Work on the RM545mil Jalan Bukit Kukus paired road project has hit a snag even before the construction mishap in Jalan Tun Sardon.

The completion date on the project, an alternative road linking Lebuhraya Thean Teik in Bandar Baru Air Itam to Lebuh Bukit Jambul, will be delayed by a year till mid-2020 due to unforeseen obstacles during construction.

State Works, Utilities and Flood Mitigation committee chairman Zairil Khir Johari, in describing the project as “very complicated”, said it was constructed by three parties as a cost-saving measure.

“The Penang Island City Council (MBPP) will construct 2.8km of the stretch, while PLB Land Sdn Bhd and Geo Valley Sdn Bhd will construct the remaining 1.4km and 0.7km respectively,” he said.

“The project is 69% done and to be completed by early 2020.

“PLB Land faced issues with big rocks and boulders. The RM150mil section has progressed 36% and scheduled for mid-2020,” he said.

Zairil said that Geo Valley faced legal issues as the residents affected by their section of the project took up matters with the Appeals Board and the case was pending.

The RM120mil stretch by Geo Valley is now 18% completed.

“Once PLB and Geo Valley complete their portions, we will connect them accordingly,” he said.

It was earlier reported that the contractor of the 600m elevated road project linking Jalan Bukit Kukus to Jalan Tun Sardon was issued with a stop-work order.

The order came after a mishap on the site where 14 concrete beams measuring 25m fell onto a slope in Jalan Tun Sardon on Thursday. No injuries were reported.

It is learnt that a crane operator accidentally knocked down one of the beams laid on the ground, causing others to fall onto the slope.

Paya Terubong assemblyman Yeoh Soon Hin hopes that there will be no further delays.

“About 60,000 vehicles use Jalan Paya Terubong daily to get to Bayan Lepas, and traffic congestion is bad during peak hours.

“I hope the project will be completed safely according to specifications and on schedule for the people to use,” he said.

Once the alternative route is completed, traffic is expected to see a reduction of at least 30%.

The new link will comprise a dual carriageway with a bicycle lane, walkway and LED street lights.

A small waterfall on the hill will also be retained and construction would go around the waterfall.

Last month, MBPP mayor Datuk Yew Tung Seang said the construction on the paired road would take up RM44.2mil of the council’s budget next year.

Source: TheStar.com.my

By Charles Tan

This is an interesting view from a property industry observer about the property prices here in Malaysia. The full article is in edgeprop.my (Titled: Developers must cut profits to lower property prices). Basically, in order to reduce the price of properties, the developers must cut their profit margins. “This is the only component of development costs that a developer can control,” they told The Edge Malaysia. The reasoning is that many public-listed property developers are currently enjoying FAT profit margins exceeding even 20 percent. One example given was that of KEN Holdings Bhd with a net profit margin of 45.86% in its financial year ended Dec 31, 2017 (FY17) and 47% in the first half of its FY18. It showed a net profit that almost doubled from 29.9% in FY16 due to the completion of KEN Rimba Condominium 1 in the KEN Rimba township in Seksyen 16, Shah Alam.

Article also quoted the recent news about our Finance Minister Lim Guan Eng who had urged developers to lower property prices as the Sales and Service Tax as exemptions from the tax on certain building services and materials are expected to reduce property development costs, failing which the waiver may be reviewed. Earlier article here: SST exemption may not be permanent, IF Analysts however expect the exemption to only result in 3% cost savings.This is an amount which is insufficient to rectify the current imbalances in the property market. “Developers are looking at cost savings of 1% to 3% from the tax exemption as some of the items are now taxed at a higher rate than under the previous tax system while others are exempted.” “It [affordability of homes] is a structural issue that cannot be solved just by giving tax exemptions on construction,” said an analyst at a local investment bank who covers property development companies. Full article in Edgeprop.my.

Image source: Edgeprop.my

Image shows some latest numbers from listed developers in Malaysia. Generally the profit margins are in double digits except for a few developers. I personally do not think the profit margin on an overall basis is a good gauge on whether the property developers should reduce prices. As a buyer, of course I would prefer the developers to reduce their prices but let’s understand that the profit margins stated are not based on a project by project basis but more of a period under review. It may also not be a good reflection unless the developer is only a pure developer and has just one project and has no other businesses. Perhaps someone could study what’s the actual profit margin by project basis for a much clearer understanding instead? A high density affordable project for example may have a lower profit margin per unit but may still be contributing a substantial number to the company while one smaller project may have a higher profit margin but this does not mean it can cover the losses from other less popular projects for example. Hopefully more good news for the market will be coming soon.

Charles Tan – the founder of kopiandproperty.com. He is popular for sharing his thought on property investment mostly based on his own 15 years experience as well as from all the readings and conversations with property gurus in the industry. (Source)

The government will incorporate three categories of affordable housing that will be constructed under the National Housing Policy, latest, by next month, says Housing and Local Government Minister Zuraida Kamaruddin.

She said houses fetching RM150,000 and below, RM150,000-RM300,000 and RM300,000-RM500,000 would make up the new categories.

Zuraida also said all housing projects under the five housing entities comprising Perbadanan PR1MA Malaysia (PR1MA), 1Malaysia Civil Servants Housing Programme (PPA1M), UDA Holdings Bhd, Syarikat Perumahan Negara (SPNB) and the Hardcore Poor Housing Programme (PPRT) would be streamlined under one programme.

“This means that the housing entities will use the same design, same pricing and the same management,” she told reporters after launching the Malaysia Property Expo (Mapex 2018) yesterday.

image: https://content.thestar.com.my/smg/settag/name=lotame/tags=Int_Business_Finance_SME,Int_Business_Finance,Demo_Gender_Female_enr,Demo_Age_65plus_enr,Demo_Age_25to34_enr,Demo_Age_35to44_enr,Int_Property,Int_Property_Affluent,Demo_Gender_Male_enr,all,Demo_Age_45to54_enr

“We are also looking at various options for social housing requirements in town areas, particularly the rent-to-own (RTO) scheme where those renting will be given time to plan and buy their house after five years (of renting),” she said, adding that the built-and-sell scheme would not be part of the ministry’s agenda for the time being.

Zuraida also expressed optimism on the property industry’s outlook given the various policies and ongoing efforts aimed at enabling people to own a house.

In the other hand, Real Estate Housing Developers’ Association Malaysia (Rehda) immediate past president Datuk Seri FD Iskandar Mohamed Mansor hoped the government would not introduce new taxes, developmental and compliance costs on the housing industry as it was already reeling from very tight margins.

“It is a volume game, not a margin game to us. Our (developer’s) margins are thinner, at about 12%-16% now compared with 35%-40% some 30 years ago.

Source: Bernama

Property developers are more optimistic about the Malaysia property market outlook in the coming year than the current second half of 2018.

According to the latest Real Estate and Housing Developers’ Association (Rehda) Property Industry Survey 1H18, only 18% of the 152 Rehda members who took part in the survey were optimistic about the property market in 2H18. However, when asked about 1H19’s outlook, 39% of the respondents believe the market will be better, 44% were neutral while 17% were pessimistic.

Meanwhile, 41% respondents were optimistic about growth in the residential sector in 1H2019 compared with only 23% respondents for 2H18.

The survey also revealed a 9% decrease in the number of respondents who were pessimistic about the market — from 25% in 2H18 to 16% in 1H19.

“About 66% of respondents who planned to launch new projects in 2H18 anticipate their sales performance to be 50% and below in the first six months after the new project launch,” said Rehda president Datuk Soam Heng Choon when noting the pessimistic sentiment for 2H2018.

Only 26% of the respondents who planned a launch during the remaining months of 2018 expect a 51% to 75% take-up in the first six months of launch, while only 7% were confident of getting 75% take-up.

According to the survey, 75% of the 152 Rehda member respondents had unsold units in 1H2018, an increase from 66% in 2H17. The rise in unsold units were attributed to mostly end-financing challenges and unreleased bumiputera units.

Of the 15,852 total units that respondents planned to launch in 2H2018, the majority (8,991 units) are strata high-rise units, while landed residences and commercial properties made up 6,433 and 428 units respectively.

In 1H18, strata residential property launches had overtaken landed units by 9% from the preceding period.

“Apartments or condominiums have become the most popular properties launched in 1H18, overtaking 2- to 3-storey terraced houses,” said Soam.

However, landed 2- to 3-storey terraced houses were the best selling residential product in 1H18.

The survey results were revealed in a media briefing on Wednesday.

Source: EdgeProp.my

Established in the year 1991, the Runnymede Group started with a humble collection of people driven by passion and the vision to be the best. Today, they have successfully established a solid ground striving towards their goal to be recorded as one of the highly competitive property developer in Malaysia.

As the Creator of The Sanctuary at Batu Uban, Runnymede has not only proven that they embraced their faith in their brand, they have definitely pushed beyond boundaries and think ahead of the curve to create quality.

Triuni Residences is truly a new Urban Resort Living at The Sanctuary. It is a home in harmony with design and nature. With its unique collection of condominium surrounded by verdant landscaped grounds that is conceptualised by an award-winning Australian landscaper, it is a home meant for everyone.

Vilaris Courtyard Homes is infused with modern interpretation of Penang’s Peranakan charm blending with contemporary luxury. It is an exclusive hillside address of The Sanctuary with an expression of living large. A unique development with a nett living area of 4000 sq ft, enveloped with a superb craftsmanship, Vilaris encompasses selected units fitted with elevator for the ease of mobility and has designed planned for three generations.

Find out more about Runnymede Group