Malaysian property market sentiment after GE13

With the dust having settled after the 13th General Elections, all eyes are now on the freshly elected government for strategies for the real estate sector.

While other issues such as increasing the minimum purchase price for foreign buyers and reducing lending rates and stamp duties are also on the wish list of most Malaysians, latest figures released by PropertyGuru Group highlighted a continuing call for the government to address the issue of home affordability.

In the latest Property Sentiment Survey (Q2 2013) by the leading online property group, 76% feel that the government is not doing enough to curb the current price increase. This is more acutely felt in regions that have experienced a high foreign demand for residential properties, namely Johor (69%) and Kuala Lumpur (81%).

While 35% out of the total of 851 respondents claim that the outlook of the local property market will remain positive, four in five expect prices to increase further in the next six months.

Respondents also seem to favour stricter market restrictions on property ownership by foreigners, with nearly half supporting an increase in the minimum purchase price from RM500,000 to RM1 million for overseas buyers and investors wanting to buy properties in Penang and Johor.

Despite the growth in price, 74% of respondents intend to buy at least one property type (either residential or commercial) within the next six months, an increase of 10% as compared to the previous quarter. This is because of the perception that the more expensive a property becomes, the higher capital appreciation it will bring in the long term.

“There is a dilemma at play for Malaysians. As they see property prices spiral up, they also see their assets appreciating in value. But in the long term, they are also finding it more challenging to own properties,” Added Value Singapore managing director Raymond Ng says.

“Affordability is also a bigger concern for the younger adult population. There is no doubt that there are enough local funds to fuel the market and allow the government to control prices a bit better without relying on foreign investments. The challenge is finding the sweet spot that will entice locals to invest locally while not turning away all foreign investments.”

The survey was conducted by PropertyGuru Group in collaboration with Added Value-Saffron Hill, a Singapore-based independent professional research agency.

Conducted since 2010, it is the only independent local survey to measure property sentiments and expectations about the property market amongst Malaysians.

It is also carried out across the group’s four key target markets of Singapore, Malaysia, Indonesia and Thailand, attracting 4,062 online respondents aged 21 to 69 who are influencers or decision makers on property.

“The results are consistent with figures from previous quarters where 75% of Malaysians find property to be expensive.

Kho says Malaysians want more affordable homes and are looking to the government to deliver. 

“The message is clear; Malaysians want more affordable homes and are looking to the government to deliver. PR1MA is a step in the right direction, but Malaysians want more measures and existing measures to be expedited, PropertyGuru.com Malaysia country manager Gerard Kho says.

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 Our cars are costing us our homes!

Right move for the planned car prices reduction 20% ~ 30% in Malaysia 

Car prices in Malaysia will be reduced gradually

Right move for the planned car prices reduction 20% ~ 30% in Malaysia

 

The Government's plan to reduce car prices gradually by between 20% and 30% within the next five years is the best mechanism for consumers and the automotive industry without disrupting the ecosystem, said an industry expert.

“Five years is the right timing to reduce car prices because a sudden reduction would impact the second-hand car industry,” Malaysia Automotive Institute chief executive officer Madani Sahari said.
He said although the car price cut plan had recently received wide publicity, the exercise itself started last year with some popular car brands reducing their car prices by 2% to 5%.

“The Government has had the car price reduction plan in the yet-to-be-announced National Automotive Policy since 2011 and had started to implement it since last year in a silent way,” he said on the sidelines of a forum on “Business Time Insight The National Automotive Policy” here yesterday.

On Tuesday, Prime Minister Datuk Seri Najib Tun Razak reiterated the Government's commitment to gradually reduce car prices by 20% to 30% within the next five years.

Madani said the car price reduction did not involve a cut in the excise duties, as Malaysian companies in reality were only paying about 40% of excise duties, even though it hovered at around 65%-105%, depending on the segment, due to value-added activities undertaken in the country.

“Completely-knocked-down (CKD) cars which are assembled in Malaysia basically have value-added activities, and are therefore receiving the privilege of lower excise duties. “Based on our calculations, most of our CKD cars enjoy excise duties in the range of 40%,” he said. Meanwhile, Volkswagen Group Malaysia managing director Dr Zeno Kerschbaumer said the car price reduction policy showed the Government's effort to put consumers into the focus of their attention.

“This perfectly matches our (Volkswagen's) policy to continuously bring the latest technology to customers at the best price possible. I think it's a big message to consumers and gives them the confidence that the Government was giving the consumers interest in the focus of their policy,” he said.

He said the move was also in line with the principle that the customers had to drive the policy. “We need to leave all our options to the customers, and the customers in the end need to decide what better fits their requirements,” he said. - Bernama

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Car prices in Malaysia will be reduced gradually 

Car prices in Malaysia will be reduced gradually

Car prices will be reduced gradually until 2017, says International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

As outlined in the 13th general election of the Barisan Nasional manifesto, Mustapa said the government had promised to trim car prices between 20 per cent and 30 per cent over five years.

“Infact, since October last year, the price of 10 popular models in the country have come down an average 7.3 per cent,” he told reporters yesterday after attending the ministry’s monthly gathering, the first after Mustapa was re-appointed to the Cabinet.

He said the price reduction was part of the market process as a result of more efficient and competitive players in the automotive industry.

Mustapa said the price reduction exercise should be done in an orderly manner so as not to affect the industry’s growth and existing jobs in the automotive and related industries.

“As such, we have had discussions with automotive manufacturers and they are aware of ongoing negotiations to conclude a free trade agreement which would be implemented soon,” he said.

JF Apex Securities in its research note on Monday said the ruling coalition will likely take some time to implement car price reduction considering the potential outcome which would dampen the national carmaker, Proton’s market share.

The research house said that a feasibility study needed to be done on the overall impact so as to avoid disruptions to the automotive ecosystem.

“We do not foresee changes for months to come while awaiting update from the revised National Automotive Policy,” said JF Apex.

In the meantime, Mustapa said industry players must now be ready to step up their competitiveness edge in tandem with the industry which was becoming more competitive in Malaysia and abroad.

Besides bringing down car prices, the government was also reducing traffic congestion by setting up a more efficient transport system in the country, he added. — Bernama

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Right move for the planned car prices reduction 20% ~ 30% in Malaysia

Too many graduates in Singapore, multiple skills are important

Singapore leaders start to talk about the importance of having multiple skills rather than just obtaining a degree.

A NUMBER of political leaders have appealed to Singaporeans not to place too much faith on university degrees in an apparent effort to manage public expectations.

This is the clearest sign yet that the authorities are expecting a sustained period of relatively low economic growth and slower employment opportunities.

Singaporeans, especially parents, who have long regarded the university degree as a key to a good life will likely be shocked.

For decades, the government has been en­couraging youths to study hard or lose out in a competitive world. This apparently spells a change in education strategy.

It has also thrown more light on a baffling revelation made earlier by a senior Education Ministry official to American diplomats.

This revelation was that the global economy embraced by Singapore has made it much less conducive for over-educated societies.

Having a large number of graduates, once thought crucial for Singapore’s prosperity, is now considered not conducive to the changing manpower market, at least in Singapore.

However, none of the political leaders – the Prime Minister and three ministers – has mentioned another reason for the excess of graduates – the mass intake of foreigners.

Led by Prime Minister Lee Hsien Loong and National Development Minister Khaw Boon Wan, the leaders
are now advising Singaporeans to consider non-university routes to success.

Khaw said: “You own a degree, but so what? You can’t eat it. If that cannot give you a good life, a good job, it is meaningless.”

He added that Singapore could not have an entire nation of graduates.

“Can you have a whole country where 100% are graduates? I am not so sure. What you do not want is to create huge graduate unemployment,” he said.

Then it was the turn of Education Minister Heng Swee Keat, who said that a good qualification alone does not guarantee a career, let alone a job.

Thirdly, Acting Minister for Social and Fa­mily De­ve­l­opment Chan Chun Sing said it is not the degree or diploma that is most important for graduates, but the ability to learn a different set of skills.

“The soft skills in life have to be acquired and have to be continuously refreshed. If not, even with the best degree from the best universities in the world, we may find ourselves obsolete one day.”

They were taking the cue from Prime Minister Lee who had earlier told polytechnic students that getting a degree is not the only option. He encouraged them to work for a few years or start their own business.

“You will gain experience and understand yourself better and then be better able to decide what the next step will be,” he said at Ngee Ann Polytechnic’s 50th anniversary celebration.

All these political leaders have served to clarify a comment made by a senior education ministry official that the government does not encourage more Singaporeans to get higher education.

As revealed by Wikileaks last year, assistant director of planning Cheryl Chan told the United States diplomats that it would instead cap graduate enrolment rate at 20%.

The reason, she said, was: “The labour market does not require too many graduates.”

She also admitted that only 23% of Singaporean students who entered primary school would ever complete a four-year tertiary education, a figure far below that of the United States (50%) and Taiwan.

This gave confusing signals to a worried population, which probably ranks as one of the most enthusiastic in Asia about getting a degree for their children.

Many continue to make great personal sacrifices to help their children and are unlikely to abandon this just because of what the government says. The new emphasis is for multiple skills and drive.

So far, the government has not reduced the places in university but has instead increased them. The number of universities were raised to five with a total enrolment of about 13,250 students, with about a third being foreign students. Cutting down tertiary education is obviously not in the cards – but “discouragement” is now taking place.

The ruling party is dependent on the scholarship system to recruit its future leaders, and it is still bent on attracting bright foreign students to its shores.

In addition, nearly 18,000 Singaporeans are studying in foreign institutions, mostly in Australia, the United States and the United Kingdom. According to local media reports, the market is unable to absorb the large number of graduates coming onstream.

One report quoted a McKinsey & Co study as saying that almost half of the graduates are holding jobs that do not require a degree.

The over-supply is having a dampening effect on graduates’ salaries (again no mention of the foreign arrivals), it added.

In the past 10 years, undergraduate numbers have doubled.

The effort to get Singaporeans to abandon the paper chase for their children is almost like mission impossible. Many have begun to spend thousands of dollars a month on private tuition for their kids starting as young as seven years old.

What is the new drive aimed at? One possibility is that it is trying to reduce the number of below average students from joining the paper chase but still encouraging the bright ones to carry on.

Economically, Singapore has barely escaped another technical recession. A revised first quarter GDP shows a rise of 1.8%. Gone are the days of double-digit growth, probably never to return.

So what work can non-graduates do? One suggestion from Prime Minister Lee is: “Become hawkers.”

Singapore plans to build 10 large hawker centres. It’s a chance to develop entrepreneurial skills in a business no Singaporean customer can avoid for long – if the products are good.

INSIGHT: DOWN SOUTH
By SEAH CHIANG NEE

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High salary and high performance require book smart and street smart!

Heera: ‘Qualifications bring credibility to the job’.

WHEN it comes to hiring suitable talents, it would be ideal to have a potential employee with the relevant qualifications as well as one that has practical experience.

But what if there was just one vacancy available – and the organisation had to choose between the two candidates? In a hypothetical situation between a candidate that’s “book smart” (has the relevant qualifications) and one that’s “street smart” (has the practical experience), who would be the more likely choice?

More importantly, is a high-paying job unattainable for those without formal education? Or is there still a chance for a candidate that does not have that oh-so-important diploma or degree?

The book smart candidate

Heera Training and Management Consultancy principal consultant Heera Singh believes a candidate with the relevant qualifications would generally be “technically competent” in that job.

“It certainly brings credibility to the job. For example, if someone has a Masters in Human Resources (HR) Management, then the qualification enhances his credibility,” he tells StarBizWeek.

“It also assists greatly in the recruitment and selection of employees. For example, if a job is advertised and does not specify technical qualifications, but only states practical experience required, then every Tom, Dick and Harry will apply and this will ensure lots of extra work for the HR department,” Heera says.

Leaderonomics finance and human resources leader Ang Hui Ming concurs that having the right qualifications adds more credibility to an individual seeking employment – at least on paper.

“Generally, the employee might probably have a wider knowledge-base theoretically of the function he is hired for and has some form of certification of his ability to understand at least the basic concepts of the function,” she says.

However, it has often been said that what one learns in theory can be quite different in practice.

Heera believes that the “book smart” candidate, though technically qualified, still lacks experience – an important element that may be vital in certain jobs.

Ang: ‘Being technically qualified doesn’t mean they can do the jobs well’.

“Being technically qualified does not mean that they can do the jobs well. They may be more academically inclined rather than hands-on.

“They may be technically qualified but may not like the job. Many people, for example, go to university and do courses that their parents want them to do, or courses which their friends are doing. All they want to do is to get their qualifications.”

Ang, meanwhile, feels that not having the relevant experience is not a big deal – as it is something that can be acquired over time.

“There is no real disadvantage, experience is to meant to be built anyway.

“At most, it’s the lack of reality. If a person is all academic, it is uncertain how he or she will handle real life situations where the theories they learn needs to be adapted to the situation, environment and culture of any given place and time.”

The street-smart candidate

The advantage of hiring an employee with experience means that they can do the job straight away with minimal disruptions, says Heera.

“There is minimum need for any job orientation and at interviews, you can ascertain the type of practical experience they have and see if it suits or meets your job expectations.”

Ang concurs: “Generally, the employee might have deeper expertise in the function and would have experienced real-life situations in the function. This makes the person more adaptable and adept to handle similar natured situations more wisely and calmly.”

“The type of experience is important. If they have the wrong type of experience, then it is of no use to the company. For example, if a person has worked in a HR capacity in a government department, then his experience may not necessarily gel with what is wanted in the HR department in the private sector.

“Experience can be a bad teacher as it is always difficult to mould a person who has the experience but has picked up some bad habits along the way.”

Ang feels there’s no real disadvantage to hiring someone that has no paper qualifications but is oozing with experience.

“At most, probably a possible lack of what’s new in the market, or what’s happening on a global scale or what new technology is out there that can better equip him or her in the function.

“This is only an assumption as people that are hands-on can still learn market trends and future technology if they read up and do research on their own. There is just no paper qualification – that’s all.”

Does it really matter?

According to an article on online investment site Investopedia, “Is It Better To Be Book Smart Or Street Smart,” its author, Tim Parker, points out that one does not need to have the relevant paper qualifications to be truly successful.

“Steve Jobs, co-founder of Apple, is widely regarded as one of the best businessmen of his day. He didn’t have a college degree and neither did Steve Wozniak, the other founder of Apple.

“Other successful businessmen without college degrees include Dell Computer founder Michael Dell, Microsoft founder Bill Gates and Virgin Brands founder Sir Richard Branson. People all over the world have found success without a college degree,” he writes.

But is that the rule or the exception, he then asks.

“Unemployment data shows that more than 8% of the population looking for a job (in the US) can’t find one.

However, for those with a bachelor’s degree, the unemployment rate is only 3.9%. The unemployment rate is 13% for people without a high school diploma.

“A college degree doesn’t guarantee success, but Bureau of Labour Statistics unemployment statistics show book smarts more than double your chances of finding a job.”

Of course, having an employee with both the relevant paper qualifications and practical experience would be the optimum choice, naturally.

“This would definitely be an ideal combination,” says Heera.

Ang says having both qualities would indeed be a plus point, adding however that having both relevant qualification and practical experience does not make one a best employee.

“It’s a person’s character, values and attitude that makes him or her a good employee. Qualifications and experience are all things that can be accumulated as long as one has the right attitude and desire.”

By EUGENE MAHALINGAM eugenicz@thestar.com.my