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The overhang in stratified properties or apartments and condominiums has worsened, with the number of unsold units rising 40% to 20,876 units in the first half of the year (H1 2017) from 14,792 units in H2 2016.

Deputy Finance Minister II Datuk Lee Chee Leong said the 20,876 units are worth RM12.26 billion and are dominated by apartments and condominiums priced between RM500,000 and RM1 million.

“It is an issue of pricing and affordability as well. Whether this will result in reduced prices, that will depend on the location of the supply, whether the residents around there can afford it or not,” he told reporters at a briefing on the Property Market Report for H1 2017 today.

According to the report published by the Valuation and Property Services Department (JPPH), Kedah surpassed Johor in overhang numbers, with nearly 21% (4,363 units) against the latter’s 18%, followed by Selangor with 17%. Kuala Lumpur made up just 3% of the total overhang.

Residential units that were unsold and under construction also increased, rising 6.5% to 68,245 units in H1 2017 from 64,077 units in H2 2016. The majority of these units too were stratified properties.

Due to the challenging market condition, new residential launches fell 9.1% to 28,397 units in H1 2017 from 31,257 units in H1 2016. Most of the launches were in the RM400,000 to RM500,000 price range with sales performance of 28.9%.

On the construction front, more housing starts were recorded, increasing 16% to 67,662 units in H1 2017 from 58,348 units in H1 2016. Completions and new planned supply reduced to 43,132 units and 43,133 units respectively.

“As at end June 2017, there were 5.35 million existing residential units with nearly 0.49 million in the incoming supply and 0.42 million in the planned supply,” said Lee.

JPPH (operation) deputy director general Dr Zailan Mohd Isa said the 16% increase in residential starts shows that investors are confident in the economy.

“These are investors, billions involved. So if you look at property as an indicator of the economy, it is a good sign of our property industry,” she said.

On whether the market will be able to absorb the new supply of homes, National Property Information Centre (Napic) director Khuzaimah Abdullah said the impact is yet to be seen.

“I am sure the developers are very prudent people. If there are no takers, no buyers, I’m sure they would hold off construction because once you are into the construction stage, there’s no turning back. If you have not started then you can hold on,” she said.

In the office and retail sectors, occupancy rate was above 80% but unoccupied space remained high, with 3.4 million square metres of unoccupied private office space.
Kuala Lumpur recorded the highest unoccupied space with more than 1.62 million square metres, followed by Selangor with 0.87 million square metres.

The retail sector recorded more than 2.79 million square metres of unoccupied space, reflecting an increase of 2.6% from the preceding half. Selangor and Penang Island recorded higher unoccupied space of more than 0.5 million sq metres.

“I must emphasise that both issues – residential overhang and commercial space vacancy are pertinent issues that must be addressed by all parties, particularly local authorities and property developers. Both must exercise due diligence before arriving at development decisions to avoid oversupply,” said Lee.

Overall, the property market continued to soften in H1 2017, recording 153,729 transactions, a decline of 6% from 163,527 transactions recorded a year ago. However, the overall value of transactions rose 5% to RM67.82 billion from RM64.60 billion a year ago.

Lee said the property market is expected to remain soft in the next couple of years but will be supported by various property-related incentives and accommodative monetary policy.

Source: TheSunDaily.my

The consortium entrusted to construct the proposed undersea tunnel and two paired highways have downplayed a news report that the multi-billion ringgit project was in jeopardy following the move by one of its contractors, Mudajaya Group Bhd to withdraw from the RM810 million contract that it had won to build the two package roads.

In a filing to the stockmarket (Bursa Malaysia), Mudajaya cited “uncertainties” over the project for its withdrawal which came just days after Penang was inundated with major floods, causing economic losses, said to be around the millions.

However, Consortium Zenith Construction Sdn Bhd, the main concessionaire behind the major infrastructure project said, Mudajaya’s withdrawal was mutually accepted.

Zenith’s chairman Datuk Zarul Ahmad Mohd Zulkifli (pix) said that it will not pose any obstacle to the package two road construction, which will consist of a flyover linking Air Itam to the Tun Dr Lim Chong Eu Expressway.

“The tender committee of consortium is in the process of evaluating new bidders for the road, taking into account a set of criteria that best serves their commercial interests,” he said.

“A decision will be made soon on the new contractor,” Zarul said in a statement.

State Public Transportation and Utilities Committee chairman Lim Hock Seng told theSun that physical works of the project have yet to begin, denying there was delay to the start of construction.

He said land matters related to the project were still under consideration from relevant authorities.

“This is only between Zenith and Mudajaya,” he said when he was asked to comment about the withdrawal.

Mudajaya was awarded part of the construction phase from Consortium Zenith, formerly known as Consortium Zenith BUCG Sdn Bhd.

The multi-billion ringgit undersea tunnel and its two paired roads which is designed to alleviate growing traffic congestion in Penang, has become a political hot potato.

Non-governmental organisations have protested against the project, citing its damage to the ecology while the fact that Zenith will be paid via a land reclamation venture, also became a sore point.

To top it off, the steep consultation fees imposed on the state government before the project had begun, drew the ire of many.

Source: TheSunDaily.my

by Charles Tan

I still remember the time when I was looking to upgrade to a bigger place from my small apartment of 700 sq ft in Relau. I considered many places and Balik Pulau was one of them. There were a few projects that my wife and I drove to and one of it was Botanica. CT by MTT Properties & Development Sdn Bhd. The price for a terrace home then was below RM300k if I remember correctly. At the time, the construction was going on feverishly. It took my wife and I around 45 minutes to reach the place from our home in Relau via the Bukit Jambul hill road. Frankly, at the time, I love the space that Botanica 1 terrace home was offering, as well as the potential capital appreciation because this is still a landed property and Penang island is still just an island. 🙂  My wife said, ‘It’s far.’ I reminded her that even when we were staying in Relau, it still took her at least 30 minutes to reach her office in Bayan Lepas. Anyway, she won the argument, we did not buy it then and recently, I told her that the price of the same unit we saw has doubled. ‘We should have bought a unit,’ was her answer. Haha.

Let’s look at the latest stats about the actual travelling time. We ask our most reliable friend, GoogleMaps. By the way, I do not usually believe what my friend tells me about travelling time because once we are used to a certain area, the travelling time somehow shorten tremendously! Let us look at a typical weekday. We also look at the typical time that my wife used to leave our home in Relau previously. You can see that the time needed for the journey from Balik Pulau to the Bayan Lepas Industrial area is between 35-55 minutes. Please do look closely and you would realise that the JAM is actually within the Bayan Lepas area and not along the road from Balik Pulau. In other words, whether we stay in Balik Pulau or we stay in Batu Maung, we will still face the same jam. Seriously, I think travelling time is not the main reason why we should buy a place.  My old friend who stays in Balik Pulau told me she does not feel the duration because she has travelled the same road for 10 years!

Beyond this, Balik Pulau has a few more POTENTIAL insights. Let’s look at a few of them shall we.

Potential capital appreciation – Balik Pulau is still growing and has lots of room to grow still. Please do not ask me if prices would double again within the next 10 years. Seriously, you should not believe anyone telling you that it will double in price. However, just ask Penangite if they believe that property prices would stop rising and the answer is definitely a NO.

Prince of Wales Island International School (POWIIS)- It is not easy to run an international school if there are insufficient students. There are insufficient students when parents refuse to send their children there, probably because it is not good, too far or even just because they were not staying nearby. POWIIS today? Take a look at it today. https://www.powiis.edu.my/ I think it has grown tremendously and is now very prominent in Penang.

Continuous developments – Balik Pulau has become a magnet for developers who are eyeing developments within the Penang island. Big names, small names and even boutique ones. The reason is a similar one. They are building because the demand is growing. The demand is growing because people are now thinking of Balik Pulau as just another choice within the island. This by itself is an awesome reason.

Penang island is still an island – If we love to live in the island and thinks of mainland as a second choice, then just note that the available land for development within the island is not growing, except for the reclamations which I believe you are also aware of the price per sq ft that is being offered today. In terms of affordability vs size vs duration, it’s obvious that there are just a few choices left currently.

Durians – This is just a funny reason but hey, every year we get access to durians by being closest to the source. Seriously, durians will become a luxury because the Chinese from China are coming here to taste them. This is the reason why it may be tough for the durians to even leave Balik Pulau in the future because there is just not enough to go around.

Additional statistics? From my good friend’s site. miichaelyeoh.com

According to Department of statistic as of the year 2010 the total population in the area are 32,489. Today definitely the figure is much more.

Source: PenangMonthly.com

Happy looking for your home sweet home, especially for a growing family and new couples. This is going to be a long term investment and not just buying a property. Cheers.

>> This guest article comes courtesy of my friend, Charles, the founder of kopiandproperty.com. He is popular for sharing his thought on property investment mostly based on his own 14 years experience as well as from all the readings and conversations with property gurus in the industry. (Source)

The government’s affordable housing schemes for Malaysians could in the future be a threat to private developers who will not be able to match the lower subsidised prices, Rehda Institute has said.

Datuk Jeffrey Ng Tiong Lip, chairman of the Real Estate and Housing Developers’ Association’s (Rehda) research arm, said that the government’s affordable housing schemes are currently not a threat to private developers.

He pointed out that private developers had in the past decade up until 2014 mostly built high-end and larger condominium units, but had only adjusted in the past few years to rolling out projects in the affordable housing category in order to survive the downturn.

But private developers’ previous disinterest in building affordable housing had resulted in a gap between demand and supply of such homes for Malaysians, he said.

“As at today the gap where PR1MA homes and so many federal, state, local authority, ministry housing schemes have been able to fill the gap where private developers are only starting to adjust

“Even buying land for affordable homes takes time to buy a land, takes time to get approval, so that so-called gestation have then led to this gap, where it was filled up very nicely by the government and participating entities,” the former Rehda chairman said at the Rehda Institute CEO Series 2017 yesterday.

“Now whilst I say that today it is not a threat, but moving forward we cannot say the same thing because as private sector developers start to roll out affordable homes, you will find that public sector developers or housing schemes versus private developers doing affordable homes, we are going to see an unlevel playing field,” he added.

Ng was responding to a question during a panel discussion, on whether developers view government initiatives for affordable housing as a threat and distortion of the property market or if it is considered as a market segment that private developers are unable to serve.

Later when speaking to the media, Ng noted long-term demand for housing will remain strong as the Malaysian population is relatively young and the younger generation are growing their income, adding that the public sector’s affordable housing schemes are “very welcoming”.

“From Rehda’s perspective, we definitely don’t see it as a threat today because the gap are being actually filled up, meeting up the demand. Bear in mind that demand is growing, supply needs to grow,” he said.

But when the gap between demand and supply starts to narrow as the private sector builds more affordable housing, it would result in competition between the private sector and the public sector, he said.

“Hopefully there will not be unhealthy competition, bear in mind PR1MA homes are selling homes at subsidised prices, subsidised by the government. And if private sector goes into the market, tries to sell it at a different price versus the subsidised price, you will roughly guess who is the winner and who are the losers.

“So what we are saying here is no issue today, but moving forward, I think we will have to address the issue as we move along because of this unlevel playing field,” he reiterated.

Ng believes that the government should play a different role instead, and work towards being a facilitator and provider of incentives to grow the market and to bring in new investment, instead of competing with the private sector.

“It’s going to be a zero-sum game because someone has to lose if that continues. I think this is a problem that I think we would like to address in the future, not today,” he said earlier during the panel discussion.

Source: The Malay Mail Online

You are cordially invited to the Grand Launching of MahSing’s latest project – M Vista @ Southbay.

This development will feature a 23-storey serviced residence, offering 237 units of residential suites with unit size ranges from 534 sq.ft. to 1,201 sq.ft.

Visit MahSing’s Southbay Sales Gallery to find out more details!

Date/Time
11 & 12 November 2017
10:00 AM – 5:00 PM

Venue
Southbay Sales Gallery
Batu Maung, Penang

Location Map