct investments (DDI).

“I am pleased to note that Penang is a major contributor towards the country’s FDI.

“We contributed 64% share in Malaysia’s total FDI. The state plays a crucial role in driving Malaysia’s participation in the global supply chain.

“We are thankful for the strong confidence placed in us by the multinational corporations,” Chow told a press conference at his office in Komtar today.

Chow revealed that the top manufacturing FDI for the first quarter of this year were from Switzerland, the United States and Singapore.

He said that Penang received remarkable investments such as projects from Dexcom and LEM International.

Chow also spoke about Penang’s RM7.1 billion in total approved manufacturing investments (FDI and DDI) for 1Q2020 amidst the challenging global macroeconomic environment.

“We successfully garnered 32 manufacturing projects in 1Q2020, which are expected to create 4,035 new job opportunities in Penang.

“The state’s RM7.1 billion in total approved manufacturing investments represents 42% of Penang’s full year (2019) approved manufacturing investments.

“The machinery and equipment, scientific and measuring equipment (which include medical devices) as well as the electrical and electronics industries collectively constituted 95% of the state’s total approved manufacturing investments for 1Q2020.

“This encouraging investment performance for 1Q2020 exceeded our expectations,” he said.

Chow said, nevertheless, Penang expected the 2020’s investment inflow to the state to be lower than the 2019’s all-time-high of RM16.9 billion.

“We are mindful that the global FDI outlook is on a downtrend until at least 2021, and that the public health challenges will persist in the near future.

“The Penang government will remain vigilant in our efforts to attract high-quality and high-technology investments,” Chow said.

He added that the state government, through investPenang, Penang Development Corporation (PDC) and other relevant agencies, is committed to assist investors and to facilitate project implementations on the ground.

He also thanked the Federal Government agencies such as Malaysian Investment Development Authority (Mida) for working hand-in-hand with investPenang in attracting high-quality investments to the state.

Datuk Seri Lee Kah Choon, the special investment advisor to the Chief Minister, said the Penang government has been very supportive towards attracting investors to the state.

“The RM7.1 billion in total approved manufacturing investments for 1Q2020 is the fruit of our work since 2019 – a ‘flow over’ from 2019 to 2020,” he said.

Source: Buletin Mutiara

The outlook of the property sector remains challenging for the next one year with most developers still assessing the economic situation and deliberating whether to continue or defer future launches.

AmResearch said this in a report to clients adding that it believed that consumer sentiment remains weak for the time being with spending mainly focused on necessities while big-ticket items such as properties take a back seat. “We are maintaining our ‘neutral’ view on the property sector as the outlook remains challenging in the next 12 months, it said.

The Covid-19 breakout has caused a “major upheaval” in the global economy, it said adding that Malaysia’s movement control order (MCO) which was put in place from March 18 to May 12 had put the economy at a pause for almost two months.

However, the outfit said developers under its coverage have reasonable amount of unbilled sales, hence they shall remain profitable in FY2020 FY2021.

“Companies such as S P Setia, MRCB, Ecoworld, Titijaya Land and UEM Sunrise have many projects still in their early stages, hence we do not expect strong revenue recognition in the next 12 months, ” it said.

On the other hand, it said it remained cautious on the financial leverage of some companies as it is one of the key factors to their survivability during an economic downturn.

Nevertheless, based on its data, the outfit said the net gearing of developers under its coverage was still under control, averaging at about 36% while interest coverage remained strong at around eight times.

“We expect the affordable segment to perform better, driven by its mass market, especially demand from young professionals and families due to continued urbanization, ” it said, adding that this was well reflected by the move by the majority of local property developers to focus on this segment. On another note, AmResearch said it viewed the long-term outlook for real estate investment trusts or REITs to be positive given the diminishing rate of Covid-19 infections in Malaysia while several stimulus plans by the government provide greater earnings visibility.

“Furthermore, Malaysian REITs’ dividend yields of more than 4% on average for FY2020 and more than 5% for FY2021 and beyond, offer attractive returns compared to the current low interest rate environment.”

It said it may upgrade the property sector to “overweight” if banks are to ease lending policies on properties or if consumer sentiment was to improve significantly.

Likewise, it may downgrade its “neutral” stance for the property sector to “underweight” if the banks are to tighten further their lending policies on properties or consumer sentiment is to deteriorate further.

Source: TheStar.com.my

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The Penang government plans to regenerate aged public housing schemes in the state to cater to current needs.

State Local Government, Housing Development and Town and Country Planning Committee chairman, Jagdeep Singh Deo, said five housing projects have been identified for the regeneration exercise.

They are Padang Tembak, Taman Free School and Mahsuri 5 Point Block on the island; and Mak Mandin Lama and Taman Siakap on mainland. Mahsuri 5 Point Block is expected to be the pilot project in this effort.

“Regeneration saves maintenance costs,” he said, adding that the maintenance of buildings is very costly for authorities.

Jagdeep said the Padang Tembak project, meanwhile, could offer huge benefits in terms of compensation for the owners of 3,000 units there.

“The regeneration exercise is a good move – but let us see how it goes.

“We hope we can begin with the Mahsuri project. The feedback so far from the people has been encouraging, with over 90 per cent welcoming the project,” he told reporters here, today.

However, Jagdeep said it is more viable and feasible to carry out a new project, as it would not involve a high cost.

“Plus, a new building can last longer.

“The other reasons are that facilities at existing (old) buildings are not suitable. In Padang Tembak, for instance, every unit is only between 300 sq ft and 400 sq ft, whereas we have guidelines where affordable homes should not be smaller than 700 sq ft.

“Moreover, other facilities such as security and recreational facilities, which are requirements now, were not requirements in the past,” he said.

Jagdeep said that a challenge the Penang government would face in a regeneration exercise is the legal aspect, as all unit owners would need to agree to the exercise prior to it being approved.

Earlier, Jagdeep talked to reporters about the issue of unoccupied homes in the state which have become the breeding grounds of pigeons and the site of nuisance.

He said 16 notices have been issued to owners of unoccupied homes as of this month.

Source: NST Online