Fresh graduates feel compelled to buy property quickly because they fear prices will soon outpace the growth of their income, said Khazanah Research Institute director of research Dr Suraya Ismail.

“Young people used to rent for 10 years before deciding to buy a home. However, graduates today rush to buy their first homes, for fear of rapid price escalation. They think that if they do not buy today, they will never be able to afford a house.”

She explained that this places fresh graduates under stress because “they do not have the confidence they can earn an income and fall in the middle income bracket,” she said at the National Real Estate Convention (NREC) 2015 on Thursday.

Suraya was part of the panel discussion, ‘Homeless Graduates: Reality or Myth?’ on challenges faced by young, aspiring homeowners in purchasing their first homes.

Her fellow panelists include Rahim & Co International Property Consultant Bhd founder and executive chairman Tan Sri Abdul Rahim Abdul Rahman, PR1MA assistant vice president for research and development, Ezlina Adnan, and Bank Simpanan Nasional (BSN) senior vice president and head of distribution, Akhzan Zaini.

Rahim said fresh graduates were facing a hard time buying their first homes due to the huge disparity between current average household income and property prices.

Suraya said the disparity between income and house prices is a complex matter.

“It is not as simple as increasing income to enable graduates to purchase homes. It is very difficult to increase income, especially if we’re not increasing productivity.

“The job market feeds into the housing market; for example, a labourer may be incur both consumption and production of a house,” she added.

According to Suraya, one way of slowing the growth in housing prices is to increase the productivity of all sectors, especially the construction sector.

“Something has got to give, and house prices should go down. We believe that the level of profit before taxation could go down, although we won’t be able to achieve supernormal profit,” she said.

Meanwhile, BSN’s Akhzan advised graduates to be realistic in applying for housing loans.

“You may not be able to purchase a home in the RM300,000 category if you are earning RM3,000 a month. For BSN, we do offer 100% loans for homes that are below approximately RM130,000.

“Graduates should look for homes within their means. If you go beyond your means, bankers will look at your repayment capability, therefore you may have a smaller chance in getting your loans, approved,” he said.

Akhzan said that BSN has approved 335 of 800 applications under the Youth Housing Scheme so far.

For affordable housing, PR1MA is doing the best it can to provide homes for the masses and young graduates, said Ezlina.

“Our goal is to build 500,000 homes by 2018. There are currently 60,000 units on the ground. Based on Budget 2016, our goal is to set house prices below market price.

“What we do is to always evaluate [our projects] on a case-by-case basis. Our projects are based by state, and the products we have,” said Ezlina.

She added that PR1MA is expediting completions by using industrialised building technology. This will lower the cost of construction, which should allow for lower home prices.

The panelists concurred that the government’s affordable housing initiatives should be streamlined under one ministry that handles financing, planning, land acquisition and construction of the homes.

Source: TheEdgeProperty.com.my

A proposed mixed residential development by OHM Group at Hye Keat Estate in Air Itam. It is strategically located along Lehuh Khoo Hye Keat, just a short drives away from Air Itam roundabout.

This strata development comprises a 31-storey condominium with 88 units of luxury residences and 6 units of 3-storey bungalows.

This is still pending for approval. Details to be available upon project launch.

Property Project : (to be confirmed)
Location : Hye Keat Estate, Air Itam, Penang
Property Type : Condominium & 3-storey bungalow
Total Units: 88 (condo), 6 (bungalow)
Indicative Price : (to be confirmed)
Developer : OHM Group (Ong Han Meng Woodwork Sdn. Bhd.)

Location Map:

Eligible Penangites should start applying for affordable housing because developers may not carry out more of such projects.

State Housing Committee chairman Jagdeep Singh Deo said the profit margin of affordable housing projects was only about 20% and it was not considered lucrative for developers.

“We are grateful to Penang property developers who have created 12 affordable housing projects with 22,512 units since 2014.

“We understand that they might not maintain the pace. We hope eligible Penangites will snap up the offered units,” he said during a press conference at Level 53 in Komtar, Penang, yesterday.

M Summit Group managing director Datuk Albert Moh, who was also at the press conference, said the profit margin was only about half of what developers could make if they built high-end property projects.

“It takes us three years to deliver the affordable homes. If you divide the 20% margin into those years, we are only making about 6% a year with what we invest,” he said.

Aspen Group managing director Datuk M. Murly said prospective buyers of affordable homes in Penang tended to be slow in applying for such properties.

He said this was due to the five-year moratorium that places a cap on property appreciation.

“But new affordable housing projects may not be available in the future, so we hope eligible buyers won’t delay any further,” he said.

* CLICK HERE for a full list of affordable housing projects in Penang *

Jagdeep also announced that the ‘Mission Home-Possible 2.0’ affordable housing roadshow would take place until March in several locations on the island and mainland.

The first will be in Gurney Plaze today and tomorrow, while the December show will be in Queensbay Mall on Dec 19 and 20.

Next year, the road show will be held in Mydin Mall, Kepala Batas on Jan 23 and 24, Sunway Carnival on Feb 27 and 28, and Econsave Jawi on March 26 and 27.

Source: TheStar.com.my

Penang’s property market is expected to stay resilient on the back of sustained demand, especially from Penangites working abroad planning to return and prospective retirees eyeing homes in the state.

“There has been a slowdown in the last year. There are a few categories of investors in Penang; those who are owner occupiers, those who are investors for the cultural developments, those who are in the Malaysia My Second Home (MM2H) and Penangites who work abroad but would like to settle in Malaysia,” said Penang Institute CEO and head of economics studies Dr Lim Kim Hwa (pictured) at the National Real Estate Convention (NREC) 2015 yesterday.

“For the last two categories, the properties in Penang would be priced significantly cheaper, thus I believe the demand in the property sector in Penang would remain rather constant,” concluded Lim during his presentation entitled “Penang: The Next Metropolis”.

In terms of the wider economy, Penang is expected to register a 5% to 6% growth in its gross domestic product (GDP), outpacing the overall country’s growth by 1%, he said, noting that last year, Penang’s GDP grew by 7.4% while Malaysia’s grew by 6%.

According to Lim, Penang contributes 21.8% of the balance of Malaysia’s trade surplus, specialising in machinery, transport equipment and miscellaneous manufactured articles.

“Penang’s economy is more export-orientated, and now there is a better demand for electrical and electronic goods,” he said.

The export sector is expected to improve with the recovery of the US economy and the weaker ringgit, he added.

“It is important that Penang provides the best environment to attract more investments. Penang is the main manufacturing and economic hub for electronic and electrical items. Bayan Lepas is already full. It is important to provide more space for industrial growth.”

Some of the projects and initiatives that are expected to contribute to this growth is the IT-BPO at Bayan Lepas, BPO Prime at Bayan Baru and Changkat Byram, south of Batu Kawan.

Other projects that will benefit Penang overall include the Penang Transport Master Plan, Penang Heritage Arts District – Ilham Penang at Sia Boey, Creative Animation Triggers at Wisma Yeap Chor Ee, and Komtar refurbishment. “All of these projects involve the private sector,” added Lim.

“The Penang Transport Master Plan (PTMP) is the catalyst to [turning Penang into a] metropolis, as it involves alleviating a lot of the problems locally in Penang, especially traffic congestion,” said Lim.

Expected to be completed in 2030, the RM27 billion project would include amenities such as trams for the heritage zones, LRT for the island and mainland, and water taxis.

Lim said Penang is on track to achieving its metropolis status.

“It is an ongoing process, and there is no deadline. Penang aims to transform into an international, intelligent city filled with life. To create a great metropolis, it has to be unique, and it has to attract people to want to live and expand the growth of the city,” he said.

NREC 2015 saw more than 250 participants from the banking, development, property and consultancy industries.

NREC is organised by the Royal Institution of Surveyors Malaysia (RISM) and co-organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS).

Themed “Homes For Generations – Redefining Development Trends”, the convention highlighted concerns for the future of the real estate industry in Malaysia.

Source: TheEdgeProperty.com.my

SimpliCity 360, an upcoming guarded residential development by Charterway Properties Group in Bukit Minyak Penang. It is only 5 minutes drive to True Light primary school and 10 minutes away from AEON Big hypermarket. This project comprises 56 units of 2-storey terrace houses with two types of layout to choose from.

Details to be available upon project launch.

Property Project: SimpliCity 360
Location: Bukit Minyak/Juru, Penang
Property Type: 2-Storey Terrace
Indicative Price: RM433,000 onward
Total Units: 56
Developer: Charterway Properties Group

Location Map: