Malaysia properties continues to fall in 2017

Prices of luxury homes, especially strata units, are expected to decline this year due to the absence of the Developer Interest Bearing Scheme (DIBS), which previously played a role in pushing up the cost of these properties, according to CBRE-WTW Managing Director Foo Gee Jen.

“You have to go back to the history of what happened two to three years ago. Whenever developers offer a project, a lot of DIBS and so forth were catered to stratified properties. For landed properties there were no issues in selling so there’s not so much mark-up in terms of pricing for landed properties but a lot of mark up for stratified properties.”

As such, he believes that prices of upscale strata residences could fall by 10 percent to 15 percent in 2017, while the cost of landed housing could drop by 10 percent or lower.

Foo explained that many people who have purchased units with the aid of DIBS and other rebates two years ago are now selling them at lower prices, and this trend is particularly evident in Kuala Lumpur, Kota Kinabalu and Johor Bahru.

In the subsale market, Foo noted that sellers are now more practical, reducing the gap between the asking price and the final agreed amount.

“I believe strongly that the price correction has started. A lot more developers are taking note of that. A lot of them are suffering. Some of the high-end products are not moving and if you go into their showroom it is very quiet.”

Based on his company’s research, the overall number of upscale condos in Kuala Lumpur reached 37,824 units last December. Of this, units costing between RM700 to RM1,000 psf account for 86 percent, but this could slide to 64 percent in 2019.

For high-end units valued from RM1,001 to RM1,500 psf, these are expected post the highest growth of 4,000 units per annum on average, comprising 23 percent of total number of condominiums by 2019.

But the most problematic segment in the housing market are SOHOs/SOVOs (small office home office/serviced office virtual office), as occupancy levels are so low given the supply glut. This situation is expected to persist until the government’s infrastructure projects are finished in the next three to four years.

Once these infrastructures are established, these are anticipated to bolster the SOHO/SOVO sector, and some landlords would find it easier to rent out their units via websites like Airbnb, said Foo.

Overall, the housing sector is forecasted to be flattish in 2017 and lower in terms of value as more builders venture into low-cost flats.

“The only good sign is a lot more developers will venture into affordable housing. If the government pushes hard enough in terms of supply of PR1MA homes and others, the residential segment, I think, will see a slight improvement but overall if you add up the rest, commercial and others, I think it (volume) will be very flat,” he added.

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Metro Homes Iskandar 2017 Letter

Dear Metro Homes Iskandar colleagues since 2012,

We have come a long way since the heydays of property boom in 2013 to the present lull in 2017. Property markets move in cycles and its inevitable that we would move from the current low to another high point again in the medium to long term.
We have started our MHI office in Horizon Hills office in Sept 2012, being the 1st property agency to open in Horizon Hills when the shoplots are mainly vacant back then. We spent two very busy years in 2013 and 2014, followed by a slowdown in the next two years 2015 and 2016. At its peak we have slightly more than 100 RENS & Expat Consultants, when the market was red hot in 2013 and 2014.
Today in Jan 2017, we have trimmed lots of fats and slimmed into a lean team of not more than 10 active RENs. The matured and actives players are still earning their keeps, having established themselves as the niche markets leaders in Horizon Hills, East Ledang, Puteri Harbour and Leisure Farm. They are still doing well and would do better in the coming years when the market slowly returns to its bull cycle in the next few years.
From Jan 2017, we have moved to our own shop office purchased in 2014, and completed in Q4 2016 in Ion Medini. The address is :
No.8-1, Blk D1, Pusat Perdagangan Ion Medini 1, Persiaran Medini Sentral 6,  
Bandar Medini Iskandar, 79600 Iskandar Puteri, Johor, Malaysia.
We are using the 1st floor office with the same experienced Admin staff Fazilah and an additional colleague, Joel Desilva, who is our D&Jo Hospitality Asst Manager. Joel is in charge of our short term leasing business, with special focus presently in our Afiniti Residensi Legoland Serviced Apartments where we manage about 30 units. Our shoplot ground floor No. 8 is still vacant and is open for any business opportunities from all of you.
We have a 10 plus people Hi-Tea gathering in our MHI’s Ecoworld Botanic Corner Villa on 14 Jan 2017 and we look forward to another gathering in our shop office in the next quarter.
I hope everyone continue to stay in touch via our What’s app group and via emails as well, till better days return for us to strive again…..
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Johor Sultan replies to Dr Mahathir

Johor ruler Sultan Ibrahim Sultan Iskandar has blasted former prime minister Dr Mahathir Mohamad for claiming that Johor is “surrendering land to the Chinese”, and said the veteran politician has “gone too far”.

In an exclusive interview with The Star published today, the sultan is reported as saying he was “deeply offended and hurt” by Mahathir’s comments made over the past weeks.

“Enough is enough. I have so far restrained myself from commenting on the controversy on Forest City generated by Dr Mahathir and his supporters.

“But Dr Mahathir has gone too far with his twisting of the issue. He is making allegations that 700,000 mainland Chinese will stay in JB, and that citizenships will be given away, and that huge tracts of land have been sold to the Chinese.

“He is giving the impression that Johor is surrendering land to the Chinese and that we are giving up our sovereignty, comparing even how we gave up Singapore to the British,” The Star reported the sultan as saying in an interview at Istana Bukit Serene.

The sultan also pointed out that a large portion of Forest City would comprise condominiums that are to be built on reclaimed land.

‘Take a look at Singapore’

“I would like to ask Dr Mahathir if these foreign buyers can just take their apartments back home or carry off an inch of the reclaimed land.

“Take a look at the number of foreigners who have bought pro­perties in Singapore. Are the Singaporeans in that tiny island republic worried? No, they are not and they, in fact, welcome affluent expatriates there,” the sultan is quoted as saying.

The situation in Singapore, he said, was unlike Mahathir’s attempts to allegedly create fear using race for political motives.

“He (Mahathir) is not stupid, he’s just selfish and opportunistic,” Sultan Ibrahim added.

Commenting further, the sultan said that Forest City’s mixed development project was not targeted at Chinese investors, but for anyone around the world, inclu­ding Johoreans.

“This project will increase Johor’s land size and sovereignty,” he said in noting that the spill­over effect would include re­venue for the state go­vernment in terms of taxes and about 200,000 job op­­por­­­­tunities.

The sultan said this in response to a series of comments and blog posts by Mahathir, who had claimed that huge tracts of land around Johor Bahru were being sold to fo­­reigners with no restriction, and there would be mass immigration to take up residence in these new cities.

Mahathir had raised his concerns based on a Bloomberg report that claimed Forest City would accommodate 700,000 new houses upon its completion.

This was on top of 60 similar other projects within Iskandar Malaysia around Johor Bahru, which could add another 500,000 houses.

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Malaysia Secondary Market Continues to Drive the Way, Up Hopefully.

The secondary housing market moved the real estate business last year, accounting for around 80 percent of the country’s real estate transactions, reported New Straits Times.

“New projects account for between 20 and 25 percent. It is the secondary market that drove the market last year,” said Malaysian Institute of Estate Agents (MIEA) past president and chief trainer K. Soma Sundram.

In fact, the booming secondary market is expected to continue to move the property market this year.

On the market’s present condition, Soma Sundram explained that the property market, which is witnessing more supply than demand, is still finding its direction.

He noted that demand is based on various factors, such as financing and income level.

“Prices have gone up and it’s good that the market is going through this period,” he said. “It is now finding the balance where it should go from here on.”

Meanwhile, MIEA deputy president Eric Lim called for a stronger regulation and enforcement in order to curb the activities of illegal real estate agents.

He revealed that majority of the real estate agents registered under the Board of Valuers, Appraisers and Estate Agents Malaysia (BOVAEA) are found in clusters within Johor, Penang and the Klang Valley.

Since activities in other states are scarce, these illegal agents thrive on unregistered transactions, he said, adding that East Malaysian states has the highest number of illegal transactions.

He shared that the company had been educating the public on the dangers of dealing with illegal property agents.

“We try and educate the public not to respond to illegal signboards on the streets, not to deal with them as they are not registered,” said Lim, who also serves as chairman of the BOVAEA’s Estate Agency Practice Committee (EAPC).

“If at any moment the deal goes wrong, victims would not be able to recover their losses.”

According to Lim, EAPC has partnered with relevant government agencies in a bid to bring the illegal real estate agents to justice.

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Mathathir’s Views on Huge China Investments in Iskandar Malaysia

The present administration has attracted significant investments from China, but in return, it has given big land parcels where buildings that will be occupied by these foreigners will rise, claimed Former Prime Minister Mahathir Mohamad.

He said the bankruptcy of 1Malaysia Development Berhad (1MDB), whose funds where allegedly used for personal reasons by Prime Minister Najib Razak and his close associates, has forced the government to use valuable land as collateral to get foreign investments.

“Our heritage is being sold, our grandchildren won’t have anything in the future,” said Mahathir on Saturday during the launch of the opposition party he leads at an indoor stadium in Selangor, Shah Alam.

Mahathir’s four-month-old Parti Pribumi Bersatu Malaysia was officially approved as a registered political party in September 2016.

Aside from that, he reckoned that Malaysia’s demography would be affected by the substantial investments from abroad and gargantuan infrastructure projects.

In a blog post written last December, Mahathir said PM Najib’s plan for a railway line to connect the country’s capital with the states in the east coast will require many migrant workers to temporarily reside in Malaysia within a long period of time.

“They (China) will come with technology and workers from their country. Their workers, tens of thousands of them, must necessarily be based here, especially in Kelantan, Terengganu and Pahang.”

The construction of the RM55 billion East Coast Rail Link, which is funded by China, is expected to take seven years, he added.

Meanwhile, the 91-year-old Mahathir pledged to rescind the unpopular six percent Goods and Services Tax (GST) and stop all sales of huge assets to foreigners if the opposition parties win in the next general election, which is widely speculated to be called in 2017.

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Malaysia Rules on Short Term Rental

While home-sharing has gained popularity across the world thanks to websites like Airbnb which allow people to list or rent short-term lodging, different places in Malaysia have varying rules regarding this.

In the country’s capital, it appears there is no licence requirement for homestays or home-sharing, said an Airbnb host who asked not to be identified.

“It depends on the property manager of a residential building. They may prohibit home-sharing activities if they cause trouble to long-term residents living in the property,” he explained.

To verify, a spokesperson from Kuala Lumpur City Hall (DBKL) said: “As long as you’re using your flat for residential purposes (which includes rental), there is no need for you to apply for a business licence or permit”.

Similarly, there are currently no rules prohibiting short-term rentals in Petaling Jaya, said City Councillor Tang Fuie Koh. However, he warned that this does not mean that residents are allowed to do so.

When asked if home owners need to convert their land title from residential to commercial if they intend to lease their residences for either short-term or a long period of time, the Petaling Jaya City Council (MBPJ) councillor explained that this is not required unless it’s for commercial use, like homes for the elderly.

 

Meanwhile, the Federal Government currently has no intention to regulate the home-sharing sector, according to a representative from the Urban Wellbeing, Housing and Local Government Ministry.

“The Tourism and Culture Ministry also has no jurisdiction over the matter,” added an officer from the agency.

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Good Bye Raffles Country Club, Welcome HSR to KL

The Singapore Land Authority (SLA) gazetted the acquisition of the land occupied by Raffles Country Club (RCC) in Tuas on Wednesday (4 January), so that it can be used for the facilities of the upcoming Kuala Lumpur-Singapore High Speed Rail (HSR) and future Cross Island Line’s (CRL) western depot.

“The RCC site is the most suitable location to run the at-grade HSR tracks immediately after the bridge crossing, and to place the tunnel portal leading to the underground tunnels that would take the HSR to the Jurong East terminus,” said the Land Transport Authority (LTA) in a statement.

“This, we feel, is the optimum site in terms of location, the size, and orientation,” LTA’s Deputy Chief Executive Chua Chong Kheng told TODAYonline. “There are not a lot of options where we can actually site, without having to make a lot of land acquisition.”

The RCC will also make way for the HSR’s crossover tracks and a siding facility that will temporarily house a train near the border for safety or operational reasons, if necessary.

In addition, the CRL’s western depot will be built there. This will contain stabling and maintenance facilities, as well as structures serving other transport-related needs, which may include train testing facilities.

The HSR, which is expected to reduce travel time from Singapore to KL to just 90 minutes, is expected to commence operations by 31 December 2026.

According to the TODAYonline report, the RCC is one of Singapore’s oldest golf clubs. It opened in 1988 and its 30-year lease was supposed to expire on 31 October 2028. However, the owners will now need to relinquish the property to the SLA by 31 July 2018.

It is the second golf club to make way for the HSR. The other was the Jurong Country Club, which was required to sell its land for the HSR terminus before it closed last year.

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