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Property News

Johor chokes on property (Update)
BY WONG WEI-SHEN AND ZAZALI MUSA
Published: Saturday February 15, 2014 MYT 12:00:00 AM
Updated: Thursday February 20, 2014 MYT 5:14:29 PM

THE property market in Johor, particularly Iskandar Malaysia, might be a case of too much too soon.

Red flags are showing in the state where launches of projects and high prices are common place but the pace of launches, which now includes “carpet building” by China developers, is flooding the market with more houses than what could be sustainable.

“We welcome foreign developers including those from China, but flooding the market with massive supply of properties could create property overhang,” says Johor Real Estate and Housing Developers Association (Rehda) chairman Koh Moo Hing.

Latest data by the National Property Information Centre (Napic) indicate the amount of new homes being built in the near future is equivalent to 42% of the stock of 702,101 houses in the state.

Almost 300,000 near homes are being built or in the planning stage at a time when the market in Johor has hit a soft patch.

Napic data shows that at the third quarter of last year, construction for 116,859 homes had already started while the building of 162,579 homes have yet to start.

Meanwhile, 16,168 homes had been approved for construction in Johor in that quarter alone.

Analysts say the new supply does not include new launches by Iskandar Waterfront Holdings Bhd, which is expected to increase three-fold to more than 4,000 units and is expected to remain elevated up to 2017.

The supply of new homes does not seem to be putting a lid on the escalation of home prices in the state. As the new launches are priced thereabouts or even higher than what is being sold in the more established Klang Valley, the new supply of homes and their higher prices have had a telling impact on prices in the state.

The average residential value for Johor property has risen some 45% over the past five years to RM197,147 in 2012 from RM136,034 in 2009. Comparatively, the country’s average residential value has only gone up by 30% in the same period to RM248,515.

Research house Hwang-DBS Vickers Research notes that recent launches in Nusajaya, Medini, Danga Bay and Johor Baru are in the range of RM600-RM1,000 per sq ft, with prime units hitting RM1,500 per sq ft.

Given there is going to be an oversupply of homes in Johor, a slew of launches by China-based developers recently has got some worried.

The grand entrance of China-based Country Garden Holdings Co Ltd surprised many with the launch of 9,000 apartment units at one go, causing local players to keep a close watch on how they will impact the market there.

Koh believes the magnitude and scale of such launches could lead to a property bubble if foreign developers are given a free hand in their development projects.

Rehda is hoping for the state government to possibly impose regulations that limit the number of units built within a year to match the market’s demands, says Koh.

Hwang-DBS Vickers Research says Country Garden’s 9,000 units launch at-one-go in Danga Bay alone could cause a glut, although delivery could be challenging given tight building material and labour supply over the next three to four years.

Analysts are concerned that these developers would replicate the ghost towns in China and if overbuilding does occur in Iskandar, that can be detrimental to the overall physical market in the mid-term.

However, some property experts say the extra supply would not pose an issue if foreign developers were attracting foreign buyers, rather than targeting only domestic buyers.

Country Garden, which has impressively sold about 70% of its Danga Bay maiden project in Malaysia, launched in August, told StarBizWeek in an email reply that some 3,000 units were snapped up by Malaysians.

Meanwhile, about 50% of its foreign buyers are Singaporean and 45% are Chinese.

Most of its units were snapped up within a month.

Then there is Hong Kong-listed Guangzhou R&F Properties Co Ltd, which recently bought 116 acres in Johor Baru from the Sultan of Johor for RM4.5bil. Market talk is that a 19-block development is in the blueprint.

But according to its filing to the Hong Kong exchange, Guangzhou R&F plans to develop high-rise residential units, low-density housing, retail properties, offices, hotel and a shopping mall, all of which will be on a saleable floor area of about 3.5 million sq m. That’s almost 10 times the floor space of the Petronas Twin Towers in Kuala Lumpur.

Also, Hao Yuan Investment Pte Ltd, which is believed to be a China-linked company registered in Singapore, is entering into a joint venture with Iskandar Waterfront Holdings to develop 15ha in Danga Bay.

Not all are alarmed by the entry of China developers.

“The sprouting of Chinese investors in Malaysia is in tandem with the Government’s initiative to make Malaysia an international real estate investment destination. Chinese developers have been investing in blue chip locations of New York, Los Angeles, London, Sydney, Singapore and their presence in Malaysia bodes well for the market,” says Zerin Properties chief executive officer Previn Singhe.

Previn is unperturbed on the potential flooding of homes in the future as the supply coming in will be spread over a couple of years. “Once all the catalytic projects are in place, there would be requirements for new homes to accommodate migrations,” he says.

Although rumour has it that Country Garden has been offering its Chinese buyers a deal that packages a unit in Iskandar together with a purchase of their property in China, it is insignificant to pushing up prices in the area, says V. Sivadas, executive director of PA International Property Consultants Sdn Bhd.

As local and foreign developers grapple and challenge for customers when launching projects in Iskandar Malaysia, the surge in supply coming in has been startling.

The slew of houses slated to be built together with a market that is taking a breather after seeing a uprush in prices and cooling measures starting to bite has seen takeup rates of new developments almost grind to a halt.

Post Budget 2014, take-up rates have come in poorly with developers like UEM Sunrise Bhd recording only 20% in bookings for its latest project Almas @ Puteri Harbour which is a mixed development of retail office and residential components.

The project comprises of 526 units.

“In any case, competition in a growing market such as Iskandar Malaysia, is a good thing – it keeps all of us on our toes and ensures that property buyers have a wide variety of products to choose from.

As we all strive to improve, greater value will be created for our customers, investors and end users,” says Eco World Development Group Bhd chief executive officer Datuk Chang Khim Wah in an email reply.

However, this year could look bleak for developers as they are bogged down with a decline in sentiment brought about by the cooling measures such as the increase in real property gains tax, as well as the abolishment of the developers interest bearing scheme, introduced in the latest budget.

Also, policies such as the change of the weekend differing from Kuala Lumpur and Singapore has caused a negative knee-jerk reaction, resulting in many developers and buyers adopting a wait-and-see attitude.

While many still believe in the Iskandar story, the success of it will largely depend on the movement of international businesses setting up shop in the area, which is reliant on how fast infrastructure there improves, which experts say has not really kicked off as yet.

As for now, demand for high-end condominiums remain largely speculative as Iskandar Malaysia still lacks critical mass, Hwang-DBS says.

http://www.thestar.com.my/Business/...hina-developers-results-in-too-much-too-soon/
 
SG Budget: Too early to relax cooling measures on property: Tharman
BY JAMIE LEE LEE
[email protected]
PUBLISHED FEBRUARY 21, 2014

It is still too early to start relaxing the cooling measures for property market in Singapore, Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance, said on Friday.

"Given the run-up in prices in the last four years, it is too early to start relaxing our measures," Mr Tharman said. "The government will continue to monitor the property market in the coming quarters and adjust our measures when necessary."

Mr Tharman said the cooling measures have been aimed at moderating the market, so as to prevent property prices from getting too far out of line with incomes.

"We are not engineering a hard landing. But neither are we able to eliminate cycles in the property market, with upswings in prices in some years followed by corrections." he added.

In the area of industrial space, Mr Tharman noted that a very large quantity of industrial and shop space is entering the market. These should have a moderating impact on rental costs over the next few years.

http://www.businesstimes.com.sg/bre...ax-cooling-measures-property-tharman-20140221
 
Insterestingly , Just drove past it yesterday. Thought it is suppose to open in 2014 but I do not see any progress .

It is difficult to have so many mega water theme parks in Johor.
 
Insterestingly , Just drove past it yesterday. Thought it is suppose to open in 2014 but I do not see any progress .

Frankly speaking personally i never even carry hope on such developer driven "water park". to maintain and run a water theme park it is not easy. normally once developer had done the projects, they will just leave the place, I dun think they will really spend so much effort and money to continue to run it in long run.
It relies heavily on the capability organization that runs it.

Looking at the planning, it is set to be opened in year 2012 until the latest news is set to be opened at the end of 2014. It has been delayed for exactly two years.
http://www.thesundaily.my/news/853338
http://www.jsic.com.my/uploaded/features/Austin Heights Water Theme Park.pdf
 
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RM500,000 minimum price still stands
Feb 24, 2014 - PropertyGuru.com.my

Industry stakeholders have become sceptical as to the implementation of the new RM1 million floor price for foreign property acquisitions.

“The market seems to have assumed that it's not implemented and I've heard that developers are still selling properties below RM1 million to foreign buyers...The rules is still iffy and it seems that it has not been gazetted yet,” said Malaysian Institute of Estate Agents (MIEA) president Siva Shanker.

Announced in October last year by Prime Minister Datuk Seri Najib Abdul Razak, the new ruling was expected to take effect on 1 January 2014.

However, a local business daily revealed on 13 January that the implementation of the new ruling may be pushed to May since it has yet to be gazetted.

Veena Loh, General Manager at Malaysia Property Inc (MPI), noted that there have been no updates regarding the new ruling while information is scarce.

Hence, the old ruling of RM500,000 minimum price for foreign property purchases still stands.

A unit under the purview of the Economic Planning Unit, MPI is tasked to connect foreign investors, both private and corporate, with real estate investment opportunities within the country.

Meanwhile, Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan said the new ruling will be implemented as soon as possible this year.

“It has not been officially implemented but it is only February. There are some legalistic tweaks that need to be done. We will implement it this year,” he said at the sidelines of the launch of Sime Darby Property Housing-Income Index last Monday.

Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email [email protected]

http://www.propertyguru.com.my/property-news/2014/2/11897/rm500-000-minimum-price-still-stands
 
It is very likely to see a U-turn for this $1 mil RM limit. Malaysia government is in need of a lot of foreigners' $ now, given that the toll levy increase has been delayed/cancelled. The slow down in property sales must have hit the government-linked developers and agencies collecting state levies and taxes hard in Oct 2013 to Feb 2014.
 
It is very likely to see a U-turn for this $1 mil RM limit. Malaysia government is in need of a lot of foreigners' $ now, given that the toll levy increase has been delayed/cancelled. The slow down in property sales must have hit the government-linked developers and agencies collecting state levies and taxes hard in Oct 2013 to Feb 2014.

Be careful, I am not surprised that they will and can surprise us by announcing the levy increase with immediate effect.
 
Foreigners to pay more to buy Malaysian property from March: report
PUBLISHED FEBRUARY 28, 2014

[KUALA LUMPUR] Malaysia's government on Friday announced that the higher threshold price for foreigners to own property will go into effect from March 1 in federal administered territories.

But states can assign their own dates for enforcement, state news agency Bernama reported, citing a statement from the Prime Minister's department.

To rein in rising housing prices and curb speculation in the market, the government announced on Oct 25 last year it will double the minimum price for foreign ownership to RM1 million (US$304,800) a unit. - Reuters

http://www.businesstimes.com.sg/bre...-buy-malaysian-property-march-report-20140228
 
I thought they will not announce the $1mil RM restriction, but they did. I suppose there will be a further slowdown in sales.
 
Friday, 28 February 2014 09:16Why does Najib CLING ON when it's clear M'sia desperately needs a FULL-TIME finance ministerWritten by Liew Chin Tong

The current practice of Prime Minister doubling as finance minister must end immediately. Or else, Malaysia will suffer under a "part-time" Finance Minister.The Malaysian economy is faced with a myriad of challenges ahead, which requires a competent full-time Finance Minister to steer it away from troubled waters.Over the short and middle-term horizon, the Malaysian economy may face the following challenges, particularly:

1) A potential slowdown
The various subsidy cuts (petrol, electricity, etc) and the impending introduction of Goods and Services Tax are depressing domestic demand as more and more ordinary Malaysians complain about price hike.External demand is unlikely to rise too much due to weak job markets (hence inability to consume our products) in Europe and the United States. The combined effect could be a slowdown.

2) The impact of the tapering of Quantitative EasingSomehow no one in the government has seriously discussed the impact of the tapering of Quantitative Easing by US Federal Reserve on Malaysia.It is quite likely that US Dollars will continue to appreciate vis-à-vis the Ringgit and at the same time interest rate will rise. What is in store for Malaysian business and the wider economy should the scenario take place?

3) A potential property bubble

There are signs that the property market is not necessarily sustainable. CIMB Chief Datuk Seri Nazir Razak has warned about the potential bubble in office spaces in Kuala Lumpur while others are concerned about the “carpet building” of high-rise condominiums in the Iskandar region.If there is a bubble and when the bubble bursts, the public will certainly be adversely affected and the financial institutions may be riddled with debts that turn bad.Such scenarios are complex and require a competent full-time Finance Minister to steer.Current economic governance in the hands on the un-qualifiedIt is farcical to see that the Deputy Prime Minister Tan Sri Muhyiddin Yassin who is also Education Minister is now chairing the Cabinet Committee on Cost of Living; as if cost of living is not part of the economic/finance portfolio.There are too many actors in the economic/finance segment of the cabinet but there is no commanding voice that sets a clear agenda for the nation’s economic health.


The actors include:•
Tan Sri Muhyiddin Yassin, Chairman of Special Cabinet Committee on Cost of Living;•
Dato' Seri Ahmad Husni Mohamad Hanadzlah, Minister of Finance II;•
Dato’ Ahmad Maslan, Deputy Finance Minister and the Government’s No 1 Cheerleader for GST;• Datuk Sri Idris Jala, Minister in Prime Minister’s Department and CEO of the Government’s super-consultant unit Performance Management Delivery Unit (Pemandu);•
Datuk Seri Abdul Wahid Omar, Minister in Prime Minister’s Department responsible for Economic Planning Unit (EPU)•
Datuk Seri Mustapa Mohamad, Minister of International Trade and Industry•
Dato Sri Hasan Malek, Minister of Domestic Trade, Co-operatives and Consumer Affairs

This list is not exhaustive.Fragmented, ad-hoc committees, lack of directionApart from the Treasury (Finance Ministry) and the EPU (in the Prime Minister’s Department), Pemandu seems to have acquired the status of Government’s chief spokesperson on economics since 2010.Further, the National Economic Council was established in 2008 as a mini-economic cabinet that includes only key UMNO Ministers and top bureaucrats.Datuk Seri Chua Soi Lek was included in the Economic Council in November 2010 after I raised the matter.There is also a newly established Fiscal Policy Committee that made decisions on subsidy cuts without full cabinet deliberations. The FPC, according to Prime Minister Datuk Seri Najib Razak, “will play a lead role in strengthening public finances as well as ensuring fiscal sustainability and long-term macroeconomic stability of the nation.”Such is the fragmented situation of economic governance in Malaysia.

Liew Chin Tong is the MP for Kulai
Full article:*http://www.malaysia-chronicle.com/i...bunch-of-clowns&Itemid=2#ixzz2ubazA9TI*Follow us: @MsiaChronicle on Twitter
 
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Friday, 28 February 2014 09:16Why does Najib CLING ON when it's clear M'sia desperately needs a FULL-TIME finance ministerWritten by Liew Chin Tong

The current practice of Prime Minister doubling as finance minister must end immediately. Or else, Malaysia will suffer under a "part-time" Finance Minister.The Malaysian economy is faced with a myriad of challenges ahead, which requires a competent full-time Finance Minister to steer it away from troubled waters.Over the short and middle-term horizon, the Malaysian economy may face the following challenges, particularly:

1) A potential slowdown
The various subsidy cuts (petrol, electricity, etc) and the impending introduction of Goods and Services Tax are depressing domestic demand as more and more ordinary Malaysians complain about price hike.External demand is unlikely to rise too much due to weak job markets (hence inability to consume our products) in Europe and the United States. The combined effect could be a slowdown.

2) The impact of the tapering of Quantitative EasingSomehow no one in the government has seriously discussed the impact of the tapering of Quantitative Easing by US Federal Reserve on Malaysia.It is quite likely that US Dollars will continue to appreciate vis-à-vis the Ringgit and at the same time interest rate will rise. What is in store for Malaysian business and the wider economy should the scenario take place?

3) A potential property bubble

There are signs that the property market is not necessarily sustainable. CIMB Chief Datuk Seri Nazir Razak has warned about the potential bubble in office spaces in Kuala Lumpur while others are concerned about the “carpet building” of high-rise condominiums in the Iskandar region.If there is a bubble and when the bubble bursts, the public will certainly be adversely affected and the financial institutions may be riddled with debts that turn bad.Such scenarios are complex and require a competent full-time Finance Minister to steer.Current economic governance in the hands on the un-qualifiedIt is farcical to see that the Deputy Prime Minister Tan Sri Muhyiddin Yassin who is also Education Minister is now chairing the Cabinet Committee on Cost of Living; as if cost of living is not part of the economic/finance portfolio.There are too many actors in the economic/finance segment of the cabinet but there is no commanding voice that sets a clear agenda for the nation’s economic health.


The actors include:•
Tan Sri Muhyiddin Yassin, Chairman of Special Cabinet Committee on Cost of Living;•
Dato' Seri Ahmad Husni Mohamad Hanadzlah, Minister of Finance II;•
Dato’ Ahmad Maslan, Deputy Finance Minister and the Government’s No 1 Cheerleader for GST;• Datuk Sri Idris Jala, Minister in Prime Minister’s Department and CEO of the Government’s super-consultant unit Performance Management Delivery Unit (Pemandu);•
Datuk Seri Abdul Wahid Omar, Minister in Prime Minister’s Department responsible for Economic Planning Unit (EPU)•
Datuk Seri Mustapa Mohamad, Minister of International Trade and Industry•
Dato Sri Hasan Malek, Minister of Domestic Trade, Co-operatives and Consumer Affairs

This list is not exhaustive.Fragmented, ad-hoc committees, lack of directionApart from the Treasury (Finance Ministry) and the EPU (in the Prime Minister’s Department), Pemandu seems to have acquired the status of Government’s chief spokesperson on economics since 2010.Further, the National Economic Council was established in 2008 as a mini-economic cabinet that includes only key UMNO Ministers and top bureaucrats.Datuk Seri Chua Soi Lek was included in the Economic Council in November 2010 after I raised the matter.There is also a newly established Fiscal Policy Committee that made decisions on subsidy cuts without full cabinet deliberations. The FPC, according to Prime Minister Datuk Seri Najib Razak, “will play a lead role in strengthening public finances as well as ensuring fiscal sustainability and long-term macroeconomic stability of the nation.”Such is the fragmented situation of economic governance in Malaysia.

Liew Chin Tong is the MP for Kulai
Full article:*http://www.malaysia-chronicle.com/i...bunch-of-clowns&Itemid=2#ixzz2ubazA9TI*Follow us: @MsiaChronicle on Twitter

hahaha! muhyiddin yassin. chairman of what?
 
Foreigners to pay more to buy Malaysian property from March: report
PUBLISHED FEBRUARY 28, 2014

[KUALA LUMPUR] Malaysia's government on Friday announced that the higher threshold price for foreigners to own property will go into effect from March 1 in federal administered territories.

But states can assign their own dates for enforcement, state news agency Bernama reported, citing a statement from the Prime Minister's department.

To rein in rising housing prices and curb speculation in the market, the government announced on Oct 25 last year it will double the minimum price for foreign ownership to RM1 million (US$304,800) a unit. - Reuters

http://www.businesstimes.com.sg/bre...-buy-malaysian-property-march-report-20140228

$1mil RM restriction is not yet for Iskandar.

The Federal Territories in Malaysia comprise three territories: Kuala Lumpur, Putrajaya and Labuan, governed directly by the federal government of Malaysia.
 
The most sellable properties in Iskandar are those penny houses which are below RM1m. And a lot of them were bought with hope that its price will double when CF is obtained. Some of my friends have gone in with 2-4units in hand. One for own consumption and others for sale. Most of the units are still under construction probably CF in 2-3 years time. This RM1m will burst all the hopes even it is not implemented in Iskandar yet.
 
When the time come say 2016, the buyer will start to serve the home loan. There is an estimated of 40,000 units completed condo around + some other landed properties by then. Iskandar is slow in attracting the real investor (Not housing developer) into the region. Spoken to a few giant American and European manufacturers, most of them have no plan to move there yet citing unclear government policy and shortage of labour.
 
$1mil RM restriction is not yet for Iskandar.

The Federal Territories in Malaysia comprise three territories: Kuala Lumpur, Putrajaya and Labuan, governed directly by the federal government of Malaysia.

read the 2nd para.

but states can assign their own dates for enforcement, s

johor will sit on it for a while.
 
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