Property & Banking News: How much is really needed to qualify for affordable housing?

YOU may find it hard to believe. Just four to five years ago (date of writing: Feb 2014), it was possible to own a decent-sized, quality condominium unit in urban centres like Kuala Lumpur, Petaling Jaya, Johor Baru and Penang for approximately RM200,000. They were in fact, quite common.

From 2010 up till 2012, the Government had considered the price of RM220,000 to be within the “affordable” housing range. This was evident when it first launched the My First Home Scheme or Skim Rumah Pertamaku (SRP) for houses priced up to RM220,000. However, towards the tail-end of 2012, it was becoming increasingly evident that houses hovering around that price was becoming more of a rarity.

Genuine first-time house buyers were gradually finding themselves being priced out of the market.

Recognising the changing property price landscape, the Government in 2013 bumped the maximum price range for SRP eligibility to RM400,000.

The move garnered ridicule from both sides of the spectrum for different reasons. On one hand, lower income groups found it laughable that a price tag of RM400,000 for a house could even be considered “affordable” as it was far beyond their reach.

On the other hand, the younger and more urbane groups who were striving to purchase their first home derided the ceiling price of RM400,000 as being out of reach. Their contention was that prices for an acceptable standard of housing was already priced beyond RM400,000.

If anything, the Government’s efforts at trying to determine what is “affordable” shows us that it should be assessed based on our personal situation.

And, what might be affordable to you today may no longer provide as comparable a standard of living to what was affordable to you five years ago. Regardless of what is affordable to you, how much is really needed to purchase an “affordable” house? Let us examine house prices ranging from RM100,000 to RM600,000.

Table 1

Affordability of initial entry costs

Firstly, there are the entry costs of purchasing a house. Table 1 illustrates the kind of upfront cash one must have to purchase a house in a given price range.

There is the standard 10% down payment, along with the rest of the legal fees and stamp duties which follow a scheduled fee structure. (Fee structures can be viewed at http://loanstreet.com.my/learning-centre/entrycosts-buying-property)

If the entry costs above look discouraging, fret not. There is hope yet. If you are a first-time buyer, there are certain schemes and methods that you can take advantage of to ease your purchasing burden.

These include (Refer to Table 2):

1) A 50% stamp duty discount on the Sales and Purchase Agreement (SPA) for properties priced up to RM400,000.

2) SRP, which allows you to take a 100% loan for properties priced up to RM400,000, negating the need to pay the initial 10% down payment. Even if one does not qualify for the above schemes, there is still the EPF (Employees Provident Fund) or KWSP’s (Kumpulan Wang Simpanan Pekerja) scheme that allows you to withdraw money from your EPF Account II to help pay for the down payment of the house.

Table 2

Affordability of loan

Even if one can afford the initial cash outlay to purchase a house, one must still be able to qualify for a mortgage loan to proceed with the purchase. When assessing whether a housing loan is affordable, there are two criteria that must be considered.

Firstly, do you meet the minimum acceptable level of income you must have before a bank can even approve your housing loan?

Secondly, even if you do qualify for the home loan, after paying off your monthly instalments, realistically, could you get by on the remaining amount?

It would be unwise to enter into a home purchase if your answer to either of the above is “No”.

Table 3 indicates the estimated minimum level of household income one must have to qualify for a loan of the given amount in the year 2014. It also shows clearly the estimated monthly instalments one must pay. These calculations have not even taken into consideration any other commitments that you may have.

Table 3

Conclusion

While your personal financial situation may be unique, the costs associated with the purchase of a home are somewhat set according to price.

The best way to know what you can afford is to measure your personal finances against the required costs.

Finally, whether or not you are a first time home purchaser, remember to take advantage of Loanstreet’s online resources and expertise to help you through your purchase and home loan application.

Published By: StarProperty
Published on: March 24, 2015

Property & Legal Article: Bankruptcy and property ownership

YOU have probably read in the news about the rising number of bankruptcy cases in Malaysia, with 2013 seeing a spike in the numbers.

Recently, it was reported by the Minister in the Prime Minister’s Department Nancy Shukri that there were nearly 22,000 cases of young Malaysians who were declared bankrupt last year compared to 13,200 young Malaysians in 2007.

Citing statistics obtained from the Department of Insolvency, she said that 12,300 young Malaysians have been declared bankrupt within the first six months of this year, of which 3,680 were women.

In Malaysia, the increasing numbers are pretty disheartening, with most incidents arising from defaulting on instalment payments on car, housing and personal loans. Indeed, being declared bankrupt carries a heavy stigma.

It is said to be one of the worst life-altering experiences a person can have aside from disability, divorce and the loss of a loved one. Statistics from the Department of Insolvency show that those between the ages of 35 and 44 have the highest bankruptcy incidences.

In this article, we explore the effects of bankruptcy in general and that on your property. So, should the unfortunate circumstance arise, you can take the necessary steps to minimise the damage or even avoid it.

What is bankruptcy?

In the context of an individual, bankruptcy is, simply put, a legal process corresponding to one’s inability to settle one’s debts.

This can stem from credit card bills, car loans, property mortgage repayments or business loans – basically any scenario that involves borrowing money on paper.

When this debt reaches a threshold of RM30,000 and is not paid within a period of six months, the bankruptcy threat becomes very real as one is then eligible to be filed for bankruptcy.

Once declared bankrupt, the director general of Insolvency (DGI) comes into play, taking possession of all documents and assets of the bankrupt individual, including bank accounts and properties besides subsequently administering and investigating all affairs related to the bankruptcy.

The DGI then has the right to sell all assets, from which the proceeds would be distributed among the creditors, which basically means liquidating everything that one owns would now fall into the hands of the DGI.

Life after bankruptcy

So, what does bankruptcy entail? For many, the perception is that bankruptcy may signify the end of the road for their circumstances. Although it may not be as dramatic as that, bankruptcy does impose significant restrictions on a person.

A bankrupt cannot leave the country or open a bank account without special permission from the DGI. He or she is also disallowed from working in companies that belong to a spouse or relative and has to declare the bankrupt status to any potential employer.

Additionally, a bankrupt is not allowed to do business or become part of any company’s management.

Sounds pretty heavy, doesn’t it? To top it off, for one to be discharged of this status is not easy as one has to settle all debts in full or get the involved creditors to accept a repayment scheme.

One can also apply to the court for an order of discharge, in which the DGI’s report will be referred to in the court’s decision.

If all else fails, one may appeal to the DGI after five years. The DGI has discretionary power to issue a certificate of discharge which will take into account all necessary factors in the process such as the person’s conduct, age and current financial status.

What happens to your property?

Once declared bankrupt, all assets, including property, will be seized by the DGI. If you think you can fool the system by transferring or selling your property to relatives prior to the bankruptcy, think again.

After bankruptcy is declared, the DGI has the authority to reverse any and all transfers backdating five years and two years if you have sold any property.

So, if you transfer an apartment unit to your relative in the face of impending bankruptcy, the DGI can make it void and subsequently, seize and liquidate that piece of property through an auction.

However, if you sell the property at a fair market value, it may not be seized as it could be viewed “in good faith”, meaning you did not sell the property with the intention of “protecting” it from the bankruptcy.

How to avoid bankruptcy

By now, you must be wondering what you can do should bankruptcy come knocking on your door. Let’s take a hypothetical scenario: Mike has overstretched his property investments a little too much.

He owns three properties with three mortgages to pay off – all of which he has been defaulting on payments since the past few months. As it is, he has his hands full with his children’s college tuition fees and two car loans with an increasing credit card debt.

Here’s what Mike can do:

  • Mortgage restructuring

As his debts stem from property mortgage loans, Mike’s creditors are the banks from which he obtained the loans.

Instead of awaiting impending financial disaster, Mike can take a pre-emptive step by negotiating with the banks to restructure his mortgage loans.

If the banks are agreeable, then Mike would have a new payment plan with ideally, a lower adjustable interest rate and longer refinancing period.

If he can obtain such an outcome for all his loans, the repayments would be much easier on him.

  • Debt consolidation

By taking a debt consolidation loan, Mike can basically throw all his current debts into one basket. Should a bank take on all of Mike’s collective debts, he would no longer owe separate creditors but just one bank. Having obtained a longer loan period, this would mean he has less to pay per month.

If Mike were to pay off a big amount of those debts, this will enable him to take a smaller mortgage as his loan would now be based on a collectively smaller amount than when the loans were first taken.

In some cases, banks would even offer an initial “interest only” period so that Mike would have time to reorganise his finances before taking on his debts again.

  • Sell the property

As disheartening as it may seem, Mike’s best option could be to sell one or maybe even two of his property units, even if they have only slightly appreciated in value. Moreover, Mike would have to bear an agent’s commission, legal fees, taxes and other related costs of selling a property.

If this move can stave off Mike’s bankruptcy which would result in his property being seized and auctioned off, this would be more advisable.

Conclusion

Following the explanation above, what can be done now is to take steps to avoid the causes leading to bankruptcy.

This, however, is easier said than done. Do not overstretch your investments unless you have the financial capacity to sustain them. Ultimately, it is wise to consult a financial advisor regarding your investment portfolio to avoid being declared a bankrupt in the event of failing to pay at the end of it. If you are caught in the bankruptcy cycle and are looking for help, do drop us a line.

Published By: StarProperty
Published on: March 19, 2015

Happy Chinese New Year 2015!

Dear friends, clients & associates,

Wishing you a Happy Chinese New Year filled with lots of laughter, merry-making, happy reunion with your loved ones and a year of abundance, success and prosperity.

Thank you for your support all these years.

CNY 2015

Warmest wishes,

Lee & Chong Team

Development News:- Government Widens GST Exempt Supply To All Stratified Residential Properties

PETALING JAYA – The government has agreed to extend the Goods and Services Tax (GST) exemption list from low-and medium-cost properties to stratified residential properties, say property-related professional bodies.

The bodies are the National House Buyers Association (HBA); Royal Institution of Surveyors Malaysia (RISM); Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector of Malaysia (PEPS); and Malaysian Institute of Professional Property Managers Malaysia (MIPPM).

HBA Secretary General Chang Kim Loong, their spokesperson, said following their petition dated Nov 28, 2014 to the Ministry of Finance (MOF), the latter gave a positive response in a letter dated Jan 5, 2015.

The petition had requested for a change in classification from the standard rated tax supply to zero rated tax supply for maintenance charges, sinking fund and all other related charges paid by parcel owners.

“The good news is that the GST exemption was extended to all stratified residential properties instead of just low- and medium-cost properties, showing the ministry had understood that there was an issue here, but the zero rated appeal was turned down,” said Chang at a press conference here Tuesday.

He said the MOF letter stated that the supplies made by management committees (MC) and joint management bodies (JMB) are deemed as conducting a form of business despite the supplies being for residential parcel owners.

He said the MOF also invited the professional bodies to convene a meeting soon on the gist of the contention.

PEPS advisor Wong Kok Soo said the bodies would reiterate the need to reclassify the GST to zero rated as only then would it benefit owners of stratified properties, who are mainly low- and middle-income earners.

He said there is no difference between the GST standard rated tax and exempt supply for stratified development areas, as the government would still get to collect six per cent tax which in the end is borne by parcel owners.

Extending the exempt supply to only residential properties would lead to complications in mixed-used development areas with both residential and commercial stratified properties, he said.

“We will highlight all of these issues when we meet the MOF, the rest we will leave to the government’s prerogative,” said Wong.

By: Bernama
Source: iProperty
Published on: Friday, January 23, 2015

Property News: How will GST impact home prices and the property market?

WITH the implementation of Goods and Services Tax (GST) in April 2015, many Malaysians are concerned with what this bodes for prices in general. It is inevitable that home prices will also be affected.

To appreciate how GST will affect home prices, it is necessary to first understand how it works.

Aside from GST, one must understand the Sales Tax, which is the existing tax scheme affecting the property sector. GST will supplant the Sales Tax come April next year.

Tax scheme on residential property – the similarities

In comparing both tax schemes, we have to first identify their similarities.

A similarity between GST and the existing sales tax scheme is that no taxes are charged or will be charged to the consumer on the purchase of a home/residential property.

For GST, residential properties fall under the “exempt rated” basket of goods.

But do note that GST charged to the consumer for commercial property purchases as commercial properties are “standard rated”.

During the creation of the final product, also known as the input stage in tax parlance, under both tax schemes, developers would incur taxes during their procurement of inputs and materials.

This is where the differences emerge between both tax schemes. The tax rate for inputs and materials vary between GST and sales tax.

How will GST impact home prices and the property market?

Difference between sales tax and GST for residential properties

Based on the Sales Tax Act of 1972, basic building materials such as bricks, cement and floor tiles fall within the First Schedule Goods category in which all the goods here will not be subjected to sales tax.

Other building materials fall within the Second Schedule Goods category. The goods here will only be charged a sales tax of 5%. Under the new GST, all building materials and services (such as contractors, engineers) will be subjected to GST with a standard rate of 6%.

This will invariably raise the production cost for developers. If you understand how GST works, you will observe in most cases, the additional tax cost will simply be passed on to the final consumer (standard-rated goods), or which is claimed back from the government (zero-rated goods). But, in this case (exempt-rated), the additional tax cost is borne by the party before the final consumer – the developer.

Developer does not have a next ‘victim’ in the supply chain

This seems like good news for homebuyers as they do not have to pay GST when purchasing a home. However, what’s to stop developers from trying to factor in the additional tax costs into the final sale price implicitly?

Pre- and post-GST

The tables show a comparison between the cost of a new property before and after GST. Certain taxes and costs leading up to the sale to the final consumer have been simplified for this purpose. Also, an assumption is made that developers are able to transfer 100% of all incurred tax costs to the consumer via the sale price.

The example above shows a price increase of 3.41% for new residential properties post-GST implementation. But, there is a plus point to this.

New residential properties may register a lower overall increase in tax compared to commercial properties that are standard-rated. This is because there is still a chance developers may only transfer some and not all of their tax cost increases to the final retail price.

The downside to this is that where pricing for new commercial properties will be clearer (Sales price + GST), pricing for new residential homes would look inflated.

This, in turn, will undoubtedly have a knock-on effect on prices in the secondary house market.

Conclusion

As a homebuyer, it pays to know the effects of GST on home prices moving forward.

So, in a nutshell:
(1) With GST, there should be a once-off increase in property prices across the board;
(2) While developers may not bill homebuyers for GST, they could transfer the costs implicitly via the sale price;
(3) The overall price increase for new residential properties could be marginally lower than that for new commercial properties; and
(4) The secondary home market should see a knock-on effect in prices.

Armed with this knowledge, you can make a better decision on when to purchase your home.

Published by:  StarProperty

Banking News:- Base Rate Malaysia Starting 2015

With the advent of 2015, there is a change of our Malaysia’s main reference rate. It has been changed from Base Lending Rate (BLR) to Base Rate (BR) effective 2nd January 2015. The aim of the current BR is to promote better transparency, pricing discipline and efficiency among financial institutions.

Here is the the official release from Bank Negara Malaysia (BNM):-

https://docs.google.com/file/d/0BxFNt13XnYKuZFp3M1hkVHJNaTQ/view?pli=1

How does the new Base Rate affects you?

Loan taken BEFORE 2nd January 2015:
Existing loans that currently pegged to BLR/BFR will continue as it is, until full loan or financing settlement or up to a renewal or refinancing. So you might want to consider refinancing by using the new Base Rate if it is lower. This means the BR does not affect you unless you take up a new loan or go for refinancing.

Loan taken AFTER 2nd January 2015:
Loan for financing taken after 2 January 2015 will certainly be based on Base Rate. The good news is, with the current system,  you can now compare and choose the best lending rate for your new loan as different financial institutions will have different base rate.**source from BNM, for the full table, you may download here (Click Here:- http://www.bnm.gov.my/documents/2015/base_rates/20150102_base_rates.pdf )**

The new framework is expected to provide transparency to the financial institutions’ efficiency and performance compared to the old BLR framework. This is because the new Base Rate will differ from one financial institution to the other. This will then mean the market will be more competitive by offering more attractive financing packages.

Nonetheless, when it comes to the Calculation of Effective Lending Rate, kindly take note that financial institutions are given the flexibility to determine their respective benchmark rates, and this in turn might increase or decrease in your repayment if there is any change in the Base Rate. It is prudent for you to check with your solicitors or bankers before you decide on which loan package to take before you sign on to one.

The implementation of the BR should be a good thing as the new Base Rate would be partially determined by the efficiency of financial institutions. 

Here is the official press statement by BNM:-

New Reference Rate Framework

Bank Negara Malaysia announces today that effective 2 Jan 2015, the Base Rate will replace the Base Lending Rate (BLR) as the main reference rate for new retail floating rate loans.

Since the introduction of the BLR framework in 1983, the BLR has served as the main reference rate on retail floating rate loans in Malaysia. Since then, the determination and implementation of the BLR has evolved with the development of the financial sector. In the recent period, however, the BLR has become less relevant as a reference rate for loan pricing, as lending rates on new retail loans are being offered at substantial discounts to the BLR. The BLR also lacks transparency, which makes it difficult for consumers to make an informed decision.

The new Reference Rate Framework aims to provide a more transparent reference rate to enable better decision by consumers in making choices among the many loan products offered by financial institutions. The new reference rate will also better reflect changes in cost arising from monetary policy and market funding conditions, while encouraging greater discipline and efficiency among financial institutions in the pricing of retail financing products.

The Base Rate will be determined by the financial institutions’ benchmark cost of funds and the Statutory Reserve Requirement (SRR). Other components of loan pricing such as borrower credit risk, liquidity risk premium, operating costs and profit margin will be reflected in a spread above the Base Rate. This increases the visibility of the factors underlying changes to the Base Rate. The greater transparency in turn will enable more informed decision making by consumers. Under this cost-plus structure, spreads will always be positive as it would not be possible for financial institutions to offer lending rates below the reference rate. Financial institutions will be given the flexibility to determine their respective benchmark rates. The expected strong link between the Base Rate, market interest rates and the Overnight Policy Rate (OPR) will facilitate more complete adjustments to retail loan repayments when market interest rates adjust to an increase or decrease in the OPR.

The Base Rate will be used for new retail floating rate loans and the refinancing of existing loans extended from 2 January 2015 onwards. After the effective date, BLR-based loans prior to 2015 will continue to be referenced against the BLR. However, when a financial institution makes any adjustments to the Base Rate, a corresponding adjustment to the BLR will also be made. As such, financial institutions would be required to display both their Base Rate and BLR at all branches and websites.

The shift to the new Reference Rate Framework should have no impact on the effective lending rates charged to retail borrowers which are determined by various factors, including a financial institution’s assessment of a borrower’s credit standing, market funding rates and competitive considerations. It is also important to note that the changes do not represent a change in the Bank’s monetary policy stance.

Bank Negara Malaysia
19 March 2014

 

By:- The Chambers of Lee & Chong
Date:- 2nd January 2015

Legal News: Minimum Requirement For Housing Loan Application to the Treasury

Kadar Kelayakan Baharu Pinjaman Perumahan Pebendaharaan Malaysia dan Pemansuhan Wang Proses (Kuat Kuasa 1 Januari 2015)

1. Seperti mana sedia maklum, semasa perbentangan Bajet 2015, Kerajaan telah mengumumkan bahawa had kelayakan minimum pinjaman perumahan dinaikkan daripada RM80,000 kepada RM120,000 dan bagi kelayakan maksimum dinaikkan daripada RM450,000 kepada RM600,000.

2. Wang pemprosesan permohonan pinjaman sebanyak RM100 juga telah dimansuhkan.

3. Kedua-dua penambahbaikan ini berkuat kuasa pada 1 Januari 2015.

4. Jadual kelayakan baharu Pinjaman Perumahan Perbendaharaan Malaysia adalah seperti berikut:-

GAJI HAKIKI (RM)                                                     KELAYAKAN (RM)

    8500 ke atas                                                                                                 600,000.00

6500 ke 8499                                                                                                   562,000.00

5500 ke 6499                                                                                                    525,000.00

4500 ke 5499                                                                                                    500,000.00

3500 ke 4499                                                                                                    475,000.00

3000 ke 3499                                                                                                    400,000.00

2500 ke 2999                                                                                                     350,000.00

2000 ke 2499                                                                                                     320,000.00

1500 ke 1999                                                                                                       260,000.00

1200 ke 1499                                                                                                       210,000.00

1000 ke 1199                                                                                                       150,000.00

999 dan ke bawah                                                                                               120,000.00

**Amaun pinjaman yang diluluskan adalah tertakluk kepada para 1.5.2, 1.5.3 dan para 3 Lampiran A6 Pekeliling Perbendaharaan PR1.1/2013 Bahagian Pinjaman Perumahan Perbendaharaan Malaysia Kementerian Kewangan 30 Disember 2014.

By: Bahagian Pinjaman Perumahan Perbendaharaan Malaysia
Source: http://bpp.treasury.gov.my/
Published on: Friday, December 30, 2014

Merry Christmas and Happy New Year!

Xmas

Here we are towards the ending of the year that was 2014.

There are some who said time flies when you are having a good time. Indeed, 2014 had been good and kind to us. It has been a busy year filled with activities and goodwill and enthusiasm with most of our milestones met. We are grateful for a good year even if we do feel it to be a very fast-paced and spirited 2014, much like the horse year that it is. We are also grateful for the many friends that we have made and the wonderful moments we have shared. We hope the new year 2015 will bring us many more good things to come.

In this holidays season, may we wish those who will be celebrating a very Very, Merry Christmas, and to the rest, a fantastic holidays and enjoy the rest of 2014! In this Christmas spirit, let’s spread kindness, joy & love all around.

Warmest wishes from us all at Lee & Chong.

 

Business News:- 2015 Budget Reactions from Property Companies, Industries

Property Companies:

* Tan Sri Leong Hoy Kum, Group Managing Director, Mah Sing Group Bhd

Mah Sing lauds the various initiatives in Budget 2015, the last budget under the 10th Malaysia Plan (10MP) which continues to be pro-rakyat and focuses on creating more affordable housing, ease concerns over the cost of living and enhance job opportunities.

Overall, we are heartened to see the focus on helping first time home buyers as Mah Sing’s strategy is very much in line; we are providing properties that meet the needs of the mass market.

Youth Housing Scheme – Increasing home ownership:  The Government is taking action to increase home ownership with the Youth Housing Scheme which is a smart partnership between the Government, Bank Simpanan Rakyat, EPF and Cagamas.

The scheme offers a funding limit for a first home not exceeding RM500,000 for married  youth aged between 25 and 40 years with household income not exceeding RM10,000.

This will directly benefit Mah Sing as 70% of our buyers are aged 40 years and below. In fact, 45% of our residential launches for 2014 are below RM500,000.

Mah Sing is very focused on products for the middle income group and has a host of well designed properties at attractive price points that will appeal to the mass market.

Some examples of Mah Sing’s properties in this range include:

Central Region: Savanna Executive Suites from RM338,000 in Southville City@KL South, Bangi, Apines@M Residence 2 in Rawang which are double storey homes from RM439,000; Sovo Suites from RM358,200 in D’Sara Sentral in Sungai Buloh;   iSovo @ Icon City , Petaling Jaya priced from RM456,000

Southern Region – Iskandar Malaysia:  Meridin Bayvue suites from RM350,000 in Sierra Perdana; Meridin Suites from RM309,000 in Meridin@Medini; Austin Suites from RM376,000 in Austin Perdana in Iskandar Malaysia.

Over the past 2 to 3 years, our landbanking strategy has been more focused on locking in larger tracks of township lands for the affordable range of mid-end products.

For 2015 onwards, we will have multiple launches below the RM500,000 price point in our big new townships:

In the pipeline are double storey link homes from RM339, 000 in Bandar Meridin East in Plentong which we intend to preview by the end of the year, double storey link homes from RM350,000 in Seremban targeted to be launched in 2015, and serviced apartments from RM300,000 in Star Residence@Subang Bestari in Shah Alam.

For existing projects, we will also continue to launch more blocks of Savanna Executive Suites in Southville@KL South from RM338,000.

Various goodies for First-Time Home Buyers: First time home owners are getting plenty of goodies in this Budget as the Government is providing RM200 monthly financial assistance to help with monthly installments, 50% stamp duty exemption on transfer documents and loan agreements, as well as a 10% loan guarantee so that they could obtain 100% financing. They can even withdraw from their EPF account 2 to top up their monthly installment and we shall certainly communicate this to our potential buyers as so many of them fall in this category.

50% stamp duty exemption for properties up to RM500,000 until 31 December 2016: We appreciate that the Government has extended the 50% stamp duty on the instruments of transfer and loan agreements, at the same time increasing the purchase limit to RM500,000.  This will help reduce the transaction cost of home ownership.

Personal Income Tax reductions:  We are also pleased that the Government is reducing income tax rates by 1 to 3 percentage points for assessment year 2015.  This translates to tax payers enjoying a tax savings of at least 5.3% and those with income under RM4,000 would no longer have to pay income tax. This brings us closer to regional practices, and not only would tax payers have more disposable income, this will make Malaysia a more attractive employment destination.

Sustaining commitment in Infrastructure projects and improving public transport network. Mah Sing is primarily a Klang Valley property player, with 75% of development focus (remaining gross development value) located in the central region.

We are heartened to see the sustained commitment by the Government to go ahead with upgrading the nation’s public transport network.  The LRT 3 project linking Bandar Utama to Shah Alam and Klang will benefit our new development in KGSASS in Shah Alam, and the construction of the second MRT Line will greatly improve public transportation.  The various highways slated for implementation in 2015 including the SUKE, DASH and EKVE will benefit our 25 ongoing projects in the Klang Valley and the Central region and its extended development corridor.

10,000 new jobs in Pengerang Integrated Petroleum Complex: The announcement is opportune as we are launching our Bandar Meridin East in 2015.  The project is sited between Pasir Gudang and Tg. Langsat, and is only 80km from Penggerang.  This will provide a latent demand for housing.

* Datuk Izham Yusoff, Group Managing Director of Bina Darulaman Bhd

Datuk Idzham Yusoff

The Government is going all out to address the issue of house ownership by mobilising its housing agencies such as the PR1MA Corporation, the National Housing Department and Syarikat Perumahan Negara Berhad to ensure that the low-middle income people are able to have a roof above their heads amid their struggle with escalating living cost.

In essence, we in BDB are very encouraged by the very comprehensive budget on the issue of affordable housing. As a responsible developer, we shall work together with the relevant agencies to assist first time home buyers as well as those who can ill-afford to finance a home in their ultimate quest to own a house.

To enable more people to own their first home and reduce the cost of buying a house, we feel that it is only timely for the Government to extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000 (till 31 December 2016).

Budget 2015 has set identified the construction of 143,000 affordable housing units under the 1Malaysia People’s Housing Programme (PR1MA) (80,000 units); the National Housing Department’s People’s Housing Programme (26,000 units) and Syarikat Perumahan Negara Bhd (SPNB) (37,000 units).

To enable more people to own their first home and reduce the cost of buying a house, the Government has also agreed to extend the 50% stamp duty exemption on instruments of transfer and loan agreements as well as to increase the purchase limit from RM400,000 to RM500,000. Such exemption will be given until 31 December 2016.

BDB is prepareds to work hand-in-hand with quarters from both the public and private sectors who are interested in developing affordable housing schemes nationwide.

For the record, BDB recently sold en-bloc one-third or 323 units of its Taman Insaniah affordable housing development in Bandar Kuala Ketil, Kedah to PR1MA Malaysia Corp (PR1MA) for RM72 million.

Boasting a Gross Development Value (GDV) of RM220 million, Taman Insaniah is a 949-unit development within the 1,100-acre township of Darulaman Utama which is located about 750m from the Kuala Ketil town in Baling. Work on the project is 60% complete and is slated to be fully completed by the fourth quarter of 2015.

“The Taman Insaniah project marks the beginning of a strategic collaboration between BDB and PR1MA to provide Kedahans with the opportunity to buy affordable housing

In recent times, BDB has acquired five parcels of land totalling 1,155 acres from Perbadanan Kemajuan Negeri Kedah. The land parcels are located in Kg Kisap in Langkawi; Pokok Sena; Sungai Lalang in Kuala Muda; Sungai Ular in Kulim, and Hosba in Kubang Pasu.

We are now ready to spread our wings beyond the shores of Kedah so that we are able to lend our expertise elsewhere in the area of affordable housing.

Industry Players

* Cheah Kok Hoong, Chairman of PIKOM

Cheah Kok Hoong

Inadequate measures in Budget 2015 towards a digital economy nation. As we move towards a high income and knowledge-based economy, PIKOM felt that there should have been more ICT-focused initiatives in Budget 2015. This is in line with our aspirations towards creating a digital economy.

However, PIKOM is pleased that the government is responding to our request on a reduction of both Personal and Corporate income tax.

The Personal income tax rates cut 1 to 3 percentage points, would result in 300,000 taxpayers no longer taxable while corporate income tax would reduce 1% to 24%. The reduction will result an increase of disposable income for the middle class and companies.

The government has also taken heed of our request on increasing broadband uptake.

The investment of RM 2.7bil over a period of 3 years augurs well towards increasing broadband subscription.

This helps address the issue of availability. PIKOM felt that the Budget did not sufficiently address the issue of broadband services charges which is deemed still high compared to regional neighbours.

Although we do not see many specific incentives towards ICT industry, there is introduction of Research Incentive Scheme for Enterprise (RISE) totaling RM10mil for Enterprises.

We would encourage the ICT players to take advantage on this scheme to fund their research and product development.  The allocation of RM1.3bil allocated to the Ministry of Science, Technology and Innovation (MOSTI) will spur R&D and commercialisation.

On the content industry, PIKOM welcomes the significant allocation of RM200mil for the MyCreative Venture and the RM100mil to promote digital content. The government is cognizant of trends towards richer content for the netizens.

Moreover, as we are moving towards a globalised business nature, SMEs now could  take advantage on the comeback of Services Export Fund (SEF) totaling RM300mil to do market studies and boost exports.

This is especially key to help the local SMEs as we welcome the ASEAN Economic Community in 2015. This will be a major encouragement for companies to seek new markets abroad for expansion.

In summary, PIKOM feels that the Budget addresses the immediate need to lessen the burden on the people. The Budget 2015 should have addressed the ICT industry’s concerns such as zero-rated GST on ICT products and competitive broadband rates.

Last but not least, with the announcement of the 2015 Budget 2015, I would like to urge the local businesses to get ready for the implementation of GST by April next year.

* Datuk Seri Stanley Thai, Group Managing Director, Supermax Corporation Bhd

Supermax is delighted to hear that finally, the government recognises the importance of the Rubber Products Industry.

The Glove Industry is heading towards the next exciting phase of growth including automation manufacturing; and the 2015 budget announcement of the following incentive program would accelerated the growth and enhance global competitiveness of gloves & other rubber products that are Made in Malaysia.

RM300mil allocated for Promotion of New Markets.

It really helps the glove industry to enter into Promotion of New Markets.  We do hope that there is an effective implementation and disbursement of funds for Promotion of New Markets to those genuine exporters.

Capital Allowance to Increase Automation Labour Incentive Industries:-

Automation Capital Allowance of 200% for the first RM4.0 million is far too low and inadequate for the Rubber Products in particular for the Glove Industry.

We urge the government to implement Automation Capital Allowances of 200% of amount spent on automation manufacturing & not to put a ceiling on Automation Capital Allowance. Developing of Human Capital and Entrepreneurship.

Datuk Seri Stanley Thai

The 2015 Budget speech emphasised heavily on Developing of Human Capital and Entrepreneurship. Malaysia is one of the largest exporter of Human Talents & the continuous brain drains remain the biggest challenge to the corporate and businesses operating in Malaysia.  We hope that the policy makers would implement policies that are inclusive and reverse the massive brain drain.

Hideo Yamazaki

* Hideo Yamazaki, Managing Director of 3M Malaysia Sdn Bhd

The allocation of RM1.3 billion to the Ministry of Science, Technology and Innovation for example, is a progressive step towards allowing the nation to remain, if not become, more resilient and competitive.

Nevertheless, the focus on improving Malaysia’s economic stability calls for the need to invest in more initiatives that will cultivate innovation capabilities as well as develop better human capital.

We need to enhance the education and strengthen the use of knowledge and skills to accelerate domestic technological development by converting research results into productive efforts.

While we acknowledge that initiatives such as the allocation of RM30 million for Industry Academia Collaboration programme for universities, government entities and industries to collaborate to develop the curriculum for internship programmes and industrial training will act as headway, we hope that the Malaysian government will work more closely with the private sector to identify the most effective means of achieving such growth.

With assets such as our existing 3M Customer Innovation Centre, private sector organisations such as 3M are ready to provide strong private-public collaboration opportunities to further grow Malaysia further up the economic value chain.

With rapid emergence of rival markets in South-East Asia who are equally keen to utilise innovation as a key means for competitive advantages, we believe that more can be done to accelerate the growth of Malaysia’s innovation capabilities.

For example, the 10th Malaysia Plan (2011-2015) which stresses on human capital development and improvements in innovation capacity has indicated that gross expenditure for research and development has dropped to 0.21% in 2008.

With an aim to ensure that investment in R&D reaches at least 1% of gross domestic product (GDP) by 2015, we believe that there is a need to intensify research activities and public research institutes as well as their links to private companies to maximize commercialization opportunities – on top of providing research funds.

Small and medium-sized enterprises for example which accounts for 95% of Malaysia’s corporations and 33% of GDP conducts little research or innovative activity.

While investment has been allocated to accelerate the participation of SMEs in economic activity such as the implementation of SME Investment Partner, we believe that more practical initiatives – instead of financing assistance – such as supporting local talent development towards high-value R&D opportunities will make innovation pervasive in the sector.

We believe that with that, and the strength of local infrastructure, availability of existing human capital and abundant resources, Malaysia has every potential to grow into an innovation hub which will propel our nation towards becoming a high-income and developed nation perhaps much earlier than 2020.

With the strength and diversity of our technology platforms and innovation capability, we are eager to work with business partners as well as the Malaysian government to advance Malaysia’s culture of innovation.

Source: the Star Online
Published on: Friday, October 10, 2014

Property & Tax News: ‘Better Services Come With Price Tag’

PUTRAJAYA: Kuala Lumpur City Hall’s (DBKL) proposal to revise the assessment rates on properties in the city is long overdue as demand for services has come with greater costs, said the Urban Wellbeing, Housing and Local Government Minister.

The Government could not afford to provide all services by subsidies or for free as it would not be sustainable, said Datuk Abdul Rahman Dahlan (pic).

P.169 Kota Belud candidate Datuk Abdul Rahman Dahlan (BN-UMNO)

He urged Malaysians, particularly Kuala Lumpur residents, to understand this as better services in the city would come with a price tag.

“The rakyat want improvement and more services every year but all these require finances – be it problems with garbage, drainage, traffic congestion and so on.

“The people must understand that there is cost to good living and the Government cannot be 100% responsible for this.

“There has to be some kind of contribution and participation from the residents of Kuala Lumpur,” Abdul Rahman said when met after the launch of the International Conference on the Challenges of Extended Mega Urban Regions here yesterday.

A recent proposal by the DBKL to increase the assessment rates has upset Kuala Lumpur residents, prompting pockets of protests to be held by residents in various parts of the city.

The rate hike is the first such increase in 21 years and Pakatan Rakyat leaders had estimated the quantum of the increase to be around 100% to 300%.

The protests from city folks have forced Kuala Lumpur mayor Datuk Seri Ahmad Phesal Talib to clarify in the media that the proposal has not been set in stone, as residents have until Dec 17 to object in writing to the Property Management and Valuation Department if they do not agree with the new rate.

Abdul Rahman echoed this statement, assuring those affected that their opinion will be heard.

“What I know (is that) we only want to get the opinion from residents, so we will take it from there. I am sure the FT (Federal Territories) ministry will look into the (appropriate) quantum,” Abdul Rahman said.

Asked if the proposal to increase property tax had contradicted the Government’s promise to provide affordable housing, Abdul Rahman replied that building affordable homes in Kuala Lumpur is a “very expensive proposition”.

“Imagine building a house that cost RM160,000 but is sold at RM35,000.

“We are talking about each unit being subsidised by RM120,000 per PPR (People’s Housing Programme) unit.

“If we go on the way we are doing right now, it is no longer sustainable.

“The people must come in and help the Government defray some of the costs,” he said.

By: Lee Yen Mun
Source: the Star Online
Published on: Thursday, October 9, 2014

Selamat Hari Raya Aidilfitri 2014

selamat-hari-raya

Selamat Hari Raya Aidilfitri !

Tangan dihulur maaf dipinta
Erat hubungan sesama kita
Semoga gembira sambutan meriah
Salah dan silap harap dimaafkan
Maaf Zahir dan Batin

To all our Muslim colleagues and friends, on behalf of all the Partners, we would like to wish you ‘Selamat Hari Raya Aidilfitri’ and a safe journey back to your loved ones in your kampung. May you have a joyous and meaningful celebration with your loved ones.

And to all our non-Muslim colleagues and friends, happy holidays and hope you enjoy your holidays and join in the festivities with your Muslim families and friends.

Lee & Chong will be closed on  the followings days:-

Monday,  28th July 2014;

Tuesday, 29th July 2014;  and

Wednesday, 30th July 2014 

on the basis that 28th July 2014 would be the first day of Hari Raya Aidilfitri and 29th the second day of the Raya celebration.

The Firm will re-open on Thursday, 30 July 2014.

As a gesture of our family-like values, we have granted an additional day of holidays on Wednesday, 30th July 2014 to everyone in the Firm, regardless to enable our Muslim colleagues and staffs to spend time with their loved ones in celebrating this festivities and our non-Muslim colleagues and staffs an additional day off in order for them to have extra time off work to spend with their loved ones too. What with the recent tragedies of MH370 and MH17, it is all the more important to appreciate loved ones and to spend time with them where possible. Let us take some time off for peace and contemplation, in honour of the lost and perished ones.

We wish you Selamat Hari Raya Aidilfitri & Maaf Zahir Batin.
Salam Eid daripada kami semua di Lee & Chong

Legal News: New Housing Rules to Curb Property Speculation

PETALING JAYA: In a move to further curb property speculation, developers who sell more than four residential units to a single person or a company must now register the purchaser with the housing controller within 14 days of the sale-and-purchase (S&P) agreement being signed.

This new requirement is expected to improve transparency in the housing industry and to keep the prices of houses stable.

A National Housing Department spokesman told theSun the regulation, which was enforced from mid-May, is provided for under the Housing Development (Control and Licensing) Act 1989.

(The housing controller comes under the National Housing Department of the Urban Wellbeing, Housing and Local Government Ministry.)

The spokesman said that to further ensure transparency between developers and buyers, all developers must display in detail the selling price, which includes all free offers of goods, services and payments.

“In this way, should a buyer decide not to accept the offers, the developer has to deduct the amount of the value of the special offers from the sales price,” he added.

The spokesman said developers who fail to comply with this regulation would be liable to face court action. The offence provides for a fine of up to RM20,000 or imprisonment of up to five years or both upon conviction.

He also revealed that as of end-April, 117 developers were on the Urban Wellbeing, Housing and Local Government Ministry’s blacklist for abandoning their projects.

Once blacklisted, the developers and their board members cannot apply for new housing developer’s licences or advertisement and sale permits.

Following amendments to the Housing Development (Control and Licensing) Act 1966 (Act 118), which would come into effect by the end of this year, licensed developers will be charged if they purposely abandon their projects.

They will be liable to a fine of between RM250,000 and RM500,000 or imprisonment of up to three years, or both if convicted, he added.

However, of the 206 private housing projects declared abandoned between 2009 and April 30 this year, 151 had been successfully revived to benefit 23,942 house buyers while 29 projects are in the planning stage for revival while 26 others are in various stages of recovery.

To help prevent developers from abandoning their projects, he said the department will increase the housing developer’s deposit from RM200,000 to 3% of the estimated cost of construction.

“This will help ensure that only developers with strong financial positions are involved in housing development and there will be sufficient funds to revive a housing project if it is abandoned,” he added.

Meanwhile, the spokesman said as of end-May, the department was also monitoring 209 “sick or ailing” projects. These are projects whose completion dates were more than 30% behind schedule or homes that have not been handed over to the buyers by the dates stipulated in their S&P agreements.

To reduce the number of “sick” or ailing projects, he said the department’s private housing monitoring division would act as a mediator or facilitator for problematic projects.

This will be done by:
> coordinating with the relevant parties to resolve the problems;
> conducting regular checks at project sites;
> strict enforcement through fines and blacklisting of errant developers; and
> close monitoring of the housing development accounts.

He said the department had issued 349 compound notices and collected RM2.3 million in fines from errant developers so far this year.

By: Adrian Phung
Source: theSundaily
Published on: Tuesday, 3 June 2014

Legal News: Errant Developers Face Jail and RM500,000 Fine

PETALING JAYA: Errant housing developers can now be hit with hefty fines and jail terms if they abandon their projects.

Under the amendments to the National Housing Development (Control and Licensing) Act 1966, which would take effect from June, developers of abandoned projects may be fined RM500,000 and jailed for up to three years.

The changes also enable house buyers to terminate sale and purchase agreements with developers if there was no progress for six consecutive months or more and seek a refund of deposits within 30 days.

House Buyers Association secretary-general Chang Kim Loong said the changes offered house buyers more legal safeguards against errant housing developers.

He said it was a reflection of the Government’s concern for house buyers’ rights and a move to ensure that developers kept to their obligation of completing projects.

He commended former Urban Wellbeing, Housing and Local Government Minister Datuk Seri Chor Chee Heung for helping to pave the way for the amendments in 2010.

“The pertinent changes include making errant developers criminally liable by meting out jail sentences upon conviction.

“The new laws also enforces liquidators, as de-facto developers, to abide by the Act,” he said.

However, Chan said changes should also be made to other laws to further streamline the construction industry.

He said among the laws being reviewed where those pertaining to housing developers regulations and sale and purchase agreements under Schedule (G,H,I,J) together with the Strata Management Act, Strata Title Act and Strata Tribunal Act.

“Since all these laws relate to the welfare of house buyers and cross-reference each other, they should be launched simultaneously to avoid potential conflicting legal views,” he said.

Chan said the drafting process involving the amendments were nearing completion and that the changes were expected to be announced by the ministry.

On April 3, Deputy Urban Wellbeing, Housing and Local Government Minister Datuk Halimah Mohd Sadique announced to the Dewan Rakyat that the amendments to the Housing Development (Control and Licensing) would come into effect on June 1.

From 2009 to Feb 28 this year, the ministry had classified 206 housing projects as abandoned.

Out of these, 149 had since been revived with 22,868 homes built.

By: G. Surach
Source: TheStar
Published on: Monday, May 26, 2014

Legal News: Errant Developers to be Blacklisted

GEORGE TOWN: Penang will blacklist developers who have been found to be in cahoots with contractors to force homeowners to use their services for renovation works.

State housing committee chairman Jagdeep Singh said those blacklisted would not have their planning applications and other development-related plans approved by the state government.

The administration viewed the matter seriously and would not hesitate to take action if there was evidence to prove such cases, he added.

He said he has received several reports on the matter about a month-and-a-half ago with two police reports being lodged in one project.

He urged those who face similar situations to register their complaint with his office and then to lodge a police report.

“Such matters can fall under Section 506 of the Penal Code for criminal intimidation,” he told a press conference today before handing over a RM2,400 automatic gate to a senior citizens home in Jalan Thomas here.

Jagdeep also said he had a meeting with Penang police chief Datuk Abdul Rahim Hanafi over the matter, with the latter giving an assurance that police would take action.

“I have forwarded him all the emails and letters I received and he assured me action will be taken,” he said.

By: Aaron Ngui
Source: theSundaily
Published on: Thursday, 8 May 2014

Business News: Malaysia banks told to set minimum CA ratio at 1.2% of total loans

PETALING JAYA: Banks have been told to have a minimum collective assessment (CA) ratio of 1.2% by the end of next year, sending a strong signal to the industry to improve its standards of prudence.

According to a circular from Bank Negara to financial institutions early last week, all banks are required to set aside a minimum of 1.2% of total loans effective Dec 31, 2015.

The requirement, effectively, will put a stop to the present situation where banks are left to set aside their CA ratio based on their own risk assessment of their asset profile.

“Most banks have maintained a CA ratio of lower than 1.2% because there is no minimum set by Bank Negara. This circular effectively sets the standard for a minimum requirement,” said a banker.

The CA ratio was previously known as the general provisions that all banks were required to adopt. The general provisions requirement was a minimum of 1.5% of total loans, a ratio set by the central bank.

However, after the introduction of the new accounting standards three years ago, the general provisions requirement was replaced with a CA ratio, with banks free to set their own ratio.

The central bank no longer set the minimum requirement for banks to comply with in regards to the provisions.

According to a research report by CIMB, banks that had a CA ratio of less than 1.2% as of September last year were Malayan Banking Bhd, Public Bank Bhd, Affin Bank Bhd and Alliance Bank Malaysia Bhd.

Bankers, when contacted, were divided on the impact that the requirement would have on their bottom lines.

According to one banker, the move to comply with the ruling will not impact profitability because the additional amount required to be set aside can be transferred from retained earnings.

“Funds out of retained earnings will not impact the profit and loss (P&L) account of banks. It’s not a P&L item,” he said.

However, it would affect the dividend payout ability of banks, added the banker.

Another banker said the financial institution was seeking clarification from Bank Negara on whether to set aside the provisions from its profits.

“If that were the case, then it would impact profitability,” said the banker.

OCBC Bank (M) Bhd country chief risk officer Choo Yee Kwan said the background to the new requirement was that Bank Negara wanted to ensure that impairment provisions could keep pace with strong credit growth.

“In addition, the regulator would like to promote consistency in practices in ensuring adequate rigour and data quality in arriving at the appropriate level of collective impairment and the factors that are considered by banking institutions.

“Adequate impairment provisions serve as necessary buffers against potential credit losses; hence, they can reduce the likelihood of systemic risk for the banking sector,” he said in an e-mail response to StarBiz.

He said the sector might witness an increase in the overall level of impairment provisions at the industry level.

“Nevertheless, this should be seen positively, as the higher credit buffers would now render the sector stronger,” he noted.

CIMB Research in a report stated that the proposed new guideline could have a negative impact on banks based on its theoretical analysis.

It pointed out that several banks would have to increase their CA provisions under the new ruling and this would lead to a rise in the banks’ overall credit costs.

“Those which do not meet the requirements would have to increase their CA (and ultimately credit cost) in 2014-2015, even if their asset quality is improving. For banks with a CA ratio of above 1.2%, the new ruling would limit the room for them to further reduce their CA ratios,” CIMB Research explained.

According to CIMB Research’s estimates, banks’ net profits could be lowered by around 0.5% (for Hong Leong Bank Bhd) to 11% (for Public Bank) in 2014 to 2015 if a minimum requirement of 1.2% for the CA ratio were implemented.

Another analyst, however, is of the view that the new requirement from Bank Negara would have a negligible impact on the operations and earnings of banks.

“We think it is not a major concern for most banks because, firstly, the grace period for the implementation of the new guideline is long. Secondly, the minimum ratio of 1.2% will not comprise of only the CA component alone, but is also a combination of the CA and the statutory or regulatory reserve.

“In general, we see the new guideline as a measure to standardise the way banks gauged their capital buffers.

“The bottom line is, we think the new guideline will only serve to further strengthen banks’ capital buffers,” the analyst added.

By Cecilia Kok & Daljit Dhesi
Source: TheStar
Published On: Tuesday, February 11, 2014

Legal News: Higher valuation coming for extended properties

OWNERS who have extended their properties in Petaling Jaya will have them re-evaluated to reflect the higher built-up.

Those who add another floor to their single-storey terrace house will also have their properties revalued, Petaling Jaya mayor Datin Paduka Alinah Ahmad said.

She said the valuation would reflect the new built-up area.

“A higher valuation will be imposed on owners who file an application to convert a single-storey terrace house into a two-level residential unit or extend their house to provide for more living space,” she said.

The Petaling Jaya City Council (MBPJ) Valuation and Property Management Department will reassess the yearly property value.

“On the other hand, those who demolish a room and convert it into an open space will see a reduction in the assessment they pay.

“The assessment will be based on the square footage added or removed,” said Alinah.

She added that property owners who had demolished their bungalows and left the land vacant can also request for a reduction in assessment.“Our officers are also reviewing certain neighbourhoods where residential properties have been converted into commercial enterprises. Some have been turned into architecture, accountancy or legal firms or even restaurants, and may be liable to pay business rates,” Alinah said.

She said residential units converted for business purposes could be assessed under “Limited Commercial” status.

“Our officers need to look into the extent and frequency of non-domestic use of the living space and check on modifications made to the property,” she explained.She added that the council’s valuation officers would conduct random checks on such properties. Ratepayers are required to pay their assessment before Feb 28 and Aug 31 every year.

On Jan 20, StarMetro reported that there would be no hike in assessment rates for properties in Petaling Jaya and the council was looking at other ways to increase revenue.

Alinah said the Local Government Act (Act 171) 1976 was clear that residential units converted for business purpose will be assessed under limited commercial rates.

The mayor admitted that residential units with physical facade that had not been altered drastically and that did not have signs indicating commercial activity would be more difficult to identify.

“Some businesses such as telemarketers do not change the house on the outside but just add additional phone lines and extra furniture.

“Those who are involved in business activities should own up.

“Alternatively, we may have to liaise with other agencies such as Telekom or TNB,” she added.

By: Edward Rejendra
Source: TheStar
Published on: February 5, 2014

Property News – Minister: Stop pre-launch property sales to curb speculators

KUALA LUMPUR, Jan 21 – Pre-launch sales are driving speculation behind local property prices and should be discontinued, Minister Datuk Seri Abdul Wahid Omar told developers today.

According to the minister in the Prime Minister’s Department, the activity draws greater participation from property investors than genuine buyers.

“My suggestion would be for developers, Rehda, to call upon their members to eliminate these pre-launch sales,” he said here, referring to the Real Estate and Housing Developers’ Association.

The minister in charge of financial affairs made the remark during a book launch by property debt refinancer Cagamas Holdings Bhd.

Despite the call, Abdul Wahid denied that Putrajaya “over-regulates” or applies pressure on the industry.

“I don’t think we want to over-regulate so much, so we’re asking the developers to come up with their own set of regulations,” he told reporters later.

When asked for his response, Rehda president Datuk Seri Michael Yam said that Putrajaya still needs to provide some guidelines as such sales are in a grey area.

“The issue then is, does it fall foul of the law? If it is (about) trying to get registration, trying to gauge response to the project, then maybe we should accommodate (it),” Yam told reporters.

He added that such sales strategies were needed to cut down on the risk of abandoned projects, saying it allowed developers to more accurately determine market demand.

Yam explained that most developers also would not want to sell several units to just one party, since they would lose money to offer discounts and that the move would limit new customers from entering the market.

Malaysians have complained of spiralling property prices that are putting the homes beyond the reach of average wage earners.

In Budget 2014 tabled last year, Putrajaya announced measures to curb speculators and prevent rapidly increasing prices, including a hike in the real property gains tax (RPGT).

The tax was doubled to 30 per cent for properties disposed within three years of acquisition, 20 per cent within the fourth year, and 15 per cent on the fifth year.

Putrajaya also did away with the Developers Interest Bearing Scheme (DIBS) in which the developer pays the interest payments for the buyers’ loans during the construction of a property, which was seen as an incentive for speculation.

The minimum price of property that may be purchased by foreigners was also doubled by Putrajaya from RM500,000 to RM1 million.

By: Zurairi AR
 
 

KUALA LUMPUR, Jan 21 – Pre-launch sales are driving speculation behind local property prices and should be discontinued, Minister Datuk Seri Abdul Wahid Omar told developers today.

According to the minister in the Prime Minister’s Department, the activity draws greater participation from property investors than genuine buyers.

“My suggestion would be for developers, Rehda, to call upon their members to eliminate these pre-launch sales,” he said here, referring to the Real Estate and Housing Developers’ Association.

The minister in charge of financial affairs made the remark during a book launch by property debt refinancer Cagamas Holdings Bhd.

Despite the call, Abdul Wahid denied that Putrajaya “over-regulates” or applies pressure on the industry.

“I don’t think we want to over-regulate so much, so we’re asking the developers to come up with their own set of regulations,” he told reporters later.

When asked for his response, Rehda president Datuk Seri Michael Yam said that Putrajaya still needs to provide some guidelines as such sales are in a grey area.

“The issue then is, does it fall foul of the law? If it is (about) trying to get registration, trying to gauge response to the project, then maybe we should accommodate (it),” Yam told reporters.

He added that such sales strategies were needed to cut down on the risk of abandoned projects, saying it allowed developers to more accurately determine market demand.

Yam explained that most developers also would not want to sell several units to just one party, since they would lose money to offer discounts and that the move would limit new customers from entering the market.

Malaysians have complained of spiralling property prices that are putting the homes beyond the reach of average wage earners.

In Budget 2014 tabled last year, Putrajaya announced measures to curb speculators and prevent rapidly increasing prices, including a hike in the real property gains tax (RPGT).

The tax was doubled to 30 per cent for properties disposed within three years of acquisition, 20 per cent within the fourth year, and 15 per cent on the fifth year.

Putrajaya also did away with the Developers Interest Bearing Scheme (DIBS) in which the developer pays the interest payments for the buyers’ loans during the construction of a property, which was seen as an incentive for speculation.

The minimum price of property that may be purchased by foreigners was also doubled by Putrajaya from RM500,000 to RM1 million.

– See more at: http://www.themalaymailonline.com/malaysia/article/minister-stop-pre-launch-property-sales-to-curb-speculators#sthash.BDsJZnbn.VfhZEMeB.dpuf

KUALA LUMPUR, Jan 21 – Pre-launch sales are driving speculation behind local property prices and should be discontinued, Minister Datuk Seri Abdul Wahid Omar told developers today.

According to the minister in the Prime Minister’s Department, the activity draws greater participation from property investors than genuine buyers.

“My suggestion would be for developers, Rehda, to call upon their members to eliminate these pre-launch sales,” he said here, referring to the Real Estate and Housing Developers’ Association.

The minister in charge of financial affairs made the remark during a book launch by property debt refinancer Cagamas Holdings Bhd.

Despite the call, Abdul Wahid denied that Putrajaya “over-regulates” or applies pressure on the industry.

“I don’t think we want to over-regulate so much, so we’re asking the developers to come up with their own set of regulations,” he told reporters later.

When asked for his response, Rehda president Datuk Seri Michael Yam said that Putrajaya still needs to provide some guidelines as such sales are in a grey area.

“The issue then is, does it fall foul of the law? If it is (about) trying to get registration, trying to gauge response to the project, then maybe we should accommodate (it),” Yam told reporters.

He added that such sales strategies were needed to cut down on the risk of abandoned projects, saying it allowed developers to more accurately determine market demand.

Yam explained that most developers also would not want to sell several units to just one party, since they would lose money to offer discounts and that the move would limit new customers from entering the market.

Malaysians have complained of spiralling property prices that are putting the homes beyond the reach of average wage earners.

In Budget 2014 tabled last year, Putrajaya announced measures to curb speculators and prevent rapidly increasing prices, including a hike in the real property gains tax (RPGT).

The tax was doubled to 30 per cent for properties disposed within three years of acquisition, 20 per cent within the fourth year, and 15 per cent on the fifth year.

Putrajaya also did away with the Developers Interest Bearing Scheme (DIBS) in which the developer pays the interest payments for the buyers’ loans during the construction of a property, which was seen as an incentive for speculation.

The minimum price of property that may be purchased by foreigners was also doubled by Putrajaya from RM500,000 to RM1 million.

– See more at: http://www.themalaymailonline.com/malaysia/article/minister-stop-pre-launch-property-sales-to-curb-speculators#sthash.BDsJZnbn.VfhZEMeB.dpuf

Happy Chinese New Year!

Happy Chinese New Year 2014

Dear Friends, Clients & Associates,

Wishing you all a fantastic celebration of the Chinese New Year with your loved ones and to the rest, Happy Holidays!

We will be closed on 30th of January 2014 until 4th of February 2014. Business will resume as usual on the 5th of February 2014.

For further enquiries, kindly email our friendly team at manager@lee-chong.com and we will get back to you the soonest we can.

Warmest regards,
From all of us at Lee & Chong Advocates & Solicitors
 
 

Merry Christmas & Happy New Year!

Christmas season is here again.

A time of reminiscence and reflections. Most of all, finding balm and gratitude in the journey to the present and looking forwards to the future. Tis the season for counting blessings, rejoicing on triumphs and reflect on tribulations and most importantly, to give thanksgiving for a blessed year.  

The year-end has always been one of a particularly favourite time of the year. It marks togetherness, solidarity and gratitude. It’s the season of catching ups with our beloved ones and friends – of celebrations and to gradually close a chapter before beginning a new one. A chapter closing and a chapter about to unravel with hopes and dreams.

Merry Christmas and Happy New Year from us all at Lee & Chong!

Merry Christmas and Happy New Year from us all at Lee & Chong!

In this Christmas spirit, let us spread joy, warmth and kindness all around. Let us be grateful and rejoice in our blessings and be humbled by Life. May we wish you A Merry Little Christmas & Happy Holidays from all of us at Lee & Chong! And may your days be merry and bright!

Here’s also wishing you a Fabulous Happy New Year in advance!

Warmest Wishes from us all,

Lee & Chong Team

 

Malaysian Investors Shifting Focus To Commercial Properties?

(From left) Knight Frank Asia Pacific head of research Nicholas Holt, capital markets research global head Darren Yates,  Sarkunan and Waters at the Global Investment report launch.

KUALA LUMPUR: Property investors could be shifting their interest to commercial properties following new cooling measures introduced by the Government to curb speculation in the residential property market.

However, demand for office space could be suppressed by supply that are already in the pipeline arising from big commercial projects like the Tun Razak Exchange and the Warisan Merdeka Tower.

“The good news is that demand is still there with a take-up rate of three to four million sq ft of office space every year. However, the issue would be on the supply side which would certainly put pressure on the market and this would be a cause for concern.

“However, it would just be temporary until it is absorbed by the market in three to four years,” said property consultant Knight Frank Malaysia managing director Sarkunan Subramaniam at the launch of its Global Investment report yesterday.

He said there was already a shift of investing patterns as investors were attracted to yields from the commercial sector which could be higher compared with residential properties.

“The problem with Kuala Lumpur is the lack of good stock (properties), where our office market is about 18 million sq ft comprising Grade A, B and C offices, and the Grade A properties comprise just 20% of the market which is already tightly held,” he said.

He said that was also the reason why some investors are moving overseas to look at property hot spots like London, which had attracted a bulk of property investments from Malaysia.

CIMB Research in a report last month also said without the solid backing of fundamental demand, the overbuilding of commercial real estate could result in painful long-term issues, such as a magnified oversupply of office space, depressed rentals and yields, wastage of strategic land resources and knock-on effects on the financial sector as borrowers default on their loans and the industry’s non-performing loan ratio rises.

“We are concerned about the flurry of big commercial projects as this will add to the oversupply of office space in Klang Valley over the medium-term. The overhang in commercial space deteriorated further in 2012, weighed down by oversupply and holding back rental rates,” said analyst Terence Wong.

Sarkunan also said residential prices would not go down despite the cooling measures to be introduced in 2014. “Transactions might be fewer, and it may slow the price appreciation, but it would not bring prices down,” he said.

He said the only way to bring house prices down was to flood the market with affordable properties, and the Government could also review incentives for private developers to supply these properties instead of relying on government agencies to supply these properties.

Elaborating on the report released yesterday, Knight Frank global capital markets partner Jeremy Waters said properties in gateway cities like London would continue to be sought after by Malaysian investors as Malaysians understood and had deep knowledge of the UK property market.

In 2012, the UK received the most capital inflows from Malaysia, at about US$5bil, followed by Singapore, Australia, and the United States, which was an almost five-fold increase compared with US$1.15bil recorded in 2011.

He said the firm also received increasing interest from local property developers who wanted to take their expertise to markets like London like what S P Setia Bhd and IJM Land Bhd did.

“The interest to invest overseas is incredibly strong now, and its not only London, but also other gateway cities in western Europe like Germany and France and also in the United States,” he said.

He said a number of sovereign wealth funds from China, Malaysia and Kuwait remained focused on gateway locations, while South Koreans and Qataris are increasingly exploring opportunities in medium-sized and smaller cities.

Source: The Star

A Merry Little Christmas!

Christmas season is here again and in this Christmas spirit, let us spread joy, warmth and kindness all around. Let us be grateful and rejoice in our blessings and be humbled by Life. May we wish you A Merry Little Christmas & Happy Holidays from all of us at Lee & Chong!

Wishing everyone a Very, Merry Christmas from All of Us from Lee & Chong.

Wishing everyone a Very, Merry Christmas from All of Us from Lee & Chong !

You will notice that snow is falling in our website in this Christmas season and we hope you enjoy our website as much as we do.

Warmest Wishes,

Lee & Chong Team

The Emerald City

Nothing like some jazz music to listen to on a busy work day at the office. We hope you enjoy this as much as we do.

Happy Mid-Autumm Festival!

We would like to wish everyone a warm celebration of the Mid-Autumm with your loved ones!

With warmest wishes on behalf of the Lee & Chong team,

Irene E. Tan   Editor & Corporate Care Associate

Selamat Hari Raya Aidilfitri & Eid Mubarak To Our Friends Who Are Celebrating!

We would like to wish all our Muslim friends and associates Selamat Hari Raya Aidilfitri & Eid Mubarak! Selamat balik kampung & may you have a merry & meaningful celebration with your loved ones.
With warmest wishes,

Lee & Chong team

Protected: The New C-Policies

This content is password protected. To view it please enter your password below:

Happy Chinese New Year 2012!

Let the Dragon lead us to Greater Success!

This year’s Chinese New Year came very early on in the year. The Water Dragon’s entry is nonetheless spectacular & all Chinese in the world rejoice & make merry to welcome in one of the most auspicious sign in the Chinese zodiac.

It is in this positive spirit that we wish you all a wonderful year filled with abundance of good health, wealth, luck, longevity  & prosperity! May we rise like the Dragon from the water to reach greater heights this 2012. Here’s to also wishing our families, friends, clients, fellow practitioners & associates a fantastic year blessed with peace & harmony all year round.

*Keong Hee Huat Chai*

With warmest wishes on behalf of the Lee & Chong team,

Irene E. Tan   Editor & Corporate Care Associate

Merry Christmas & A Happy New Year!

Time flies and here we are nearing the last days of 2011.

In this holidays season, may we wish those who are celebrating a very Very, Merry Christmas, and to the rest, a fantastic holidays and enjoy the rest of 2011!

In this Christmas spirit, let’s spread kindness, joy & love all around.

With warmest wishes from us all and signed off on behalf of the Lee & Chong team,

Irene E. Tan   Editor & Corporate Care Associate

Image

Selamat Hari Raya Aidilfitri

image1