Building more homes, the only long term-way to bring house prices down

Building more homes may be one of the most practical ways to bring prices down

WHILE flipping through a business magazine, I saw an interesting chart illustrating the average household size of various countries including Malaysia.

At one glance, our number of 4.4 people per household is among the highest in the world, even in the Asia Pacific region with many developing countries.

We are far behind compared to developed nations such as United Kingdom and Australia, which have 2.3 and 2.6 people per household respectively. Our number is also higher than two nations with high population in our region, China and Indonesia, which recorded 3 and 3.9 people for their average household size respectively.

What do these numbers tell us? Other than giving us information on our demographic structure, it also offers an important insight which could address the issue of home prices in our country.

The Governor of the Bank of England (BoE) Mark Carney once said, the only long-term way to effectively bring home prices down is to build more homes. This may be one of the most practical ways for us to address the issue too.

According to National Property Information Centre(NAPIC), we had 4.9 million homes in the fourth quarter of 2015. As NAPIC does not track rural homes, we assume that only urbanites were taken into account in the survey. This accounts for about 70% of our 31 million population or 21.7 million people. Therefore, on average, there is about4.4 people per household in the urban areas of our country.

The above figure is a poorer ratio than Australia in 1927. If we are to match the same ratio as Australia today, we need 8.3 million houses instead of 4.9 million houses. It means we need additional 3.4 million houses to meet the standard in Australia.

With our current rate of housing production, which is about 70,000 new units launched a year according to NAPIC, we need 48 years to build 3.4 million homes, and it would still be a long distance for us to catch up with UK and Australia, given the rapid growth of population and urbanisation in our country.

Our Statistics Department estimates that our population will reach 38.5 million by year 2040. If we maintain the ratio of 70% urban population by then, we would need another 5.5 million houses to reach the ratio of 2.6 people per household in 2040. This literally means we need to build 230,000 houses per year for the coming 24 years!

Basic economic principle says, when demand is higher than supply, prices will go up. And when supply exceeds demand, prices will go down. Equilibrium is met when demand equals supply.

This is well reflected in the world oil market. From 2010 until early 2014, oil prices had been fairly stable at around US$110 per barrel. However, since mid-2014, prices have dropped by more than half due to a surge in production and a drop in demand in many countries.

United States production has nearly doubled over the last few years. Saudi, Nigerian and Algerian oil that once was sold in the United States have to compete for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising every year. Russians also manage to keep pumping at record levels. All these contribute to the oil prices which are hovering around $50 per barrel today.

It works the same in the real estate market. Imagine if we are having 8.3 million houses today instead of 4.9 million, our house prices would be much more affordable due to sufficient supply.

The key factor here is, we need more houses, especially affordable homes. The relevant authorities need to streamline the delivery system to encourage the number of homes built every year. Government and various local authorities should also pool resources together in filling the gap by speeding up approval process, and building more affordable homes.

Rick Jacobus, an expert in affordable homeownership in United States shares his view in his article “Why we must build?”– the answer for hot-market metro areas is simply to build. Build more. Build now. Build anywhere. Even when we build high-end housing for the rich it adds to the overall supply and pushes rents down.

I particularly like a quote in his article, “We can’t build our way out of the housing crisis but we won’t get out without building.”

It is an interesting point for us to ponder when it comes to the challenge of housing the nation in our country, especially the need for affordable homes.

 By A;an Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, email feedback@fiabci-asiapacific.com.

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The affliction that feeds on children

PEDOPHILIA is not a new sex crime. What is new is the attention that it is getting in the public arena in Malaysia especially after the case of Huckle (pic). In fact pedophilia has developed into the hot topic in Criminology.

A pedophile is an individual who prefers to have sex with children. They have an abnormal and an unnatural desire and attraction for sexual relations only with children.

Sexual abuse of the children can begin without people recognizing it because it can be a small act in everyday life.

Pedophiles come from a variety of socioeconomic backgrounds. They are normally male, from any race, educated or uneducated, young or old, rich or poor, employed or unemployed. They can be religious or non-religious, a father, family member or trusted coworker or professional.

Just as Huckle used” wealth and status as Westerner” to exploit children, pedophiles hide behind the cloak of normality, morality and respectability within the community. Research revealed that nine out of ten are close to their mothers.

One of the most popular criminological theories is the notion that criminal behavior is learned in association with those who have criminal attitudes and values.

The majority of criminologists believe that the behavior of a pedophile is caused by environmental factors (nurture), involving upbringing and life experience of the individual. Furthermore, perpetrators confess that they themselves were child victims of sexual abuse.

However, recent studies revealed that individuals suffering from pedophilia are also fostered by genetic or biological traits which eventually lead to criminal behavior.

Colleen Berryessa, a Criminologist, stated that a 2014 Korean report on monozygotic twins with pedophilia, concluded that genetic influences appeared to be more important to the causes and development of pedophilia than environmental factors, including childhood abuse.

But there seems to be little or no agreement about what conclusively makes an individual cause pedophilia.

Experts also believe that there is no permanent treatment to cure pedophiles but some claim therapy treatment can work but is a challenge. Since pedophiles are sociopaths whose behavior is antisocial, lack sense of empathy and moral responsibility for their victims, the disorder is chronic and lifelong.

Studies show that pedophiles are repeat offenders after imprisonment or treatment.

The criminogenic asymmetries factor such as relaxed atmosphere, weaknesses in laws and enforcement produce criminal opportunity, motive for foreign pedophiles like Huckle himself to took advantage of the weak internal controls in a country to find victims. The penalty in their home country is normally more severe.

To fight this crime we need legislative changes, more effective laws, intelligence gathering and sharing, technology such as facial recognition and enhance investigation capabilities by training specialists.

Huckle operates a website called The Love Zone (TLZ) on the Dark Web, a hidden network used to maintain anonymity. His site consisted of photos of the children he abused and shared with other members.

The web is accessible only with specialized software or conducting deep web analysis. To make it more complicated; cybercriminals are often using encryption to protect their malicious data and communications.

There should also be increased focus on proper enforcement and skill level in conducting cybercrime investigations in order to reduce the use of the Dark Web in committing child sexual activities.

Crime prevention should be the priority for police but that should not be their sole responsibility. To prevent crime is the obligation of everyone in society and parents, schools and families have responsibility to ensure children are safe.

They must also instill in children a strong appreciation of right and wrong.

Parents, being the most important people in their children’s lives, must make sure children are not exposed to situations where irresponsible people can take advantage of them.

They must pay attention and respond when any adult seems overly focused on befriending a child, make a spot check on child nurseries and babysitters and do not allow a child to go alone on vacation or spend the night with someone other than those proven to be trustworthy and reliable.

Certainly do not assume that a person is reliable because of position, status, title or working in a place where children commonly gather.

At this point, our country still does not have a central registry for child abusers and pedophiles. The data is very important as it would contain the particulars of sex offenders, allowing law enforcement agencies to keep track and monitor the child sexual activities in our community. We need to protect our children.

By DATUK AKHBAR SATAR
Institute of Crime & Criminology, HELP University

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China urges Philippines to quit arbitration; Pushes back against US pressure

China urges Philippines to immediately cease arbitral proceedings

http://english.cctv.com/2016/06/09/VIDESodRMnJFJdiaDZ3JKzuo160609.shtml


<<< Foreign Ministry spokesperson Hong Lei (Source: fmprc.gov.cn)

BEIJING, June 8 (Xinhua) -- China on Wednesday again urged the Philippines to stop its arbitral proceedings and return to the right track of settling relevant disputes in the South China Sea through bilateral negotiation with China.

Foreign Ministry spokesman Hong Lei made the comment at a routine press briefing.

The Foreign Ministry on Wednesday issued a statement saying that disputes between China and the Philippines in the South China Sea should be settled through bilateral negotiation.

Hong said that by unilaterally initiating the arbitration in 2013, the Philippines had turned its back on the possibility of solving the issue through negotiation, leading to a dramatic deterioration of relations between China and the Philippines.

China and the Philippines have reached consensus on settling maritime disputes through bilateral negotiation in a number of bilateral documents, but the two countries have never engaged in any negotiation on the subject-matters of the arbitration, said Hong.

By unilaterally initiating the arbitration, the Philippines has violated its agreement with China as well as its own solemn commitment in the Declaration on the Conduct of Parties in the South China Sea (DOC), he said.

This is an abuse of the dispute settlement procedures of the United Nations Convention on the Law of the Sea (UNCLOS), and is against international law, including UNCLOS, he added.

The door of China-Philippines bilateral negotiation is always open, he said. "China will remain committed to settling through negotiation the relevant disputes with the Philippines in the South China Sea on the basis of respecting historical facts and in accordance with international law."

"China urges the Philippines to immediately cease its wrongful conduct of pushing forward the arbitral proceedings, and return to the right path of settling the relevant disputes in the South China Sea through bilateral negotiation with China," Hong said. - Xinhua

BEIJING: China has urged the Philippines to “immediately cease its wrongful conduct of pushing forward the arbitral proceedings” and “return to the right path” of settling the relevant disputes in the South China Sea, through bilateral negotiation.

In an official statement released yesterday, the Foreign Ministry reaffirmed Beijing’s commitment to a settlement via two-way negotiations, rather than an arbitration unilaterally sought by Manila against China in 2013.

Ties between Beijing and Manila were sunk after the initiation of the arbitration. From the very start of the arbitral process, China has refused to accept or participate.

In the wake of recent comments made by various Chinese officials about the arbitration, the statement said “the door of China-Philippines bilateral negotiation is always open”.

Observers and the media have increasingly called on Philippine President-elect Rodrigo Duterte and his expected administration to quit the arbitration and return to the table for two-way negotiations.

The arbitral case is still pending. Some media and observers said the expected ruling by the arbitral tribunal would be made in a few weeks.

China will remain committed to settling through negotiation the relevant disputes “on the basis of respecting historical facts and in accordance with international law,” the ministry wrote.

In the past weeks, Washington has publicly pressed Beijing to accept the ruling.

That also included a call from US Defence Secretary Ash Carter on Saturday at the Shangri-La Dialogue in Singapore.

Wu Shicun, president of the National Institute for South China Sea Studies, said although it remained to be seen if the incoming Philippine administration would quit the arbitration and return to the table for talks, “it is apparent that the arbitration – from its very beginning – has led to increasing, not decreasing, number of problems between Beijing and Manila”.

“Other regional countries will come to the conclusion that embarking on such an arbitration will obtain no benefit, not to mention resolving any of the existing disputes,” Wu said.

Jia Duqiang, a researcher of South-East Asian studies at the Chinese Academy of Social Sciences, said as the arbitration process came to a critical moment, all parties knew clearly that “no good will serve any party if the big picture is damaged”.

He also said the incoming administration was re-evaluating its policies towards China. — China Daily / Asia News Network

China pushes back against US pressure

SINGAPORE: China rebuffed US pressure to curb its activity in the South China Sea today, restating its sovereignty over most of the disputed territory and saying it "has no fear of trouble".

On the last day of Asia's biggest security summit, Admiral Sun Jianguo said China will not be bullied, including over a pending international court ruling over its claims in the vital trade route.

"We do not make trouble, but we have no fear of trouble," Sun told the Shangri-La Dialogue in Singapore, where more than 600 security, military and government delegates had gathered over three days.

"China will not bear the consequences, nor will it allow any infringement on its sovereignty and security interest, or stay indifferent to some countries creating chaos in the South China Sea."

The waterway has become a flashpoint between the United States, which increased its focus on the Asia-Pacific under President Barack Obama's "pivot", and China, which is projecting ever greater economic, political and military power in the region.

The two have traded accusations of militarising the waterway as Beijing undertakes large-scale land reclamation and construction on disputed features while Washington has increased its patrols and exercises.

On Saturday, top US officials including defence secretary Ash Carter warned China of the risk of isolating itself internationally and pledged to remain the main guarantor of Asian security for decades.

Despite repeated notes of concern from countries such as Japan, India, Vietnam and South Korea, Sun rejected the prospect of isolation, saying that many of the Asian countries at the gathering were "warmer" and "friendlier" to China than a year ago.

China had 17 bilateral meetings this year, compared with 13 in 2015.

"We were not isolated in the past, we are not isolated now and we will not be isolated in the future," Sun said.

"Actually I am worried that some people and countries are still looking at China with the Cold War mentality and prejudice. They may build a wall in their minds and end up isolating themselves."

During a visit to Mongolia today, US secretary of state John Kerry urged Beijing not to establish an air defence identification zone (Adiz) over the South China Sea.

Kerry, who will visit China next, said an Adiz would be "a provocative and destabilising act", which would question Beijing's commitment to diplomatically manage the dispute.

The South China Sea is expected to feature prominently at annual high-level China-US talks starting in Beijing on Monday, also attended by US Treasury Secretary Jack Lew.

US concerns about Chinese trade policy and the difficulty foreign businesses say they face operating in China will add to what will likely be difficult discussions. — Reuters

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Analysts refute Ashton Carter's China 'self-isolation' claims

SINGAPORE - US defense secretary's China "self-isolation" claims were totally incorrect, local analysts said here on Saturday.

In a speech delivered here Saturday at the on-going Shangri-La Dialogue, US Defense Secretary Ashton Carter said China could end up erecting a Great Wall of self-isolation, but analysts here refuted Carter's remarks as one-sided and over-exaggerated.

As China develops, Asia-Pacific countries had built close relations with not only the United States but also China, which proves Carter's China "self-isolation" claims at best "exaggerated," said Huang Jing, Professor and Director of Center on Asia and Globalization, Lee Kuan Yew School of Public Policy, National University of Singapore.

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Carter's claims are misinterpreting China's policies, and are not in line with the two countries' consensus on forging new pattern of relationship, said Colonel Lu Yin, Associate Researcher from the Institute of Strategic Studies of China's National Defense University.

The colonel noted that Carter's remarks revealed logical paradoxes in the US rebalance strategy in the Asia-Pacific.

"I don't see it possible that without efforts from China, the United States can realize its rebalance strategic in the Asia-Pacific region as well as achieve common prosperity as envisioned," said Lu.

In his half-hour or so speech, the US defense secretary mentioned the word "principle" for as many as 37 times. In Professor Huang Jing's view, it is fairly disputable that the United States does faithfully stick to principle.

When asked about the fact that not only China, but countries including Japan, the Philippines and Vietnam all had similar construction actions, Carter said there are differences in the scale of such activities.

If one really sticks to principles, it doesn't matter what scale the actions might be, any construction activity is against the principle, argued Professor Huang.

On matters of navigation freedom, the professor said that navigation freedom should be guaranteed, but any country's freedom shall not be at the cost of posing threats to others.

Although tensions in the South China Sea are included in Carter's speech, analysts pointed out that the US defense secretary had also elaborated on the fact that China and the United States do have cooperation potentials over a number of international agendas. To safeguard peace and stability in Asia-Pacific, the two countries need to cooperate.

Oh Ei Sun, senior fellow with S. Rajaratnam School of International Studies in Singapore, said that Carter actually adopted a relatively "mild" approach when addressing disputes in the Asia-Pacific and gave much emphasis on setting up security networks in the region.

William Choong, Shangri-La Dialogue Senior Fellow for Asia-Pacific Security, said he thought the US-China relations are far more inclusive.

It's a broader relationship, although they disagree on the South China Sea issue, they can agree on many other issues which are important, such as the cooperation in cyber space, the DPRK issue, and climate change, he said.

The two countries are preparing for their upcoming strategic economic dialogue as well, he noted.

"To put it very simply, even though there are tensions in the South China Sea, I think the relationship is broad enough and strong enough, and has enough institutional mechanism for both sides to avoid their differences and work on potential solutions," said the researcher.

China refutes US defense secretary's China 'self-isolation' claims

SINGAPORE - A high-ranking Chinese military official Saturday refuted US Defense Secretary Ashton Carter's "self-isolation" claims about China.

"Carter's claims are incorrect and do not accord with the actual situation," Guan Youfei, director of the Office for International Military Cooperation of the Chinese Central Military Commission, told the media.

Guan's comments came after Carter's claims at the ongoing Shangri-La Dialogue that China's military activities in the South China Sea would isolate itself.

Guan said the United States should learn lessons from the wars it had waged in the Asia-Pacific region after World War II and play a constructive role in the region.

Guan urged the United States to keep its security pledges, withdraw troops from Afghanistan as soon as possible, stop arms sale to China's Taiwan and refrain from holding military drills on the Korean Peninsula.

Guan said China has made great efforts in promoting international and regional security cooperation since its reform and opening-up, and China's achievements in areas such as peacekeeping, disaster relief and naval escort missions are obvious.

China will continue to enhance cooperation with other Asia-Pacific countries under the Belt and Road initiative in various fields, the Chinese military official added.

The US defense secretary had earlier made similar accusations against China in a speech delivered at the US Naval Academy. The Chinese Foreign Ministry had responded, saying such claims reflected "American-style mentality" and "American-style hegemony."

Sources: China Daily/Asia News Network

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Penang's lively market

Many estate agents and developers generating interests in primary and secondary markets

 

Popular locations: A section of George Town showing Komtar and the surrounding area. Properties in good locations are said to be still popular.

WHILE the property market in Malaysia may be subdued, Penang is still generating interests among buyers and potential investors.

Raine & Horne Malaysia senior partner Michael Geh says: “Although sentiment is generally cautious, both interest and transactions within the Penang property market is ‘still active’.”

“In the primary market, there are still a lot of estate agents and developers generating interests,” he tells StarBizWeek.

Geh says this is especially the case for affordable homes.

“For middle and upper-end properties, there are still a few projects that are generating interests from genuine buyers,” he says.

“The market is still active. There is activity but transactions have slowed down.”

In terms of the secondary market, Geh says properties in “good locations” are still popular.

“Within the secondary market, there are a lot of enquiries for properties in good locations. In the not-so-good locations, there’s stagnation in both price and activity.”

Geh says demand for landed properties in Penang is still strong.

 

Bridge boost: Housing project in Bukit Relau. Penang’s second bridge has spurred growth in Batu Maung, Sg Ara, Teluk Kumbar on the island and Batu Kawan on Seberang Prai.

“For the high-rise properties or those that are highly speculated on, there has been stagnation.”

Malaysian Institute of Estate Agents Penang branch state chairman Mark Saw says the property market has been slowing over the past two years due to the cooling measures brought about by the Government.

“Until year-end, things should be slow – assuming that the global economy does not tank. But the market is still active in certain areas.”

He says landed residential properties and the hospitality segment in Penang are “still doing fine”.

“Hotel operators are still looking at Penang as a potential location to set up operations,” Saw says, adding that it is “business as usual” for players within the industrial sector.

“Within the industrial sector, there has been no real slowdown. I mean, we’ve not seen any factory closures.”

For residential properties in Penang, Saw says there had been a “swing towards affordable housing” in the past couple of years.

“In the top end of the market, developers have been more cautious as loans have not been as forthcoming. However, those developers with good stock are still able to continue launching new products.”

Looking ahead, Geh feels the market will “swing” in the final quarter of the year.

“The third quarter tends to be a little bit quiet. It’s in the fourth quarter that I think things will swing, and I believe it can go either way.

“This will depend on various factors, such as sentiment, or if Bank Negara comes out with an announcement that could affect the local property sector. But I think it will swing for the better.”

Saw meanwhile believes that the rental market will remain competitive for the rest of 2016.

Geh: ‘There is activity but transactions have slowed down.’ >>

“For those speculators and investors who purchased their properties some five years ago, looking to flip (for profit), those properties are coming into the market now and they might have problems selling, especially those having difficulties in servicing their loans.

“So instead, they will try to rent it out. But with a lot of these stocks coming in, it will be more of a tenant’s market than a landlord’s one.”

Penang in 2015

According to the National Property Information Centre, residential property transactions recorded a marked decline in market activity in 2015 by 16.9%.

The state saw a substantial decline in new launches by 47.5% or 2,348 units.

According to Rahim & Co in its Property Market Review 2015/2016, completion of Penang’s second bridge (Sultan Abdul Halim Muad-zam Shah Bridge) in 2013 has spurred growth in Batu Maung, Sg Ara, Teluk Kumbar and Batu Kawan areas.

“A new project to be launched in 2016 is the RM10bil Eco Marina project in Batu Kawan. Eco Marina, by Eco World Development Group Bhd, will include high-rise and landed properties on a 299.64 acres with a golf course adding prestige to the area.

“The development will be gated and guarded. Other projects by the same developer are Eco Terraces in Air Itam, Penang island and Eco Meadows, Bukit Tambun near Juru/Batu Kawan area.”

Other upcoming projects it cited are the Straits Garden Condominium, Platinum III (from RM428,000), D’Zone Condominium and three-storey detached houses in Baymont Residences (RM3.18mil) in Teluk Kumbar.

“There are also The Tamarind@Seri Tanjung Pinang, Raintree Park 2 comprise of two-storey terraced, two-storey semi-detached houses and Avenue Garden, a 17-storey serviced apartment by Tambun Indah and several others.

“An international school has recently been completed at Simpang Ampat within Pearl City development by Tambun Indah Land Bhd.”

According to CH Williams Talhar & Wong (WTW) in its Property Market Report 2016, 287 units of landed properties came into the market in 2015 in Penang Island alone.


<< Saw: ‘Hotel operators are still looking to set up operations in Penang.
It said prices of newly-launched houses continued to increase, reaching a new benchmark in their respective locations.

WTW added that terraced and semi-detached houses in established neighbourhoods such as Seri Tanjung Pinang in Tanjung Tokong and Island Park & Island Glades in Greenlane, still command strong demand in the secondary market despite the increasing prices.

“Transacted prices of 2½-storey terraced houses and three-storey semi-detached houses in Seri Tanjung Pinang have surpassed RM2mil and RM3mil per unit, respectively.

“However, the hike in prices is expected to taper off in the near future with more new houses entering into the market.”

On the mainland, WTW said demand of landed residential developments remained strong in 2015 underpinned by the improved infrastructure.

“A number of major property players venturing into Seberang Perai for the first time has excited the local market with new housing products. For instance, Ecoworld, positioned as a pioneer in sustainable and green developments launched its maiden residential project known as EcoMeadows in Bukit Tambun.

“With its lush green landscape, gated and guarded concept as well as proximity to the expressway, a typical terraced unit was priced at RM700,000 per unit, a new price benchmark to the market.”

As for high-rise residential properties, WTW said a number of projects were completed in first half of 2015. These included The Address at Bukit Jambul (124 units), Vertiq at Gelugor (318 units), Sierra Residences at Sungai Ara (300 units), Gardens Ville at Sungai Ara (476 units) and The Latitude at Tanjung Bungah (218 units).

Luxurious condos

“A newly completed luxury condominium development located at Batu Ferringhi, known as By The Sea, was developed by Selangor Dredging Bhd.

“It comprises 138 units with floor areas ranging from 1,037 sq ft to 3,012 sq ft.

For new projects launched in 2015, one luxury condominium project that was launched was Shorefront Residence by YTL Land.

“Situated along Lebuh Farquhar which is within the city of George Town, the luxurious condominiums offered 115 units with floor areas ranging from 1,400 sq ft to 3,400 sq ft.”

It said average transacted prices of condominiums in the sub-sale market increased marginally in 2015.

“Moving into 2016, the market is likely to experience slower growth with transaction activities expected to slow down.

“With more affordable flats and apartments being launched and under construction, a spike in the existing supply of high-rise residential units is expected within the next three to five years.”

WTW notes that high-rise residential developments make a strong inroad in Seberang Prai over recent years, with the majority being in the town area especially Butterworth in Seberang Prai Utara.

“Existing condominiums developments that are actively transacted in the secondary market in the past five years included Habour Place and Casia Condominiums.

“Bukit Mertajam is emerging as the next hotspot for high-rise residential developments with a majority of projects in the pipeline and due for completion.”

Condominiums developments remained as the main development trend in Seberang Prai, says WTW, with a number of serviced residences and Soho (small office home office) projects being proposed that are pending approval.

“Prices of a typical condominiums unit have increased around 9% since 2014 to RM370 per sq ft on average.

“The coming few years will see the mushrooming of skycrapers in Butterworth and Bukit Mertajam as several property players plan to develop integrated developments comprising condominiums, serviced residences or Soho together with shopoffices and hotel in these locations given their robust and established business sentiment.” - By Eugene Mahalinggam The Star

It says take-up rates of newly-launched projects are likely to taper off as the rental market in Seberang Prai is less demanding in comparison with the island.

KL firms bullish on Penang sales

 

Goh: ‘The City Residence and City Mall is expected to contribute RM40mil while The Wave will contribute RM90mil GDV.

Kuala Lumpur-based property development companies in Penang are expecting sales contributions from the state to increase significantly for their upcoming financial year amid a tough property market environment.

Eco World Development Group Bhd, Eastern & Oriental Bhd (E&O), IJM Land Bhd and Mah Sing Group Bhd are some of the Kuala Lumpur-based property companies expecting strong contributions from the state.

Mah Sing, for example, is projecting for Penang to contribute 9% of its revenue for the fiscal year ending Dec 31, 2016 compared to 1% for the previous financial year.

Says group managing director Tan Sri Leong Hoy Kum: “With no project launches in 2015, our properties in Penang contributed 1% or RM26mil to our total sales of RM2.3bil last year, leveraging on the take-up for projects launched before 2015.

“The group has set a target of RM2.3bil for 2016 for all our properties (throughout the country) and Penang is expected to contribute 9% of the revenue for the (current financial) year.

“With the value of the ringgit at an attractive level, we foresee strong buyer interest, particularly from foreigners, who represent 30% of our purchasers in Penang, as well as locals,” says Leong, who is also the CEO of the group.

Ferringhi Residence in Batu Ferringhi and Southbay Plaza in Batu Maung, both on the island, performed well in 2015, says Leong, with take-up rates of 92% and 96%.

Mah Sing plans to launch Ferringhi Residence 2, a high-end condominium project in Batu Ferringhi, in the second half of 2016, while the Southbay Plaza, a mixed-development project, will be completed this year.

Toh: ‘The group is targeting RM240mil sales this year in Penang.>>

Eco World expects its projects in Penang to generate about RM600mil this financial year ending Oct 31, 2016, compared to RM200mil in the previous year.

Its general manager Khoo Teck Chong says the targeted revenue for the 2016 financial year is RM4bil, compared to RM3bil in 2015.

“The contribution in Penang would come from Eco Terraces in Paya Terubong, which is 40% sold, Eco Bloom, scheduled to be launched in June, and the first phase of Eco Marina, scheduled for launching in October 2016.

“The Eco Terraces and Eco Bloom are priced respectively at over RM850,000 and below RM400,000, which are still considered as affordable by the locals, given the strategic locations of the projects,” he says.

IJM Land is expecting its projects in Penang to generate RM240mil to the revenue for the current financial year ending March 2017, compared to RM168mil in the last financial year.

Its senior general manager Datuk Toh Chin Leong says the projects planned for launch this year are The Trehaus (with a gross development value or GDV of RM64.7mil) in Bukit Jambul, The Senjayu (RM69mil GDV) in Jawi, South Seberang Prai, and The Waterside Residence (RM260mil GDV) for the second phase of The Light Waterfront.

“These projects should help the group realise the targeted RM240mil sales,” Toh says.

E&O also expects the contribution from Penang to improve significantly this year compared to a year ago.

Its marketing and sales general manager (Penang) Christina Lau says that given the strong sales of the last financial year in excess of RM1bil, the group believes that there will be sustained interest in its Penang projects comprising existing launches such as 18 East at Andaman, The Tamarind, and its landed super-luxe terraces Amaris and Andorra, which collectively tally an estimated GDV of RM1bil.

“The sale of these properties coupled with upcoming launches on the remaining plots within Seri Tanjung Pinang Phase 1 (STP1) will keep us busy, as STP1 approaches its maturity, evolving since the maiden launch of the Ariza courtyard terrace homes in 2005. “Now in its eleventh year, STP1 has developed into one of Penang’s most preferred addresses with a vibrant community of more than 20 nationalities,” she adds.

Ivory Properties Group Bhd is carrying out RM1.8bil worth of projects on the island this year.

These are the first phase of Penang WorldCity called Tropicana Bay Residences with a GDV of RM933mil, The Wave with a GDV of RM494mil, and The City Residence and City Mall with a GDV of RM313mil.

Group chief operating officer Goh Chin Heng says The City Residence and City Mall and The Wave will be the main contributors to the group’s current fiscal year revenue ending next March 31.

“The City Residence and City Mall is expected to contribute RM40mil, while The Wave, RM90mil.

“Both projects have done very well and should enable the group to achieve better results for the current fiscal year.

“There are only a handful of units left for both projects,” he adds.

Ideal Property Development Sdn Bhd plans to undertake RM2.723bil worth of condominium projects on the island this year.

Of the amount, the group has already launched the RM378mil Summerskye Residences in Bayan Lepas in January 2016.

The upcoming projects, comprising 3,648 units to be launched between May and November 2016, are strategically located in Bayan Lepas in the south-west district, which is close to the Penang International Airport and the first and second bridges.

The projects are Forest Ville (RM495mil GDV) in May, Bukit Ayun Development (RM1bil GDV) in August, Queens Residences (RM550mil GDV) and Amarene (RM300mil GDV) in August.

Besides the Queens Residences and Bukit Ayun Development projects, which will be priced between RM600,000 and RM900,000, the rest of the schemes are priced between RM450,000 and RM600,000.

“Some of these projects are among those that will be injected into Ideal United Bintang Bhd (IdealUBB) this year,” says Ideal Property executive chairman Datuk Alex Ooi. Ideal Property is the parent company of IdealUBB.

Ooi said that while most developers were holding back launches, the group has decided to go ahead with a variety of property products priced between the RM450,000 and RM900,000 range.

According to Ooi, properties within such a price range are still the most marketable, especially if the location is very strategic. - By David Tan The Star

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