CONSTRUCTION on the second Penang link is surging ahead of schedule with 84.35% of the massive project completed.

Jambatan Kedua Sdn Bhd construction director Hamizol Ngah said as of Sept 20, work was 2.45% ahead of plan.

“We are two months ahead of schedule from the September 2013 deadline.

“We aim to have 90% of the bridge completed by end of the year,” he said in a briefing to state officials at the China Harbour Engineering Co Ltd (M) Sdn Bhd (CHEC) office in Batu Maung, Penang.

Hamizol said if work continued as planned, the two ends of the bridge would converge at the main navigation span in early April next year.

The 24km bridge will then go down in the history books as the longest bridge in South-East Asia.

Hamizol added that the second bridge has a lifespan of 120 years and can handle earthquakes up to 7.5 on the Richter scale with its High Damping Rubber Bearing system.

Penang Public Works, Utilities and Transportation Committee chairman Lim Hock Seng, who was present at the briefing, said two traffic dispersal projects on the island end of the bridge were expected to start next year.

“The Federal Government has approved RM262mil to upgrade the coastal road (Tun Dr Lim Chong Eu Expressway) from the entrance of the second bridge to the Penang Bridge.

“Aside from that, RM161mil has also been allocated to upgrade roads leading south to Teluk Kumbar from the Batu Maung interchange,” Hock Seng said.

He added that both projects were expected to be completed about a year after the second Penang bridge opens for traffic in September 2013.

“We expect about 30% of the first bridge’s traffic (70,000 vehicle per day) to move to the second bridge, so we think traffic will be manageable until the two upgrading projects are completed,” Hock Seng said.

On a related matter, Hock Seng said the state had been informed that CHEC, one of the contractors of the second bridge, was not involved in the building of the Harbin Yangmingtan Bridge that collapsed in China on Aug 24.

Penang Chief Minister Lim Guan Eng had previously called for an immediate safety audit on the second Penang bridge following speculation that the China Communications and Construction Company Ltd, the parent company of CHEC, was the contractor of the collapsed bridge in the Heilongjiang province.

Source: The Star

KUALA LUMPUR: The increase in real property gains tax (RPGT) announced in Budget 2013 will not have significant impact on the property sector, according two developers.

Budget 2013 proposed a rise in RPGT from 10% to 15% for properties sold within the first two years and from 5% to 10% for those sold from three to five years.

Selangor Dredging Bhd managing director Teh Lip Kim told StarBiz: “The latest budget is all about reducing the deficit. To me, the rise is not that much.”

She said she did not see a slowdown in the property segment as a result of the RPGT increase and was confident of sales.

“I can only speak for myself. I don’t see any problems in sales because the products we offer are different,” she added.

In a separate press conference, Dijaya Corp Bhd executive director Koong Wai Seng said the RPGT measure was “moderate.”

“I don’t think most investors buy properties and hope to flip it within two years. So this 15% tax measure doesn’t really worry us. If the RPGT had been increased for the later years, then yes, there would be some impact. On the whole, we are happy with the Government’s move,” said Koong.

On the issue of affordable housing, Teh said that construction costs had gone up substantially largely due to rising material prices.

“I think it is the fluctuation in prices that is worrying the developers. Steel and concrete prices have not been stable and that leads to variations in construction prices.” She also attributed the current property prices to expensive land cost.

“What we should be mainly concerned about is infrastructure. If logistics and infrastructure were better, many people would not mind living further away,” Teh said, adding that the Mass Rapid Transit project was a necessity.

On the company shares that she had bought recently, she said: “I have been buying the shares since I became chief executive officer in 1998. It shows that I have confidence in the company.”

Teh had acquired 2.6 million shares at 71 sen each. Her direct interest in the company is at 17.52% and indirect interest at 40.03% as of Sept 18.

Source: The Star

Orange Villa 2, second phase of gated and guarded residential development by Tah Wah Land next to Jalan Song Ban Kheng, Bukit Mertajam. Comprises 12 units of semi-detached and 62 units of terrace houses.

3-storey Terrace

• Standard land area: 22 x 73.5 ft.
• Standard built-up area: 22 x 42 ft.
• Total units: 62
• Indicative price: RM 604,800 onwards

3-storey Semi-Detached

• Standard land area: 33 x 76 ft.
• Standard built-up area: 24 x 45 ft.
• Total units: 12
• Indicative price: RM 800,800 onwards

Project Name: Orange Villa 2
Location : Bukit Mertajam, Penang
Property Type : 3-Storey Terrace & Semi-Detached
Other Phases: Orange Villa (Phase 1)
Developer : Master Developer Sdn. Bhd. (Tah Wah Group)
Contact Number : 012-486 7898 / 012-502 7898 / 04-323 8688 / 04-331 4388

The Government acknowledges that comfortable and affordable housing is the most important basic necessity for the rakyat. The Government is committed in ensuring that the rakyat has the opportunity to own a house. This is not only an economic imperative, but also a moral imperative for a responsible Government. Therefore, the Government will make affordable housing a continuous priority. I am happy to announce that the Government will allocate RM1.9 billion to build 123,000 affordable housing units in strategic locations in 2013. The initiative will be implemented by PR1MA, Syarikat Perumahan Nasional Berhad (SPNB) and Jabatan Perumahan Negara.

A total of RM500 million will be spent by PR1MA to build 80,000 houses in major locations nationwide with the selling price ranging between RM100,000 and RM400,000 per unit. Among the locations are Kuala Lumpur, Shah Alam, Johor Bahru, Seremban and Kuantan.

In addition, PR1MA will provide the Housing Facilitation Fund totalling RM500 million to build houses in collaboration with private housing developers. The house prices under this programme will be 20% lower than the market price and distributed through an open balloting system.

Meanwhile RM320 million will be allocated through SPNB to build 22,855 residential units including low and medium-cost apartments, Rumah Mesra Rakyat and Rumah Mampu Milik. SPNB’s housing projects, which will be implemented immediately, include the construction of 1,855 medium-cost apartment units with a built-up area of 850 square feet in Shah Alam and Sungai Buloh. These units will be sold at about RM120,000 to RM220,000 per unit.

With regard to Rumah Mesra Rakyat programme, SPNB will build a total of 21,000 houses in 2013. Under this programme, SPNB will construct houses priced at RM65,000 per unit with a subsidy of RM20,000 as well as a 2% subsidy on interest rate.

In addition, a sum of RM543 million will be provided to Jabatan Perumahan Negara for the implementation of 45 projects under the Rakyat Housing Programme (PPR) involving 20,454 units which will be constructed through the Industrialised Building System (IBS). These units of houses will be sold at a price between RM30,000 and RM40,000 per unit, much lower than the market price of about RM120,000 per unit. The Government will also allocate 20% of the PPR houses to public sector employees and 1% to the disabled.

To enable more Malaysian own their first residential property, My First Home Scheme, which was launched under the previous Budget, will be improved by increasing the income limit for individual loans from RM3,000 to RM5,000 per month or joint loans of husband and wife of up to RM10,000 per month. In addition, the requirement for a savings record equivalent to three months instalment and minimum employment of six months will be abolished.

In the 2009 Budget, the Government had given a 50% stamp duty exemption on the instrument of transfer agreements and loan agreements for the purchase of the first residential property of up to RM350,000. The Government proposes that the stamp duty exemption is extended to 31 December 2014 with the price limit on residential properties raised to RM400,000.

Revision of Real Property Gain Tax

The limited supply of real property especially in urban areas has provided opportunities for speculative activities. Therefore, the Government proposes the real property gains tax (RPGT) from the disposal of properties made within a period not exceeding 2 years from the date of purchase will be taxed at the rate of 15% and 10% for disposal of property within a period of 2 to 5 years. For property disposed after 5 years from the date of acquisition, RPGT is not applicable. In addition, gains from the disposal of one residential property once in a lifetime and disposal of properties based on love and affection between husband and wife, parents and children, grandparents and grandchildren are exempted from RPGT.

Tax Incentive for Revival of Abandoned Housing Projects

Furthermore, in 2013 the Government will allocate RM100 million to the Ministry of Housing and Local Government to revive 30 abandoned housing projects. In addition, to encourage the involvement of the private sector, the Government will provide tax incentives as follows:

First: Banking institutions be given tax exemption on interest income received from the rescuing contractor/developer;

Second: Rescuing developer be given a double deduction on interest paid and all direct costs incurred in obtaining loans;

Third: Rescuing contractor be given stamp duty exemption on all instruments executed for the purpose of transfer of land or houses and loan agreements to finance the cost of revival; and

Fourth: Original house buyer in the abandoned project be given stamp duty exemption on all instruments executed for the purpose of obtaining additional finance and the transfer of the house.

Source: The Star

SOME analysts have already downgraded the property sector amid speculations that Budget 2013 will implement tough measures on the industry.

Soaring property prices are on most people’s minds but any steps taken to counter this may not be positively viewed by industry players. Yet, public outcry has been loud and clear – affordable living tops the rakyat’s budget wish list .

As a listening Government, I expect that they will include strategies to address this issue in Budget 2013. At the same time, the Government will need to make sure that the Malaysian property market remains robust and attractive, to both local and foreign investors.

In managing this, the Government should take a two-pronged approach – giving incentives and support to increase affordability, and curbing spiralling property prices.

Increasing affordability

Expectations are high as to how the Government will deal with this issue. It launched the PR1MA project to provide affordable housing to first-time homebuyers, but critics say that the loan approval process has been slow and there has been a large number of rejections due to stringent lending requirements. The eligibility criteria should be reviewed – with lower interest rates and the loan repayment period extended.

It is still early in the game to evaluate the success of PR1MA as its first property launch happened only in November last year. But I firmly believe that it is a step in the right direction and the Government should continue pressing on – allocating more land and accelerating project launches, particularly in the Klang Valley, Penang island and Johor Baru, which are the areas worst hit by high property prices. The Government also recently announced its plan to build 50,000 units in Kuala Lumpur alone in 2013, which is another piece of good news.

But the current requirement for private developers to build low-cost homes may not yield its full benefits as this is obviously not their focus. Instead, each state could set up a trust fund or foundation, which developers can choose to contribute to. The fund would then coordinate the construction, allocation and maintenance of affordable housing.

For other first-time homebuyers, the Government could introduce a tax relief on interest expenses incurred to buy residential properties. Such a move wouldn’t be new as it was introduced during the 2009 economic stimulus package to address the dampening property market then.

Also, while full stamp duty exemption has been given to property bought under the PR1MA scheme, property in the medium price range should not be forgotten. The current 50% stamp duty exemption for properties valued RM350,000 and below will expire this year.

I hope the Government will extend the exemption period, and increase it to a 100% exemption moving forward. In addition, looking at the prevailing market prices, the threshold should be increased to at least RM500,000.

Managing property prices

There is a strong sentiment that property prices are soaring beyond what’s affordable. But if we compare ourselves to neighbouring countries, our residential property prices aren’t all that bad. Except, perhaps, in some urban areas like the Klang Valley and Penang island.

To curb property prices, Bank Negara has tightened measures – a 30% loan-to-value ratio for third mortgages onwards is required, and loan affordability is now based on net income instead of gross income. These measures have yielded some positive results, but may not be enough.

Stamp duty on property acquisition can be used as a tool. Singapore, for example, recently introduced additional buyer stamp duty (ABSD) of up to 10% for foreign buyers and 3% for subsequent property purchases by Singapore citizens and permanent residents. The ABSD is imposed on top of the normal stamp duty rates. Our Government could consider adopting this.

Real property gains tax (RPGT) is also a good way of managing property prices. There’s been talk that the Government may reintroduce RPGT in its original form i.e. with a tax band of 30% to 5% for corporates, and 30% to 0% for Malaysian residents. (see figure 1) The current RPGT regime was brought back in 2010, following the revocation of full RPGT exemption since April 1, 2007.

The existing RPGT rate of 10% is rather mild in addressing the speculative nature of the property industry so a rate of 30% would have greater impact. The existing three-tier low RPGT rates are not effective as properties generally take two to three years to complete development. By that time, the rate would have dropped to 5%.

While these are all good measures to counter property prices, we need to be careful that any move to increase affordability could also dampen market sentiment. This could have adverse effects on the property market’s growth.

In fact, the property market has already started to show signs of cooling with home loan approval rate dipping in the first half of 2012. Despite the recent Asia Property Market Sentiment Report 2012, which revealed that Malaysians continue to be upbeat about the property market, we need to be mindful of the current economic calamity facing the world which may soon hit our shores. The softening market demand, both locally and abroad, coupled with counter measures could severely impact the property industry.

With elections looming round the corner, any aggressive counter measures are unlikely. Nonetheless, the Government should seriously consider RPGT as a long term strategy for managing the speculative nature of the industry.

It’s fairly certain that the property sector will be one of the priority areas for Budget 2013. The rakyat will invariably expect some goodies to be handed to them. And property players will have to keep their fingers crossed that any measures taken should not significantly dampen market sentiments and property demand.

Source: The Star