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Malaysia | 2014/2015 Penang Property | My Musings On Penang Properties - 9 reasons for Penang real estate in gloomy and doomy

9 reasons for Penang real estate market in gloomy and doomy

We're coming towards the end of year 2013. As for year 2014, ever since the #Budget2014 annoucement the real estate market will be placed into regulated control. As with #Penang State government, she has taken additional steps towards damage control to curb property speculation. Below are the chronology of events that expect to take place:

1. 1-Jan-2014: [Malaysia] Stricter bank loan(effect with net purchase price instead of gross purchase price, example if gross purchase is RM1,000,000 with 5% discount then net purchase is RM950,000). The #SPA will be registered as RM950,000 instead of RM1,000,000 . 
2. 1-Jan-2014: [Malaysia] Increase in #RPGT. Check out http://www.vulcaninternational.blogspot.com/2013/10/penang-property-malaysia-real-estate.html for more details. Refer to table below: 
3. 1-Jan-2014: [Malaysia] No #DIBS(Developer Interest Bearing Scheme)
4. 1-Feb-2014: [Penang State] 5-year rule. Owners of affordable homes bought for below RM400,000 on the island and RM250,000 on the mainland would be barred from reselling their properties in the first five years of ownership. Chief Minister Lim Guan Eng said affordable and public housing owners who wished to sell their units during the moratorium RM400,000(only can dispose after 6th year), for mainland RM250,000 would have to appeal to the state government, and if given the green light, could only sell to qualified “listed buyers from middle-income group” who were registered with the state housing department. Lim said in a statement that the new rulings would cover future and past purchases.
5. 1-Feb-2014: [Penang State] 10-year rule. Future and past purchases of up to RM72,500 only can dispose after 10 years. That is to say that owners of public housing low and low-medium cost units bought for RM42,000 and RM72,500 respectively or less cannot sell their units for 10 years. Effective date should be based on SPA. 
6. 1-Feb-2014: [Penang State] “A two per cent levy will be imposed on the seller, for all properties(including land) sold within three years from the date of the Sales & Purchase Agree­ment(SPA) signed from Feb 1, 2014. Property bought with the SPA signed before Feb 1, 2014, will not be subject to this levy. This two per cent levy is not applicable to affordable housing. All levies will be collected by land office.
7. 1-Feb-2014: [Penang State] The new regulations also stipulate that foreigners(non-citizens) can only buy property valued at RM1mil or more, and the threshold is increased to RM2mil if it is a landed property on the island.
8. 1-Feb-2014: [Penang State] A three per cent levy would be imposed on properties bought by foreigners, but an exemption would be made if the property is for industrial use, or “promotes employment, education and human talent”, said Lim.
9. 1-April-2015: [Malaysia] #GST(Goods and Services Tax) of 6% to replace SST(Sales and Services Tax) which is 15 months to go.

This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .

VulcanInternational could be contacted at +6 016 451 1321 .

You're welcome to write your constructive comment below.

Malaysia | Penang 2013 Blueprint Development | One Penang, Two halves, Three links...what is it for me as investor/developer?

What is Penang state development plan moving forward? Penang state, Consortium Zenith BUCG Sdn. Bhd. and China Railway Construction Corporation International(#CRCC) together with Beijing Urban Construction Group are the prime movers. 

With future development in Penang been catered for rapid growth, any discerning investors and developers that concerned with their investment and development of the Penang state would be keen to know what are in store for them in the near future.

Lately we've KL's developers like #EcoWorld is coming over to Penang to buy lands both in island and mainland. News circulation mentioned that Eco World has acquired 5.26ha in Air Itam, Penang Island; 24.28ha in Seberang Prai, Penang. Another been #Tropicana (previously Dijaya) with their maiden project #Tropicana #218Macalister. On my part I'm working with developers from KL as they're keen to have their maiden projects both here(Penang) and Johor.

Few weeks ago media annoucement of major road projects and undersea tunnel in Penang(refer to attachment). Total estimate value is RM6.3billion to be built in Penang with target completion dates as follow:

(a) Third Tunnel Link: 6.5km of undersea tunnel to be completed by 2025. This third connection is between Gurney Drive(Penang Island) to Bagan Ajam(Butterworth).

(b) Gurney Drive-Tun Dr. Lim Chong Eu Expressway By-pass: 4.2km of expressway and a by-pass to be completed by 2022.

(c) Tun Dr. Lim Chong Eu Expressway to Bandar Baru Air Itam By-pass: 4.6km expressway and a by-pass to be completed by 2019.

(d) Tanjung Bungah-Teluk Bahang Paired Road: A four-land, 12km road to be completed by 2018. (The news for this came out in March, 2013 that caused price for bungalow land near the project increase from RM110 psf to RM140psf. I made some land transactions there). 

Also been mentioned is that Consortium Zenith BUCG Sdn. Bhd. jointly with China Railway Construction Corporation International(CRCC) together with Beijing Urban Construction Group to undertake feasibility studies and detailed design works(FSDD) for the planned Penang highway and traffic mitigation projects. 

"The FSDD is a critical component of the total project plan to ensure that we meet the requirements," said Consortium Zenith BUCG Sdn. Bhd. chairman Datuk Zarul Ahmad Zulkifli adding that initial phase of the FSDD project will take approximately a year and a half after which upon approval together with environment impact assessment(EIA) approval will then commence the initial phase of tunnel and road works.

There'll be 70/30 split on construction works between CRCC and Beijing Urban Construction Group.

The major infrastructure projects is also to improve connectivity and help to bring about development in Seberang Perai Utara(SPU). This balanced development is to give SPU a link after Seberang Perai Tengah has the 1st Penang Bridge and Seberang Perai Selatan has the 2nd Penang Bridge to achieve "one Penang, two halves, three links". Henceforth, the title of this blog message.

On the funding of this mega project, it'll be funded exclusively by local and international banks. In terms of funding concessions, the state government will award 110 acres of net leand in its permitted land bank on Eastern & Oriental Bhd's Sri Tanjung Pinang 2 and a 30-year toll concession to operate the tunnel with the same rate as that of the Penang 2nd Bridge.

This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .

VulcanInternational could be contacted at +6 016 451 1321 .

You're welcome to write your constructive comment below.

Property Development Company In Malaysia | Australia Property Market | SP Setia: WTF(What The Facts) about 50/50 contribution?

Quote: "The vision must be followed by the venture. It's not enough to stare up the steps, we must step up the stairs"...Vance Havner. The quote has been chosen as it's appropriate for this blog post.

By now #SPSetia has been fully grown to be "A-list" developer in Malaysia. It has been said that the company under its current CEO Tan Sri Liew Kee Sin has managed to position S P Setia at its pedestal. As a matured company pushing for its revenue to 50% contribution from local(Malaysia) and 50% from elsewhere is indeed a prudent and wise strategy as the saying "never put all your eggs into one basket." In the event Malaysia's market softening as with the hike of #RPGT(Real Property Gain Tax) the company still can cling on its revenue elsewhere to be in healthly balance sheet. He envisioned the 50/50 contribution five years ago.

It's known that SP Setia has its development in elsewhere in countries like Australia, Singapore, Vietnam and London(on massive #Battersea Power Station project joint-ventured with EPF and Sime Darby). Australia, Singapore and London are developed economies whilst Vietnam and Malaysia are developing economies.

In Australia, they've previously launched Fulton LN (http://vulcaninternational.blogspot.com/2011/06/current-australia-property-market.html) and now Parque(557 St Kilda Road) both in Melbourne. The units at Parque are with build up of 1,500 sq ft to 1,700 sq ft. It's a 332-apartment development. SP Setia is said to sold 331units within few months after the project was launched. 40% of the units sales came from Malaysia while the rest 60% was sold in Melbourne. To put icing on the cake, they hired renowned architect in Australia, Karl Fender to design Fulton Lane and Parque. This is to added value. Having top architects design SP Setia's projects are becoming a theme as it fits into the concept Liew is championing, which is having 5-start consultants to go along with a 5-star service and 5-star quality for its projects. Construction for Parque is expected to begin in early 2014 and end in 2016.

Having such good response, they're said to be looking for buy land in major cities in Australia such as Sydney, Perth and Brisbane.

To quote CEO Tan Sri Liew Kee Sin,"We definitely want to continue investing in Melbourne and London. These two markets are very good markets."

This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .

VulcanInternational could be contacted at +6 016 451 1321 .

You're welcome to write your constructive comment below.

Praque, 557 St Kilda Road

Penang Landed Property Investment | Mudah | Building For Sale In Penang

Malaysia | Penang | One of few pieces of land which encompassed more than half an acre of land off Green Lane Road (Jalan Mesjid Negeri), Penang is currently available for sale. With vicinity such as 24-hour Green Lane's #McDonald Fast Food Restaurant, Penang Free School, Heng Ee Secondary School, Convent Green Lane and situated at tranquility neigbourhood this place does indeed command good value for investment.

The current state of the land (see Fact Sheet below) has a three storey building erected at site.   

Fact Sheet:

Type Of Land: Freehold

Total Build Up Area: 14,337 sq ft

Land Area: 26,318 sq ft (0.6 acre)

Low Density: Per floor consists of 3 units. Total unit is 9 (three storey)

Floor Layout: Each unit has three rooms and three bathrooms

Carpark: 20 parking lots

Note: The sale is 'as is where is basis'

Copy of Proposal For Sale report is made available (compliment from VULCAN INT'L Real Estate Research Institute(Penang iProperty)) for interested prospect(s).  

Those interested in the property please contact Vulcan Lau, mobile: +6 016 451 1321 to arrange for viewing.

Penang Property | Malaysia Real Estate Investment | Budget 2014 Malaysia | RPGT and its cousin Stamp Duty

The dust has settled...almost. Now that we're digesting on the Budget 2014 announcement. One of the talkabout is RPGT(Real Property Gains Tax) and to much lesser extent Stamp Duty. 

Budget 2014 is said to contain six amendments to Real Property Gains Tax Act and two amendments to Stamp Act.

It has been highlighted in Malaysia's media that RPGT is to be increased with effect from 1-Jan-2014. The structure quantum of increase has been varied based on the following:

1-3rd year: 30%

4th year: 20%

5th year: 15

6th year: No Tax

(see table below, RPGT rates)

Prior to this the RPGT is pegged as:

1-2nd year: 15%

3-5th year: 10% 

6th year: No Tax

Foreigner's RPGT:

1-5th year: 30%

6th year onwards: 5%

This will hurt developers in promoting the project aboard since the exit plan with this new scheme requires foreigner to pay 30% flat RPGT for first five year.

The mechanism of 2014 RPGT rates is said to curb speculation of would be investors or flippers. It's used as step with measues to slow down the steep rise in properties prices due to false demand and excessive speculation fuelled by easy mortgages and previous low tax.  On the subsale of 70% of total transacted properties, the price might be increased due to scarcity of supply with developer been slowed down due to sale and thus will slowdown nation development. The 2014 RPGT is likely to dampen speculation but it's unlikely to stop house prices from escalating. 

Limiting of foreign buyers to buy property above 1 million due to their superior exchange rate. This new limit ruling doesn't really applies to Penang as Penang state requirement for foreigner to purchase condominium is above 1 million ringgit and for foreigner to buy landed property it has to be above 2 million ringgit. Foreigner under #MM2H programme in Penang will be able to purchase at lower than 1 million ringgit for condo and 2 million ringgit for landed property respectively.

Not much news been said about Stamp Duty which has two amendments. At the moment, stamp duty chargeable on the Sale and Purchase Agreements is RM10.00 each. In addition, the stamp duty chargeable on a memorandum of transfer(MOT) is based on property transacted value, with stamp duty of 1% for the first RM100,000.00, 2% for the next RM400,000.00 and 3% for amounts  exceeding RM500,000.00 .

DIBS has been removed. It was with understanding that developers offering DIBS had actually marked up prices by about 5% to cover the interest they paid when the properties were under construction.

#GST(Goods and Services Tax) of 6% to be implemented on 1st April 2015, which is 17 months to go.

This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .

VulcanInternational could be contacted at +6 016 451 1321 .

You're welcome to write your constructive comment below.

Malaysia Real Estate | Budget 2014 Malaysia Conundrum | What is there for real estate?

Scenario: Number of my investors are asking me on whether should they proceed with purchase of new development or sub-sale properties at the moment? 

My answer to them is why not wait for the budget 2014 to be announced first before you take any action(afterall is only one week to go) so that you've a clearer pictures on how property market going on then.

By next Friday, 25-Oct-2013 Malaysian will again vis-a-vis the 2014 budget (you can follow via #Bajet2014) that will be tabled. It has been quite a number for speculations of what are going to announce then. As from the perspective of Malaysia's real estate sector the following might be affected:

(1) #DIBS (Developer Interest Bearing Scheme): As we're awared our neighbour(Singapore) has banned on DIBS since 2009. The Malaysian government might follow the same path.

(2) #RPGT (Real Property Gains Tax): There has been talked around that RPGT will be increased from current of 15%(for first two year upon signing of SPA) and 10%(from 3rd to 5th-year upon signing of SPA) to 30% and 15% respectively. Reason behind this move is that the RPGT can be effectively use to curb speculation on property by flipper or investor that looking for short term gains.

(3) #Stamp Duty: As been mentioned the current scale of Stamp Duty for property transaction will be increased from the current of 1%(up to RM100,000.00 purchase price) and 2%(from between RM100,000.00 and RM500,000.00 purchase price) and 3%(RM500,000.00 and above). The quantum of increase will be reveal then.

(4) #GST (Goods and Services Tax): Currently real estate agents are charging 6% GST for their services. It has not been implemented in all sector of industries. With this budget there might be a chance to implement across other industries. At present, we're paying a sales tax of 10% and 6% in service tax(as charge by McDonald Restaurant outlets).

(5) #LTV(Loan-To-Value): Reducing loan-to-value cap for a second property would affect genuine upgraders, who may find it challenging to pay a higher downpayment while waiting to sell their existing properties. This could reduce supply to the secondary market.

PS: Rising #RPGT and #Stamp Duty could risk pushing house prices higher as sellers would tend to pass the increemental costs to buyers and also delay disposal leading to even tighter supply. Developers will also hold back launches in view of weaker sentiment. This could reduce supply to the primary market.

This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .

VulcanInternational could be contacted at +6 016 451 1321 .

You're welcome to write your constructive comment below.

Malaysia | Penang Property | Space Rental Box | Secure Self Storage(3S) Concept

Secure Self Storage(3S) concept offers you extension of space for your personal and business storage beyond your living room and business premises. 3S concept is the first of its kind in Penang and offers such flexible storage space service. 

Strategically located in high demand area in Penang Island and Prai, Penang MALAYSIA, 3S offers you the space while let you take care your business with peace of mind as self storage been secured with CCTVed.

Affordable rates and flexible access time of 7:00am to 7:00pm through out the year been offered at your convenience to access your goods.

Future expansion: For wine seller and wine collector, 3S is going to provide temperature controlled room to enable you to store your goods.

PS: Foreign businessman that would like to setup his business present in Penang, Malaysia and would like to engage temporary storage for their goods or machinery are encourage to discuss with Vulcan Lau, mobile: +6 016 451 1321

Interested in Secure Self Storage(3S) space, please contact Vulcan Lau, mobile: +6 016 451 1321 for details.

MASPEX Malaysia 2013 | Penang Property | MIEA | Facts and figures about Malaysian Secondary Property Exhibition

MASPEX is the brainchild of MIEA(Malaysian Institue of Estate Agents). Penang Edition of the Malaysian Secondary Property Exhibition(MASPEX) is the 2nd in the series of nationwide establishment. 

Fundamental analysis from JPPH data are showing that 70% transaction of residential property is made up of secondary market with the balance contributed by primary market(new project).

At this point of writing the MASPEX 2013(Penang Edition) is currently underway at:

Location: Penang Times Square

Time: 10am to 10pm

Date: 27-29 Sept 2013

This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .

PS: Pictures of MASPEX(Penang Edition) been contributioned by VulcanInternational while Facts and Figures been contributed by MIEA/JPPH.

VulcanInternational could be contacted at +6 016 451 1321 .

You're welcome to write your constructive comment below.

Penang iProperty | Beverly Hills Bungalow At Tanjung Bungah For Sale, Penang Malaysia

Beverly Hills bungalows are situated at Tanjung Bungah, Penang Malaysia for sale. It's ideally located in midway between Georgetown and Batu Feringghi. This is the hotspot for expatriates to stay for their retirement or under MM2H programme to eligible to purchase land property with investment value of RM2,000,000.00 and above.

All the bungalows and some units of terraces and semi-Ds command great panoramic view of the sea. The other houses boast the greenery view of the surrounding forest of the hills. Beverly Hills is a low density development with just a handful of houses within the site. Hence, you will definitely feel the exclusivity and privacy residing in Beverly Hills.

Fact sheet: 

Type of building: 2-storey bungalow

Title: Freehold

Built-up area: 5,600 sq ft

Land area: 8,200 sq ft

Bedroom: 7 

Bathroom: 7

Remark: Bungalow for sale is renovated with large garden area for landscaping. It is fitted with Jacuzzi in the master bathroom.

Asking price: RM4,200,000.00

Interested please contact Vulcan Lau, mobile: +6 016 451 1321

Surrounding Property Mix & Amenities:

Tanjung Bungah is an established and fast growing area with abundance of amenities. Several schools can be found nearby are SJKC Pai Chai, SK Tanjung Bunga, SK Pendidikan Khas Persekutuan, Dalat International School and Tenby International School.

Besides schools, Beverly Hills is approximately 1 km away to Apple Tree Education Kindergarten, Air Force Professional School (SITU) and TAR College Penang. Furthermore, the neighborhood is within walking distance to Kuan Yim See Temple Mount Erskine. Other amenities are mosque, hotels and shopping malls – Straits Quay, Island Plaza,Gurney Plaza and Gurney Paragon within 10 minutes drive away.

Interested please contact Vulcan Lau, mobile: +6 016 451 1321 for details.

Bukit Minyak Industrial Park | Single Storey Warehouse/Factory BuildingFor Rental @ Bukit Minyak Industrial Park, Prai, Penang Malaysia

Warehouse/Factory Rental Malaysia | Penang Single Storey Warehouse/Factory Building For Rental: Prime location with attractive factory corporate office inclusive of warehouse/production floor for rent. Total lettable area is 93,535 sq ft. Fact sheet: (1) Easy accessibility & connectivity to Batu Kawan, Bukit Tengah, Butterworth sea port, dual highway inlet/exits(Juru/Tambun), 12km to Penang Bridge & 2nd Penang Bridge. (2) Floor loading: 2.5 ton per m2, 1000A power supply, sprinkle system installed. (3) loading/unloading capabilities with 3 dock levelers to cater for 1 toner to 40 footer container. (4) ceiling height min/max is 25 ft/33 ft. (5) ample car park. Asking rental RM1.30 psf nego. Suitable for: warehouse, logistic transporter, factory. Interested please contact Vulcan Lau, mobile: +6 016 451 1321 Surrounding Property Mix & Amenities: Bukit Minyak Industrial Park was developed by Penang Development Corporation (PDC) in the late 90's comprising over an acreage of approximately 1000 acres. This Industrial Park is segmented into Industrial Plots, Single-Storey Terraced Factories and Single Storey Semi-Detached Factories for Small and Medium-Scale industries. Among reputable Local & Multinational Industrial players to name a few are; Flextronics, High Ace Industry, Maxonic Marketing, Eagle & Pagoda Brand Medical Industry and Teik Senn Malaysia. Opposite this Industrial Park, across the Butterworth - Ipoh trunk road is the Small and Medium-Scale Industrial(SMEs) Region which was developed by Penang Regional Development Authority or commonly known as IKS Bukit Minyak Perda. Residential Housing Estates located nearby includes Taman Pulasan, Taman Markisah, Taman Sukun, Taman Bukit Minyak and Taman Sentul Jaya. Shopping, Marketing, Educational, Recreational Amenities and Public Facilities are readily available in the Town of Bukit Mertajam which is located approximately 8 kilometers to the North West of the Bukit Minyak Industrial Park. Interested please contact Vulcan Lau, mobile: +6 016 451 1321

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