Property News

[malpaso]

home-prices-johor-slide-second-quarter-

http://www.straitstimes.com/news/bu...-second-quarter-20141104#sthash.3vmewV2I.dpuf


Home prices in Johor state, which takes in the huge Iskandar development zone, dipped in the second quarter for the first time in more than two years.

Prices of high-rise units - which have sprung up in large numbers recently in Iskandar - tumbled 13.5 per cent from the first quarter.

The figures are from Johor's House Price Index (HPI) in a recent Maybank IB Research report.

It showed that the overall index fell 1.6 per cent quarter on quarter - though it was still up 4.6 per cent from the second quarter last year.

The slide has been caused by the Malaysian government's cooling measures from January, said analyst Wong Wei Sum of Maybank IB Research.

The raising of the minimum price of property that can be bought by foreigners - from RM500,000 (S$195,000) to RM1 million - since May has hit demand as well, Ms Wong told The Straits Times.

Still, property consultants noted that while prices of newer projects are falling, secondary market prices remain robust.

Prices in newer developed estates have run up to an unsustainable level, leading to a large price difference between older and newer areas, they said.

"Prices of properties launched up till 10 years ago have been gradually rising over the past 10 years," said Mr V. Sivadas, executive director of PA International Property Consultants.

"But in Iskandar in the last five to 10 years, developers' pricing has shot through the roof."

Developers have been hiking prices "indiscriminately" in response to changes in the minimum value for property purchases by foreigners, Mr Sivadas added.

"The developers' market will eventually find its own level. If developers can't sell, they will have to be more innovative in marketing strategies or adjust pricing."

Demand for recent property launches has been softer than from the second half of 2012 to the first half of 2013, Ms Wong noted.

For example, by the end of September, the first phase of Guangzhou R&F's Princess Cove received about 46 per cent bookings for its 1,488 apartment units which were launched at the end of July. Half of its 79 retail lots were booked. The take-up rate for UEM Sunrise's Almas condominium in Puteri Harbour was 25 to 30 per cent as at the end of September, while Tropicana has yet to launch its high-rise units in Danga Bay.

Property prices are expected to stay weak or flat, especially for mixed-use and high-rise residential projects over the medium term, given the "more than ample" incoming supply by the end of next year, said Ms Wong.

A study by property consultancy Landserve says 18,718 high-rise residential units are set to be added by the end of next year, with 40,374 units more by the end of 2017.

Iskandar Waterfront Holdings is also said to be in talks with several foreign developers to sell some of its land in Danga Bay or Permas Jaya, which could raise fears of a housing glut in Iskandar, said Ms Wong.

Still, despite the gloom in the high-rise residential sector, the industrial and commercial property sector is still doing well in Iskandar, said Mr Wee Soon Chit, executive director of Landserve in Johor.

About two weeks ago, all 52 semi-detached and detached factory units in Phase 1 of the iBP@Nusajaya in the Southern Industrial and Logistics Clusters (SiLC) were sold on launch day - from RM3 million per unit on average. A week earlier, developer AME had sold all 52 three- and four-storey shop offices in Nusajaya Square 2, also in SiLC, from RM1.4 million per unit.

Said Mr Wee: "The perception that the property market has softened in Iskandar is mainly influenced by the performance of the high-rise residential sector, which is rather misleading as other sectors are still doing well."

[email protected]

 

[FHBH12]

Condo rents to drop by up to 10%: ANZ
Supply glut looms as S'pore population growth can't absorb new supply, it adds

By Lynette [email protected] @LynetteKhooBT
6 Dec 5:50 AM
Singapore

VACANCIES in the private residential market are set to inch up over the next few years as a supply glut looms, and this would exert further downward pressure on rents and, hence, investment returns.

ANZ Bank flagged in a report on Friday that Singapore's population growth is not enough to absorb the new housing supply between 2014 and 2017, with record completions of new homes posing a "supply shock".

Daniel Wilson, economist for Asean and Pacific at ANZ Bank, said that he expects non-landed property rents to fall cumulatively by up to 10 per cent by the end of next year, given the time lag between changes in vacancies and rents.

Rising interest rates pose a second headwind, he added, warning that a potential 100-basis point hike in interest rates next year could trigger a sharper fall in rents.

Vacancy rates in the first three quarters of this year have already outpaced the bank's expectations.

Data from the Urban Redevelopment Authority (URA) showed that private residential rents sank by a deeper 0.8 per cent in the third quarter, after a 0.6 per cent decline in the preceding quarter; the data showed overall private home prices slipped 0.7 per cent in the third quarter.

The vacancy rate of private homes rose to 7.1 per cent in the second and third quarters, the first since 2006 that it has exceeded 7 per cent, with the vacancy rate for non-landed private homes already exceeding 8 per cent in the second and third quarters.

Mr Wilson said that a vacancy rate of 7.5-8.5 per cent is deemed the tipping point at which "intensified downward pressure on property rents manifests itself". But the overall vacancy rate for private homes could rise to a higher 8.5-9.0 per cent over the next two years, he projected.

"Though the supply pipeline is well-anticipated, its impact has not been tested," he said.

About 80,000 units are in the supply pipeline - including units under construction and planned development - way above the long-term average of about 60,000 units. Some 80 per cent of these units are already under construction and many will be hitting the market over the next few years, according to Mr Wilson.

URA's third quarter statistics showed that some 20,852 private condos and executive condos will be completed in 2014, significantly higher than the 13,150 units completed in 2013. Another 23,769 units are expected to be completed next year.

ANZ expects new completions of private condos to peak in 2016, nearly 2.5 times the long-term average.

Even by assuming that the population size of Singapore will grow to 5.9 million in 2020 with slightly over 80 per cent of the households staying in HDB flats and the rest staying in private homes, the population growth is not sufficient to absorb the new supply, he warned.

Meanwhile, the economist expects any decline in property prices to be more muted relative to the decline in rents, as developers are easing prices modestly to move inventory rather than undertake any fire sale.

If the 80th percentile of the median resident household income is used as a proxy (since 80 per cent of the resident population live in HDB flats), "prices have not grown too fast", Mr Wilson argued.

http://www.businesstimes.com.sg/real-estate/condo-rents-to-drop-by-up-to-10-anz

 

[FHBH12]

The Affordability of Landed Properties in Malaysia
posted on Dec 03, 2014
article source from www.thestar.com.my
written by Alis Padasian

The Khazanah Research Institute has recently released a report, The State of Households, which underscoring concerns of the house prices and affordability in Malaysia.

The institute reported that houses on average cost 5.5 times annual median income, when it should be just three times annual median income.

And the report further says that “in median income terms, our houses are more expensive than those in Ireland, and even Singapore,” according to The Star Online.

This issue of affordability is being revisited with the impending goods and services tax (GST) to be introduced on April 1.

Nevertheless, there is something positive in today’s housing market.

There is a general consensus among property consultants that the market has stabilised. To a great degree, speculation has been weeded out.

In a project located in Kota Damansara, Selangor when the first block was launched in 2012, all the 400-odd units were sold in less than a week. When the second block was launched, the next 400-odd units took a longer time time to sell. The developer has launched the third and final block at about RM1,200 per sq ft but there were only 80 buyers after its launch early this month.

Says PA International Property Consultants (KL) Sdn Bhd managing director Jerome Hong, “A lot of the speculators have been removed with the various cooling measures and stringent banking requirements. Prior to this, developers took care of their own marketing and do not need the services of marketing agents.”

The second positive in today’s market is that buyers are “more genuine” with the majority of them purchasing for own occupation or to upgrade.

The next two largest groups are people who are buying for their children and those who are buying to rent out the units.Investors buy to rent out, while speculators buy to flip.

“While we continue to see speculators, they are considerably few,” says Jordan Lee & Jaafar managing director P. Tangga Peragasam.

On the current concerns with regards the GST, Tangga says there are other issues looming ahead. He draws attention to a promotion by a local commercial bank which is offering fixed deposit (FD) rates at 4.15% per year for tenure of six to nine-month.

He is of the view that at 4%, there will be more interest in FDs rather than big ticket items like buying a house.

Therefore, the two motivating factors in property investments - yield or capital appreciation - are no longer as attractive as before the run-up in property prices.

The rise in interest rates also mean larger mortgage payments and in today’s weak salary market, coupled with stringent lending conditions, many have been deterred, or have their applications rejected, says Tangga.

“Our salaries have not grown in tandem with property prices,” he says.

in order to overcome the issue, Jerome Hong says developers will do generally do two things – give more freebies or build smaller units.

http://www.propertyhunter.com.my/news.php?id=1256

 

[malpaso]

Another article regarding affordability issues facing Malaysians -

http://www.propertyguru.com.my/prop...me-prices-in-six-states-severely-unaffordable

""Residential properties in Sabah cost 11.41 times a family’s median annual income, making them the most expensive homes in Malaysia, according to Institut Rakyat, a think tank run by Pakatan Rakyat.

Based on the federal government’s data for Q4 2012, houses in Sabah were pricier the than the national average of RM251,731, said Institut Rakyat’s Executive Director Yin Shao Loong,

The next most unaffordable residential properties are found in Sarawak (9.04 times) due to a huge gap between home prices and annual household income. For instance, the average price of houses in Sarawak is RM330,594, but the median income of a family is merely RM36,564.

“Sabah and Sarawak suffer from a combination of weak household incomes and house prices that are far higher than the national average, with average prices comparable to Selangor,” he explained

The third most expensive place for houses is Kuala Lumpur (8.22), where the average price of such properties stands at RM576,991, but the annual median income is only RM70,164.

The capital is followed by Selangor (5.88), Penang (5.83), and Kelantan (5.54), but home prices in all the six aforementioned states are considered as severely unaffordable.

On the other hand, residential prices at Terengganu (4.93), Pahang (4.84 times), Perak (4.67), Kedah (4.40), Perlis (4.37), and Johor (4.20) were categorised as seriously unaffordable

Only Negeri Sembilan (3.71) and Malacca (3.16) were deemed as moderately unaffordable. “However, average house prices for these states still exceeded three times the annual income of each state’s median household,” Yin noted.

For middle-income families, they can only afford residential properties priced at RM153,000 and below, he added.""

 

[FHBH12]

EcoWorld’s grand plan materialising
By Joseph Wong
Friday, 12 Dec 2014, 12:30 AM

The proposed listing of special-purpose acquisition company Eco World International Bhd (EWI) on the Main Market of Bursa Malaysia will mark a significant transformation for property tycoon Tan Sri Liew Kee Sin’s Eco World Development Group Bhd (EcoWorld).

For one, the property developer is in the process of acquiring Eco World Development Sdn Bhd with the aim of making the group bigger and stronger.

“As part of the corporate exercise, the group will acquire development rights to eight projects from Eco World Development Sdn Bhd, which will enable it to significantly scale up its business operations in the three key development regions of the Klang Valley, Iskandar Malaysia and Penang,” says group president and CEO Datuk Chang Khim Wah, pictured.

With the EWI special-purpose acquisition company (SPAC), which is awaiting approval from the Securities Commission, the group will comprise two arms – EcoWorld will confine its business to Malaysia while EWI will focus on international business.

The move to combine the listed company with the private limited company will increase the size of the group’s landbank by 1,257ha, which will generate an additional gross development value of about RM30 bil, Chang says.

- See more at: http://www.focusmalaysia.my/Mainstream/EcoWorld’s grand plan materialising#sthash.hj0VeVke.dpuf

 

[FHBH12]

Green drive fizzles out for some developers?
By Gan Pei Ling
Friday, 12 Dec 2014, 12:30 AM

It’s increasingly common for developers to market their commercial or residential properties as “green” by stating their green building certification rating on advertisements.

But what do these ratings mean to potential buyers? And what happens when developers fail to deliver on property with “green” elements as advertised?

A check by FocusM with Green Building Index (GBI) Sdn Bhd reveals developers are free to advertise their GBI rating as soon as their projects have secured provisional certification.

However, the catch is there is no guarantee a property will be able to maintain its provisional rating after having gone through a completion and verification assessment (CVA) to receive the full award valid for three years.

Indeed, GBI general manager Herman Teo confirms there are cases in which “developers have dropped the rating [after the] CVA” though he declined to specify the number of such incidences.

- See more at: http://www.focusmalaysia.my/Assets/Green drive fizzles out for some developers?#sthash.4pXYYvgH.dpuf

 

[potter]

Desperate homeowners launch fire sales of shoebox flats

The flat glut will only intensify.

Shoebox flats had seemed like the perfect investment property a number of years ago. These units, typically with a floor area less than 50 square meters, hooked penny-pinching investors because of their affordability and the cheap downpayment outlay that they required.

However, homeowners who bought shoebox flats as investment properties will soon find that these tiny homes will fail to deliver promised profits. According to CIMB, distressed sales of shoebox flats is likely in 2015 to 2016, as sellers struggle to eke out a profit in the soft market.

“The trigger for the distressed sales of suburban small-formats may come from rising vacancy rates. Smaller units are typically bought for investments, but investors will find themselves hitting a soft market caused by the cutback in foreign labour and ballooning property supply,” noted CIMB.

CIMB further warned that banks may see some non-performing loans from these mortgages. “But as LTVs for investment properties are lower, the ticket size of each loan is smaller and the smaller price quantum of these products is more likely to find a secondary buyer, we do not expect mortgage NPLs to balloon. The developers that are aggressive on the small-format trend tend to be the small developers, but most have sold off their stock,” CIMB stated.

- See more at: http://m.sbr.com.sg/residential-pro...eowners-launch-fire-sales-shoebox-flats#.dpuf

 

[potter]

Mortgagee sales surged sevenfold as lenders strive to recoup losses

Blame it on higher bankruptcies.

Mortgagees turned to property auction in a bid to recoup losses in a weak market. According to data released today by Colliers, the Singapore property auction market through 2014 saw a total of 529 properties being put up for sale. One-third of this figure, or 159 homes, were put up by mortgagees.

Not only is this 5 times the 32 properties put up by mortgagees in 2013, it is also the highest number in 5 years since 2010. Meanwhile, the proportion of properties put up by owners in 2014 remains high at close to 69.9%.

“The higher number of mortgagee listings this year was on the back of the stricter regulatory and financing environment, in which borrowers in default are finding it challenging to sell their properties on their own, as buyers generally remain cautious.” said Annie Chan, Director of Auction & Sales at Colliers International.

In addition to buyers having to fork out a higher cash outlay with measures such as Additional Buyers’ Stamp Duty and Total Debt Servicing Ratio in place, there are also concerns of a mounting supply of residential units and an impending increase in interest rates.

The high number of bankruptcies could have also contributed to the increase in the number of properties put up for mortgagee sale.”

Ms Chan continues, “However, there is little cause for anxiety, as the 159 properties put up by mortgagees this year are still fewer than the mortgagee listings during the 2008 global financial crisis, the 1998 Asian financial crisis, as well as the last market downturn in 2004.”

- See more at: http://m.sbr.com.sg/residential-pro...-sevenfold-lenders-strive-recoup-losses#.dpuf

 

[potter]

Highly-leveraged households grapple with intensifying debt threat

Problems will worsen when interest rates rise.

Highly-leveraged Singaporean borrowers should get ready to shell out more cash for debt servicing next year. According to UBS, Singapore will have to raise its interest rates next year, in line with the expected rise in the US Federal Reserve’s rates.

UBS notes that other highly-leveraged countries in the region, such as Korea, have the capacity to slash their rates to boost growth, but Singapore cannot recourse to such an action.

“Not all countries in the region have control over domestic interest rates. In Hong Kong and Singapore interest rates are basically linked to US rates, because of their exchange rate regimes. Rates in Hong Kong and Singapore should rise with the US Fed Fund rate next year and that should push up the debt service burden for households in those two dollar-linked financial systems,” noted UBS.

“The bottom line is that households in Hong Kong and Singapore will have to set aside an increased portion of their disposable income for debt service. Furthermore, the potential for property prices to fall in Hong Kong and Singapore assuming rising interest rates could be a significant complicating factor for household debt as outlined earlier,” the report added.

- See more at: http://m.sbr.com.sg/economy/news/highly-leveraged-households-grapple-intensifying-debt-threat#.dpuf

 

[potter]

The Star/Asia News Network

Saturday, Dec 13, 2014

JOHOR BARU: The ringgit's slide is expected to attract more Singa*poreans to snap up properties in the state, especially within Iskandar Malaysia.

Johor Real Estate and Housing Developers Association said the Malaysian Property Exposition's (Mapex) Johor edition, which takes place from Dec 19 to 21 at Sutera Mall, would be a good indicator.

Its Johor branch chairman Hoe Mee Ling expressed confidence that there would be more Singapore buyers now compared with the previous Mapex.

Their interest was largely due to the weaker ringgit, she said, adding that the price of private properties in Johor was also lower than those in Singapore. Hoe said Singapore buyers would usually go for landed residential properties here as such homes were priced beyond their means in the republic.

 

[Iskandar007]

https://sg.finance.yahoo.com/news/tough-times-ahead-iskandar-malaysia-properties-153737651.html

 

[PuteriWorld]

All these people have been naysaying the Iskandar projects even when Iskandar is just a huge tract of Palm trees forest.

I find it amusing that they are discouraging Sing dollar earners from buying S$380k houses which can give u a freehold 2-storey houses with garden in Nusajaya and keep saying prices will crash. Even if prices crash, you are still enjoying life up north.

They expect you to pay S$380k to invest in a leasehold pigeon hole 3 room flat in Singapore where the quality of life is so poor that it takes a 10 step to reach the bedrooms from your main gate.

https://sg.finance.yahoo.com/news/tough-times-ahead-iskandar-malaysia-properties-153737651.html

 

[RedsYNWA]

All these people have been naysaying the Iskandar projects even when Iskandar is just a huge tract of Palm trees forest.

I find it amusing that they are discouraging Sing dollar earners from buying S$380k houses which can give u a freehold 2-storey houses with garden in Nusajaya and keep saying prices will crash. Even if prices crash, you are still enjoying life up north.

They expect you to pay S$380k to invest in a leasehold pigeon hole 3 room flat in Singapore where the quality of life is so poor that it takes a 10 step to reach the bedrooms from your main gate.

I have to agree with you on this point. Just to add that bloggers like Property Soul are really keyboard warriors, and I would be very surprised, if she has even visited malls like Sutera Mall or Jusco Tebrau before.

She has probably only heard of Horizon Hills, Leisure Farm, East Ledang and will give you a blank look if you talk about Setia Tropika or Sutera Utama.

 

[gooddebt]

I have to agree with you on this point. Just to add that bloggers like Property Soul are really keyboard warriors, and I would be very surprised, if she has even visited malls like Sutera Mall or Jusco Tebrau before.

She has probably only heard of Horizon Hills, Leisure Farm, East Ledang and will give you a blank look if you talk about Setia Tropika or Sutera Utama.

If you had read her book, you will find that she is super KS when investing. Makes me wonder how to buy anything with that kind of mentality.

 

[sgcount]

I have to agree with you on this point. Just to add that bloggers like Property Soul are really keyboard warriors, and I would be very surprised, if she has even visited malls like Sutera Mall or Jusco Tebrau before.

She has probably only heard of Horizon Hills, Leisure Farm, East Ledang and will give you a blank look if you talk about Setia Tropika or Sutera Utama.

She's just really lucky to be at the right place, at the right time. If I'm not mistaken, she is from Hong Kong. Back in 2002, she bought her first property followed by a few others.

If I am right also, she has sold most of her properties, reaping twice or more than the original prices bought. So it's not hard to figure she has made a few million $$$ in profits now.

Frankly, if I were in her position now, I would also say to avoid Iskandar, unless you have plans to live there yourself long term. With millions of $ already in my pocket, why would I put $ on something much more uncertain? The rental returns in Iskandar are little compared to SG, you face the risk of a weakening RM (it's not hard to imagine S$1 = RM2.8 in a few years time), and you never know what sort of new policies the MSIA govt will come up with along the way to make it disadvantageous for foreigners.

But for those who have missed the boat in Singapore several years ago, it's quite impossible to look at properties here any more, unless you are very rich. Even the ministers have hinted the cooling measures will not end soon. So that's why investors are looking at Iskandar or elsewhere. But have to be aware of the greater risks exposed.

I disagree than weakening RM = good time to buy MSIA properties now. There are other more important factors to consider also. If Iskandar will take off, it will probably be many many years later. Likely the next generation, ie our children's or grandchildren's generation. But no one can predict exactly what will happen by then.

 

[potter]

I have to agree with you on this point. Just to add that bloggers like Property Soul are really keyboard warriors, and I would be very surprised, if she has even visited malls like Sutera Mall or Jusco Tebrau before.

She has probably only heard of Horizon Hills, Leisure Farm, East Ledang and will give you a blank look if you talk about Setia Tropika or Sutera Utama.

she picked up the poh zua, then summarized what have written, then acts like machaim beri prof in jiu hu property market. talk like drinking water.



"So stop asking me what I think of Malaysia or Iskandar properties. When everybody is talking about a hot market, it’s not the time to buy. It’s time to sell."

she thinks it's time to sell lei... anyway, it doesn't bother me, as im the lo.......ng term investor. :p

 

[RedsYNWA]

She's just really lucky to be at the right place, at the right time. If I'm not mistaken, she is from Hong Kong. Back in 2002, she bought her first property followed by a few others.

If I am right also, she has sold most of her properties, reaping twice or more than the original prices bought. So it's not hard to figure she has made a few million $$$ in profits now.

Frankly, if I were in her position now, I would also say to avoid Iskandar, unless you have plans to live there yourself long term. With millions of $ already in my pocket, why would I put $ on something much more uncertain? The rental returns in Iskandar are little compared to SG, you face the risk of a weakening RM (it's not hard to imagine S$1 = RM2.8 in a few years time), and you never know what sort of new policies the MSIA govt will come up with along the way to make it disadvantageous for foreigners.

But for those who have missed the boat in Singapore several years ago, it's quite impossible to look at properties here any more, unless you are very rich. Even the ministers have hinted the cooling measures will not end soon. So that's why investors are looking at Iskandar or elsewhere. But have to be aware of the greater risks exposed.

I disagree than weakening RM = good time to buy MSIA properties now. There are other more important factors to consider also. If Iskandar will take off, it will probably be many many years later. Likely the next generation, ie our children's or grandchildren's generation. But no one can predict exactly what will happen by then.

Yah I agree with your assessment on Property Soul. Right place right time, who wouldn't be making money if you buy in 2003 and sell in 2011? I think we can get more insights if we read Brett Alegre-Wood's book on 3+1 plan instead.

http://www.3plus1planbook.com/freebook/

As for Malaysia or for that matter, Singapore properties, I subscribe to Brett's idea of buying everyman's house (articulated in other articles, not in this 3+1 book), rather than too lowly or highly priced. In property, one should always seek to 稳中求胜, as it is a LT game of 10-15 years.

 

[PuteriWorld]

By guest contributor Property Soul, a successful property investor, blogger, and author of the No B.S. Guide to Property Investment. Posted courtesy of www.Propwise.sg, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide.

There are many property investors whom considered themselves "successful" when they own one HDB and one condo.

 

[RedsYNWA]

By guest contributor Property Soul, a successful property investor, blogger, and author of the No B.S. Guide to Property Investment. Posted courtesy of www.Propwise.sg, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide.

There are many property investors whom considered themselves "successful" when they own one HDB and one condo.

To be fair to Property Soul, I think she owned around 4 condos before selling all except her home, making a few millions. But to write a book based on that is really err...err...... Compared to people like Brett Alegre-Wood who at least had some substance in his book, albeit that there are some generalisations, which is inevitable for a book meant for the mass public.

 

[FHBH12]

To be fair to Property Soul, I think she owned around 4 condos before selling all except her home, making a few millions. But to write a book based on that is really err...err...... Compared to people like Brett Alegre-Wood who at least had some substance in his book, albeit that there are some generalisations, which is inevitable for a book meant for the mass public.

Shoot the market down, buy then sell. Rinse and repeat.