City&Country: Cover Story-- Strong housing demand to continue

Property developers in the country are predicting that the housing sector will continue to see strong demand,  barring any bad news on the global economic front.

A poll conducted among the state chiefs of the Real Estate and Housing Developers’ Association (Rehda) Malaysia, the Sarawak Housing and Real Estate Developers’ Association (Sheda) and the Sabah Housing and Real Estate Developers Association (Shareda) found that the strong consumer confidence in the country’s economy currently augurs well for the property market in their respective states in the months ahead.

There was encouraging performance in 2010, in line with the country’s recovery from the impact of the global financial crisis. The National Property Information Centre’s 1H2010 report says some 110,348 residential property transactions worth RM23.48 billion were recorded during the period, an increase of 13.9% in volume and 31.9% in value from the previous corresponding period.

The measures announced by the government in Budget 2011 to help Malaysians own their first home, such as the First Time Homeowners Scheme where the government guarantees the 10% down payment on a property, is expected to boost the sales of homes priced below RM220,000 in most states.

Terraced houses will continue to be the property of choice of most Malaysians, especially 1 and 2-storey terraced houses close to city or town centres that are most popular with the middle-income group.

Security will continue to be a strong feature of new developments and gated and guarded communities will be much sought after, especially by the higher income group. It is interesting to note that condominium living is on the rise in Penang, Johor and Kelantan.

Included in the wishlist of several state chiefs was for  states to review policies that impede the growth of the sector, especially with regards to bumiputera housing and land titles. Some also wants the local authorities to speed up approvals, and is concerned about the rising cost of construction, including land cost in the city and town centres, as this will contribute to higher property prices in the prime areas.

Read on for the thoughts of the housing developers’ associations on the property market in their states in the last year and in the coming months.

altN K Tong
Chairman, Rehda Wilayah Persekutuan (KL)

The property market in 2010
In 2010, the KL property market recovered from the effects of the global financial crisis, which slowed things down significantly in 2008 and 2009. This was evident from the more positive take-up of new launches and the rising cost of vacant land.

Outlook for 2011
This positive trend is likely to continue into 1H2011. As KL is the capital of Malaysia, its property market will be very much influenced by global and regional economic forces. Global capital flows continue to move from the West to the East as Asia is currently the world’s engine of growth. How our property market performs in 2H2011 will depend on the broader economic condition of the region and what is happening in its other cities.

What property, located where, will attract buyers/investors?
altKL city is very compact and dynamic on all fronts. Thus, all property types targeted at all income groups in all locations will attract long-term buyers and investors. The beauty of properties on the secondary market is that there are always good deals for those prepared to be patient, do their research and homework and take a very long-term view. Those looking to buy in new developments can look forward to more innovative designs being introduced all the time.

Wish list for 2011
•    For policies that encourage a long-term sustainable approach to property development through enhanced technical discussions with DBKL (City Hall);
•    That the infrastructure projects such as the MRT and River of Life that were announced in Budget 2011 will kick off;
•    That the mega-projects will be phased intelligently to bring in the anticipated foreign investment and multinational companies; and
•    That KL residents will be the ultimate beneficiaries of the continually improving and higher standards of living and lifestyles being developed by Rehda KL members.

altCheoh Chee Guan
Chairman, Rehda Pahang

The property market in 2010
Overall, 2010 was a good year. The supply of residential properties was spread out over the major towns and there is no question of oversupply.

Outlook for 2011

Rehda Pahang expects the sales of homes, especially those priced below RM250,000, to pick up as the 10% down payment on these houses by first-time home owners is guaranteed by the government.

What property type, located where, will attract buyers/investors?

The majority of residential properties built in Pahang are 1-storey terraced houses priced RM180,000 and below. These houses are affordable to those earning RM3,000 and below.

Development is always based on supply and demand. There are no specific hot spots in Pahang as it is a big state and developments are spread out over the major towns like Kuantan, Pekan and Mentakab. Property demand depends on the local economic activities of the area.

Wish list for 2011

We would like to see stable building material prices to keep building costs down.

altDatuk Francis Lee
Chairman, Rehda Perak

The property market in 2010
In 2010, the residential property market recovered from a lacklustre 2009 as both the developers and homebuyers regained confidence. Housing prices remained firm throughout the year, with those of 2-storey terraced houses in the Majlis Bandaraya Ipoh area breaching the RM200,000 mark.

Outlook for 2011

The pace of the market in 2010 could carry on into 2011, shored up by improving activity. Based on the planned delivery of developers, total transactions on the primary market should breach the 12,000-unit mark in 2011. Prices are also expected to rise to reflect the increasing cost of delivery.

What property type, located where, will attract buyers/investors?
In residential property, the bulk of demand is for low-medium and medium-cost homes in the price range of RM80,000 to RM400,000. Landed property investment represents a small percentage of total transactions, given the relatively low rental yields and the absence of speculative elements in the primary market.

Wish list for 2011
That the primary essence of the 10th Malaysia Plan and the Economic Transformation Programme (ETP) — to remove any unnecessary rules and compliance cost that may result in price distortions in the property sector — be implemented. The cost of bureaucratic compliance has increased substantially over the last decade and it is unfair to burden homebuyers with this indirect payment that is incorporated into the pricing of residential properties.

altSimon Heng
Chairman, Rehda Johor

The property market in 2010
The Johor market was on an uptrend from 2H2009. Boosted by the recovering economy in the US and the buoyant property market in Singapore, the Johor market reacted positively and snapped up properties that were unsold for some time. New property launches fared better than in the previous years and the take-up rates were higher.

The pricing of new launches improved too, partly due to the rising cost of construction and pent-up demand. Towards the later part of the year, when interest rates were raised and the loan margin was limited to 70% for the purchase of third homes, the market slowed down slightly but buying interest remained intact.

Outlook for 2011
altIskandar Malaysia in south Johor and part of the government’s Corridor of Growth have moved into implementation phase. Among the projects that have started or been completed are Legoland, Newcastle University, Premium Outlet, Aeromall, Columbia Hospital and Puteri Harbour. Many infrastructure works are in progress and scheduled to be completed in 2011 or 2012. This has resulted in rising interest, including foreign, in the property market, especially in projects located in Iskandar Malaysia.

For the first six months of 2011, demand is expected to grow as purchasers try to beat or keep up with the expected rise in prices. Supply is expected to increase with more product launches. In 2H2011, when supply has risen, demand will stabilise and there will be a price consolidation.

What property type, located where, will attract buyers/investors?
Demand is good in almost all the sectors. In Iskandar Malaysia, there is strong demand for 2-storey terraced houses of around RM400,000 or less in areas like the Tebrau corridor, the Kempas corridor, Skudai corridor and Nusajaya corridor. The prices of houses in Nusajaya, targeted at international investors, have risen to more than RM500,000. In the outer areas like Senai Kulai, Kangkar Pulai, Ulu Tiram and Pasir Gudang, there is still strong demand for 1-storey houses of RM180,000 or less.
Commercial properties have also garnered strong demand, especially in areas like Molek, Austin, Kempas, Skudai and Nusajaya, where 3-storey shoplots have breached the RM1 million mark. Industrial properties are also being snapped up after a long period of inactivity. Strong demand from Singaporean and local manufacturers has pushed prices up.

Condominiums and apartments are also in demand, especially in the city areas. Prices have not risen much but in certain areas like Danga Bay and the coastal areas, developers are asking for more than RM300 psf for a condominium. In Johor, developers target the more than 400,000 Malaysians who work in Singapore and commute daily.

Wish list for 2011
•    That the authorities work will review the low-cost housing policy and the bumiputera housing policy so as not to place too great a burden on the developers. Many developers suffer cash flow problems when the low-cost or bumiputera units are not sold, and the authorities take too long to release the units for sale to the general public; and
•    That the government not make the majority of developers bear the brunt of new rules and regulations because of a few black sheep responsible for abandoned housing projects. Strict enforcement of existing rules should be sufficient to reduce the number of abandoned projects.

altDatuk Gwee Yew Kiat
Chairman, Rehda Melaka

Property market in 2010
Generally, the Melaka property market improved from 2009 and 2008. According to National Property Information Centre, the residential and commercial subsectors registered 5,511 transactions (4,300 and 1,211 respectively) as at 3Q2010. However, the supply of homes and shop units stood at only 3,848 units (2,892 and 956 respectively).

Outlook for 2011
altThe outlook is positive for the next 12 months. However, Melaka is facing a shortage of houses. House prices have increased at least 15% mainly due to high land cost, increased prices of building materials and the imposition of a 60% bumiputera housing quota in Melaka. Due to the high land cost, we believe that in the future, affordable homes, especially 1-storey terraced homes within 10km of the city centre, will be scarce in Melaka city. Only a small number of Malays will have the privilege to own affordable homes on land reserved as Malay customary land. Those who want to stay in Melaka city will probably have to go for higher-end properties with selling prices starting at RM250,000.  

What property, located where, will attract buyers/investors?
The 1-storey terraced houses on the outskirts of Melaka in the price range of RM120,000 to RM200,000 are preferred by those with a monthly salary of RM3,000 and below while 2-storey terraced homes within 10km of the city are the choice of those with a monthly salary of RM3,000 to RM5,000. The state government should focus on medium low-cost houses with prices ranging from RM100,000 to RM120,000 instead of low-cost houses since the majority of Melaka residents have a monthly income of RM2,000 to RM2,500.

Houses located around Cheng, Paya Rumput and Batu Berendam have the potential to attract buyers due to the amenities nearby such as hypermarkets and schools. Ayer Keroh and Bukit Katil may also be attractive due to the federal and state government offices in Melaka International Trade Centre (MITC) and Ayer Keroh.

The hot spots for the commercial subsector are shoplots located around Kota Laksamana, Cheng, MITC and Ayer Keroh.

Wish list for 2011
•    That the bumiputera quota be standardised at 30% or follow Johor’s bumiputera policy of 20% for properties that cost RM300,000 onwards and 30% for properties selling from RM200,000 to RM300,000;
•    That more quality and high-end properties be built; and
•    That more hotels be built as the tourism industry is one of the main contributors to the state’s economic growth. In 2010, Melaka attracted nine million visitors and the state government aims to attract 10 million tourists in 2011.

Woo Mun Kit
Chairman, Rehda Terengganu

The property market in 2010
The Terengganu property market was robust in 2010. Since 2000, houses within a 15km radius of the Kuala Terengganu City Centre (KTCC) have seen their prices increase by 30% to 50% depending on the location. For instance, the prices of 1-storey terraced houses have increased from about RM100,000 to RM150,000 while those of 2-storey terraced houses have risen from RM190,000 to RM280,000. Meanwhile, the prices of 2-storey bungalows have jumped from RM360,000 to RM600,000.

The prices of 3-storey shopoffices increased from RM800,000 to RM1.5 million in KTCC between 2000 and 2010. This was mainly due to a rise in the cost of doing business, including higher cost of land, labour, building materials, management/operation cost, cost of obtaining development approval and licence, and higher risk of hefty penalties on administrative negligence.

Outlook for 2011
Based on market needs, the outlook for the state’s property market next year is still good. If there is no crisis in 2011, the market will be able to maintain its momentum. In the local context, there is no sign of speculation in the housing market. However, in the commercial sector, conventional shop-
offices have seen much investment activity.

What property type, located where,
will attract buyers/investors?
The target market is the middle-income group, which prefers 1 and 2-storey terraced houses. The hot spots are still areas within and surrounding the capital city of Kuala Terengganu.

Wish list for 2011
•     More transparent regulations that are not open to different interpretations. This will help
reduce the abuse of power and corruption;
•     That the government does not rush into creating or amending laws without in-depth studies; and
•     The state should consider converting Malay reserved land titles into open titles within the capital city to spur development.

altNgian Siew Siong
Chairman, Rehda Selangor

The property market in 2010
In 2010, the Selangor property market was very vibrant with many new launches and good sales.
According to Napic, the property market became positive in 1H2010 as indicated by improved sales and shrinking residential and shop overhang. Some 43,221 transactions worth RM17.04 billion were recorded during the year, an increase of 8.3% in volume and 35.5% in value from 1H2009 (39,896 transactions worth RM12.57 billion). Against 2H2009 (41,983 transactions worth RM15.46 billion), the volume and value of transactions increased 2.9% and 10.2% respectively. The residential subsector kept the market going, accounting for 77% of the state’s property market volume. This was followed by the commercial (9.5%), agricultural (6.9%), development land (3.3%) and industrial (3.2%) subsectors.

Outlook for 2011
Overall, we remain optimistic about the market for 2011 due to pent-up demand for properties as a long-term investment. There is greater motivation to buy properties for capital appreciation and as a altpreferred inflation hedge. We also do not think Malaysia will experience a property bubble due to the limited supply of land in prime areas. For landed residential properties, high capital appreciation is limited to strategic locations where demand exceeds supply. The 70% cap on the loan-to-value ratio (LVR) for the purchase of third homes will affect the market, but we do not foresee an adverse impact. We believe buyers will continue to seek quality properties as they remain a safe and solid asset class. Although there may be further tightening measures, we believe the government will adopt a balanced approach to support the ETP, which is aimed at making Malaysia a high-income nation.

The state will benefit from the Greater KL Plan because it will spur development in Selangor. The Greater KL Plan under the 10MP will see the redevelopment of the Sungai Besi airport, Pudu jail, Kuala Lumpur Financial District and planned township development on the Rubber Research Institute land in Sungai Buloh. Plans are also underway to make KL a safer city. The MRT and high-speed rail are key projects to improve accessibility.

What property type, located where, will attract buyers/investors?
We are optimistic that the residential sector targeted at the middle to high-income group will enjoy steady growth due to a stable employment rate. About 3.3 million new jobs are also expected to be created by 2020.

Demand will remain strong for landed homes, especially in strategic locations in Selangor such as Petaling Jaya, Puchong and Subang Jaya. Moreover, Malaysian property prices are still considered cheap in the region. We also believe that residential prices will continue to rise and be the star for 2011.

Wish list for 2011
•     To see enhanced accessibility and infrastructure in Selangor;
•     More incentives to spur the property sector, including greater financial incentives for property developers to comply with the Green Building Index;
•     More awareness of the benefits of living in houses that are certified green, which will lead to more efficient energy and water usage in the long term; and
•     Greater use of the industrialised building system (IBS) in construction as it reduces labour, wastage and building materials and increases environmental and construction-site clealiness and quality control.

altS Sivanyanam
Chairman, Rehda Negeri Sembilan

The property market in 2010
The property market remained stable in 2010, with the residential sector being the most active and a moderate demand for shopoffices. There was a slight increase in the prices of all types of property due to demand, with the 1-storey houses priced between RM120,000 and RM150,000 and the 2-storey houses priced between RM180,000 to RM350,000 being the big sellers.

Higher-end properties like semidees and bungalows were also saleable. The prices of semidees ranged from RM250,000 to RM650,000 while those of bungalows were between RM350,000 and RM1.1 million.
The more popular locations currently are Seremban, Seremban 2, Sendayan, Sikamat, Senawang, Nilai and Pajam. The market will continue to be driven by the residential sector while affordable housing within the price range of RM120,000 to RM350,000 will continue to be the most marketable.

Outlook for 2011
With the 10% government guarantee for first-time homebuyers, we expect a surge in property purchases, especially in the residential sector. Therefore, the first six months should see an increase in the take-up of properties by first-time homebuyers.

Developers would also take advantage of this to launch new products in 2Q and 3Q. Bank financing will continue to be competitive and homebuyers should take this opportunity to land the best offers from the banks.

What property type, located where, will attract buyers/investors?
The 1-storey and 2-storey terraced houses will continue to attract the middle-income group while the semidees and bungalows with the gated and guarded concept will be attractive to upmarket buyers. We expect some 90% of them to be homebuyers.

The state will continue to promote “Live In Seremban, Work In Klang Valley” and with the improvement of infrastructure between Kuala Lumpur, Selangor and Seremban, and with the increase in the prices of properties in the Klang Valley and surrounding areas, we should see better response to the above-mentioned types of houses.

Hot spots that would attract buyers/investors are Senawang, Mantau, Sendayan, Seremban, Nilai/Pajam and Sikamat.

Wish list for 2011
I hope that the property sector in Negeri Sembilan will grow further with quality and well-planned developments. With the support of all players in this industry, we shall make Negeri Sembilan the place of choice.

altDatuk Ricque Liew
Chairman, Rehda Kedah/Perlis

The property market in 2010
The market was steady in districts like Kota Setar, Kubang Pasu and Kuala Muda in Kedah but slow in other areas.

Outlook for 2011
With the recently adopted policy to not allow the swapping of Malay reserve land, the prices of properties are expected to increase substantially due to a shortage of freehold land, especially in the Kota Setar district. The market is expected to be slow down next year as buyers in Kedah are owner-occupiers.

What property type, located where, will attract buyers/investors?
The middle and lower-middle-income group will go for semidees and terraced houses. In the commercial sector, it will be 2 or 3-storey shoplots in the urban and suburban areas. Industrial plots and ready-made factory/warehouse buildings in the urban/suburban areas and districts adjacent to Penang and Thailand will also be popular.

Wish list for 2011
•     Policies that are more supportive of growth in the property development sector;
•     Better delivery system in line with national standards as ease of doing business has to improve for the sector to grow; and
•     That the association’s views be considered by the authorities when drafting property development policies.

altDatuk Susan Wong
President, Shareda (Sabah)

The property market in 2010
In Sabah, the property market was vibrant in 2010. Domestic demand for properties is very strong due to the good earnings of the oil palm industry and other related trades.

Outlook for 2011
We expect the state’s property market to continue to be good and sustainable due to strong local demand. In Sabah, only about 5% to 10% of demand comes from foreign investors.

What property type, located where, will attract buyers/investors?
Terraced houses and apartments will attract the middle-income group, especially government officers who could get government housing loans to purchase houses in the price range of RM100,000 to RM500,000.
Luxury semidees, bungalows and condominiums with prices starting at RM500,000 attract the higher-income group and foreign buyers.

The hot spots would be within a 10km radius of Kota Kinabalu city centre. The others would be in Lahad Datu town, Sandakan town and Tawau town.

Wish list for 2011
•     That the banks remain strong and continue to give a 90% loan margin for the purchase of first and second homes and 70% for that of third homes;
•     That the government does not implement the 10:90 build-then-sell concept as it will affect cash flow and increase the financial burden of developers;
•     That palm oil prices continue to be attractive and make oil palm planters cash rich to maintain their strong local buying power;
•      That the government provide more infrastructure, roads and basic amenities like water and electricity;
•     That Sabah Electricity Sdn Bhd (SESB) will levy a more reasonable rate for electricity connection charges in Sabah. It is charging about RM4,000 per unit whereas in Peninsular Malaysia, Tenaga Nasional Bhd is only charging RM450 per unit;
•     For the land lease term to be maintained upon subdivision and change of land use like in Peninsular Malaysia where the freehold tenure land title still remains after sub-division; and
•     For lower freight charges as construction cost is 30% to 40% higher than in Peninsular Malaysia due to freight, transport and handling charges.

altDatuk Jerry Chan Fook Sing
Chairman, Rehda Penang

The property market in 2010
In 2010, demand for properties was very robust, especially for those on the island. Demand does not appear to be affected by rising property prices caused by escalating land cost.

Malaysians from other states and foreign buyers from Hong Kong, Singapore and the UK are investing in the property market here as well.

On the island, land is scarce but demand for housing is strong. Earlier guidelines have impaired both the developer’s ability to build and the buyer’s ability to buy property at affordable prices. Too much land has been lost to low density, low built-up property guidelines.

The government revised the residential guidelines in July 2010 from a plot ratio of below 1 to 2.8 with certain price controls but it will still take about two to three years before these products are available on the market.

Investors are switching their attention to properties on the mainland and demand is catching up very fast. However, the situation is complicated by industries competing with the housing sector for the use of land. The state has earmarked large tracts of land in Seberang Prai Selatan for industrial use; therefore, Seberang Perai Tengah and Seberang Perai Selatan will see demand for housing.

Outlook for 2011
altDemand will remain strong both on the island and mainland. Hotels and F&B outlets are reporting vibrant business with an increasing inflow of tourists. The thriving economy means we will see more investments in real estate. Penang being a small and highly industrialised state offers a secure and stable climate for property ownership and investment. For 2H2011, we do not foresee any softening of the local market. Limited land resources in Penang will continue to push prices up.

What property type, located where, will attract buyers/investors?
Many new and iconic projects have been launched, especially by big players like IJM Land, Mah Sing Group Bhd, E&O Property Development Bhd and S P Setia. These feature new concepts, higher levels of comfort and luxury and new price benchmarks.

While properties in the northeast district of the island remain highly sought after, supply is limited and buyers will have to look at areas like Balik Pulau and Teluk Kumbar in the southwest district, or even the mainland. The catalysts for growth on the mainland are the second Penang bridge, which is now coming up, and the opening of more industrial sites. The second bridge will open up the southern part of Penang; Batu Kawan, Seberang Perai Tengah, and Seberang Perai Selatan on the mainland; and northern Perak.
There is pent-up demand from the middle-income group for properties priced between RM200,000 and RM500,000 as there is a gap in the supply of such units. This situation arose from the old residential guidelines, which set strict limits on built-ups in the case of medium-cost condominiums.

Wish list for 2011
•  That the state review existing guidelines and do away with unnecessary requirements;
•  That the state open up more land for development by improving the infrastructure to other parts of the island or allowing more land reclamation;
•     To review the restriction on hillslope developments in certain areas;
•     That developers be given greater freedom to build for a wider range of price, design, built-up and locations to better respond to market needs; and
•     That with the proposed establishment of the Penang State Housing Board, the state can take over the role of providing and managing public housing.

altZaidi Ahmad
President, Sheda (Sarawak)

The property market in 2010
The improved economic climate saw an increase in launches which were held back during the financial crisis. Sales generally reached 65%. There was a significant increase in new projects in the booming Greater Tabuan Jaya/Samarahan areas in the southern part of the state capital of Kuching. As land is scarce and expensive in the urban areas of major towns, most developers are now focusing on the outskirts.

Besides Kuching South, new residential and commercial projects can be seen along Airport Road, Kuching-Serian Road, Batu Kawa areas, Matang and Petra Jaya, all in Kuching. There were some new launches in the other divisions of Bintulu, Miri, Sibu and Mukah as well.

The year also saw the launch of two major developments in 3Q2010 in Kuching — Tabuan Tranquility, consisting of 242 mixed residential units and 76 commercial properties on a 162-acre site along the Kuching-Samarahan Expressway, and The Summer Mall, a 3-storey shopping mall located along the Kuching-Samarahan Expressway with a total built-up of 500,000 sq ft and to be ready by 2012.

The year also saw terraced houses selling at record prices of more than RM500,000 in Kuching. Projects in prime locations with better designs, bigger built-ups and added features enjoyed good sales. Most launches are aimed at the mass market, consisting mainly of terraced houses priced below RM250,000 in the secondary suburban areas.

The prices of commercial properties rose slightly in 2010 in the busy areas. Units in Kota Samaharan are closing the gap with Kuching, with prices reaching almost RM1 million in projects along the Kuching-Samarahan Expressway.

Outlook for 2011
The upturn is envisaged to continue, with improving consumer confidence. The momentum experienced in 2010 is expected to continue throughout 2011, strengthened by the various catalysts in Budget 2011, such as the First Time Homeowners Scheme for homebuyers with a household income of less than RM3,000 and a 10% down payment for houses below RM220,000 guaranteed by the government. This augurs well for the market as the majority of houses fall under this category.

The exemption of a stamp duty of 50% on instruments of transfer and loan agreements for residential properties not exceeding RM350,000 will encourage more people to own residential properties. However, properties below this price are not easily found in the more affluent and upscale locations. Higher loan entitlements for civil servants of up to RM450,000 and an increase in the quantum for renovations from RM10,000 to RM20,000 will boost the sector.

The increase in graduates entering the job market will contribute to demand for housing. Low interest rates for fixed deposits and lower returns from financial institutions are likely to boost investment in property.

The prices of residential and commercial properties should remain stable with a slight upward trend due to greater demand, rising cost of living and higher cost of land, building materials and manpower.
Overall, 2011 looks promising.

What property type, located where, will attract buyers/investors?
In the absence of proper data, the comments are assumptions arising from the market in general. The mass market for residential units priced below RM250,000 remains the preferred choice of buyers with a household income of RM3,000 to RM5,000 a month. Landed property, 1 or 2-storey terraced and 1-storey semi-detached houses are the most popular, while fully furnished apartments and higher-end 2-storey semidees targeting the upper-income group and niche products with lifestyle concepts will also be increasingly popular.

As mentioned earlier, developers are moving to the suburbs due to higher land costs and the scarcity of land in the urban areas. In Kuching, localities at Kuching South in the Greater Tabuan Jaya/Samarahan areas are favoured sites. Areas along Kuching-Serian Road, Batu Kawa and Petra Jaya and upcoming Samariang will see more developments.

Demand for lower-end housing, particularly landed properties from RM40,000 to RM47,000 and those selling for RM80,000 to RM100,000, remains strong. Those with household income of less than RM2,500 a month form the majority of the lower-income group seeking affordable housing. The Housing Development Corporation (HDC) Sarawak (865 units) and the private sector (147 units) built 1,012 units of low-cost houses in 2010 to meet such demand. The government through HDC and the private sector will build an additional 1,108 low-cost houses under the economic stimulus package in a move to boost the construction sector in the state and to meet demand. These houses will be built in Kuching, Mukah, Bintulu, Samarahan, Song and Kanowit.

Wish list for 2011
•     That the prices of building materials and transport cost do not go up despite a reduction in subsidies;
•     That the government assume the responsibility of providing low-cost housing;
•     That approvals will be quicker in the interest of business investors;
•     That stamp duties on memorandum of transfer and loan agreement/memorandum of charge will be removed;
•     That the stamp duty on construction and service contracts be maintained at RM50 indefinitely and that the ad valorem stamp duty of 0.5% be repealed;
•     That utility companies bear the cost of constructing their distribution networks and infrastructure/installation works in development projects as developers should not be made to pay for the construction of such assets;
•     For a National Homeownership Campaign to promote home ownership with the provision of a one-time monetary grant of RM20,000 each to help first-time homebuyers and tax relief on interest on housing loans; and
•     That the state review upwards the housing density of land development in the state and review the development control standards in tandem with present-day needs.

altDatuk Sekarnor Che Omar
Chairman, Rehda Kelantan

The property market in 2010
There was minimal growth of around 10% to 20% in the Kelantan property market.

Outlook for 2011
The property market in the state will be status quo because of limited supply due to stringent requirements and control. In a way, this is good to ensure only genuine housing developers do business. We also observed a new lifestyle trend here, whereby the public is beginning to consider owning apartments and condominiums.

What property type, located where, will attract buyers/investors?
The main property type in Kelantan will still be 1-storey terraced houses targeted at the middle and low-income groups. The hot spots will be around Universiti Malaysia Kelantan such as Bachok and Jeli.
In the town area, medium-cost apartments and condos priced between RM150,000 and RM350,000 are also in demand by Kelantanese living in the state and those working in major cities such as KL, Johor Baru and Penang. The apartments are used as holiday homes when they balik kampung since there are few hotels in Kelantan and these are usually fully booked during the holiday season.

Wish list for 2011
I wish to remind those who are planning to own a house to do so as soon as possible. Price increases are inevitable as some factors are beyond the control of the developers, such as rising cost of land and building materials.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 839, Jan 3-9, 2011

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