Sungai Besi airport becomes township?

Multiple agreements were signed on 15 June within the Economic Planning Unit of the Prime Minister’s Department to begin the transformation of the old Sungai Besi airport into the Bandar Malaysia township.  

1Malaysia Development Berhad (1MDB) announced that the strategic development will contain a number of interesting elements to further fortify Kuala Lumpur’s worldwide competitiveness and to draw in foreign businesses and investors.  

Some of the documents signed were the sale and purchase agreement (SPA) with the Federal Land Commissioner for the handover of a 200.3 ha plot of airport land to 1MDB as the master developer. The agreement also covers the acquisition of a 303.5 ha land parcel in Sendayan to replace the site.

Furthermore, a master relocation agreement was signed with the Defence and Home Ministries to develop eight replacement sites.  

The signing was witnessed by Tan Sri Lodin Wok Kamaruddin, Chairman of 1MDB and Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop. 

NEW HDA Protecting Purchasers

The Housing Development Act (HDA) will be amended to make sure that developers are held liable for their actions, according to Housing and Local Government Minister Datuk Chor Chee Heung.

Mr. Chor said the amendment, which will be tabled in Parliament before the end of the year, would bring in criminal liability for developers who abandon their projects.

“This would include a jail term and fine,” he said.

“We will see fewer abandoned projects,” he commented without elaborating on the details of the fines.

Currently, 161 projects were abandoned nationwide. “Of the number, 72 have been revived,” noted Mr. Chor.

He also said that developers are required to pay a deposit of RM200,000 to the ministry prior to the issuance of permits.

“This deposit will be increased,” said Mr. Chor.

Additionally, the act would be revised to ensure that developers are professionals who have a good understanding of the business.

“We do not want purchasers to end up suffering,” he said, adding that to date, errant developers are only blacklisted.

Govt. mulling incentives for green buildings

The Malaysian government is planning to provide incentives to developers who build homes and facilities that adhere to the Green Building Index (GBI).

“The design and technology used in such eco-friendly buildings may cut power consumption by up to 60 percent and save water usage by 65 percent,” said Deputy Prime Minister Tan Sri Muhyiddin Yassin.

He said that more “green” buildings should be developed in Malaysia, as they can save costs and contribute to promoting better environmental quality.

“Building constructions in our country should consider going down this road,” he said at the opening of the Diamond Building.

Mr. Muhyiddin said the Diamond Building is a state-of-the-art development which features green building elements to permit an efficient usage of water and energy, a step up from conventional buildings. 

The Diamond Building is the recipient of a certification issued by green building technology authorities in Malaysia and Singapore. 

Furthermore, it is the government’s third green building, following the Low Energy Office (LEO) building, which houses the Energy, Green Technology and Water Ministry, and the Green Energy Office (GEO), which houses the Malaysian Green Technology Corporation. 

Luxury property buyers undaunted by higher interest rates?

High-end property buyers seem unaffected by the higher cost of funds, given the recent success of launches in Kuala Lumpur, even at new benchmark prices.

The recent high-end property launches, which include a condominium development and a landed property, have led many property experts to talk about the high take-up rate despite a 25 basis point rate increase earlier this month.

The launch of S P Setia’s 708-unit residential tower, which is part of the KL Eco City (KLEC) project, saw priority customers taking close to three-quarters of the units with a gross floor area (GFA) of between 650 sq ft to 1,200 sq ft, which were priced at around RM1,200 psf, 10 percent higher than the initial price. Surprisingly, the bigger loft units were all sold out, priced at more than RM300 psf.

The demand for luxury condos in prime areas saw YTL Land’s 466 condominiums at Capers@Sentul East, launched last month, sold out in less than one week.

Even landed properties at Desa Park City showed little signs of price relief. It’s Mansions @Park City Heights listed between RM2.7 million and RM7.5 million recorded an extraordinary 86 percent take-up rate at its pre-launch this month, said Maybank-IB.

A major selling point for KLEC and Capers, aside from better security and amenities, has been Kuala Lumpur’s proposed mass rapid transit (MRT) blue line. Work on the main line linking KL and Kajang to the south-east will begin this year and will be completed by 2016.

"Hwang-DBS's Ms Yee, commented that investors responded positively to the MRT, and are eagerly monitoring the development in the Economic Transformation Programme."

The consequent rate hikes are not to detrimentally impact demand, as borrowers will see a subtle increase of RM100 to RM200 per month on the monthly mortgage. However, that Bank Negara Malaysia will raise the overnight policy rate (OPR) by another 50 basis points (BPS) to 3.5 percent this year.
In conclusion, the pricing trend will continue especially within Penang and the Klang Valley. “Anything priced below RM900 psf tends to be (quickly) taken up by locals.”

No worries of loan Repayment?

Young adults in Malaysia are eager to acquire their first homes under the My First Home programme. However, they are worried that they might have difficulty handling the monthly payments, due to the high cost of living.
Cheaw Wen Guey, a Malacca Multimedia University Research Officer who earns around RM2,100 a month, said he would be comfortable in a home in the outskirts of Kuala Lumpur, provided there was easy access to public transport.

“There should also be other amenities like supermarkets located nearby,” said the.

“For those who earn over RM3,000, the loan amount can be reduced accordingly,” said Nick Ong, a 27 year-old IT consultant. “Likewise, (for) those who earn below RM3,000 (they) can still get the 100 percent loan. I think this is fair.”
Sindhu Kumar, a 27 year-old software engineer, suggested that those who purchased their homes prior to the implementation of the initiative should be allowed to have their loans worked into the scheme.

“This scheme is good, as it encourages younger people to buy homes sooner,” he said.

Chang Kim Loon, Secretary General at the Home Buyers Association, said the scheme ensures adequate, affordable homes and encourages home ownership.

“However, the homes should be fairly located, with proper infrastructure and public transport,” he said.

Kwan Foh Kwai, President of the Malaysian Master Builders Association, "estimated that homes costing RM220,000 will have an average area of 850 sq ft."

Demand On high end property remain strong??

The demand for high-end condominium and serviced residences in Kuala Lumpur remains strong, said Christopher Boyd, Executive Chairman at CB Richard Ellis (CBRE) (Malaysia).

“Take-up rates range from 65 percent-88 percent as of the end of the first quarter of 2011,” he said at the Eastern & Oriental Bhd’s “Invest in Malaysia, Invest in Kuala Lumpur” Forum.

He cited Soho@KLCC and M Suites serviced apartments as prime examples. Soho@KLCC reported 85 percent sales with its 300 condominiums having a selling price of between RM700 psf and RM850 psf. M Suites, located within the Ampang Hilir enclave reported 70 percent sales with 442 service apartments having an average price of RM850 psf.

According to a report by CBRE, the total supply of existing condos and serviced residences, which have an average price of RM350 psf or higher, in Kuala Lumpur rose four percent to 32,742 units since end-2010.

About 44 percent, or around 14,514 units, are located in the Golden Triangle, Ampang areas and the CBD, while 34 percent, or approximately 11,121 units, are located in Mont’Kiara and Sri Hastamas.

Approximately 38 percent of the available condominiums and serviced residences are listed from RM350 psf to RM499 psf, with an additional 38.6 percent listed from RM500 psf to RM799 psf.

Meanwhile, more than 24 percent were listed at RM800 sq ft and up, which is categorised as luxury residential units, with many located in the Suria KLCC shopping centre area.

Mr. Boyd said the average capital values for KLCC, Bangsar and Mont Kiara in Kuala Lumpur – the three main condominium markets – have remained stable since the global financial crisis in 2008.

A CBRE report last year said there were 2,156 transactions for luxury condominiums in KL with an average value per transaction of approximately RM1.09 million.

Proposed Railway LRT,MRT and KTM (MALAYSIA)