Saturday May 5, 2012
By THEAN LEE CHENG
AS one scans through the classified advertisements, a bungalow in Sg Long, Cheras, about 20km from the city centre, is advertised for RM3mil. In Kepong, Kuala Lumpur, terraced housing with built-ups of between 5,000 sq ft and 6,000 sq ft, which is about the size of semi-detached units, in a gated and guarded community were sold for between RM3mil and RM4mil. Corner units are priced about RM5mil.
In the high-rise residential sector, the situation is the same. The prices in the same gated and guarded environment is advertised at RM650 per sq ft. In Ara Damansara, a new project is priced at RM700 per sq ft. On a per sq ft basis, the prices of new properties located in the peripherals are creeping up to match the prices in older and sought-after locations like Bangsar and Damansara Heights, one of the most upmarket residential areas in Kuala Lumpur.
The above situation may be the answer why sales of new launches are a bit slow today, as some developers have discovered as they take their launches to the market. This is particularly so for those offering high-end residential category, both landed and high-rise.
Property professionals say there are a couple of reasons for this wait-and-see attitude by buyers.
Valuer and property manager Datuk Mani Usilappan of Mani Usilappan Chartered Surveyors says buyers are still digesting the hefty price rise of the last couple of years.
But while that is still going on, something else is happening and that is the pricing of today's new launches, says Mani in a telephone interview.
He says many of today's new launches are way above the secondary market. The price of new launches today should be closely linked to the secondary market in that area.
“The prices of new launches are to have a close relationship with the secondary market. But today, the primary market prices seem to be higher and the secondary market seems to be moving lower.”
He says in Kajang, a new double-storey is priced between RM400,000 and RM500,000 while the older units are less than RM400,000. “The house may be new, but why would anyone want to buy something off plan at that price when he can buy something priced lower and which is already built?”
This may be the reason why people are taking a longer time to decide whether to buy or not. And when they do buy, it is because they need a house in that location to stay. For those who are buying to rent, he does not think the rental will justify the price. Mani, however, adds that there are quite a number of people who are looking for capital gains, and no longer at yields, and may still buy.
A property consultant who declined to be named says when prices of new properties in the peripherals creep up to match the pricing in Bangsar and Damanasara Heights, buyers who have that kind of money have a lot more choices.
“Once you hit that line and above, developers, or sellers in the secondary market, are creeping into somebody else's market that is better located and is more prestigious.
He says there are pockets of bungalows which are RM3mil and RM5mil and located far away from the city centre and he finds such pricing incomprehensible despite the house being new or beautifully renovated.
On developers who justify their pricing because of the guarded and guarded features, he says this is a concept being sold today, but the over-riding factor is still location.
“A guarded and guarded community may have a 20% to 30% premium, but it will still open up the minds and choices of potential buyers, that he now have a choice in Bangsar or Damansara Heights. The basis of pricing depends on location, not concept,” he says.
“Once you hit RM3mil to RM4mil in some peripheral locations, you (be it the seller or developer) are in trouble, as banks will not support such valuations.”
He says there is a clear profile between the buyers of these new expensive locations versus the established locations the likes of Bangsar, Damansara Heights and Bukit Tunku (Kenny Hills).
“The buyers are young and most of these newer locations do not have a history. They tend to take huge loans compared with buyers in Damansara Heights and Bangsar who are older, and who opt for smaller loans,” he says.
On the slow sales even in the secondary markets like Bangsar and Damansara Heights today, he says the market is saturated. Traditionally, locations like Damansara Heights, Bukit Tunku and Mont' Kiara are the preferred choices of the expatriate community but many of them have left. Coupled with that are the new pockets of developments in these upmarket areas as well as new ones in KL Sentral.
“Bangsar, KL Sentral and Damansara Heights are all within close vicinity of each other. The properties launched in KL Sentral may be different but it is still properties. There are just too many new developments being launched today, and there are only so many young people in town to take up these new launches as well as the older ones,” he says.
He reckons the same situation is happening in Cheras, where new units are priced higher than older ones. A semi-detached is priced at RM1.5mil to RM2mil, the reasoning is that a bungalow should be between RM3mil and RM4mil.
“The sellers do not realise that when they hit a certain price tag, the choice opens up and the potential buyer will think at that price, he may as well live in Bangsar or Damansara Heights.
Property consultant C H Williams Talhar & Wong MD Foo Gee Jen says the cautious attitude of buyers are reflected in some ways by the developers themselves.
“If you look at launches of high-end landed properties, these are few and far between. The number of units released are also small, maybe between 50 and 80 units. It would be commendable if they are able to sell 50 % of them,” says Foo.
He says in the high-end high-rise residential sector, there is an oversupply which explains why buyers can afford to look around. If you look at the past six to nine months, there is a trend that the sales is weakening. The seller who is asking for RM1mil is now asking for RM900,000.
“People are beginning to ask: why do I need to buy something off the plan when the ready units are almost at the same price as the new launches?”
He concludes: “Buyers have become more educated and cautious.”
He says the this situation of slowing sales is not helped by tenants moving from the older condominiums to new ones at the same rates of rental as this creates quite a bit of vacancy and bring down the yield, he says. The price of a house depends on the yield and household income.
Another reason for the slower sales is financing as banks lend according to valuation and these valuations may not be according to market rate, says an agent who declined to be quoted.
As to the direction of the housing market, all of them say buyers will wait for the election if their intention is to invest.
Monday, 21 June 2010
There is usually a correlation between real estate values and highway accessibility, as evident from numerous successful projects and schemes located along major highways. The opening of Lebuhraya Damansara-Puchong
(LDP), for instance, saw a number of new developments such as Bandar Puteri Puchong, Bandar Bukit Puchong, Damansara Perdana and Desa Parkcity sprout like mushrooms after rain all along the highway. Property values in
these places have climbed steadily over the years due to a combination of factors, including accessibility via the highway, say real estate consultants.
Similarly, the opening of the 14.7km Lebuhraya Kemuning-Shah Alam (LKSA) last month is expected to benefit real estate in Shah Alam where the new highway enhances accessibility. Now, it takes only a 10 minutes to drive
from Kota Kemuning to the Selangor State Mosque, from 30 minutes previously. The three-lane dual carriageway shortens the journey between the Shah Alam Expressway (Kesas) and the Federal Highway by connecting the
Kesas Kota Kemuning Interchange to the Federal Highway Route 2 Interchange near Shah Alam. Of the six interchanges, toll has to be paid at Alam Impian and the other at Taman Sri Muda.Improved accessibility
Managing director of PA International Property Consultants (KL) Jerome Hong tells City & Country that LKSA can help users save travel time and gain easier access to Kuala Lumpur city. This in turn will spur economic activity and produce indirect benefits.
“Economic activity can increase employment and commercial growth. However, the overall effects of the highway are difficult to quantify,” he says.
The industrial zones in Sections 15 and 16 in Shah Alam; residential areas of Sections 18, 19, 24 and 25; Hicom-Glenmarie; Batu Tiga; Padang Jawa; I-Bhd’s i-City; Alam Impian; Kota Kemuning by Hicom-Gamuda Development Sdn Bhd; Bukit Rimau by Malton Bhd; Kemuning Utama; Bandar Puteri Klang and Bandar Botanic are expected to benefit from the new highway. The benefits may spill over from the northern part of Shah Alam to the south.
Chan Wai Seen, director of research and consultancy with JS Valuers Property Consultants Sdn Bhd, says a steeper price growth can be expected for new and well-planned landed residential properties compared with older
projects. “Most established township developments in the Klang Valley have good access to major highways. Their growing population will stimulate commercial developments in the vicinity,” he observes.
Chan singles out Island & Peninsular Sdn Bhd’s Alam Impian as the main beneficiary of LKSA.
“It is a well-planned township with direct access to LKSA. On top of that, the prevailing strong demand for landed homes augurs well for landed residences in Alam Impian. The project, which is still in the early development stage, has room for further appreciation when the township matures.”
Citing the 2-storey terraced houses in Alam Impian known as “Canting” that were sold by the developer at about RM420,000 last year, he says prices have since appreciated to about RM480,000. Based on the track record of
the developer, secondary prices have the potential to breach RM600,000 when the development matures., he says.
Alam Impian is a 1,235-acre township with an estimated gross development value of RM4.95 billion. Launched and promoted as the “Township of the Arts” in 2006, it offers platforms to showcase local art, such as art installations, landscaping and street art, an art gallery and a 31-acre central town park.
So far, some 200 acres in Alam Impian have been developed.
“The values of homes in older housing estates such as Taman Sri Muda and other surrounding developments are also expected to rise, albeit at a slower rate than newer projects such as Alam Impian,” Chan says.
Of course, the highway’s impact on property values also varies according to the type of property and the distance from it. Chan notes that the prices of landed homes in the southern part of Shah Alam, including Taman Sri Muda, have appreciated by about 10% to 20% since end-2008 when it was announced that the highway will be partially opened in early 2009 at the Alam Impian interchange.
“Except for Alam Impian, there are limited large tracts of land available for development near the highway,” he says. “Also, upcoming developments will probably be positioned as niche high-end developments as opposed to ‘mass’ property developments, which are often associated with this locality,” he says.
New and ongoing developments in the vicinity of the highway include Pesona Kemuning, a residential project by AEH Capital (a subsidiary of APEX Equity Holding Bhd); Milano @ Kemuning (38 units of zero-lot bungalows by
Jaya Upaya Corp Sdn Bhd); as well as Bayu Villas at Bukit Rimau.Combination of factorsPA International’s Hong believes several factors have contributed to a rise in demand and property values in the areas with access to the LKSA.
“In addition to the prospects of a new highway offering better connectivity, other factors include the increasing demand for landed residential properties in the Klang Valley in general, and the broad-spectrum increase in values of such properties in the past few months,” he says.
“Generally, the LKSA is expected to boost demand for properties and positively impact property prices in the surrounding areas. However, the actual possible upside is dependent on many factors like property type, location, scheme, concept, developer and branding.”
According to PA International’s data, a 2-storey, 1,760 sq ft terraced home in Alam Impian was going for RM306,900 in 2006.
Hong adds that industrial property values in Shah Alam will also rise in the immediate future thanks to the highway. With its direct link to the Federal and Kesas Highways, LKSA will reduce travel time and traffic congestion within the internal road network of the area.
Industrial land and properties within Shah Alam have thus become more appealing to investors considering their lower entry prices/costs in comparison with the more established industrial areas in Petaling Jaya. Current average values of industrial land in Shah Alam are around RM40 to RM60 psf depending on the location.
“Also, with the rapid redevelopment in PJ such as the proposed rezoning of Section 13 for commercial use, demand for industrial land and properties in Shah Alam is expected to increase as an alternative area for industrial activities considering its proximity to PJ, lower entry prices, improved accessibility and the availability of workers,” Hong says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 811, June 21-27, 2010
Sunday July 1, 2012
BY LISA GOH
Property consultants forecast the property market to remain slow for the rest of the year. Will the average middle-income earner be able to afford the house of their dream now?
COMMUNICATIONS executive Michelle (not her real name) has been house-hunting for a while now but has yet to find a property that suits her budget.
Having been in the workforce for nine years, Michelle, 33, feels it is time to buy her own house. But with the prices of residential properties in Malaysia skyrocketing over the last two years, her prospect of getting her dream home looks bleak.
“Back in 2009, my friends were telling me to buy my own place but at that time, my priority was to travel. Around last year, when I was finally ready to commit to getting a house, prices weren't what they used to be any more.
“A decent 1,000sq ft (93 sq m) apartment that used to cost around RM200,000 to RM300,000 is now RM500,000 to RM600,000. That is far beyond what I can afford,” she laments.
From early 2010 up to the end of last year, residential properties in good locations within the Klang Valley have seen a sharp spike of between 20% and 40% in price, a trend which has caused grave concern for potential house-buyers.
But how is the scenario looking in 2012?
According to KGV International Property Consultants executive director Anthony Chua, the first half of the year has been generally quiet.
“There seems to be a breather in the residential market. It's definitely not as busy compared with the same period last year. (The number of) inquiries with us have also lessened significantly,” Chua says.
He explains that inquiries in 2012 with KGV on high-end properties (above RM2mil) have gone down by about 30% compared with the first half of last year. Inquiries on other segments (between RM1mil and RM2mil, and below RM1mil) have also gone down but not as drastically.
Reasons for this could include tighter lending guidelines set by the banks and buyers taking a more cautious approach on their investments this year.
(Following Bank Negara's new lending guidelines, which came into effect on Jan 1, loans are now approved based on net income compared with gross income previously, in addition to the need for more documentation. The new guidelines are intended to help keep household debt in Malaysia to reasonable levels.)
Chua adds that there was a lot of speculation in the property market in the past two years, and that the market is due for a correction.
“The economic scenario is not as rosy and people are expecting things to worsen, which could be why they are hesitant to invest. And to a lesser degree, it could also be the coming general election, which is causing some uncertainties,” Chua says.
“The number of buyers (for properties above RM3mil) has dropped by about half with the stricter bank-lending guidelines, which has eliminated the speculative group (of buyers).
“For properties below RM2mil, the market is relatively active with more real transactions. With the new lending guidelines in place, many investors have disappeared from the radar,” Khong says, adding that those who want to purchase their third property now will need 30% in cash for downpayment.
“So, to buy a RM3mil property, they'll need RM1mil in cash if it is their third property. Previously, RM400,000 was enough,” Khong says.
Interestingly, Chua notes that while interest in property purchase has waned, prices are still going strong for landed property.
However, sellers are seen to be less aggressive this year.
“They seem to be less demanding and more willing to accommodate. Last year, they would have said this is my price', and would have refused to budge,” he says.
Property consultants forecast the property market to remain quite slow for the rest of the year.
Even so, for average middle-income earners such as Michelle, the current prices of properties in various locations within the Klang Valley (refer to chart) leave her with few options.
“I don't even dare look at landed property any more. Even apartments at relatively good locations cost RM400,000 and up.
“For my budget, an apartment around RM200,000 to RM350,000 would still be quite comfortable,” says Michelle, who currently lives with her family in Petaling Jaya.
A mass communications graduate from the United States, Michelle draws a salary of about RM5,000 a month, which goes into paying for her car loan, household expenses, utilities, and credit card bills.
“Household expenditure doesn't just cover grocery shopping. I also have to pay for medical bills, car maintenance and repairs as well as give my parents some money too,” she says.
“As banks are now looking at net income, the loan amount I qualify for is unlikely to be enough for me to even afford an apartment in the Klang Valley.
“Sure, you can still get cheaper houses in places like Bukit Beruntung, but it's just too far away. My life is here. At the rate property prices are going, the thought has crossed my mind that I may never be able to afford a place of my own.”
It's not just within the Klang Valley that property prices have escalated.
Early last month, it was reported that residential property prices in Penang have shot up by more than 25% over the past five years.
Condominium units in Batu Ferringhi, Tanjung Bungah and Gurney Drive, with sea-front views, are being sold at astronomical prices, in some cases beginning with RM2mil for a 1,000 sq ft unit.
Houses which cost about RM500,000 in 2007 now cost RM800,000 an increase of about 30%.
Raine & Horne Malaysia director Michael Geh was reported as saying that the increase was among the steepest in the Pulau Tikus, Gurney Drive, Tanjung Tokong, and Tanjung Bungah residential neighbourhoods, which experienced a 25% increase in prices of condominium units.
Other areas where prices of condominium units and terrace and semi-detached houses have shot up by at least 25% are Bayan Baru, Sungai Ara, Minden Heights and Batu Maung.
Medium-range housing schemes in George Town neighbourhoods of Perak Road, MacCallum Street, Jelutong Road and Sungai Pinang have also not been spared an apartment located in such a neighbourhood cost RM180,000 in 2007 but is now RM250,000.
It is precisely with this concern in mind that the National House Buyers Association (HBA) has come up with a 10-point proposal to the Government, to find solutions which it claims will hopefully bring prices down.
Among the proposals are for the Government to unlock its land banks in various locations and give priority to affordable housing projects rather than high-end properties.
The HBA is urging the Government to take the lead in developing affordable homes and not leave it to property developers.
It has also proposed that those who buy homes under the affordable housing projects (with a proposed price range of RM150,000 to RM300,000) be barred from selling their property until after 10 years. Before the 10-year period is up, they should only be allowed to sell the house back to the Government.
The association has also proposed that the Government impose a higher stamp duty and real property gains tax as well as tighter mortgage rules for those buying a third and subsequent properties.
HBA secretary-general Chang Kim Loong notes that with the way prices are climbing, the majority of young working adults will not be able to afford to buy a home.
“I'm talking about young people from around the age of 25 to 35 years old, with an average income of about RM3,500 per month.
“The rule of thumb is that a third goes into paying for your home.
“But with RM1,000, many will still not be able to afford it. The consequence of this could be that an entire generation of young adults could be locked out of property investments,” he explains.
A question that needs to be asked, however, is whether HBA's proposal for “affordable housing scheme” by the Government will be able to meet the needs of the urban middle-income earners such as Michelle.
“There are several factors to consider. The location, for example,” Michelle says.
“If the design and quality is decent, then yes, I am willing to consider it. But this doesn't mean we have to settle for bad quality homes, with cheap construction materials.”
Soft launch last phase of Double Storey Terrace House. Mimosa (20'x70') on 30/07/2011 (Sat). Price from
RM 688,000. Launch by balloting with RM10,000 BANK DRAFT payable to Bandar Setia Alam Sdn Bhd. Registration at 10am. Balloting start at 11am. Info 33432255
Soft launch of Double Storey Terrace House Maranta (20'x70') on 9th July, 2011 (Sat). Price from RM668,000 onward. Launch by balloting with RM 10,000 Bank Draft payable to Bandar Setia Alam Sdn Bhd. Registration at 10am. Balloting start at 11am. Info 3343 2255.
Total no of units: 78 Sold 70 Balance 8 as at 11/07/2011
Saturday July 2, 2011
By ANGIE NG
LBS Bina Group Bhd, which is working towards developing more premier property projects, will launch D’Island Residence in September.
Located on 175 acres in Puchong, the development will comprise 237 super-link houses, 298 semi-detached homes, 148 bungalows and 352 high-end condominiums as well as two blocks of commercial units.
Managing director Datuk Lim Hock San says the project, with a gross development value (GDV) of RM3.5bil, will also feature a commercial hub.
It is expected to take five to seven years to complete, he says.
Lim says D’Island Residence will be developed based on the tagline Island Retreat, Urban Charm and will promote modern lifestyle living.
It will have a clubhouse and adopt environment-friendly features like rainwater harvesting system and light-emitting diode street lights.
At the soft launch of D’Island Residence in April, 71 super-link houses worth RM83.4mil were sold. The latest launch today will feature 74 semi-detached houses priced from RM2.38mil.
Lim says the development is projected to contribute 30% to 40% to the group’s revenue and earnings over the next few years.
“We are transforming LBS to move up the value chain to focus on higher priced products,” Lim explains.
Houses priced above RM350,000 will constitute 60% of those that will be built by LBS this year. For the past five years, abouts 90% of the company’s sales came from medium-low to medium-cost homes.
Lim says LBS will adopt more green technology and designs in its projects.
As part of its long-term initiative to focus on high-end residential property market, Lim says LBS will launch a re-branding exercise later this month.
LBS has engaged alpha245, the brand communications subsidiary of Leo Burnett, to provide professional advice and guidance on the exercise, Lim says.
“LBS is also improving on customer experience and the quality of its products,” Lim adds.
Known for building affordable homes, the company plans to focus on medium-high to high-end market segment to earn better profit margins.
Lim says LBS is targeting sales to hit RM650mil this year from RM422mil last year.
He expects sales to reach RM800mil in 2012 and RM950mil in 2013.
As at May 31, the company has unbilled sales of RM527mil, which will be realised over the next two years.
Lim says LBS will continue to build affordable homes priced below RM350,000, albeit on a smaller scale.
The company has been building affordable homes at Bandar Saujana Putra, its flagship development spanning over 835 acres in Selangor.
The self-integrated township was launched in February 2003 and has a GDV of RM3bil. Sales of RM850mil have been recorded so far.
LBS has handed over about 5,000 units of various types of properties in the township.
The first day of the preview held for YTL valued buyers at Grove Sales Office saw teeming crowds rushing to stake a claim in the project from as early as Wednesday, 22nd June, queuing overnight to secure their units. All preview units were snapped up by noon of the 1st day of its debut, and the balance semi-detached units – lake-facing homes with stunning vistas of the lake were snapped up by 11am on the 2nd day when it was released for sale.
Commenting on the staggering results, Dato' Yeoh Seok Kian, Executive Director, YTL Land & Development Berhad said, "We knew the interest in Grove was high as more than 1,500 people signed up their interest through an earlier registration exercise. But we certainly didn't expect a sell-out success in just 2 days of its public debut."
Dato' Yeoh also added that the positive response was in appreciation of YTL Land's track record of delivering truly branded homes with highly unique concepts. A testament of this was when all 343 units of 3-storey terrace homes in the second phase, Dale, were also snapped up ahead of its launch.
"This clearly shows that Lake Fields' popularity as a modern, spacious residential development, coupled with Sungei Besi's strategic location that is well-connected with multiple highways and public transport, is in high demand."
Standing tall at 3-storeys, the lakeside semi-detached homes comes in two built-up sizes - 4,300 sq. ft. and 5,900 sq. ft. with a choice of a sky garden or 7 car park bays with lift access. With a total of 4+1 bedrooms and en suite bathrooms, Grove's master suite comes with a private terrace or outdoor shower, and the generous space of the homes is further reflected in its open and airy interiors and floor-to-ceiling windows. Residents can further take the opportunity to enjoy the outdoors with their family as Grove's lush landscape environment comprises a Central Park for kids and a tapestry of green meandering streets for evening strolls.
For more information on Grove, please visit www.grove.com.my
Launch Aquina - TTDI Alam Impian Double Storey - 25th-26th June, 2011