Malaysia needs to produce more houses to achieve 20/20 by 2020

KL to rank 20th Most Competitive and 20th Most Livable City by 2020

AS I walked the streets in Melbourne, people are either taking pleasure in their daily activities or catching up with their friends. More importantly, they are enjoying an abundance of economic and lifestyle opportunities, supported by their affordable housing prices and convenient transportation. It comes as no surprise that the city has been ranked as the world most livable city by The Economist for years.

Melbourne tops the list as the most livable location, according to a survey of 140 cities conducted by the Economist Intelligence Unit (EIU).

For Malaysians, the good news is, Kuala Lumpur ranked second in South-East Asia after Singapore on the same list, while the challenging part is we were at No. 77 in the world ranking, according to the survey last year.

In terms of competitiveness, the World Economic Forum (WEF) has ranked Malaysia as the 24th most competitive nation among 148 countries in its Global Competitiveness Report 2013-2014. Under the Economic Transformation Programme (ETP), the Government aspires to elevate Kuala Lumpur to be the top 20 most economically dynamic cities and top 20 most livable cities by 2020.

To realise these goals, we need to gear up our efforts in building both the hard and soft infrastructure of the country. And if we are to be a truly developed nation, one of the most critical criteria is to have more homes, as the nation’s housing needs must first be addressed to ensure quality living.

Let’s take a look at how developed nations house their people. Take Australia as an example, where four of its cities, i.e. Melbourne, Adelaide, Sydney and Perth, ranked in the top 10 most livable cities as measured by the Global Liveability Survey in 2012. Australia has a population of around 22 million living in 9.1 million homes, according to its census in 2011, which means their average person per household is 2.5.

Another developed nation in Europe, United Kingdom, has a population of 62.7 million people and number of homes is approximately 25 million, which also works out to have an average of 2.5 persons per household.

In Malaysia, while our population is about 28 million, we only have about 4.6 million homes, according to National Property Information Centre. This is equal to 6.08 persons per household. For us to catch up with Australia and United Kingdom which have an average of 2.5 persons in a household, we would require a total of 11.3 million homes in our country, which is a 250% increase from what we have currently!

However, at our current housing production of about 100,000 homes a year, it would take us 67 years to catch up with the benchmark displayed by these developed nations, assuming there is no additional increase in population.

The statistic above paints a picture of the fundamental required for a developed nation. As a developing nation, the Government and the relevant private sectors need to find ways to grow the number of homes in Malaysia. We are in need of more housing especially when the Government aims to move our country towards developed nation, and to grow the population of Greater KL from 6 million people to 10 million by the year 2020, which would put further pressure on the housing market in urban areas.

Currently, production has not been able to keep up with demand and this has pushed up housing prices. Having ample supply is the only long-term sustainable way to keep housing affordable. The Government needs to streamline the delivery system to increase the number of homes built every year, instead of stifling the supply which also include the cooling off measures which may eventually lead to higher prices due to inadequate supply.

Imagine if we are having 11.6 million houses today instead of 4.6 million, our house prices would be more affordable due to ample supply. The bottom line is we need more houses, especially affordable houses. It will help in the long run if the authorities can find ways to encourage housing supply, and this include putting off cooling measures on the property industry which only work in the short run as shared in my last article “Cooling Off Measures Choke Supply”.

More production of houses will make prices more affordable. And, if the Government can further support the housing needs with infrastructure including having a good public transportation system, the aspirations of making Kuala Lumpur the top 20 most livable and most competitive cities in the world can become a reality by 2020.

FOOD FOR THOUGHT BY ALAN HONG KOK MAU
FIABCI Asia Pacific chairman DATUK ALAN TONG has over 50 years of experience in property development. He was FIABCI World president in 2005/06 and was named Property Man of The Year 2010. He is also the group chairman of Bukit Kiara Properties.

Related posts:
 Rising tides of currencies globally cause inflation, money worthless!

Is having a car still a symbol of freedom?

Make the right money moves: investing in a property is still best

Malaysia's property market still growing strongly

Malaysia's property market still has much room to grow and will benefit from the high property prices in Singapore, said founder and principal trainer of Singapore-based School of Infinite Potential, Kenny Tan (pix).

"Malaysia('s property market) still has much growth. The market here is exciting and there is a lot of potential and resources. Malaysia can become a really solid country with its hardworking people," he told SunBiz in an interview.

Tan, who is also ERA Realty Network Pte Ltd group division director and a practising real estate agent, said property prices in Singapore have driven buyers to Malaysia due to its closeness in terms of proximity and culture.

"A lot of Singaporeans buy their second home or investment properties here. There is a lot of interest here, especially in Iskandar Malaysia (Johor). There is a lot of interest from Singaporeans, but we always advise them to do research prior to investing," he said.

Tan said while Singapore's property market has gone through a few rounds of corrections, property prices in Kuala Lumpur have been constantly rising since 2004.

Although the issues in Europe and the US have resulted in expatriates pulling out and weakening the rental market, there has been a good influx of foreign interest from South Korea and Japan.

"There is still a lot of opportunities for real estate agents in this segment," he added.

Meanwhile, the cooling measures introduced by the Singapore government has also helped attract interest to Malaysia, with Malaysian property developers taking the opportunity to ramp up their marketing efforts in Singapore.

However, there is still strong demand in Singapore's properties despite the cooling measures, especially from Chinese investors, said Tan.

"(It's just that Singaporean) investors are now taking their time to buy instead of rushing in and chasing prices. There are still transactions (in Singapore properties)," he added.

On property buying trends in Malaysia, Tan said it is moving towards online buying, selling and marketing.

"Technology provides convenience and productivity, one can search for properties online at any time and anywhere. This is already happening in Singapore and we foresee that happening in Kuala Lumpur over the next two to three years.

"There is an evident trend that Malaysia is moving towards that direction with the various online forums and property portals," he said.

Tan said going online means buyers can do research before viewing properties or meeting up with agents, saving time and money. At the same time, real estate agents know the calls they get are more likely to be hot leads rather than cold calls.

"However, there is still a segment of buyers who still use newspapers to search for properties. For example, the older generation and those who are less internet-savvy.

"In Singapore, buyers who want to buy landed properties do not search online. There is still a certain type of buyer who like traditional media thus it is important to have both (mediums)," he added.

 By Eva Yeong  sunbiz@thesundaily.com

Related posts:

Kuala Lumpur property market gains stronger Momentum

Property investments: good Infrastructure a way to huge profits and success  

Kuala Lumpur property market gains stronger Momentum

SINGAPORE, July 18 (Bernama) -- The Malaysian property market has gained stronger momentum after the May general election, which saw a turn-around in the investment market in the second quarter of the year, says DTZ Research.

In a research note titled, "Property Times Kuala Lumpur Q2 2013 - Greater Market Certainties After The Election", it said the turn around in the second quarter was driven by corporate purchases for occupational requirement despite concerns about overall oversupply in the market.

It said the overall office market was stable.

Both vacancy and rental rates remained unchanged with continued substantial supply in the pipeline.

The research house also said the anticipated oversupply sentiment did not appear to affect the market as activities remained resilient and active, supported by stable rental and capital values.

Retail sales remained buoyant with continued local and international interest for investments in the sector.

It said the high-end residential market resumed activities with several new launches during the quarter despite Bank Negara contemplating measures to curb speculation and lending.

"Now that the GE13 is over, companies are starting to proceed with major investments, which may have been temporarily held back by political uncertainties.

"We can expect stronger momentum in government-linked mega projects such as the Tun Razak Exchange (TRX) where third-party investors and developers have been invited to participate, DTZ Research added.

The total value of 12 deals recorded in the second quarter amounted to RM988.6 million compared with RM490.8 million, comprising three deals in the first quarter, mostly in the office sector.

-- BERNAMA

Malaysia's property market steady, demand not affected by global factors

KUALA LUMPUR: The property market may be affected by the global economic factors but local demand has not been dampened, according to some property developers.

Low Yat Group sales and marketing executive Sean Saw said there was interest among Malaysians especially the younger adults to purchase property although the economy may be holding some of them back.

“I gather that even though the property sector may be quieter due to external factors, but there are still transactions. Newly launched projects continue to be sold out, surprisingly,” he said after a briefing for exhibitors at the Star Property Fair 2012.

He added that the market for sub-sale may be slower but the overall market was expected to be back in full swing next year.

Saw said the fair would be a great avenue to raise awareness among homebuyers about Low Yat's high-end projects, especially its Tribeca serviced apartments to be launched this quarter.

LBS Bina Group Bhd's managing director Datuk Lim Hock San also concurred noted that despite the economic uncertainty, there was still demand in the local property market especially the affordable homes.

“This can be seen in our recently launched Royal Ivory double-storey double storey cluster link semi-detached development where over 300 units were fully sold in three months,” he said.

LBS which is participating again in the Star Property Fair after a hiatus last year said that it was back with exciting projects.

Senior public relations executive Cleosun Ng said after the first exhibitors' briefing: “It has been an exciting year for us. We have many projects to share with the homebuyers and this fair is the right platform for us.”

She added that the fair would serve as a branding channel for LBS to convey its lifestyle living range of products to the homebuyers.

Bukit Gambang Resort City developer Sentoria Group Bhd would also be exhibiting, promoting its investment development within the Bukit Gambang resort city that include commercial and residential projects.

Sales and marketing senior executive Cony Tan said that the fair would be a great ground for Sentoria to get more exposure and reach new customer as it used to only reach out to existing customers through its buyer-get-buyer scheme.

Bucking the trend: Exhibitors attending the briefing. Some property developers say newly launched projects continue to be sold out.

 

“All the while we invite existing customers to our events but since launching our villas, we are trying to market our products through different channels,” she said, adding that Sentoria has started participating in roadshows and exhibitions in the second half of the year.

“The customers who walk in to (the Star Property Fair) would be very potential buyers. There are good chances of growing our customer database and getting feedback on our products,” she said of what to expect at the fair.

The Star Property Fair, in its fourth year rolling, would be held from Nov 30 to Dec 2 at Kuala Lumpur Convention Centre.

By LIZ LEE lizlee@thestar.com.my

Malaysia's Tax Budget 2013: politically savvy for general election? Housebuyers may struggle to pay!

Beyond the statistics of Budget 2013, it is clear that the government is well aware that the middle income group has found itself in a sandwich position.

FOR some in the Malaysian middle class, especially those in the upper income bracket, there is not much to cheer about Budget 2013.

But this is a group that is not easy to please. If they have their way, they would want to have personal taxes reduced. I would want to pay less to the taxman too, but it is also about time that we wake up to the reality of having the consumption-based goods and services taxes (GST) implemented.

It may not be politically savvy to introduce the GST prior to the general election but the fact is the current tax base is simply too narrow. Just over a million people are now paying personal income tax in a country of over 27 million people.

Through the GST, the tax net would be wider and those who spend on more pricey items would just have to pay for them. An ordinary wage-earner buying economy rice or roti canai won’t have to pay GST, for sure.

But if you buy a Louis Vuitton bag in KL, then it’s only right that you pay a hefty GST bill, and help the government raise its tax revenue. If we want to encourage tourism, we just have to follow what other countries are doing – limiting GST only to our citizens. Tourists, even if they are rich sheikhs, can apply for tax refunds at the airport.

That’s how GST works, but there is a general election ahead. The government does not want to be in a defensive mode, where it has to explain how GST works.

We are always looking to pay less while we expect the government to spend more to boost the economy, or even give away monetary goodies to spur spending.

When the government spends, it has to look for money. Currency speculator George Soros is surely not a good option.

Reducing by one percentage point for those with chargeable income between RM2,500 and RM50,000, as proposed in the Budget, plus the other tax reliefs, also mean that only 1.7 million people will now pay taxes compared with the workforce of 12 million.

Beyond the statistics, it is clear that the government is well aware that the middle income group has found itself in a sandwich position. They are the ones who feel the rising cost of living the most, and any effort to reduce their tax burden should be lauded.

It is this group that the Budget wants to target. The rich can take care of themselves and the poor has been taken care of.

The higher income group would still benefit, in some way, as regardless of how much one earns, the existing tax relief for their children’s education has been increased to RM6,000 from RM4,000 per child.

But it is the financially distressed wage earners, especially those in the lower earning bracket, who are doing their best to stretch the ringgit. After paying for their home rentals, car or motorbike loans and food expenses, there is nothing left, really. Saving itself is difficult, let alone finding the downpayment for the first home.

The affordable houses scheme would be essential to allow this group of urbanites to believe that they can own houses. The government must make it work.

Another measure that is targeted at this group is the 50% discount on KTM fares for Malaysians earning RM3,000 and below monthly. I would have preferred the government to just provide a blanket free KTM ride during peak hours in the mornings and evenings.

I am curious to see how KTM plans to carry out the registration of commuters who qualify and give them the special discount cards. If it is not effectively carried out, due to practical logistic issues, this scheme is definitely open to abuse. So the government might as well just provide free rides.

The whining upper middle class won’t be joining the queues at the crowded KTM stations, that’s for sure. It will still be the same KTM passengers who want to cut down on their financial expenses because they live in the outer city zones or even in Negri Sembilan but travel daily to Kuala Lumpur to work or to study.

The 70 new 1Malaysia Clinics will surely be welcomed as they would be a great help to the urban poor. Furthermore, 350 clinics would be upgraded and an additional 150 dialysis machines will be made available in government haemodialysis centres nationwide. All measures to improve healthcare facilities for the masses are surely welcomed.

But there is one area where the whining from the Malaysian middle class is legitimate – the crime problem.

We have repealed laws such as the Emer­gency Ordinance because the intelligentsia in urban areas demanded it. But the reality is that many of the Simpang Renggam graduates are now on the streets and the police cannot find these crooks because their hands are tied.

Budget 2013 has allocated for 496 CCTV cameras to be installed in 25 local authorities nationwide to prevent street crime in urban areas. This is like a drop in the ocean and surely insufficient.

We should have thousands, if not hundreds of thousands, of these cameras put up, as in London, to keep an eye on potential criminals.

As I write this, I have just been informed that my colleague had his new car hijacked by two men while he was on his way home with his wife and son in Subang Jaya. Incidents like this point to the necessity of having more of our policemen out on patrol.

The proposal to increase the number of police personnel for patrolling and combating crime is in the right direction. The police also have to review how police reports are made so that a person making a simple report about a car accident, or a lost handbag, does not have to compete with people making reports for serious offences. We need to put our policemen on the streets, not behind desks.

Let us consider making Rela, the civil service group, and volunteer policemen take over simple tasks like crowd and traffic control. The Budget has proposed an additional 10,000 officers for the Police Volunteer Reserve force. This is not something new but it will definitely reduce the unnecessary burden on the police.

On the Beat By Wong Chun Wai

 

HBA: Housebuyers may struggle to pay

Among the goodies were the building of 123,000 affordable homes at a cost RM1.9bil in key locations such as Kuala Lumpur, Shah Alam, Johor Baru, Seremban and Kuantan. The houses will cost between RM100,000 and RM400,000 each.

THE National Housebuyers Asso­ciation (HBA) has warned that house-buyers may struggle to service monthly loan payments if they buy homes under the My First Home scheme.

An applicant with a household income of RM5,000 a month, or a couple with a combined income of RM10,000, will not be able to afford the monthly repayments of a RM400,000 housing loan based on a 30-year repayment period after taking into account other household expenses and mandatory tax payments, said its secretary-general Chang Kim Loong.

Chang said applicants who commit to housing loans of RM400,000 with an average interest rate of 4.75% would end up having to pay RM2,086 each month.

“Based on Bank Negara Malaysia (BNM) guidelines, a single loan repayment cannot exceed one third of the applicant, or joint applicant’s gross income.

“It would also be a potential disaster for a household which cannot afford to fork out the 10% down payment from their savings to commit to a RM400,000 loan,” he said.

He said house buyers should always match the repayment period with the number of remaining years they expect to work.

Otherwise, he said, the applicants would not be able to retire, or end up committing their children to continue paying the loan.

On PR1MA, he said, the price cap of RM400,000 for homes was too high.

“PR1MA should be pricing their properties below RM300K, preferably in the range of RM150K to RM300K to cater to a wider base of the middle-income and lower-income groups,” he said.

Related post:

A promising Malaysian tax budget for 2013 this Friday?

Are Malaysian salaries enough to draw our talents back?

 Click on graphic for larger view.

FOR Daniel Chew, Brisbane a city of modern skyscrapers but known for its laidback lifestyle has been “home” for the last 10 years.

Even before graduating with a degree in Commerce from the University of Queensland, Chew, 29, remembers having secured a job offer. The fact that his qualifications entitled him for permanent residence in Australia only made his decision to stay on so much easier.

His career path was set out in 2005, with him joining KPMG as an auditor, and later moving on to its corporate finance division where he specialised in business valuations. His years in professional practice also saw him qualify as a chartered accountant.

Today, Chew is a commercial analyst in the oil and gas industry, and he says the salary range for such a role can be anywhere from A$80,000 (about RM255,000) to A$140,000 (about RM446,000) per annum, “depending on the level and type of experience”.

“I don't think I could be earning in Malaysia what I earn here. Just the exchange rate alone already makes the salary here three times more than what it is in Malaysia,” he says.

Opportunity and lifestyle are two other factors that are keeping him Down Under, but he does not discount the possibility of returning to Kuala Lumpur if a good opportunity presents itself.

“Right now I have a girlfriend here, which means that if I were to go back, it must also mean that there is a good job prospect for her as well.

“Having a good salary package would definitely be a good motivator (to move back), but I'm also looking at career growth opportunities. And being close to my family would be a plus point,” he says.

Norman: ‘Salaries in Malaysia in the mid-tier management are generally about 10% to 30% lower compared with that found in our Asia Pacific counterparts such as Singapore, Hong Kong and Australia.’

Another Malaysian, who only wants to be known as Justin and who has been in London for about nine years, says he is apprehensive about coming back.

Justin works in the finance department of an investment bank. The market rate for his role is roughly between £50,000 (about RM248,000) and £60,000 (about RM297,000) per annum, one which he isn't sure Malaysia can match.

“I don't know if Malaysia would be able to offer a better salary package but for me, the main question is whether Malaysia will be able offer the same opportunities.

“London is a world hub for foreign exchange (FX) and other investment banking products such as credits, equity, rates, etc, whereas the products traded in Malaysia are considered vanilla'. What I do in investment banking is quite specific. Even if I were to move into a different product area, there might not be a lot of opportunities for my career development in Malaysia,” he says.

However, Justin adds that taking care of his ageing parents in Kuala Lumpur is also an important consideration, and if push comes to shove, “Singapore might be a feasible option”.

Chew and Justin are just two examples of the many Malaysian talents living abroad, and to pull them back, salary and career opportunities are two factors which need to be seriously looked into. It has been reported that at present, as many as one million Malaysians are living abroad.

Interestingly though, according to Kelly Services managing director Melissa Norman, salaries in Malaysia in the mid-tier management are generally about 10% to 30% lower than that in our Asia-Pacific (Apec) counterparts such as Singapore, Hong Kong and Australia.

“It varies depending on the functions and skills, but for the mid-tier level, the difference is between 10% and 30%. When it comes to the C-suite executives, the difference could be much higher (where salaries overseas could double that in Malaysia),” she says, adding that the exchange rate alone is a pull factor for Malaysians to work overseas.

Money issues: It has been reported that as many as one million Malaysians are living abroad. To pull them back, salary and career opportunities are two factors which need to be seriously looked into.

 

(Refer to the chart, which is derived from the Kelly Services Asia Pacific Professional and Technical Salary Guide 2012. The salary guide is based on the actual transactions between Kelly's clients and candidates.)

Currently, positions that are in high demand in the Apec region are in the engineering and information technology industries.

“Where it shows (in the chart) that Malaysia is offering a higher salary compared to, say, Singapore, it means that those are skills which are highly in demand. They are niche skills, and companies are willing to pay a higher salary to bring in talent from abroad,” she says.

Generally, Norman says, fresh graduates in Singapore are commanding a starting salary of about S$2,500 (RM6,200), while many Malaysian graduates are “still hovering between RM1,800 and RM2,000”.

“You need to go one step further and ask Why are they getting paid a little more, and why are we paid a little less?' This brings you to the quality of the students. The majority of graduates here come out lacking in skills.

Sure, Malaysia is moving towards a high-income economy, but if wages go up and productivity remains the same, it would be a recipe for disaster. - Shamsuddin Bardan, MEF executive director

“When you talk about Singapore graduates, you're talking about universities like NTU (Nanyang Technological University), which are the cream of the crop. So the package they earn is warranted based on the quality of their background.
 
“Over here, you have the cream of the crop too, but naturally they get picked by all the big boys' (major firms and MNCs) even before they graduate. And you will have a pool of students who study overseas, but they don't come back,” she says.

Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan adds that when it comes to salaries, one has to look at the productivity aspect as well.

“When you talk about whether Malaysian salaries are competitive, you have to factor in productivity. According to the MPC's (Malaysia Productivity Corporation) 2012 report, Malaysia's productivity is 3.8 times lower than Singapore's productivity.

“In simple terms, what takes one employee to do in Singapore takes 3.8 employees here to accomplish the same task,” he explains.

According to the report, Malaysia's employee productivity value (the value of productivity of one Malaysian employee) is at US$14,217, lower than Hong Kong at US$65,174 and Singapore at US$55,702.

“So to look at wages on its own, that would not be fair. Sure, Malaysia is moving towards a high-income economy, but if the wages go up and productivity remains the same, it would be a recipe for disaster,” Shamsuddin says.

But the fact remains that brain drain and talent scarcity in Malaysia are very real issues that challenge employers.

Norman says that organisations are definitely “feeling the pinch of scarcity of skilled talent” which is prevalent today as people are very open to the idea of changing jobs and moving countries.

Since 2010, the Government has also been trying to woo talent back via TalentCorp, and more recently, Prime Minister Datuk Seri Najib Tun Razak announced the Talent Roadmap 2020, a nine-year time frame designed to address the underlying issues affecting talent availability in Malaysia.

So what will it take to bring our Malaysian talents back?

“Motivation is different for different people, but I would say the top three things would be the total package (salary, compensation plus benefits), the type of role these talents will have here (roles will have to be better, as no one moves laterally), and the policies that are involved (how easy it will be for talents to come back with foreign spouses, for example),” Norman says.

She adds that in trying to attract Malaysian talents back, the “rewards and the opportunities must be fairly presented so there's a nudge for people to make that move”. “To a certain extent, having Malaysians abroad is good for Malaysia, because of the exposure that they will have. But if we can bring them back, they can do so much for the country.

“Today when you look for talent, organisations need to pitch. If the talent is extremely great, some companies even have an attraction bonus just to get them to sign on. Package jumps when you're doing head hunting is fairly high,” she says.

Talent retention is equally important.

“We must recognise the fact that we must do something to retain the talent we already have here, so we don't also lose them eventually,” she says, likening it to a leaking bucket.

Ultimately, Norman says, the talent that Malaysians want back are “skilled workers who are in demand with niche expertise”.

To bring them back, the question which will need answering is “What's in it for them?”

BY LISA GOH  lisagoh@thestar.com.my/Asian News Network

Foreign funding for political purposes in Malaysia

Investigations to determine source of its foreign funding

KUALA LUMPUR: Investigations are being conducted on Suara Inisiatif Sdn Bhd, the company linked to non-governmental organisation Suaram, to determine the source and extent of its foreign funding.

So far, the “money trail” dates back to 2005 with the amount totalling over RM2mil.

The two main contributors are the American-based National Endowment for Democracy (NED) and the George Soros-linked Open Society Institute (OSI), which have been financing groups supporting its interests and objectives around the world.

The NED supposedly provided US$535,000 (RM1.605mil) to Suaram while OSI gave about US$248,000 (RM744,000).

Suaram's No 3 funder was identified as the South-East Asia Centre for e-Media (Seacem), with the German Embassy as the fourth.

The investigations centred on financial transactions conducted with Suara Inisiatif to counter-check “misleading information” and “suspicious transactions” in the company's accounts.

The NED dedicates itself to the growth and strengthening of democratic institutions and awards grants to organisations with programmes consistent with its (political) objectives.

Among others, it was reported to have provided funds to groups in Xinjiang and Tibet opposed to the Chinese Government.

OSI, started by financier Soros in 1984 to help countries make the transition from communism, is active in more than 50 countries in Eastern Europe, the former Soviet Union, Africa, Latin America, Asia, and the US.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob had said that legal action would be taken against Suaram and Suara Inisiatif by various government agencies for reporting a “misleading” account in its annual report.

He revealed that CCM's investigation had allegedly detected serious violations of at least five sections of the Companies Act by Suaram and Suara Inisiatif.

The minister also called for an investigation into an American NGO's alleged funding of Suaram and urged Bank Negara to investigate the matter under the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.

On Wednesday, the Attorney-General's Chambers directed CCM to further check accounts and other related offences under the Companies Act.

By PAUL GABRIEL paulnews@thestar.com.my

Related Stories:

Soros link kept under wraps
Malaysiakini admits to receiving foreign funds

• Sep 21

  Police reports lodged against Ismail Sabri over Suaram issue - Story | The Star Online

• Sep 20

  ROS probing Suaram over illegal raising of funds - Story | The Star Online

• Sep 19

  Suaram-linked firm faces legal action - Story | The Star Online

• Sep 19

  ROS: Suaram, Suara Inisiatif being probed separately for different offences - Story | The Star Online

Gamers battle it out for chance to ‘fight’ for country

KUALA LUMPUR: Over 600 Malaysian gamers are battling it out in the national edition of the World Cyber Games (WCG) to claim the chance to represent Malaysia in the Asian championships this weekend.

The tournament will see teams from nine other regional countries – China, India, Indonesia, South Korea, Mongolia, Singapore, Thailand, the Philippines and Vietnam – competing.

Winners will be selected to represent Malaysia in the WCG grand finals in Kunshan, China this November.

The national event at the Kuala Lumpur Convention Centre saw seasoned teams pitted against ad hoc teams, playing seven games including DOTA 2, FIFA 2012, Counter Strike Online and World of Tanks.

Among the teams was Orange eSports, which had participated in the Dota 2 tournament “The International 2” in Seattle earlier this week.

Cyber superheroes: Gamers fighting on the cyber battlefield during the World Cyber Games at the KL Convention Centre.

Team member Chan Litt-Binn, 23, from Kepong, said the six-man team barely had any time to recover after flying back on Tuesday, and had not even practised for this competition.

He said gaming did not have a good reputation here despite it being a lucrative career in other countries like China and Korea.

“My parents are not happy about my passion. They are expecting me to get a job soon,” said Chan, a former national chess player.

His team won US$25,000 (RM77,700) in their last tournament. The grand prize was US$1mil (RM3.11mil).

Form Five student Kung Ter Chuen took part in his team event in Counter Strike GO, despite dislocating his left elbow the day before in a bicycle accident.

Arriving at KLCC with his arm in a bandage and sling, Kung did not even go for an X-ray first before joining his team, called `Unknown’ at the championship.

The WCG was held in conjunction with the Pikom Digital Lifestyle Expo 2012, and is part of the programme for the National ICT Month.

By SHAUN HO shaunh@thestar.com.my

Smartphone Ascend P1 unveiled by Huawei Technologies

KUALA LUMPUR: With smartphones becoming an indispensable tool for staying connected on the social media networks, China-based Huawei Technologies has launched an affordable yet feature-rich model.

Many queued up as early as 6.30am to get their hands on the Ascend P1 at the introductory price of RM999 during its launch in KL Hilton yesterday.

Ong Boon Lin, 35, who was first in line, said he bought the phone for his wife as the larger screen would make it better for “reading news and books”.

“The Ascend P1 is a fast smartphone with a camera for capturing and sharing contents while on the move,” said Huawei country director for consumer business group Wong Wey Hwa.

A model with the Ascend P1 smartphone at the launch.

The phone has a large 4.3-inch screen, making it easy to browse the web, view images and watch high-definition videos. It also comes with 4GB of storage to store content, applications and games.

“Huawei has been working behind the scenes for many years by supplying infrastructure for network service providers,” said Wong. “We are now trying to grow our brand using online and social media with the Ascend P1.”

The smartphone, which is available currently in the Klang Valley, is expected to hit shelves nationwide in the coming weeks. The introductory price is valid until Malaysia Day.

Meanwhile, Bernama reported Huawei country director for consumer business group Wong Wey Hwa as saying that the company was aiming for double-digit sales growth in the Malaysian market.

“Last year, we did US$40mil sales in Malaysia for all our products,” he said, adding that the smartphone was expected to contribute 20% to 30% of the targeted double-digit sales growth.

Wong also announced the expansion of Huawei's device business under a new distribution partnership with ECS ICT Bhd via its wholly-owned subsidiary, ECS Astar Sdn Bhd, which would open up access to over 3,000 resellers nationwide.

“Through our formal partnership with ECS in Malaysia, we are able to expand our product reach and offer more accessibility of our devices to everyone looking for value-added mobile connectivity,” he said.

Wong said Ascend P1 would be available at participating ECS retailers in the Klang Valley and in other places in the next few weeks.

For a review of the Ascend P1, check out TechCentral.my.

By CHONG JINN XIUNG starbiz@thestar.com.my  

Related posts:
Apple's rot starts with its Samsung lawsuit win 
Put an end to patent battle
The US Pacific free trade deal that's anything but free?   

Upbeat views on Malaysian property

Tang: ‘Investors from China are big time property purchasers in Singapore.’

Substantial inflows and outflows of investments expected for this year

GEORGE TOWN: Despite the global economic crisis, property investments coming into the country and going to overseas this year are expected to increase substantially.

The recently introduced 10% stamp duty for foreigners buying properties in Singapore has increased the attraction of Malaysia as a property investment destination.

Property investments flowing to Melbourne, Australia, are expected to increase between 15% to 18% this year from RM125mil in 2011, thanks to new housing loans for the Australian market recently introduced by Malayan Banking Bhd (Maybank).

Property Talk International Sdn Bhd managing director Steven Cheah said that foreigners showing interest in Malaysian properties had increased significantly this year, compared with the last three years, due to the recent 10% stamp duty introduced in Singapore for foreigners buying homes.

“The other reason is that Kuala Lumpur still remain as one of the few South-East Asian cities with attractive property prices.

“Compared to Jakarta, the price for a prime residential in Kuala Lumpur is about 15% lower.

“The buyers are from Indonesia and China and they show preference for Iskandar, Johor Baru and Kuala Lumpur.

“Indonesians prefer Iskandar because it is close to Singapore,” he said.

The Indonesians and China buyers generally go for properties priced between RM600,000 to RM1.5mil in Iskandar and Kuala Lumpur, while in Penang they go for RM1mil above homes, according to Cheah.

The additional direct flights from Jakarta to Penang by Air Asia had also fueled the interest from Indonesia for Malaysian properties, Cheah added.

This year, Property Talk expects to sell about RM55mil worth of properties located in Johor, Kuala Lumpur, and Penang, compared with over RM20mil achieved for 2011.

“Over the past three months, we have sold over RM25mil worth of properties, comprising 35 residential homes located in Kuala Lumpur and Iskandar, Johor Baru.

“We expect to sell another RM30mil worth of properties, comprising 30 to 40 homes, from Iskandar, Kuala Lumpur, and Penang via three more property exhibitions in Jakarta jointly organised by Malaysia Property Inc and private developers before the year ends,” he said.

An aerial view of Melbourne. Property investments flowing to the Australia’s city are expected to increase between 15% to 18% this year.

 

On investments from Malaysia to Australia, Cheah said the loan interest from Maybank was between 4% to 5% per annum compared with 5.7% to 6% per annum by Australian banks.

“This is why we can expect more Malaysians to take up the loan to invest in Melbourne, Australia this year,” Cheah said, adding that the Maybank housing loan was for Melbourne only.

According to Cheah, Melbourne is the top investment destination for Malaysian property investment funds.

“This is because many Malaysians have relatives who have migrated to Melbourne, where you can find a variety of Malaysian food restaurants.

“According to the latest research from Australian Property Monitors (APM), over the last five years, Melbourne has been the standout performer among the major capital cities for house price growth, with prices increasing almost 30% in just 15 months,” he added.

Meanwhile, Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said Henry Butcher had recently set up a property show gallery in Beijing, following the imposition of the 10% stamp duty by the Singapore government for foreigners buying properties in Singapore.

“The gallery, set up two to three months ago, showcases residential properties from Klang Valley, Malacca, and Penang.

“Investors from China are big time property purchasers in Singapore.

“With the 10% stamp duty introduced, Malaysian developers are now trying to attract them over.

“We still need to do a lot of education work in China to promote Malaysia as a property destination, as the awareness is still lacking,” he said.

Tang added there were many enquiries from China investors to buy vacant land to develop residential projects in Malaysia.

“We hope they will undertake development in Malaysia and promote the properties in China.

“This will help to increase more awareness for Malaysian properties in China,” he said.

According to Tang, the global financial crisis which erupted in 2008 and 2009 saw foreign interest for local properties dropped significantly. ”In 2010, we see a return of foreign interest, but the volume and value of property transactions involving foreigners still have not not recovered to anywhere near its peak prior to 2008.

“We believe the pace of investment from overseas will remain flat against last year.

“Besides tapping into traditional sources like Singapore, Hong Kong and Indonesia, Malaysian developers are moving into markets such as South Korea and China.

“China is a vast market and if Malaysian developers are able to educate the investors on the attraction of Malaysian real estate, we may see a surge in foreign interest,” Tang added.

Henry Butcher Marketing director for international marketing Jazmine Goh meanwhile said the global economic crisis had created favourable conditions and opportunities for Malaysians to invest in overseas real estate.

“The economic slowdown in Britain has caused property prices to plunge and coupled with the drop in the value of the pound sterling against the ringgit, properties in the United Kingdom have become more affordable and within reach of middle income Malaysians.

“The mortgage defaults in the United States have also resulted in a lot of opportunities to pick up properties foreclosed by the banks at a fraction of the original price.

“Of course, the fear of the prolonged debt woes in Europe has at the same time resulted in a more cautious attitude being adopted by investors,” Goh said.

The popular investment destinations for Malaysians are Australia, mainly Melbourne and to a lesser extent, Sydney, Perth, Brisbane and Gold Coast as well as London, and Singapore, and more recently, the United States, according to Goh.

By DAVID TAN davidtan@thestar.com.my

The right property mix

Making housing affordable, avoiding a property bubble and ensuring there is no over or under development are some key issues.

FOR the vast majority of people property means getting a respectable roof over their heads with proper amenities in a decent neighbourhood, and getting it affordably.\

For others, it is about getting a second or third property or more for the sake of investment – a good return eventually for the price they paid and as a hedge against inflation because property prices mostly continue to rise in the long term much faster than inflation.

The most sophisticated of them don’t just restrict their investments to the residential market but dabble as well in commercial and industrial space such as shops, offices and factories, wherever they may be located.

Socially, there has to be regulation of property development not only to ensure that it is done up to certain standards but to ensure a proper mix between the various kinds of development such as residential, commercial and industrial and the various segments within these broad sectors.

It would be a mistake to micromanage however and within broad guidelines, it is often best to leave it to the market place to adjust things. But it does take a long time for things to adjust in property because of the gestation period before a property can be brought to market.

Ideally, property development should take place under the aegis of a broad master plan which has been formulated after intense study and research, taking into account projected population growth and other demographics. It should be dynamic to take into account changes.

Unfortunately we don’t stick to a plan in terms of development and even when there is a master plan it is often overruled by those in authority for other reasons which are often not compelling from an economic viewpoint.

In residential development, the greatest challenge is, of course, providing decent housing at affordable cost to the vast majority of the population. Unfortunately that is also a function of income – if people are poor, they won’t be able to afford nice houses no matter what.

But we are a middle-income country and we can do some things to keep prices of properties within reasonable levels. The best gauge of that is in relation to our own income level instead of making comparisons with countries with much higher incomes (eg Singapore) or those where special situations make property expensive (eg Mumbai).

Prices are always a function of demand and supply. Some moves simply increase demand, often without a fundamental increase in demand for actual occupation. Opening up property purchases to foreigners often result in a spurt in demand at the time of sale but properties may not get occupied. Look at some high-end properties in Mont’Kiara and around the twin towers area in Kuala Lumpur for illustration.

Also, making a leveraged property purchase easy encourages property speculation. If you pay 5% down and if your next payment is two years later and if the property appreciates just 10%, you have made 100% (before transaction costs) in two years or 50% a year roughly. That is powerful incentive for speculation, creating an artificial demand that can collapse two years out.

To curb such kinds of speculation which lead to temporary surges in house prices and a potential bursting of the bubble in future, it will be necessary to curb foreign property purchases and easy financing schemes.

Meantime, the state and federal governments and their agencies must be more circumspect about handing out their landed assets to developers at very low cost to develop. Developers naturally want to maximise their returns and high-end, high-density properties offer the best returns.

Instead governments and their agencies should develop a master plan for the land they have and allocate the areas meant for low-cost, medium and high-end residential as well as commercial and industrial. Then they can invite the developers to bid for the parcels they will develop.

All that would take a lot of work, yes, but nothing worthwhile comes without proper effort. Examples to emulate for low-cost to medium-cost housing might be the Singapore Housing Development Board which has strict criteria for purchase of property, resale and standards.

Examples not to emulate would be Singapore again which has adopted a free and unfettered stance as far as sale of property to foreigners is concerned which has priced high-end property beyond the vast majority of Singaporeans to become the domain of multi-millionaires.

Incidentally, this is one of the major complaints of Singaporeans who otherwise have little to complain about in terms of economic development and living standards given their tiny space and resources. That has been reflected in voting trends too, leading the government to descend from its mighty perch of “I know it all” to re-examine its policies.

In commercial development, the trend in Malaysia has been to cramp it all in as little space as possible to maximise development profits. Abetment comes from authorities who give approvals with little or no thought of proper planning considerations such as availability of parking, public transport and whether it will cause congestion.

Many developers are willing to take the plunge into commercial development because of high profits. The danger of over-development is the greatest here, especially with plans to set up a new financial district called the Tun Razak Exchange, which will result in plenty of commercial space coming on stream in Kuala Lumpur city. Developers in this area have been granted tax exemption which will cause market distortions by giving them an advantage over others.

Under the circumstances, authorities have to be extra-vigilant to ensure that there are no untoward pressures on the property market, both in terms of a boom or a bust.

Speculation and ill-considered development can cause a volatile, mercurial mix which if it explodes can cause years of agony. Better a sensible, more stable brew that stands the test of time and ages gracefully.

A QUESTION OF BUSINESS By P. GUNASEGARAM starbiz@thestar.com.my

P Gunasegaram (t.p.guna@gmail.com) is an independent consultant and writer. He believes strongly in the old adage that prevention is better than cure.

Credit-tightening cooling down property market

 Loan approvals for home purchase decline

The banks' tighter lending rules have slightly diminished the actual sales in the residential property market, according to real estate consultants as well as Bank Negara Malaysia data.

Bank Negara's website revealed that the percentage of loan approvals for houses have declined to 46.8 percent in 1H2012 from 50.1 percent over the same period last year.

The amount of mortgage applications for home purchases rose by 2.9 percent year-on-year to RM96.7 billion in 1H2012. However, the value of loans that were approved fell from RM47 billion to RM45.26 billion.

Paul Khong, Executive Director of CB Richard Ellis Malaysia (CBRE), noted that residential property prices could be affected if the mortgage approval rate continues to decline.

"In order to conclude transactions, residential property sellers may now need to realistically adjust their selling prices as many of the buyers cannot get their loan applications approved," added Khong.

CBRE's recent report on Kuala Lumpur's housing market also noted a decline in the percentage of loan approvals in Q2 2012. The report revealed that the rate "was as high as 60.5 percent during the first five months of 2008, and has declined steadily since."

The report also highlighted that the lower rate could be due to the central bank's new lending guidelines.

Anthony Chua, Director of KGV International Property Consultants, commented that although the demand for homes continues to be high, the tougher lending measures have somehow cooled the market.

"We are still monitoring the situation. There is less transactional activity in the market this year for both new property launches and the secondary market compared with last year," said Chua.

Related Stories:
Bank Negara should extend guidelines to non-bank lenders
New guideline axes loan approvals non-bankable borrowers
Loan demand remains stable

 Actual sale of residential properties declining

PETALING JAYA: The residential property market may be cooling down in terms of actual sales due to credit-tightening measures by banks, according to real estate consultants and Bank Negara data.

Bank Negara's website showed loan approvals' percentage for residential properties in the country declined to 46.8% in the first half of this year from 50.1% during the same period in 2011.

The number of loans applied for purchases of residential properties increased by 2.9% year-on-year in the first half of this year to RM96.7bil.

However, the number of residential property loans approved during the six-month period declined to RM45.26bil from RM47bil in the same period in 2011.

It is also worth noting that the loan approval percentage for non-residential properties was stable at 52.3% in the first half of this year, compared with 52.4% during the same period in 2011.

The number of loans applied (RM50.35bil) and approved (RM26.35bil) for purchases of non-residential properties was also stable in the first half of this year.

CB Richard Ellis (Malaysia) Sdn Bhd executive director Paul Khong said if the housing loan approval rate continued to decline, it will affect residential property prices.

“In order to conclude transactions, residential property sellers may now need to realistically adjust their selling prices as many of the buyers cannot get their loan applications approved,” he said.

KGV International Property Consultants director Anthony Chua said although the demand for residential properties continued to be high, the credit-tightening measures by banks had resulted in the market “cooling somewhat”.

“We are still monitoring the situation. There is less transactional activity in the market this year for both new property launches and the secondary market compared with last year,” said Chua.

Property consultancy CB Richard Ellis (M) Sdn Bhd had, in its recent report on the Kuala Lumpur residential market for the second quarter of 2012, also noted that there was a significant decline in the loan approval percentage this year.

“The loan approval rate was as high as 60.5% during the first five months of 2008, and has declined steadily since,” said the report.

The CBRE report said that the lower rate of loan approvals this year could be attributed to the implementation of new lending guidelines by Bank Negara.

Effective this year, banks have started using net income instead of gross income to calculate the debt service ratio for loans.

“Anecdotal evidence from real estate agents suggests that transactional activity has also declined as a result.”

The property consultancy also pointed out that despite the lower loan approval rates, buyer interest in new property launches, typically of smaller housing units in secondary locations, during the second quarter remained strong with developers continuing to offer attractive incentives to the purchasers such as the developer interest bearing scheme (DIBS), early bird discounts, free built-in cabinets and free legal fees.

“We expect 2012 to be a period of stabilisation especially within the luxury residential market, with transactional activity depressed by uncertain economic conditions and the reduction in loan approval percentage, which remains well below 50%.”

The CBRE report also said speculative property purchases were expected to be reduced for the rest of this year, as a result of tighter lending conditions, uncertain economic outlook, and concerns about the outcome of the upcoming general election.

Meanwhile, another property consultant said the tighter lending conditions had taken a visible toll on the secondary residential property market.

“Newly-launched properties are selling well thanks to better financing access, especially with the DIBS offered by many property developers.”

The consultant said slower sales activities in the secondary residential property market had resulted in innovative offers from marketing agents.

“This includes transactions where buyers sign the sales and purchase agreement but take the bank loans only a year or twolater. In effect, the buyers lock in the unit price now (perhaps in anticipation of further increases in market prices) and defer payment until much later. This works just like an informal DIBS,” he said.

In a recent report, Kenanga Research also said based on its channel checks, the secondary market appeared to be very weak and prices of secondary and primary products have diverged further.

The research unit opined that buyers were more focussed on new launches due to financing and promotional schemes.

“From a bank's perspective, we think there is a preference to lend to the primary market as it means better asset quality whilst banks can get all-in' deals with developers (for example, end-financing to bridging to land financing) to ensure a more balanced systems loans growth.”

Kenanga Research also opined that as a result, property developers can continue to grab greater market share and chalk-up high sales, although it expected Malaysia's overall residential transaction value growth to be relatively unexciting at 5% year-on-year.

It was noted that despite the tighter lending criteria, Malaysia's total residential transaction values have remained stable in the first quarter of this year.

It said buying interest remained strong, due to residential property buyers hedging against inflation and the lack of alternative investments, but this will be reigned in by more prudent lending criteria and the banking system's fear of real-estate tightening measures such as higher real property gains tax.

By THOMAS HUONG huong@thestar.com.my/Asia News Network