The subprime troubles and the ensuing financial crisis in the US has been called the global financial storm. The crisis, which former Federal Reserve chairman Alan Greenspan described as “once in a century credit tsunami” whilst the 2008 Noble Prize Winner U.S. economist Paul Krugman said the crisis bears some resemblance to the Great Depression of the 1920’s.

The IMF has warned of a sharp slowdown in the world economy next year and forecasts that financial sector losses could total US$1.4 trillion(US$1,400,000,000,000.00) whilst as much as twenty million jobs will disappear by the end of next year as a result of the impact of the financial crisis on the global economy, according to UN’s report. The global economic downturn is expected to last two years before it slowly recovers from 2010 onwards as world economy recovery takes time.

Malaysia Response

For Malaysia, like other countries in the world, has already felt the impact of the global financial meltdown as Malaysia’s key sectors show signs of slowdown. The Malaysian economy has been resilient in the first-half of 2008, but is increasingly being affected by the global downturn.

According to MIER, Malaysia’s economy may grow at the slowest pace in eight years in 2009 given the dismal outlook for the global economy stemming from the financial turmoil.

In response to the crisis, the Malaysia Government has already announced several measures of economic stabilisation plan ie. a)Bank deposits are guaranteed by the central bank of Malaysia until the end of 2010 and b) Inject RM5 billion into a special- purpose fund Valuecap to support the stock market etc.

To further cushion the effects of the world economy slowdown, Malaysia’s Prime Minister-in-waiting and Finance Minister Najib Tun Razak has announced the RM7 billion Economic Stimulus Package during his Budget 2009 winding-up speech in Parliament on 4th November 2008, details of the stimulus package are here and here.

Impacts on Malaysia Property Sector

Just about 6 months ago, Malaysia’s NAPIC has projected a bullish property outlook for this year. But the property landscape and market sentiments have changed in recent weeks. Recent statements by REHDA’s President as well as commentary of several property industry experts indicating that Malaysia property sectors are showing signs of softening. The weakening of market conditions has also affected the listing of two largest REITs on Bursa Malaysia.

However, the Malaysia property sector is unlikely to face similar degree of market downturn as experienced by Singapore Property Sector. Malaysian property market still remains attractive to foreign investors. Comparatively, properties in Malaysia are still among the cheapest in the region and property investment remains a solid hedge against inflation in the long term.

For property owners and investors seeking for latest update and outlook on Malaysian economy as well as the Malaysia Property Market amidst the global economy slowdown, here are the several upcoming events and seminars by Malaysia institutions of ASLI, MIER and PEPS:-

National Property Housing Summit 2008 by ASLI;
Date : 13 – 14 November 2008
Venue : Sunway Resort Hotel & Spa, Petaling Jaya

National Economic Outlook Conference 2009-2010 by MIER;
Date: 2 - 3 December 2008
Venue : Hilton Kuala Lumpur

Malaysia Property Market Outlook 2009 by PEPS;
Date : 20th January 2009
Venue : Sime Darby Convention Centre, Kuala Lumpur

www.intproperties.com blogs into this subject of land area conversion units with an aim to give you a better understanding and guides on the current land area conversion units commonly used in the northern states of Peninsular Malaysia ie Penang, Kedah and Perlis as well as the neighbouring country of Thailand.

Hectare, Acre, Relong or Rai

Although Malaysia has officially adopted a metric system since 1982, the British’s imperial units and local units are also very much in use. The computerisation of land titles registration in land offices in Malaysia over the last two decades and the implementation of E Tanah system have replaced much of the old titles and have used International System (SI) unit of hectare in land registrations.

The old unit of acre, which is non-SI, is still widely use in Penang State whilst relong is the local unit commonly used by the people in the Kedah and Perlis States. A browse on the land for sale listing posted on Malaysia’s popular portal of mudah.com shows that relong is still widely use in Kedah. 

In Kedah and Perlis, the early system of land tenure was influenced more by the ancient Thai Law of Property than by the Malay Customary Law. From an early date, ‘surat putus’ (or document of title) was issued by Sultans. Originally, these ‘surat putus’ was a written decision of ‘hakim’ or judge of the state following an ownership dispute, countersigned by the Sultan. The documents recorded the evidence submitted and the decision made together with the dimensions and area of the land concerned and a rough description of its locality and abuttals. The earliest survey of property lots started by 1912 in Kedah.

Whilst in Penang, the land registration inherited the British land tenure system. The English Law of Real Property and Conveyancing continued to be used until they were repealed and substituted with a system of Registration of Titles under the present National Land Code (Penang and Malacca Titles) Act, 1963. More at related article of history of land system.

Across the border to southern Thailand, the common land measurement is Rai. A Rai (Thai ไร่) is a unit of area, equal to 1,600 square metres (40 m × 40 m), used for measuring land area. Its current size is precisely derived from the metre, but is neither part of nor recognized by the modern metric system, the International System (SI). 1 Acre = 2.5 Rai, 1 hectare = 6.25 Rai. Guide on land measurement conversion in Thailand.

In UK, although the non-SI unit of acre is still in use, it will no longer be allowed when land is being registered come January 2010 in compliance with EU Metric Directive-European Union abolishes the British acre.

For advisory on land investments in Malaysia and Penang Properties, 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.

HOW TO CALCULATE LAND MEASUREMENT

SI units (Metric )
1 hectare = 10,000 sq meters

Non SI units
1 acre = 43,560 square foot
1 hectare = 2.471 acres

1 relong = 30,976 square feet
1 relong = 484 jempa
1 jempa = 64 sq ft
1 hectare = 3.4748 relong
1 acre = 4 rood
1 rood = 40 pole
1 rood = 10,890 sq. feet
1 pole = 272.25 sq. feet
1 sq meter = 10.76381 sq feet

Example 1
Land Area 5a 2r 20p = 5 + 0.5 + 0.125 = 5.625 acres x 43,560 square feet
= 245,025 square feet
= 22,763.80 square metes
= 2.2763 hectares

Example 2
Agricultural land in Kedah
Land Area 15 relong 50 jempa = 15 x 30,976 square feet + 50 x 64 square feet
= 467,840 square feet
= 43464.16 square metres
= 4.3464 hectares

Example of site plans attached in the old titles in Kedah and Perlis- with unit measurements in both relong and acre

Example of old land titles in Kedah issued in 1950’s

Jusco Seberang Perai City at Bandar Perda

A growing hotspot in central Seberang Perai

The development gravity is gradually shifting from Butterworth-Perai area towards Jalan Baru-Bukit Tengah-Bukit Mertajam as more lands are make available and earmarked for new housing developments including the partially developed mixed development project of 456-acre Bandar Perda township. Several government bodies such as Local government headoffice of MPSP, District Police headoffice, Bomba and Inland Revenue Department have already relocated to Bandar Perda. Central Seberang Perai is poised to be the upcoming conurbation of mainland Penang.

According to the Property Market Report 2007, Central Seberang Perai (Daerah Seberang Perai Tengah) has the most numbers of newly launched housing units totalling 605 compared to 544 units of North Seberang Perai(Daerah Seberang Perai Utara), indicating that more housing developments are taking place in central Seberang Perai.

Property Market Report 2007 on Butterworth properties

Notable upcoming residential schemes being launched within the Jalan Baru-Bukit Tengah- Bukit Mertajam growth corridor area include Uda Land’s Taman Pauh Jaya along Jalan Baru, Taman Aman By PPH Group and AMDB Berhad’s Bayu Mutiara in Bukit Tengah area, Parklane Residence and Aston Villa, a RM88 million mixed development project by Ivory Properties Group.

In recent years, selling prices of newly launched housing units in this growing hotspot area of Central Seberang Perai have noticeably fast catching up and match the pricing levels of those similar houses in more established locations of Butterworth- Mak Mandin-Raja Uda area.

Market Prices for conventional double-storey terraced houses in the secondary market for established housing schemes in the vicinity of Bukit Mertajam – Bukit Tengah area namely Taman Gemilang Ria, Taman Jambu Madu, Bayu Mutiara, Desa Palma, Taman Jernih, Saujana Permai, Bandar Perda have crossed to a new price benchmark level of RM250,000.00 to RM300,000.00. However, if you are looking for similar double-storey terraced houses costing below RM200,000.00 per unit, you still have the choice whereby these houses are located in the secondary locations of Bukit Mertajam namely Alma, Juru, Macang Bubuk and Permatang Tinggi area.

Market rental ranges from RM700 to RM1,000 permonth (unfurnished) for a standard 2-storey terraced house in choice locations in central Seberang Perai and those located in secondary locations, the rental rates are in the range of RM500 to RM650 permonth.

The latest trend in the market is that more higher end luxury terraced houses are being launched, these new 2.5 storey to 3 storey terraced houses comes with bigger built up area and better design and services are being priced at new ceiling prices of RM300,000.00 to RM420,000 per unit. Similarly, more higher end with luxury design 2-3 storey semi-detached houses and bungalow are being released to the market with new record pricing ranges from RM600,000.00 to RM1.2 million per unit.

For advisory on individual property investments, purchases and rentals of Penang Properties, 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.

butterworth properties -BORR Jln Baru aerial view

butterworth properties BORR-jln baru map

The new MPSP office building at Bandar Perda

The new private hospital at Bandar Perda

newly completed double storey houses in Taman Jambu Madu

Newly completed 2-storey houses at Bayu Mutiara, Bukit Tengah

Newly completed 2.5 storey semi-detached house at Taman Kristal, Bukit Tengah

According to the report, there are 7 cases of signature forgery on transfer form (Borang 14A) and fraudulent land transfers detected and the properties identified are located in both Penang Island and mainland Seberang Perai whilst another 4 cases involving forgery of documents relating to court order, more at Auditor-General’s Report 2007 (page 129 -132, Table 50 & 51). And the shocking revelation is the opinion of the auditor :-

“Pada pendapat Audit, Pejabat Tanah Dan Galian tidak dapat mengesan kesahihan dan ketulenan dokumen yang dikemukakan bagi urusan tanah kerana kakitangan Pejabat tidak ada kemahiran dalam bidang tersebut. Hak pemilik tanah tidak terjamin apabila berlaku pemalsuan dalam urusan tanah.”

(In the opinion of the auditor, The Department of Land and Mines could not detect the validity and authenticity of the documents presented for land dealings because the department staff does not have the expertise in this field. The rights of the land owners can not be guaranteed when forgery in land dealing occurs).

In light of the above, Penang land and property owners are advised not to take things for granted and to exercise caution on the safekeeping of their property title deeds and conduct regular title searches and seek reputable solicitor advice.

Amendment to Section 340 National Land Code

According to Ministry of Internal Security’s reply in Parliament house on 9 July 2007, the number of case of fraudulent signature for land title transfer recorded during the period 2001 till May 2007 are 16 cases in 2001, 19 cases in 2002, 22 cases in 2003, 32 cases in 2004, 35 cases in 2005 and 40 cases in 2006 and 16 cases up to May 2007. The statistics disclosed that forgery of land titles and land scams are on the rise. In a move to safeguard and protecting the landowners, Malaysia’s Bar Council has taken a lead and submitted a memorandum to the then Natural Resources and Environment Minister Datuk Seri Azmi Khalid on July 24 last year. It is understood that in the memorandum, the Bar Council proposed several amendments to be made to the relevant sections of the National Land Code (NLC), especially Sections 340(3) and (4) and 187B. Bar Council welcomes move by government to amend s 340 NLC and is expected to be amended by year end.

For advisory on individual property purchases and rentals of Penang properties, 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.

Highlights of Budget 2009 on property and housing :

a) First time house purchasers are eligible for 50% stamp duty waiver on sales and purchase agreement signed during the period of 30th August 2008 to 31st December 2010. Unlike budget 2008, The 50% stamp duty exemption to be extended to loan agreements as well to further reduce the cost of buying medium-cost houses of up to RM250,000. More related information on 50% stamp duty waiver at here, here and here.

The move is expected to help purchasers for homes costing under RM250,000 to save up to RM2,625.00 on stamp duty waiver on transfer instrument and loan document.

Example :

Stamp Duties

i) Loan Agreement
0.5% of the loan amount
ii) Transfer of Title (for completed properties)
1% for the first RM100,000
2% for the next RM400,000
3% on the excess above RM500,000

Purchase Price;RM250,000.00, Housing loan @90% of purchase price; RM225,000.00

Stamp Duty payable on transfer instrument; RM4,000.00
Stamp duty payable on loan document ; RM1,125.00
Total stamp duties payable ; RM5,125.00
Apply for 50% waiver on stamp duties ;RM2,562.50
Amount payable ;RM2,562.50
Savings for house purchaser ;RM2,562.50

b) Reducing withholding tax on dividends of Malaysia REITs to 10%

c) RM330m allocation for Jabatan Perumahan Negara to complete 4,400 units of Program Perumahan Rakyat (PPR) Disewa, 1,500 units of PPR Bersepadu and 600 units of PPR Dimiliki. In addition, Syarikat Perumahan Negara Berhad will build 33,000 low cost houses.

d) Increase the size of the Housing Credit Guarantee Scheme (SJKP) to RM100m from RM20m to assist those without fixed income to own affordable houses.

e) RM50 Million conservation funding for heritage buildings following the recent inscription of Malacca and George Town as historical cities of the Straits of Malacca under Unesco’s as World Heritage Sites(WHS). The Unesco listing of these two historical cities is expected to boost tourism and a boon to the property sector of these two cities.

For advisory on individual property investments, purchases and rentals of Penang Properties, 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.