Higher withdrawals from retirement funds and stamp duty exemptions are among measures for first-time home buyers likely to be announced in Budget 2017.

CH Williams Talhar & Wong managing director Foo Gee Jen (pix) said a 100% stamp duty exemption would help first-time home buyers as it could result in a RM2,000 to RM3,000 difference in stamp duty payment.

“That is something that would help. The other option available is to give grants to first-time home buyers. It will be definitely a good thing. At the end of the day, we do not want to give the impression that you must rush into buying houses, even for first-time home buyers. You must be able to afford before you jump into this big ticket item,” he said.

VPC Alliance (Malaysia) Sdn Bhd managing director James Wong said the stamp duty exemption, which is currently 50%, could be enhanced to 100% for first-time home buyers and expanded to houses below RM750,000 from the current RM500,000 limit to allow more first-time home buyers to qualify.

However, Malaysian Institute of Estate Agents (MIEA) immediate past president Siva Shanker warned that the system could be abused, if it is unable to determine whether the buyers are genuinely first-time home buyers.

“I think you must also differentiate a first-time buyer from a first-time home buyer. There are some people who never bought residential but have invested in commercial properties and made their money. When they decide to buy a house, they also enjoy all sorts of exemptions which is not fair,” he said.

National House Buyers Association of Malaysia (HBA) secretary-general Chang Kim Loong concurred, adding that enforcement against false declarations are as important as the statutory declaration itself.

“I would support it (100% stamp duty exemption) as it helps the new generation of home buyers but the selection criteria is very important. Making them swear a statutory declaration is important. However, prosecuting on false declaration is equally important as there are a lot of cases where there’s been a lot of deviation,” he said.

Chang said in the past, there have been buyers who claimed that they are first-time home buyers when purchasing low-cost homes but it was discovered later that these buyers own several low-cost units.

“That’s where the leakages are. The problem in Malaysia is that we don’t have a consolidated system on ownership. We don’t have data on whether they are first-time buyers or not,” he said.

Meanwhile, the announcement by Second Finance Minister Datuk Johari Abdul Ghani on allowing higher withdrawals from the Employees Provident Fund (EPF) Account 2 for first-time home buyers has been well-received.

“A better bet than allowing developers to give out loans (under moneylending licence) is to allow first-time home buyers to take extra money from EPF to bridge the gap. That is your own money. Whether you are investing it in EPF or in your home, it is fine because a home is an appreciating asset,” said Siva.

Wong, who also hopes that the withdrawal limit will be raised, said the move will result in higher equity and lower loan margin, thus reducing the total principal and interest cost to the buyer.

“The EPF dividend is only about 6%. Withdrawing EPF savings to buy the house will make sense as the future capital appreciation of the house will definitely be higher than 6%,” he said.

It was reported that the government and EPF were in discussions to increase the withdrawal limit from 30% to 40% for first-time home buyers. EPF declined to comment on the issue at press time.
Both Siva and Wong believe that developer interest bearing schemes (DIBS) will make a comeback in Budget 2017.

Siva, who in the past had said that such schemes led to speculative buying, said if such schemes return, it must be limited to first-time home buyers and a system must be in place to deter abuse.

“We are not in favour of DIBS to be revived in Budget 2017 as such packages actually distort property prices and the property market. DIBS actually created artificial demand in the market,” said Wong.

Chang, who also strongly rejects DIBS, hopes that the government would re-consider the Build-then-Sell (BTS) 10:90 scheme and suggested that the scheme be limited to houses priced not more than RM300,000.

Under BTS 10:90, buyers only pay a 10% downpayment and nothing more until the property is completed. The scheme was announced by former Urban Wellbeing, Housing and Local Government Minister Tan Sri Chor Chee Heung and was to be implemented beginning 2015.

However, it hit a snag when Datuk Abdul Rahman Dahlan, who replaced Chor, said that the scheme will be reviewed again.

Source: TheSundaily.my

To be competitive means to be more knowledgeable and updated on all market aspects. Get information relating to tax & property strategies by tax expert – Dr. Choong Kwai Fatt and renowned retail expert – Sam Siew on franchising this Saturday.

EcoWorld Gallery @ Eco Meadows
22 October 2016 (2pm)

RSVP @ 04-510 2255 by 20 Oct for a good seat

An upcoming development by Red Blue Development Sdn. Bhd. within the established township of Sungai Nibong. Strategically located along Jalan Sultan Azlan Shah, diagonally opposite three public schools, namely SRJK(C) Kwang Hwa, SRJK(C) Shih Chung and SMK Sungai Nibong. It is also within walking distance to the future Sungai Nibong LRT station.

* Find out where is the future Sungai Nibong LRT station *

This development will offers a mix of residential and commercial components:

• 25-storey condominium (89 units)
• 3-storey terrace (3 units)
• 3-storey shop offices (4 units)

More details to be available upon project launch.

Project Name : (to be confirmed)
Location : Sungai Nibong, Penang
Property Type : Mixed development
Total Units: 89 (condo), 3 (terrace), 4 (shop offices)
Built-up Area: (to be confirmed)
Indicative Price: (to be confirmed)
Developer : Red Blue Development Sdn. Bhd.

Location Map:

The Penang Development Corporation (PDC) targets to complete the development of the 60ha (150 acres) SME Village in Batu Kawan by 2019.

Special Advisor to Penang Chief Minister and investPenang director Datuk Seri Lee Kah Choon told StarBiz that to-date PDC had sold all the one to two-acre bungalow lots in the first phase of the SME Village, and almost all the landed properties in the second phase.

The bungalow lots in the first phase were sold for around RM40 per sq ft and are suitable for building detached factories.

“For the second phase, comprising 40 terraced and four semi-detached light industrial units, we have sold 40 units of the properties, priced from RM800,000 onwards.

“They should be ready for the owners to move in by the end of 2016,” he said.

Lee said the third phase, comprising a service centre, would be ready by next year.

“We will look at the demand for industrial properties next year, so that we can plan for light industrial properties most suitable for the fourth and fifth phases of the SME Village.

“The automation cluster could be on the fifth phase,” Lee added.

On future investments into Penang, according to Lee, there are three big medical device companies from US and Europe interested to set up manufacturing operations in Penang.

“Negotiations are underway. We expect to see some results next year,” Lee added.

It was recently reported by StarBiz that Minnesota-based Lake Region Medical Inc, a maker of medical devices and consumer healthcare manufacturer Johnson & Johnson are in talks with Seagate Technology to acquire the latter’s 16.4ha land in Batu Kawan.

Talks between the companies, however, are still at the preliminary stage.

Seagate, which acquired the land two years ago, is closing down its hard disk manufacturing operations in Penang by mid next year.

According to the data from Medical Manufacturing Asia 2016, the medical device market in the Asean region is projected to double from US$4.6bil in 2013 to US$9bil in 2019.

“Three Asean countries – Malaysia, Indonesia, and Thailand – account for approximately 65% of the current medical device market among the 10 member countries,” the Medical Manufacturing Asia 2016 report says.

Affordable medical devices, cardiac devices in particular, are in demand in Asia.

Lee said the merger and acquisition exercises undertaken by some of the global multi-national corporations (MNCs) could result in the movement of higher-end technologies and new products being move to another cost effective location.

“When companies merge, there would be consolidation exercises, which could prompt the migration of technologies or new products to other cost effective manufacturing sites.

“This is why it is important for the country and Penang to be competitive in the cost of doing business, have a ready pool of talents, and the necessary infrastructure to attract these new investments,” Lee said.

Meanwhile, The Free Industrial Zone, Penang, Companies’ Association’s (Frepenca) is forecasting that the fourth quarter 2016 would improve over the preceding third period.

“Some 74% of the members are projecting their performance to improve in the final quarter of 2016 over the previous third quarter.

“About 16% are forecasting a flat fourth quarter, and the remaining 10% a drop in their revenue,” Frepenca committee member Datuk Heng Huck Lee said.

For the third quarter 2016, some 54% are expecting an improvement in their revenue over the second quarter.

“About 42% are seeing a flat third period, while the remaining 5% a drop in their revenue,” Heng said.

The Frepenca companies, comprising 75 local firms and multinational corporations from the United States and Europe, are involved in the semiconductor and electronics industries.

Source: TheStar.com.my

* Article by Freemind Works *

Since the start of property boom nearly 10 decades ago, owning a home has become the lynchpin of the Malaysian dream. Although, with the increasing cost of living, depreciation of Ringgit, GST implementation and various other lending restrictions, the dream seems to be increasingly out of reach for many especially for the younger generation.

Property investor and property
 coach, Kaygarn Tan says there 
are many reasons property is 
still the number one investment 
choice despite the current 
challenges, one of them being 
leverage. Your investment can 
either create enough positive 
cash flow for you to quit your day 
job or give you a good capital
 appreciation. But before you can achieve this, there are three important fundamentals of property investment that need to be addressed – Your intention of buying, property location and access to financing.

To find out more about Property Market Outlook 2017 And Beyond, please click here

IDENTIFYING YOUR NEEDS
In identifying your intention of owning a property, Tan poses two important questions: (1) Is the property intended for own stay or for investment? (2) And if you are looking to invest, what is your strategy?

He suggests that those looking to invest should determine if they are looking for capital appreciation or cash flow (rental). Once the strategy has been decided, they need to identity the type of property that will match it.
“Buying a high rise property would be the obvious choice if you’re looking to capitalise on rental yield. On the other hand, if you’re looking for capital appreciation, a landed property would give you the best return. Make sure you do your rental return calculation,” advises Tan.

When it comes to capital appreciation, it is crucial to have the foresight and to be able to identify the boom factor/ development potential of a location. The quiet backwater, called Batu Kawan in mainland Penang that started booming during the construction of the Second Penang Bridge linking the mainland to Batu Maung exemplifies this point. With the arrival of notable developments such as IKEA, Designer Village (Premium Outlet), KDU University College, Batu Kawan and its periphery towns are expected to experience a price surge.

FUNDING YOUR FIRST HOME
Although it’s tempting to purchase a home with the best view and a myriad of luxurious facilities, Tan suggests that young investors stay realistic and purchase within their means. Keeping your purchase below RM300,000 (assuming that the buyer manage to obtain 90% financing) would only require RM30,000 down payment. Attainable as it may be (with calculated planning), the idea may seem farfetched to the Generation Y. To prove this possible, Tan lays down six solutions to funding your first home down payment.

Solution # 1: Invest in yourself first
You need to have the awareness that you are your best investment, thus is important to be well-equipped with knowledge. Without good knowledge, you will not be able to identify a potential property.

Solution #2: Good money management
Make a point to save some of your monthly income and contribute it towards your down payment fund. Your purchase goal should be realistic and according to your budget.

Solution #3: FAMA loan
In other words, father-mother loan. Knowing how little you earn on your first job, parents are usually more than willing to either subsidize a little bit or pay for the full amount.

Solution #4: Leverage using a credit card or Personal loan
Unless it’s a very good deal, credit card or personal loan can be a double-edged sword due the high interest charged. Use it merely as a tool.

Solution #5: EPF withdrawal
For those working and contibute to EPF, you could actually opt to EPF withdrawal. You can actually withdraw from EPF Account 2 to finance your 10% downpayment.

Solution #6: 100% from Government Scheme and Commercial Bank
For the 1st home buyer out there, do explore the option of getting 100% loan. For example, there are 100% Government Loan Scheme for 1st home buyer. Recently also announced, commercial banks are also providing 100% loan to buyer purchasing their 1st property.

Solution #7: Structure a deal with the developer for a No-Money-Down
Say you purchase a RM300,000 property and manage to obtain 90% loan. If you can work out a deal with the developer for 10% rebate, which is worth RM30,000, how much do you have left to shell out? Zero, of course. This is what you call buying with no money down.

To find out more on How To Design Your Property Portfolio For 2017 And Beyond, please click here

Till then, happy investing,
Article contributed by Kaygarn Tan
Penangites, good news. You are in for a treat as Property Investment Master Coach Kaygarn Tan will be hosting Property Stratagems on 22-23 Oct 2016 in Penang. He will be inviting his property investors friends and sought after speakers to share on how to invest in current property market especially on how to buy with no money down in sub-sale market, how to get unlimited access of loans from the banks, 2017 budget & property market outlook and many more.

As only 17 seats left, so hurry please click here to reserve your seats. See you there.

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