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Weekly Malaysia News(07th March-14th March)

11th March 2014

Asian Property Investors Should Be Welcomed, Says Aussie Minister

MELBOURNE: Foreign investment, which could see a proposed mini-city built in Melbourne's western suburbs, should be welcomed, not feared, Victoria's Planning Minister Matthew Guy says.

A South-East Asian developer planned to build a residential and commercial centre in Yarraville, eight kilometres from Melbourne's central business district, on an abandoned 24-hectare industrial site, The Age reports.

Guy said the potential development could transform the suburb while providing a jobs boost.

"My view is that we should welcome the overseas investment that meets our own guidelines.

"This is about jobs, it's about hundreds of new jobs, it's about providing higher density in areas that can sustain it, around transport, around existing infrastructure, and so I think it is welcome news that we can get new developments like this up and running in Melbourne," he said.

He denied overseas buyers were pricing locals out of the market, saying an increase in the high-rise apartment market and the extra housing lots in growth areas had helped to stabilise house prices.

Reserve Bank of Australia Governor, Glenn Stevens, said wealthy Asian investors were bidding up Australian home prices, with inner city areas feeling the greatest pressure.

Stevens has, however, warned borrowers against taking on too much debt because they assumed house prices would always rise.

"People need to keep in mind that prices don't just rise, they can fall, they have fallen, and we need to be careful we don't take on too much leverage," he is reported in the Herald Sun newspaper as saying.

Stevens told a parliamentary hearing in Sydney on Friday that the wave of Asian investment in Australia real estate was akin to investment by Russian oligarchs in London properties.

A frequent flyer, Stevens said he often noticed advertisements in Asian countries tempting investors to buy Australian real estate.

"I travel through Singapore a number of times a year on the way to interminable meetings in Basel. It is quite noticeable when you pick up a Singaporean newspaper on the plane to see advertising for Australian property, as well as property in other countries.

"So there is no doubt that wealthy foreign investors have an interest here," Stevens said.

But most of the interest was confined to inner city areas, and around universities in particular.

"If you are sending your children to study in Australia, you are probably an affluent person and quite possibly, in some cases, you have purchased an apartment in which they would live or which you might come and stay in when you come to visit them. There are people who are wealthy enough to do that," he said.


12th March 2014

Bulk-buying curb won’t affect developers

PETALING JAYA: The possible restriction on bulk-buying of properties by investor clubs will not affect members of the Real Estate And Housing Developers' Association Malaysia (Rehda), said its president Datuk Seri Michael Yam.

He insisted that Rehda members do not sell in bulk and rather sell directly to an investor if they were looking for en bloc buyers.

"I would go to an investor, a private equity fund, an insurance company or whatever, instead of going through a normal financial arrangement where I borrow from the bank and pay interest. Here is this investor maybe an institution, maybe even EPF, who will buy from me. I don't mind giving him a discount equivalent to the bank interest that I would have had to pay. That's a financial engineering thing.

"Property investor clubs are a different marketing tool. Some people may want to use it, but most of our developers don't use it," he told reporters at the sidelines of the Rehda Property Industry Survey 2H 2013 briefing yesterday.

On whether there are developers engaging investor clubs to sell properties in bulk, he said: “I don’t know, if there are, they are not our members. Not every developer is a member (of Rehda).”

Last month, Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan announced that the government is considering ways to restrict bulk-buying of properties by investor clubs, which has resulted in false demand and price hikes.

Measures being looked into include restricting bulk selling to groups or individuals for example, developers who intend to sell more than a stipulated number of units to one person or a group must obtain prior approval from the Controller of Housing.

This condition may be prescribed as a mandatory requirement in every advertisement and sale permit for housing development.

"We've written to the minister. If they want to do that, we are supportive but let's do a few things. They must clear it (application to sell in bulk) very quickly, don't hold up the process…For example if you don't give approval (for bulk sales) within seven days, we consider it approved. We don't want another mechanism to hold back, another red tape," said Yam.

He said the limit on the number of units allowed for bulk sales could be six units per buyer, but details are still being discussed with the ministry.

Rehda Wants Gst Be Implemented Gradually

PETALING JAYA: The Real Estate and Housing Developers' Association Malaysia (REHDA) has proposed that the goods and services tax (GST) be implemented gradually as it will have an adverse impact on the affordability of housing to the people.

Its Finance and Investment Committee Chairman, Datuk Ng Seing Liong, said the six per cent GST, which would be implemented from April 1, 2015, was quite high and the consumers would be burderned by it.

"The developers' margins will also be lower with the GST," he said at a media briefing on 'GST -- Impact on the Housing Industry' here Monday.

Ng said REHDA has submitted its proposals on the GST to the government and was awaiting the response.

"REHDA has requested the Finance Ministry give serious consideration to the proposals as the implementation of GST in its current form will cause financial hardship, adding to the costs of development resulting in overall increase in house prices and will be eventually passed on to the buyers," Ng said.

He said one of them was that REHDA wanted the government to extend the zero-rated goods and services to major cost components of property development projects like steel bars, iron, cement, concrete and aggregate sand or consider provisions for some relief to the suppliers to help them deal with cash flow issue.

"The suppliers may end up passing the costs in the form of higher prices," he said.

The industry also wanted the stamp duty on transfers of real property be maintained at the current maximum three per cent instead of the proposed four, he said.

Ng said the imposition of GST would add another layer of cost as there were already multiple 'taxes' imposed such as real property gains tax, Construction Industry Development Board levy and service tax.

Another proposal, he said, was to allow developers adopt a fixed allocation -- either built-up, land area (acreage) or any method (segregation between residential and commercial propery development) -- in claiming residual input tax credits as this would help ease the administrative burden when claiming residual input tax.

For sale purchase agreements of land entered prior to appointed date of April 2015, payments received of invoices issue prior to the appointed date where the supply of land is made available after appointed date will not attract GST, he said.


Najib Announces RM200 Million Bumiputera Business Expansion Fund

KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak on Monday announced a RM200 million Bumiputera Business Expansion Fund to help technology-based Bumiputera companies to expand their business to international level.

For a start, RM25 million allocated to the Bumiputera Agenda Steering Unit (Teraju) in the Prime Minister's Department, will be managed by the Malaysian Technology Development Corporation, he said.

"The fund will provide flexible loans without any collateral and the repayment period is six years starting from the second year after the loan has been disbursed.

"However, every project proposed must have profit prospects. The proposal paper must focus on business expansion," said Najib, who is also the Finance Minister, after chairing the Bumiputera Economic Council meeting at Parliament House.

The prime minister said the business sectors eligible to receive the financing are technology-based in the biotechnology field, green technology, oil and gas, electrical and electronics, information and communications technology, nano technology and food technology.

Najib also announced another seven Bumiputera companies that would receive the Facilitation Fund Grant totalling close to RM20 million to implement various projects.

The companies are Grand Ten Holdings Sdn Bhd, PEPS-JV (M) Sdn Bhd, imension Bid Sdn Bhd, Faiza Marketing Sdn Bhd, Mansalin Education Sdn Bhd, Al Ameen Development Sdn Bhd and Majpadu Bricks Sdn Bhd.

"These companies have signed an agreement with Teraju to implement their proposed projects that are expected to attract private investments totalling RM128.7 million and can create nearly 700 job opportunities.

"I hope with the availability of the Facilitation Fund Grant, more Bumiputera companies will come forward with their proposals for high-impact projects that have vast potential to stimulate the country's economy and be beneficial to the people, particularly with regard to creating job opportunities," he said.

The Facilitation Fund was introduced in August 2012 with a whopping RM2 billion, comprising 15 per cent grant from the overall project cost valued at RM5 million at the least and has infrastructure, machinery and equipment components.

Najib said that up to February this year, RM1.4 billion from the Facilitation Fund has been approved to Bumiputera companies to undertake 132 projects in collaboration with Teraju, regional economic corridors and Public Private Partnership Unit (UKAS).

He said the projects entailed RM15.12 billion in total private investments in the oil, gas and energy, property development, construction, wholesale and retail sectors.

"Under the Facilitation Fund programme, Teraju and the Bumiputera companies involved are expected to provide more than 23,000 new jobs to locals.

"Every initiative announced reflects the government's concern and its continuous effort and emphasis on the empowerment of the Bumiputera agenda as an important national agenda.

"I'm confident the new measures and the synergy created among the government agencies will benefit Bumiputera entrepreneurs in propelling their business to a more progressive level," he added.


13th March 2014

Decide on the best approach to explain GST — Shahrir

THE government has to decide the best and effective approach to explain to the public on the Goods and Services Tax (GST) to be implemented in April next year.

Tan Sri Shahrir Abdul Samad (BN-Johor Baharu) said this was to ensure the people, as well as traders, understand what GST was about and its impact on their daily life.

“There should not only be information sessions, but to ensure that the approach can make the people understand, it has to be monitored,” he said when debating the motion of thanks on the royal speech in the Dewan Rakyat here yesterday.

Shahrir suggested the government to organise a separate information session, especially for traders who would impose the tax on their goods.

“When information for the business community is passed to consumers or community leaders, there will be misunderstanding,” he added.

He said a survey could be carried out to determine whether those who attended the GST briefings understood what GST was.

The Dewan Rakyat sitting continues today. 

— Bernama

Seri Austin - Winners of Asia Pacific Awards

In the Asia Pacific Property 2014-2015 Awards, Dynasty View Sdn Bhd (a wholly-owned subsidiary of UMLand Bhd), has successfully being awarded in two categories of Property Single Unit and Residential Development for their luxurious Ametrine Bungalow Development at Seri Austin Hills of SERI AUSTIN township.

The International Property Awards are open to residential and commercial property professionals from around the globe. They celebrate the highest levels of achievement by companies operating in all sectors of the property and real estate industry. The awards are given for the quality of design, construction and presentation of individual properties and property developments, interiors, architecture and marketing. The awards are recognitions of achievement in a particular category or discipline, decided by a panel of more than 50 well-respected experts judging panels represented by well-established professional bodies around the world. The gala dinner for the Asia Pacific Property Awards will be held in May 2014 at Shangri-la Hotel Kuala Lumpur.

Early this year, SERI AUSTIN has been recognized as the 1st Role Model for the Smart and Healthy City and Community Township. Two recreation parks in SERI AUSTIN have also been gazette as 1st Smoke-free parks in township in Iskandar Malaysia. The Smart Healthy City aims to enhance the people’s quality of life, and to achieve a sustainable economic and technological ecosystem that would ultimately create smart, connected and inclusive communities.

SERI AUSTIN was the 1st Township in Southern Johor to offer free High Speed Broadband to its residents through signing of High Speed Broadband (HSBB) Unifi services with Telekom Malaysia in October 2010.  SERI AUSTIN was also the 1st Township to launch and implement “ Effective Microorganism” together with MBJB  in November   2008, which was officiated by the then Mayor of Johor Bahru Dato Mohd Naim Bin Nasir.  EM is used wisely by many countries worldwide as an alternative to chemical in agriculture, environmental remediation and Waste water treatment and many more.  Further, SERI AUSTIN implemented the 1st designated bicycle lane in Johor for safety cycling in April 2012.  The bicycle lane stretches approximately 7.3 km around the Seri Austin Township and is well designed with proper bicycle signages, integrating with the existing roads. 

During the year 2013, Seri Austin Residence was awarded “The Most Livable, Modern Residential Enclave” at the Malaysian Reserve Property Press Awards 2013.   It is one of the most meaningful property awards in Malaysia as it is not given out by an association but rather awarded by the Property Press, which has been following the major property events in the year.  The award this year acknowledged the company’s success in making Seri Austin Residences an icon in Johor Bahru.

SERI AUSTIN was also awarded SME Sahabat Negara Award by SMI Association Malaysia at Sunway Convention Centre, Subang Jaya. The award was bestowed on corporation which have contributed significantly and played a prominent and proactive role in the promotion and development of SMEs community in the country that enhance SME’s competitive edge and operation efficiency in pursue of globalization simultaneously.

SERI AUSTIN fully embraced the lifestyle concept of “We build, We care, We love” as we believe in “Every Single Life is Precious”. We will continue to build innovative homes of quality design and affordable pricing to enhance your 'Simply Better' lifestyle. 

Dubai's Arabtec Signs MoU with Egypt's Defence Ministry to Build One Million Housing Units

KUALA LUMPUR: Dubai's leading listed construction group Arabtec Holding PJSC (Arabtec), is set to develop one million housing units, in various locations across Egypt, with a total value worth 280 billion Egyptian pounds (RM132.1 billion).

The recently formed subsidiary of Arabtec Holding 'Arabtec Real Estate' will undertake the development of this project, which will be developed in phases over a span of five years, Arabtec said in a statement.

The statement said that it will be Arabtec Real Estate first project of its kind, which will see the construction of housing for the middle-income group and create over one million job opportunities for the Egyptians.

The memorandum of understanding (MoU) was formalised Monday between Arabtec and Egypt's Defence Ministry under the directives of Abu Dhabi Crown Prince and Deputy Supreme Commander of the United Arab Emirates (UAE), General Sheikh Mohamed bin Zayed Al Nahyan, and in the presence of Egypt's Field Marshal Abdel Fattah Al Sisi.

"This historic project will be a major boost to the Egyptian economy," Arabtec's managing director and chief executive officer Hasan Abdullah Ismaik was quoted as saying in the statement.

Ismaik said the project is seen as a "historic turning point" in the pursuit of "growing the company into one of the leading holding groups in Egyptian region."

"Egypt is held in high regards by the leaders and citizens of the UAE. The two countries are linked together by historic bonds of fraternity and friendship," Ismaik said.

He also believes that the Egyptian economy is poised for a significant rebound, particularly with the current governmental policies geared towards encouraging investment in the property development sector.

The statement added that the construction work is scheduled to begin in the third quarter of this year. The first batch of units will be delivered in early 2017, while final delivery of all units will be achieved before 2020.

Ismaik also praised the continuous efforts of the UAE under the leadership of its President Sheikh Khalifa bin Zayed Al Nahyan in supporting their brothers in Egypt.


Retiring Poor Or Comfortably - It's Your Choice

KUALA LUMPUR: So many of today's young adults live beyond their means.
They are decked in brand names from head to toe, and live in the absurd fear of jeapordising their reputation should they fail to do so.
They feel compelled to own the latest gadgets and drive fancy cars, even if it costs them a lifetime of loan instalments.
This is worrisome in that not only do their "live for the moment" motto blinds them from seeing the importance of retirement planning, it also 
sends them on a downward spiral where their finances are concerned. Many of them have been declared bankrupt from a very young age due to overspending.

According to the Department of Insolvency, 23,397 of those declared bankrupt from 2007 to September 2013 were between 24-34 years old. Of the figure, 1,322 were 24 years old.
A study by Prof Dr Jariah Masud, a senior research fellow at the Gerontology Institute of Universiti Putra Malaysia, found today's younger generation focused on day-to-day spending without sparing a thought for future finances.
Retirement planning is put on the back burner as priorities are given towards career advancement, marital commitments, property ownership and similar undertakings.
"Today's generation is a 'consumer society' that is obsessed with lavish lifestyles. The way they value money is also different from the previous generations.
"Those from my generation see the value of money in savings, while today's youths see it in terms of purchasing power," she told Bernama.
The "AXA Retirement Scope 2010", a global retirement study by the AXA Group, found that of the 38 percent of Malaysian workers who planned for their retirement, many of them only started saving as they were nearing 40.
The study, which was conducted in 26 countries across Europe, U.S. and Asia, also found that 46 percent were only ready to save for their retirement as they approached 50 years old.
Failure to build financial reserves from an early age can make the realities of retirement age harder to handle.
The situation is worse for those without a pension. Many are shocked to find how quickly they deplete their Employees Provident Fund (EPF) savings and subsequently find themselves forced to rejoin the workforce.

It is rather surprising how many workers falsely believe that their EPF savings is enough for retirement.
Some believe it is even enough to cover the expenses of their entire family and thus there is no need to build their financial reserves elsewhere.
The Head of EPF's Retirement Research Section Farizan Kamaluddin said studies found that of the 13 million EPF contributors in Malaysia, only 7.36 percent have an excess of RM150,000 in savings at 55, while 70.89 percent have less than RM50,000.
"Some of them cannot help it (having little savings) because it depends on their contribution. If their salary is low, their contribution is low too," she said.
The age for withdrawal of EPF savings has remained at 55 since its establishment in 1951. This is despite the government extending the retirement age to 60 and the country's life expectancy increasing to 75.

With the rising cost of living, a longer life expectancy, low salaries and early retirement at 55, many would not be able to make their EPF savings last, said Farizan.
It was found that 50 percent of retirees deplete their EPF savings in the first five years, thereafter having to work again.
"What causes their savings to be drained so quickly is their failure to plan their finances accordingly, and using the money as a means to fulfill their desires and not as a replacement for their income," she explained.
Therefore, there is a need to vary their sources for financial reserves.
They also need to be prudent with their withdrawal of EPF savings before retirement, even if it for settling their housing or education loans.
"If they have other forms of savings, they should see their EPF savings as the last resort for making withdrawals," she said.
Farizan said EPF has also set a new quantum for their basic savings at RM196,800 as the minimum amount a contributor needed to have in his EPF account by age 55, effective January this year.
To prevent the fast depletion of EPF savings, EPF has also introduced a more flexible form of withdrawal upon reaching 55 years old where contributors can choose to withdraw completely, monthly, or partially.

Although many government servants may feel more at ease under the pension scheme, they could also get into financial trouble if they chose to live a lavish lifestyle and don't prepare for their retirement.
The Director of the Gerontology Institute of UPM, Prof Dr Tengku Aizan Hamid said civil servants needed to be wary of the drop in income upon retirement.
"We cannot carry our present lifestyles into old age. Would you be able to alter your lifestyle when the pension you receive is considerably less than your present income?
"There have been cases where a pensioner failed to settle his credit card debts that ultimately had to be borne by the children, simply because he wanted to maintain his extravagant lifestyle," he said.
The government, in helping increase employee contribution, has implemented the minimum wage effective January this year following the increase in retirement age to 60.
The government has also set up the 1Malaysia Pension Scheme for the self-employed with no fixed income to voluntary contribute in the EPF. 
It has also encouraged youths to make long-term investments via the Private Retirement Scheme.
It is easier to make money while we are young and our health is at its peak. To rely on our health at an old age can be quite a gamble, so planning wisely and early for our retirement years can help ensure we are comfortable in our old age.

Malaysia's Ultra Wealthy Population Expected To Surge 33 Per Cent By 2023

KUALA LUMPUR: Knight Frank, a leading independent global property consultancy, has forecast that Malaysia's ultra-wealthy population will increase by 33 per cent in the next decade.
The ultra wealthy include ultra high-net worth individuals with US$30 million or more in assets excluding their main residence, as well as centra-millionaires and billionaires.
Knight Frank Managing Director for Malaysia Sarkunan Subramaniam said nine new individuals joined the rank of Ultra High-Net-Worth Individuals(UHNWI) in Malaysia last year, bringing the total to 557, while the higher wealth bracket increased by three to hit 206.
Speaking to reporters at the launch of the Knight Frank Wealth Report 2014 here, he said these new ultra wealthy individuals in Malaysia come from sectors like oil and gas, manufacturing, services and information and telecommunications technology.
The report says although globally about 15 per cent of high net worth individuals plan to change residence, Kuala Lumpur remains home to 53 per cent of Malaysia's ultra high net worth individuals, and the situation is forecast to remain approximately the same in 2023.
Meanwhile, Goh Cheng Ean, United Overseas Bank (Malaysia) Bhd Executive Director and Country Head of High Networth Banking, said the Malaysian ultra wealthy are more sophisticated and invest with a long-term view.
"In the past, investments were made within the region of their comfort zone but now they have more confidence and exposure to invest in developed markets.
"With continued signs of economic recovery in the US and Eurozone, we foresee increasing fund flow from emerging markets into developed markets," she said.
On the Prime International Residential Index (PIRI), Kuala Lumpur has climbed two positions from last year and is ranked 26th globally, while prices were up 5.5 per cent in 2013 compared to only one per cent growth in 2012, according to the report.
Goh said properties in Malaysia remain attractive for local and foreign investors who believe in the country's long-term economic potential.
The appreciation in real estate prices in key economic centres like Kuala Lumpur and Iskandar Johor was driven by the the implementation of the government's Economic Transformation Programme, the rise of the middle class and rapid urbanisation, she said.
Property valuations in Malaysia, however, are still lower than in other economic centres like Hong Kong and Singapore, she added.
Elsewhere in Asia, Jakarta heads the PIRI, with growth of 38 per cent in 2013, with Bali at number three with a 22 per cent gain.
Indonesia's key markets continued to outperform the rest, the report says.

Matrade Targets RM400 Million Worth Of Projects In Myanmar

KUALA LUMPUR: The Malaysia External Trade Development Corp (Matrade) targets RM400 million worth of construction projects in Myanmar for Malaysian companies.
In a statement Wednesday, Matrade said the projects include residential, commercial, industrial parks and mixed developments such as hotels, office buildings and shopping malls.
The projects are owned by government-related agencies and private entities identified by Matrade, it said.
"Malaysian firms are in the best position to contribute to the development in Myanmar due to outstanding track record in undertaking various construction and infrastructure projects globally," said Matrade.
Last year, Matrade said, projects worth RM330 million were identified, adding Myanmar offers huge business potential and opportunities, especially in the infrastructure and property development sector.
"There is a surge in demand for modern residential and commercial properties due to the people's changing lifestyles and foreign investors' influx into the country," said Matrade.
Infrastructure development is given the highest priority by the government thus improving the social well-being of Myanmar citizens, it added.
Nine Malaysian construction companies will be joining a Matrade 
Specialised Marketing Mission to Myanmar on March 17-21, to meet project owners and assess projects that have been identified, as well as to participate in the Myanmar Infrastructure Summit and Exhibition in Yangon, the commercial capital.