Foreigners buying landed properties in Penang island can now only do so if the property is priced above RM3 million.

The Penang government has agreed to halve the approval fee for foreign purchasers of some stratified properties on the island from three per cent to 1.5 per cent.

The reduction will apply only to stratified properties on the island costing between RM1 million to RM1.5 million, said state executive councillor Jagdeep Singh Deo today.

The state housing development committee chairman said the state exco decided this today after considering proposals by Penang Real Estate and Housing Developers Association (Rehda) last week.

Rehda Penang had proposed to the state to reduce the approval fee to 1.5 per cent and for the state to reduce the minimum price for foreign purchase of stratified properties on the island to RM800,000.

“We will not reduce the cap price for foreign purchase of properties in Penang but instead, we will increase the minimum price for landed properties on the island from RM2 million to RM3 million,” he said.

The state government introduced the measures to curb property speculation by foreigners in 2015, limiting non-citizens to properties above RM2 million for landed properties and RM1 million for stratified properties on the island.

The minimum price for the mainland is RM1 million for landed properties and RM500,000 for stratified properties.

The Penang state government also introduced a three per cent approval fee for all foreign purchase of properties in the state at that time.

Jagdeep told a press conference in Komtar today that all landed property purchases by foreigners will continue to attract the full fee.

“We came to these decisions to protect the locals’ interests,” he said.

He stressed that this decision does not include any reduction in minimum price for industrial properties.

He again reiterated that there are no discounts given to foreigners to purchase properties in Penang, regardless if its industrial, residential or commercial.

Source: TheMalayMailOnline.com

Picture shows the existing Ariza Courtyard Terrace

Ariza Seafront Terraces, the final phase of landed property development by E&O within the mature neighborhood of Seri Tanjung Pinang Phase 1. Located next to E&O’s Sales Gallery, less than 5 minutes walk to Straits Quay retail marina.

This development will offer 32 units of 3-storey freehold terrace homes with a standard built-up of 3,800 sq.ft.. It is similar in architectural design to the highly successful Ariza Courtyard homes that marked Seri Tanjung Pinang’s debut launch in 2005.

More details to be available upon official launch. Register your interest now for early bird invitation.

Project Name: Ariza Seafront Terrace
Location : Seri Tanjung Pinang, Penang
Property Type : 3-storey terrace
Built-up Area: 3,800 sq.ft. onwards
Total Units: 32
Indicative Price: (to be confirmed)
Developer : E&O Property (Penang) Sdn. Bhd.

Location Map:

The sale and transfer of property valued at RM500,000 and below will now be subjected to a 1% conveyancing fee.

Taking effect today, it came about with the revision of the fee structure in the Solicitors’ Remuneration Order by the Bar Council last year.

The revision, which was approved by the Solicitors Cost Committee on Feb 28, will also see 0.8% conveyancing fee for properties worth above RM500,000 but below RM1mil.

Previously, only properties worth RM150,000 and below were subjected to a 1% fee while those costing above RM150,000 and up to RM1mil were imposed with a 0.7% charge.

However, like the old Order, property transactions from licensed housing developers will automatically get between 25% and 35% reduction in fees depending on the value.

This means that for a property worth RM500,000, the new conveyancing fee is RM5,000 but will only come up to RM3,500 following reductions. In the past, the fee was RM2,765.

For a RM1mil property, the fee is RM5,850, up from RM4,842.

According to the association, the sum is calculated by charging the 1% fee on the first RM500,000 before adding the 0.8% fee on the subsequent value. This total is then deducted with the 35% reduction.

Before the revision in March last year, the fee structure had remained the same for the past 11 years.

Bar Council’s conveyancing committee co-chairman Datuk Roger Tan said the revision was “minimal” considering the accumulated inflation in the past decade.

“The changes are minimal and reasonable,” Tan told The Star.

He said it was difficult to find a house worth RM150,000 nowadays, adding that most now sold for at least “half a million ringgit”.

This, said Tan, was the basis for raising the bar for the 1% fee from RM150,000 to RM500,000.

“Even affordable homes now cost around RM300,000,” he said. The previous amendment to the Solicitors’ Remuneration Order was made in 2006.

A calculation by the association also showed that with the revision, conveyancing fees were expected to rise between 8.1% and 26.6% depending on the value of property transaction.

However, this was still lower than the accumulated inflation, which, since 2006, had amounted to at least 33%, said its honorary secretary-general Chang Kim Loong.

“We are of the opinion that the increase in legal fees under the Order for sale and purchase, and loan agreements are still reasonable and justified, taking into consideration the rising costs of living and doing business since 2006,” he said.

Chang said he did not expect the slight rise to set off a “domino effect” on living costs or house prices.

“Most people can only afford to buy one property in their lifetime. A small minority may be lucky enough to afford a second property for long-term investment.

“Such a one-off increase is not expected to impact living expenses every day compared to, say, increase in toll or utility charges which are incurred on a daily basis,” he said.

In Malaysia, both buyers and sellers in a property transaction pay the conveyancing fees to their own lawyers.

However, in some cases where the buyers do not have their own lawyers, the property developers will offer to absorb the costs.

Source: TheStar.com.my

1 City, is an upcoming mixed use development with commercial and residential components by World Corporate Construction Sdn. Bhd. at Bukit Minyak. They are located off Jalan Pinang, just a stone’s throw away from Bukit Minyak Industrial Park.

This development comprises a total 102 units 2 and 3-storey shop offices with indicative price starting from RM750,000 onwards. The residential components of this development is yet to be confirmed.

More details to be available upon official launch.

Project Name : 1 City
Location : Bukit Minyak/Juru, Penang
Property Type : Mixed development
Total Units: 102 (shop office)
Indicative Price: RM750,000 onwards (shop office)
Developer : World Corporate Construction SB./Paramount Garden SB.

Location Map:

EcoWorld’s development in Penang

The economic climate has not deterred developers from planning multi-billion ringgit projects in Penang.

The general consensus is that the current slow period is part of the property cycle and not something sinister like the 1997/98 Asian Financial Crisis.

In time, the situation will turn around and they are preparing for the cycle to turn. Among some of these positive thinkers are SP Setia Bhd, Eco World Development Group Bhd, Hunza Properties Bhd, Ideal Property Development Sdn Bhd and Aspen Vision All Sdn Bhd.

These companies are planning multi-billion ringgit schemes for launch in the near future.

Among the larger players, SP Setia general manager Ng Han Seong says in 2017, the group will focus on a new project in Bertam which will have a gross development value (GDV) of RM9.6bil.

“This is the group’s biggest project in Penang. It will take 15 to 20 years to complete the entire scheme which will comprise hotels, shoplots, high-rise residentials on a 1,600-acre site.

“The masterplan will be finalised in six months,” Ng said.

On the new higher density guidelines, Ng says the group would not launch fresh projects under this new guidelines on the island this year.

To recap, the local authorities had recently increased the density per acre to 128 units from the previous 87 units.

“We launched a condominium project known as Setia Sky Ville in Jelutong, and Isle of Palm, a landed property scheme in Sungai Ara, last year.

Both the Isle of Palm and Setia Sky Ville projects are 40% and 50% sold respectively.

Over at Eco World Development Group, general manager Khoo Teck Chong says the group is focusing on the RM8bil Eco Horizon and Eco Sun projects in Batu Kawan on a 374-acre site later this year.

“We are seeking approval from the local authorities. We will reassess market conditions again next year before making plans for projects on the island under the new density guidelines,” he says.

The group will focus on its ongoing Eco Terraces project in Paya Terubong for 2017.

Hunza Properties Bhd plans to develop the RM8bil Penang International Commercial City (PICC). The mixed development project comprises condominiums and serviced apartments, a mall and other retail outlets, hotels, a business process outsourcing (BPO) tower and a medical centre.

The PICC project will be developed over a 10-year period on 43.35 acres (17.5ha) site in Bayan Baru, according to Hunza managing director Datuk Khor Siang Gin.

Ideal Property executive chairman Datuk Alex Ooi says among the biggest project the group plans to undertake this year is the RM2.4bil mixed development project on Pulau Jerejak.

“The group is also planning the RM520mil Imperial Grande in Bayan Lepas, a RM300mil condominium development known as The Rain in Sungai Ara, the RM486mil Queens Residence 2 at Persiaran Bayan Bay Indah, and a RM1.4bil landed property scheme in Balik Pulau.

“These projects will be developed over a five-year period till 2022,” Ooi says.

Aspen Vision All Sdn Bhd chief executive officer Datuk M. Murly says the group plans to launch the Vertu Resort and Vittoria Financial Centre in Batu Kawan this year.

Other projects to be unveiled this year include Beacon Executive Suites in Sungai Pinang and the HH Residence in Tanjung Bungah.

All three projects have a total GDV of RM2.1bil, Murly says.

Before planning for higher density projects under the new density guidelines, the group will determine whether the state plans to impose additional contribution for projects under the new policy, says Murly.

“All our existing developments are submitted based on old guidelines.

New guidelines

Mah Sing Group Bhd senior chief operating officer Seth Lim says that the group will plan new projects based on its remaining land bank in Penang. The group has a land bank of 83 acres with a GDV of RM2.8bil in Penang as at Sept 30, 2016.

On the revised and increased density guidelines, Lim says: “It reflects Penang as an advanced city state.”

“We are currently reviewing the new guidelines and how to best implement them in future launches. The increase in density will enable developers to have better land use by reducing the cost per unit. This will improve affordability,” he says.

IJM Land Bhd senior general manager Datuk Toh Chin Leong says the group is not planning fresh projects based on the new density guidelines on the island this year.

“We will assess the market situation before making plans for higher density projects,” Toh adds.

Toh, who is Real Estate & Housing Developers Association (Rehda, Penang) chairman, says developers in Penang are now exploring how to best implement projects under the new density guidelines.

“The additional 41 units per acre allows the developer to build more 600 sq ft to 700 sq ft units. The pricing for these properties is over RM400,000.

“Under the old guideline, developers, due to the lower density of 87 units per acre, have to focus on building larger units of 1,000 to 1,400 sq ft to sell at a higher price to generate a reasonable margin.

“If they build more smaller size units with a lower selling price under the old guideline, they would not be able to generate a decent margin,” Toh says.

Property prices are expected to remain stable due to excess supply and the difficulty in obtaining bank loans.

“The soon-to-be-implemented measure requiring purchasers to pay upfront the stamp duty upon the signing of sales and purchase agreement is likely to dampen property transactions.

“The stamp duty, which is usually above 2% of the purchase price, is normally paid after the project has been completed.

“We expect developers to price their products even more competitively once the measure is implemented,” Toh says.

On the Penang Transport Master Plan (PTMP) and its impact on the property market, Raine & Horne Malaysia senior partner Michael Geh says the plan will only materialise if the federal government approves PTMP’s reclamation plans.

“Furthermore, should the federal authorities approve PTMP, the integrated transportation project will take a long period to complete. Any positive impact on the market will be felt only when the project is completed many years later. However, one thing is certain. As the island runs out of development land, property prices would always be maintained at a stable level, making property investment a wise choice,” Geh adds.

Source: TheStar.com.my