Runners for the ‘in-house’ contractor manning their counter near the elevator entrance of a newly completed apartment project in Penang.

GEORGE TOWN: Contractors, some with links to triads, are forcing buyers of high-rise property here to carry out renovation works.

Many of them charge a premium, sometimes up to 20% more than normal contractors.

If the buyers insist on hiring contractors from outside, they are compelled into buying materials such as sand, bricks, cement and steel cages.

Alternatively, the buyers can pay a “settlement” to bring in outside contractors.

Most buyers dare not lodge complaints with the police for fear of retaliation from triad members.

With developers turning a blind eye to the issue, the so-called “in-house” contractors have become more brazen in intimidating buyers.

Although such practices could be traced back to the 1990s, the mushrooming of condominium projects in Penang has made matters worse.

It has been estimated that more than RM10bil worth of projects had been undertaken on the island over the past 18 months.

During a check by The Star at several newly completed apartment blocks in Relau, a man was seen manning a makeshift counter near the lifts.

He said his “company” was selling sand, bricks, cement and steel cages, and providing other services such as hacking and electrical wiring.

When told that the unit owner wanted to bring in his own contractor to carry out tiling works, the stern-looking man said: “You can still buy the steel cages or other materials from us. We will handle your waste as well.”

Another in-house contractor, who declined to be named, claimed that he could offer better prices for construction materials.

“We get bulk discounts from suppliers. If we buy 100 steel cages and you buy only one, who will get a better price?

“Besides, we also know the unit layout better than anyone else. We know where the electrical wiring is hidden in the wall. We also know where to hack inside the house,” he said.

Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi said his group had encountered numerous cases of such triad activities in its projects in the South-West district over the past few years.

“This is because the district is a hot spot for the development of reasonably priced properties (read more here). Whenever we have such problems, the police are very quick to come in to arrest the culprits. We have also tightened the security for our projects in the district and this has reduced such incidents,” he added.

SP Setia Bhd property (North) general manager Khoo Teck Chong said the group’s projects in the South-West district had never faced such problems because of its tight security system.

Penang police chief Deputy Comm Datuk Abdul Rahim Hanafi urged unit owners to lodge reports or call the police hotline at 04-269 1999.

“We do not condone such actions. We need unit owners to provide us with information so that we can act.

“Everyone has the right to choose their own contractors or material suppliers,” he said.

DCP Rahim gave his assurance that the identity of whistle-blowers or affected victims would be protected.

Source: StarProperty.my

Top planners: (From left) Rosli, Lim and Deputy Chief Minister II Dr P. Ramasamy briefing the press on developments in Batu Kawan, Penang.

THE Penang Government will hold a Request For Proposal (RFP) for the purchase, lease and development of an international theme park and golf resort in Bandar Cassia, Batu Kawan.

PDC general manager Datuk Rosli Jaafar said those who submit tenders are allowed to propose other developments to ensure the viability of the overall project.

PDC has allocated 87ha for the international theme park while another 190ha is set aside for the 18-hole golf course and other developments.

“The developments should be social based and not a product they can impose a charge such as public swimming pool, outdoor amphi-theatre for performing arts or a sports complex, just to name a few.

“With the second Penang bridge due for completion at the end of the year, it is the right time to embark on the project that will benefit the region.

“This will also give a boost to the people on the mainland as well as promote the tourism sector,” Rosli said in a press conference here yesterday.

Rosli said the request for the proposal will be open from Aug 14 and the closing date is on Oct 31.

The theme park and golf course must be built and completed within four years from the date of signing the agreement for the project.

Penang Chief Minister Lim Guan Eng said the state needs to leverage on the services and manufacturing sector.

“This is especially in view that the manufacturing sector is experiencing a slow growth on the first quarter this year,” said Lim.

The manufacturing sector last year in the first quarter experienced a growth of 4.4% while it only experienced 0.3% this year.

On the other hand, the services sector fared better with a growth of 5.9% in the first quarter this year compared to 5.7% last year.

Lim added that it is important to have a balanced growth of the tourism sector not only on the island but also the mainland.

Source: StarProperty.my

Lakeside Superlink, second phase of Jesselton Hills by DNP Land in Bukit Mertajam, Penang. This development comprises 198 units of 2-storey link houses with standard land area size of 1,725 sq.ft. onwards.

Facilities

• 24-hour security
• Thematic Landscaped Parks
• Clubhouse Facilities
• Outdoor Fitness Stations
• Children’s Fun Place
• Lake Garden
• Designated Cycling Track
• Jogging Trails

Location : Bukit Mertajam, Penang
Property Type : 2-Storey Superlink
Total Units: 198
Land Area: 23′ x 75′ onwards
Built-up Area: 23′ x 50′ (Ground floor), 23′ x 60′ (1st floor)
Indicative Price : RM598,000 onwards
Developer : DNP Land
Contact Number : 04-5308989 / 04-5309229

At current rates, fresh grad workers cannot afford to buy a house

It was one of those long eye-opening conversation between father and his soon-to-graduate son.

“What are you going to do when you graduate?”

“Get a job, buy a car.”

“Don’t you want to buy a house?”

“It’s too expensive. I can always live with you and mum,” says Sonny.

There was a long silence.

“Dad, I went into environmental studies because I believe I can do my little part for the world we live in today. I am not looking for a fat salary,” says Sonny.

“But you need to have a decent salary in order to buy your own house one day. You can’t live with mum and dad forever, although I know your mum would like that,” says Dad.

“I read somewhere that it is possible for young people to buy their own house without taking a two-generational loan. And I am trying hard to be independent. I just need to get around some puzzling issues.

“Like what?”

And so begins the little lesson in house ownership.

What sort of loan tenure will be suitable for a young person?

A 35-year loan is more than adequate. If he needs a loan tenure longer than 35 years, it just means that he is buying something that is far beyond his current income levels.

What sort of loan tenure do most banks provide?

Most banks only give housing loans up to 30 years. Selected banks previously gave loans up to 45 years. These are two generational loans. Most people are against two generational loans as the second generation is born into debt – “Slave into debt”.

How much of my salary should go towards housing loan repayment?

The rule of thumb is always the following:

(a) Any single loan repayment should not exceed a third of the borrower’s income

(b) All combined loan repayments should not exceed half of the borrower’s income

(c) The price of the house ideally should be three times that of the borrower’s annual household income to be deemed as affordable based on a study by Harvard University and World Bank. A young couple with RM10,000 between them is equivalent to RM120,000 a year. The value of the house that this young couple should be looking at is RM360,000 at the most.

Does a young person need help from parents to buy a house today?

It has become almost impossible for a fresh graduate to buy a property without parental support. Many condominiums are now launched in excess of RM500,000 even in suburban areas and landed properties in areas such as Kota Damansara are almost RM800,000 and above. How is a fresh graduate with a starting salary of RM3,000 ever going to afford such properties?

Here are some numbers to chew on. The monthly repayment for a housing loan of RM450,000 (average condo price of RM500,000 less 10% downpayment) for 30 years is RM2,175. This is 72% of the fresh graduate’s monthly income of about RM3,000.

Fresh graduates will have to continue staying with their parents until both the parents and the borrower have saved enough money for a larger downpayment, or for the parents to withdraw their own EPF funds to help their children.

What about young people applying for government-linked projects like Perumahan Rakyat 1Malaysia (PR1MA)?

Some quarters have commented that young professionals still have the option to do that. PR1MA has just raised the ceiling price of their properties to RM450,000 and the maximum household income eligibility to RM7,500. Based on a study by Harvard University and World Bank, the ratings of the Value of Property over Annual Household Income are as follows:

Based on the above study, the Value of PR1MA properties are actually not affordable by international standards. In fact, it is between “Seriously” to “Severely unaffordable”.

Under PR1MA, the borrower need not pay the 10% downpayment and can take a 100% loan for the RM450,000 property.

We have illustrated a typical household income vs expense of a prospective PR1MA buyer (see table above).

Hence, it would not be unusual for banks to reject PR1MA applicants for housing loans as many of them are buying far beyond their income eligibility. In other words, PR1MA properties are just too expensive. House Buyers Association (HBA) has suggested a price of between RM150,000 and RM300,000.

By this time, both dad and son are glad the conversation is coming to an end. There does not seem to be a happy ending though.

“What does this mean, Dad?”

“It means the Government must introduce further measures to reduce speculation in the property market. The Government must bring back the old formulae of real property gains tax, higher stamp duty for buyers of multiple properties, further reduction of loan to value ratio,” says Dad.

Chang Kim Loong is the honorary secretary-general of the HBA (www.hba.org.my), a non-profit, non-governmental organisation (NGO) manned by volunteers. He is also an NGO councillor at the Subang Jaya Municipal Council.

Source: StarProperty.my

Sunway Wellesley Phase 2, a gated and guarded residential development in the heart of Bukit Mertajam, Penang. It is strategically located with easy access to public amenities such as schools, hospitals and eateries. AEON Seberang Prai City Shopping Centre and Juru Auto City all just a stone’s throw away.

This development comprises 60 units of 3-storey semi-detached, 154 units of 1 1/2-storey townhouses and a private clubhouse with swimming pool.

Features:

• Gated & guarded community
• Grand entrance statement with guard house
• Lush landscapes with thematic gardens & central linear park
• Back gardens with pathways integrating the environment & recreational spaces
• Semi-ds with modern contemporary design & double volume dining
• Resident’s clubhouse with facilities
• Fibre optic infrastructure ready for hi-speed internet