unsold property

Price Range Of Unsold Unit

unsoldTHERE seems to be a Catch-22 situation in the property market as more developers plan new launches in the second half of this year (2H14), knowing that demand remains solid, and yet may end up accumulating more unsold units going forward.

Many property players have been holding back their launches in the first half (1H), banking on homebuyers’ rush to buy in the face of the Government’s imminent Goods and Services Tax (GST) implementation in April 2015.

Market experts, however, believe the sector does not have to worry about a Catch-22 situation.

CB Richard Ellis (M) Sdn Bhd executive director Paul Khong says that with nominal Government intervention, the property market will automatically find its own equilibrium.

“No private developer will continue to build if demand does not exist. With the market doing fairly well, developers are pushing harder for sales with various incentives,” he says, touching on how players are adapting to the environment the best they can.

Khong notes that the market has had a quiet start in 2014, as forecast earlier, due to various tightening measures taken by on the Malaysian property market through Budget 2014. Read more

Digital Image by Sean LockeDigital Planet Designwww.digitalplanetdesign.com

Malaysia Property Agent Fees

Digital Image by Sean LockeDigital Planet Designwww.digitalplanetdesign.comAs property agents are instrumental in helping you deal with the massive task of sourcing, acquiring and handling the paperwork for a property, it is only fair that they receive proper remuneration for their work.

Unfortunately, as many property seekers have attempted to subvert or get themselves out of having to pay a fair amount –and some estate agents who have been less than honest in their calculation for payment – the official government body, The Board of Valuers, Appraisers and Estate Agents Malaysia have established a rule on the fees payable.

For a sale or purchase of land, buildings as well as joint ventures, sale of company and property swaps, a maximum fee of 3% is imposed.

For chattels (personal property such as furniture, tools, etc.) including machinery, 10% of the proceeds is payable to the agent. This is a flat amount.

Any sale or purchase that occurs by way of tender, private treaty or any other mode of disposal or acquisition will adhere to the above rules.

Should you acquire an estate agent for sale and marketing projects however, the fees payable are not governed by the official body and are instead to be agreed between the client and the estate agent.

Furthermore, these fees do not apply to the sale of foreign properties in Malaysia or the sale of Malaysian properties on foreign soil. Read more


Sales fall to ‘worrying’ levels

KUALA LUMPUR: Sales in the primary market have fallen to a “worrying” 49% in the first six months of this year, according to the Real Estate and Housing Developers’ Association’s (Rehda) property industry survey in the first half of 2014 (1H14).

While new launches picked up considerably with 10,189 units launched in 1H14 compared with 9,364 units in 2H13, developers had only managed to sell six more units in 1H14 from 4,983 units in 2H13.

“It’s the first time that the percentage of sales is below 50%,” said Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor (FD Iskandar) at a media briefing yesterday.

About 85% of the 152 respondents — comprising Rehda members nationwide — said the cooling measures have affected their sales.

Developers said the cooling measure that has hit them hardest is the 70% loan-to-value ratio, followed by the impending goods and service tax (GST), higher real property gains tax, prohibition of the developer interest bearing scheme (DIBS), and the maximum loan tenure cap of 35 years.

Half of the respondents blamed slower sales on buyers facing difficulty in securing end-financing — specifically, a more favourable loan margin.

“End-financing issues are mostly caused by ineligibility due to buyers’ income and lower margin of financing,” it said.

Rehda found that other challenges to securing financing include banks requesting more documents, credit history and a limited quota of loans for low-cost and affordable housing.

“We are all for responsible lending, but there must be flexibility. [For example], please reintroduce the developers interest bearing scheme for first-time house buyers,” said FD Iskandar.

“Homes in the RM250,001 to RM500,000 price range [mainly affordable housing] are most vulnerable,” said the report.

According to the report, properties in this price range accounted for 41% of all launches in 1H14 with most of them in Johor and Pahang.

Homes in that price range were mostly launched in Kelantan, Johor, Kedah, Melaka, Pahang and Perak in 1H14, while commercial properties in that price range made up 67% of launches.

In 2H13, homes priced from RM250,001 to RM500,000 comprised 43% of new launches.

Meanwhile, houses in that price range were mostly launched in Selangor, Penang, Negeri Sembilan, Johor, Kedah, Melaka and Pahang, and commercial properties in that range accounted for 80% of launches.


While Rehda acknowledged a pressing need for affordable housing, only 38% of developers surveyed said they have up to 30% affordable housing components.

Their top five challenges, in order, are increased overall costs of doing business (by 20%), high land prices, cross-subsidy requirement from their more expensive products, inconsistency with surrounding property values, and a lack of incentive as only low densities are permitted.

According to FD Iskandar, the population in Greater Kuala Lumpur is expected to grow by 40% to 10 million in 2020, so there is a need for a million new homes in the next six years, or 166,000 new homes per annum.

Meanwhile, Rehda expects prices per sq ft of new launches to be stable over the next 12 months. “None of the areas have seen a drop in pricing. It’s only that the types and prices launched this quarter compared with the last quarter are different,” said Rehda deputy president Datuk Soam Heng Choon.

Some 45% of 152 Rehda members surveyed said they had a neutral outlook for 2H14 while 33% of them said they were pessimistic. Meanwhile, 20% of them said they were optimistic about the next six months’ prospects, while none was very optimistic.

“Based on the survey, the majority have a neutral outlook. What we can deduce is that demand will be flattish as there will be a mismatch of the loan margin required versus the percentage that is approved by the banks,” said Soam.

The percentage of pessimistic developers rose to 41% when surveyed about their outlook for 1H15, while the same number of developers held on to their neutral outlook.

In contrast, the number of developers who felt optimistic about 1H15 dropped to 13%.

Nonetheless, Rehda expects launches to gain momentum in 2H14 as developers seek to address the pent-up demand from buyers rushing to beat the imposition of the GST on April 1 next year.

Despite the lack of optimism, half of the developers surveyed said they planned to expand in the next one to two years.

At the top of their list is increasing their land bank, followed by increasing staff and operations, finding new joint-venture partners, venturing into other states and overseas.

Source: The Star


PM Najib unveils Rent to Own scheme

PR1MAPrime Minister Najib has launched the Rent to Own scheme yesterday in order to help PR1MA applicants who are struggling to obtain housing loans.

“This programme is to help applicants who are rejected by the bank, such as those without permanent jobs or a bad track record.”

“Hence we agree with the bank to offer the Rent to Own scheme that enables the applicant to only pay rent within 20 to 30 years and the house will belong to them,” he said after the ground-breaking ceremony for the PR1MA project in Seremban Sentral.

Located in the rear of the Seremban railway station, the PR1MA project in Seremban Sentral comprises 3,196 low-cost homes. 1,504 units will be built in the first phase, while the second phase will involve 1,692 units.

Depending on their financial capability, buyers can select a home with two rooms and one bathroom, or a house with three rooms, two bathrooms, living room and kitchen.

The project is targeted for completion within two to three years, noted Najib, adding that the government plans to build another 2,000 PR1MA homes near the Keretapi Tanah Melayu (KTM) depot site and an additional 10,000 in Labu, Seremban.

Seremban Sentral PR1MA is a collaboration between PR1MA, the state government, Keretapi Tanah Melayu (KTM), Railway Assets Corporation (RAC), Public Private Partnership Unit (UKAS) and private developer Brunsfield International Group.

Aside from affordable homes, the 23ha Seremban Sentral also features a hotel, public amenities, office buildings, shopping centre, medical facilities, recreational parks and educational campus.

Image Source: hmetro.com.my

not affortable

Property prices nearing ‘not affordable’ level

not affortableKUALA LUMPUR: Malaysians believe current property prices are close to being “not affordable at all”.

In a survey, the “Asia Property Market Sentiment Survey 2H 2014” conducted by iProperty Group, the respondents gave an average rating of 7.29 (one being very affordable and 10 being not affordable at all) to their views on current property prices in Malaysia.

The new rating is a slight improvement from the average rating of 7.5 given in the previous survey for the first half of 2014 (1H14), said the online property portal.

Understandably, respondents said affordability and rising house prices remain the top concerns of the property market, followed by stringent home financing and high interest rates.

iProperty’s latest survey, its sixth iteration since it was first conducted, serves as a forecast of consumer sentiment for 2H14.

It polled over 5,000 Malaysians, 76% of whom were aged between 20 and 40, while 70% had an annual household income between RM30,001 and RM180,000.

Respondents considered location the main consideration when purchasing a property, followed by price and security, which is slightly different from the 1H14 survey which saw them choosing properties based on location, price and size.

“The change from size to security resulted in a 70% preference for private condominiums and serviced apartments in 2H compared with 62% in 1H14,” iProperty chief executive Georg Chimel told a news conference yesterday.

The survey also found that 47% of respondents believe transactions in the property market for the next six months will remain the same, while 37% believe the market will pick up.

Petaling Jaya, Ara Damansara and Puchong in Selangor, Iskandar Malaysia and Nusajaya in Johor, George Town in Penang as well as Melaka and Nilai, Negeri Sembilan are among the places Malaysians see as hotspots for property purchases, the survey showed.

However, Chimel said 27% of respondents feel properties in Iskandar Malaysia are too expensive, while 40% view Iskandar as a safe and good investment, but will wait a few years before purchasing.

In addition, 74% of respondents feel that foreign buyers are driving up house prices, despite the RM1 million floor price for foreign home ownership that has been enforced in Kuala Lumpur, Labuan and Putrajaya on March 1, followed by Johor on May 1.

“The floor price increase automatically requires foreigners to purchase more expensive properties, which, in the mind of the public, increases the average property prices that have been transacted,” said Chimel.

Meanwhile, 85% of respondents feel that the imminent goods and services tax will make properties more expensive, while 55% think it will affect their decision to purchase.

Source : The Edge & Astro Awani