DIBS (developer interest bearing scheme) curb has little effect on banks

DIBS - ah, such an important word now. In a nutshell of my own perspective:

pay a bit now > no need to pay until development is completed > start paying loans again 

Here is an article about it and how DIBS effects the banking system of Malaysia

DIBS curb has little effect on banks

Posted on | June 27, 2013

By THE STAR

It has been speculated that Bank Negara is studying the risks arising from DIBS with a view of potentially imposing curbs on it.

ASSUMING the developer interest bearing scheme (DIBS) is curbed, we estimate the worst case scenario to be a marginal 0.7 percentage points (ppt) shave off our 2014 industry loan growth forecast of 10.5% to 9.8%.

We believe domestic banks have been more tempered in their exposure to the mortgage segment and channel checks point to limited exposure at this stage. We maintain our industry loan and earnings forecasts for the individual banks for now. We remain “overweight” on the banking sector with our “buys” being AMMB Holdings Bhd, RHB Capital Bhd, BIMB Holdings Bhd and Hong Leong Financial Group Bhd.

Speculation has it that Bank Negara is looking to curb the DIBS. General guidance is that such loans have made up 15%-20% of new mortgage loans over the past few years and thus some dampening effect is to be expected. Nevertheless, we believe the impact is likely to be contained by the fact that housing loan growth of the Big 6 banks has been measured and such loans account for less than 5% of total residential loans for the big banks.
Assuming DIBS loans account for 20% of new mortgage loans, we estimate the worst case impact to be a marginal 0.7-ppt decline in our 2014 industry loan growth forecast to 9.8% from 10.5%.

While industry housing loan growth rose 13% year-on-year (y-o-y) in 2011 and 2012 respectively, housing loan growth for the Big 6 banks rose 14% y-o-y in 2011 and at a more measured pace of 10% y-o-y in 2012, with foreign banks picking up the slack in 2012.

Public Bank continues to be the most aggressive in the market, with growth of 17% y-o-y in 2012, but with stringent controls, we understand that DIBS loans make up less than 2% of its mortgage book and that it has been very selective about which developers it ties up with for this scheme.

Based on our channel checks, AMMB (2-year housing loan compounded annual growth rate of 6%) has shied away from the property sector for several years while DIBS loans account for about 1%, 2% and 5% of CIMB’s, Maybank’s and RHB Cap’s mortgage books respectively.

Any move to curb the DIBS would be aimed primarily at further curbing speculative activity in the property market. To be fair, measures to date such as the raising of the loan-to-value (LTV) ratio in 2010 and a hike in real property gains tax in January 2013 have had some success.

Bank Negara had highlighted in its 2012 Financial Stability and Payment Systems Report that ever since the imposition of a LTV ratio of 70% on individuals with more than two housing loans, the annual growth in lending to such individuals had declined sharply to 14.5% y-o-y in November 2010 to 1.9% y-o-y in December 2012.

Individuals with multiple housing loans made up less than 3% of total housing loan borrowers and their borrowings accounted for 13.7% of outstanding housing loans.

- Malaysia Property News

How to sell my home/ property?

Perhaps this is one question that have made it to the top 20 list of main questions that a seller asks. 

I know it is quite challenging and sometimes can be down right frustrating, but I came across this article that may help you understand better on 

"Why can't I sell my home"?

Reading this article may help you see a clearer picture and how to improve on that:

By EU­GENE MA­HALINGAM
The en­vi­ron­ment for sell­ing a home is not with­out its chal­lenges, es­pe­cially in a tough prop­erty mar­ket.

But for a few un­for­tu­nate in­di­vid­u­als, try­ing to sell off their prop­erty (even in good times) can be next to im­pos­si­ble, no mat­ter what they do!
The fol­low­ing are rea­sons why some po­ten­tial sell­ers have prob­lems dis­pos­ing off their homes.

Bad lo­ca­tion
We all know this one – when its comes to suc­cess­fully sell­ing your prop­erty, it’s all about lo­ca­tion, lo­ca­tion, lo­ca­tion. What amounts to good or bad lo­ca­tion is ac­tu­ally quite ob­jec­tive. But se­ri­ously, how bad is “bad?”

Ac­cord­ing to Malaysian In­sti­tute of Es­tate Agents (MIEA) pres­i­dent Siva Shanker, there are some lo­ca­tions that no­body wants to live in.
“This could be at a T-junc­tion, next to an ox­i­da­tion pond or even a power sub­sta­tion,” he tells StarBizweek.

1. Siva adds that many buy­ers are also re­luc­tant to pur­chase homes lo­cated near over­head power lines. “We have a set stan­dard based on guide­lines by the World Health Or­gan­i­sa­tion on how far these lines need to be away from the homes. But re­gard­less, buy­ers still pre­fer not to live in ar­eas where there are power lines near by.”

I have personally managed and sold properties around these areas. However I too, as a seller and a marketing agent was a bit fearful of these power lines, but the more I sold these projects, I did allot of research and it seems that it is safe - provided if the developer follows the ruling and the approval of the government. Usually if a property is on it's way for an "OC" approval, all is good! 

1. Carey Real Es­tate Sdn Bhd man­ag­ing di­rec­tor Nixon Paul says most Malaysians can be quite su­per­sti­tious about where they choose to live. “Peo­ple are re­ally into the feng shui el­e­ment. Houses with the num­bers four (4) on them, are typ­i­cally dif­fi­cult to sell. “And this is even among non-Chi­nese buy­ers, who fear that they might not be able to sell the prop­erty in the fu­ture.
2. “A house sit­u­ated next to a sew­er­age fa­cil­ity or a ceme­tery can be a prob­lem when to sell,” he says.

Well this again depends on the target market. Some people that are used to living in such environment since childhood days have no problem with such place. Cemeteries are after all more quiet and peaceful on an overall. Sewerage areas are more of an issue as it protrudes the smell senses that is undeniable - so you might want to consider about it matter. 

Ter­ri­ble con­di­tion
You’re not go­ing to be able to at­tract buy­ers if your home looks like it could col­lapse at any time.
“A di­lap­i­dated place over­grown with grass and where the walls are full of cracks or leaky roof is un­likely to at­tract any buyer,” says one in­dus­try ob­server.
Siva how­ever feels that a run­down prop­erty could ac­tu­ally be a bless­ing in dis­guise.
“I feel that it’s bet­ter to buy a dump for a cheaper price, and then spend some money to re­fur­bish it into its for­mer glory, or some­thing even bet­ter.”
Siva says many Malaysian buy­ers can­not “vi­su­alise” the po­ten­tial of a di­lap­i­dated home.
“The av­er­age buyer can’t see what a house that is in ut­ter dis­re­pair can be turned into, be­cause all they see is a home that is in ter­ri­ble con­di­tion.

Very true, how would you feel as a car buyer that is buying a second hand car. Some people cannot see past the uncleanliness and cosmetics rather then the true value of the property (which is the more important part), but only judge on face value. It is an important factor to consider this because MOST buyers will only buy what they see. 
Show me a guy who doesn't want to spend a single cent to tidy and upkeep his property and I'll show you a property that is undesirable to most potential buyers.

“On the other hand, when he vis­its a de­vel­oper’s show unit, he is so cap­ti­vated by what he sees be­cause it (the show unit) looks so amaz­ing. In his mind, he thinks he’s pur­chas­ing that prop­erty but what he’s ac­tu­ally buy­ing is an empty shell.”

Siva says spend­ing a bit of money to spruce up a place can be ben­e­fi­cial. “Why not spend RM20,000 to spruce up a place worth RM500,000 so that you can sell it for RM550,000?”

He says the sit­u­a­tion is sim­i­lar even for ten­an­cies.
“Most land­lords are also un­will­ing to ren­o­vate a place to make it look more at­trac­tive. In­stead, they would rather wait for a con­firmed ten­ant and then only ren­o­vate.
“This may not even hap­pen (se­cur­ing a ten­ant).
“This is where home-stag­ing comes in,” says Siva.
The con­cept of home-stag­ing, which is aimed at im­prov­ing the prop­erty’s ap­pear­ance in the eyes of po­ten­tial buy­ers (with the ul­ti­mate goal of a quick sale and for a bet­ter price tag), is pop­u­lar es­pe­cially among coun­tries in the West.

Stag­ing usu­ally in­volves some­thing aes­thetic, im­prov­ing the de­sign, or­gan­i­sa­tion and over­all ap­pear­ance of a prop­erty.
In some in­stances, the po­ten­tial suc­cess of sell­ing your home can be de­pen­dant on the con­di­tion of your neigh­bour’s prop­erty.
“If your neigh­bour’s house is run-down or di­lap­i­dated, your house can also be­come af­fected,” says Nixon.

Un­rea­son­able prices
Another in­stant where prop­erty can be hard to sell is when the seller sets the price of the prop­erty ridicu­lously high.
“This is a typ­i­cal case of over­pric­ing, where the owner is just greedy and the ask­ing price is too high.
“And be­cause of this, the prop­erty re­mains in the mar­ket for­ever,” says Siva.

Loans
He adds that in re­cent times, strin­gent loan ap­provals have also made it tough for pur­chasers to get a loan.
“You might find a buyer, but then he might have a prob­lem get­ting a loan.”
Un­der Bank Ne­gara’s re­spon­si­ble lend­ing guide­lines, which were im­ple­mented on Jan 1 last year, loans are now ap­proved based on net in­come com­pared with gross in­come pre­vi­ously.

These statements made by these professional spokes persons are all relevant and true. 
How do I know? Because I am involved in the property business myself and whatever comments in the blue colour fonts are my personal take on the article. 

Hope that helps! 

Source: The Star

Completed but empty: Will Budget 2014 help fill out vacant properties?

How will vacant and empty property units fair? What is the outlook of 2014 look like after the new budget has been released?
 
Lets take a peek at current predictions:
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Hopefully the latest Budget 2014 measures will result in more realistic prices and houses functioning as homes again.

The recent budget dropped a double whammy for property buyers: An increase in real property gains tax (RPGT), ranging from 30% to 15% within five years, and the prohibition of Developer Interest Bearing Schemes (DIBS) where developers pay for interest on buyers’ loans during construction.

What will be the impact on the property market? According to property consultants CH Williams Talhar & Wong, an increase in RPGT would cause property transactions to drop, as they did this year when RPGT was increased in Budget 2013. 



Selected launches have been very popular with property investors.

Indeed, outside of stampedes on projects like Sime Darby’s Bandar Bukit Raja, YTL Land’s Fennel, SP Setia’s Seri Mutiara apartments in Setia Alam and Setia Eco Hill in Semenyih as well as Eco World’s debut previews, the market of the last two years has cooled compared to the double-digit bull runs of 2010 and 2011.

While total property transactions dropped about 1% last year after having climbed more than 10% in 2010 and 2011, the number of home sales in the first half of this year dropped about 13% compared to the first half of last year.

This was from around 136,000 units to about 119,000 units, according to the Ministry of Finance’s National Property Information Centre (Napic). Number of home sales dropped by about 16% in Selangor, and by almost half in Kuala Lumpur!

“Since early 2012, when Bank Negara imposed the property responsible lending guidelines, we have seen the market slow down,” says MIEA president Siva Shanker. “Before that, it was a bit of a free-for-all. Anyone could get all sorts of loans, especially in the primary market.”


The recent launch at Setia Eco Hill saw all houses on offer booked out within a day.

Will prices drop?

In terms of value, however, the value of total home sales stayed pretty constant throughout Malaysia and Selangor in the first half of this year, compared to 1H2012, although they did drop about 26% in KL.

In terms of average home prices transacted, in fact, that still increased in this year’s first half by a national average of 16% compared to 1H2012, or 19% in Selangor and a whopping 41% in KL.

Indeed, according to Napic’s house price index, house prices increased every year since 1988. Outside of 1998 and 1999, in the wake of the Asian Financial Crisis, the index has increased even in years when the total values of property transactions dropped, such as 2001, 2005, albeit marginally.


Even for highly popular areas like Bangsar, there has to be a limit in property price increases, says real estate valuer Elvin Fernandez.

Some industry watchers also believe that there will be a surge in demand next year, before the goods and services tax (GST) is implemented in 2015.

“We do not think property prices will correct but rather stabilise allowing a greater pool of buyers to come on stream,” suggested Kenanga Research in its post-Budget analysis.

Nevertheless, property prices in some areas have increased to unsustainable levels, believes Khong & Jaafar managing director, Elvin Fernandez. “For selected hotspots in Kuala Lumpur, property prices are not four times the average household income but 15 times!

“Even for highly popular areas like Bangsar, there has to be a limit. If Bangsar is RM1.5mil, people want to live there, but are you saying that if the price is RM3mil or RM10mil, will people still want to live in Bangsar? At some point, it’s got to stop.”

Completed but empty


Even desirable neighbourhoods such as Mont’Kiara and Sri Hartamas have recently completed buildings which are only half occupied.

One property which has dropped its prices is that of a beautiful condo development located behind my own. It sits on a hilltop within a quiet and low-density part of Sri Hartamas, within striking distance of Bangsar, Damansara Heights and Mont’Kiara. For many, you can’t get a more desirable address than that.

The property itself is gorgeous with all mod-cons: exclusive lift lobbies where unique access cards open only to your apartment, video intercom, fibre optic backbone, etc. Even though the development was completed about three years ago, however, more than 60% of this tower is empty.

“This tower was originally bought en-bloc by a tycoon who intended to re-sell for profit but it has taken some time because they are all big units like over 2,000, 3,000 and 4,000 sq ft,” says a source close to the development. “Now the bank is also involved in the sale, and although the developer’s last price was over RM800 per sq ft, the price has recently been reduced to RM720 per sq ft.”

Another condominium in a central Damansara Heights spot has been quite empty since being handed over in 2011. 92 out of 318 units are occupied, which works out to under 30%, says a source close to the development. In fact, there are still developer units available for sale.

Siva: Owners of apartments would sometimes hang on to their investments, while waiting to get the right price, than look for tenants.

The majority of sub-sale owners here are foreigners, including investors, from Europe and Singapore, as well as block owners holding between 25 to 40 units, who engage agents to market their units.

Many times, owners of apartments such as these would rather hang on to their investments in the hope of selling for a profit, than look for tenants, reckons MIEA president Siva Shanker.

“We as estate agents often go to these owners and ask them, ‘Would you like to rent your unit?’ They say, ‘No, no, I want to sell!’ and we say, ‘But you’re getting nothing for it now, why don’t I bring you a tenant that will give you at least 6K?’. Maybe they don’t want to spend RM150K to renovate, put in kitchen cabinets, wardrobes and all that. They just leave it and don’t care.”

“It’s a distortion of the market,” admits a young developer. “Too much money speculating on property, while the main core of market cannot afford those prices.”

“The worst part about it is when absentee buyers don’t pay management or maintenance charges. Sometimes they say there’s no income from the unit so they don’t want to pay. The result is delapidated facilities and a security concern for those few units which are occupied.”

Even developers don’t like properties which stay empty after being handed over. “We don’t want it empty,” says one representative of a leading developer. “It doesn’t looks good.”

Too many luxury condos, not enough expats

Even if owners are willing to rent, the average occupancy rate for existing luxury condominium in KL has been on a downtrend since 2008 except for the Kenny Hills area, according to C.H. Williams Talhar & Wong’s Property Market Report 2012. “In the first half of 2012, the average occupancy rate further decreased by about 5% to 61.6%.

This is because new units were entering the rental market at a faster rate than the slower projected demand from working expatriate professionals entering Malaysia.

Furthermore, many more luxury condo units will be completed in the Klang Valley this year, says the report. “Approximately 6,113 units by 25 developments are expected to be completed by 2013, giving the total cumulative supply registering at 29,038 units by 2013.”

Empty offices


Officially, about 77% (24mil sq ft out of 104mil sq ft) of Malaysian office space is occupied, although anecdotally, experts profess to seeing several buildings “quite vacant with hardly any tenants”.

With its luxurious fully glazed and curved facade, this office building is a looker located just next to the SPRINT highway, opposite Tropicana City Mall. Yet, even though it was handed over to its strata title owners since early this year, it is still only about 10% to 20% occupied, says an estate agent who sells units there.

Signs recently came out for a furniture retailer to take up the ground and 1st floor, while one floor was sold to a Japanese company, she says. Nevertheless, the rest of the units remain empty.

Unsurprisingly, prices and rentals have dropped. Launched at about RM270 per sq ft, owners had originally listed the units for RM550 per sq ft, but some of them are now willing to go down to RM440 per sq ft, she adds. “Asking rental has also gone down, from originally RM4 per sq ft to RM2.50 or even RM2 per sq ft.”

These prices are just asking prices going down, however, says Siva Shanker. “Take condos around KLCC for example, people were asking for RM2,500 psf and then in 2008, 2009, people didn’t want to buy anything anymore, so prices dropped to RM1,700 or RM1,800 per sq ft. But these are mainly asking prices. In reality many of the good locations stayed flat in transacted price. People are still making money compared to the price they first paid.”

Hopefully, this would ultimately mean more realistic prices. Given the banning of DIBS and credit controls, credit may be less and less easy to come by, but prices may ideally approach fundamental values and keep the market moving.

The increase in real property gains tax will also make it more attractive to rent than flip. “Instead of trying to sell at a high price, rent it out for the next two to three years,” advises Siva. “Don’t leave it empty, waiting for it to turn. You don’t know how long it will take. Get a rental income.”

I hope this ultimately means all those properties we are told are so scarce and in-demand but end up empty would, rather than just being owned and held, actually be occupied and lived in. Just seems to make more sense, doesn’t it?

Is now the time to take advantage of an uncertain market? Check out all the latest real estate projects and discussions about the impact of Budget 2014 at Star Property Fair 2013, happening from Nov 8 to 10 at KLCC Convention Centre. More information from fair.starproperty.my.

Watch This Space by Chee Su-Lin | sulin.chee@thestar.com.mysource: the star

BNM: One template for housing loans of RM500,000 and below from Jan 1

So I was wondering what is happening in the banking sector on the handling of real estate/ properties of Malaysia under the value of RM 500,000 in the year 2014? 

This is what I found out:

KUALA LUMPUR: All commercial banks must have a standardised documentation for conventional housing loan and home financing agreements involving a principal sum of RM500,000 and below.

Bank Negara Malaysia (BNM) said on Friday this would take effect from Jan 1, 2013.

“The primary objective of this initiative is to enhance borrowers’ understanding and comparability of the key terms and conditions of the loan agreements, including the responsibilities and obligations of borrowers and financiers under such agreements,” said the central bank

BNM said banking institutions would have to adopt this template for all conventional housing loan and home financing agreements offered to individuals for the financing of residential properties valued at principal sum of RM500,000 and below.

It explained the principal sum referred to only the loan amount for the purchase price of the residential property.

It added the loan or financing could however extend to cover renovation costs, mortgage reducing term assurance (MRTA) or such other insurance premium as may be permitted by the banking institution and legal fees incurred in connection to the purchase of the property.

BNM said this initiative was a collaboration between the central bank, PEMUDAH and the financial industry to enhance the efficiency of business processes and improve the quality of service delivery in the financial services sector.

- Malaysia Real Estate News
The Star

Top 10 architectural trends for new Malaysian properties in 2014

Hi there,

So I was really interested to know what are the new trends for property/real estate in the year 2014 and this article from the Star online paper that I found to be relevant, logical and helpful.

Please read if you are into the beauty of landscaping, architecture, development and layouts :)

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THE trends for new properties have seen the mushrooming of landed, gated and guarded properties, projects clustering around upcoming MRT and LRT stations, green-rated buildings and branded residences, not to mention top-to-toe glass-clad residences.
Here are more innovative offerings which have caught StarProperty’s eyes:

1. Iconic sculptural structures
 
Iconic architecture is a dominant trend that’s set to stay, judging from the wave of new buildings such as The Capers and The Fennel (pic, above left) developed by YTL Land & Development Bhd, Datum Jelatek by PKNS (Selangor State Development Corporation), Angkasaraya by UEM Sunrise Bhd and Icon Residence Mont’Kiara (pic, above right) by Mah Sing Group Bhd. Few in number but growing in stature, they make their presence felt with creativity and imagination.
The Fennel, for example, alters the skyline with its sharp and angled towers. “Its form, while unique to high-rise towers in KL, is actually a composition of standardised floor plates for the units – albeit stacked in a manner where every floor is incrementally adjusted outward or inward in groups of eight.
The result is a distinct profile in the skyline – somewhat “gravity defying”– but the floor plans are typical and repeated,” shares Rene Tan of RT+Q Architects, the firm which designed the 38-storey residential towers.

2. Dual key units

 

Offering a studio apartment attached to the main apartment, each with separate entrances, dual key units are increasingly gaining ground with developers.
Recent projects offering this layout include Zefer Hill Residence developed by Villamas Sdn Bhd, AraGreens Residences @ Ara Damansara by HSB Development Sdn Bhd, Urbana Residences @ Ara Damansara by Weida (M) Bhd and EcoSky @ Taman Wahyu by Eco World Development Sdn Bhd.
They promise flexible occupancy for multi-generational families to co-exist under the same roof, or the ability to subsidise loan repayments by renting out one of the apartments.

“A family could live here and rent out the studio unit, or it could be for adult children who want their privacy and independence. It could also be the other way around. If the children leave, the husband and wife can move into the studio, and rent out the main unit,” says developer Mitraland Group’s CEO Chuah Theong Yee of his Vina Versatile Homes project (pic, right) in Taman Seri Taming, Cheras, Kuala Lumpur, which offers dual key units among its choice of layouts.
“The response to the dual key units has been pretty encouraging,” adds chairman Datuk Johan Ariffin. “People like it and they see the possibilities. It’s good for them to have the option for the older child to have privacy, or to rent out the studio to subsidise loan repayments.”

3. Condo beaches
The last few years have seen a race by property developers to offer the country’s first man-made beach for private residential dwellings. Projects include Verve Suites Mont’Kiara (pic, above) developed by Bukit Kiara Properties Sdn Bhd, LaCosta by Sunway City Bhd and Le Yuan Residence by UOA Group.
Christened Versilica Sky Beach, Verve Suites’ sandy playground is not only the first to complete, it physically tops the others by crowning one of its four condominium blocks, rather than being located on a podium. Besides the beach, a pool, cafe, “chill zones”, recreational rooms, Jacuzzi and sun garden with sunken seater sit on top of 37 storeys of 250 fully furnished suites.

4. Private lift lobbies

Example Photo of private lift

Lending one added advantage of security and exclusivity, private lift lobbies can be found in developments such as Sunway Palazzio by Sunway City Bhd, 28 Mont Kiara by UEM Sunrise Bhd and IOI Properties’ Puteri Hills luxury town villas.
The lift opens straight into your apartment as doors may open on opposite sides and on specific floors designated by your access card.

Another project to offer private lift lobbies is Serai by Bandar Raya Developments Bhd, currrently under construction in Bukit Bandaraya. The RM900mil luxury project will comprise 121 apartments in two 21-storey towers. Its five spacious layouts are generously proportioned from 4,000 sq ft to a royal 14,000 sq ft in the penthouse.

“Serai is poised to take your breath away with a treasure trove of thoughtful, well-designed luxuries,” says Hud Bakar, managing director of RSP Architects Malaysia which designed the project.
 
5. Landscaped back lanes
 
It seems that back lanes are now becoming obsolete. These forgotten wastelands, historically populated by rubbish bins and alleycats, are increasingly being turfed over and made into car-free communal spaces.

Examples include Ken Rimba in Shah Alam developed by Ken Holdings Bhd (pic, above left), LakeClub Parkhome in Rawang by DA Land Sdn Bhd, Parkville townhouses by Sunway City as well as Tiara South (pic, above right) in Semenyih developed by Kueen Lai Development Sdn Bhd.

6. Double decker grounds
 
Pedestrian lifestyle facilities above car parking in landed strata developments make life a breeze at The Arie in Bukit Sri Damansara developed by Loh & Loh Corporation Bhd, Embun @ Kemensah Heights (pic, above right) by Titijaya Group and 16 Quartz Melawati (pic, above left) by Mitraland Group.
This way, cars are confined to the lower levels without endangering children at play. This leaves the upper grounds blissfully free of asphalt while being generously peppered with water features, walkways and playgrounds.

“Large sliding doors have been selected for the balconies and main entrances to blur the definition of private and public domain fronting the common open space. Hence, the courtyard becomes the ‘extension’ of the living room at ground level and the balconies above,” says Ar. Woo Yoke Khing of Kumpulan Senireka Sdn Bhd, commenting on Embun @ Kemensah Heights.

7. Sky bridges
 
More and more projects are offering sky bridges or communal spaces that connect towers at upper levels. Examples include Datum Jelatek (pic, above left) by PKNS and Verve Suites KL South (pic, above right) by Bukit Kiara Properties Sdn Bhd.
“Sky lounges have been quite a trend in the last few years as developers innovate to improve the overall lifestyle of apartment community living. Sky bridges, in particular, are emerging for a few reasons.

Sometimes, the existing building’s constraints do not allow for a rooftop sky lounge so facilities bridging between the two towers are a brilliant solution to getting resident activities off the ground,” says Dion Vercoe, managing director of Palladio Interiors which worked on Verve Suites KL South.

8. Generous, full-width balconies
Large balconies which either span the entire living room, or are outdoor terraces in themselves, can be witnessed in projects such as Arcoris Residences (pic, above left) in Mont Kiara by UEM Sunrise Bhd, KM1 East by Berjaya Land Bhd (pic, above centre) and Eco Sky Residences by Eco World. These spaces are large enough to accommodate alfresco dining and entertainment.

“The outdoor lifestyle is more holistic and more people want to enjoy the extension of their spaces, hence, the trend for bigger balconies that are also great for hosting parties.

And, while the whole unit is 2,400 sq ft in space, the balcony takes up to nearly 400 sq ft,” says Benson Saw, director of VW+BS, which furnished an apartment with a balcony converted into an outdoor lounge within the Troika condominium (pic, above right) near KLCC.

9. ‘Floating’ gyms
Not content to be tucked away in a corner, gyms are now being offered with a view. Often dubbed “floating gyms”, these workout spaces are usually designed to overlook swimming pools, magnificent views or lush landscaping.

Examples include Verdi in Cyberjaya by UEM Land Holdings Bhd, Laman Granview (pic, above right) in Saujana Puchong by IJM Land and Zeva (pic, above left) in Taman Equine by Trinity Group Sdn Bhd.

10. Communal streams
Swimming pools aren’t enough anymore. Developers now want to mimic or make the most of existing terrain with communal streams, lakes and wetlands. Examples include Tijani Ukay developed by Symphony Life Bhd (above, right) and Parkville homes in Lake Edge Puchong by YTL Land (pic, above left).

The Glades at Putra Heights, developed by Sime Darby Property Bhd, offers a lush and connected green lung centred by a wetland area. A central pond with miniature streams add allure to a morning stroll or evening jog.

As part of its By the Sea (pic, above centre) luxury condominium project, meanwhile, Selangor Dredging Bhd invested RM2mil to rehabilitate a stretch of river running through its site. The result becomes a plus point for house buyers, says its managing director Teh Lip Kim.

Posted on November 7, 2013  |  29345 Views |  Topic : Home & Living.

By YVONNE YOONGyvonneyoong@thestar.com.my

Pressure on property, new ruling likely to impact housing loan growth

PETALING JAYA: A new circular from the central bank that took effect last Friday will pile more pressure on an already hard-hit property sector, even if its merits are likely to be felt in the long-term, analysts and industry executives said.

In a bid to make the property market sustainable, the new rules have put the brakes on interest capitalisation schemes (ICS) and the developer interest-bearing scheme (DIBS).
It also calls for the use of the net selling price of a property as the benchmark for obtaining bank loans, which raises the amount to be paid upfront.

Alliance Research’s banking analyst Cheah King Yoong said the measures were “more onerous” than anticipated and posed downside risks to his 9% loan growth estimate for the banking sector next year.
“Although the guidelines on the prohibition of the DIBS was not a surprise, the new rule on using the net selling price to determine the loan-to-value (LTV) ratio is a negative surprise to us.
“While it is difficult to gauge the impact on banks, the fact that this new rule applies to all property financing, including first-time home buyers, means that property buyers’ affordability will be affected, and this will lead to lower property loan growth,” Cheah said in a report yesterday.
“We believe the latest policies illustrate the sheer determination of the authorities to contain the growth of household debt.

“These measures, together with potential rate hikes in 2014, fiscal tightening by the federal government and subsidy rationalisation next year, could further drag on loan growth in the retail segment, temporarily leading to a rise in credit costs, and dampen investor sentiment on the banking sector,” he added.
The circular prohibits financial institutions from granting end-financing facilities to individuals or non-individuals for the purchase of property offered under an ICS, including the DIBS.
Financial institutions are also barred from granting a bridging facility to finance a property development that offers ICS.

According to Alliance Research’s Cheah, this effectively removes any alternative incentives that developers might concoct to replace the DIBS.

“Nonetheless, our channel checks show that for the banking groups under our coverage, property loans with the DIBS only made up 1% to 3% of their outstanding mortgages,” he said.
Affin Bank is the exception, with some 7% of its mortgage loanbook comprising loans tied to the DIBS.
“Given that property loans with the DIBS are immaterial to overall outstanding mortgage loans as well as new mortgage loans approved, we do not expect the restrictions to have a significant impact on the banking sector,” Cheah said.

Public Bank has the highest exposure to housing loans at 56% of its gross loans, followed by Alliance Bank with 55% and Hong Leong Bank, 46%, company data showed.

Another key item on the circular requires banks to calculate the LTV ratio based on the net price of a property instead of its gross price.

To illustrate, a property with a list price of RM1mil, rebate of 5% and 90% financing would incur a down payment of RM50,000 after discount.

Under the new regime, the down payment increases to RM95,000 because the 90% loan will be computed using the discounted price tag of RM950,000.
While property executives expect a slowdown in sales, they believe that genuine buyers will remain undeterred.

Mah Sing Group Bhd group managing director and CEO Tan Sri Leong Hoy Kum told StarBiz via email that demand for properties would continue to be robust, especially among those buying to own or for long-term rental income.

“There is still a large supply-demand gap as supply growth for properties has been on a decreasing trend since 2003, with Malaysia’s supply growth in the second quarter of this year at only 0.8%.
“The fundamentals driving the property market’s growth in recent years have not changed, for example a younger population leading to new household formation, a rising middle-income group, the supply-demand gap and stable employment.

“Initiatives in Budget 2014 may remove the speculative element, but not the fundamentals,” he said.
Leong noted that the lending environment was still conducive, with low interest rates and banks offering BLR minus 2.4%, from BLR minus 2.1%-2.2% a year ago.

Mah Sing had stopped offering the DIBS for most of its launches since the start of the year. None of its projects in Iskandar Malaysia feature the DIBS.

- Malaysia Real Estate News
Posted on | November 20, 2013 By THE STAR

Welcome to the property / real estate blog

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Welcome to the friendly new property blog where we would be discussing about Properties/ Real Estate in Malaysia, especially Penang Island! 

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