Economic News

[FHBH12]

Inflation in 2014: Just a spike or start of a spiral?
By PY Chin
Friday, 13 Dec 2013, 12:08 AM
- See more at: http://www.focusmalaysia.my/Columns...ke-or-start-of-a-spiral-#sthash.3HE39nFs.dpuf

THE inevitable cannot be avoided. Come 2014, which is just about two weeks away, inflation – the economic scourge that consumers dread the most – is at the doorstep of Malaysia’s economy, waiting to rear its ugly head again.

For the last 40 years, the inflation rate as reported by the Statistics Department was rather benign, averaging 3.7% annually, rearing its ugly head only once in March 1974 when it hit 23.9%. The four-decade trend gave no nightmares to consumers. But for 2014, consumers are already getting the jitters, as higher property assessment, power, and possibly fuel, not forgetting the withdrawal of sugar subsidy, will cause a cascading effect on prices of food, rent, and other services, eating deeper into consumers’ almost empty pockets.

Inflation in the form of higher prices of goods and services will certainly happen. But whether the inflation will still be due to cost-push factors, as most economists argue it to be, or whether there will also be an element of demand-pull as well, remains debatable.

Next year’s rise in power tariffs for commercial and industrial users will raise production cost, which will eventually be translated into higher selling prices to consumers.

Already, retailers and small and medium industry (SMI) producers are sounding the alarm that the increase leaves them with "no choice" but to pass it on to consumers. Electricity is an important component of total manufacturing costs, in the range of 6-16%. For SMIs, the higher power cost will certainly put their 3-8% profit margins under pressure. For commercial users, the average rise in power cost will reduce their earnings by 2-4%, leaving them with a 1% profit margin.

Shopping malls are hard hit, as electricity is the single largest expenditure, thus impacting their competitiveness. Among retail outlets, food and beverage, which consume the most electricity, will be worst affected as power makes up 10-15% of total operating costs.

- See more at: http://www.focusmalaysia.my/Columns...ke-or-start-of-a-spiral-#sthash.3HE39nFs.dpuf

 

[FHBH12]

Taking liberties: A Malaysian pastime
By Khoo Hsu Chuang
Friday, 13 Dec 2013, 12:08 AM
- See more at: http://www.focusmalaysia.my/Columns/Taking-liberties-A-Malaysian-pastime#sthash.DmicqGiD.dpuf

I HAVE a (very) Chinese friend who is exceedingly funny, though only in the sense that the way he speaks warrants humour, not with him, but at him. One of his favourite sayings is this: ‘Wahhh. I give you chicken wing, now you want drumstick arr.”

He didn’t know it at the time, but the utterances of my esteemed buddy from Muar (which could partly explain the way he is) could well describe the events of these past few weeks. The description of the act of taking liberties. Helping oneself to the cookie jar. Taking the piss. Or more officially, the opportunistic act of taking advantage of the situation.

It all started, perhaps, when in hapless response to the prospect of a ratings downgrade, the government embarked on the unpopular journey of dismantling subsidies. The date: Sept 2. The target subsidy: fuel. By the next day the price-per-litre of RON95-grade petrol and diesel had risen by 20 sen. RON95 was up to RM2.10 per litre and diesel to RM2 per litre. Fine. Wheels set in motion. Ratings agencies pacified.

Ok, no further details or timetable but hey – that’s ok: at least Malaysia has a spine! Fire in the belly! But this act of narrowing the gap between Malaysia’s La-La Land of cheap fuel and power to The Real World – like it has each time in history – set off a series of events that are exactly that: taking the piss. Hawkers began hiking their prices. Ditto the mamak eateries. Chinese iced tea, for example, now sells for 60 sen. Up from 50 sen three months ago, for a 20% increase. Which all makes a mockery of official government inflation data.

- See more at: http://www.focusmalaysia.my/Columns/Taking-liberties-A-Malaysian-pastime#sthash.DmicqGiD.dpuf

 

[cow138]

Quick question do you think whether the banks will increase the interest rates in response to the higher inflation rate?

 

[FHBH12]

Quick question do you think whether the banks will increase the interest rates in response to the higher inflation rate?

2H 2014 maybe, but I think it will be a small upward adjustment at most, and probably due to gradual reduction of QE. Even if US unemployment drops to 6-7% next year, it is still a high figure, so I think US will not be in a hurry to raise the interest rates drastically.

 

[malpaso]

Quick question do you think whether the banks will increase the interest rates in response to the higher inflation rate?

i'm guessing that they will, within a years' timeframe. traditionally, interest rate hikes help combat inflation.

 

[FHBH12]

Woodlands commercial site launched for sale
POSTED: 17 Dec 2013 15:36

The government has launched a commercial site near the Woodlands MRT station for sale by public tender next month.

SINGAPORE: The government has launched a commercial site near the Woodlands MRT station for sale by public tender next month.

This is the first site to be put up for sale in the Woodlands Regional Centre since detailed plans for the area were announced as part of the Draft Master Plan 2013 on November 20.

In a statement on Tuesday, the Urban Redevelopment Authority (URA) said the proposed development on the site will have at least 90 per cent, or 58,492 square metres (sqm), of total gross floor area (GFA) dedicated for office use.

This is in line with plans for the Woodlands Regional Centre to be developed as a major employment centre in northern Singapore.

The remaining GFA can be set aside for complementary uses such as childcare centres, retail and food & beverage uses.

URA said an extensive pedestrian network has been planned to connect the site to Causeway Point, Woodlands Civic Centre, the existing MRT station and bus interchange, as well as the future Thomson Line MRT station in the vicinity.

The tender will close at noon on 8 April 2014.

With about 100 hectares of land available for development, the Woodlands Regional Centre can potentially yield 700,000 sqm of commercial floor space.

This will anchor it as a key commercial cluster in the northern part of Singapore and a business hub for companies that do not need to be located in the central business district.

When fully developed over the next 10 to 15 years, URA said the regional centre will also bring some 100,000 new jobs closer to homes.

- CNA/al

http://www.channelnewsasia.com/news/business/woodlands-commercial-site/925336.html

 

[FHBH12]

I have this feeling that more Malaysians will stay in Johor Bahru city center and travel across to Woodlands to work once the RTS is up.

 

[FHBH12]

Sales slow in M'sia retail sector
PUBLISHED DECEMBER 18, 2013

[PETALING JAYA] The local retail sector is feeling the pinch of slower sales as a result of the various government subsidy rationalisation measures, which are causing consumers to be more cautious about their spending, according to industry experts.

The former president of the Malaysian Association for Shopping and Highrise Complex Management, Richard Chan, said that many retailers are experiencing a slowdown in sales despite the approaching Christmas season, a time when consumers tend to increase spending, according to a report in Malaysia's The Star daily.

"Sales are slower compared with last year. Consumers are cautious with their spending because of the various government policies," he said.
Consumer spending during this time is often boosted by year-end sales and promotions in shopping malls and hypermarkets, he added.

As part of its fiscal consolidation measures, the government has over the past few months reduced its subsidies for fuel, resulting in the increase in the prices of RON95 petrol and diesel by 20 sen (7.7 Singapore cents) to RM2.10 and RM2 per litre respectively.

It also abolished the 34 sen per kilogramme subsidy for sugar, which resulted in the price of domestic refined sugar increasing to RM2.84 per kg.

Effective next year, the average electricity tariffs in peninsular Malaysia will increase by 15 per cent to 38.54 sen per kilowatt hour (kWh) while those for Sabah and Labuan will rise 17 per cent to 34.52 sen per kWh.

Further rounds of subsidy rationalisation are expected next year as the government consolidates its expenditure.

An industry observer said that the government's subsidy rationalisation measures would inevitably result in inflation. "This will affect spending as consumers are more wary about how they want to part with their money now," he said.

Mr Chan said: "In the past, despite the poorer global economic conditions, such as the meltdown in Europe, Malaysia was still resilient because its domestic demand was strong. But I feel that the various measures now will be like applying the handbrake on the entire economy."

However, he said that certain food and beverage outlets are still doing well. "Outlets where the items are priced in the low to medium range are not affected. As for the high-end outlets, of course, they would be frequented by the elite group of customers with spending power."

Retail Group Malaysia, in its report in August, forecast growth for the sector in the last quarter of this year at 6 per cent in anticipation of slightly better retail sales during the school holidays, year-end sales and festivals, said The Star.

http://www.businesstimes.com.sg/premium/malaysia/sales-slow-msia-retail-sector-20131218

 

[FHBH12]

Malaysia economic plan draws RM220b since 2010 inception
PUBLISHED DECEMBER 18, 2013

[PUTRAJAYA] The government's Economic Transformation Plan has proven to be a success, attracting RM220 billion (S$85.1 billion) worth of investments since its inception in 2010.

Prime Minister Najib Razak, in announcing this on Monday, said that the investments from 195 projects launched under the National Economic Key Areas (NKEA) have also created 435,000 jobs and contributed RM144 billion to the country's gross national income (GNI), according to a report in Malaysia's New Straits Times.

Mr Najib, who is also finance minister, said that Malaysia's confidence was on a high note with such a dynamic economic footing, which would set a positive outlook for 2014.

"Despite the global economic outlook continuing to be uncertain, the country has targeted to achieve between 5 and 5.5 per cent gross domestic product (GDP) growth next year, with private investments expected to grow 12.7 per cent to RM153 billion."

He said that next year, he was optimistic of developments in the pipeline to support the nation's pursuit to become the centre for global operations, services and trading. "We have set our sights on attracting 13 large multinationals to base their operations in Kuala Lumpur.

"Six international trading companies, with a projected minimum total turnover of US$600 million, could establish their operations in the country.

"In the financial markets, we are set to see an increased value in new listings, with a targeted market capitalisation of RM18 billion," Mr Najib said at the ETP Turns 3 event.

Mr Najib said that Malaysia had not only become more efficient in its tax collection, but also broadened its tax base.

He stressed that stronger revenue would put the government in a better position to administer socioeconomic programmes, aimed at narrowing the income disparity. "The results, as you can see, are an increase in government revenue of 14 per cent from 2010 to 2012, growing from RM160 billion to RM207 billion.

"We project to collect RM220 billion in revenue this year."

He said that the country was also on target to reduce its fiscal deficit. "One aspect that gives me great satisfaction is our performance in reducing the fiscal deficit. Where many governments failed to deliver, Malaysia, by contrast, is on track to a balanced budget by 2020.

"From 6.6 per cent in 2009, we will achieve four per cent this year and further reduce the deficit to three per cent in 2015."

To secure a strong investment portfolio for Malaysia, he said that it was vital that various agencies collaborate.

"I have asked Mustapa Mohamed, Idris Jala and the (corridor economic) authorities to work together, to institute a plan of action by placing projects, where relevant, directly under their monthly steering committees."

He said that Malaysia was at full employment, with a declining unemployment rate from 3.7 per cent in 2009 to 3 per cent last year. "During my tenure, employment has increased by 1.8 million, while population growth stands at 1.7 per cent," said Mr Najib, adding that currently, total employment was at 13.66 million.

Based on International Labour Organisation standards, any country with an unemployment rate of less than four per cent is regarded as having attained full employment.

http://www.businesstimes.com.sg/pre...mic-plan-draws-rm220b-2010-inception-20131218

 

[FHBH12]

Fed to start tapering massive US stimulus in January
PUBLISHED DECEMBER 19, 2013

[WASHINGTON] The Federal Reserve announced Wednesday it would begin to taper its massive stimulus program next month as it sees improvement in the US economy and the ailing job market.

The Fed will spend US$75 billion on bonds a month starting in January, down from the US$85 billion a month it has spent for a year, in an effort to tamp down long-term interest rates to stimulate growth and jobs, the Federal Open Market Committee said after a two-day monetary policy meeting.

Stocks rallied sharply after the Fed action, which marked the beginning of the end of five years of its easy-money policy, aimed at helping the world's largest economy recover from the devastating recession.

"In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to modestly reduce the pace of its asset purchases," the FOMC said in a statement.

Noting the negative impact of the federal government's tax hikes and spending cuts on growth since the start of the current asset-purchase program, the FOMC said it "sees the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy." The FOMC said it now saw the outlook for the economy and the labor market as having become "more nearly balanced" but voiced concern about weak inflation, which is well below the Fed's 2.0 per cent target.

Fifteen minutes before the markets closed, the Dow Jones Industrial Average was up 1.75 per cent at 16,153.85 and the S&P 500 added 1.63 per cent.
The taper decision took many analysts by surprise. A slight majority had expected the Fed to wait until the January or March meetings to allow time for more data to assess whether the economy would be strong enough to withstand a reduction in bond purchases.

Fed Chairman Ben Bernanke acknowledged in a news conference that the economy had a way to go to get back on track, but insisted the taper did not mean a reduction in the Fed's support because of the growing size of the bond holdings and the near-zero interest rate.

"We're not doing less," Mr Bernanke said. "We have been aggressive to keep the economy growing." The Fed, as widely expected, held its key interest rate at 0-0.25 per cent where it has been for five years to support the recovery.

Mr Bernanke highlighted a change in the FOMC's forward guidance on when the federal funds rate could be increased.

The committee said it would likely keep the current near-zero rate "well past the time" that the unemployment rate declines below 6.5 per cent, especially if projected inflation continued to run below the Fed's 2.0 per cent target.

The FOMC noted that inflation persistently below the target could pose risks to economic performance, and it is monitoring developments carefully for evidence that inflation will move back toward its objective over the medium term.

In updates of its economic forecasts, the Fed projected gross domestic product growth between 2.8 per cent and 3.2 per cent, a tenth point wider than the 2.9-3.1 per cent range it projected in September.

It projected the unemployment rate, currently at 7.0 per cent, would fall to a range of 6.3-6.6 per cent by the end of next year, an improvement from the prior estimate of 6.4-6.8 per cent. - AFP

http://www.businesstimes.com.sg/bre...tapering-massive-us-stimulus-january-20131219

 

[FHBH12]

Property outlook rosy in 2014 despite cooling-off measures
By the FocusM Team
Friday, 20 Dec 2013, 12:01 AM
- See more at: http://www.focusmalaysia.my/Assets/...ite-cooling-off-measures#sthash.oXhYj6zC.dpuf

How did the year pan out for your company?

Khoo Cheng Hai
@ Ku Cheng Hai
group managing director
KSL Holdings Bhd

It has been a volatile year, in which buyer sentiment was affected by the general election and budget measures. But overall, our project in Johor Bahru is doing very well due to our strong brand there, and sales from the Klang Valley are within our expectations.

What are your expectations for your company and the property sector in 2014?

We hope next year will be a better year than the current one, as there will be fewer events which affect investor sentiment. Our company is in a relatively healthy condition, while we are still actively looking for a suitable landbank for development.

What do you think will be key events and challenges that will shape the outlook of the property sector next year?

The main challenge next year is to look at the impact of GST implementation in 2015. The selling price of a house is not taxed under the GST but the cost of materials is. We need to carefully plan the timing of launches, keeping track of construction progress and tax implications when the GST comes into effect.

With that, we advise all first-time buyers to make their house purchases as early as possible. The cost of construction is a linear progression, as is cost of living. It is more expensive to buy next year compared to the current one.

- See more at: http://www.focusmalaysia.my/Assets/...ite-cooling-off-measures#sthash.oXhYj6zC.dpuf

 

[malpaso]

Which developer will advise people to buy later instead of sooner.

 

[FHBH12]

Which developer will advise people to buy later instead of sooner.

Buying early is correct if there is a need. The developers are hinting that they will raise price or cut down the size at the same price next year.

 

[graveyard]

Buying early is correct if there is a need. The developers are hinting that they will raise price or cut down the size at the same price next year.

Those who are planning to buy ppty below 1m will rush in before the effective implementation date next year, so developer of such ppty will see some decent sales number

 

[Newbie11]

Which developer will advise people to buy later instead of sooner.

But he is right, regardless of his role

 

[FHBH12]

Iskandar draws S'pore capital to cheaper land
But concerns rising about a property bubble and unequal economic development
Published December 23, 2013

[NUSAJAYA, Malaysia] Rising from a former palm plantation, the towering Astaka complex will cast its shadow across the Malaysia-Singapore border by 2017, a symbol of an ambitious development zone linking the economies of the two former rivals.

Construction cranes are sprouting across southern Malaysia's Johor state as investment flows into Iskandar, a development zone that aims to draw Singaporean capital to its larger neighbour's cheaper land and labour costs.

The zone has been dogged by scepticism since its inception in 2006, due in part to Johor's reputation in Singapore as a hotbed of petty crime.

But soaring costs in Singapore are causing a re-think.

Anthony Phillips moved his family across the narrow Johor Straits to Iskandar, lured by property prices that are less than half those of Singapore and cheaper schooling.

He now commutes to his Singapore communications consultancy, a trip that takes less than an hour.

"Last year's move to Iskandar has been a great success all round. Iskandar offers the best of both worlds," he said.

Authorities say Iskandar - named after a revered former Johor sultan - landed US$40.5 billion in investment commitments by end-October, one-third of the way towards an ambitious 2025 target of US$123 billion.

Singaporeans are already a key market for a US$280 million Legoland theme park that opened in 2012 and brand-outlet shopping.

Other projects include a branch of UK-based movie makers Pinewood Studios and an "Edu-city" bringing together several European universities on one campus.

A Singaporean-funded US$1.1 billion Motorsports City being built will include racing circuits and a driving school, and is intended as a regional hub for development of the sport.

Bilateral relations have long been prickly. But Ismail Ibrahim, head of Malaysia's Iskandar Regional Development Authority, notes a "reversal of tide", saying Iskandar allows each to leverage its strengths amid an uncertain world economy.

"We like to describe our relationship with Singapore through this simple term: 'co-opetition'," said Mr Ismail, standing beside scale models of the Iskandar area. "We compete, but at the same time we cooperate."

With a world-class financial centre and port, high-tech Singapore's five million residents create a GDP equal to that of Malaysia's 28 million. But soaring prices have crimped competitiveness.

A 120 square metre condominium in the centre of Singapore fetches well over US$2 million while the Johor Baru equivalent rarely tops US$400,000.

Malaysia, meanwhile, views Iskandar as a new conduit for the foreign investment that has been vital to its development.

It offers a range of tax breaks and other inducements in Iskandar's designated 2,217 square kilometres - three times Singapore's size - of mostly plantation land.

Concerns are rising, however, that Malaysian, Singaporean and Chinese money is fuelling a speculative property bubble while more balanced economic development lags.

Johor housing prices have jumped more than 20 per cent in the past year, double the national average and causing some local grumbling, yet Iskandar has one of Malaysia's lowest retail and office occupancy rates.

Units in places like Astaka, which at 301 metres will be the tallest residential block in either country, can go for upwards of US$2.5 million.

Analysts say recent Malaysian measures to cool speculation will have little impact, especially with huge Chinese developers now eyeing Iskandar.

Country Garden, one of China's top property firms and among a handful of cash-rich Chinese developers in Iskandar, has broken ground on a US$5.6 billion residential township.

Of the project's 9,000 luxury condominiums, one-quarter were sold to China buyers.

Malaysian officials express hope that "catalytic" projects like Legoland and the motorsports facility will stimulate other business growth.

"There was a property play in the beginning; now we have to focus on job creation . . . to migrate to a vibrant economic zone," said Wan Abdullah Wan Ibrahim, chief executive of Malaysian government-owned UEM Sunrise, a key Iskandar developer.

International business consultancy Frost & Sullivan has announced plans to invest US$176 million to house its back-end operations in Iskandar.

But few other major corporate names have taken the plunge, causing some concern.

Johor business leaders complain that the area's Malaysian labour base is short on skills and that many residents still prefer better-paying work in Singapore.

A speculated linking of Singapore's mass transit system with Iskandar has been cited as a potential shot in the arm, but no firm plans have yet emerged.

Observers believe, however, that economic fundamentals will ensure the area's makeover is eventually completed.

"Iskandar will succeed because it has to," said Johor ruling-party Member of Parliament Nur Jazlan Mohamed. "Malaysia needs it economically and Singapore needs it politically to release the cost pressure." - AFP

http://www.businesstimes.com.sg/premium/malaysia/iskandar-draws-spore-capital-cheaper-land-20131223

 

[FHBH12]

2013 a positive and vibrant year for property sector
Last updated on 24/12/2013 - 14:00
Posted on 24/12/2013 - 13:59

KUALA LUMPUR: This year was generally a positive and vibrant one for the property sector, with the low-interest regime, special schemes like the developer interest bearing scheme (DIBS) and higher loan margins of up to 90%, despite some housebuyers holding off on the purchasing decision before the general election in May.

The recent cooling measures announced in Budget 2014 and those taken by Bank Negara Malaysia to end special schemes offered by developers are seen by many as timely moves to curb speculative activities.

As the market takes time to digest and absorb these measures, will there be renewed interest in the property sector, given that demand outstrips supply? Will this be the right time for potential property buyers to go into the market, more so with the implementation of the GST on April 1, 2015?

FocusM spoke to developers, the Real Estate and Housing Developers’ Association, the House Buyers Association and an analyst on the performance of the property sector in 2013 and the outlook for next year.

Datuk Seri Michael Yam – President, Real Estate and Housing Developers’ Association (Rehda)

How did the year pan out for the property sector?

In general, the first half of 2013 was positive for developers as the trend, based on a survey of Rehda members, indicated that sales were better than in the preceding half-years in 2012 and 2011.

The survey showed a better sales performance in H1 2013, with 6,095 (56%) units sold compared to H2 2012 with 4,822 (46%) units sold, and the number of landed properties launched is dwindling, while launches of strata-property units are on the rise.

The main challenges are labour issues and the increasing cost of building materials like cement, steel bars, sand and bricks, which increased by between 5% and 10% in H1 2013.

What are your expectations for the sector in 2014?

The first half of 2014 will see an initial slowdown in sales, as the market adopts a wait-and-see attitude. This approach is compounded by the fear factor of a higher cost of living and lowered affordability due to increases in electricity, toll charges, gas and Kuala Lumpur assessment rates that will be effected in 2014.

We expect the rate of sales to accelerate in the second half of 2014, as the population adapts to the situation and realises that fundamentally, the demand for housing will not change. As more youths join the house-buying group and a lower supply comes onstream, there is only a small window in which to buy before the GST kicks in, in the second quarter of 2015.

What do you think will be key events and challenges that will shape the sector’s prospects next year?

With the various stringent measures in place, developers will need to be more creative and diligent in terms of coming up with better product offerings and pricing. Developers will need to focus on research and marketing to reach target customers.

Among main challenges will be the higher cost of compliance with new regulations such as 3% of the development cost as deposit for a developer’s licence and the backloading of progress payment drawdowns as stipulated in the revised Housing Development Act. These changes will inevitability lead to higher costs of development, leading to higher selling prices.

Inflationary pressure will feature prominently as the rakyat adjust to the higher costs occasioned by increased tariffs, toll charges and the reduction of subsidies.

Which areas in Malaysia will be 2014’s hot property areas?

Greater Kuala Lumpur (Kuala Lumpur and the nine local authorities), Putrajaya and Cyberjaya, Penang (Penang Island and Seberang Perai), the Iskandar region and Seremban.

Chang Kim Loong – National House Buyers Association (HBA) honorary secretary-general

How did the year pan out for the property sector?

It was another good year for key players in the property market, ie developers and banks. Property prices continued the uptrend mainly because of the ill advice given to our prime minister, resulting in ineffective measures announced for Budget 2013, such as the real property gains tax [RPGT] and high threshold for affordable housing.

We are glad that finally the prime minister has realised the seriousness of the situation and has increasing the RPGT in Budget 2014 to 30% if the property is disposed of within three years of acquisition; and an imposition of 20% if the property is disposed of within the fourth year, and 15% in the fifth year.

What are your expectations for the sector in 2014?

HBA hopes the [Budget 2014] measures will slow speculative activities in the property market which have driven up prices to levels no longer deemed affordable to the majority of lower- and middle-income wage-earners which form the bulk of the population.

We also hope the government will continue to monitor the situation and take additional measures such as to increase entry costs in the form of higher stamp duties for the transfer of titles for people who hold/buy multiple properties, as such measures are deemed more effective and can yield more immediate results.

What do you think will be key events and challenges that will shape the sector’s prospects next year?

The challenge for the government in 2014 and beyond is to create a sustainable property sector. For too long, the government has adopted a laissez-faire approach and left it to the market to regulate itself.

The problem with this approach is that the two key players in the property market – banks and developers – are profit-maximising entities. Hence, property prices have skyrocketed in recent years due to aggressive lending and speculative activities. Property in many urban and suburban areas is no longer deemed affordable to many lower- and middle-income families and especially to our current younger generation.

What areas in Malaysia will be 2014’s hot property areas, particularly for the low- and middle-income groups?

The current hot areas such as Puchong and Kota Damansara are already far beyond the reach of our younger generation, particularly fresh graduates.

The next hot areas will be places with good connectivity to public transport hubs such as MRT stations.

Lee Chung Cheng – JF Apex Securities head of research

How did the year pan out for the property sector?

The property sector has outperformed the FBM KLCI year-to-date (21% vs 8%). The property index staged a sharp rally post the 13th general election in May, buoyed by a rising investor appetite for high-beta stocks. Also, the positive performance was partly due to a re-rating of developers having landbank/projects in Iskandar, following positive newsflow, robust property sales and rising residential prices in Johor.

What are your expectations for the sector in 2014?

For the physical property market, we expect the transaction volume to come down in 2014 while we anticipate property prices will be flattish due to recent property cooling measures which will drive away speculators. The removal of the DIBS and the RPGT hike effective January 2014 may affect buyer sentiment temporarily and we anticipate fewer launches by developers in H1 2014. However, buying interest will pick up in H2, driven by pent-up demand. Hence we are “neutral” on the sector, following a good run of share prices this year.

What do you think will be key events and challenges that will shape the sector’s prospects next year?

Infrastructure development such as the MRT2 & 3; major highways in the Klang Valley – KIDEX, DASH, SUKE, LRT 3; the High Speed Rail from Kuala Lumpur to Singapore; b) the listing of megadevelopers such as IOI Properties, Medini Iskandar, Iskandar Waterfront Holdings, the PNB property trust; asset injections of Ecoworld into Focus Aim Bhd; premium valuations of megadevelopers will spill over to existing property players; c) the award of federal land development (Rubber Research Institute of Malaysia, Bandar Malaysia, Tun Razak Exchange, Bukit Bintang City Centre) could stir investor interest in the sector.

For full story, go to www.focusmalaysia.my, which also targets other Malaysian businesses.

http://www.theantdaily.com/news/2013/12/24/2013-positive-and-vibrant-year-property-sector

 

[FHBH12]

Inflation Drivers from 2014 onwards

Transport:
- Further fuel subsidy cuts (implemented in 2013 and more announcements expected in 2014)
- Increase in toll (new announcements expected in 2014)

Wages:
- Minimum wage requirement (announced for implementation in 2014)
- Tighter labour market (expected trend particularly in construction/real estate and manufacturing)

Goods and Services:
- Sugar subsidy cut (implemented in 2013)
- 6% GST (announced for implementation in 2015)

Property owners:
- Increase in assessment taxes and quit rents (announced for implementation in 2014)
- Increase in electricity tariffs (announced for implementation in 2014)

Property buyers:
- 2% levy on purchase price replacing $10k RM state levy (announced for implementation in 2014)
- Min $1 min purchase for foreigners (announced for implementation in 2014)
- Higher RPGT (announced for implementation in 2014)
- More stringent financial requirements for developers (announced for implementation in 2014)
- Record purchase prices for Iskandar land (reported in newspapers in 2013)

 

[FHBH12]

It is not a very good time to be a Johorean earning in RM in Johor now as basic necessities (food, transport and housing) will be taxed heavily. Basic government-school education is the only one that is not touched, but it is hard to keep school fees low in 2014.

 

[FHBH12]

Parents feeling a pinch on wallets
BY TASHNY SUKUMARAN AND WINNIE YEOH
Published: Saturday December 28, 2013 MYT 12:00:00 AM
Updated: Saturday December 28, 2013 MYT 6:56:47 AM

KUALA LUMPUR: While kids are excited over starting a fresh year at school, parents are feeling the pinch on their wallets.

Many parents said they have to fork out hundreds of ringgit for stationery, school bags, uniforms and books.

Despatch officer S. Gunalan, 51, doesn’t mind spending RM600 on his 10-year-old daughter Praveena, as “school is not something you should save on”.

“Things are more expensive this year, but we must get good quality items. However, we must also keep track of things like stationery, items like colour pencils and erasers often go missing or are borrowed and never returned.”

Single parent Zana Riah, 55, has one school-age daughter and has budgeted RM400 for school supplies.

“I get most of Alya’s things from wholesale markets like Hari-Hari. Otherwise it’s just too expensive. I have three other kids, but they are grown up now and have their own families to take care of,” she said.

For housewife Laili Azura, 42, having three daughters allows for some things to be shared among them.

“This year I spent about RM600 already. Things are definitely more expensive than last year, but fortunately we have some leftover stationery and other items which can be re-used.”

Salme Mariam Abdullah, 38, said while costs for items like uniforms and school bags hadn’t increased much from last year, books were definitely more expensive.

“I’ve spent RM500 already and have only settled three of my kids!” said the mother of five schoolgoing children.

“We have to always budget for the back-to-school period and set aside RM2,000 to RM3,000. If not, it will be very tight at this time of year,” she said at Wangsa Maju yesterday.

Salme explained that she would often spend money on more expensive items like school bags, paying up to RM100 for one backpack, as cheaper options priced at RM50-RM60 often fall apart after a few months of use.

In Penang, business development manager David Khoo, 38, was taken aback at the price of some back-to-school items.

“I need to buy two pairs of schools uniforms and two pair of shoes. I didn’t know that a school bag can cost over RM200 these days,” he said at Magazine Road here yesterday while shopping for his eldest daughter Hannah, who will be attending Year One next year.

Shop owner Lim Kooi Hing said school shoes and school bags are dearer by about 10% this year.

“A school bag could cost from RM50 to over RM200, a pair of shoes is priced between RM25.90 to RM39.90, while a set of school uniform could cost between RM42 and RM52,” said Khoo, adding that the Government should consider providing tax relief for parents who have school-going children.

Homemaker Mastura Salleh, 47, from Sungai Petani, was also seen waiting for her son Mohd Arman Hakim, 11, to try on a new set of school uniform.

“Being the youngest of my four children, Mohd Arman did not get any hand-me downs.”

She added that the high cost of the school uniforms and other necessities could be a burden to the lower income families.

http://www.thestar.com.my/News/Nati...-hundreds-of-ringgit-for-high-cost-backtosch/