Authorities worried about 70% drop in real estate investments
According to the Malaysian Investment Development Authority (MIDA), investments in Malaysia’s real estate sector plunged by 70% to RM26.9 billion in 2015 from RM88.6 billion the previous year. The massive decline could have a domino effect as the property sector is linked to over 200 other industries, said International Trade and Industries Minister Datuk Seri Ong Ka Chuan. Issues affecting the country’s real estate sector include a sluggish economy, a slump in commodity prices and the rising cost of living, as well as other factors that warrants further analysis. Nevertheless, MIDA said that the figure for 2015 still surpassed the targeted annual average of MYR148 billion (USD36.19 billion. (Property Report)
Forest City incentives include duty-free zone, no foreign ownership caps
Property consultants agree that the Forest City mega-mixed development in Iskandar Malaysia, Johor is poised for success, due to the multiple tax incentives accorded it including the coveted duty-free zone. Besides corporate tax incentives for qualified companies in the selected areas of tourism, education and healthcare, the companies will not face foreign equity ownership restrictions. Unlike most local developments, it will not be subject to the usual standard requirements including a specified number of low-cost homes, or that a certain percentage of the development is allocated to bumiputras. There are also no foreign ownership caps. The move is hoped to attract investors, buyers and tourists to Malaysia amid a depressed market. (Business Times SG)
EcoWorld plans 8 new commercial projects, provide grants
Eco World Development Group Bhd is going ahead with eight new commercial development projects under its Business Masterplan series, despite the soft property market. The property giant exceeded its sales target of RM3 billion for 2015, and is confident of securing RM4 billion this year. Citing that there is still demand, albeit selective, from buyers, Eco World plans to offer business grants to buyers of its commercial property in the Klang Valley, Penang and Iskandar Malaysia this year. The aim is to make the overall environment more conducive for business, and help boost the development’s image. The developer also plans to provide franchising grants of up to 3.5% of the property value, while investors who lease out their commercial units will be provided investment grants. (The Star Online)
Millennials avoiding property market, rather spend on lifestyle
Even though the property market remains a firm investment choice, property experts say that many millenials are opting against entering the property market and focusing instead on lifestyle purchases. Those in their 20’s now do not have property purchases in mind; given their income level and lifestyle, people in this age group have limited capacity to buy houses. An Association of Valuers, Property Managers, Estate Agents and Property Consultant (PEPS) member said that for previous generations, there were fewer distractions and the tendency to save was higher, but the prices of properties were also much lower. Its president Datuk Siders Sittampalam also said that many millennials will not venture into property as a form of investment because the returns are much lower than what it was 20 years ago. High property prices are discouraging millennials from purchasing their own homes, and many are still living with their parents as a result. However, property research house Knight Frank also pointed out that millennials’ purchasing of a lifestyle rather than property was their downfall when it came to property investment. (The Malay Mail Online)
(Photo from The Malay Mail Online)
Sunway Property named Property Company for 2015 in Asia by UK financial magazine
Sunway Bhd’s property unit Sunway Property has been voted “Property Company of the Year 2015 – Asia” by readers of World Finance, a UK-based financial magazine. The magazine’s panel stated that Sunway’s commitment towards building a first class infrastructure in Malaysia, was helping to transform the country into one of Asia’s leading economies. It also said that the company has been steadfast in its determination towards social development, focusing on both education and healthcare in particular. (The Star Online)
Ministry of Housing, REHDA to work on making housing more affordable
The Real Estate and Housing Developers’ Association Malaysia (Rehda) will work closely with the Ministry of Housing and Infrastructure to tackle the issue of high housing prices. For starters, Rehda is encouraging property developers to shift to the industrialised building system (IBS), a special construction technique where components are manufactured either on- or off-site. However, the rate of affordability would differ according to areas, for example in KL it would be around RM500,000 while in small towns affordable houses would cost about RM300,000. Last week, the government agreed to review the National Housing Policy, especially related to property prices, which was proposed to be decided by the government and not just market forces. (The Malay Mail Online)
Sime Darby collaborate with KYS Education for international school
Sime Darby Property Bhd has teamed up with KYS Education Group to build KYS International School in the KL East integrated development, located on a 2.43ha site within reach of the Kuala Lumpur City Centre. KYS International School will be able to accommodate up to 900 students and will cater to pre-school, primary and secondary education, following both the local Kurikulum Baru Sekolah Menengah and the International General Certificate of Secondary Education, as well as offering A-Level education. The school is strategically positioned to tap into the expatriate and higher-income households which are key demographics of the upmarket KL East residential area. (The Malay Mail Online)
Chin Hin eyeing Johor land for new factories
Building material manufacturer Chin Hin Group Bhd is planning to acquire land in Johor to build new facilities to boost its manufacturing division. It hopes to secure a sizable plot of land to build two factories, which will further drive its manufacturing division growth and contribute to group revenue in two to three years. Group managing director Chiau Haw Choon said the company was expecting double-digit growth in net profit for the financial year ending Dec 31, 2016, mainly driven by its manufacturing business. The group had benefited from the disposal of properties worth RM4.93mil, and looking to expand its business into East Malaysia. (The Star Online)
