As house prices soar worldwide, Malaysia sees slow rise
House prices in Malaysia rose in the past year albeit at a slower rate amid the fastest hike of prices worldwide in three years, according to a survey by Knight Frank. The Global House Price Index for 4Q2016 found that slow house price growth was due to cooling measures but remains an attractive investment destination in the region with its stable property market and relative lower entry prices that continue to offer reasonable returns. The index showed that Malaysia ranked 27th out of the 55 countries measured. Iceland leads the rankings for the first time since the index started in 2006, where prices have increased by a whopping 14.7% on average. (Malay Mail Online)
“Rent longer to avoid long-term property debt”
Finance Minister II Datuk Seri Johari Abdul Ghani has urged Malaysians to change their mindset when it comes to buying properties at a young age, which results in a huge long-term debt. He pointed out that in many other countries, people prefer to rent for a longer amount of time and only make a long-term commitment when they have enough cash. Johari noted that many Malaysians take on hire-purchase loans and mortgages at a young age, mostly when they start working, adding that more affordable houses should be built for rent instead of purchase. (Malay Mail Online)
KWAP buys into E&O project with RM887mil deal
Retirement Fund Inc (KWAP) has taken up a stake in Eastern & Oriental Bhd’s (E&O) flagship property project in Penang and acquired a substantial equity interest in the listed developer in a deal worth a total of RM887.7 million. KWAP will purchase 20% in E&O’s second phase of Seri Tanjung Pinang (STP 2A), a township being developed on reclaimed land with an estimated GDV of RM17 billion. The STP project is essentially a seafront development situated on reclaimed land along Penang’s north-east coast. (The Star Online)
Johor Bahru’s biggest mall to be built by Singapore-listed company
Johor Bahru‘s largest mall is being built by Capital City Group, which is listing on the Singapore Exchange (SGX) via a reverse takeover of marble producer Terratech Group. Slated to open early next year, the Capital 21 mall will have a gross floor area of one million sq ft. It will be part of Project Capital City, which includes a hotel and residential component, in the heart of Johor Baru near the Inland Revenue Board building. Capital City will have 690 serviced apartments and 630 hotel-style serviced suites. Capital City is the company’s first development. (The Straits Times)
Iskandar needs 500,000 more new homes
Iskandar Malaysia still needs about 500,000 new homes to cater for an estimated three million-strong population by 2025. Iskandar Regional Development Authority chief executive officer Datuk Ismail Ibrahim said Johor only had about 700,000 homes presently. Iskandar Malaysia is growing at an annual rate of 7% to 8%, much higher than the national average of 4.5% to 5% annually. Ismail added that even with the 20,000 to 25,000 homes being developed by the Chinese, the state was still in need of more houses. (The Star Online)
Maybank named Malaysia’s most valuable bank brand at US$2.5bil
Malayan Banking Bhd (Maybank) has strengthened its brand position by being crowned as the most valuable Malaysian bank brand and among the top 5 Asean bank brands in the Top 500 Banking Brands 2017 published by global brand valuation and strategy consulting firm, Brand Finance. Maybank was also the only Malaysian bank brand with an AAA brand strength rating making it the strongest Malaysian bank brand. Maybank managed to nearly double its brand value lead over the second placed Malaysian bank to US$654mil in 2017 from US$334mil in 2016. (The Star Online)
New bus terminal for Lahad Datu
A new bus terminal set up in the First Palm City Centre at Lahad Datu, Sabah will enhance the area’s transportation system and public amenities. Local Government and Housing Minister Datuk Seri Panglima Hajiji Mohd Nor said the RM3mil development would be appreciated by local residents as it would reduce travel time within the town and across Sabah. It will be able to ease connectivity between Lahad Datu and other areas in Sabah and consequently bring in a bigger crowd from neighbouring towns. The development of the Pan Borneo Highway will also be a boost to domestic business activities. (The Borneo Post)
BNM Report: Top 20 income group have largest share of debt
About 40% of debt, the largest share, is owned by individuals in the top 20 income group who earn over RM8,000 a month, said Bank Negara Malaysia (BNM) in its 2016 Financial Stability and Payment Systems Report. The average debt level for borrowers in this group was more than double that observed for other borrower groups. However, a large share of this debt, about 77%, is secure because it is taken out for property purchases and investments which contribute to individuals’ wealth accumulation. The report highlighted that about two-thirds of total debt was acquired by those living in major employment centres, namely Selangor, Johor, Kuala Lumpur and Penang. A significant portion of debt is for purchase of residential property, followed by vehicle purchases and personal use. (New Straits Times)