PETALING JAYA: The secondary residential property market could face a slowdown in transactions within the next six to 12 months due to oversupply of properties caused by speculative buyers.

Malaysian Institute of Estate Agents (MIEA) deputy president Siva Shanker said “secondary properties in secondary locations,” namely apartments within the RM150,000 to RM300,000 price range, could be difficult to sell as an oversupply situation has resulted.

“A lot of these properties were sold in the last two to three years and developers made a roaring business out of it. However, they’re now struggling a bit,” he told StarBiz in an interview.

“A lot of people in the past would have bought these properties for speculation,” said Siva.

He said many people bought these properties with the sole intention of selling them immediately once the development was completed.

“The buying public in Malaysia are like sheep. A few people buy, and then everyone will rush in to do the same!

“However, when everyone tries to flip it (sell for a higher price) at the same time, that’s when you create an oversupply situation.”

Siva cites an example of a 300-unit apartment block, where half, for instance, are placed on the market simultaneously by the initial (speculative) buyers.

One seller will lower the price because he can’t hold it, and then the prices start coming down.”

Siva pointed out that because transactions start slowing down, there is a misconception that property prices will crash.

“It’s not what people think – that property prices are crashing. A person buys an apartment for RM300,000 and after two years, wants to sell for RM400,000 and puts it on the market. But then, others also start doing the same and the buyer gets spoilt for choice.”

He said because everyone puts the property on the market, the RM400,000 price-tag would not be achievable.

“Perhaps at the end of the day, instead of RM400,000, you sell it for RM350,000 and in the eyes of the buying public, prices have fallen!

“But in actuality, prices didn’t fall. You bought at RM300,000 and sold it at RM350,000. You tried to flip the property, but you didn’t get the level of profit you thought you could get. But you walked away with a profit nevertheless.”

Source: The Star

AFTER losing a roof over his head due to an interim court order in Penang more than two weeks ago, Tan Kim Swee thought his parents would never get to enjoy the comforts of a home.

The 34-year-old construction worker, who earns only RM900 per month and has to support both his ailing parents, was ordered by the court to move out from his rented home in Perak Lane after being unable to settle his rental for about two years.

After spending three nights by the roadside near his former residence, Tan and his parents can now rejoice as he was offered one of the seven Rifle Range flat units under a refurbishing project, undertaken by the Penang Master Builders & Building Materials Dealers Association.

“When my landlord asked for a court order to ask my parents and me to move out, I was at my wit’s end as we did not have anywhere else to stay.

“I could not afford to pay rent, which was RM350 per month, as I had to pay for my parents’ medical fees and other expenses such as food,” he said.

“Even after I sold off my motorcycle, it was not enough. A friend of mine recommended me to seek assistance from Sungai Pinang assemblyman Koid Teng Guan, who helped me move in into one of the units at Block J of Rifle Range flats,” said Kim Swee.

He said his adopted father, Thor Yu Aun, 64, is suffering from a stroke while his mother Tan Saw Lean, 75, has symptoms of old age illnesses.

Association president Lim Kai Seng said the refurbishing project, costing over RM10,000 per unit, was part of the association’s corporate social responsibility (CSR) project.

“We hope those who are without homes or are in need of a shelter will be able to benefit from our CSR project,” he said before presenting a mock key to Kim Swee in Komtar recently.

State Town and Country Planning, Housing and Arts Committee chairman Wong Hon Wai said priority was given to the poor and needy as it was the state government’s effort to provide homes to them at a minimal rental cost.

“The state government is repairing all of the units in blocks E and J in Rifle Range so that we can rent them out to the needy.

“This is also our initiative to take care of the poor,” said Wong.

The two 16-storey blocks with 170 units were once used as quarters for the military in the 1980s and 1990s. The state is currently subsidising the rental of such units, which normally cost between RM250 and RM300 in the market, by charging only RM90.

Source: The Star

Taman Sungai Ara, located within the established township of Sungai Ara, Penang. This residential property development by WLB Properties Sdn. Bhd., comprises 37 units 3-storey terrace houses with built-up area ranging from 3,389 sq.ft. – 3,869 sq.ft. Each will comes with a private lift.

Property Project : Taman Sungai Ara
Location : Sungai Ara, Penang
Property Type : 3-Storey Terrace
Built-up Area: 3,389 sq.ft. – 3,869 sq.ft
Land Area: 1,701 sq.ft. – 4,554 sq.ft
Tenure : Freehold
Total Units : 37
Developer : WLB Properties Sdn. Bhd.

Indicative Price: RM 1,211,000 onwards

Location Map:

PETALING JAYA: Affordable housing will be one of the highlights in Budget 2013, said Datuk Donald Lim Siang Chai.

The Deputy Finance Minister said among the initiatives being looked into was the enhancement of low-cost home development projects, particularly the My First Home Scheme.

Lim said the Government had proposed to increase the limit of house prices under the scheme from RM220,000 to RM400,000 to fulfill the needs of those earning below RM3,000.

“Over 70% of Malaysians live and work in urban areas and easing their financial constraints will be highlighted in the upcoming Budget,” he said.

In July, the ministry concluded discussions via 18 focus group meetings exploring areas like affordable housing, urban transformation plan, small and medium enterprises and green technology.

More than 84 memoranda and proposals from various groups, NGOs and individuals were handed to the ministry for the Budget.

Topping the wish list were affordable housing, lower taxes, cheaper food and better public transportation.

Budget 2013 will be tabled in Parliament on Sept 28.

Lim said Malaysians should not rule out the possibility of a second round of the 1Malaysia People’s Aid (BR1M) programme.

“We respect Deputy Prime Minister Tan Sri Muhyiddin Yassin’s wishes for a second BR1M and are looking at our financial standing before making a decision,” Lim said after launching myTRADELINK, a new trade facilitation portal.

The portal, an initiative by the Finance Ministry and operated by Dagang Net Technologies Sdn Bhd, acts as a platform where businessmen can exchange documents required to fulfil regulatory trade processes for import, export or transit via the Internet.

Source: The Star

PETALING JAYA: Property players are hoping that Budget 2013 would introduce encouraging policies or tax adjustments that allow businesses to thrive in the current local and global economic environment.

Mah Sing Group Bhd managing director Tan Sri Leong Hoy Kum hopes to see new financial incentives, tax breaks or even infrastructure projects that will directly and indirectly benefit the sector as it is a key growth pillar for the economy due to its impact on more than 140 industries.

“We hope there will not be any policies or requirements which will increase the cost of doing business. At the same time, we hope for measures to reduce compliance cost, ultimately promoting the property market,” he said in a statement.

Leong explained that by reducing compliance cost, it would directly reduce the cost of doing business and the savings passed on to buyers would improve the affordability of the properties.

He suggested some measures to increase affordability such as charging tariff-based utility fees, limiting the requirement of land to be surrendered to improve the efficiency of land use and applying plot ratio instead of density to encourage smaller, more affordable units and at the same time reduce land cost per unit of property.

He also suggested reducing stamp duty so that the cost of property and home ownership could be reduced.

“We propose that the stamp duty be reduced to 0.5% for the first RM300,000, 1% between RM300,000 and RM1mil and 2% in excess of RM1mil,” he said.

He added: “Property is acknowledged as the best hedge against inflation, and people buy properties as a form of wealth preservation and not speculation. We hope that the Government would balance its approach in stimulating the property sector which is an important engine of growth for the country.”

To minimise the Government’s loss of income, Leong said that maintaining a favourable real property gains tax regime could potentially increase sales and stronger growth of property and housing industry, which in turn bring in higher stamp duties due to higher transactions.

To further stimulate the property sector, Leong recommended a tax relief extended to all interest incurred on end financing for the first home.

“Alternatively, the Government could consider providing grants of up to 10% of the purchase price of affordable properties, to first-time home owners,” he said.

Leong also hoped that the Government would further ease policies to encourage foreigners to buy properties in Malaysia.

“As foreign purchasers account for only 2% of property transactions in Malaysia, this will not be a big cost to bear, and at the same time, can project a pro-investment image to the world at large,” he said.

On another note, Leong said that with the escalating pressure of higher cost of goods, the Government could consider reducing the personal income tax rate or increase personal income tax relief to raise disposable income.

“As a business friendly measure to encourage economic growth and to be in line with regional practices, we hope to see a reduction in corporate income tax as well,” he said.

It was also reported that property and plantations group Tradewinds Corp Bhd had hoped for measures to sustain domestic economic growth in the wake of the uncertain world economy.

Chairman Tan Sri Megat Najmuddin Megat Khas said concerted efforts were needed for Malaysia’s economy to continue to expand in order to cushion the impact of the current sluggish global economy.

He noted the bearish European economy and slowing growth in China has rubbed off on the local economy.

“We’ve to find our own solutions (to our own problems). We should not merely rely on other countries. Unfortunately, our country is still dependent on imported goods. Hence, we should improve on our competitiveness to produce more competitive products,” he said.

Source: The Star