The National House Buyers Association (HBA) has criticised the apparent collusion between some developers, valuers and banks for pushing up property prices to levels which it called “exorbitant” and said that stronger measures are needed to deter speculation.

This is a very good article about the current 'exorbitant' property prices in Malaysia. All credit goes to Lee Wei Lian (The Malaysian Insider). Happy reading!

‘Unholy alliances’ to blame for exorbitant property prices, says HBA
By Lee Wei Lian
May 04, 2011

The association recommended that the government implement stronger measures to deter speculation. — world-stay.com pic

KUALA LUMPUR, May 4 — The National House Buyers Association (HBA) has criticised the apparent collusion between some developers, valuers and banks for pushing up property prices to levels which it called “exorbitant” and said that stronger measures are needed to deter speculation.

HBA said in a statement that in addition to low interest rates and easy credit which had fuelled speculative activity, greed had taken over the market.

“A ‘unholy alliance’ exists between certain developers, valuers and banks,” said HBA.

“In an environment of hot demand, the banks work in cahoots with developers assisted by those wayward valuers. Our ‘teh tarik syndrome’ is also very relevant. When the price of condensed milk increases by 20 sen, the entire cost ‘teh tarik’ increases by 20 sen. Similarly, when the cost of construction increases by 20 per cent, the equivalent cost of housing increases.”

The association suggested that the government implement stronger measures to deter speculation as the 70 per cent loan-to-value ratio (LVR) mortgage cap introduced would be of limited effect.

“For those in the speculation business, the 20 per cent reduction in LVR will not really deter them,” said HBA.

It gave the example of a RM300,000 house, which would now require a 30 per cent downpayment, but this would be based on the subsequent progressive payments for a property under construction, after which the end-financing loan of 70 per cent kicks in.

“If he (the speculator) can flog the house off at a profit at this stage, he does not need to incur an additional sum to his housing loan,” HBA pointed out.

“Speculators or maybe ‘syndicates’ are also cash rich because of the roll-over system they are using. In other words, whatever profit they earned from the previous house, they put into the new house, thus the 30 per cent up-front is not a major deterrent factor. Those who buy en-bloc may feel the heat but when collaborating with their ‘friendly’ developers/ builders, terms and conditions may be ‘cushion off’.”

The association also called for the sliding scale Real Property Gains Tax (RPGT) rate to be reintroduced.

This would entail a one-time RPGT exemption after which the next two properties should be taxed starting at 30 per cent for properties disposed of within two years and a reduction to zero per cent for properties disposed after five years.

For third and subsequent properties, HBA is proposing that a 30 per cent flat rate RPGT would apply.

The association also proposed that a quota of low-medium and medium-cost houses priced between RM250,000 to RM550,000 be imposed on developers similar to the 30 per cent quota for low-cost houses.

“It has always been the Government’s aspiration for every citizen to have a roof over their head and the Government should continue to push this agenda,” said HBA.

The high prices of property in urban areas prompted the Najib administration to introduce a first-home ownership scheme in March in addition to the loan-to-value ratio cap in a bid to stave off discontent.

The measures pale in comparison, however, to efforts seen elsewhere in the region, such as China and Singapore.

The Chinese government last year introduced curbs on foreigners buying property and raised the minimum downpayment for first-time buyers to 30 per cent from 20 per cent and banks were ordered to suspend mortgages on third homes and above in some cases — in addition to hiking interest rates three times since October.

Singapore, meanwhile, raised stamp duty on new properties to as much as 16 per cent of the sale price to be paid by the seller if the house is offloaded within a year of purchase.

The amount that banks can lend for a second property has also been lowered to 60 per cent of the home’s value.

Source : The Malaysian Insider

Unduk Ngadau 2009 ~ Ms. Rowena

Photo source : http://blog.malaysia-asia.my/

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The Malaysian Insider in its 1 March 2011 edition reported that the property market is showing signs of decline, as indicated by rents and capital values for prime areas (I believe in Kuala Lumpur).

What about Sabah, in particular Kota Kinabalu?

This is the article as published in The Malaysian Insider. Enjoy reading...

Property market shows signs of slowdown
By Lee Wei Lian
March 01, 2011

KUALA LUMPUR, March 1 — The property market has either gone flat or is showing signs of decline, as indicated by rents and capital values for prime areas.

The market, especially the high-end segment, appears to be feeling the pinch of oversupply and the tightening measures on investment.

Figures in a report by property consultancy DTZ Research released in January shows that rental rates for commercial property were on a downward trend last year dropping from RM6 per square foot (psf) in the second quarter to RM5.97 in the fourth quarter.

Office occupancy rates also fell from 87.9 per cent in the second quarter to 86.4 per cent in the fourth quarter.

“The outlook for the (commerical property) sector is expected to remain soft in the next few years as it will take time to increase demand with these new initiatives while there is a substantial amount of new supply, most of which is of a speculative nature,” said the DTZ report.

Meanwhile the average capital value of prime condominiums declined slightly from RM600 psf in the third quarter to RM599 in the fourth quarter.

DTZ pointed out that Bank Negara had mandated a 70 per cent cap on the loan-to-value ratio (LVR) for a purchase of a third residential property, down from 80-90 per cent and this could affect the high end property market in the coming months.

“This (the 70 per cent LVR cap) will have some negative impact on the high-end segment where buying has been concentrated,” said the report.

Property agent Melvin Wong says however that the slowdown will not likely affect affordable properties in the RM300,000 to RM400,000 range.

“The 70 per cent LVR cap doesn”t affect first time home-buyers,” he said. “The government is trying to curb speculation in the higher end segment of the market and those are the properties which might see a slowdown.”

Read more here

You may want to read my earlier posts ...
1. 70% financing for third and subsequent Home Loan
2. Sabah Property Market is Promising
3. It is still a Buyer's Market
4. RM542M Sabah Properties Unsold

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Happy New Year 2011 !

Good news for properties owners whose land leases may be expiring soon!

The Sabah State government has reduced the premium on lease renewal. The additional premiums for extension of land leases on houses has been lowered by 80 per cent and that for commercial and industrial properties by 45 per cent.

According to the report in the Daily Express (published on 30 December 2010), the Land office has used the new premium rate beginning this year (2010). But the formula use to calculate the premium was not made public. (Anyone who has any knowledge on this may share his / her view in the comment section)

You may want to read my earlier posts on this subject

1. Premiums on renewal of leases 2

2. Premiums on renewal of leases 1

Here is the full report as published in the Daily Express on 30 December 2010...

45-80pc discount on renewals

Kota Kinabalu: Good news for owners of both residential and commercial-cum-industrial properties in the State whose land leases may be expiring soon.

The additional premiums for extension of land leases on houses has been lowered by 80 per cent.

And that for commercial and industrial properties by 45 per cent.

Chief Minister Datuk Seri Musa Aman said the Land and Survey Department here used the new premium rate beginning this year.

"Such low premium rate for renewing extension of land leases for homes proves the State Government is dedicated and committed to realsising the people's needs to own their houses for a longer period.

We want also to make sure the new premium rate will not burden the houseowners but accommodate them to posses their homes when their land leases are almost expiring," he said.

Read the full text here Show/Hide

Musa, who is also Minister of Finance, said this in his speech at the launching of Wisma Tanah dan Ukur by Head of State Tun Ahmadshah Abdullah at its hall here, Wednesday.

Wisma Tanah and Ukur on 5.1-acre site is the first headquarters of the Land and Survey Department since its inception in 1882.

The previous building was deemed unsafe for the staff to carry out their duties.

Hence, the new headquarter for the department, Wisma Tanah and Ukur was constructed and became operational in 2007.

Also present were Federal Deputy Minister of Natural Resources and Environment Tan Sri Joseph Kurup, Minister in the Chief Minister's Department Datuk Nasir Tun Sakaran Dandai, State Secretary Datuk Sukarti Wakiman, Federal Secretary for Sabah,s Datuk Mohamad Hatta and Sabah Land and Survey director Datuk Osman Jamal.

On changing land use from agriculture to housing, commercial and industry, Musa said the additional premium rate for such purpose has been reduced since April 2008.

The move was aimed at ensuring the property market is maintained at a level where the majority of Sabahans can afford to own and purchase them.

Through the Government Transportation Programme (GTP) under a lab for Bumiputera Sabah and Sarawak, Musa said the Government is committed to ensure Native Customary Right Land is issued with individual titles or communal titles.

"Through Sabah Land Information System (SALIS), the State Government will set up an Idle Native Land Bank to record land acreage about 140,000ha.

"This will facilitate implementing agencies like Sabah Land Development Board (SLDB) and Sabah Rubber Industry Board (LIGS) to make plans of developing the lands on commercial scale through a joint venture with the land owners. By doing this, such development plans on the idle land could have positive impact to enhancement of the people's socio-economic and State's economic growth," he said.

Therefore, Musa said the effort of Land and Survey Department to establish a Unit for State Customary Land is very timely to ensure the success of GTP under the Bumiputera Lab for Sabah.

He also commended the success of building Wisma Tanah dan Ukur that reflected the State Government's high commitment in ensuring efficiency and effectiveness of public delivery system, increasing land revenue and providing conducive working environment to the Land and Survey Department staff to give best service to the clients.

Musa said he was impressed with management level of the department in upgrading its services to public and reducing bureaucracies to expedite official land matters.

Among the services are shortening the time of processing land surveying for issuance of land titles, creating a new method for Temporary of Lease application for sand and stone extraction from the river and land.

This also includes, he said, speeding up processing work for land dealings registration using a system of Land Dealings Electronic Submission System (LADESS).

Without stating the amount, Musa also expressed satisfaction with the department's collection of land revenue collection for November, which was the highest ever achieved by the department.

He also called on the department to intensify its law enforcement on offences involving encroachment into State lands, illegal extractions of stones and sand, digging on land without permit and pollution to environment so as to safeguard the State's natural resources form further destruction.

Source : Daily Express

Through the sheer weight of his personality, Jose Mourinho willed Inter to unexpected glory with Italy's first treble victory.
Source : Yahoo! Sports

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In case you did not read today's news in The Star Online...

Lease extensions to 99 years


State governments can approve applications for renewal or extension of leasehold land for a period of not more than 99 years unless they require the land for public purposes.

Deputy Prime Minister Tan Sri Muhyiddin Yassin said all state governments had agreed to adhere to the new policy.

“The implementation of this policy would fulfill the needs of the rakyat who are worried about losing their land titles,” he told reporters after chairing the 66th National Land Council meeting here yesterday.

He said the policy, which was decided during the meeting, would be used as a guide with several conditions which include:


1. leasehold land under the categories “building”, “industrial” or “agriculture” for which owners can apply at any time to extend their lease and are not bound by the remainder of the lease period;
2. applicants are required to make simultaneous applications in order to surrender their land in accordance with Section 197 of the National Land Code and apply for alienation using Form Schedule 1 of the respective State Land Rules and existing rules and procedures under the National Land Code 1965;
3. extension of the new lease is not more than 99 years if the land is not required by the government for public purposes;
4. it is subject to imposition of relevant fees;
5. the new period of the lease is effective from the date of the registration of the new title; and
6. it is not contrary to any written laws that are enforced.


Source : The Star online (By IZATUN SHARI ~ Published on Thursday December 2, 2010)

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Have you checked the unexpired lease period of your property?
Do you know that a property with a shorter unexpired lease period normally fetches a lower value as banks do not normally offer financing.In addition, if you were to renew the lease the premium may become unaffordable (for many)!

Please refer to my earlier post on the same subject : Premiums on renewal of leases

Image source : http://www.dailymail.co.uk/news/article-1330976/Cheerleaders-bikinis-blamed-putting-team-Asian-Games.html

As I was reading the news in the Daily Express (one of my favourite online news portals) I found an interesting article related to the issue of land lease renewal premium which I would like to share with...

here it goes...

Kolombong landowners worried premium may be excessive: SAPP

Kota Kinabalu: Sabah Progressive Party (SAPP) said landowners at the Kolombong area are worried that the State Government will charge excessive premium for extension of their title deeds.

Former SAPP Treasurer-General, Datuk Wong Yit Ming, pointed out that the BN Government had promised to extend their title deeds and that the premium would be so affordable that every landowner will be able to pay for it.

According to the landowners most of the title leases in Kolombong area will expire in the next 10 years.

At the moment, most of the banks or financial institutions refuse to give loans to the landowners unless they can extend their title lease to another 30 years.

Wong also said that when some of the landowners approached the Natural Resource Office in the Chief Minister's Department to renew their lease titles for another 60 years, they were told that the premium required for the extension of lease title is very much higher than the amount promised.

"Some of the landowners cannot even afford to pay for the premium requirement.

They all feel cheated and upset that the BN Government cannot fulfil their promises.

"SAPP calls on the State Government to speed up the renewal of Kolombong land titles seriously and the State Government to be fair in charging premium in order to help the landowners extend their title deeds," he said.

Source : Daily Express, Published on: Tuesday, November 23, 2010

Other related news you may want to read (all from the Daily Express online news):
1. Land lease extension issue for discussion with Dept
2. Rate set to renew lease too high: DAP
3. Sari denies higher premium for Kolombong land
4. Kolombong land lease extended to 99 years
5. Widow's 18-year futile wait to renew land lease

Have you read my earlier post on the same topic? Here is the link Premiums on renewal of leases

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Hi there.
Bank Negara Malaysia (BNM) has just announced the implementation of a maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower. 

I personally view this as a good measure to curb excessive speculation on property prices as one needs to come up with a higher downpayment of 30% from the current minimum of 10% to own the third and subsequent home. Of course, for the cash rich, the new ruling does not affect them.  

BNM Press Statements on Measures in Promoting a Stable and Sustainable Property Market and Sound Financial and Debt Management of Households 

Bank Negara Malaysia wishes to announce with immediate effect the implementation of a maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower.  Financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies. The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public. 

At the national level, residential property prices have increased steadily in tandem with economic development and the rise in income levels.  This aggregate growth trend remains largely manageable and has not deviated from the long term trend in residential property prices.  In the more recent period, however, specific locations, particularly in and around urban centres, have experienced faster growth, both in the number of transactions and in house prices. This is further supported by an increase in financing provided for multiple unit purchases by a single borrower, suggesting increasing investment activity that is of a speculative nature.

The targeted implementation of the LTV ratio is expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations. This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers.  This measure therefore remains supportive of the objective of encouraging home ownership among Malaysians which continues to be an important national agenda. 

  Read the full text here Show/Hide

.......

Introduction of the Financial Capability Programme

As part of the continuous efforts to raise the level of financial literacy and to promote  sound financial and debt management by Malaysians, Bank Negara Malaysia also wishes to announce the introduction of the Financial Capability Programme. This Programme will be offered by Agensi Kaunseling dan Pengurusan Kredit (AKPK) through its establishments nationwide and will commence from January 2011. The Programme is aimed at equipping individuals with important knowledge for responsible financial decisions by gaining practical understanding and skills in money and debt management. This in turn will contribute towards preserving the sound financial positions of households and ensure that debt accumulation is commensurate with household affordability, including their ability to absorb interest rate adjustments and potential volatility to income and expense levels. Individuals particularly new prospective borrowers and young adults are strongly encouraged to participate in this specially designed programme. The details of the implementation of the Financial Capability Programme will be announced later in December this year.


Bank Negara Malaysia
3 November 2010

Source : BNM website 

You may want to read my earlier post
1. High Cost of Materials and Land Value Blamed for City’s Expensive Properties
2. Property Prices in Kota Kinabalu
3. Newly Launched Project. 30% Reserved / 5% Discount for Bumiputera!

Image source : shanghaiist

I'm looking forward to see The Monkey King movie in 3D to be released in 2012.

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Image source : www.sabahtourism.com

It has been found that the natives of Sabah tend to sell land, which is only a land application status, or by using the power of attorney letter in a transaction involving more than one buyer.
Such cases have caused problem and losses to the State Government be it in the form of wastage of manpower, time or cost...
...Datuk Nasrun Mansur, Assistant Minister to the Chief Minister

In a move to stop the sales of NT lands that is still under Land Application status, an amendment to the Sabah Land Ordinance was passed on 19 November 2009 that will enable the State Government to issue a communal native title for any State land.

With this amendment, it would not be easy for the natives to sell the land given to them by the Government unless the land is subdivided, which must first have approval from the Land Revenue Collector as provided for under Section 77 of the Land Ordinance (Cap 68). Besides that, it would also expedite the process of awarding land to natives.

You may want to know...
Definition of Sabah Native
What You Need to Know About Buying Sabah Native Title Lands

Read the full report...
Stopping sales of NT lands Show/Hide

Kota Kinabalu: An amendment to the Sabah Land Ordinance was passed Thursday that will enable the State Government to issue a communal native title for any State land.

Currently, this can only be done for land with proven customary tenure or under native customary rights.

Assistant Minister to the Chief Minister Datuk Nasrun Mansur, in tabling the Land Ordinance (Amendment) 2009 Bill, said the amendment was also aimed at stopping activities to sell native land, which is still under Land Application status or abuse of the power of attorney letter in land transactions.

He said that under Section 76 of the Ordinance, the Minister was empowered to issue the communal native title for land that has its customary tenure proven as well as for native customary rights land.

But, this provision could not be implemented effectively because it takes a long time and is difficult to determine the native customary rights, apart from the limited logistics and manpower at the Land and Survey Department.

Nasrun said the State Government often faced problems concerning land applications by natives as well as those that had already been given to the natives.

"It has been found that the natives of Sabah tend to sell land, which is only a land application status, or by using the power of attorney letter in a transaction involving more than one buyer," he said.

Such problems usually resulted in serious dispute by those involved that would finally lead them to court and in the end drag the State Government as well, he said.

"Such cases have caused problem and losses to the State Government be it in the form of wastage of manpower, time or cost," he said.

With the amendment, Nasrun said it would not be easy for the natives to sell the land given to them by the Government unless the land is subdivided, which must first have approval from the Land Revenue Collector as provided for under Section 77 of the Land Ordinance (Cap 68).

Besides that, he said it would also expedite the process of awarding land to natives such as through the fast track land ownership pioneer project programmes planned by the Land and Survey Department at Nabawan.

Meanwhile, he said the State Government was also addressing the problem of delays in processing the registration of land memorandum, especially with land transaction deals received by the Land and Survey Department increasing at an average of 22,000 yearly.

In this respect, he said Section 97(2) was being amended to allow the Land and Survey Department Checker to attest to the land transaction memorandum for registration and authenticity verification.

Nasrun said currently attestation of the memorandum was being done by the Collector but due to their limited number coupled with the heavy duty entrusted to them, the job was practically being done by the Checker.

"But, due to the provision in subsection two that requires the signature of the Collector, the memorandum is still being submitted to the Collector (even though it had been checked and signed by the Checker)," he said.

Nasrun said in order to expedite the land transaction process the subsection two would be deleted so that the process no longer needs to wait for the Collector.

He assured that the move would not in any way affect the validity of the memorandum because currently the work was virtually being done by the Checker.

In order to be more effective, he said the State Government had also formulated strategies to improve the delivery system at the Land and Survey Department by proposing the setting up of the electronic land transaction system known as e-Pendaftaran.

The system expected to be commissioned by next year, he said, would further smoothen land transaction deals and save time, cost and energy.

The State Legislative Assembly on Thursday also passed the Land Acquisition (Amendment) Ordinance 2009 to allow land acquisition for projects involving public utility or any public purpose.

Tabling the Bill, Assistant Minister to the Chief Minister, Datuk Radin Malleh, said the State Government was facing problems acquiring land for development programmes due to the ambiguity in the ordinance.

For example, he said the land acquisition cases involving SESB, POIC and others.

He said the State Government had to find a solution to ensure that bodies such as SESB, Petronas and KKIP, among others, would be able to carry out development, especially under the Ninth and 10th Malaysia Plans.

The definition of "public purpose" in the Ordinance had never been amended in the past 45 years although during that time so many changes had happened such as the privatisation of the Sabah Electricity Sdn Bhd.

"Changes such as this have been hindering the process of land acquisition for development in the State," he said.

Another amendment was to provide for the date of the value of land acquired to be the date of the second publication in the Gazette of the declaration (under Section 3) or of the direction (under Section 5), whichever is earlier.

Published in the Daily Express on Friday, November 20, 2009.

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Good news for the rich (Malaysians or Non-Malaysians) / property investors !

LT Alliance Development Sdn Bhd, the developer for Taman LT Jaya, Adamas 118, Bayumas 118, Damas 118 Plaza and Ceriamas 118 (Phase 1 and 2) has recently launched the 3rd phase of Ceriamas 118 project to be built in Putatan area. The exclusive three storey semi-detached houses are priced from RM668,000 onwards and has a net built-up area of 3,100 SF with 5 bedrooms. The developer can be contacted at 088-256 118

As reported in the New Sabah Times Online on 15092009.
Read more High-end houses in Putatan now open for booking

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SEPANGGAR: The costs of properties in Sabah and particularly within the city capital area are expensive due to the high cost of materials and land values. The price of a semi-detached house located within 5km radius from the city centre can easily fetch a price of between RM700,000 and RM1.2 million, said Wah Mie Group managing director, Kong Kwok Wah yesterday.

He said when speaking to reporters after the launch of the Taman Sepanggar build-and-sell detached showhouse unit that they were also facing sand shortage.

“The last time, we faced shortage in cement supply. I hope it will be resolved, but as it is now, we are constantly facing such problems,” he said. But aside from that, he promised that Wah Mie Group would continually upgrade the quality of their properties.

“We are aiming towards zero defects as much as possible. Of course, in some areas, our hands are tight because much of our materials are bought from the mass market such as bricks and sand, but in areas where we can control, we will upgrade,” he said.

He added that in some of their newer build-and-sell concept detached single and double storey houses they have even incorporated the use of shingle roofs, which are produced only in US. “The roof material is expensive, but it carries with it 30 years warranty,” he said.

In his speech earlier, Kong said that most of the units in Taman Sepanggar were already sold. He added that they were launching 32 units of semi-detached houses yesterday.

Wah Mie Group will be launching the sales of another 100 units of terraced houses possibly by October this year, he said.

He said that the Taman Bukit Sepanggar consists of 380 acres, where approximately 40 percent of the area was kept as green lung. “That is why Taman Sepanggar stands out as a unique development with plenty of greens and natural landscape,” he said.

Source : New Sabah Times, Published on 23 August 2009
Image Source : Wah Mie Group

My Say :In addition to the two factors mentioned above, I believe the following factors also play their parts in the high properties value.
(1) Greed; from my experience a developer normally takes about 40% - 50% profit from each property sale. If a Developer can lower down its gross profit margin, the selling price of a property will become lower and attractive and this will make the property easy to sell.
(2) Speculation; There are cases where a project registered a high take up rate or even sold out in a few days after being launched. The ones who booked or bought the properties the most are the Owners/Directors & Co. This is where Resale starts to come in. Price will go up by another 20% - 40% depending on the response from the public / potential buyers.

If the selling price of newly launched project is not controlled, the price of properties in the secondary market will go up like crazy. This is what happening in Kota Kinabalu at the moment.

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Assurance from Sabah Housing and Real Estate Developers Association...

Sabah property mart is promising: SHAREDA

KOTA KINABALU: The Sabah property market looks promising despite the global economic crisis, said Sabah Housing and Real Estate Developers Association (SHAREDA) president, Datuk Susan Wong Siew Guen.

“Only the demand for commercial shops and offices as well as the high-end residential property in Sabah has slightly slowed down. Properties with good design and in prime location are still in good demand. And the demand for medium cost residential property is still going strong,” she noted.

The overall outlook of the property developments in the state remains an attractive investment option with various considerations like political stability, exotic natural environment and influx of foreign direct investment, she said at the 11th Malaysian Developers Council (MDC) meeting held at the Le Meridien Kota Kinabalu recently.

The MDC is a tripartite meeting among SHAREDA, the Real Estate and Housing Developers’ Association (REHDA) and Sarawak Housing and Real Estate Developers’ Association (SHEDA).

For example, she said the KK City Waterfront project overlooking the Kota Kinabalu seafront and with its innovative building design is selling very well. The condominium, priced at RM400-RM700 per sq ft floor area, has attracted many local and foreign buyers.

“The Hartamas Height condominium, located along Jalan Lintas and consisting of 120 units with prices ranging from RM180,000 to RM300,000, was also very sellable with 80% of the units sold within a month after its launch.

“The innovative designed semi-detached houses of Taman Bukit Sepangar developed by Wah Mie Group have attracted many buyers and the sales were very encouraging,” she said.

“The medium cost Cyber City Apartment 2 developed by W Group is selling very well and sold out in a short period of time.

“The seafront bungalows of Nexus Bay Resort Karambunai has attracted many foreign buyers and sold out mostly under the Malaysia My Second Home programme,” she added.

Sabah, with its many beautiful tourist destinations, has attracted many foreign investors to buy homes here.

“The consideration of permanent resident status for high net-worth individuals bringing in more than US$2 million for investment in Malaysia has attracted many foreign investors to invest in Sabah’s property,” she said.

Moreover, Susan said the consistent promotion by the Ministry of Tourism, Culture and Environment and the Sabah Tourism Board had brought in many tourists who also invested in Sabah’s properties.

The housing industry continues to flourish as can be seen from a number of newly launched or on-going projects in Sabah such as the Nelly Phase 8D, Kolombong consisted of 280 units, Hartamas Height, Kepayan (120 units), 1 Sulaman, Kuala Menggatal (1,008 units), Putatan Platinum Apartment (1,012 units), RH Residences, Kuala Menggatal (87 units), Mahkota, Bundusan (56 units), Prima Jaya, Penampang (34 units), Legenda Damai, Luyang (14 units) and Tiara Boutique Pool Villa Resort (93 units).

These properties comprise condominium, apartment, townhouse, double-storey detached and semi-detached houses and pool villa.

The selling prices range from RM233-RM522 per sq ft for condominium, RM186-RM205 per sq ft for apartment, RM350,000 (town house), RM347,800 (terrace houses), RM449,950-RM1.29 million (pool villa), RM795,000 (double-storey detached house) and RM1.3 million (semi-detached house).

Source : New Sabah Times, Monday, 17 August 2009

I do not think so! What about you?

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Advice from DBKK to Property Buyers.


DBKK: Check for unsettled rates before signing S&P

Kota Kinabalu: Property buyers were on Monday advised to check for outstanding assessments or rates before signing Sales and Purchase agreements.

City Hall Deputy Director-General (Corporate), Bahari Haji Hassan stressed this was especially important for properties which have yet to be issued with their individual sub-divided or subsidiary titles.

In a recent dialogue between City Hall and the Sabah Law Association (SLA), he said, among the reasons for unsettled assessment bills here was because City Hall was not informed about the transfers of properties, hence, burdening incoming property owners with the outstanding assessment bills.

"Without information of the new owners, assessment bills would still be sent by City Hall to the previous owner on record. The new owner may not know of the accumulating assessments and interests."

Meanwhile, SLA President, Datuk John Sikayun gave his backing to City Hall in solving such matters, pointing out they will issue circulars to notify all lawyers, members and non-members, to be aware of the need to inform City Hall or the Local Authority of the change of ownership in such cases.

In addition, the SLA will also advise all lawyers to update City Hall on details of any aborted sales of properties.

A joint statement here, Friday, said the City Hall will also approach the Sabah Housing and Real Estate Developers Association (Shareda) to seek the cooperation of developers to require the settlement of outstanding assessment bills before consenting to the assignment of properties.

Towards this end, City Hall will see if there were any laws that need to be amended or passed.

In the case of properties without title deeds that are being auctioned off, City Hall will request the assistance from auctioneers to notify City Hall of successful auctions and particulars of the successful bidders and to ensure payment of assessments.

These conditions will be sought to be included as a condition for the issuance of the auctioneer's license.

SLA in its effort to promote and raise awareness on consumer issues, especially on properties, concurred that lawyers should inform property owners on the difference between service fee and property rates, where the former is being paid to the management of common properties in developments such as apartments and complexes while the latter is for providing services such as garbage collection, streetlights maintenance, drain clearing, grass cutting and sewerage system.

Properties with existing or intended subsidiary (strata) titles attract both assessments and management fees. Landed properties such as terrace and semi-detached houses need only pay assessments. All landed properties also attract annual rent which is payable to the Land Office and not to City Hall/District Office.

SLA's intended actions above will cover other Local Authorities in addition to City Hall.

Source : Daily Express, Saturday, 15 August 2009

Useful link ~ Dewan Bandaraya Kota Kinabalu (DBKK) / Kota Kinabalu City Hall Website

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This is a very interesting view on the property market in Malaysia in general which I like to share with you all. I for one second the author's view that the property market is still a buyer's market.

Still a buyer’s market

WITH the dust of the global financial crisis settling at least for now, barring further surprises, the new liberalised environment for the country’s business and property sectors is a good platform for local property players to leverage on.

If the relaxed measures are able to attract more foreign direct investments (FDIs) in the country’s business and property sectors, there should be greater demand for commercial and residential property from these foreign investors.

In fact, the removal of the Foreign Investment Committee ruling for foreigners purchasing commercial property has the potential to turn Malaysia into a vibrant commercial property market as more foreign investors are attracted to the market.

The commercial market has turned a lot more liquid and there could be more en-bloc transactions down the road.

The market has proven its resilience with capital values and rental rates for commercial space holding out quite well despite the onslaught of the global financial crisis.

However, to give a further boost to the local business environment and inflow of FDIs, it will certainly help if the Government can further liberalised the tax structure for businesses and individuals to raise the country’s competitiveness.

As for the residential market, the existing low interest rates for property financing and the housing packages that are still offered by most of the developers are attracting stronger buying interest.

Those who have yet to purchase their own property and are shopping around for one still can take advantage of the low entry cost until developers decide to put a stop to these facilities.

Going by the strong take-up for some of the recently unveiled condominium projects around the peripherals of Kuala Lumpur, it looks like more Malaysians are resorting to investing in property to hedge against inflation.

After all, bank interest rates for property financing are at one of their lowest and it will be wise to lock in at the current levels.

Meanwhile, industry players are also anxious to get on with their project launches once again after having to defer their plans over the past three quarters since the crisis broke out last September.

After having laid low for much of the past few quarters, it is not surprising that developers are eager to unleash their products and are lining up a string of projects for launch. A variety of property products will be making a beeline for the market soon.

They may feel that delaying the launch further will mean higher holding cost for them.

But, a word of caution for developers. The local economy is not yet out of the woods and the gross domestic product for the second quarter is likely to remain in the negative terrain, although the contraction is expected to ease and bottom out by year-end.

There is still an imbalance in demand and supply in the property market for now and it will take a few more months before a more balanced market sets in.

Developers should be prudent and conduct proper feasibility studies before launching their projects, especially new greenfield projects that take many years to complete.

Gauging the market response through project previews and pre-launch registrations will show whether a project is ready for launch.

To register sustainable earnings growth path going forward, developers have to come out with holistic plans for their residential and commercial properties.

There should not be a sudden clamour for project launches but they should be based on market fundamentals and actual takeup rates.

As the market is just about to make a turnaround and it is still very much a buyers’ market, developers have to be prepared with more quality projects and the right product offerings at the right pricing.


Source : The Star Online (The Real Estate with Aggie Ng)

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"...these unsold properties reflected a supply that was not absorbed by the market due to a mismatch between demand and supply"

In other words, the supply is more than the demand. Wow! This is something property owners should consider when they want to dispose their properties at this time. If you cannot sell your property after one month try reducing your Asking Price . Also, please consider factors like your housing loan interest, rental, etc. Do bear in mind that the longer you hold the property the more cost you are going to incur. Also, a lot of headaches ;)

RM542m Sabah properties unsold

Kota Kinabalu: A total of 2,942 properties worth RM542.94 million remained unsold in Sabah up to the first quarter of this year.

"Of this, 2,590 units are residential properties, 323 units of commercial shops and 29 units of industrial buildings," said Assistant Local Government and Housing Minister Datuk Edward Yong.

"Apart from these, there are also properties under construction but identified as unsold properties totalling 1,741 residential units and 201 units of commercial shops."

Yong said these unsold properties reflected a supply that was not absorbed by the market due to a mismatch between demand and supply.

This can be considered a waste of the investment funds of the financial sector, he added, when launching a briefing on the Property Information System Malaysia (Prism) computerisation system at the Federal Administrative Complex, Thursday.

Prism, to be implemented as a product of the Valuation and Property Services Department's (JPPH) National Property Information Centre (Napic), focuses on transmitting data through online facilities from the existing manual transmission.

The objective of Napic is to provide accurate, comprehensive and timely information regarding the demand and supply of property in the country to government agencies, property developers and all parties involved in the property industry.

Hence, Yong appealed to all parties involved in the property industry to use the Napic property data as part of information gathering before making decisions on their development projects.

Throughout the country, about 23,000 houses worth RM3.7 billion were not sold in the country over the last ten years.

According to the JPPH these residences were completed but that there had been no takers following the 1997-1998 financial crisis and other economic factors.

However, JPPH Director-General Valuation Dato' Abdullah Thalith MD. Thani, who disclosed this, said the figure is negligible given that about 4.3 million houses were built during the same period.

"In addition, the 23,000 units only account for 0.5 per cent of the six million units of properties in the country, including commercial shops and industrial properties," he said.

Abdullah said, Johor had the highest number of unsold properties totaling 6,513 residential units worth about RM1.17 billion, which represents 28 per cent of the total properties in the country. Next comes Selangor with 3,827 units worth about RM635 million and Kedah involving 2,619 units worth about RM237 million.

The briefing on Thursday was for the public sector as well as the private sector like housing developers, land dealers, and real estate agents among others.

Also present were JPPH Sabah director Sautarwin Marto and Sabah Land and Survey Department Director Datuk Osman Jamal.


Source : Daily Express, Friday, 17 July 2009

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The Sabah State Government's Lands and Surveys Department has tightened the registration process of private sale and purchase transfers of lands held under Native Titles to avoid abuse by the Malaysian citizens of Sabahan and non-Sabahan descent with 'Sijil Anak Negeri' or native status certification obtained by dubious means that was started during the mid 1970s to the early 1980s pending the definition of 'native' under the law to be finalized soon. The issuance of the Native Certificate was stopped in 1982 but thereafter some cases were found to have been processed to backdate their issuance to prior dates before 1982.

In Sabah, any dealings on Native Title lands, like Malays Reserve lands being restricted to Malays in (Malaya) Peninsular Malaysia, may only be permitted among natives of Sabah under the Land Ordinance 1930. By this definition, even Malay Bumiputeras of West Malaysia and Sarawak including native Sarawakians are not eligible to buy NT lands. They and other citizens and non-citizens in Malaysia can only buy and own Provisional Lease (PL), Town Lease (TL) and Country Lease (CL) lands ranging from tenures of 60 years, 99 years and those registered from the colonial period - 999 years.

The naturalisation of thousands of Muslim migrants from the Philipines, Indonesia and South Asia has complicated the issue of who are to be recognised as natives of Sabah besides those defined by earlier colonial and administrative legislation. Many are active in the procurement of NT lands. In Sabah, it shall be lawful for the native land owner to grant a sublease to a non-native for a term not exceeding 30 years (from the previous 99 years to boost the value of NT lands to commensurate with Country Lease lands but amended to 30 years after much criticism by the opposing native politicans) by virtue of the amendment to Section 17(5) of the Land Ordinance, Cap. 68 and passed by the State Legislative Assembly on November 2, 2000. (Refer to Government Gazette No. 5 of 2000).

Many non-natives deem such short tenure economically unviable for any production purposes for meaningful returns of investment and for the purpose of securing bank loan facilities. After the said amendment, there is no significant registration of such 30 years subleases transactions for commercial and industrial purposes.

Now holders of Native Certificate may need to furnish other documentary proofs such as birth certificates, verification letters by the Native Court office (MAN) or an officially appointed Native Chief (KAN) to process their purchase and registration of ownership with the Lands and Surveys Department after buying Native Title or NT lands. Their Application also be referred to the Sabah Native Affairs Office (PHEANS). The Sabah Native Affairs Office serves as the current final authority for the State Government in resolving native-related issues.

The renewal of Provisional Lease, Town Lease and Country Lease lands ranging from tenures of 45 years, 60 years, 99 years will come under the purview and valuation of the Lands and Surveys Department and the Nature Resources Office subject to advance payment of land premium. The lands will also be subjected to new quit rent based on the current market value of the land.

Source : REALTY ~ Daily Express, 13 July 2009

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TheStar online reported today that some 44,000 low-cost houses under the Program Perumahan Rakyat in the Federal Territory will be offered for sale to the existing tenants. In addition, the flats will be sold 20% to 30% cheaper from the market price.

Wow! lucky them, I hope the same incentive will be extended to the people in Sabah. I also hope that the Federal Government will launch more affordable housing projects in Sabah so that everyone will be able to own a home.

Low-cost flats to be sold below market price

KUALA LUMPUR: More than 44,000 low-cost flats in the city will be sold below the market price.

Federal Territories Minister Senator Datuk Raja Nong Chik Raja Zainal Abidin said he would propose that the units be sold 20% to 30% cheaper.

He said this would help the people own at least one asset in Kuala Lumpur.

“From my experiences with those from squatter areas or those who migrate to Kuala Lumpur from rural areas, they are striving to have at least one asset here.

“Hopefully, this will help them own property,” he said, adding that the move would be one of his Key Performance Indicators (KPIs).

He said he had already informed Prime Minister Datuk Seri Najib Tun Razak of the proposal and would bring it to the Cabinet in August.

“Hopefully, it will be approved by the Cabinet and finalised in November,” he added.

Raja Nong Chik added that the ministry would try to assist the people in various ways, including working with the banks, to provide, hopefully, 100% financing.

Cuepacs president Omar Osman was particularly happy with four measures, namely the offer to purchase low-cost homes, the toll discount, the issuance of individual taxi permits and petty traders’ licence discount.

“It is a good start. But there must be adequate monitoring to make sure there’s no abuse of the system,” he said.

Malacca Chief Minister Datuk Seri Mohd Ali Rustam Mohd Ali said the state would also give a 50% discount on new applications and renewals of business licences for petty traders, starting next month.

“The decisions made by the Prime Minister clearly focuses on the needs of the people, especially those in rural areas. It will benefit everyone, young or old, rich or poor,” he said.

Home Minister Datuk Seri Hishammuddin Tun Hussein said Najib’s announcement was made with the future of the people in mind.

“It covers issues like public safety, citizenship, permanent residency and absence of birth certificates. It’s all decided with the people in mind,” he said. Women, Family and Community Develop-ment Minister Datuk Seri Shahrizat Abdul Jalil said Najib’s goal-oriented style was reflected in his first 100 days in office.

Minister in the Prime Minister’s Department Tan Sri Dr Koh Tsu Koon said Najib’s emphasis on KPIs placed everyone under pressure.

“It puts all of us under pressure to perform, for the benefit of the people,” he said.

Source : TheStar Online

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PETALING JAYA: Household loans, notably for residential properties, are expected to drive loans growth for many banks this year, industry players say.

Although it had slowed, growth prospects for residential loans continued to look favourable on an expected recovery in the country’ economy by the year-end and a steady demand for homes, they said.

Hong Leong Bank was projecting a growth of 5% to 8% for loans to the residential sector over the next 12 months, said chief operating officer for personal financial services Moey Tan.

“While the growth will remain positive, the projected rate of 5% to 8% has softened compared with April 2009 growth rate of 10% for residential loans.

“We remain optimistic that there will be positive growth as the general consensus among the public is that residential properties will remain a good investment during these uncertain inflationary times.

“Also, demand for owner-occupied landed properties will remain resilient due to the steady population growth,’’ she told StarBizWeek in an e-mail reply.

Furthermore, she noted that prices of landed residential properties had continued to remain stable even in the current economic environment.

“Residential loans currently contribute 41% of the bank’s total loan base and would continue to be a key driver of growth and profit for Hong Leong Bank,’’ Tan said.

Residential property loans made up 27% of the total loans in the industry, she said, adding that Hong Leong Bank expected household loans to be a significant driver of growth in the next 24 months.

Alliance Bank Malaysia Bhd had seen a growth of 3.3% in household sector loans for the quarter ended March 31 compared with the previous quarter, driven mainly by mortgage and unsecured loans, according to group CEO Datuk Bridget Lai.

Alliance Bank has also seen increasing interest from customers in refinancing their properties to reduce borrowing costs due to lower interest rates.

“The bank expects loans growth for the household sector to increase marginally this year compared with last year, as we begin to see stability trickling back into the economy following expectations that the country is heading towards a recovery come the end of 2009,’’ Lai said.

According to Lai, household sector loans (mortgage, hire-purchase, credit card and personal loans) as at March made up 60% of Alliance’s total loans portfolio.

Based on Bank Negara’s latest statistics, loans disbursed to household in May grew annually by 10% to RM17.3bil compared with RM16.9bil in April.

OSK Research attributed the growth of household loans mainly to the purchase of residential properties, apart from hire-purchase and credit-card loans.

On an annual basis, outstanding household loans expanded by 8.4% at end-May against 8.5% the preceding month.

Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias sees slower growth in household loans this year due to the weak economy and given that the country’s external sector has yet to fully show a firm turnaround.

“Against such a backdrop, there are fewer qualified borrowers because labour market conditions and income prospects are still deteriorating.

“This will make financial institutions more cautious in their lending practices as some banks are already seeing higher non-performing loans ratio,’’ Zahidi said.

RHB Bank sees 5% to 7% growth in its consumer home loan portfolio, which is at parity with last year’s level and above the industry growth targets, according to head of retail banking Renzo Viegas.

RHB was aggressively targeting the refinancing sector as well as customising end-financing packages with developers, he said.

Viegas also said the bank had adopted risk-based pricing whereby it offered better rates for loans with lower loan-to-value (LTV) ratios and customers who opted for mortgage reducing term assurance (MRTA) for their loans.

The LTV is the size of a loan against the value of the property while MRTA guarantees the repayment of a mortgage loan in the event of the borrower’s death or total and permanent disability.

OCBC Bank (M) Bhd head of secured lending Thoo Mee Ling said home loans would be one of the main growth drivers for the bank.

Thoo said OCBC had been outperforming the industry in terms of total home loans approved as it had experienced growth of more than 100% from January to April.

Source : The Star online (By Daljit Dhesi)

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