There are daily traffic jams in Jalan Masjid Negeri during the morning peak hours.

Slow-moving traffic has become the daily bane of road users on Penang Island and has recently gotten worse.

With a population of 752,800 people, the island had 1.03 million private car registrations in 2014 – a staggering increase of 32.9% in seven years from 2008.

Road users commute for various reasons and the most common is out of necessity. The existing roads have failed to keep up with the increasing number of vehicles and this has increased traffic snarls.

Daily congestion

Nur Ruzzana Md Hashim, 29, a customer service executive who works in a logistics company in the Bayan Lepas Free Industrial Zone (FIZ), battles traffic congestion daily.

“I spend an average of two hours daily on the road as there are bottlenecks in the FIZ area during peak hours, compared to only 15 to 20 minutes in the past.

“It is worse when it rains. I will need to leave home earlier in order to reach the office on time after dropping off my children to school,” she said.

Besides being wearied by the long commute and lack of rest, she lamented the impact of the time spent on the road.

“The long hours spent on the road leaves little time for me to have quality time with my family.

“Besides that, living expenses have gone up and so has my fuel consumption with the traffic congestion. I spend more than RM50 a week on fuel for a one-way distance of 6km.”

Those who have to endure the long commute from the mainland to the island for work or leisure are also feeling the impact.

While congestion and scarce parking are interrelated, insurance manager Gobal Narayanasamy, 42, finds this situation going from bad to worse.

“Coming from Bukit Mertajam, the daily traffic congestion is causing me delays in going to work.

“When I’m on the island, it’s very challenging to look for parking spots in town and at shopping malls. During the festive seasons, parking is a nightmare altogether,” he said.

Another mainland resident, Sher Ibrahim, 43, was not impressed with the current road conditions with not many alternative routes available.

“Road construction will not solve this issue in the long run, even the second Penang Bridge does not divert much traffic from the first bridge and in my opinion, is not the faster and cheaper route to the island,” he explained.

New infrastructure needed

The current traffic congestion calls for finding an immediatesolution besides strengthening the existing roads.

To the relief of Penangites, the state government recently unveiled the RM27bil Penang Transport Master Plan (PTMP) which is aimed at tackling the traffic congestion by 2030 and ensuring Penang’s prosperity beyond 2050.

Postgraduate student of Universiti Sains Malaysia, Nur Fatinah Abu Hassan, 24, resides on campus and relies heavily on public transport to get around the island during class-free days.

When asked about the state’s current public transport situation, she said it lagged behind other developing cities such as Kuala Lumpur, Petaling Jaya and Shah Alam, which has the Klang Valley Mass Rapid Transit Line 1 and 2, and the Klang Valley LRT Line 3, LRT Kelana Jaya Line, LRT Ampang Line, KL Monorail and KTM Komuter.

“I find the service of the local bus service operator Rapid Penang nowhere near satisfactory.

“The waiting time to go from Sungai Dua to the Sungai Nibong Terminal (approximately 2.3km) is around 30 minutes to one hour and the buses don’t really run according to schedule although it is one of the most used bus routes in Penang,” she said.

“The buses in Kuala Lumpur are much more frequent and on time.”

However, she welcomed the idea of the PTMP as a way to improve Penang’s transport system.

“It is good news for commuters like me when our government is taking measures to address the traffic issues while working towards making public transport more efficient as an alternative travel mode, especially with the proposed Light Rail Transit (LRT) and monorail,” she said.

Sustainable solution

To many Penangites, it is high time the state has a new form of land public transport besides buses and taxis.

Besides curbing traffic congestion, the rail-based public transport proposed by the government will be more reliable than other forms of public transport and reducereliance on private vehicles.

Mohd Yunus Yoon, 62, is concerned about the current state of congestion.

“It wasn’t like this 20 to 30 years ago. Traffic congestion started to worsen year by year about five years ago. How long more do we and the next generation have to endure before this gets worse?”

Mohd Yunus is looking forward to rail-based public transport on the island that is more environmental-friendly and provides good accessibility.

“I feel that this cost-efficient transport option will be a step in the right direction in changing the public transport scene in Penang.

“It will also reduce pollution caused by the many private vehicles on the road.

“It would be great if it covers major areas on the island such as George Town all the way to Bayan Baru. It is something people can look into,” he concluded.

Rashid Ismail, 42, who works in one of Penang’s well-known hotels, gave his thumbs up to the PTMP.

“It is timely for the government to introduce transport infrastructure that can cater for generations to come. They should go all out for it as it will benefit us all. It is a win-win situation for the residents and travellers as well.

“This will open up new opportunities for Meetings, Incentives, Conference and Events (MICE) tourism and leisure market for Penang.” he said.

Narayanasamy and Sher Ibrahim are also positive that the introduction of LRT will translate into shorter travelling time and also be cost-effective as they would not need to rely so much on their own private vehicles.

Addressing the traffic congestion could also mean a vast improvement in the quality of life.

“With an efficient public transport, I will be able to get to my destination quickly and without worrying about traffic congestion,” concluded Nur Fatinah.

Ending congestion in Penang is no longer an option and it is time for Penangites to live in a city where travelling between destinations become more convenient, accessible and stress-free.

Source: TheStar.com.my

The Government is considering housing developers’ request to reintroduce DIBS (Developers Interest-Bearing Scheme) for first-time house buyers.

Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar says the Government is discussing whether to relax current buying and lending guidelines for first-time house buyers.

“It is still at the discussion stage,” he says after the opening of the 2015 Malaysia Property Exposition (Mapex) on Friday. Today is the last day of the expo, which is being held at the Mid Valley Exhibition Centre, Kuala Lumpur.

“As much as we want to promote home ownership, it is important that we make sure that home ownership comes with the ability to service the loans.

“The last thing we want is to force people to own homes and take up loans which they are not able to service later.”

But he says the Government recognises the request by the Real Estate and Housing Developers’ Association (Rehda) to see how they can help young families who are renting and, at the same time, are in the process of buying their first house.

“If they were to buy a house now, it takes three years to complete and they have to continue paying rental for the house they are staying in. But at the same time, once their loan is disbursed progressively for the house they bought, they have to service it, and some people can’t deal with both together (house rental and house loan instalment at the same time),” says Wahid, explaining why developers have requested for DIBS to be reintroduced for first-time buyers.

DIBS is a scheme in which the developer absorbs the interest of the housing loan during the construction period, which means that the house buyer does not need to service the loan until the house is completed, which usually takes about three years from the time the development is launched.

However, this has led to excessive ­property speculation, as people who could not really afford the loans were using DIBS to buy properties because they could do it without putting down any of their money, with the intention of selling – or flipping – the house upon its completion to make a quick profit.

The other widely acknowledged issue with DIBS is that when developers absorb the interest from loans for house buyers during the construction period, they ­inevitably pass that amount down to the house buyer in the form of higher prices for the completed house compared with prices for a house without DIBS.

In November 2013, Bank Negara tightened lending guidelines and curbed DIBS.

When the 2016 Budget was announced recently, the First House Deposit Scheme was introduced with RM200mil allocated to help first-time house buyers afford their down payment.

Wahid says the Government has not yet determined whether this will also apply to second-hand homes or be confined to newly-built property only.

“The main intention is to assist first-time home buyers. It is important to observe the spirit and intention. We appreciate that for many young families to come up with that 10% down payment can be challenging.”

As for complaints that people are finding it hard to secure housing loans because the regulations have been tightened, Wahid says that when the Govern­ment surveyed the banks, the banks told them that the rejection rate for loans is less than 20%.

“This is where we need to look at the detailed data because there might be some screening at the developers’ end.”

He says the cooling measures the Government introduced over the past few years, such as responsible lending guidelines, have had their desired impact in curbing excessive speculation and moderating rapid growth in household debt.

He makes it clear that these measures are not meant for first-time house buyers but rather for those who are buying their third property onwards.

For Wahid, it is crucial for developers and those in the property sector to innovate and embrace new technologies to keep costs low.

He points out that the construction industry is facing productivity-related issues that need to be addressed.

These issues, according to Wahid, include a low-skilled work force, inadequate or a mismatch in training and development, over-reliance on low-skilled foreign labour, limited adoption of modern practices, mechanisation and industrialised building systems (IBS), the lack of data and information-driven decision-making, and a limited adoption of information technology such as building information modelling.

However, Rehda president Datuk Seri F.D. Iskandar Mohamed Mansor claims that 50% of housing loans are being rejected and urges the Government to relook some of its cooling off measures.

“It has taken a toll on developers. We are facing challenging times,” he says.

He says it would help if developers are given GST relief for constructing low-cost and affordable homes.

Iskandar also says another issue affecting the industry is rising “compliance costs”.

When they build something, he says, there are Federal Government and State Government regulations to comply with, and doing so can be costly.

Citing new infrastructure costs, he says this is now being passed down to the developers when it was not the case five to six years ago.

He says land takes up 15% to 20% of the development cost, and compliance costs, which used to be about 5%, now has gone up to 20% in some states.

Source: TheStar.com.my

Are you currently renting or looking to rent? If you are, there might be some good news for you on the horizon.

Rental charged for condominium units is expected to drop by 20% to 40% due to an oversupply: as more and more of them become ready for occupancy and come onto the market, buyers are finding it difficult to sell their units for a good price and are being forced to rent them out for much cheaper than usual.

Siva Shanker, the immediate past president of the Malaysian Institute of Estate Agents (MIEA), says he is absolutely certain that for the next one to three years, the biggest winner will be the rental market.

“The guy who wants to rent will suddenly be able to find a nice, brand new condo with facilities for half the price it should actually go for,” says Siva, who is also the chief executive officer of PPC International Sdn Bhd, a property consultancy and real estate group.

This, he says, is because in 2012, 2013 and 2014, many properties were bought on speculation by those wanting to flip them – sell them – as soon as they were ready to be occupied.

And a lot of these condos will be ready at the end of this year and in 2016 and 2017.

These flippers, he says, did not put any of their money down because they took out a 100% housing loan (lending regulations were less stringent then) and also took advantage of DIBS, the developers’ interest-bearing scheme, in which the developer absorbs the interest of the housing loan during the construction period.

“They probably bought these units on the advice of some ‘property guru’ whose skills and credentials I would question.

“These investors clubs made a mess by telling people to buy, say a RM600,000 unit, as they would be able sell it off for RM900,000 in three years’ time when it is ready. So that fellow (the flipper) thinks he can make RM300,000 out of thin air. He only bought it because he took advantage of the DIBS and the 100% loan. Otherwise, he wouldn’t have been able to buy.”

Siva says a lot of properties that were bought in this way in 2012 and 2013 are going to become ready and available at the year-end and in 2016.

That is when the problem starts. Because with the property completed, the DIBS comes to an end and the housing loan kicks in, so the buyer will now have to start servicing his loan.

Because of the economic slowdown, the political uncertainties affecting sentiment, and the tighter banking regulations now, the buyer who bought a unit with the intention of flipping it right away might now find it difficult to sell even if he drops his price.

“He wants to sell it at RM900,000 but there are no takers at that price, so he drops the price to RM800,000 and still there are no takers, down to RM750,000, RM700,000, still no takers, and now he is at RM650,000, which is dangerously close to how much he bought it for, and he is panicking like mad.

“The bank doesn’t care if the market is good or not. You still have to pay the bank loan,” says Siva.

Siva says some buyers might end up losing their properties because they can’t pay their loan instalments and it becomes a non-­performing loan (NPL); some would struggle but somehow manage to service their loan; and then there are those who might choose to rent out their unit rather than sell it at such a low price.

“The buyer (flipper) might ask for RM3,500 rental but not get it, then he’ll drop the rental, then drop it and drop it again to RM2,000 or RM1,500 … so it will be a renters market,” he says.

However, Siva stresses that it is not the entire housing sector that will be affected by lower rents; this would apply only in selected speculative sectors.

“I think it will be with the RM500,000 to RM800,000 condos, the high-end residential condos and shoebox units like SoHo, SoVo and SoFo, which have been built by the ­dozens,” he says, referring to different types of small commercial units, the small-office-home office, small-office-virtual-office, and small-office-flexible-office.

He expects projected rentals to drop by 20%, 30% and 40%, adding that these projected rentals were already a bit too high to start with.

However, Siva does not think there will be a massive non-performing loan problem as in the 1997-98 financial crisis.

“My opinion is that even though the rent might not cover their monthly instalment, at least it’ll cover half, and they ll top up the other half.”

As for those wanting to buy homes, Siva advises looking further afield because land that can be developed in the cities is scarce and very pricey.

Even during the current economic slowdown, prices of property in the Klang Valley have not come down, he says.

Nevertheless, Siva claims, even though all the data is not in yet, he can tell that 2015 will end up looking like a bad year for the property sector.

This is the case, he maintains, even though there was actually a slight improvement in the volume of transactions in 2014 compared with 2013.

“It was very small but an improvement, nevertheless. All of us thought ‘great, the down side is over’. ”

Then, for the first three months of 2015, people were like “ostriches who dug their heads into the sand and stood still”, as ­buyers refused to buy and sellers refused to sell because of the GST.

“We thought ‘Okay, everywhere in the world it was the same human reaction when the GST was first introduced’.

“We predicted that through April, May and June, the market will get used to the GST and learn to adapt, and learn it’s not the end of the world after all. It’s just a bit tough but let’s get on with things.”

But, he says, just as people were getting used to the GST, the 1MDB issue “cracked open”. And when the Wall Street Journal published the report on money (RM2.6bil political funding) going into Prime Minister Datuk Seri Najib Razak’s personal account, people panicked and there was a bit of a halt in the property market, Siva says, adding ruefully, “Malaysians constantly have knee-jerk reactions.”

So the recovery the experts were expecting to see in the third and fourth quarter did not happen.

“We are now into the final quarter of the year. I do not believe we will see an improvement,” he says.

“What we have to do is write off 2015 as a bad year and put it in our pocket and forget about it. And say to ourselves that life cannot end. It must carry on.

“Let’s just ride this out, and let’s start all over again with vigour next year.”

He predicts there will be a bit of interest coming back in the first quarter of 2016 and that in the second quarter, the market will be just about ready to recover.

Source: TheStar.com.my

An upcoming high-rise development proposed by CBD Capital Sdn. Bhd. at Butterworth. This project comprises a 15-storey 205-unit service apartment with 3 retail units located at ground floor.  It will also comes with facilities such as swimming pool, gymnasium and etc.

This development is located just next to Butterworth Outer Ring Road (BORR), adjacent to Orange Garden housing scheme by Tah Wah Group. It’s about 10 minutes drive from Butterworth Ferry Terminal and the future Penang Sentral.

This is still pending for approval. Details to be available upon project launch.

Location Map:

Ewein Bhd, which is currently jointly developing the RM800 million City of Dreams condominium project in Bandar Tanjong Pinang, Penang with Consortium Zenith BUCG Sdn Bhd (CZBUCG), is set to bag its second project on the island by the end of the year.

“Right now, we are finalising and fine-tuning the [contract] terms [to develop] the next parcel of land [in Bandar Tanjong Pinang] with CZBUCG, and hope to make an announcement by year end,” its deputy chairman and group managing director Datuk Ewe Swee Kheng told The Edge Financial Daily in an interview last week.

In June, it incorporated a new 60%-owned subsidiary, Ewein Zenith II Sdn Bhd, in anticipation of winning the contract. The remaining 40% stake in Ewein Zenith II will be held by CZBUCG.

Ewe said Ewein is proposing to develop three blocks of luxury serviced apartments on the 4.4252-acre (1.79ha) piece of freehold land, which will have a gross development value (GDV) of RM1 billion.

To be called City of Dreams II, the serviced apartments will comprise 891 units, but with smaller built-ups than that of City of Dreams, he said.

“Nevertheless, this is subject to the finalisation of the second parcel of land,” said Ewe.

Meanwhile, Ewein will start to see contributions from the City of Dreams project to its profit for the third quarter ended Sept 30, 2015 (3QFY15), based on its 60% share of the joint venture with CZBUCG, which owns the remaining 40%. It is due to announce the results of the quarter in the second week of this month.

“We have started progress billing for road and drainage works serving the project. We expect the project to gain momentum from 4QFY15,” said Ewe.

“The development is expected to contribute RM200 million in profit before tax and minority interests over the next four years,” he said.

Ewein saw its 2QFY15 net profit jump 88.1% to RM521,000 from RM277,000 in 2QFY14. Revenue, however, fell by a marginal 1.48% to RM10.55 million from RM10.71 million a year ago.

Ewe said the group had received overwhelming responses to the City of Dreams condominium project, receiving 1,203 applications for the 572 units available.

“We are in the progress of qualifying these applications, and hopefully will be able to sign some of the SPAs (sale and purchase agreements) by the end of this year,” he added.

City of Dreams features two blocks of 40-storey towers housing a total of 572 condominium units, with built-ups ranging from 1,100 sq ft to 2,350 sq ft.

Sitting on a 3.67-acre piece of freehold land, the seafront units are priced from RM1,172 per sq ft (psf), which is relatively lower than Eastern & Oriental Bhd’s high-end condominiums in Seri Tanjung Pinang nearby, which are going for RM1,800 psf.

City of Dreams and City of Dreams II are part of a proposed development measuring 50 acres to be known as Wellness City of Dreams, which will have a GDV of RM13.89 billion. The proposed project is expected to comprise, among others, a wellness resort, retirement and nursing residential suites, and serviced apartments.

While property development will contribute “significantly” to the group’s pre-tax profit from FY16, Ewe said the group had no intentions of ending its manufacturing of precision sheet metal fabricated parts business.

“We can still remain profitable in the manufacturing segment. While profit growth rates may be flat, but in times like these (lower demand from the electronics and electrical sector), I think we are considered good to be able to remain profitable,” he remarked.

On its property investment business, Ewe said rental income from Menara IJM Land in Penang provides the group recurring income on an annual basis. The group acquired the property in 2011 for RM50 million.

Ewe said contributions from this segment are expected to increase in the coming years from a revision of rental rates.

Year to date, Ewein’s (fundamental: 0.95; valuation: 1.4) share price has risen 109.78% to close at 96.5 sen last Friday, up 7.5 sen or 8.43% higher from the previous day’s closing. Its market capitalisation stood at RM186.68 million.

Source: TheEdgeMarkets.com

PENANG RESIDENTIAL PROPERTY MARKET

In Penang, the residential property market contracted by almost half since the hitting its peak in 2011. The market recorded a total of 9,667 transactions in 4Q2011, its highest in four years, before seeing a drastic drop of about 48.47% in 1Q2012, to just 4,981 transactions. The corresponding value of transactions dropped to RM1.5 billion in 1Q2012, from RM2.27 billion in 4Q2011.

The market saw fluctuations in 2012. In 2Q2012, the number of transactions increased by about 38.68% to 6,908 valued at RM1.92 billion before dropping slightly to 6,398 in 3Q2012. The market plunged again in 4Q2012 by 22.17%, to 4,979 transactions.

The market continued to contract in 1Q2013, when the number of transactions dropped slightly to 4,193 (worth RM1.55 billion) but remained stable with slight increases throughout the next three quarters of the year, bringing the total transactions to 17,700 units (RM7.1 billion).

In 2014, the pattern of transactions was interesting. It dropped slightly by about 8.66% to 4,291 transactions in 1Q2014 from 4,598 transactions in 4Q2013, before increasing by about 10.27% to 4,732 in 2Q2014, valued at RM1.89 billion. By 3Q2014, the number of transactions had dropped to 4,194 (RM1.75 billion), before surging 23.82% to 5,193 transactions (RM2.06 billion) in 4Q2014.

By 1Q2015, the market had plunged again by about 26.17% to 3,834 transactions (RM1.55 billion) compared with 4Q2014. A year-on-year (y-o-y) comparison with 1Q2014 also saw a market contraction of about 10.65%.

In 2Q2015, the market improved slightly on the previous quarter, to 3,909 transactions (RM1.59 billion). However, in a y-o-y comparison with 2Q2014, the market contracted by 17.39% or 823 transactions.

Geh believes the market contraction in Penang could also be due to strict loan approval criteria and fewer loan approvals.

He adds that the long delay in the issuance of the advertising permit and developers licence (APDL) had also taken a toll on the Penang residential property market.

“I believe the demand for projects in the pipeline in Penang is good but the sales process cannot commence due to the delay in the APDL,” he says.

Developers must obtain the APDL from the Housing Ministry before the sale process and the signing of the sales and purchase agreement for any development project.

The issuance of the APDL in Penang for many projects by local developers has been delayed for more than a year.

MALAYSIA: OVERALL RESIDENTIAL PROPERTY MARKET

There was an overall contraction of the Malaysian residential property market in the first half of this year (1Q2015) compared with 1Q2014, according to figures released by the National Property Information Centre (Napic).

The first half of 2014 (1H2014) recorded a total 122,830 transactions in the market worth a total RM40.31 billion. In comparison, 1H2015 recorded 119,599 transactions with a value of RM37.97 billion, or a 2.63% contraction.

If we look at the quarterly comparison, the 1Q2015 saw a slight increase of about 1.46% to 59,626 transactions (RM18.74 billion), from 58,767 transactions (RM19.39 billion) in 1Q2014 .

By 2Q2015, there is a noticeable contraction of 6.38% to 59,973 transactions, from 64,063 transactions in 2Q2014. Over the years, it is normal for the number of transactions to increase from the first to the second quarter, as seen in 2014 (from 58,767 to 64,063, worth RM20.92 billion).

Looking at transaction history, the first quarter of every year usually sees a slight drop before the transactions spike in the second quarter. The residential property market in Malaysia hit its peak in 2Q2011, when transactions spiked to a high of 73,710 (RM16.68 billion) from 60,333 (RM13.52 billion) previously. Similarly, 1Q2012 saw a total of 64,402 transactions (RM15.13 billion), which spiked in 2Q2012 to 71,595 transactions (RM17.48 billion).

After the market hit its peak period between 2011 and 2012, it began to drop in 2013 and reached a four-year, all-time low in 1Q2014. The market picked up in 2Q2014 and 3Q2014 by recording 64,063 transactions (worth RM20.92 billion) and 63,661 transactions (RM21.66 billion), respectively.

By 4Q2014, the market had again dropped, to 60,760 transactions (RM20.09 billion) and continued to drop in 1Q2015 before increasing slightly in 2Q2015.

In summary, the overall residential property market in Malaysia in the last four years up to the first half of this year saw the market spiking in 2011 and 2012 before it contracted in 2013. While picking up slightly in 2014, it again showed a contraction in the first half of this year.

Raine & Horne International Zaki + Partners Sdn Bhd senior partner, Michael Geh, attributes the overall contraction in the market to strict loan requirements.

“The low loan approvals due to stricter loan requirements has taken a toll on the property market,” he says.

Source: TheEdgeProperty.com

If you ever wonder how well are the affordable housings doing in Penang, take a few minutes going through the chart below. These are the top 20 most active projects in Penang, based on the total number of project page views we have received in October 2015.

With the introduction of new measures by the state government to ease affordable housing application and development, a significant increase of interest and activities in the affordable segment is observed. This is particularly evident in the Island where almost all of the affordable housings that are currently open for registration are in the top 20 list.

* Full list of affordable housing in Penang *

On the flip side, the environment has become one of the key challenges for condominiums in the mainland, especially for those units selling in the same price range as the affordable housing in the island. With an increasing supply of affordable housing in the pipeline, the situation is expected to continue over the medium term.

For developers in the mainland, the promotion designed to stimulate the demand needs to be changed and the choice of marketing strategy to establish a differential advantage has to be made.

Just for the record, Eco Meadows is the only project in the mainland that managed to squeeze itself into the top 20 list last month with the aggressive promotion by EcoWorld. This is a gated and guarded development situated on a 75.7-arce land in Simpang Ampat. The initial phase of Eco Meadows comprises 375 units of 2-storey terrace houses and a 2-storey resident clubhouse.

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

The Real Estate and Housing Developers’ Association (Rehda) has urged Penang state government to do away with requirement for developers to build low-cost housing.

The chairman of its Penang branch Datuk Jerry Chan argued that the state should instead focus on “rent-to-own” scheme to help lower-income home owners.

“There are recent cases where buyers could not even get bank financing for RM17,000 to buy a RM42,000 property on the island. Although the actual value of such a property on the island today is around RM160,000, the bank still refuses to lend,” Chan said.

A typical low-cost housing in Penang is priced between RM42,000 and RM75,000 a unit.

Speaking at a press conference, Chan said that in place of low-cost housing, the state government should explore the “rent to own” property scheme to help the poor.

“Under this scheme, tenants would eventually get to own the property after paying rentals for a certain number of years. These ‘rent to own’ properties should be undertaken by the state government,” he said.

On affordable housing projects priced between RM200,000 and RM400,000, Chan said the present list of first-time home buyers drawn up by the state government was not reliable.

“The state government’s list does not take into account whether the applicants are eligible for bank loans.

“The state government should allow the developers to draw the list of first-time house buyers for their projects, as the developers would take the time to check on the applicant’s eligibility for bank loans before allowing them to apply for an affordable house,” he said.

Chan said there should also be a timeframe for the implementation of affordable housing projects.

“As the price of land in Penang keeps on escalating, it will not be possible in the near future for developers to continue building affordable houses. There are also other compliance fees which make such schemes difficult to implement,” he added.

On housing prices in Penang, Chan said the price of residential properties in Penang had not plunged due to slowdown in the property market.

“The old high-rise properties in Bayan Baru, for example, are still selling between RM395,000 and RM478,000 nowadays. These properties, built in the early 1990s in the south-west district, were first priced at around RM70,000 to RM80,000.

“Despite the soft property market, we are not seeing any correction in housing prices,” he said.

Chan said that based on market feedback, Singaporeans were now coming in to buy properties in Penang to take advantage of the weak ringgit, providing support for the local property market.

On the delays in issuing advertising permits and developers’ licence (APDL), he said there were currently about 50 projects, involving 20 to 30 developers, which still had not received APDL from the federal government.

Source: TheStar.com.my

Skyridge Garden, an upcoming residential development by OHM Group in Tanjung Tokong, Penang. It is located along Lebuhraya Halia, only a stone’s throw away from the The Latitude and The Peak Residences by Ivory.

Open for Private Preview. Call +604-2299 559 now!

This development comprises a 40-storey luxury condominium with 486 residential units, one unit of bungalow and the restoration of a 2-storey heritage building.

Project Details

Project Name	Skyridge Garden
Developer Name
Project Type	Condominium
Location	Tanjung Tokong
Built-up Area	1,450 sq.ft. & 2,335 sq.ft.
Indicative Price	RM712,000 (RM490 psf) onward
Project Status	Private Preview
Website	www.ohm.com.my

Areca @ Penang, an upcoming mixed development by Titijaya Group in Batu Maung, Penang. It is strategically located next to Penang second bridge. This is the Group first’s acquisition and development outside of Klang Valley, with an estimated GDV of RM2.6 billion.

The 20.3 arce parcel of land will be developed in multiple phases, and is expected to be completed by 2023. This development consists of the following components:

Residential

• 25-storey condominium (299 units)
• 33-storey condominium (575 units)
• 37-storey condominium (503 units)
• 37-storey condominium (359 units)

Commercial

• 3 blocks of 36-storey serviced suites
• 1 block of 27-storey serviced suites
• 1 block of 5-storey shop offices
• Multiple level of shop offices (92 units)

More details to be available upon project launch.

Location Map:

The Penang Chinese Chamber of Commerce (PCCC) says it is willing to build the proposed new category of affordable housing units if the state government gives sufficient incentives.

Datuk Finn Choong Khuat Seng, convenor of the chamber’s Property Development Construction and Management Committee (PDCMC), said the committee lauds the recent revision by the state government of the guidelines for affordable housing, particularly the introduction of the RM150,000 home category.

“PDCMC fully supports this new category of housing as this comes with the allowance to increase the density.

“This move serves to protect the interests of the lower income group as the existing allocation for housing of RM200,000 and below has now effectively increased,” he told reporters here Saturday.

He said both the state government and housing developers must at all times work closely hand in hand to meet the state’s housing needs and to enable the property industry to contribute to the state’s growth, he added.

Choong, who is also PCCC Vice President, said in order to be able to provide more low cost (LC) and low middle cost (LMC) units, the state government should increase the permitted development density for LMC units from the current 120 units/acre.

“We also urge the state government to reduce the time taken to approve eligible purchasers and to reduce the requirements for common facilities and car parks.

“The responsibility to ensure these units end up with the correct social group should fall on the state government,” he said.

Source: Bernama

After a delay of almost four years, land reclamation works on the RM10 billion Penang WorldCity mixed development in Bayan Mutiara, Penang may finally be moving forward. The joint venture (JV) between Ivory Properties Group Bhd and Tropicana Corp Bhd plans to call for tenders for the reclamation works at Penang WorldCity by the end of this year or the first quarter of 2016.

Ivory Properties chief operating officer Goh Chin Eng said Tropicana Ivory Sdn Bhd will kick-start the tender process in a matter of months, which was postponed twice after having problems getting approvals from the local authorities within the stipulated time which were prerequisites for the tender.

Tropicana Ivory is a 51:49 JV between Ivory Properties and Tropicana.

Goh said yesterday approvals from the relevant departments including the department of environment to undertake the reclamation works have been received.“We called off the tenders twice after the six-month contract lapsed, but now we have gotten all the necessary approvals and can finally call for a tender,” he told The Edge Financial Daily in an interview.

Ivory Properties in November 2011 signed a purchase and development agreement with Chief Minister of Penang (Inc) and Penang Development Corp for the proposed development of a mixed residential and commercial property project on a 41.5ha site in Bayan Mutiara for RM1.07 billion. Of the 41.5ha, 27.3ha are existing land and 14.2ha are to be reclaimed

“We are finalising some technical issues and would call for a tender to select a contractor by year end or the first quarter of 2016. We believe the potential contractors, who had expressed their interest in the project earlier including foreign companies, would resubmit their bids,” said Goh.

“We target to begin works to reclaim 14.2ha of land [in Penang WorldCity] in the second quarter of 2016. We plan to build a hotel, hospitals, schools and residential units on the reclaimed land,” he added.

The Penang WorldCity project is expected to give a massive boost to Ivory Properties’ revenue in eight years, Goh said, contributing some RM5 billion to RM6 billion towards the group’s overall sales then. The Penang-based property developer on Oct 3, 2014 changed its financial year end from Dec 31 to March 31. Due to the year end change, the cumulative quarters for the current financial year consist of 15 months’ results beginning Jan 1, 2014 to March 31, 2015, which saw Ivory Properties posting a net profit of RM22.77 million on revenue of RM270.19 million.

Already, Ivory Properties has seen contributions coming from the Penang WorldCity project. The group has launched the first phase of condominium units in the Penang WorldCity project, and plans to release the second phase of homes by the end of next year. These properties are located on the existing 27.3ha of land in Bayan Mutiara.

Goh said construction of phase 1A, comprising 1,343 condominium units priced from RM450,000, is 30% complete.

For its first financial quarter ended June 30, 2015 (1QFY16), Ivory Properties saw its net profit drop 22.3% to RM8.1 million from RM10.42 million in 1QFY15 as revenue slid 16.5% to RM47.42 million from RM56.76 million. In its notes in the quarterly results, Ivory Properties said the 1QFY16 revenue from its construction contracts segment was mainly contributed by the construction claim on phase 1A of Penang WorldCity, where the construction work progressed towards the end of last year.

On its gearing level which stood at a 12-month rolling average of 61%, Goh said Ivory Properties aims to reduce reliance on institutional financing in the long run and to focus on its sales and marketing activities from its ongoing Penang Times Square project in George Town, Penang.

The group had unbilled sales of RM492.9 million as at July 31, which will keep it busy for the next three to five years. It also carries a tender book of about RM500 million. Ivory Properties currently owns 120 acres (48.6ha) of land bank, all located on the island, with a combined gross development value of RM11.12 billion.

“The land bank will sustain us for another eight to 10 years. We continue to look for more land in Penang and the Klang Valley. We are now negotiating with some landowners in Kuala Lumpur and will make the necessary announcement in due time,” said Goh.

Meanwhile, Goh sees Penang’s property market recovering next year, boosted by the RM27 billion Penang transport master plan. “Due to land scarcity in Penang, I believe that the market will consolidate now and pick up in 2016 as the transport master plan kicks in. Penang is still an attractive and interesting location preferred by investors and foreigners,” he said.

Ivory Properties shares closed up 6.58% or three sen higher to 41 sen on Friday, giving it a market capitalisation of RM180.44 million.

Source: TheEdgeMarkets.com

The Penang government and Bank Negara will hold a workshop early next month to discuss the state housing policy following a fruitful meeting between the two parties.

State Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said that during the meeting recently, Bank Negara had shared the criteria to be considered when it processed housing loans.

“We will discuss the requirements of the applicants for low-cost, low medium-cost and affordable housing with Bank Negara.

“Our intention is to find solutions to narrow the gap between the total housing loan applicants and the loan rejection rate.

He said there was a need for prudent debt management.

Jagdeep added that the workshop would also discuss in detail the process by the commercial banks when considering a housing loan.

Source: TheStar.com.my

Buying your first home is never an easy decision. Not only it is most people’s biggest financial commitment, it can also be time-consuming and frustrating.

One of the most common question asked by first time home buyer is when will be the best time to buy a property in Penang. There is always the right time, but no best time. The right time is the time when you can comfortably afford a unit that suite your lifestyle.

In fact, owning a first home is a very rewarding experience and you can make the process smoother by having the right information at your fingertips. If you are not sure where to start with, here are the three aspects that you need to contemplate before placing your down-payment:

1. Ponder over a realistic lifestyle

The very first thing you should do is to ponder over a realistic lifestyle that you would envision. How you would like to live day-to-day, your plans for the short-term future and your budget will determine the home you buy.

Is it important that you live close to family, work, schools, shopping mall and other amenities? Consider how far you are prepared to live from those places if there is good accessibility. In some cases, one may choose to stay further away from work in seek of better lifestyle for his/her family.

Remember, not necessary an ideal lifestyle that can last for two to three decades, neither is the best one. Think about a realistic one that will works for you in the next 10 years.

2. Know your affordability

Before you start focusing on where and which house to buy, work out your budget first. One of the most common conscious mistake people made is to first look for a dream house, setting an unrealistic expectation and then blame it to the unaffordability. As our young nation continues to evolve and grow, housing affordability issue is inevitable. But continues blaming the house prices will not make your life better.

So, work out your affordability, figure out your existing expenses, estimate your potential loan repayments and associated costs. Look realistically at whether your income can cover it all comfortably. Once you know how much your budget is, then you can start looking for a house within your budget that suite the lifestyle. In some cases, some fundamentals may have to be sacrificed.

3. Perform your own research, don’t rush

Deciding and placing a down-payment for your very first home is definitely very exciting. Many people tend to get overjoyed and rush to make a decision. This is usually influenced by friends and colleagues who have also bought a unit from the same project.

Bear in mind that everyone has different needs. A house that suites your friends and colleagues may not necessary suites you. It’s always good for you to perform your own research, a least do some study on the surrounding area.

Penang is fortunate to have plenty of affordable housing to choose from, and there are more to come in 2016. The attractive element is that the price will stay below RM400,000 and you don’t have to worry about price going up soon. Hence, take time to perform some research, you may be able to find some good units from the secondary market too.

Will discuss in details for each of these aspects in the next write-up.

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

SimpliCity 360, an upcoming guarded residential development by Charterway Properties Group in Bukit Minyak Penang. It is only 5 minutes drive to True Light primary school and 10 minutes away from AEON Big hypermarket. This project comprises 56 units of 2-storey terrace houses with two types of layout to choose from.

Picture above is the location map of the proposed development. Please contact the developer directly for more details.

Details to be available upon project launch.

Property Project: SimpliCity 360
Location: Bukit Minyak/Juru, Penang
Property Type: 2-Storey Terrace
Total Units: 56
Indicative Price: RM398,000 onwards
Developer: Charterway Properties Group
Contact: 012-433 8095 (Alex)

Location Map:

Penang’s property market is expected to stay resilient on the back of sustained demand, especially from Penangites working abroad planning to return and prospective retirees eyeing homes in the state.

“There has been a slowdown in the last year. There are a few categories of investors in Penang; those who are owner occupiers, those who are investors for the cultural developments, those who are in the Malaysia My Second Home (MM2H) and Penangites who work abroad but would like to settle in Malaysia,” said Penang Institute CEO and head of economics studies Dr Lim Kim Hwa (pictured) at the National Real Estate Convention (NREC) 2015 yesterday.

“For the last two categories, the properties in Penang would be priced significantly cheaper, thus I believe the demand in the property sector in Penang would remain rather constant,” concluded Lim during his presentation entitled “Penang: The Next Metropolis”.

In terms of the wider economy, Penang is expected to register a 5% to 6% growth in its gross domestic product (GDP), outpacing the overall country’s growth by 1%, he said, noting that last year, Penang’s GDP grew by 7.4% while Malaysia’s grew by 6%.

According to Lim, Penang contributes 21.8% of the balance of Malaysia’s trade surplus, specialising in machinery, transport equipment and miscellaneous manufactured articles.

“Penang’s economy is more export-orientated, and now there is a better demand for electrical and electronic goods,” he said.

The export sector is expected to improve with the recovery of the US economy and the weaker ringgit, he added.

“It is important that Penang provides the best environment to attract more investments. Penang is the main manufacturing and economic hub for electronic and electrical items. Bayan Lepas is already full. It is important to provide more space for industrial growth.”

Some of the projects and initiatives that are expected to contribute to this growth is the IT-BPO at Bayan Lepas, BPO Prime at Bayan Baru and Changkat Byram, south of Batu Kawan.

Other projects that will benefit Penang overall include the Penang Transport Master Plan, Penang Heritage Arts District – Ilham Penang at Sia Boey, Creative Animation Triggers at Wisma Yeap Chor Ee, and Komtar refurbishment. “All of these projects involve the private sector,” added Lim.

“The Penang Transport Master Plan (PTMP) is the catalyst to [turning Penang into a] metropolis, as it involves alleviating a lot of the problems locally in Penang, especially traffic congestion,” said Lim.

Expected to be completed in 2030, the RM27 billion project would include amenities such as trams for the heritage zones, LRT for the island and mainland, and water taxis.

Lim said Penang is on track to achieving its metropolis status.

“It is an ongoing process, and there is no deadline. Penang aims to transform into an international, intelligent city filled with life. To create a great metropolis, it has to be unique, and it has to attract people to want to live and expand the growth of the city,” he said.

NREC 2015 saw more than 250 participants from the banking, development, property and consultancy industries.

NREC is organised by the Royal Institution of Surveyors Malaysia (RISM) and co-organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS).

Themed “Homes For Generations – Redefining Development Trends”, the convention highlighted concerns for the future of the real estate industry in Malaysia.

Source: TheEdgeProperty.com.my

Eligible Penangites should start applying for affordable housing because developers may not carry out more of such projects.

State Housing Committee chairman Jagdeep Singh Deo said the profit margin of affordable housing projects was only about 20% and it was not considered lucrative for developers.

“We are grateful to Penang property developers who have created 12 affordable housing projects with 22,512 units since 2014.

“We understand that they might not maintain the pace. We hope eligible Penangites will snap up the offered units,” he said during a press conference at Level 53 in Komtar, Penang, yesterday.

M Summit Group managing director Datuk Albert Moh, who was also at the press conference, said the profit margin was only about half of what developers could make if they built high-end property projects.

“It takes us three years to deliver the affordable homes. If you divide the 20% margin into those years, we are only making about 6% a year with what we invest,” he said.

Aspen Group managing director Datuk M. Murly said prospective buyers of affordable homes in Penang tended to be slow in applying for such properties.

He said this was due to the five-year moratorium that places a cap on property appreciation.

“But new affordable housing projects may not be available in the future, so we hope eligible buyers won’t delay any further,” he said.

* CLICK HERE for a full list of affordable housing projects in Penang *

Jagdeep also announced that the ‘Mission Home-Possible 2.0’ affordable housing roadshow would take place until March in several locations on the island and mainland.

The first will be in Gurney Plaze today and tomorrow, while the December show will be in Queensbay Mall on Dec 19 and 20.

Next year, the road show will be held in Mydin Mall, Kepala Batas on Jan 23 and 24, Sunway Carnival on Feb 27 and 28, and Econsave Jawi on March 26 and 27.

Source: TheStar.com.my

A proposed mixed residential development by OHM Group at Hye Keat Estate in Air Itam. It is strategically located along Lehuh Khoo Hye Keat, just a short drives away from Air Itam roundabout.

This strata development comprises a 31-storey condominium with 88 units of luxury residences and 6 units of 3-storey bungalows.

This is still pending for approval. Details to be available upon project launch.

Property Project : (to be confirmed)
Location : Hye Keat Estate, Air Itam, Penang
Property Type : Condominium & 3-storey bungalow
Total Units: 88 (condo), 6 (bungalow)
Indicative Price : (to be confirmed)
Developer : OHM Group (Ong Han Meng Woodwork Sdn. Bhd.)

Location Map:

Fresh graduates feel compelled to buy property quickly because they fear prices will soon outpace the growth of their income, said Khazanah Research Institute director of research Dr Suraya Ismail.

“Young people used to rent for 10 years before deciding to buy a home. However, graduates today rush to buy their first homes, for fear of rapid price escalation. They think that if they do not buy today, they will never be able to afford a house.”

She explained that this places fresh graduates under stress because “they do not have the confidence they can earn an income and fall in the middle income bracket,” she said at the National Real Estate Convention (NREC) 2015 on Thursday.

Suraya was part of the panel discussion, ‘Homeless Graduates: Reality or Myth?’ on challenges faced by young, aspiring homeowners in purchasing their first homes.

Her fellow panelists include Rahim & Co International Property Consultant Bhd founder and executive chairman Tan Sri Abdul Rahim Abdul Rahman, PR1MA assistant vice president for research and development, Ezlina Adnan, and Bank Simpanan Nasional (BSN) senior vice president and head of distribution, Akhzan Zaini.

Rahim said fresh graduates were facing a hard time buying their first homes due to the huge disparity between current average household income and property prices.

Suraya said the disparity between income and house prices is a complex matter.

“It is not as simple as increasing income to enable graduates to purchase homes. It is very difficult to increase income, especially if we’re not increasing productivity.

“The job market feeds into the housing market; for example, a labourer may be incur both consumption and production of a house,” she added.

According to Suraya, one way of slowing the growth in housing prices is to increase the productivity of all sectors, especially the construction sector.

“Something has got to give, and house prices should go down. We believe that the level of profit before taxation could go down, although we won’t be able to achieve supernormal profit,” she said.

Meanwhile, BSN’s Akhzan advised graduates to be realistic in applying for housing loans.

“You may not be able to purchase a home in the RM300,000 category if you are earning RM3,000 a month. For BSN, we do offer 100% loans for homes that are below approximately RM130,000.

“Graduates should look for homes within their means. If you go beyond your means, bankers will look at your repayment capability, therefore you may have a smaller chance in getting your loans, approved,” he said.

Akhzan said that BSN has approved 335 of 800 applications under the Youth Housing Scheme so far.

For affordable housing, PR1MA is doing the best it can to provide homes for the masses and young graduates, said Ezlina.

“Our goal is to build 500,000 homes by 2018. There are currently 60,000 units on the ground. Based on Budget 2016, our goal is to set house prices below market price.

“What we do is to always evaluate [our projects] on a case-by-case basis. Our projects are based by state, and the products we have,” said Ezlina.

She added that PR1MA is expediting completions by using industrialised building technology. This will lower the cost of construction, which should allow for lower home prices.

The panelists concurred that the government’s affordable housing initiatives should be streamlined under one ministry that handles financing, planning, land acquisition and construction of the homes.

Source: TheEdgeProperty.com.my

The Association of Banks in Malaysia (ABM) says first time home buyers who are eligible will continue to be able to obtain financing.

It explained that it was crucial for these buyers to also recognise the need to make sound decisions of their own affordability based on their financial circumstances.

“The business of our member banks is in the main lending or extending credit. There is no intention whatsoever to make lending more difficult, particularly for first time home buyers,” ABM said in a statement on Monday.

ABM had issued the statement to clarify a recent report on banks being “overly cautious” on mortgage loans for first-time home buyers.

The association also pointed out that for first time home buyers, the bank would usually finance up to 90% of the price of the property.

“They may also want to consider applying for government schemes such as ‘Skim Rumah Pertamaku’ for assistance in their property purchase,” it said.

ABM added commercial banks had offered special housing loan packages to suit the needs of first time home buyers.

It encouraged them to shop around to find a suitable financing package.

“Additionally, applications for such mortgage loans are decided on a case to case basis and there is no blanket approval system,” it said.

ABM also encouraged consumers to fully and accurately disclose all material information with regard to their financial position when applying for a home loan.

“In conducting affordability assessments, commercial banks take into account the applicant’s income after statutory deductions, expenditure on necessities and all existing debt obligations from banks and non-bank lenders.

“For self-employed applicants, banks will also take into account their proof of savings and regular income sources.

“First time home buyers should work with their financiers when making the suitability and affordability assessments for any facility applied for to pave the way for more robust financial management on the part of the buyers. Commercial banks are committed to playing their role in this process,” it said.

ABM said the association and its council banks would be pleased to engage with all State Governments with regard to matters related to home ownership in the state.

It added members of the public with enquiries or complaints related to housing loan matters could contact the ABMConnect hotline by dialing 1-300-88-9980, or e-mail to eABMConnect by logging on to its website, www.abm.org.my.

Source: TheStar.com.my