PETALING JAYA: The residential property market may be cooling down in terms of actual sales due to credit-tightening measures by banks, according to real estate consultants and Bank Negara data.

Bank Negara’s website showed loan approvals’ percentage for residential properties in the country declined to 46.8% in the first half of this year from 50.1% during the same period in 2011.

The number of loans applied for purchases of residential properties increased by 2.9% year-on-year in the first half of this year to RM96.7bil.

However, the number of residential property loans approved during the six-month period declined to RM45.26bil from RM47bil in the same period in 2011.

It is also worth noting that the loan approval percentage for non-residential properties was stable at 52.3% in the first half of this year, compared with 52.4% during the same period in 2011.

The number of loans applied (RM50.35bil) and approved (RM26.35bil) for purchases of non-residential properties was also stable in the first half of this year.

CB Richard Ellis (Malaysia) Sdn Bhd executive director Paul Khong said if the housing loan approval rate continued to decline, it will affect residential property prices.

“In order to conclude transactions, residential property sellers may now need to realistically adjust their selling prices as many of the buyers cannot get their loan applications approved,” he said.

KGV International Property Consultants director Anthony Chua said although the demand for residential properties continued to be high, the credit-tightening measures by banks had resulted in the market “cooling somewhat”.

“We are still monitoring the situation. There is less transactional activity in the market this year for both new property launches and the secondary market compared with last year,” said Chua.

Property consultancy CB Richard Ellis (M) Sdn Bhd had, in its recent report on the Kuala Lumpur residential market for the second quarter of 2012, also noted that there was a significant decline in the loan approval percentage this year.

“The loan approval rate was as high as 60.5% during the first five months of 2008, and has declined steadily since,” said the report.

The CBRE report said that the lower rate of loan approvals this year could be attributed to the implementation of new lending guidelines by Bank Negara.

Effective this year, banks have started using net income instead of gross income to calculate the debt service ratio for loans.

“Anecdotal evidence from real estate agents suggests that transactional activity has also declined as a result.”

The property consultancy also pointed out that despite the lower loan approval rates, buyer interest in new property launches, typically of smaller housing units in secondary locations, during the second quarter remained strong with developers continuing to offer attractive incentives to the purchasers such as the developer interest bearing scheme (DIBS), early bird discounts, free built-in cabinets and free legal fees.

“We expect 2012 to be a period of stabilisation especially within the luxury residential market, with transactional activity depressed by uncertain economic conditions and the reduction in loan approval percentage, which remains well below 50%.”

The CBRE report also said speculative property purchases were expected to be reduced for the rest of this year, as a result of tighter lending conditions, uncertain economic outlook, and concerns about the outcome of the upcoming general election.

Meanwhile, another property consultant said the tighter lending conditions had taken a visible toll on the secondary residential property market.

“Newly-launched properties are selling well thanks to better financing access, especially with the DIBS offered by many property developers.”

The consultant said slower sales activities in the secondary residential property market had resulted in innovative offers from marketing agents.

“This includes transactions where buyers sign the sales and purchase agreement but take the bank loans only a year or twolater. In effect, the buyers lock in the unit price now (perhaps in anticipation of further increases in market prices) and defer payment until much later. This works just like an informal DIBS,” he said.

In a recent report, Kenanga Research also said based on its channel checks, the secondary market appeared to be very weak and prices of secondary and primary products have diverged further.

The research unit opined that buyers were more focussed on new launches due to financing and promotional schemes.

“From a bank’s perspective, we think there is a preference to lend to the primary market as it means better asset quality whilst banks can get all-in’ deals with developers (for example, end-financing to bridging to land financing) to ensure a more balanced systems loans growth.”

Kenanga Research also opined that as a result, property developers can continue to grab greater market share and chalk-up high sales, although it expected Malaysia’s overall residential transaction value growth to be relatively unexciting at 5% year-on-year.

It was noted that despite the tighter lending criteria, Malaysia’s total residential transaction values have remained stable in the first quarter of this year.

It said buying interest remained strong, due to residential property buyers hedging against inflation and the lack of alternative investments, but this will be reigned in by more prudent lending criteria and the banking system’s fear of real-estate tightening measures such as higher real property gains tax.

Source: The Star

SUNGAI PINANG can only be filth-free if Penangites stop treating it as a rubbish dump.

The fishing community that has lived by the river bank for decades are upset that their home has been used as a dump for years.

Welcoming reports that the river would be devoid of garbage within three years, Shaaban Che Amat, 60, said some 100 fishermen living there were tired of the recurring flash floods and pollution.

“It’s good that the Penang Drainage and Irrigation Department (DID) has been cleaning and dredging the river but sometimes, the work is not done well.

“For instance, when the soil is dredged, it is not removed from the river but merely transferred to the other side of the bank and when rubbish accumulates, we are back to square one — our boats cannot go out to sea and we are stuck for hours in shallow waters.

“Sometimes after a heavy downpour, you can find old television sets, furniture and huge black plastic bags floating near our boats by the jetty.

“The river can be rubbish-free but only if Penangites stop treating it as a dump,” he said when met at the Sungai Pinang jetty in Jelutong, Penang, yesterday.

Shaaban, who has been a fisherman there for the last three decades, said he often saw people getting out from their vehicles parked beside the road, to dump bags of rubbish into the river.

Mohd Shariff Abu Bakar, 60, agreed.

“We grew up in Kampung Selut by the Sungai Pinang river bank and I remember there being lots of prawns, fishes and crabs but that was 20 years ago.

“It seems like the more developed we become, the dirtier our habits are,” he said.

Amir Ali Basamiah, 64, said everyone must work together if Sungai Pinang is to be clean again like it was before the 1970s.

“It was only in the 1970s when an abattoir, car workshops and factories started mushrooming here and it marked the start of Sungai Pinang’s woes,” he said.

Penang Municipal Council (MPPP) Public Health Standing Committee alternate chairman Ong Ah Teong said the council was diligently working to clean up George Town under the state’s ‘Cleaner, Greener, Penang’ campaign.

“There is strong emphasis on the roads and drainage systems because it is related to flash floods.

“Some garbage traps in the river and litter hotspots especially those around the river banks are cleared daily,” he said.

From being among the ‘stinking seven’ most polluted rivers in the country five years ago, Sungai Pinang is slowly but surely making its way to Class II from its present Class III Water Quality Index rating and the DID is aiming to make Sungai Pinang waste-free by 2015.

Sungai Pinang had been categorised as a Class III river since 2008 but in September 2007, it received the MS ISO 14001:2004 Environmental Management System certification for its river management.

The river was classified under Class V as most polluted with no marine life before an initial allocation of RM20mil was spent on the first phase of rehabilitation which was completed in 2007.

So filthy was the river then that when Sungai Pinang assemblyman Koid Teng Guan jumped into a dirty shallow end to get mud and water samples, he ended up seeking medical treatment for the rashes on his feet.

State Health, Welfare, Caring Society and Environment Committee chairman Phee Boon Poh said it was unfair to blame those living along Sungai Pinang for the floating garbage.

“It’s a Catch-22 situation because when there are flash floods, garbage from the litter-filled roads are washed into the river which in turn, clog up the waterway and when there’s another heavy downpour, flash floods would recur.

“Since 2009, the state government has engaged the community, private sector, non-governmental organisations and relevant government departments on an awareness campaign to clean up the river.

“The state government’s message is very clear — we are determined to act against those who pollute the river but we want to make them understand the importance of keeping the river clean as it also helps prevent flash floods from occurring,” he said.

Phee said individuals and business premises in the area had been issued notices indicating that those caught discharging effluents would be compounded a minimum of RM10,000.

A three-year project to enhance community participation in the protection and rehabilitation of the severely polluted Sungai Pinang was launched in July last year.

The RM100,000 Sungai Pinang River Care project, to be carried out in phases, is funded by HSBC Bank Malaysia Berhad in partnership with Global Environment Centre.

On June 25, DID director Anuar Yahya said waste collected from the 3.1km-long river was reduced by more than 50% with the implementation of the Sungai Pinang River Care project.

He said currently, the amount of rubbish collected from the river had significantly reduced to nine tonnes per month compared to that of previous years.

Phee said two main milestones which led to the cleaner river were the closure of the island’s last remaining rubber factory in March and the diversion of waste water from a nearby abattoir directly to the IWK waste treatment plant in Jelutong.

The factory was identified as one of the causes of the river’s pollution.

It had caused air and water pollution by discharging effluents into Sungai Dondang which flowed into Sungai Air Itam and subsequently Sungai Pinang.

He said the state government was working closely with the fisheries department and fish breeders to identify a suitable species for the river.

“We want to introduce fishes into the river to further help clean it up but the species chosen must not be harmful to the eco-system. We are looking at ‘non-aggressive’ fishes that feed on plankton and not each other,” he said.

Rainwater from Sungai Dondang and Sungai Air Itam flows into Sungai Pinang, causing the river banks to burst so every time there’s prolonged rain, those living nearby spend sleepless nights worrying about waking up in knee-deep water.

With squatter relocation still a problem for the RM150mil Sungai Pinang flood mitigation project, a clean waterway is crucial as a clogged river littered with rubbish has made Sungai Pinang the most flash flood-friendly area in Penang.

To check on Sungai Pinang’s updated water quality index readings, visit www.sungaipinang.wqms.info.

Source: The Star

PENANG will soon offer a different kind of hotel stay experience for those who yearn to be closer to nature — hotel rooms perched on trees.

Believed to be the first of its kind in Asia, the ‘Treetops Hotel’, which is part of the Escape Theme Park in Teluk Bahang, will see some 300 units of tree houses set up on 6.4ha of land.

The park’s chief ‘escape’ officer Sim Choo Kheng said the hotel is expected to be ready in about four years’ time.

He said the tree house units will be built at a height of about 2m to 10m.

“The units will be built around a tree and the idea is for the occupants to wake up to nature around them, feeling the fresh breeze and sounds of nature greeting them,” he said when met at the site of the park in Jalan Teluk Bahang recently.

He said besides tree houses, those “who do not love heights” can put up in tents.

Those who just want to stay for the day, can try out the cabanas.

Sim said the ‘Treetops Hotel’ will be either rated three or four stars and the accommodation will be at a reasonable rate.

The theme park is set to open its door to the public in October and the first phase of the park’s Adventureplay on a 6.9ha land, is expected to be ready by then.

“Escape is not a conventional theme park but it is more nature themed where parents and children will enjoy a great outdoor experience,” he said, adding that the activities there will be hosted with nature in mind.

The activities will feature eight rope courses, tree climbing, jump tower, tubby racer, fox burrows and more.

Children can also learn to make traditional toys in its workshop and produce toys like bamboo pop gun, gasing and kite.

Work on the 4.4ha Waterplay area is scheduled to start in 2014 and the park’s management has also got a fishing village setting in mind.

“Other than water slides, we will create a wave pool in the fishing village setting,” he said.

Upon completion, the theme park will cover a total 17.8ha of land with over 200 parking bays.

Source: The Star

PROPERTY developer DNP Land Sdn Bhd is set to transform quiet Alma town near Bukit Mertajam into a vibrant place with modern facilities.

Its senior marketing manager Joe Ang Kean Joo said the area, which used to be an oil palm estate, was fast becoming a preferred location for residential and commercial units.

“Consider owning a piece of property in Alma as it has the potential to be- come a satellite town to Bukit Mertajam,” he said.

He was speaking at the launch of a nine-day long DNP Land Property Showcase 2012 promotion at the DNP Sales Gallery in Jalan Rozhan, Alma.

Ang said DNP Land’s development projects in Alma were more focused on concept-based and landscaped-themed exclusive housing and commercial units.

He said the company’s Jesselton Hills project in Alma was a luxurious residential development spanning over 48 ha of elevated land, nestled in a guarded and greenery-shrouded environment.

“Our double-storey Lakeside Terraces units in Jesselton Heights under Phase II boasts of a spacious built-up of 2,408sq ft (216.72 sqm), which is about 30 per cent more than the regular built-up of 1,600sq ft (144 sq m).

“All 200 units have four rooms and a maid’s room apart from an utility area, wet kitchen and dry kitchen,” he said.

Ang said the guarded Lakeside Terraces units, which are within walking distance to a man-made lake, would showcase ultra- modern architecture.

And, in conjunction with the soft launch on Saturday, he said that customers stood to enjoy an early bird’s rebate of RM25,000 from the units’ selling price of RM578,000 during the showcase period till Aug 26.

He said the company would also absorb the legal fees, stamp duty as well as transfer and loan charges totalling more than RM20,000.

Ang said DNP Land was also in the midst of developing a new project, called Sentinelle Ville, located within its BM Utama development near Taman Kota Permai.

He said the development would consist of 66 units of three-storey semi-detached houses.

The houses would have a built-up of 3,609sq ft (324.81sq m), with an estimated price of RM1mil.

“We are also in the midst of developing 360 service apartments with built-up areas between 900sq ft (81sq m) and 1,200sq ft (108sq m) within our Impiana Square area next to Tesco Alma.

“The estimated price for the units is above RM300,000. We are targetting the sales launch in the first half of 2013,” he said.

During the showcase period, the company iss also giving a RM50,000 rebate on the selling price of its two and three- storey commercial lot units in Impiana Square. The units have a starting price of RM1mil.

During the soft launch, guests were treated to a buffet lunch and entertained with a variety of shows.

There with hip hop and street dance performances by JN Dance Studio, a beat box performance by U Shane Low, a magic show by Samuel Chong as well as a Chinese mask changing show.

The guests also watched a lion dance on stilts performance and listened to a property talk as well as a feng shui talk.

Source: The Star

PETALING JAYA: The real property gain tax (RPGT) revision which had been one of the highlights of Budget 2012, should be either reverted or adjusted based on proper understanding of the market situation, according to property sector associations.

Real Estate and Housing Developers Association Malaysia (Rehda) revealed in its Budget 2013 wish list that the Government should not review taxation or policies which were beneficial for the industry and recommended the previous RPGT regime be reinstated.

“Under the current market conditions such as the softening market and early signs of better growth of the economy ahead and the uncertainties of the United States and eurozone economy, we urge the Government not to interfere with the existing policies which are business friendly,” Rehda told StarBiz.

With the local Gross Domestic Product announced recently at 5.4%, Rehda believed that Government should grab the opportunity to facilitate market growth by introducing punitive and restrictive measures and suggested the new budget included reverting to the previous RPGT regime of 5% tax if a property is disposed before five years and no RPGT if disposed after five years.

The revised RPGT in Budget 2012 meant that gains from property held for less than two years were subjected to a 10% tax while a 2% was imposed for properties held between two and five years, and those who kept it for more than five years are exempted from tax.

National House Buyers Association secretary-general Chang Kim Loongsided Rehda’s recommendation, noting that the current RPGT was not effective in reducing market speculation.

“Developers typically need two years to complete landed properties and three years to complete stratified properties. This would mean that speculators could buy properties from developers, flip on completion and in effect pay the same 5% RPGT rate that was before Budget 2012,” he explained.

The Master Builders Association Malaysia (MBAM) opined that more focus should be put on affordable housing which will benefit more stakeholders and purchasers.

In addition, MBAM wished for the Government to release more land for affordable housing especially in the Klang Valley to meet the demand from first time time housebuyers as well as to sustain the housing and construction sectors.

On MBAM’s Budget wish list was also lower coporate tax rate to be on par with Singapore and Hong Kong.

On construction, MBAM pointed out a shortage of skilled workers for heavy engineering like the My Rapid Transit (MRT) project.

“We wish to appeal for skilled workers from China to be allowed to work on these projects as many Chinese workers are now available after completing MRT and high speed rail projects in China,” it said, noting that MBAM would like to source foreign workers from Asean and India too.

With the announcement of the Budget 2013 inching closer, the property sector associations have again reiterated the need for more measures to be taken to supply the market with affordable property.

For the coming Budget, Rehda recommended a closer look into the capital contribution charges on developers that is eventually passed on to housebuyers.

It said that currently developers are required to pay various capital contributions such as sewerage, electricity, water, telecommunications, Construction Industry Development Board levy and surrender of land, construction of facilities and infrastructure as well as compliance of other planning requirements.

Through Rehda’s own research, it found that all these compliance costs payable to various authorities could be as high as 30% of the selling price of the housing units.

What Rehda recommended is for private utility companies to not impose capital contribution charges on developers as developers are already required to lay infrastructures in their development projects and bring in new customers to the utility companies.

“These utility companies should revise their own capital and collect revenue via tariff based on consumption,” the association said.

Source: The Star