Archive for the ‘Penang Policy’ Category

4 Market indicators on Penang Property Sector 2010

Sunday, September 5th, 2010

1. More new property launches - More housing projects are being slated for launching in the second half of this year by established developers in Penang as there is growing optimism amongst housing developers and market players on the recovery of domestic economic and improving market outlook on the property sector. Read more at Penang gears up for more property launches.

2. Property transactions on the rise -According to NAPIC’s press release, there is an increase of 16% in terms of number of property transaction in 1st Quarter 2010 compared to the corresponding quarter in year 2009 whilst the total transaction values surged significantly, almost 49% from RM16.92bil to RM25.5bil. It is projected that the rise on the property transactions and total values are likely to continue for the forthcoming quarters. The overall property market performance this year is expected to be much better than year 2009 which have been marred by the world financial crisis.

3. Rebound in market demand -The rebound in market demand experienced by the Penang Property sector in the first half of this year is mainly attributable to the pent-up demand after a period of subdue market activities brought about by the impact of the world financial crisis.

Recent reports of higher take up and improving sales performances experienced by Penang’s established housing developers indicates that the market demand has indeed picked up and the demand trend is likely to remain firm in the short term as property investors are flocking back into the property market in anticipation of buoyant economic outlook as well as further price increase following the recent government’s move to implement gradual removal of subsidy on energy and raw materials.

Another factor that could fuel the buoyancy of the property market is the recent strong performance of the Bursa Malaysia KL Composite Index which have recovered over 1,400 points. The stock market has made substantial gains this year and this could boost the property sector.

A local research fund house predicted that Malaysia’s property sector is set to see its biggest residential boom in a decade. The property sector was already entering the early stage of a property “super cycle”. More at OSK bets on Malaysian Property boom.

The Economic Clock - Malaysia’s property sector is currently at the stage of 9 - 12

4. Rising home prices - There is a growing concern that home prices are getting costlier due to the cost push factor as most of the newly launched projects appeared to be in the category of upmarket segment offering luxury housing units.

Penang Island is facing very limited land bank for housing development particularly medium cost housing units and landed homes. With limited supply in land bank, land costs on the Penang Island keep rising and inevitably push up home prices to unprecedented range that go beyond the affordable levels of the majority of the island’s population. A Penang politician MP has recently voiced his concern on rising home prices and has urged the housing ministry to relook into the present housing policy. In the meantime, more parties are urging the state government to review and address the housing issues in Penang which may have an impact on brain drain of Penang employment. The rising prices of homes, if left unchecked, may result in gentrification. Urban gentrification is a phenomenon on socio-cultural changes in an area resulting from wealthier people buying up the housing units in a less prosperous community area.

Penang Property Guide : Is it better to buy or rent ?

Saturday, May 1st, 2010

Many consider property, be it a landed home or stratified condominium unit, is a big ticket item which involves high capital and long term commitment, so the question of whether is it better to buy or rent is very much depends on one’s financial affordability and needs. www.intproperties.com looks into the advantages of owning a home versus renting.

Advantages of home ownership

i) Provide stability and certainty of stay for your family;
ii) Benefit of security and pride of home ownership;
iii) Freedom on choices of usage ie. for self-occupation or weekend second home or rent out;
iv) Built equity of your own home. Instead of paying rental monthly, you make repayments to the banks and gradually building up your home equity and ultimately owning the property after you redeem the property.
v) Hedge against inflation. Owing to the scarcity of landbank earmarked for new developments and growing population, demand for quality and affordable housing in established areas in Penang remains high which leads to higher home prices. In addition, the cost to build new housing stock continues to rise due to inflationary factor.
vi) Tax relief. Malaysians are eligible for tax relief of up to RM10,000.00 a year on loan interest payment to finance the purchase of property for three consecutive years subject to conditions that it is limited to one residential home for own occupation( not for rental) and the sale and purchase agreement is signed between March 10 2009 and December 31 2010. Besides, the government has further relaxed the EPF housing withdrawal guidelines beginning of January this year to encourage more Malaysians home seekers to own houses.

Advantages of renting

i)a cheaper and affordable way (less upfront costs) as you only need to come out with deposit payments equivalent to 3 months rental of which the security and utility deposits are refundable;
ii) Faster move in time unlike property purchase which takes 3-4 months to complete the deal and hand over the property.
iii) option of choosing length of stay according to tenant’s need ie. monthly or yearly tenancy ;
iv) No need to bear documentation costs such as legal fees for preparation of sale and purchase agreement and loan documents and stamping charges in connection with home ownership transfer and yearly taxes like assessment rates and quit rent.
v) No need to bear maintenance charges and structural repair costs either as these costs are also to be borne by the landlord.
vi) flexible of being relocated without having to worry about the empty home!

Recommended blogs on the advantages and disadvantages of Buying versus Renting, go to Renting vs Buying a home or Buying vs. Renting.

Whether renting is better than buying depends on many factors, including how fast prices rise and how long you will stay in your home. And now there is a new method rent-buy interactive calculator to compare the costs of buying and renting equivalent homes.

The methodology of the calculator keeps a running tally of the most common expenses of owning and renting. It also takes into account something known as lost opportunity costs — for example, the return you could have earned by investing your money instead of spending it on a down payment. The calculator assumes that the profit you would have made in your investments would be taxed as long-term capital gains and adjusts the bottom line accordingly. The calculator tabulates lost opportunity costs for all parts of the buying and renting scenarios.

This rent-buy interactive calculator allows home seekers to do their own comparisons on renting versus buying whereby you can i)  adjust the annual home price change and annual rental rates according to local market conditions  and ii) change inputs or variables such as your rate of return on investments, condo/common fees and your tax bracket to find out whether the buying is better than renting or otherwise!

Whilst no one can accurately predict the future pricing/rental trend of the houses in a particular area, however, analysis to find out average house price index or its trends based on the past historical housing data of say past 10 years or 15 years or 20 years of a similar class of property in a specific housing area can be quantified.

In Malaysia, information on property pricing trends and rental movements, current and future supply and take up rates of various sub-sector of Malaysia property market can be obtained from the annual publication of Malaysia Property Market Report published by Department of Valuation and Property Services (JPPH) and NAPIC quarterly reports. Find out more at 6 websites that property investors need to know in Malaysia. It would be good that a similar calculator can be generated in Malaysia using our very own housing data.

Views of new completed housing schemes in mainland Penang

Villa Cendana 2 ( Cendana Permai) at Juru

Dedaun - another housing scheme by PDC at Batu Kawan

Global economic crisis - implications for Malaysia

Thursday, August 13th, 2009

Khazanah Nasional Berhad organized its 6th Khazanah Penang Lecture entitled “The Global Economic Crisis: Implications for Malaysia” at Wawasan Open University last week. More than 300 guests of mostly businessmen attended the talk by Penang-born Professor KS Jomo, a prominent Malaysian economist who is currently serving as the United Nations Assistant Secretary-General for Economic Development in the United Nations Department of Economic and Social Affairs (DESA) whilst Mr Andrew Sheng,  another prominent Malaysian economist/chartered accountant chaired the panel discussion after the talk. Many were there at Wawasan Open University to seek their latest views and insights into this complex financial meltdown from global and Asia prospectives ! Related article : Global Financial Crisis and Malaysia Property Outlook.

Wawasan Open University along Jalan Sultan Ahmah Shah
(Northam Road), Penang

Here is Mr Andrew Sheng’s An Asian View Of The Global Financial Crisis. Though economists are of the views that the worst is over and confident level on the global economy outlook is improving, the lingering concerns remain whether the world economy recovery is V-shaped or W-shaped recovery? Nobel prize-winning economist Paul Krugman’s view ; World may witness W-shaped recovery whilst a local Fund Manager has a bullish view; V-shaped recovery has begun.

Malaysian Economy - at which stage of economic clock; 7 or 8 or 9 O’clock ?

6 websites that property investors need to know in Malaysia

Wednesday, July 1st, 2009

Izrin & Tan Properties Sdn Bhd compiles a list of Malaysia’s official portals providing property information and guidelines that property buyers and foreign property investors need to know in Malaysia.

1. Relaxation of FIC guidelines- The Prime Minister of Malaysia has announced that, effective 30/6/2009, all property transactions, including those between foreigners and non-bumiputeras, will no longer require Foreign Investment Committee (FIC) approval. The NEW FIC guidelines on acquisition of properties can be downloaded from the website of Economic Planning Unit of the Prime Minister’s Department.

However, foreign investors cannot acquire properties below specified threshold limits, with the threshold amount for commercial properties at RM500,000. For the purchase of residential properties, the present threshold of RM250,000 is maintained until the end of 2009, with the threshold increased to RM500,000 effective of Jan 1, 2010. More latest related information on deregulation of FIC guidelines at here and here.

2. Pemudah– A special taskforce set up by the government of Malaysia in 2007 to facilitate easier business dealings and improving public services delivery system. Pemudah has come out with a guidebook on land registration in Malaysia. The guidebook provides a brief information on land ownership registration in Malaysia. It also provides the stages and processes involved in land administration and complete with relevant forms required when transferring ownership for both local and foreign investors as well as list of registration fees for ownership transfer of each states.

The guidebook can be downloaded free from Pemudah’s website-here;

3.JPPHValuation and property services department, ministry of finance Malaysia. The JPPH’s website has shown much improvements over the years. The website not only posted the department’s up-to-date information but incorporates various NAPIC (National Property Information Centre)’s publications as well which was previously available on printed copy at a fee.

It is commendable that JPPH has posted NAPIC’s publication online on regular basis providing free quarterly property information such as Property Stock Report, Property Market Status Report, Property Sales Data etc. In addition, the portal now comes with new added online services such as stamp duties calculator for ownership transfer of real estate and MySMS services for property purchasers on stamp duty valuation cases. Though JPPH has uploaded the property information online, layman and property beginners somehow find that these quarterly reports are not easily comprehensible as there is little explanation or commentary and comparative findings on these tabulated statistics and data. The information is catered more for macro analysis on the suppy and demand of the various sub-sectors of the property market.

4. Department of Director General of Land and mines – this website posted general information (in Malaysian Language only) and a list of Malaysia Laws and application guidelines of various land dealings such as application for state alienated lands, subdivision and amalgamation, land conversion and guidelines on the approval process of land ownership (residential units) by foreign interests. Under Malaysia’s Federal Constitution, Land is under the jurisdiction of the respective state administration and each state has its own set of land enactments. Related link : Penang’s new policy on land conversion.

The website has also posted a paper written by Mohd Shukri Bin Ismail providing some insights into the latest amendments of the National Land Code 1965. The National Land Code is the primary land law of the states of Malaysia.

5.MM2H – Malaysia, My Second Home Programme, an international residency scheme being promoted by the Ministry of Tourism Malaysia to allow foreigners to live in the country on a long-stay visa of up to 10 years. The portal, MM2H, has been enhanced several times and is now accessible in various languages and provided with all the one-stop information including guidelines on purchase of residential homes by foreigners/expatriates.

6. Guidelines for house buyers issued by Ministry of Housing and Local Government Malaysia- The guidelines has been posted on the ministry’s website for many years which are still relevant and provides  helpful tips to FIRST-TIME house buyers who wish to purchase new housing units (off-the-plan or under construction units) from primary market ie from housing developers.

The website also provides information of housing legal clinic and tribunal for homebuyer claims set up by the ministry to provide advice and help solve the problems faced by home buyers against housing developers.

For advisory on property investments in Penang and Kuala Lumpur, email to us at Izrin & Tan Properties Sdn. Bhd or call us at +604 6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.

Evening Scene of Butterworth-Penang Skyline

KLCC skyline

How to increase your home value through smart renovations

Sunday, May 24th, 2009

Many house owners have the tendency to renovate their new homes exceeding their original budget. It is common to see that house purchasers of newly completed schemes in Penang are “competing” each others in home renovations. Some common renovations visible in Penang’s new residential areas are demolition of front car porch and replaced with a bigger car porch to accommodate two or more cars, hacking down the entire front terrace and facade (without balcony) and replaced with a much bigger car porch incorporating a balcony, extending the rear portion of the house to accommodate a larger kitchen etc.

We have seen house owners carried out major renovations to their houses to the extent that the renovation costs exceeding the purchase price of the house.

Renovations do not always translate to an increase in the value of your home. However, if you’re planning to sell sometime in the future and want to ensure you get the most ROI (Rate of Return), it is important to assess the value renovation. Below are several ways to optimise the cost-value ratio and achieve maximum ROI for your renovations;

a) Avoid renovations with too much customization of personal liking and taste.

If the major renovations and home improvements are customized design to suit to personal liking and lifestyle which is not commonly acceptable in the marketplace sometime in the future, you may not get much of a return when you sell as potential buyers may find these renovations are not value-added renovations but rather owner’s own personal indulgence and lifestyle. Potential buyers may also view it as a liability because he may have to spend more money to change or renovate again.

When choosing tiles, countertops, paint, cabinet doors, kitchen appliances and awnings, go with colors that will stand the test of time even as fashions come and go. Conventional or classic home designs are still the ideal for home renovations because such designs never go out of style and will always attract buyers when you are ready to sell your home.

b) Retain the essence of the original design ambience

Avoid excessive renovations such as changing the structure of house from the original two storey house to become a three storey house or demolition of a front porch and facade and replaced with a totally new design super large car porch with a balcony. Such major renovations could have materially changed the external facade of the house and may render the house no longer blend in with the design ambience of the neighbourhood and this may affect the saleability of the house.

c) Summit proper building plan for new extensions

Check with the building department of the local council MPPP or MPSP and obtain a copy of building  approval guidelines. Engage a licensed draftsman or architect to ensure that the extensions are in compliance with the building guidelines by the local authorities.

A property valuer, when assessing the market value of a house, will give due consideration and only accord full value computation for properly constructed extensions with valid approvals.

d) Value-neutral or value-added renovations

Ascertain whether the renovations to be carried are value-neutral or value-added renovations. Upgrading cement floor with homogenous floor tiles, modernizing a kitchen or upgrading the kitchen into wet and dry cooking area, improving home security system are regarded as value-added renovations whilst demolition of front terrace and house facade and rebuilt it with a large balcony, adding a swimming pool or building a sauna or long bath,  reducing the number of bedrooms to less than three are considered value-neutral renovations.

List down your options before embarking on home renovations. For house buyer who prefers house design with large car porch and balcony, it is wise to compare and weight the option which is more worthwhile and cost effective ? to buy a landed house without a balcony and later renovate it or to look for house design that comes with large car porch and balcony ?.

House Design : 2-storey terraced houses without balcony

Another House Design : 2-storey terraced houses with large car porch and balcony

For more tips on home renovations, go to Renovation quotation.

Very often when house owner decides to sell off his house, they tend to overprice their properties as they calculate their asking price by factor in all the costs incurred during and after acquisition of the house ie. purchase price plus all incidental costs such as payment of legal fees and stamping charges plus  renovations costs, bank interest charges incurred plus exit fees or penalty charges for termination of loan agreement within the lock-in period (if any).

The true fact is that total cost spent on the particular house is NOT necessarily equate to the market price of the house. In an active and uptrend market, house prices tend to go up higher than the total acquisition costs. Conversely, in a weak or depressed market, house prices may go down and fall below the total acquisition costs of the house. The market price of the house is very much influenced by the prevailing economy conditions and market sentiments and more specifically relates to the demand and supply of similar houses in the local area.

For advisory on property investments in Penang and Kuala Lumpur, email to us at Izrin & Tan Properties Sdn. Bhd or call us at +604 6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.

Penang’s new policy on land conversion

Friday, June 13th, 2008

The new Penang state government land policy seeks to encourage Penangites to become permanent landowners and boosting commercial and industrial growth. Under the new policy, industrial landowners in Penang can apply to extend their lease period from the present maximum 60 years to 99 years, while owners of leasehold residential lands can apply to convert their land to freehold status. More at We will be fair in land conversion.

The conditions and procedure for conversion are here and here.[Update : The official guidelines (Bahasa Malaysia version) on the new land conversion policy and the application form (Borang 12A) is now available and can be downloaded from the website of Penang State's Department of Land and Mines].

Land owners can begin submitting individual applications after June 15 to change the status of their land titles.

And here are the views and comments on the state’s new land conversion policy from man on the street, local community leaders, property consultants and housing developers to legal practitioners.

The move is expected to benefit industrial land owners or companies to secure financing to expand their factories as presently commercial banks are less keen to provide banking facilities to industrial lands and factories with short leasehold tenure of less than 30 years as collaterals.

Industrial/Housing schemes to benefit from this new land conversion policy

Industrial lands and factories in Penang’s Industrial Parks developed by Penang Development Corporation (PDC) are alienated on 60 years lease. These industrial parks are Bayan Lepas Industrial Park, Mak Mandin Industrial Park, Seberang Jaya Industrial Park, Prai Industrial Park, Bukit Tengah Industrial Park and newly developed Bukit Minyak Industrial Park.

Whilst PDC’s housing schemes are mostly leasehold properties of 99 years namely Bandar Bayan Baru and Bandar Seberang Jaya, Taman Pelangi and Komtar development area in Georgetown.

Other notable housing schemes built on state alienated lands of 99 years lease are Techware’s condominium schemes along the Sungai Nibong coastal area ie Gold coast, Putera Marine, Villa Emas, Putera Place and IJM’s housing schemes ie Tmn Sri Damai, Alphine tower, Parkview tower, Lakeside, Ocean view, The Spring etc. Others such as Mewah Court, Midland condo, Mutiara Idaman, Mutiara Heights, Pangsapuri Tanjung Tokong and Sri Saujana at Harbour city.

However, owners of leasehold high rise stratified units seeking to obtain freehold rights may have to be patient until the state government resolved legal matters with the Federal Government. More at Freehold land applications now on hold.

Several high profile townships such as the Seri Tanjung Pinang and Bayan Bay development (both on the Penang Island) and 456-acre Bandar Perda township and Bayu Mutiara in Bukit Mertajam of mainland Penang have since been granted conversion from leasehold to Freehold status. Related link at Penang projects to gain from conversion.

For more insights on Malaysia’s land administration policy, a recommended website by Ministry of natural resources and environment provides resources on Malaysia’s current land administration process, types of land titles , classification of lands etc.

For advisory on individual property investments in Penang, email to us at Izrin & Tan Properties Sdn. Bhd. or call us at +604 6588333 (Penang Office) or +603 92839782 (Kuala Lumpur Office) and we would be pleased to assist.

Aerial view of the Perai Industrial Park in central mainland Penang and its coastline. The development of the industrial parks in Penang since 1970’s have transformed Penang into the biggest industrial hub in the northern Peninsular Malaysia.

Bandar Perda, a privatized 456-acre housing project in central Seberang Perai which have been granted Freehold status…

Penang State is the first CAT government in Malaysia

Monday, June 2nd, 2008

Institution of Surveyors Malaysia (ISM) Northern Branch has recently organized its 15th anniversary dinner. The event was attended by more than 250 members of ISM and the guest of honor of the event was the newly appointed Penang Chief Minister Mr Lim Guan Eng. During the function when speaking to members of the ISM and guest, the Chief Minister acknowledged the role of the Surveying Profession within the construction industry comprises 4 main divisions ie GLS, PCVS, QS and BS and hopes to establish close relationship with professional bodies and invites qualified professionals to sit in the Penang Tender Board’s Committee.

The Chief Minister stressed that the new state administration of Penang is a CAT government, Competency, Accountability and Transparency and Penang will lead to be the first state government that adopts the CAT governing philosophy.

On foreign investments, Mr Lim disclosed that two foreign companies from Japan and USA have confirmed their investments in Penang. It was later reported in the media ie. Japanese firm invests RM1.2b and Honeywell to invest RM115m in Penang. The new administration hopes to achieve RM3.1 billion foreign investment this year.

Earlier, the state government has endorsed the Northern Corridor Implementation Agency Act which empowers the agency to implement plans for the Northern Corridor Economic Region (NCER) to speed up economic development in the region and federal projects in Penang. More at Penang supports NCER agency act.

To know more about Penang’s new Chief Minister, there is a blog that provides a compilation of media reports and press statements since March 2008, click here.

Guest and Members of the ISM Northern Branch at the 15th anniversary dinner..

Chief Minister of Penang YAB Lim Guan Eng addressing members of ISM

Public Hearing on Draft Penang Structure Plan 2005-2020

Saturday, January 13th, 2007

The Penang State Government has unveiled the Draft Penang Structure Plan 2005-2020 in September 2006. The draft plan, which was prepared by Penang State Town and Country Planning Department, is a written blueprint consists of the state’s policy, direction and strategic proposals on development and land use until year 2020. The last Structure Plan for Penang Island and the mainland Seberang Perai was gazetted on 14th June 1990 and 19th September 1993 respectively.

Following the month-long public display of the Draft Penang Structure Plan 2005-2020, a total of 84 respondents have forwarded their views and objections to the Penang State Town and Country Planning Department. The respondents comprises of representatives from government agencies, political parties, NGOs, various resident associations, REHDA, housing developers and individuals etc.

Consequently, in accordance with Section 10 (3)(b), Malaysia’s Town and Country Planning Act 1976 (Act 172), a public hearing has been held at Mutiara Room 2, 29th Floor, KOMTAR during the period from 11th to 22nd December 2006 whereby each respondent was given half an hour time to present their objections and views on the Structure Plan to the public objections hearing committee. The structure plan is expected to be gazetted this year after the draft report together with the feedbacks and objections gathered during the hearing have been submitted to the higher authority for approval.

Respondents expressing their views /objections to the public hearing committee;

Please come back again for more insights on the Penang property and housing development – its future trends and directions and where are the locational hotspots as expounded in the Penang Structure Plan…(To be continued).

Making Penang a More Liveable City

Friday, December 22nd, 2006

FIABCI Malaysian Chapter, Penang Branch has recently organized a seminar –“ Making Penang a More Liveable City” presented by Puan Mainunah Shariff, Director of Planning & Development, Municipal Council of Penang (MPPP) on 20th December 2006 at USM, Penang. About 100 people including USM university students attended the talk. The speaker briefed the participants on limited land availability for development on Penang Island, transport and linkages network such as PORR and strategic new investment areas as outlined in the Penang Structure Plan 2005-2020. She also highlighted several essential components of a liveable city such as security, stability, health, economic etc..More story at Penang close to attaining liveable city status.

More info on Penang and Liveable Cities. Melbourne, Australia is the world’s most liveable city. Read more on World’s most liveable cities.

Email your comments and opinions whether Penang is your choice liveable city !

Updated version - 18.3.2007

Penang has been ranked as the 10th most liveable city in Asia, according to an international survey involving 254 cities worldwide. Read more ..