Tougher credit checks on potential buyers and lending curbs imposed by Bank Negara is distorting the market, claims a top official at Malaysia’s biggest grouping of property developers.

Real Estate and Housing Developers’ Association (Rehda) Malaysia reveals that due to the high rejection rates of housing loan applications, many developers have delayed their property launches, especially affordable houses.

As the supply of new affordable houses slows, the pressure is on prices to increase.

“These people are not speculators because for those interested to buy affordable homes, the Government had set specific criteria such as no sub-selling and a 10-year period before they can resell the units,” its president Datuk Seri Fateh Iskandar Mohamed Mansor said.

He urged Bank Negara to review its policy, especially the ones that affected lower income groups looking to purchase their first home.

Fateh Iskandar was speaking to reporters after launching Glomac Bhd’s RM710mil mixed housing project in Kulai, Johor.

Meanwhile, Austin Heights Sdn Bhd managing director Datuk Steve Chong also agrees that there is a distorted supply and demand in the high-rise sector in Iskandar Malaysia.

“Other properties are doing reasonably well, no doubt the temporary slowdown is due to the recently implemented goods and services tax, the financial slowdown and the cautious buying sentiment,” he said.

He said the temporary setback should not hold back property developers as buyers knew that anytime was a good time to buy properties.

“I say that the setback is temporary because in the long run, the housing market in Johor will still be on the uptrend,” he said.

Chong is positive that the situation will turn for the better once the connectivity between Johor and Singapore improved, especially with the development of the high-speed rail link and rapid transit system.

“More Singaporeans will then definitely come to Johor to buy properties and settle down here.

“Comparing the prices of property in Johor and Singapore, I think more would prefer to buy houses here and commute to the island for work,” he said.

He added that many senior managers and executives from Singapore were buying properties here.

Source: TheStar.com.my

G’ Mansion Garden Residence, high-rise development by MPSB Venture Sdn. Bhd. at Bukit Gambier, Penang. It is strategically located next to Gambier Heights Apartments, easily accessible via Jalan Bukit Gambier.

This development comprises a 34-storey condominium, featuring 282 residential units with 8-level multi-storey carpark. Each unit is expected to come with 2 car parking lots.

The project is still pending for approval. More details to be available upon official launch.

*Updated: Nov 2018*

Property Name: G’Mansion
Location : Bukit Gambier, Penang
Property Type : Residential
Built-up Area: 1,100 sq.ft. – 1,250 sq.ft.
Indicative Price : RM 620,000
Developer : MPSB Vensture Sdn. Bhd.

Location Map:

YTL Land and Development Bhd sold the final units of its low-rise condominium project – Penang Shorefront – at a preview last weekend.

YTL Land and Development executive director Datuk Yeoh Seok Kian remarked: “It’s amazing to witness the way the market responded to our Shorefront project, a niche upmarket, low rise and low density development right in the heart of George Town and neighbouring the historic Eastern and Oriental (E&O) Hotel.

“We strongly believe in innovation and invested heavily in our concept and design to complement Shorefront’s unrivalled location – a landmark seafront address within this unique heritage zone in Penang’s capital city,” he said in a recent press statement.

YTL Land and Development said the project is now fully sold before the launch, with the remaining 45 units being snapped up at the preview last weekend. The first two blocks of the same project, which offered 67 units, were previewed over a weekend in February and were fully sold then.

The three-acre freehold project comprises 115 units across three five-storey blocks. It sold from RM1,300 psf to RM2,100 psf while the maintenance fee is 65 sen psf, which includes a 10% sinking fund.

Shorefront units come with built-ups ranging from 1,400 sq ft to 3,400 sq ft and the project has a gross development value of RM310 million.

Slated for completion in 2017, it will be developed in a single phase.

“At RM2,100 psf, this is a new record price for the upmarket luxury lifestyle segment in Penang. This new benchmark reflects a strong demand for quality homes in a premium location, and is a very positive sign for the market, which had been slowing down under a subdued economic climate,” Yeoh added.

It is located in George Town city and adjacent to the E&O Hotel. Its nearby amenities include Penang’s local food havens, hotels, restaurants, entertainment outlets, schools, shops, bazaars and historical sites.

Source: TheEdgeProperty.com

Land scarcity or abundant, which one is better?

Scarcity of land is one of the most common explanations given by those looking to invest or having invested into a property in Penang Island. Many people seem to have convinced that since the island is running out of development land, prices of houses should increase at a much higher rate than any other places, including mainland.

Theoretically, the assumption is correct and that the land price increases are often sustainable too. But one should also be clear with their property investment objective. Are you looking to invest into an expensive property or a property with high investment value? Land scarcity will result into higher property price, but not necessary property with higher return on investment.

In reality, as the property is getting more expensive, a higher price resistance among the buyers would be seen. Especially when it goes beyond the psychological price limit of the majority, people will need more time to accept the higher limit. The chart below shows the average transacted price and average price movement, based on the combination of 3 most popular residential property types – Condominium, 2-3 storey terrace and 2-3 storey semi-detached houses.

The data from NAPIC clearly indicated that the residential property transaction in the mainland has shown a higher degree of positive price movement as compared to the properties in the island.

Under the influence of land scarcity, some people has opted with the “buy first, think later” strategy and believed that if they don’t buy a property in the island today, they might lose the opportunity later. Some went to the extent of buying property at western part of the island without having a clear objective in mind. Of course there is nothing wrong if that is planned for own stay. But for investment, bear in mind that all houses built are eventually meant for human habitation. The livability of the property and location should be the utmost priority.

One should focus on the investment objective and land scarcity ought to have the least influence here. If your objective is to own a property in Penang Island as a brand, and that you admire a busy urban lifestyles, north east district of the island is probably your best option. But if you don’t mind to spend additional 10-20 minutes traveling to your workplace, the abundance of land in mainland may be able to offer you a more relax lifestyle with myriad of outdoor activities that your whole family can enjoy in the future. Most importantly, it is likely to cost less than half the price that you will be paying in the island.

It is my firm belief that the increases in property price have very little thing to do with scarcity of land. Whether it is in the island or mainland, a general uptrend in land prices will inevitably results in more expensive houses. However, a sustainable property market price is when people are convinced and perceived that the premium they have paid is reasonable for a lifestyle the house will bring them.

OTHER TOPICS:
Penang Island vs Mainland (Part 1) – Location branding
Penang Island vs Mainland (Part 3) – Connectivity & Accessiblity
Penang Island vs Mainland (Part 4) – Population

– Ken Lim
(Founder and Principal Reviewer, PenangPropertyTalk.com)

Property transactions seen declining, prices to remain flattish

THE property market has been in a grind this year and according to projections, it’s not about to free up any time soon.

According to a report early this year by research house JF Apex Research, property transactions are expected to decline by about 10%, with house prices remaining flattish or rising slightly by 3% to 5% upon the implementation of the goods and services tax (GST) on building materials.

Lo and behold, you need to part with that house of yours now. Bad timing? Definitely! Zero chances of selling? Well, not necessarily.

The following are some tips to help you dispose of your property in a slow market.

Be realistic with the selling price

When the market is soft, it’s time to accept reality and not expect to sell your property at prices that were projected two or three years earlier, advises PPC International Sdn Bhd chief executive officer Siva Shanker.

“Don’t be unreasonable with your asking price. Many buyers, especially the flippers (those who buy with the intention of selling it later a higher price once the properties have been built) will try selling it at the price they were promised a couple of years back.

Chan: Get (your property) occupied, even if at lower-than-usual rental rates.

“But because the market is soft, they end up waiting months and months but nothing happens. Better to accept reality, save yourself the headache of waiting and lower the price,” he tells StarBizWeek.

Erik Folgate, in his article Four Tips For Selling Your Home In a Fallen Housing Market on financial education website, moneycrashers.com, says undercutting the market is the one thing that most sellers will do last.

“Sometimes we all need to face reality, and the prices of two years ago are definitely no longer the prices of today. List your house 10% to 15% lower than the other houses on the market in your area, and you’ll get a lot of attention from buyers.

Spruce it up

A house that’s in good condition will sell better than one that’s in dire need of repair, says Siva.

“A secondary property, even if it looks like a dumpster, will still sell when the market is good. But when it’s not, you might have a problem.

“Spruce it up. Repair what needs fixing and it will be more attractive to potential buyers.”

Folgate says the first places you can start is the kitchen and the bathrooms.

Siva: ‘Don’t be unreasonable with your asking price.’

“These are the most expensive rooms to update, but they stand out the most to potential buyers. And if you’re going to update your home, do it right. There are ways to save money remodeling your house, but just because you’re putting in new materials doesn’t mean it looks good.”

When it comes to the kitchen, Folgate advices buyers to get stainless steel appliances.

“It has the most modern look, and the prices really aren’t that much more than black and white. Buyers also love to see granite countertops.

“Your budget may not have enough money for a slab of granite, so look into using granite tiles.

“They are inexpensive, and they look great. You don’t have to replace your cabinets, unless they are in really bad shape, so look into refacing or painting them.”

Proper marketing

Marketing is crucial – and could either make or break the sale, says Siva.

“The best person to help you market your property is a certified estate agent. Be sure to appoint one that’s registered with the Board of Valuers, Appraisers and Estate Agents Malaysia. They also have a special tag to verify this.

“These days, many people are involved in property, so plenty of sellers will go to some broker or their favourite nephew.

“But what these guys will end up doing is place an ad in the papers for you and wait. This, anyone can do.”

Other than placing ads, alternatively, Siva says the seller could try conducting “open house” events to allow buyers to inspect the property.

“Have an open house, say from 9am to 5pm for people to have a look at your property.

“Clean it up to make it look more appealing. It’s essentially like how developers hold a property launch with a show unit, but on a smaller scale.”

Siva says that having “a number of people” on the premises at one time will also help give off that psychological feeling that there is a demand for that property.

“When you’re there and you see a lot of other people displaying similar interest in the property, there’s the perception that someone else might buy it before you. It’s the herd mentality.”

More buyer incentives

With buyers a little hard to come by when the market is slow, providing incentives that can sweeten the deal is a good way to help push your property.

Buyers love to feel like they are receiving something for free, says Folgate.

“With the sale of your house, include a free home inspection, pay a portion of the closing costs. You can be as creative as you want with this tip,” he says.

Siva concurs: “Give your buyer more favourable terms to the deal.

“Perhaps, a lower downpayment or a longer period to complete the sale. If you’re not willing to compromise, you might lose a potential buyer.”

Rent it out

If, after everything, you’re still having problems disposing of your property, then consider renting, says SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng.

“Rent it out anyway. Get it occupied, even if at lower-than-usual rental rates. If you’re still paying off your mortgage, the money coming in will still help you service the loan,” she says.

Source: TheStar.com.my