Property prices are now at rock bottom

January 20th, 2021 No comments

penang properties

The reinstatement of movement control order (MCO 2.0) and the surging number of Covid-19 daily new cases might have dampened the market sentiment, but the industry leaders do not foresee the property prices continuing to move downwards as current price has bottomed.

Real Estate and Housing Developers Association Malaysia (Rehda) Malaysia president Datuk Soam Heng Choon said the current property price has “hit the rock bottom”.

“The selling price now is the result of the input cost made of the spiking building material price and additional cost incurred due to the pandemic. All developers want a quick sale so that they can pay the contractors and so on to move the business,” he said.

Nevertheless, he also highlighted that developers have gone back to the drawing board as far as launch projects and pricing are concerned as they want to minimize any losses or additional holding cost at this point in time.

“With the MM2H program on hold and MCO reinstated, the developers have no other choice but to price the new projects at a very competitive price to survive the pandemic,” he noted.

Soam was speaking during the live EdgeProp.my virtual fireside chat entitled “Impact of MCO 2.0 on the Malaysian Property Sector” on Facebook today.

Also taking part in the session were Malaysian Institute of Architects (PAM) president Datuk Ezumi Harzani Ismail and Master Builders Association Malaysia (MBAM) deputy president Oliver Wee Hiang Chyn. The almost two-hour session was moderated by EdgeProp.my editor-in-chief and managing director Au Foong Yee.

Ezumi concurred that current property prices are affordable as the pandemic has already adjusted the market.

“Whatever that is overpriced will not work anymore. The pandemic has adjusted the market and what we have now in the market is affordable and matches the income level of the local buyers,” he shared.

Meanwhile, Wee stressed that the property price may not reduce to the level which the market wishes for.

He explained that the indirect construction input cost has increased, such as temporary shut down of construction sites, lack of skilled workers and higher standard of worker’s living and working facilities.

“The selling price is a reflection of the additional construction cost due to the pandemic,” Wee said.

As for secondary market properties, Soam noted that it is not a surprise that the traditional property hotspots remain popular even during an economic downturn.

Land scarcity is one of the reasons that supports the price and popularity — for instance, demand for landed residential properties near the Mid Valley area will remain intact as there will not be any suitable land left for development, he explained.

“The existing landed house prices will be holding up firmly as everyone knows it is a good location and you will never go wrong buying there, so don’t expect it will be cheap during a downturn.

“If there is a sudden price drop in a property hotspot, it will mean that something is wrong with the country’s economy, which we don’t want to see happen,” Soam noted.

Source: EdgeProp.my


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Air-Itam to LCE Expressway bypass project to take off after 2-year delay

January 20th, 2021 1 comment

Image source: MalayMail.com

Heavy machinery has started arriving at the construction site of a 6km dual carriageway that is part of the RM6.3 billion three major roads and undersea tunnel (PMRT) project.

Yesterday morning, hydraulic excavators, bulldozers and soil compactors were seen transported to the construction site at Lorong Bukit Gambir where works on the highway are expected to start on February 1.

It is learnt that about 40 different types of machines will be making their way to the site in preparation for the construction works.

Other machinery and equipment that will be arriving at the site included dump trucks, bored piling machines, mobile crane, crawler crane, roller compactor, road paving machines, tandem roller, backhoe loader and mixer trucks.

The 6km dual carriageway is Package Two of the PMRT project to build a highway to connect Lebuhraya Thean Teik in Air Itam to Tun Dr Lim Chong Eu Expressway.

The alignment for Package Two consists of a 4.2km elevated section and a 1.8km of at-grade section.

There will be three interchanges along the road; Interchange One at Lebuhraya Thean Teik, Interchange Two at Jalan Bukit Gambir — Jalan Sultan Azlan Shah and Interchange Three at Tun Dr Lim Chong Eu Expressway with a left in- left out junction and an elevated U-turn.

Last week, the state government signed a supplemental agreement with Consortium Zenith Construction Sdn Bhd (CZC) which will kickstart physical construction works of the highway.

It also marked the starting point of the overall PMRT project.

Package Two is expected to complete by January 3, 2025.

The master agreement for the PMRT project was signed on August 2, 2019 and this was followed by the signing of a sub-agreement for Package Two on October 11, 2019.

The supplemental agreement to the sub-agreement for Package Two was signed on January 15 this year.

A ground-breaking ceremony for Package Two was held on November 2, 2019 in which early works were started.

The PMRT consists of three toll-free major roads and a tolled undersea tunnel.

The packages under the project are Package One (north coastal paired road from Tanjung Bungah to Teluk Bahang), Package Two (Air Itam to Tun Dr Lim Chong Eu Expressway Bypass), Package Three (Gurney Drive to Tun Dr Lim Chong Eu Expressway Bypass) and Package Four (Undersea tunnel).

Source: MalayMail.com


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Federal Court: Late delivery payment begins from booking fee collection

January 19th, 2021 No comments


The calculation for late delivery payment to house buyers begins from the date the booking fee is paid, and not when the sale and purchase agreement (SPA) is signed, the Federal Court ruled today.

Chief Justice Tengku Maimun Tuan Mat said the Housing Development (Control & Licensing) 1966 and its subsidiary laws were social legislation and that was a settled law.

In a dispute brought before the court, the developers contended that the scheduled contracts must be read literally and in accordance with the intention of parties.

“It is our view that the submission is untenable. When it comes to interpreting social legislation, the courts must give effect to the intention of Parliament and not the intention of parties,” Tengku Maimun said.

“Otherwise, the attempt by the legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory,” she said in the judgment to allow seven appeals by purchasers.

The purchasers, from Melaka and Kuala Lumpur, had hauled the developers – PJD Regency Sdn Bhd, GJH Avenue Sdn Bhd and Sri Damansara Sdn Bhd – before the housing tribunal over the payment of the liquidated ascertained damages.

Tengku Maimun said the courts would not countenance the bypassing of statutory safeguards meant to protect the purchasers.

“While the developers might think that it is a standard commercial practice to accept booking fees, the development of the law clearly suggests to the contrary,” she said adding that the courts would not condone such a practice until the law said otherwise.

The court said the LAD payable by housing developers to purchasers for late delivery of vacant possession in a housing project begins when the booking fee is collected and not when the SPA is signed between the developer and purchaser.

Other judges in the five-member bench were Nallini Pathmanathan, Abdul Rahman Sebli, Zabariah Yusof and Mary Lim Thiam Suan. The unanimous verdict was delivered through a virtual proceeding following the enforcement of the movement control order since last week.

In one of the cases, purchaser Wong Kien Choon bought a property from PJD Regency in Kuala Lumpur at RM501,800 and paid RM10,000 as commitment fee (booking fee) on Jan 16, 2013.

The SPA was signed on March 21, 2013 and the contract stated that vacant possession must be delivered within 42 months or by September 2016. However, the developer only informed Wong to collect keys to his house on Jan 23, 2017.

Wong asked the developer to pay him RM33,000 in LAD but the developer disputed the amount.

The matter was referred to the housing tribunal which ruled in favour of Wong. PJD’s appeal to the High Court and Court of Appeal were also dismissed.

Lawyers Kok Kean Kang, Viola D Cruz, Andy KL Wong and Rex RS Wong through the National House Buyers Association (HBA) appeared for Wong and another buyer, Ng Chee Kuan.

HBA secretary-general Chang Kim Loong said it was a landmark ruling and another victory for house buyers.

He urged the housing and local government ministry to put to rest the issue and to enforce laws and regulations that prohibited developers, estate agents, lawyers or any third party purportedly acting for developers to collect booking fees.

“There has not been any reports of prosecution for this blatant defiance of the law,” he said.

Real Estate Lawyers Association president Pritam Singh said today’s ruling had brought some clarity to the law.

Source: FreeMalaysiaToday.com


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Worsening Covid-19 situation will derail property market recovery

January 19th, 2021 No comments


Last year had been extremely challenging for the overall market, including real estate, due to the prolonged Covid-19 pandemic and it continues to disrupt lives, economies, and societies globally.

Homebuyers and investors held on to their money due to the certainty in the market and because of that many developers registered a higher number of unsold properties.

Knight Frank Malaysia managing director, Sarkunan Subramaniam said the current worsening of the Covid-19 situation in the country is expected to derail the recovery in the property market as more developers push back their launches.

Sarkunan expects potential buyers and investors to likely postpone property purchases in the short-term as they adopt a wait-and-see approach.

He said the anticipated rollout of the Covid-19 vaccine is expected to boost hopes for a return to normalcy and will set the path for recovery of the global economy.

“The performance of the residential market is very much dependent on how the economy moves forward. The anticipated commercial rollout of the Covid-19 vaccine by 1H2021 will certainly boost the hopes for the country’s economic recovery and lift overall consumer sentiment. However, the current ongoing political uncertainties amid the worsening Covid-19 crisis has led property buyers as well as developers to rethink their future plans and strategies,” he said.

Sarkunan said these are reasons to believe that the residential market is expected to remain challenging in the first half of 2021.

Malaysia’s economy is expected to rebound in 2021 given the expected commercial rollout of the Covid-19 vaccine by the first half of this year (1H2021).

The government predicts that the economy will expand between 6.5 per cent and 7.5 per cent in 2021 driven by the anticipated improvement in global growth and international trade.

Sarkunan said post-Movement Control Order (MCO), selected developers have reportedly recorded improved bookings supported by the low-interest-rate environment and pent-up demand.

“The conversion of bookings into sales, however, has been more challenging due to stringent bank requirements,” he said in a statement that was issued following the launch of the firm’s latest research report, Real Estate Highlights 2nd Half of 2020, here, today.

Incentives to boost the market this year

Sarkunan said the re-introduction of the Home Ownership Campaign (HOC) in June 2020, coupled with several initiatives under the recently tabled Budget 2021 are expected to boost market activity – include a full stamp duty exemption on both instruments of transfer and loan agreement for the first home purchase worth up to RM500,000. The exemption is applicable for the sale and purchase agreement on purchases that are completed from January 1, 2021, until December 31, 2025.

Stamp duty exemptions on loan agreements and the transfer instrument for abandoned housing projects will be extended for another five years, also till December 31, 2025. The waiver of stamp duty will lower upfront cash payments and encourage home-ownership among the first-timers.

The proposed full stamp duty waiver complements the real property gains tax (RPGT) exemption as unveiled under the country’s Short-Term Economic Recovery Plan (PENJANA) in June 2020, whereby gains arising from disposing of residential property by Malaysians (limited to three units per individual), between June 1, 2020, and December 31, 2021, are exempted from RPGT. Sarkunan believes that collectively, these incentives are expected to spur more activities in the primary and secondary residential markets, further supported by the current low interest rate environment.

In addition to that, he expects the reduction in employee’s statutory contribution rate from 11 per cent to nine per cent effective 2021, will boost disposable income and ramp up domestic spending.

Moving forward, with lower-interest rates and higher disposable income, more potential purchasers who qualify for loans may be encouraged to start buying properties and this may provide some traction to the sluggish housing market, he said.

Source: NST Online


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UPCOMING: Butterworth / Woolley Development Sdn Bhd

January 18th, 2021 No comments


This is a residential development by Woolley Development Sdn. Bhd. at Butterworth. Strategically located near Jalan Dahlia, easily accessible via the ever bustling Jalan Raja Uda. It is adjacent to Bola-Bola Sports Centre and the proposed Garden City mixed development by Flexizone Venture Sdn. Bhd.

The proposed development comprises a 12-storey medium cost apartment, offering 198 residential units.

Property Project : (to be confirmed)
Location : Raja Uda, Butterworth
Property Type : Apartment
Total Units: 198
Built-up Area: (to be confirmed)
Indicative Price:(to be confirmed)
Developer :Woolley Development Sdn. Bhd.

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DISCLAIMER: This article is solely based on research done using publicly available data. This is not an advertisement. Any claim, statistic, quote or other representation about a project or service should be verified with the developer, provider or party in question.