International property consultancy firm Rahim & Co is hoping a guideline will be provided on the newly-imposed limit on sales of new homes priced up to RM300,000 for first-time home buyers.

“A clearer guideline is probably required. Developers can price a project at RM300,000 a unit but it may be a shoebox unit. In that case, the buyer still has to pay RM800 psf for a unit,” said Rahim & Co research and strategic planning director Sulaiman Akhmady during the launch of Property Market Review 2015/2016 report.

However, Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman said the policy is the right move to encourage house ownership among Malaysians and discourage speculation on affordable housing.

He also said that the government’s minimal-intervention stand towards the property sector was appropriate as the segment should correct itself based on the open market and available liquidity, although the latter is one of the reasons causing the temporary market slowdown.

According to the report, there was an annual 3.5% drop in property transactions and 6.6% drop in transacted value in 1H2015.

Sulaiman AhmadAbdul Rahim expected the property market to continue to be challenging, with moderate activity in 2016.

“Property prices are still expected to rise but more marginally for the residential sector. Depending on the location and type of property, some may see price consolidation as the gap between sellers’ asking prices close towards buyers’ expected prices,” he noted.

Sulaiman also expected the office sector to remain challenging due to greater incoming supply into the market. Prices and rental rates are expected to be competitive, and the same goes to the retail sector.

“Retail sales are expected to face some tougher times, fuelling the pressure in rental rates amidst decaying consumer sentiments. The market will still remain cautious, with buyers definitely becoming more discerning in their purchases across all sectors, while expecting bargain purchases to slowly creep up in the market.”

Source: TheEdgeProperty.com.my

Construction industry experts warned of additional costs being passed on to property buyers following the increase in foreign workers’ levy.

Master Builders Association (MBAM) even cautioned that the prices of houses could increase owing to this reason.

“The levy hike will impact the construction industry,” said MBAM deputy president Foo Chek Lee.

He said there were about 130 sub-sectors including manufacturing and services, which would pass the cost back to the industry.

“Ultimately, we will pass the additional costs to the end users or purchasers,” he said.

The Government, he added, should instead look into legalising the existing illegal foreign workers.

“By doing so, this will bring in extra revenue to the Government instead of increasing the levy,” said Foo in a press conference yesterday.

MBAM said the construction industry was looking at a 10% increase in labour cost and a 2% increase in overall costs.

“Two per cent is the bottom line for some of us. The profit margin in construction is usually a single digit. Some don’t even make 2%,” said former president Kwan Foh-Kwai.

The association’s vice-president Tan Sri A.K. Nathan said the Government should also understand that the construction industry could not operate without foreign workers.

“It is almost impossible to get local workers. This is a fact,” he said.

The association said locals were not willing to work in the construction industry despite the willingness of the industry players to train them.

“Malaysians don’t even want to work as crane operators.

“We are willing to train them and pay as high as RM3,000 a month, but they are not interested.

“They prefer to work in air conditioned areas with short hours.”

He said foreign labourers were usually paid just above the minimum wage, but with overtime, they could take home RM2,000 to RM3,000 a month.

MIC Youth chief C. Sivarraajh said about 80% of small and medium scale enterprises (SMEs) would try to survive the increase in levies by passing the additional cost to customers or shutting their operations.

“Business sustainability is at stake. Jobs are also at stake, even for local workers when businesses find great difficulty in sustaining their operations,” he said in a statement.

The new charges, which were announced on Sunday, would see the foreign worker levy for manufacturing, construction and service sectors being increased to RM2,500.

The levy for those in the plantation and agriculture sectors had been raised to RM1,500.

Previously, the levy was between RM410 and RM1,850, depending on the industry and the location.

Sivarraajh said the Government should have consulted stakeholders before imposing the levy hike.

He said businesses were already paying a hefty cost such as the new minimum wage, higher costs of energy and raw materials, but lower sales as a result of the weakening ringgit.

“Everybody will suffer from the raise – plantation, construction, services – because all sectors employ foreign workers extensively.”

Source: TheStar.com.my

Volume of transactions is expected to decline in Penang, says Henry Butcher Malaysia (Penang)

Key Economic Indicator

Penang’s Gross Regional Product (GRP) was mainly contributed by the manufacturing and services sectors. Manufacturing accounted for 50% of the GRP shares while 46% was from the services sector. Manufacturing’s main sub-sectors include electrical and electronic while services include hospitality, medical tourism and outsourcing of support services. The services sector is expected to surpass the manufacturing sector soon and is projected to grow by 48.6% in 2015. Unemployment rate remained stable at less than 3%. Penang’s population stands at 1,638,400 as at 2013 and two thirds of Penang’s population is less than 40 years old.

Impact of Goods & Services Tax (GST)

Goods & Services Tax (GST) under the Budget 2014 which replaced Sales Tax Act 1972 was implemented on 1st April 2015. The sale, purchase and rental of residential properties will not attract GST. However, any sale, purchase and rental of commercial & industrial properties will be taxed at 6%. Under the GST tax regime, consumers have been paying more for food, products and services. In view of the overall cost increase in property development, most analysts are of the opinion that this will have an eventual impact on property prices in the primary market. Commercial properties which attract GST are now beginning to feel the brunt of its effect.

Base Rate

Effective from January 2015, the new reference rate is known as Base Rate (BR). The latest BR as at Jan 2015 is between 2.96% to 4.02% while effective lending rate hovers between 4.45% to 4.8%.

Non-Performing loan

The percentage of non-performing loans (NPLs) reflects the health of the banking system. A higher percent of such loans means that the banks are having difficulty to collect their interest and principal on their credits. The total housing loan approved this year was RM1.937 million as at May 2015 compared to RM1.723 million during the same period in 2014, an increase of about RM214 million.

Read more here – iProperty Focus

The public can have access to documents and agreements for two reclamation projects in Penang starting from today.

State secretary Datuk Seri Farizan Darus said the relevant documents for the two projects — 10.11ha in Pantai Jerejak and 14.16ha in Bayan Mutiara — were open for public viewing from 9am to 4.30pm.

“Visitors have to register at Level 3, Komtar, and make their payment first,” he told a press conference after a gathering with the state civil servants in Jen Hotel yesterday.

Farizan said viewers were allowed to bring only pens and pencils into the hall to copy the contents.

“However, no recording devices or handphones are allowed and they can request to buy the copied documents,” he said.

Farizan added that group viewing would be available for three people.

He, however, stressed that the state would disclose the documents only for the two projects approved by the present government as the two concessionaires refused to declassify the agreements on deals made with the previous state government.

“Our hands are tied. We can’t do anything since the agreements, which involved reclamation of 1,400 acres, were made by the Barisan Nasional administration,” he said.

Source: TheStar.com.my

While we are still waiting for Nadayu 290 at Bukit Gambier, here is yet another condominium proposed next to it.

The newly proposed development comprises a 39-storey building with 222 residential units. It is strategically located along Jalan Bukit Gambier, about 1.5km from University Science Malaysia (USM). Other amenities such as schools, convenient stores, banks, eateries and markets are also just a short drive away.

Details to be available upon project launch.

Project Name: (to be confirmed)
Location: Bukit Gambier, Penang
Property Type: Condominium
Built-up Area: (to be confirmed)
Indicative Price: (to be confirmed)
Total Units: 222
Developer: Pingat Mutiara Sdn. Bhd.

Location Map: