Friday, June 6, 2008

7-6-2008, Megan Properties

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Saturday, May 17, 2008

(2)17-5-2008, Malaysian Valuation and Property Services Department, the fourth quarter of 2007 saw developers offering a total of 6,636 new housing units to the market.

(1)17-5-2008 , Property - a hedge against inflation
By Tee Lin Say

The property market was bustling with robustness due to the slew of measures to boost the sector. Does that still hold in the current climate of uncertainty?

WHEN it rains, it pours. Inflation jitters, global credit tightening, stubborn high oil prices (and rising) and a looming food crisis have been major beefs weighing down global economies over many months.

As a direct consequence of battered consumer and business sentiments, companies have been snipping away at their sales forecasts, causing jitters in equity markets across the board. Such sentiments have led to a volatile and fluid environment; market pundits have not been spared from the wild swings as they vacillate between the “worst is over” and “there's still bad news in store.”

In Petaling Jaya and Kelana Jaya, prices are going between RM400 and RM450 psf, and have the further benefit of infrastructure capital.

This week, for example, key figures in US offered directly contrasting opinions on their take on the market direction. US Treasury Secretary Henry Paulson and Citigroup Inc CEO Vikram Pandit commented that the worst of the credit crisis is over. However, Federal Reserve chief Ben Bernanke’s comments were laced with reservation. He said that while markets have improved, they remain far from normal. The markets continue to reflect such uncertainty.

However, undeniably, the mood has been somewhat buoyant since April, as retail and ISM figures paint a more optimistic US outlook.

According to Standard & Poor’s monthly global stock market review, developed markets posted a 5.15% gain in April after losing 8.95% in March. Likewise, emerging markets climbed 7.49% in April after falling 5.11% the month before.

Now that we're full fledged into May, record oil futures of US$124 are back to sting the market.

Ng: I would buy today because raw material prices are going up.

With few other fuel alternatives in production, it is still carved in stone that oil is the main source of energy. Some oil experts have said that further dollar weakness can possibly send oil prices to US$150 a barrel in coming years.

Time to buy property?

Hence we have a general undertone that is still one of restrain and uncertainty. The lowered wealth effect from equity markets heightens the defensive nature of investors.

This has obviously put a damper on Malaysia's property market, taking some shine away from its robustness last year, not least because of the slew of attractive measures to boost the sector.

The fluid political landscape in Malaysia does little to lift the cloud for investors, most of whom are evidently adopting a wait and see approach.

But interestingly, economists say that during times of inflationary pressures, real estate in fact offers a good hedge against inflation. (Inflation hedging is when the real return of an asset is independent of the rate of inflation. Generally, an asset is a complete hedge against inflation when its nominal return changes in a one-to-one relationship with inflation).

Citi Research expects, that over the long run, property rents and asset values to rise in line with inflation, but more likely with nominal gross domestic product.

Will prices slide?

“There is no way property prices are going down. Construction and labour cost is going up. Land cost is also fixed. If you have money, you have to invest, because you won't get them any cheaper,” says Hall Chadwick Asia Sdn Bhd chairman, Kumar Tharmalingam.

“For example, if you bought a home 18 months ago or if you buy that very same house today, it is likely to be more expensive now than it was 18 months ago,” says Kumar.

Wong: The demand for properties depends on perception.

Real Estate and Housing Developers' Association (Rehda) president Ng Seing Liong adds: “If I were a buyer, I would buy today, because raw material prices are going up. This is the time to buy,”

“Demand on property still depends on location. On the whole, the results of the recent general election did cause some instability and led to a wait-and-see attitude among house buyers. But the undercurrent is still fairly stable,” he says.

Getting the act together

While global financial markets will continue its roller coaster ride, most property experts opine that Malaysia is fairly well insulated, Although macroeconomic fundamentals are sound, asset prices have been temporarily dampened as investors price in discounts to factor in a possible slowdown in the future.

“The subprime in the US is not really affecting us. But because of uncertainties in equity markets, this is creating a temporary gap of expectation. People are anxious that their incomes may be eroded by rising commodity prices. Banks have also started to aggressively advertise again. But house buyers are holding back until the market clears,” says Kumar.

“We have been so used to being mollycoddled over the last 30 years. So the present situation confuses people especially the lower rungs of homebuyers. Among the developers, yes, there is a slowdown in the bread and butter homes, but it's marginal. There is perhaps a 10% drop across the board on the bread and butter homes of less than RM400,000,” says Kumar.

Rehda’s Ng says that the state and federal government should take more proactive measures in their approach to work together.

“Everyday we are hearing criticism from the various political parties which isn't constructive. We need to hear more positive statements,” he says.

Kumar: The subprime in the US is not really affecting us.

Slower implementation

Ng admits that developers are delaying launches of new developments. He attributes this partly to building plans that are slower in getting approved, adding that some local authorities have yet to have their new councillors.

Areca Capital Sdn Bhd chief executive officer Danny Wong says that demand in the residential urban segment for medium and high end homes is still encouraging.

“Nonetheless, we are in a period of rising inflation, so caution dominates. The demand for properties depends on perception. If the location is unique, people will still buy as there is ample liquidity...” he says.

Given the present scenario, Wong says there are a few factors that developers can consider when launching a new development, such as rising cost of material and labour, uncertainty on demand and the rising cost of funds of a development.

A property analyst from Hwang-DBS Vickers Research says that people are adopting the wait-and-see attitude.

“Nonetheless good developers, such as Sunrise Bhd for instance, are not really affected by this period of uncertainty. Malaysia has a young population with an economy that is still growing. On that note, the property market will continue to perform decently,” he says.'

For Ng, location is everything in picking the right property.

He says Mont Kiara, Damansara and Petaling Jaya are prime property areas. Overhang issues exist mostly in the outskirt areas, where the population is sparse.

Generally, successful developers are those that have land in prime areas. While Ng says there is some truth in attention being given to far-out locations due to its unique design, that novelty will eventually die off and people will start to neglect those areas.

“Good locations must have close proximity to schools, hospitals and other such amenities.

“Shah Alam is one good example. While the initial launches in these areas have done well, it remains to be seen whether there is the population to support later launches. So far, the launches that have been made are over 3 to 4 years. The next 6 to 7 years remain to be seen,” he says.

Kumar and Ng are strong advocates of buying now, as they don't see prices coming down. Generally too, house prices appreciate by 4% to 6% per annum based on the inflation rate.

“If you want long-term capital appreciation, you buy landed property. If you want rental yields, you buy condos. Property development in Malaysia has always been robust and an important engine of growth other than plantation and oil,” says Kumar.

Limited downside

Noteworthy is that Malaysia's property market has yet to strongly take off unlike Singapore and Hong Kong. In prime areas, where rental yields of 8% to 10% are easily achieved, the property's price downside risk is further protected.

Malaysia's property market is buffered as it isn't financed by international bankers, nor is it affected by foreign debt.

“Malaysian banks are in healthy financial positions. We are able to take loans up to 80%. Even the EPF helps to pay the downpayment for property purchases,” says Kumar.

Kumar says certain developers have been very innovative. Through unique landscaping and creative gardening, they are able to fetch a premium price tag although their developments are located out of the city.

“The development in Ara Damansara for instance is very clever, as it has divided its development into small plots, each with its own identity. Instead of saying they live in Subang Jaya or Section 19, PJ, they say The High, or The Swing,”

“These niche developments have a name of their own, and is a one-upmanship by the developer. This enables the developers to tweak the prices as they offer a sort of avant-garde kind of living,”

Kumar says there are new groups of homebuyers, the younger generation, who do not mind paying more for quality design.

In the condo sector, he sees pockets of excellence in Mont Kiara, KLCC, Ara Damansara, Petaling Jaya Section 16 and the Kelana Jaya area. Notable developers include Sime Darby, SP Setia, Gamuda and E&O.

“Mont Kiara is a good example of how other developers have tapped into pioneer developer Sunrise Bhd's blueprint and benefited from it. All the developers there are doing well because Sunrise has set the standard and quality. They match its quality, if not make it better. So although the place is so crowded, it has not lost its attraction,” says Kumar.

He adds that the slowdown in Malaysia's property sales has not been significant, somewhere around 10%.

“Developers have no choice but to keep the momentum going as most of them are public listed companies with earnings to deliver. If they can't sell at a previous high price, they will reduce its size or increase its value added proposition,” he says.

Wong is of the view that if a buyer has the intention to reside in a property, then the present time is the time to buy, as vacant land is scarcer especially in the prime areas.

“However, if you are buying to invest, perhaps pause for awhile, as the global situation is still uncertain. The Malaysian economy could be slightly affected by slowing exports, as the exports are currently supported by strong commodity prices. While the impact is not severe, it may slow down the economy,” he says.

Talking hi-end

One segment of the market that has certainly not been affected by inflation or credit worries is definitely the luxury and upper end property market. Because of healthy liquidity and wealth amassed, this segment continues to transact record prices.

Kumar says luxury homebuyers are typically high net worth individuals with deep pockets.

“Record prices in KL will continue to be transacted in the secondary market. One KL (a development by Datuk Chua Ma Yu) for instance, which started off at RM1,200 per sq ft (psf), recently had two transactions at RM2,000 psf. We have yet to see what kind of prices will be transacted when The Four Seasons is launched,” he says.

The Binjai and the Millenium Residence are other branded residences that may be tested with new benchmark pricing.

Currently, the average develper's selling prices of residential properties in Kuala Lumpur and its fringes range between RM1,300 and RM2,000 psf, while those in the suburbs are between RM700 and RM1,000 psf.

In the last few years, these apartments, which were sold for between RM500 and RM700 psf, have recorded price appreciation of between 70% and 120%.

“For suburbs such as Mont' Kiara and Sri Hartamas, prices start from RM650 psf and goes beyond RM1,000 psf. In Petaling Jaya and Kelana Jaya, prices are going between RM400 and RM450 psf, and have the further benefit of infrastructure capital.

“The KL City area is an AAA location. Prices will vary, but as long as we have tourism income contributing RM15bil-RM17bil a year, I don't see the property market being affected,” says Kumar.

On record prices, Ng says this is dependent on the yield that the particular property is generating. If the property is unable to command the said yield, property prices will eventually go down.

“Even if the area is a AAA location, but if it cannot get the yield required, the price will fall. The rule of thumb is that yields must be at least 5% of the property cost. Lets say you buy a property for RM1mil, therefore you should get rental of at least RM50,000 per annum. Otherwise the law of equilibrium steps in to bring the price down.”

Another area that Kumar foresees to be one of the hottest spots is the Bandar Utama, Mutiara Damansara and Damansara Perdana area. Known as the “golden mine”, the only missing ingredient is a link connecting all three townships.

“This has got to do with the stubborn old school mentality of the three developers. The linkages between Bandar Utama and Mutiara Damansara will benefit both the commercial centres of 1Utama and the Curve/Ikea/Cineplex area and Damansara Perdana.

Each has its own loyal purchasers but cross selling and ease of connections can only help both developers and Damansara Perdana in values and trade,” says Kumar.

He sees another future hot spot nearer the Shah Alam area, as many of the developers there are owners of huge tracts of landbank.

Among the developers in Shah Alam are SP Setia Bhd, Sime Darby Bhd, Island & Peninsular Bhd and IOI Corp Bhd.

Foreign Direct Investments

Kumar admits that foreign direct investments (FDI) into Malaysian properties could be a lot better. To the high-end segment, FDI is contributing about 15%, while to the overall property market, it is contributing 5%.

“There is a perception in Malaysia that still needs to be overcome. There are still issues on FIC for non-residential. Not every non-residential wants to buy residential property. They also want to buy investment and commercial properties,” he says.

In Thailand and Vietnam for instance, foreigners can choose any partner when buying such properties, but in Malaysia, they cannot.

“Our regulations are quite dated. There aren't many incentives for real estate, only restrictions. But I think our government realises now, as they have seen how Vietnam has benefited enormously from wooing real estate investments.”

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Friday, May 9, 2008

Home for sale by any means

Home for sale by any means
By Carolyn Bigda, Money Magazine writer-reporter
May 1st, 2008

Are you really serious about selling your home in this market? Then be prepared to try anything - and everything.

(Money Magazine) -- For nearly two years, Adriel and Lance Bush tried unsuccessfully to sell their 1925 home in West Palm Beach, Fla. First the couple went the traditional route: They hired a realtor (three of them, in fact) who gave them standard advice, like getting rid of all the clutter caused by their twin toddler boys. They also renovated their master bath and added granite counters to the kitchen. Still no takers, which wasn't surprising: Home sales in the West Palm Beach area have fallen by double digits.

Then Lance, 43, who had already accepted a new job in Tucson, relocated his family out West. That's when the Bushes got desperate. Between the mortgage, property taxes and insurance (including hurricane coverage) on their Florida home - along with their Arizona housing expenses - the couple was shelling out more than $7,000 a month.

Deluxe pool-side living extreme_home_selling.jpg

Though they had already slashed the price on their 3,500-square-foot Mediterranean-style home several times - from $1.3 million to $795,000, which is about what they originally paid - they were willing to go even lower.

They also got creative. For instance, they decided to consider a lease-to-own deal, which makes it easier for cash-strapped buyers to take the plunge.

And they even went so far as to hire a feng shui expert, who for a fee of $250, added minor touches around the front entrance of their home to give it more "positive" energy. "I figured it wouldn't hurt anything, so why not try it?" says Adriel, 38, a professional organizer. A few weeks later, they found a buyer.

Of course, the Bushes aren't saying it was feng shui that triggered the eventual sale. But in today's market, where there are more homes for sale than corn in Kansas, one thing's becoming increasingly clear: You've got to be open to anything.

At last count, there were 4 million pre-owned houses for sale. That's up 14% from the start of last year. In cities and counties hardest hit by the real estate downturn, the numbers are even more dizzying. In Orlando, for example, there are now 26,000 homes up for sale. In 2004, "we were lucky if we had 3,000," says Lydia Pisano, former president of the city's local board of realtors.

In such a hypercompetitive market, you have to go way beyond what everyone else is doing - especially if you want to move your home quickly. Old standbys like slapping a fresh coat of paint on your clapboards or throwing in a complimentary plasma TV just won't cut it.

Instead, you have to rely on guerilla marketing tactics to get your home noticed. Maybe you start pitching your home on popular message boards. Certainly you'll need to seek out buyers rather than wait for them to find you. And you can no longer limit yourself to conventional sales agreements.

Here's what you have to do to move your home quickly in today's market.
Find your hook

When Kelly Andrews, 28 and just married, decided to sell her one-bedroom Atlanta condo in February, hers was one of about a dozen on sale in a 936-unit complex. Being in public relations, though, Andrews knew to play up the condo's one unique feature: its former owners.

So she called up a reporter for the Atlanta Journal-Constitution and told a tale of how she and the two prior owners of unit No. 163 were single women who ended up finding their future husbands there. After the paper dubbed Andrews' unit "Cupid's Condo," she was flooded with calls from single women (and agents representing them).

One of those women offered to lease the unit for the precise amount of Andrews' mortgage payment. She thought this might work out even better than an outright sale, since leasing would allow her to build equity while waiting for the market to improve (Andrews hopes she can sell at a higher price).

The lesson: Highlight what makes your house special. Generic descriptions about "spacious bedrooms" or "modern appliances" are too common. "If I see one more listing that says 'sparkling pool,' I'm going to throw up," says Veronica Mullenix, a broker associate at Coldwell Banker United, Realtors in Katy, Texas.

Instead, "paint a lifestyle, a story," Mullenix says. And be as specific as you possibly can. Don't simply mention that your home is near local amenities. Let buyers know they can live within "a five-iron shot of the 15th tee."
Be a hunter, not a gatherer

In today's market, you can't wait for potential buyers to find you - you have to go to where they are. This means marketing your real estate in the virtual world.

The fact is, 84% of buyers search for homes online, more than double the percentage that did so in 2001. And looking for them online is even more important if you're in an area that appeals to out-of-town buyers. Patty Kelley, president of the Greater Las Vegas Association of Realtors, says real estate in Sin City is being bought sight unseen through sites like helloWorld.com, which allows agents to do business over a live broadcast.

In addition to traditional spots like Realtor.com, check out alternative sites where buyers are flocking, like Craigslist.org, Realestate.yahoo.com, Zillow.com, Trulia.com and Base.google.com, Google's classified section.

Because many home seekers are getting to these sites through a search engine, it's critical to offer a comprehensive description of your home, so searches will find you through any number of listed features.

And don't just look for buyers - look for people who know potential prospects. John DuPriest, a real estate broker in Penryn, Calif., suggests a simple way to generate word of mouth offline: In addition to basic marketing fliers, make up business cards with a picture of your home, contact info and the price. Cards are easier to hand out - and be passed around - than fliers.

DuPriest noted that he recently passed out four or five cards to people who looked at one of the homes he was showing. One of them gave it to a member of his church, who then passed it along to another agent, who then showed the home to his clients. It wasn't exactly viral marketing, but the property eventually sold for $495,000 - just $4,000 shy of the home's list price.
Don't just sell - swap

If you're having trouble drumming up buyers through a traditional listing, consider swapping your home. Hey, it worked with lunches in the school cafeteria, why not in the real estate market?

The idea is simple. Instead of struggling to rope in reluctant buyers, look for like-minded sellers who'll need a new place to move into once they close their own deals. In the past year, free websites such as DomuSwap.com and GoSwap.org, along with paid services like OnlineHouseTrading.com ($19.95 to list), have cropped up to bring home swappers together. Keep in mind these services are still new. A recent search on DomuSwap showed a listing of 1,021 Florida homes but only 43 in New York.

Once you post details of your property - and what you're looking for in a new home - these sites will ping you back with a list of houses that come close to your wish list whose owners are interested in a property like yours. If you find something you like, just click on it and send the owner a message. Once a match is made, the transaction can move quickly. Within four days of posting their home on DomuSwap, Sherry Crosslin, 53, and James Ray, 63, of Hampton, Va. were contacted by a prospective buyer. And nine weeks later, the deal closed.

Keep in mind, you don't have to trade for equivalent value. While it's called a swap, it's really two separate transactions, where both trading partners take out mortgages based on the price they agree to pay.

So if you're an empty-nester who wants to downsize - and pocket some of the equity you've built in your home - you might choose to swap with a younger couple with a growing family.
Lock in a future buyer now

With banks tightening lending standards, your problem might not be finding an interested buyer; it could be attracting a buyer with the means to purchase your home. One option is to give the buyer time to improve his credit or save for a bigger down payment through a lease-to-own contract.

Here's how it works: You agree to rent the property to the interested buyer. At the end of the lease, which normally lasts 18 months or less, the buyer has an option to purchase at an agreed-upon price. With the help of an attorney, you can draft these contracts however you see fit. Some homeowners, for example, charge a nonrefundable "option fee," as much as 2% of the home's value. This fee, which is typically applied to the down payment if the renter buys, also serves as a penalty if he decides against purchasing.

For the Bushes of West Palm Beach, the lease-to-own option they offered their prospective buyers helped seal their deal. That couple, who showed up shortly after the Bushes experimented with feng shui, needed time to clean up their credit report. Today their rent covers the Bushes' mortgage, insurance and property taxes - and they're expected to buy in July.

"It's a huge relief," says Adriel. "We can finally move on." She doesn't know if the lease-to-own offer turned out to be more crucial than feng shui. All she knows is that she and Lance were able to get out of the home and go on with their lives in one of the most difficult markets in recent history. Now that's positive energy.

Nine ways to enhance a home's curb appeal

Tuesday, May 6, 2008

Rising construction costs may dampen industry growth

Tuesday May 6, 2008

Rising construction costs may dampen industry growth

By S.C. CHEAH

RISING costs of construction may dampen the growth of the Malaysian real estate industry next year as property developers postpone or curtail some of their launches.

There have been growing complaints from industry players, particularly contractors and developers, that higher construction costs, intense competition and - to some extent - the recent shift in political landscape following the general election, will further erode profit margins and cause a “wait-and-see” attitude among investors and house buyers.

In fact it has been reported that many contractors are going bust because of rising building costs. Many of them are pleading with the developers to review their contracts. The developers in turn are faced with reduced margins.

Although the spate of new launches, especially in the Klang Valley, seems to be still going strong with many new players jumping onto the band wagon, there is a general sense of caution, even among the more established players, that things will start to worsen if crude oil prices do not come down soon.

“I think the property market is slowing down. We are monitoring the situation very closely,” said the chief operating officer of a property development company.

However, house buyers are caught in a dilemma of whether to put off their purchase to play safe in case the economy sours or buy now as property prices are unlikely to come down. The second choice seems to be more popular judging from the generally good demand for newly launched properties although they now take longer to sell.

Recently, the Real Estate and Housing Developers’ Association of Malaysia (Rehda) held a dialogue session with 35 analysts and fund managers to discuss issues like political changes, rising consumer prices and building material costs as well as bumiputra quotas and discounts.

Aseambankers analyst Ong Chee Ting said the dialogue “echoed our view that the property development sector outlook remains uncertain in the immediate term, with rising inflation affecting consumer sentiment and affordability.”

“Rising construction costs are also affecting developers’ margins and delaying new launches. Compounded with domestic political and external economic uncertainties, developers and house buyers are generally adopting a wait-and-see strategy,” he said adding that developers were relying on strong locked-in sales over the past two years to deliver earnings growth.

“On a positive note, developers are experiencing general improvements in public delivery, with increased efficiency and reduced bureaucracy post-election,” he added.

Ong said the mass market segment remained price sensitive, which limited developers’ pricing power while high-rise developers were generally at greater risk of margin erosion as they faced higher land cost.

Meanwhile, Rehda in its Budget 2009 wish list, has urged the Government for a total tax exemption for dividend income from real estate investment trust companies; higher minimum selling prices for low-cost houses, at RM60,000 per unit; lower stamp duties across the board, by half; and standardising bumiputra housing policies at the national level in terms of discounts (e.g. Johor’s 15%, Malacca’s 10% and Selangor’s 7% currently) and policies relating to the release of bumiputra quota.

Sunday, April 20, 2008

Megan Avenue II

Prime Buildings near KLCC - Kuala Lumpur Goldern Triangle area , completed in early 1999, individual units are issued with freehold strata titles, fronting Jalan Yap Kwan Seng which is off Jalan Ampang & Jalan Tun Razak providing easy accessibility, having ample parking lots, with 4 basement parking space, for more info. please call Angie Ng 012- 2696 389,
JS Valuers Property Consultants Sdn Bhd.

Megan Avenue II

Call for appointment to view. Prime Building near KLCC area, near LRT - 2 adjoining lower grd flr. commercial Units, approx 3,000sf & 2,000sf with 2 adjoining equally big open terrace garden space. Ideal for Pub, Cafeteria, Restaurant & Business that require open outdoor space. Rent Negotiable

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