Concern over rising prices of houses

Speculators believed may be taking advantage of easy financing

PETALING JAYA: The jump in home prices lately has raised concern that speculators may be taking advantage of the easy home financing scheme.

Since the introduction of the scheme early last year, property sales have improved considerably while prices in some locations in the Klang Valley and Penang have edged up by between 10% and 20%.

Under the housing facility, buyers only need to fork out a small deposit of 5% or 10% of the property price and do not need to make any further payment until after their property has been delivered to them.

Developers are absorbing the stamp duty, legal fees and interest cost during the construction stage.

While some industry players agree that there is cause for concern, most feel the housing facility is still needed at least over the next 12 months until the market is back on a stronger footing.

Ireka Development Management Sdn Bhd chief operating officer Lim Ech Chan said easy-payment schemes had its pros and cons.

With the low entry cost, such schemes enabled those who have difficulties buying a house to put down the initial 5% or 10% downpayment and have their own roof over their heads two to three years later.

“When SP Setia first came out with the scheme, it helped the mass market a great deal,” Lim said.

He said the drawback was that since buyers did not have to pay anything for the next two to three years, they may sell their units when the project was completed.

“If the project is handed to them during a boom, they can sell it. But if the project is handed to them during a weak economic environment, they will have to pay for the mortgages.”

ECM Libra head of research Bernard Ching said the recent 25 basis point increase in overnight policy rate had prompted more buyers to buy and lock in at the current interest rates as they might expect the cost of fund to rise further.

“This is the best time to buy a property for own occupancy as entry cost is at an all time low. As seen in the high buying interest in the past six months, many buyers are buying to hedge against rising inflation down the road,” Ching told StarBiz.

According to Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector president James Wong, developers need to catch up with “lost time” when launches had to be deferred for more than a year as a result of the global financial crisis.

“Buyers were facing cashflow problems then and needed to watch their spending. Buying big-ticket items like a house is the last thing on their mind. There are merits in the scheme as it has lowered the entry cost and make house purchase more affordable for buyers.

“Such financing schemes require a lot of resources and only the big developers with strong financial resources can afford to adopt them. In a way, it is a variant of the build-then-sell concept,” Wong said.

He said there was still no risk of overheating in the market as the double-digit rise in property prices was registered only for very niche projects in very-sought-after locations where demand far surpassed supply.

“Property prices on the whole are still much lower compared with those in other countries. While there is still upside potential, prices will not spiral out of control,” Wong said.

Since buying interest recovered in the past few months, developers are no longer offering the housing facility across the board but only for selective projects.

“Besides, Bank Negara is very stringent and only eligible buyers who have the required minimum income level will be able to sign up for the housing packages,” Wong added.

On its downside, he said while the scheme might had drummed up sales, it could give the wrong indication of the real or effective demand for houses.

Admitting that there would always be speculators in the market, SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin said as long as speculation was not rampant, it was actually good for the market as it demonstrated confidence and would improve market liquidity.

“The key is for banks to be vigilant in their credit assessment to determine the borrowers’ ability to service the loan. They should also be selective in terms of the projects and developers to whom they extend the scheme.”

Liew said the higher prices reflected insufficient supply to meet the strong demand for projects in good locations and there was ample room for further price appreciation for good landed residential property.

Since the scheme was launched early last year, SP Setia’s monthly sales averaged more than RM190mil between January and July 2009, which was a new sales benchmark for the company.

Mah Sing Group Bhd president Tan Sri Leong Hoy Kum said of the company’s RM727mil sales recorded last year, 51% of the buyers signed up for the easy financing facility. The sales was much higher than its target of RM453mil.

By ANGIE NG and THEAN LEE CHENG starbiz@thestar.com.my

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A server for the home

EASY ACCESS: The Home Server Console will allow you to manage the operating system remotely from any other machine.

 

ONE OF the most overlooked versions of Windows is Home Server and it also happens to be one of Microsoft’s best.

It is not uncommon for a home to have more than one computer, which is why having a dedicated machine with Home Server is so vital.

Firstly, Home Server will make backups of up to 10 machines in your house — we would prefer that there wasn’t a limit but 10 sounds reasonable for now.

Besides maintaining backups it can also stream movies and music, and share files across the network.
At the moment, you can’t get your hands on just a copy of the OS but instead have to buy a Home Server PC.

Acer is the only one offering such a machine here and it is called the Acer Aspire Easy Store.
Though custom building your own computer and installing Home Server would be the best option, the Acer Easy Store gets quite a number of things right.

Acer Aspire Easy Store

 

It has an Intel Atom 230 processor (1.6GHz /512K cache/ 533MHz FSB), Intel 945GC Express chipset, 2GB RAM and 1TB hard drive (upgradable to 8TB over four bays). It costs RM1,299.

Also, more Home Server PCs are expected to be available starting from the third quarter of this year. If you don’t wish to wait, you can download a trial copy at bit.ly/q85Fb and start fooling with it.

Remote access
Because the Home Server is best controlled remotely, you will have to install a client called a WHS Connector on each machine.

Even though the software is included with the Home Server disc, there is a better way to install the client over the network. Open up a browser window and type in http://servername:55000 where the server name is the name of your Home Network PC.

This should bring up the Windows Home Server Connector page which will prompt you to download the client. Once you download and install the client you’ll be prompted to input the admin password for the Home Server machine.

After that you will be presented with the Console window from which you can fully control the functions of the Home Server and how it’ll interact with the other machines.

The first tab – Computers and Backup – will show all the other computers connected to the Home Server. You can use it to schedule backups or start an instant backup.

Also, should you need to retrieve any of the backed up files, you can access the read-only virtual partition that the Home Server will create for you on your local machine.

Streaming media
The Home Server will automatically create a few standard folders for file sharing. To be able to stream to other devices, go to the Console setting and click on Media Sharing on the left pane.

You will then be able to turn on media streaming for all your shared folders.

However, the Home Server can only stream to devices that support the Windows Media Connect protocol such as a PC with Media Player and Xbox 360.

More add-ins
It’s also a good idea to update Home Server with the latest patches and security fixes. Click on the Setting button on the top right corner. Look for the Update Now button under the General tab and click it.

This will download the latest patches and security fixes. There are also a number of community developed add-ins that you should consider installing. Here are a few of our favourites.

Advanced Admin Console (home-server-addins.com)
For even better control of your Home Server, you can install the Advanced Admin Console which will create an additional tab in the Console window.

The handy tab will give you quick access to the server’s Command Prompt, Registry Editor, Start Menu, Recycle Bin, Administrative Tools and Task manager.

Disk Management (bit.ly/cCnGAX)
As good as Home Server is at managing the multiple hard disks but you’ll still want to be able to see every possible information of your storage.

With Disk Management, you’ll be able to see detailed information about each disk including its capacity, real-time temperature and activity and a 3D wireframe representation of the server.

The 3D wireframe is not only cool looking but it also makes it easy to select any part of the hard disk that you wish to monitor.

Armed with this info, you’ll know exactly which drive to upgrade or replace before it’s too late.

LightsOut (bit.ly/8mBCS5)
Home Server is meant to run 24/7 so that it is always available but you still should do your part for the planet by saving as much power as possible.

You can do this with the LightsOut add-in which can put the server in Suspended or Hibernation mode until a particular event triggers it awake such as a scheduled backup.

However, LightsOut comes in two flavours — a free but limited version and a full version which costs US22.90 (RM75).

My Movies (www.mymovies.dk)
With so many movies and songs on your hard disk you’ll want a convenient way to sort them. Enter the My Movies add-in.

This nifty add-in retrieves community generated metadata for tagging movies with info such as movie summary, director and cast information, running time, genres and more.

You’ll even get high quality movie covers so you don’t have to browse your movies by text alone.

This feature is only supported if you access the Home Server using Windows Media Centre from any other computer.

The add-in also features extra functions such as DVD ripping but this has to be unlocked with a donation to the forum.

Source: The Star TechCentral


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Surprise! The banks want to make money, Goldman Sachs

Goldman Sachs, one of the most prestigious banks in the world, has issued a detailed rebuttal of the SEC's accusation of fraud

 

Gordon Brown is "shocked". The notion that Goldman Sachs might have been playing off one set of clients against another to its own advantage, as alleged in a civil lawsuit filed by US regulators last week, had apparently never occurred to him, and he has called for a special investigation into the US investment bank's activities.

Give me a break. Until last week, I had never heard of the transaction in question – an unpleasant-sounding structure involving dodgy mortgages, a clever hedge fund manager and some less savvy investors – and I have no idea if the charges will stick.

I am, though, familiar with the concept that bankers in the middle of such transactions tread a fine line in order to remain on the right side of propriety. This issue is so widely understood that it has a special name: managing conflicts of interest.

It is also obvious that in the run-up to the financial crisis banks sold sub-prime mortgage products that were not, let us say, as safe as they were cracked up to be. Last year, the Securities and Exchange Commission subpoenaed Bank of America, Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley and UBS, for information about the marketing of mortgage products.

This is par for the course: whenever there is a financial boom, bankers peddle hot products with enthusiasm that verges on the excessive, and after the inevitable crash, investors – rightly or wrongly – seek to pin the blame for their bad decisions on these middlemen. The difference this time is the scale of the crisis and the resulting economic downturn. As a result, a restructuring of the financial system, rather than some rule tweaks, is now on the cards.

Goldman in the line of fire

Given that Goldman has been at the centre of post-crisis controversy on several counts, it is not surprising that it is in the line of fire. Wall Street's most prestigious bank has always conceded that its business model involves managing complex conflicts of interest – not only between different sets of clients, but also between itself and its clients. This is true of all investment banks, since trading inevitably creates losers as well as winners.

Of course, banks which advise companies and execute big trades for clients have an edge: they are in possession of superior information. There are rules in place to prevent abuse, but let's not pretend that doing the right thing – or even defining what is the right thing to do – is always easy.

In recent years, grey areas have become even greyer, partly as a result of the proliferation of derivative instruments, which have many useful functions, including obfuscating what is really going on.

At Goldman, the web of conflicts became increasingly tangled as the bank built its own private equity business – allowing it to invest in companies directly – and developed strong relationships with hedge funds.

How effectively Goldman was "managing" these conflicts was an issue long before the crisis. Four years ago, Hank Paulson, its then boss, rebuked his London colleagues for a controversial attempt to bid for BAA, the British airports group it was supposed to be defending against a takeover approach.

Goldman's reputation, he feared, was at risk. That risk is now acute, particularly given Mr Paulson's subsequent role as US Treasury secretary during the financial crisis, when he allowed Lehman Brothers to fail but helped Goldman and Morgan Stanley to avert disaster.

Goldman has rebutted the SEC charges, and notes that the complaint involves "disclosure on a single transaction involving professional investors in a market in which they had extensive experience". The bank also points out that it subsequently lost money on the transaction.

I don't find this to be compelling evidence either way. Most banks lost money in the sub-prime market, but it doesn't mean that their actions were misguided, rather than ill-intentioned. The individuals who structured transactions may have been awarded big bonuses on the back of deals which, at least initially, allowed banks to book profits. This represents yet another potential conflict of interests.

The widely advocated separation of retail and investment banks would do nothing to solve this long-standing problem, since some of the worst conflicts are to be found within standalone investment banks. To strip down activities sufficiently to remove all conflicts would involve reducing the financial industry to uneconomic fragments.

Furthermore, the crackdown after the dotcom crash on analysts who privately denigrated stocks they publicly recommended showed that it is possible to end such abuse, if lines are clearly drawn then policed.

The big surprise, as far as I am concerned, is that anyone was naive enough to believe banks' "clients-first" rhetoric. Clever, financially motivated employees were given powerful incentives to prioritise short-term profits.

The email reflections of a Goldman banker, which form part of the SEC's case, describe "these complex, highly leveraged, exotic trades… created without necessarily understanding all of the implications of those monstruosities [sic]". Whatever the legal conclusion, that is a vivid indictment of how the industry operates.

 By Tracy Corrigan, Telegraph