yesterday i put an earnest deposit to buy a unit at palma puteri an apartment at kota damansara. this is my first time experience investing in real estate. i will give details after i close the deal.
Property Talk: A weekly column by S.C. Cheah
http://biz.thestar.com.my/news/story.asp?file=/2008/6/23/business/21567102&sec=business
HOW can you tell when the property market is softening?
There are several telltale signs like developers taking a longer time to sell their properties, delaying new launches and giving away more freebies and incentives. A weakening market will also see a decrease in rental and capital values.
There are also more subtle signs like the developer keeping a low profile, the project slowing down, the development changing hands or the developer maintaining the original selling price but reducing the built-up area.
There are also instances where the developer continues to build the houses despite very slow sales but this situation is masked as “build then sell”. Some developers might earlier claim they have sold most of their units but later said they have taken back the units and selling en bloc as prices have escalated.
Datuk Ng Seing LiongThese ominous “signs” have mostly surfaced.
Of late the property development industry is feeling the jitters as crude oil prices continue to soar. The industry is grappling with increased cost of doing business, rising price of building materials, inflationary trends in cost of living, global economic uncertainties, rigid policies for developers and a softening market.
Property developers are also faced with eroded profit margins, higher construction costs, intense competition, and fear that rising inflation was affecting buyers’ sentiment and affordability.
To make things worse, they are burdened with what Real Estate and Housing Developers’ Association (Rehda) president Datuk Ng Seing Liong described as “onerous contributions and social obligations”.
Although he did not elaborate when speaking at the official opening of Mapex 2008 in Kuala Lumpur last week, it is clear what he meant: developers having to provide all sorts of amenities from building police stations, community halls to flyovers.
Many developers have argued that even in the best of times, these “social obligations” were “eating” into their profits, what more in the current tough market condition.
If the inflationary pressures continue, Ng warned that another “recession is very near!”
The Government has proposed various measures in the 2008 Budget to sustain economic growth and provide such incentives as 50% waiver of stamp duty for purchase of one house costing not more than RM250,000 from Sept 8, 2007 until Dec 31, 2010; exemption of real property gains tax; allowing monthly withdrawal of EPF contributions for housing purposes and a RM50mil fund to guarantee housing loans for buyers who do not have fixed income.
However, Rehda feels this is not enough and wants policy changes.
A “thorn” in their flesh is the bumiputra quota in which Rehda wants the release procedures to be standardised to reflect a more transparent and structured release mechanism.
“Bumiputra quota should not exceed 30%, based on sales regardless of the units being sold to bumiputras were the identified lots or not. Bumiputra discount should be capped at 5% and only applicable for houses priced at RM250,000 and below, excluding low-cost and low-medium cost houses,” said Ng.
Ng said it was unfair for someone who could afford a multi-million ringgit property to enjoy a bumiputra discount that differed from state to state (7% discount for Selangor, 15% for Johor and 10% for other states).
Rehda, he said, also wanted the Government to take over the provision of low-cost public housing, thus freeing the private sector developers to focus more on market driven products.
The Government should also review the price of low-cost housing from the current RM42,000 to RM60,000 to mitigate increased costs.
Rehda hopes the Government would abolish its decision to charge 10% import duty on cement importers immediately. “Instead we hope the Government will impose 10% to 20% export duty on all cement and steel materials to ensure adequate supply,” he added.
Rehda vice-president Datuk FD Iskandar said it was inevitable that house prices would go up soon as construction costs had shot up by 30%.
“Prices of raw materials from steel to cement have all gone up. It will be very challenging for the property development industry. Contractors are crying out for a revision of their contract prices and they will walk off if their demands are not met. Projects will stall,” he said, adding there was also a shortage of steel and cement whose prices have risen to RM4,000 per ton and RM18 per bag respectively.
Iskandar who is also the Rehda Selangor chairman said there were construction firms who would be too glad to get out of a contract now that prices of everything had soared. They would stand to lose, as there was no price fluctuation clause to allow for an upward revision of prices. “Some of them prefer to wait until prices have stabilised,” he said.
Unless oil prices drop drastically (which many industry players do not see it likely to happen) and the inflationary trend is checked, the economy in particular the housing and construction industry will be heading for a
By LEONG SHEN-LI
I would like to know exactly where is the LRT station. This will boost up the real estate value nearby.
http://thestar.com.my/news/story.asp?file=/2008/6/15/nation/21558681&sec=nation
PETALING JAYA: More than one million Klang Valley residents will benefit from the much awaited new Kota Damansara-Cheras rail transit line.
The Government had earlier said the new line and extensions should be ready by 2012. Sources said with the average construction period taking three to four years, work would have to start by the end of this year.
The 40km route covers some of the most densely populated areas in the Klang Valley such as Damansara and Cheras as well as the fast growing area of Kota Damansara.
It will also serve the heart of the Golden Triangle, the business and financial hub of Kuala Lumpur.
Currently, the area is only served by KL Monorail, which is already suffering from overcrowding.
The new line, which sources said would cost between RM4bil and RM5bil and will be mostly elevated, will provide the much needed expansion to the current 56km, 48-station light rail transit network, especially in view of the rising fuel prices and the new emphasis on public transport.
The line was announced in October 2006 by Deputy Prime Minister Datuk Seri Najib Tun Razak but little has been heard about it since then.
The alignment, made available to The Star, showed the new line running from Kota Damansara along Persiaran Surian to the Damansara-Puchong Expressway and then heading towards the city centre along the Sprint Expressway, through Bangsar Baru and Jalan Bangsar.
It will then run parallel to the existing Kelana Jaya LRT line (formerly Putra-LRT) to KL Sentral, Pasar Seni and Masjid Jamek before heading to the Golden Triangle along Jalan Raja Chulan.
The route will then pass Pasar Rakyat in Bukit Bintang and then Jalan Tun Razak where it will join Jalan Cheras.
It will continue along the road and the Cheras-Kajang Expressway to the Balakong interchange near Cheras Batu 11.
Passengers will be able to switch with the existing Kelana Jaya LRT line at Bangsar, KL Sentral, Pasar Seni and Masjid Jamek; and the Ampang LRT line (formerly Star-LRT) at Masjid Jamek and Maluri.
There will be around 30 stations along the line, including the interchange stations.
Sources said the route was a “desktop alignment” which would form the basis for the eventual line. The number of stations has also not been finalised.
The final alignment and number of stations is unlikely to vary in any major way from the “desktop” plan.
As with the other lines, the new line will be owned by Syarikat Prasarana Negara Bhd and operated by RapidKL.
While the Government has yet to announce when work will begin on the new line, sources pointed to the “positive statements” by Second Finance Minister Tan Sri Nor Mohamed Yakcop after a briefing session with Backbenchers last Thursday.
Nor had announced that public transport would be getting more incentives, allocations and assistance in Budget 2009 and future budgets.
Sources said the Government was also currently conducting the mid-term review of the 9th Malaysia Plan and there were concerted efforts to get the new line in.
Besides the new line, the Government is also trying to get extensions to the Kelana Jaya and Ampang Lines started.
The extensions will cover Subang Jaya, USJ, Kinrara and Puchong and meet at Putra Heights.
last nite i visited an unit at palma puteri kota damansara. The unit was sold below market price. When i entered the unit, everything seems ok. but at the 2nd room, the floor was terrible. all the parquet seems to be destroyed by water. it seems there was a flood in the room recently.
no wonder it is selling below market price. now i have to estimate the repair cost. if the repair cost will make the unit same price or higher than market price, then i have to let go the unit. I was quite frustrated. i thought i could buy a unit below market price with at least people can live in it.
i did quite simple studies on the fuel hike impact to the rental apartments after the fuel hike of 78 cents. After the increase, renters to find out lower monthly rental. They try to move out as quickly as possible from the higher monthly rental apartments. If you try to rent out apartment at RM650, your phone wont stop ringing.
Sooner or later, BLR will increase, inflation increase, less disposable income, people will try to sell their properties quickly if they own a lot of them and auctions time. stocks already go down.
Is this another indicator saying that our economy will slow down? This is a problem and also an opportunity for me.
Problem because I have to increase my spending because of inflation.
Opportunity because less potential buyers in real estate and more desperate owners to sell their properties.
The Star – Bumpy ride ahead for second-hand market
http://biz.thestar.com.my/news/story.asp?file=/2008/6/2/business/21401748&sec=business
IN contrast to the industry outlook forecast for auto companies, used car dealers are bracing for a rocky road ahead.
Challenges include stiff lending policies, rising fuel prices and weakening economic conditions, said various Klang Valley-based used car dealers.
Sonny Soh Sdn Bhd owner Sonny Soh said the various concerns had seriously dampened the value of used cars lately.
“Financial institutions are tightening up their loan approval process. It is much harder to obtain loans for used cars nowadays and the value (of used cars) is dropping,” he told StarBiz.
Soh said sales for the first five months of the year had been poor and he forecast that the trend would continue for the rest of the year.
“Fuel hikes will have a huge impact and high capacity cars would suffer the most,” he said.
The used car company sells both local and foreign used cars.
“So far, sales of local cars have been slightly better because they are generally cheaper,” Soh said.
Bangsar-based Zaibi Motor Sdn Bhd is also not optimistic about the used car trade.
Manager Dave Foong said the year thus far had been “quiet” in terms of sales.
“Oil prices are escalating and the economy is slowing down. Going forward, I see a drop in demand for used cars,” he said.
Another used car dealer from Kuala Lumpur-based Syarikat Motor SP also said the value of used cars had been depreciating over the past few years, attributing it mainly to increasingly tougher loan policies.
“Market demand for used cars has been dropping. Sales for the year so far have declined. The hike in petrol prices and dwindling economic conditions will only worsen conditions,” the dealer said.
A dealer from another KL-based used car dealership also had less-than-optimistic views about the trade.
“Sales so far have been bad and we predict it would continue to be bad for the rest of the year. Market demand has dropped and the economy is slowing down,” the dealer added.
Another dealer said sales had been flat and would continue to remain flat for 2008.
“We do not see any upturn (in sales) for this year,” he said.
Last Saturday 31/05/2008, I went to auction fair at Renaissance Hotel KL. There was a unit at Palma Perak, Kota Damansara for auction. Reserved price was at RM120k. Unfortunately for me, the unit was called off last minute.
I wonder how the owner can come out with the money at last minute? whether it is the owner money or someone intelligently approached the owner and paid all outstanding payments. The buyer got the unit at a good price and the owner was saved from having NPL.
Either way, it was a good lesson for me. Next time approach the owner and make and offer. Furthermore through my friends staying there, the owner really wanted to sell the unit. But again unfortunately I got the information last minute.
