Penang Island's Seri Tanjung Pinang

Considering the state of the economy, Penang properties are going through some sort of boom the past couple of years. There has been a lot of effort to attract wealthy foreigners to adopt Penang as part of the Malaysia 2nd Home initiative. Apparently, celebrities like Lau Tak Wah and Simon Yum have bought properties in Penang. Luxurious condominiums and beach front bungalows have been mushrooming but that's not the only market that is doing well.

Middle class terraced homes and mid-range down to to even low-cost apartments are selling well especially those in good locations near or in Georgetown or closer to the industrial belt in Bayan Lepas and Bukit Jambul. And in fact the middle class have somewhat moved a few notches up. 2 years ago, it would be impossible to think that a terraced house in Penang can sell at RM700k. So when E&O launched their 1st phase of terraced houses in the reclaimed piece of land in Tanjung Tokong called Seri Tanjung Pinang, sales was initially slow. Then when Penangites started to accept the concept, the sales shot up and today, these houses are available in the sub-sale market hovering around RM1 million.

A few months back when E&O launched the same terraced homes closer to the sea at minimum RM1.1million, they were snapped up within 3 hours. These units are now under construction and it seems from the pics below, despite the million price tag, they are using low quality cheap cement bricks.

Now, E&O is trying their luck to set another benchmark. The condo market. Never in the history of Penang, even with the super luxurious condos along Jalan Gurney and Tanjung Bungah has anyone tried to peddle condominiums at RM800k to RM900k for a studio or 1 bedroom unit and almost RM1million for slightly larger 2 bedroom units. They have even thrown in a 10:90 financing scheme but take up has somewhat been rather cautious. I suspect like most other E&O projects, the initial rush in bookings are actually from their own directors and staffs who are offered to profit from the project through an attractive discount (20% for St Mary's, I wonder if it's the same here).

So for this seafront Quayside resort condominium, I do not know what is the actual take up from actual buyers and investors (who are not E&O staff). Official launch is this end of January 2010.

When I visited the showroom at the Seri Tanjung Pinang site, I was attracted by the design of the corner 1+1 bedroom unit. It has a very nice view of the coast of Tanjung Bungah. But strangely most buyers have opted for the inside corner facing the other block and also some side view of Penang city and Gurney Drive. This corner seems to be almost sold out.

The nearest competitor to Quayside is probably the Infinity (picture below), now almost completed at Tanjung Bungah. Apparently there are still units available but I did not have enough time to visit the showroom. Unlike Quayside, the Infinity actually offers a beach front. However, the location is towards the end of Tanjung Bungah, it's close proximity to a mosque and the dirty condition of the beach and water may be pulling its value down. Nevertheless, prices start from RM1million but the units have bigger layouts compared to Quayside.

Seri Tanjung Pinang is marketed as the next location to be in Penang after Tanjung Bungah, Batu Feringgi, Gurney Drive and Bukit Jambul's expatriates enclave.

The concept is certainly attractive, gated communities with club house and marina facilities (pic above), an international school and a Tesco will be built on this piece of land beside the Quayside (picture below).

The entire plot of land that Seri Tanjung Pinang is sitting on is actually reclaimed land (picture below). Many Penangites and environmentalists are unforgiving, blaming the reclamation on the heavy silting of the sea off Gurney Drive and the stronger than usual currents off the North-Eastern Penang Coast. The reclamation will however not stop there. There is a grand plan which when it takes off will see new islands hosting luxurious residential and office buildings complete with a golf course taking shape off the coast of Seri Tanjung Pinang. Current Purchasers may be well assured that any future tsunami coming their direction will be fended off by these islands but hopefully the islands themselves do not turn out to be an environmental catastrophe for Penang.

The planned Penang Outer Ring Road (PORR) which is currently shelved, if materialized will take commuters right to the entrance of Seri Tanjung Pinang. Along the way, the PORR will pass the door steps of the luxurious condos along Gurney Drive, turning an idylic seafront into a raging expressway. The seafront of Gurney Drive will be no longer. The land will be reclaimed and turned into a park, until the next development takes place with more condos and buildings, effectively killing off Gurney Drive as competitor to Seri Tanjung Pinang.

Perhaps another big disappointment of Seri Tanjung Pinang is the vicinity. Much like Sierramas in Sungai Buloh where everything is nice and spanky inside but once you go outside, the scenery is chaotic, dusty and dirty. Opposite the entrance of Seri Tanjung Pinang is the old Malay Kampung which is currently in a state of controversy, being played into the hands of politics. The unfriendly Federal ruling party in the Federal government is scheming a plan to raze down the Kampung for development by their crony company UDA. Like the mainly Indian Kampung Buah Pala village earlier, this is expected to create animosity against the State government and racial tension in Penang as part of ther Federal government's effort to undermine their opposition.

(*Penang is ruled by the Federal Opposition party)

(To be continued - updated after results of Quayside launch this weekend)

The Case with Conversion of Public Area to Gated and Guarded Community

Gated and Guarded Community
Tuesday, 1 December, 2009 11:11 PM
From: "ng boonhong"
To: usj2gng@gmail.com, alanchuah@gmail.com, christie@gmail.com
Cc: hannahyeoh@dapsj.com, mpsj@mpsj.gov.my, rajiv@dapsj.com

Dear All,
I am a resident of USj2 and write, on behalf of a few residents in USJ 2, to offer our humble opinion on the proposal for a GnG community in USJ2.

Firstly, we would like to record our appreciation and thanks to the Committee of USJ2 RA for the commendable effort in trying to ensure a secure and safe environment for residents in USJ2. It is also heartening to note that generally the residents are concerned with the security problem in the area.

We are in favour of viable measures to improve safety and security in USJ2. The proposal for a GnG community in USJ2, on the surface, looks attractive. However, there are concerns that the implementation may have legal and practical implications that merit in-depth considerations.

Some of these are :
1. The project may be unlawful. The roads in USJ2 are public places and it is unlawful to prevent/restrain members of the public from having free and unrestraint lawful movement/access. The mere act of stopping vehicles, erecting barriers, diverting traffic and recording particulars of persons wanting access into the area, to my mind, constitutes "restrain". Only the Police and some relevant authorities are empowered by law to conduct such activities for purposes of security, maintenance of public order and traffic management. The security guards are not vested with such powers ;

2. It is said that the local authorities, in this case the MPSJ, can approve the project if substantial number of residents ( 75% - 80 % ) agree to it. We would greatly appreciate if we could be enlightened on the provisions of the Law or Regulation authorising MPSJ to act as such and also whether or not this Law or Regulation, if any, are ultra vires the Federal Constitution which guarantees lawful free movement.

3. If the project is unlawful, who will bear the consequences of any litigation that may arise from any untoward incidents or challenge. The USJ2 RA Committee needs to be protected from this eventuality.

4. The infra-structures in USJ are unique ( unlike other housing schemes in USJ ) and affect practical implementation of the GnG project. Two schools and a mosque are located in the middle of USJ2. The area is flanked by Jalan Kewajipan and Jalan Tujuan - two of the busiest roads in USJ/Subang Jaya. There are six entry points into USJ2, a pedestrian crossing from USJ2 to SS 14 Subang Jaya, two petrol stations and two rows of low-cost shop lots. Implementation of the GnG project will cause inconvenience to movement within USJ2 itself and traffic jams especially during peak hours.

5. It is said that the principals of the 2 schools had agreed to the GnG project. Theirs are only 2 opinions. Have they brought the matter to the attention of the Parents/Teachers Association ? What have the people in areas outside USJ2 who send their children to school got to say ?

6. Sad to say, it would appear that the residents have to fend for themselves to ensure their safety and security. To many, this appears to be an Abdication of Responsibilities by the proper authorities. In particular, it does not speak well for the Police. For this reason too they do not support the GnG project.

7. This is a project to be funded by voluntary contributions by the residents and is not bound by any agreement. Many may choose not to contribute. There are also those who may eventually withdraw support if, by and by, they consider the required cost and monthly maintenance too high. In this eventuality, the project may collapse.

The concerns enumerated above represent the reasons why some residents are not in agreement with the implementation of the GnG project. It is presented in good faith and not intended to undermine support for the project. As pointed out earlier, we are all in favour of viable measures to improve security and safety in USJ.

In the meantime, in view of the high crime rate ( not including those that go unreported ), representation needs to be made to the Police to conduct and maintain "high visibilty patrols" in our area.

To my mind, the following are some measures requiring study/consideration as viable alternatives :

1. In most cases, house breaking were through the back doors. MPSJ should consider allowing construction of gates to prevent unauthorise entry into the back lanes. I surmise MPSJ objects to this for reason that keys to the gates cannot be readily available in case of emergencies like fire-fighting. Actually, in such eventuality, the gates can be smashed down if keys are not readily available.

2. CCTV coverage of USJ2 with links to Police Station. The cost and maintenance may be high. On the other hand, this may not be so if the project is undertaken with support from Telcos and MPSJ. Telcos may be interested in view of benefits they can derive from such projects.

3.Rukun Tetangga has proved difficult to implement in our area. In lieu of this, we can probably look into the possibility of employing Malaysian citizens as security guards with Auxillary Police powers to conduct patrols and checks. The auxillary Police powers can only be exercised within USJ2 or any area in USJ approved by the IGP. 8 to 10 such personnel working on 8 hourly shifts should suffice.

This email is forwarded in good faith and sincerity in supporting any viable measures to improve safety and security in our community.

Thank you for your attention.
Ng Boon Hong

Investing in Students Accomodation - Casa Subang

Since I am targeting investments in students accomodations and after a visitor in this blog prompted me, out of curiosity I visited Casa Subang. I learnt that besides Segi College, there are students from Summit College and Pantai College nearby living here besides those from Taylors further away. Taylors provide a shuttle service for the students.

The access road to this building is via the back of Summit as well as via neighbouring Mydin hypermarket's car park. Unfortunately, the access to the USJ1 area where Casa is located is not so good. I found myself stuck in traffic for almost half an hour trying to get out.

However, despite the access issue, due to the students population, the occupancy is actually very good, almost 100%. There are also ample car parks in the building but the car parks are dark and water logged, very badly maintained much like the rest of the building.

Security access uses a keycard system and there are several security guards on duty at the gate house above. Some students managed to get in without any car park access card because the security personnel know them and there are ample car parks anyway.

There are facilities like basketball courts, tennis, there is a very nice swimming pool and restaurants and laundry shops. To get to the basketball court above, one has to go through a very dark and smelly stair case. There was a decomposing rat inside the stair case.

There are about 4 or 5 of these mamak shops below on the swimming pool deck which serves affordable food to the residents. As you can see, the trolley from a neighbouring hypermarket even found its way into the building, past security and everything.

However, due to bad business or the weekend, many of the shops are closed below.

In terms of convenience for students, as long as they do not intend to wander beyond this is actually not quite a bad place. But I must emphasize on the quality (..or lack of) of the maintenance. It's hard to imagine that this building is new and things have already fallen apart. The security fire door below for example may not be able to provide much security, nor protection if an emergency happens. I also did not see any fire hydrants. I am surprised this building received the CF (or not..?)

Typically, the picture below is how the corridors look like. Dark, dinghy and water-logged. This visit was at around 5pm on a weekend and there seems to be a lack of light. It is easy to slip and fall or worse, get mugged.

About 10 to 12 students share a unit ranging from 3 to 4 bedrooms in various sizes. One college appointed a warden who regularly visits the dorms but he does not seem to notice all the obvious signs of delapidations of the place which endangers the students.

Now, this explains why there were rat carcasses in the staircases. There is no rubbish bins. Rubbish are just left in the open for god knows who to collect. I can't describe the smell as I need to go for lunch after writing this.

I have no more kind words to offer. I know it's cheap to rent. Students pay RM250 per month for a bed and they share 2 to 3 to a room. With 10 students to a house, one would collect RM2500/month for an investment which returns almost 10% yield. So, it makes me wonder who makes this kind of money and think that students deserve to live in this kind of dump. This is Malaysian standard. If we want to change, we have to change from this attitude. Because if students live in dump, when they grow up they think its alright for their future generation to inherit a dump country. That's why we are still a shit hole despite having all the resources.

Flip Flop

Not that I am complaining. But this kind of flip flop does not bode well for investment stability. Policies in this country are not very well thought out before they are announced. But at least speculative activities are going to be curbed by introducing the tax for properties sold under 5 years. This is how they should have done it, Right First Time.

Najib announces RPGT reversal
NEWS/COMMENTARIES Thursday, 24 December 2009

By Syed Jaymal Zahiid, The Malaysian Insider

Datuk Seri Najib Razak announced tonight a reversal of his government’s decision to reintroduce real property gains tax (RPGT) on January 1 for all transactions, amid concerns that it would hit long-standing homeowners and foreign investors.Instead, the government has now decided the five per cent RPGT would only apply to property sold within five years of purchase.

The five per cent tax, which was announced under Budget 2010 in October, is normally imposed to curb speculation but due to its flat structure does not differentiate between homeowners who have been holding a property for 20 years or those who are flipping properties within one or two years for a profit.

The property sector was taken by surprise by the announcement and had expressed worries that it would have sent a message to potential investors that the government has not been consistent in its policymaking.

An exemption on the RPGT was given in 2007 by the then-Tun Abdullah Ahmad Badawi administration in order to boost the property development industry.

Its removal two plus years later with little warning could have heightened the feeling of uncertainty among investors.

But speaking at a dinner with the federation of Chinese Associations Malaysia tonight, Najib allayed fears from the business sector, many of whom are from the Chinese community.He said the decision to backtrack on the implementation of the RPGT will likely cost the government RM200 million in lost revenue.

Apart from this, Najib also announced that the hospitality industry will enjoy a 60 per cent reinvestment allowance from the government, to be handed out to hotels undertaking investments for renovation and refurnishing.

He said that in line with this new policy, the government will extend the investment allowance for 15 years.

The announcements were made following requests made by the Federation of Chinese Associations for the government to help the property sector.

“I hope the Chinese community will respond to the announcements accordingly,” he said.
Najib also said that he hoped to see the Chinese reciprocate his gesture by helping him realise his “1 Malaysia” concept.
http://themalaysianinsider.com/index.php/malaysia/47494-najib-announces-rpgt-reversal

Pangsapuri Subang Jaya After Renovations

Here are the results of the renovations. Refer to here (http://realtymalaysia.blogspot.com/2009/10/renovations-at-pangsapuri-subang-jaya.html) for pictures before renovation.

picture above: The biggest room in the apartment is for double occupancy

pictures above and below: This used to be the kitchen, now renovated and become a double room with a double-decker bed

picture above: The 3rd bedroom

picture above: The biggest bedroom came with a built in cabinet and dresser which we painted white to blend in the wall colour

picture above: the living room

picture above: the ikea kitchen which was really a pain to install especially that white cabinet at the bottom. You need 2 people 4 hours to put it together! The kitchen backsplash will protect the walls from oil and water stains

picture above: as this house is intended for students, the shallow sink would discourage them from piling in unwashed dishes for weeks. There is a filtered drinking water dispenser on the left as students would be too lazy to boil their drinking water and water in the SS15 Subang Jaya area is very dirty due to the old pipes

picture above: The dressing area

picture above: The dining area

picture above: The small bathroom cum toilet

picture above: The smaller bathroom

picture above: The bigger bathroom - both bathrooms are common

St Mary Residences to set new benchmark in Jalan Raja Chulan - The STAR Biz

From The Star - http://biz.thestar.com.my/news/story.asp?file=/2009/11/7/business/5045842&sec=business

Saturday November 7, 2009
St Mary Residences to set new benchmark in Jalan Raja Chulan
By THEAN LEE CHENG

ANIL, 45, from India works in the oil and gas industry. Managing projects on a piecemeal basis, his work entails quite a bit of travelling. Anil flies into Malaysia several times a year, sometimes it is a week, sometimes two.

Renting an apartment is not cost effective, likewise staying two weeks at a hotel. Accommodation has always been an issue, until about a decade ago with the appearance of serviced apartments, which he can rent on a weekly or monthly basis.

“I just need a decent place to return to after work where I can call for room and housekeeping services but without having to bear rates equivalent to hotel charges.

“Hence, a serviced apartment seems to be the best option. Occasionally, I use the gym and of course, Internet connectivity is a must. If I want to meet friends, there are food and beverage outlets nearby,” he says.

Anil belongs to a group of mobile workers who have to pack up and leave at the drop of a hat. They have no time to cook, or to be bothered with the daily household chores that come with renting a condominium.

As the city and the job market evolve, Kuala Lumpur will be seeing more serviced apartments entering the market. By 2012, Kuala Lumpur will have another addition with the entry of Eastern & Oriental Bhd’s (E&O) St Mary Residences CBD in Jalan Tengah, behind Menara Weld. The project is jointly developed by E&O and the Lion Group.

When it was launched in June, prices average RM1,000 per sq ft with early bird purchasers paying about RM900 per sq ft. The second launch was priced 25% higher at an average of RM1,250 per sq ft.

Although the project is currently marketed as a new home, a second home or an investment, the 657 units are being fitted like a hotel room with 34,400 sq ft of retail space. It will also have a one-acre park. There may be plans to provide housekeeping services later on.

Comprising three blocks, Tower C and A are currently on the market while Tower B, which will have about 200 units, will be returned to the Synod of the Diocese of West Malaysia, the previous owner of the 4.04-acre freehold tract.

The development will have a swimming pool and a clubhouse as well as a meeting and function room.

Says an industry source: “St Mary will be more for the rental market, although there may be buyers who want to stay. The developer will also build an office block close by. So the possibilities are there, particularly with Tower B being returned to the church.”

When Tower C was launched, E&O priced it cautiously. It was among the first project to be launched in the city after the September 2008 fall of Lehman Brothers. E&O group itself had not launched anything in 2007 and 2008.

With the good response, it appears it had underpriced the project and are trying to get back on the pricing. To justify that increase, it enhanced the package by offering a more furnished unit right down to curtain railings, while those from the first phase only had a fitted kitchen with appliances. At the same time, buyers for the first phase enjoy a capital appreciation, the source says.

There are several serviced residences in the Jalan Raja Chulan vicinity with unit sizes ranging from 500 sq ft to about 2,000 sq ft. In the case of St Mary Residences, the developer is offering reasonable sizes, says Regroup Associates Sdn Bhd executive director Paul Khong.

It has the right target segment for investment purposes – the units are small from about 1,000 sq ft to 2,300 sq ft. On a per unit basis, it is affordable. E&O also provides the 10/90 financing package which make it convenient for buyers.

Khong adds that only selected niche developments within a good location, a right theme/concept and a branded developer will be able to carry a premium price in their projects.

E&O executive director Eric Chan says the company has made the project as convenient as possible for the regional market. It aims for foreigners to constitute 20% of buyers in Tower A.

A major consideration is utility rates will be on a commercial basis. Generally, when a developer build on commercial land, the project comes with retail facilities as opposed to a project on residential title, which will not have the retail podium.

The setback is that for a project with a commercial title, the utility rates will be 25% to 30% higher compared with one on a residential title.

In the case of St Mary Residences, although the project is on commercial land, the developer has managed to keep the utility rates at residential levels.

For those who bought into St Mary with the intention of renting out their units, they may have a bit of trouble due to the current economic slowdown, an industry source says.

“Many would have invested in it to sell or rent. The global situation is still wobbly and it is difficult to say what 2012 will bring,” the source says.

At press time, Pacific Regency located near St Mary Residences is having a 70% occupancy rate. A customer service officer says since Pacific Regency offers short and long-term stay, it has a pretty good following compared with those that offers only a minimum of a year’s lease.

About 60% of Pacific Regency’s guests stay on a daily basis while the rest take a longer lease. Most of its guests are from the oil and gas sector.

“In terms of cost, we are more economical than a hotel, and there are only five-star hotels in the vicinity. We also offer housekeeping and 24-hour room service.

“This is what most of our guests need. We also have three dining outlets for those who want to meet visitors in a restaurant setting,” she says.

There are other choices for people like Anil who want the option of short and long-term stay other than Pacific Regency. There is UBN Tower next to Shangri-La Hotel which offers a minimum of a year’s lease, and closer to the Mandarin Oriental, there is also the Ascott in Jalan Pinang.

Operated by Singapore-based The Ascott Group, its portfolio in Kuala Lumpur also includes Somerset Ampang, Somerset Seri Bukit Ceylon, Marc Service Suites and Seri Bukit Ceylon Residence.

According to its website, The Ascott is the world’s largest international serviced residence owner-operator with around 19,000 units in key cities of Asia-Pacific, Europe and the Gulf region, as well as about 6,000 units which are under development. It has three brands internationally – Ascott, Somerset and Citadines.

The Ascott Group is a wholly-owned subsidiary of CapitaLand Ltd, one of Asia’s largest real estate companies.

One Residency, located behind Hotel Istana, is the latest addition this year but it will be St Mary Residences that will be interesting when it is completed, as it is expected to set a new benchmark in the Jalan Raja Chulan vicinity. E&O, after all, prides itself as a lifestyle developer and it will make sure that the project spells l-i-f-e-s-t-y-l-e.

Singapore private home sales plunge in Oct - REUTERS

Singapore private home sales plunge in Oct - govt
Reuters - Monday, November 16

SINGAPORE, Nov 16 - Sales of uncompleted private homes in Singapore plunged 29 percent in October from September, falling below the 1,000 unit level for the first time since January as government measures to cool the property market took effect.
Private developers including property giants City Developments and CapitaLand sold 811 units in October, according to data on the Urban Redevelopment Authority website, down from 1,143 units a month earlier.
The October data marked the third consecutive monthly drop since sales hit a high of 2,772 units in July, but volumes were still well above the 211 units that changed hands in October 2008 during the worst of the global financial crisis.
Singapore moved to curb speculation in the housing market in September, saying authorities will release more land for development and make it harder for home buyers to defer payments. [ID:nSIN486658]
"The market is most definitely cooling down," said Mohamed Ismail, CEO of PropNex, a real estate broker. He predicted sales in the last two months of 2009 will likely be less than 2,000 in total.
"The pent-up demand which accumulated during the financial crisis has largely been spent," he added.
URA started releasing monthly sales data in June 2007 for private property, which house around 15 percent of Singapore's population. The majority live in government-built apartments.

NYTimes.com - Cold Water for Asia Property Market

Also read it here http://www.nytimes.com/2009/10/29/business/global/29property.html?_r=1&scp=1&sq=asia%20property&st=cse

By BETTINA WASSENER
Published: October 28, 2009

HONG KONG — Almost four years after swelling property prices started to collapse in the United States, giving rise to the most severe global financial and economic crisis in decades, the housing market remains depressed in many parts of the world — except in much of Asia.
Here, property prices have defied the global gloom, soaring this year as buoyant economic growth and low interest rates prompted an inflow of money into apartments and houses — as well as stock markets — across the region.

Earlier this month, a Hong Kong luxury apartment sold by the developer Henderson Land grabbed headlines when it sold for $55.6 million, at a price per square foot that had never before been seen in a city renowned for some of the world’s most expensive housing.

And property developers have been taking advantage of the boom by lining up to tap the financial markets with a wave of stock market listings.

But is the party set to last?
Over the past few weeks, regulators across the region have begun to announce small steps to keep a lid on property prices. Some investors are also now indicating that they are ready to take a break from the frenzy.

This week, Excellence Real Estate, a property developer based in the southern China city of Shenzhen, announced it was putting on ice its planned stock market listing in Hong Kong, which had been expected to raise as much as $1 billion.

Excellence cited “the current market conditions” for its decision — a reference to fading investor appetite for the flood of new offerings that has swamped the increasingly sated stock markets in China and Hong Kong.

Similarly, Yuzhou Properties, based in Fujian, priced its planned Hong Kong I.P.O. at the bottom of its previously indicated range, Reuters reported Wednesday. A person who answered the phone at Yuzhou declined to comment.

To be sure, many analysts still expect property prices to rise next year in many major markets, and half a dozen other property companies are still lining up for initial public offerings. Among them are Evergrande Real Estate Group and Longfor Properties.

But analysts, who have started to worry about an asset bubble in the making, are welcoming the newfound sense of moderation as a healthy development in the market. “I think it’s a good thing that the listing was pulled,” said Paul Schulte, head of multistrategy research at Nomura in Hong Kong. “For several weeks now, there’s been a lot of concern that too much paper is coming onto the market too quickly.”

So far this year, residential prices in Singapore are up 15.9 percent, according to analysts at Macquarie. In Hong Kong, they are up 23 percent, and back at their March 2008 peak. Residential prices in most Chinese cities are at least 15 to 25 percent above the lows of a year ago, Macquarie estimates.

The odd man out in Asia is Japan, whose economy is struggling to emerge from the deep slump it has been in for much of the past two decades. Urban land prices in Tokyo, for example, fell 8 percent in the second quarter of this year from the previous quarter, according to data compiled by Global Property Guide.

One factor driving the property boom in the rest of Asia, though, is low interest rates and ample lending — reminiscent of the origin of the U.S. boom that went bust. “Policy makers in 2009 waved their collective magical wands and, hey presto, turned a financial meltdown into an Asian property bubble,” said analysts at Macquarie in a recent research report.

Another factor driving the boom: Western capital is flowing to Asia in search of better returns, according to Mr. Schulte. “Hong Kong and China are on fire because of a shift in leverage,” he said.

The rally has extended to emerging Asia’s stock markets, which have easily beaten Wall Street and Europe in their performance this year. As a result, Asia has also dominated global I.P.O. activity — though as Excellence’s decision and the lackluster performance of numerous recent debuts show, the oomph has now gone out of that market.

“Things start to get a bit overheated when the amount of new supply gets to about 2 percent of overall market capitalization within six months,” said Ajay Kapur, head of global strategy and economics at Mirae Asset Securities in Hong Kong. “We’re at about 1.5 percent now, so there’s a bit of indigestion creeping in now.”

Macquarie says that much of the property market growth one would have normally expected to see in 2010 has simply been brought forward into 2009 — leaving less room for prices to rally as much next year.

It is a view that is gaining traction.
“We believe the market will normalize next year, but also, that it is unlikely to fall sharply again, despite increased regulatory controls by the authorities,” said Kevan Tsang, an analyst at the ratings agency Moody’s, referring to mainland China’s property market.

Policy makers in China and elsewhere, unnerved by the rapid price rises, have begun to announce measures aimed at taming the market.

Most countries are reluctant to raise interest rates — and mortgage rates — quite yet, for fear of stifling nascent economic recovery. But they have plenty of other tools in their arsenal.

Last Friday, for instance, regulators in Hong Kong raised the down payment required for homes costing more than 20 million Hong Kong dollars, or $2.6 million. In South Korea, the financial regulator plans to tighten regulations on nonbanking finance companies’ lending to households.

“I think we will see more of that sort of thing across the region going forward,” Mr. Kapur said.

Real Property Gain Tax is BACK!

In the 2010 budget which was announced recently by Najib Razak, the Prime Minister and Finance Minister, it looks like Real Property Gain Tax (RPGT) which was suspended by then Prime Minister Abdullah Badawi in 2007 to boost the property market is now back.

"The Government needs to ensure that the Malaysian tax system is equitable and able to generate revenue for development purposes. In line with this, the Government proposes that a tax of 5% be imposed on gains from the disposal of real property from 1 January 2010. However, the existing tax exemption wll be retained for gifts between parent and child, husband and wife, grandparent and grandchild. This exemption will also be given on disposal of a residential property once in a lifetime."

What does this mean? Speculators, i.e. people who buy to flip once the property is completed are screwed.

Renovations at Pangsapuri Subang Jaya

Following the success of the 1st apartment at Subang Jaya SS15, I was fortunate enough to buy another unit, which coincidentally is directly beneath the 1st one.


Thus, embarking on another journey of renovations and furniture shopping. I am also fortunate enough to come across a very understanding seller who is willing to give me vacant possession when I paid the booking fee. (N.B: However, this arrangement is risky and not encouraged and only possible if there is this element of trust between buyer and seller). A tenant was found also on the same day and we have exactly 1 month to deliver the apartment to the tenant.

Below are some pictures of the apartment before and during renovations. I will post pics after renovations in exactly 1 month to show you the results. Keep posted...

pictures above and below: Bedroom 4 before and during renovation

pictures above and below: Bedroom 3 before and during renovations

pictures above and below: Dining Area before and during - the dining area will become the kitchen

pictures above and below: The Kicthen before and during - the kitchen will become another bedroom with a balcony. It is important this is done carefully as this balcony serves as a fire escape. Safety is first!

pictures above and below: Master bedroom before and during renovations

pictures above and below: One of the 2 bathrooms before and during renovations

The major part of the renovation is the electrical wiring and plumbing. It was discovered during the inspection that the Electric DB was not able to support 4 air-cons. This apartment was constructed almost 20 years ago when homes typically only have 1 air-con (When air-cons were expensive!). The kids rooms can only accomodate fans. The piping was done using Galvanised Iron Pipes which has since rusted and blocked.

The parquet was removed some time ago due to termite infection. I do not like the tiles and tiles are really not suitable for bedrooms. The 1st thing your feet touches when you wake up must not be cold. Over years, one would develop arthritis. Hence, we are going to cover the bedroom floors with termite-free teak wood (laminate... hahaha!).

The door of the master bedroom is also adjusted to give common access to its' bathroom so that the ratio of tenants to bathrooms will be 2:1. The sink will be relocated out of the bathroom so that people who are just applying make-up or brushing their teeth will not get in the way of those with more pressing or desperate agendas!

Keep posted for the results!

Private home prices up 15.8% in Q3; HDB resale prices up 3.6%

Is this real or speculative? And is this effect affecting Malaysian properties?

Channel NewsAsia - Saturday, October 24

SINGAPORE: Private home prices rose 15.8 per cent in the third quarter compared to the second quarter — slightly lower than the initial forecast of a 15.9—per—cent rise made by the Urban and Redevelopment Authority (URA) in early October.

The rise in prices between July and September is a sharp turnaround from the 4.7—per—cent fall seen in the second quarter, and snaps four straight quarters of decline.

According to the URA, non—landed private homes in the city fringe areas saw the highest increase in prices of 18.5 per cent in the third quarter, while the prime districts saw private home prices rising 15.2 per cent. In the rest of Singapore, private home prices climbed 16.1 per cent.

In the second quarter, all three regions had seen a decline in private home prices of between 2 and 5 per cent.

Meanwhile, property prices for office, shop and industrial properties decreased by between 1.2 and 2.1 per cent.

Rentals of private residential, office, shop and industrial properties also fell, with the decline ranging from 0.9 to 4.1 per cent.

URA said that the fall of rental rates for all property types in the third quarter moderated compared to the second quarter.

Meanwhile, prices of HDB resale flats rose 3.6 per cent in the third quarter. Resale transactions increased by about 14 per cent from the second quarter to 11,649 cases.

The Housing & Development Board (HDB) said the median Cash—Over—Valuation (COV) amount among all resale transactions has risen to S$12,000. It said in tandem with this trend, cases transacting above valuation has also increased to 79 per cent.

HDB said that in the next two months, the public can look forward to another 4,000 Build—to—Order flats in Punggol, Bukit Panjang, Sembawang and Dawson.

Together with other sale exercises, as well as flats offered under the Design, Build and Sell Scheme, the total flat supply for 2009 would be about 13,500 units.

HDB said it is monitoring demand and would adjust its building plan accordingly to ensure an adequate supply of new flats.

— CNA/sc

Property Headlines and Sentiments in Singapore

The Straits Times of Singapore reported today that HDB is ramping up flats supplies up to 7000 units over the next 3 months.

At the same time, it is also reported that private home prices have soared 15.9% in the 3rd quarter. This have wiped out half the losses since mid-2008. However, the Straits Times quoted experts warned that this could be due to excessive speculation. The government may intervene if the price rise continue to be unsustainable.

A number of property launches are also advertised including overseas projects such as the Gold Coast, New Zealand, London and our very own D'Tiara. Amanah Raya advertised D'Tiara with a lucrative 10:90 scheme and a dubious 35% guaranteed rental return. Prices for D'Tiara at KL Brickfields area start from SGD228,000. However, Singaporeans may not have a problem choosing large luxurious Auckland City Apartments in New Zealand which comes with a car park starting from SGD225,000. The Kiwis also offer a more realistic guaranteed rental return of 7%.

London's Woodberrypark project is also advertised in the Straits Times with starting prices at GBP199,950. These are 1,2 and 3 bedroom units located in Zone2, 5 minutes from the Picadilly Line. Despite the hefty starting price for a 1 bedroom unit, it should not be far off the reach of many Singaporeans as that price would get the same size unit in central Singapore.

High-Rise Demolition

This old condo at Orchard Road Singapore is in the process of being demolished.

Several tractors are working on it from the top floor and slowly working on their way down. There is no more empty parcels of land in Orchard Road, so the only way to build new is to demolish old.

Win Win Lose Situation - Guaranteed Rental Return

http://www.myrealestate.com.my/
Posted: Fri Oct 02, 2009 11:55 am Post subject:

cblau wrote:
Visit dua residency the other day and there is this landlord selling his f/f unit 2.3ksft @ 1k psf and willing to guarantee 12k rental per month ... Non furnish units i still see ads asking Rm 850 psf ... Actually this is not a bad place to stay consider the asking price ...

Sinleong: This guarantee high rental rate is an old trick... I hope you guys think about it.

2300sf @ RM1000psf = RM2.3million

Normal price is RM850psf i.e. RM1.955million

Difference is RM345,000.

Rental guarantee is worth RM12k x 12months = RM144,000.00

I can get my friend to sign the tenancy agreement with you. After 12 months, my friend moves out. He gets to stay in Dua Residency for 12 months and I get RM200k more for my sale. WIN WIN LOSE Situation. Haha!

Don't forget, you pay maintenance fees over this 12 months... RM0.40 x 2300sf = RM920/month or RM11,040 per year.