Malaysia's property market seen next high in 2018

SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng (filepic) believes the market would bounce back as soon as the Government decides to “boost the sector,” namely, measures promoting the industry. “We hope the market will return within the next two years,” she said.

‘Next market high’ for property seen in 2018

PETALING JAYA: A combination of pent-up demand, improved buyer sentiment and overall business environment is expected to spur the local property market to its “next market high” in 2018.

PPC International Sdn Bhd chief executive officer Siva Shanker said conditions have been improving albeit slowly, with the implementation of the goods and services tax (GST) not really having much of an impact as originally expected.

“GST came and went and everyone is still carrying on. But the general perception is that business is slow. When things are slow, the first thing that suffers will be property, because it is a big-ticket item.”

Siva said property transactions, not prices, have been spiralling since 2012.

“But we believe things (transactions) are improving already and we expect 2018 to be the next market high,” he said.

SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng believes the market would bounce back as soon as the Government decides to “boost the sector,” namely, measures promoting the industry.

“We hope the market will return within the next two years,” she said.

Chan admitted that property transactions this year have been a little slower compared with the same period in 2014.

“From our marketing activities and road shows so far, it (transactions) has reduced compared with last year. There’s a bit of hesitation.

She added that the central bank’s tighter lending rules has had an impact on transactions.

“Year-to-date bookings have been about the same as last year, but conversions into sales are not the same.”

An AmResearch report last week reaffirmed an “overweight” outlook for the local property sector.

“While we expect residential prices to continue moving sideways in 2015, a return of pent-up demand towards end-2015 – barring external shocks – is possible as the market is still awash with liquidity.

“Besides that, property cooling measures and post GST impact appears to have already been priced-in, given the steep 52% discount that property stocks within our coverage currently trade at vis-à-vis their respective net asset value.”

In terms of property sub-segments, Siva feels that high-end condominiums are oversupplied within the Klang Valley.

“With that, owners will have problems selling. The landed (residential), industrial and commercial sectors, I believe, will be alright.”

He said the office subsector was also oversupplied - but added that it wasn’t a worrying situation.

“In the short-to-medium term, the oversupply will be absorbed. This is normal. Not every building will be fully taken up - it usually takes a while to get tenants anyway.”

In terms of pricing, Siva said secondary property prices were between 20% and 40% cheaper than new launches.

“It’s the secondary market that’s doing better now. But the focus should be on affordable homes, namely those below the RM500,000-range.

“Landed property within this price range is grossly undersupplied,” he said.

Source: By EUGENE MAHALINGAM The Star/Asia News Network

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Deterrent action for housing developers mooted

DEVELOPERS who carry out earthworks without approvals or permits from the Penang Island City Council (MBPP) could face the possibility of having their applications for future development projects frozen for five to 10 years.

Bukit Setiawangsa concrete embankment has collapsed due to soil erosion

Local Government Committee chairman Chow Kon Yeow (DAP - Padang Kota) suggested that stringent action be taken against such errant developers.

“The state government or the city council will freeze all future development applications of such developers between five and 10 years, if they are found to be carrying out illegal earthworks.

“Such action needs to be taken against these ‘environmental violators or sinners’ to curb illegal hill clearing,” Chow said during his winding-up speech at the state assembly yesterday.

He said if such measures were imposed, developers would be more concerned and serious about getting valid approval for earthworks.

Chow added that MBPP was also seriously looking into the hill clearing issue at Bukit Relau.

“MBPP has met General Accomplishment Sdn Bhd (GASB), which is responsible for the mitigation works on the hill, 13 times since April 26 last year.

“The city council has issued order notices to the company for more mitigation works .

“GASB has carried out hydro-seeding and close-turfing works to minimise the soil erosion on the hill.

“The company has also been ordered by MBPP to supervise the close-turfing, trench and sediment pond at the hill, so that the soil erosion can be controlled,” he added.

Besides that, Chow said a stop- work order had been issued to the developer who had been carrying out illegal earthworks near the Teluk Bahang Dam on Jan 12.

- The Star Community by Christopher Tan, Logeiswary Thevadass and Crystal Chiam  Shiying at Penang State Assembly

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Erosion worsens on Bukit Relau despite slope repairs

GEORGE TOWN (Nov 15 2013): Mitigation works on Bukit Relau, where massive illegal clearing of greenery has stirred widespread condemnation from Penangites, have not been effective, as shocking new photographs of the aggressive erosion have emerged.

This was confirmed during a site inspection by the Penang Island Municipal Council (MPPP) on Nov 2 after the scars on its slopes had appeared to worsen despite the landowner having been convicted by the courts.

The Penang government has however denied that the controversial clearing activity has continued, saying that new damage to the hill are due to landslips and erosion.

Chow Kon Yeow, the state executive councillor for local government, today refuted allegations that the earthworks activity has expanded.

He explained that the apparent increase in the hill’s scarring is due to landslips that happened following mitigation works on the slopes.

“The earlier mitigation has not been effective,” he said. “The grass did not grow well. And the rainy season in September and October caused erosion and landslips.”

He added that MPPP engineers together with MPPP secretary Ang Aing Thye and representatives of landowner General Accomplishment Sdn Bhd (GASB) were present at the site visit on Nov 2 to inspect the conditions.

GASB has since been asked to engage a landscape consultant to improve the situation.

“The landowner must then submit an earthworks plan to the MPPP to approve the mitigation works,” he said.

Chow said this during a visit to the site of the Briksa community park in Farlim where the MPPP is expected to complete landscaping and building of recreational facilities by next month at a cost of RM649,930.

Deep gullies seen at site

Meanwhile, MPPP councillor Dr Lim Mah Hui expressed alarm at photographs of deep gullies taken by a group of hikers and nature lovers at the site last week.

“From the pictures they took, one can see that the erosion is bad,” he said. “It is so clear that they are not just landslips. There are gullies that are about six and seven feet deep.”

“I have raised this matter before in MPPP but nothing is being done. I am a lone voice in the wilderness,” he said. “The media should do its part to highlight this matter.”

Lim lamented that six months have passed since the general election and nothing significant has happened on the site even though Batu Uban assemblyman Dr T Jayabalan and Seri Delima assemblyman RSN Rayer have brought this matter up with the state.

About six acres cleared

When contacted, Tan Sri Tan Kok Ping, one of the four directors of GASB, said the mitigation work done following the stop-work order by MPPP was only to cover the exposed soil with white and blue plastics but that was not adequate.

“Due to the sun, rain and wind, the plastic covering came off and withered. We stopped covering the soil in September to submit the rectification plan,” he said

“I know the erosion is bad because the covers came off. But every time it rains, about six to seven workers are there daily to check on the condition and make sure the lower parts of the area are not badly affected,” he stressed.

He added that the cleared land spans about six acres but the remedial works would involve 30 per cent of the land.

“This will ensure erosion and soil run-off do not occur in future. We will listen to the consultant’s advice on whether to plant grass or trees and spend as much money as needed to repair the damage caused by the clearing,” he added.

The controversy over the clearing, which can be seen from many parts of Penang, blew up in April.

On July 11, GASB was sentenced to a fine of RM30,000, in default of three years jail, by the Penang Sessions Court.

The maximum sentence for the offence is jail term not exceeding five years or a fine of not more than RM50,000, or both.

The deputy public prosecutor has since filed an appeal so that a heavier sentence can be meted out.

by Himanshu Bhatt and Sangeetha Amarthalingam The Nation Malaysian Insider

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Getting titles right in the engineering field in Malaysia

RECENTLY, the Institution of Engineers Malaysia (IEM) received an enquiry on the usage of the title “Engr.” for members of the institution.

http://www.myiem.org.my/default.aspx?redirect=oldsite

The title “Ir” was first introduced by IEM in the early 1970s for both the graduate and corporate members of the Institution. The amendment to the Registration of Engineers Act in 1987 provided for the use of the title “Ir” to registered professional engineers only.

With this development, IEM had to amend its constitution to disallow the use of the said title. Hence, the title “Ir” which once signified the membership of the Institution was taken away.

Since then, IEM has strongly felt that there was a need to provide an identity for the members of the Institution. Many suggestions and calls were made for the institution to look into the issue of a suitable title for its graduate and corporate members who are qualified engineers with accredited and recognised engineering degrees.

Therefore in 2006, the use of the pre-nominal “Engr” for the graduate and corporate members was introduced with the aim of not only giving due recognition and honour to the engineers, but also encouraging the younger generation to take up engineering.

However, in 2009, IEM further amended the constitution to allow only graduate members and corporate members, who are not professional engineers, to use the title “Engr” before their names. This will clearly distinguish between the title “Ir” for professional engineers and “Engr” for IEM members who are not professional engineers.

Moreover, the usage of the title “Engr” shall be used in conjunction with the post-nominal of “FIEM”, “MIEM” or “Grad IEM”, whichever is appropriate. As such, the use of pre-nominal “Engr” shall not be construed to imply that the person is a professional engineer.

With the progress of society and the Government’s aspiration for Malaysia to achieve the status of a developed nation by 2020, IEM shall always support the Government’s vision to produce more qualified engineers who will play a very important role in nation-building.

IEM graduate members can use the title “Engr” with pride and confidence as their degrees have been vetted and recognised by the Institution.

The admission as graduate members of IEM is only accorded to the holders of engineering degrees accredited under the Washington Accord. In so far as the approving authorities are concerned, the title “Engr” does not pose any confusion because all submission of plans need to have the stamp of a professional engineer (P.Eng.) with the title “Ir” as required by the Board of Engineers Malaysia (BEM).

http://www.bem.org.my/v3/index.html

 

“Engr” is now a title where members of the institution who are not professional engineers can be addressed.

This will give high recognition and honour to the engineers and promote the growth of the engineering profession for the progress of the nation.

Currently, there are more than 10,500 members of IEM who are entitled to use the title “Engr”

By IR YAM TEONG SIAN Secretary Institution of Engineers, Malaysia

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China says: we can build High Speed Rail by 2020; Malaysia and Singapore push back deadline

Making connections: Liow (left) speaking with Liu Yunshan, secretary of the Secretariat of the Communist Party of China Central Committee. - By Patrick Lee The Star/Asia News Network

KUALA LUMPUR: China is confident that it can build the Kuala Lumpur-Singapore High-Speed Rail (HSR) line by 2020.

China embassy’s economic and commercial counsellor Wu Zhengping expressed confidence that the original target date could be met – within certain parameters.

“Technically, it’s possible if Chinese companies are awarded the contract. We will be able to achieve that by 2020. We’ve still got five years,” he told The Star in an interview.

He was commenting on reports that the HSR line would not meet its original target date.

Wu pointed out that it took a mere three years to build the 1,318km Beijing-Shanghai HSR line, which was completed in 2010. It opened to the public in June 2011.

The 350km Kuala Lumpur-Singapore line is expected to cost about RM40bil while there are matters between Malaysia and Singapore which are expected to be ironed out by year end.

Wu said China was determined to build the line, adding that it would fall in with its plans to link Kunming to Singapore via some 2,700km of rail.

Calling it the “Pan-Asian Railway”, he indicated that this would cut through Laos, Thailand and Malaysia.

He added that not all of this railway might be high-speed lines, especially in Laos, which has rough, mountainous terrain.

Wu said the HSR traffic might not be enough to justify building such a line but spoke of an economic “spillover effect” if it were to happen.

Chinese companies here, he added, might even start to develop areas near the Singapore-Kuala Lumpur line.

“If China is awarded the contract (in Malaysia), we’ll encourage Chinese companies to locate their factories and firms along the railway line,” he said.

He also said there were plans to build high-speed train cars in Malaysia should China be given the contract.

Asked what would China do if Chinese companies were unable to win the HSR bid, Wu said Malaysia had given assurance that this would be “open, fair and transparent”.

Transport Minister Datuk Seri Liow Tiong Lai, who is in Beijing on an official visit, said while he welcomed the offer from China, the open tender would only be called after details of the project had been thrashed out between Malaysia and Singapore.

He said a memorandum bet­ween the two countries would be signed by end of this year, adding that it would then take another year to complete the technical study.

“By then, only we would know what is the actual period (needed to build the line).

“It is too early to say that the project can be completed by 2020 when we do not have the details yet,” he said.

Tell us: Which country would you like to get your fast rail from? 

 

Singapore, Malaysia push back deadline for high-speed rail link -
Reauters

SINGAPORE - Singapore and Malaysia have decided to push back an initial deadline of 2020 for the completion of a high-speed rail link between the wealthy city state and Kuala Lumpur, their prime ministers said on Tuesday, citing the complexity of the project.

The Southeast Asian neighbours said they hoped to reach agreement by the end of the year on a new timeline for the railway link, which will cut travel time between the cities to 90 minutes.

"We looked at the original timeline of 2020, and think it is not really realistic," Singapore Prime Minister Lee Hsien Loong told a news conference, adding that the project was very challenging to carry out.

"We have to take a bit more time to do it well, but to do it without delay."

Singapore and Malaysia set a completion date of 2020 when they announced plans for the high-speed rail link in February 2013, but gave no estimate of the project cost.

Hailed at the time as a major breakthrough by some analysts, the announcement reflected an improvement in ties between the neighbours. Singapore was once part of Malaysia but they separated acrimoniously in 1965, clouding diplomatic and economic dealings for decades.

On Tuesday, Malaysian Prime Minister Najib Razak said construction of the link with the Malaysian capital would take five years, design one year and the tendering process another year. "We both decided that bilateral issues pertaining to the high-speed rail project will be settled by the end of the year," Najib said.

Can Malaysia's household debt at 87.9% in 2014 be reduced to 54% ?

BEING a teenager, my granddaughter started to pick up interest on how the economy works, what are the real assets and liabilities in one’s financial planning. As the topic itself can be slightly “dry”, I made an attempt to discuss it in a way that was easier for her to digest.

“Our national household debt to GDP ratio edged up to 87.9% last year. Is the number alarming?” she asked one day.

“It depends. We have good debts and bad debts in life. For example, 10 years later, our new cars may have depreciated more than 80% and our new clothes would have been worn out. Those are liabilities. On the other hand, houses are assets as they will appreciate in the long run. Debts which are backed by appreciating assets are considered good debts,” I said.

As she nodded in agreement with my simple explanation of good debts and bad debts, her question has piqued my curiosity to look into the details of our household debt.

Overall, is our nation having more good debts or bad debts?

Bank Negara report shows that our household debt was at RM940.4bil or 87.9% of GDP as at end of 2014. Residential housing loans accounted for 45.7% (RM429.7bil) of total debts, hire purchase at 16.6%, personal financing stood at 15.7%, non-residential loans were 7.7%, securities at 6.5%, followed by credit cards and other items at 3.9% respectively.

At first glance, our residential housing loans were the highest among all types of household debts. However, a recent McKinsey Global Institute Report highlighted that in advanced countries, mortgages or housing loans comprise 74% of total household debt on average. As a country that aspires to be a developed nation by 2020, our housing loans that stand at 45.7% is considered low. In other words, we are spending too much on other depreciating items instead of appreciating assets like houses.

If advanced economies, which are usually consumer nations, have only 26% debts on non-housing loans, we shouldn’t have as high as 54% loans on items such as hire-purchase (which are mostly cars), personal loans, credit cards and others.

If we were to follow the household debt ratio of advanced economies, our housing loans of RM429.7bil should be at 74% of total household debts, and other loans should be reduced from 54% to 26%, i.e. from RM510.7bil to RM150.9bil. With such reduction, total household debt would be slashed significantly from RM940.4bil to RM580.6bil (existing housing loans plus reduced non-housing loans), the amount would be at 54.2% of GDP instead of 87.9%.

I am wondering why we can’t have a household debt to GDP ratio of 54.2% as illustrated above. Are we spending too much on depreciating items?

Non-housing loans comprise mainly borrowings for cars, personal loans and credit cards. Car value depreciates about 10% to 20% per year based on insurance calculation and accounting practice. Borrowings for personal loans and credit card are also likely to depreciate over time which can be dubbed as “bad debt”.

Perhaps it is time for the Government to introduce massive cooling off measures for non-housing loans in order to curb bad debt in our household debt.

According to our Deputy Urban Wellbeing, Housing and Local Government Minister, our homeownership rate currently stands at 50% and the Government strives to increase the number with more affordable homes. As a comparison, almost 85% of Singaporeans are homeowners.

We can expedite the above vision if more stringent measures are imposed on non-housing loans, it will free up more resources for household financial planning. The rakyat should be encouraged to secure a roof over their heads with effective execution of affordable housing policy by the Government.

It is time to re-look our debt categories and reallocate our resources appropriately. If we are willing to cut back on cars, clothes, shoes and other depreciating items, reducing a household debt to GDP ratio of 54.2% is not only an aspiration, but an achievable reality.

By ALAN TONG Food for Thought

And the more beneficial effect is, more rakyat will have the financial resources to own a house, which is both a shelter and an appreciating asset.

■ FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

 
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