Tambun Indah developing five Penang projects valued at RM571m

Saturday April 7, 2012

By DAVID TAN
davidtan@thestar.com.my

GEORGE TOWN: Tambun Indah Land Bhd is undertaking five development projects in Penang with a combined gross development value (GDV) of around RM571.5mil this year.

The projects are the RM131.3mil Pearl Indah and RM180mil Pearl Residence 1 in Simpang Ampat; RM39.3mil BM Residence in Bukit Mertajam; RM41mil Carissa Villas in Bagan Lallang; and RM180mil Straits Garden in Jelutong on the island.

Group managing director Teh Kiak Seng told StarBizWeek after an EGM that with the exception of the Straits Garden project in Jelutong that would be launched in the third quarter of 2012, the construction for the other four projects had started.

“Both Pearl Indah and Pearl Residence 1 are in the RM2bil Pearl City project, where we plan to build some 5,600 landed residential properties and 1,400 commercial properties.

“The first two phases of the Pearl City project the Pearl Garden and Pearl Villas are 90% and 80% sold respectively. Some 41% and 28% of the purchasers for Pearl Villas and Pearl Garden respectively are from the island,” he said.

The funding of the projects would be through the issuance of 88.4 million rights issues of new shares that would raise RM44.2mil for the group.

The two-for-five rights issues, which were approved at the EGM and expected to be completed in June, would effectively increase Tambun Indah's share capital to RM154.7mil, comprising 309.4 million shares.

“We have a landbank of 625 acres, which has a GDV of RM2.8bil. We are constantly on the lookout for more land in Penang. We are also exploring land outside of Penang,” he said.

Teh said the Penang property market was expected to chart commendable growth in the coming years, as it had been identified as one of the world's top 10 most dynamic industrial clusters and contributed 28% or RM17.7bil of Malaysia's total foreign direct investment in 2010-2011.

“In addition, the Malaysia My Second Home initiatives over the past years have resulted in a spill-over benefit for Penang's property market,” he said.

“As for properties in Seberang Prai, we believe the prices will be well sustained, due to the completion of the second link in 2013, which will have a positive effect on properties in Batu Kawan and Simpang Ampat.”

The rising prices on the island were prompting many young families to explore properties in Seberang Prai for quality lifestyle at affordable prices, Teh added.

Teh(below): 'We are constantly on the lookout for more land.'

Source reference link:
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10-20pc increase in house prices healthy, says Donald Lim

By Lee Wei Lian
The Malaysian Insider

KUALA LUMPUR, April 3 — Malaysia is not experiencing a property bubble and price increases of up to 20 per cent per year is acceptable, said Deputy Finance Minister Datuk Donald Lim today.
This comes as increasing numbers of Malaysians, especially city dwellers, have become concerned over the affordability of housing.

Lim said the government wanted to ensure healthy growth in the property market which would give better returns than money parked in fixed deposit accounts.

“An average increase in house prices of 10-15 per cent per annum is healthy as compared to fixed deposits in the bank,” Lim said in a press conference today. “For areas like KL, a 20 per cent increase is quite acceptable.”

When asked whether such a high annual increase in property prices is out of sync with annual income increases in the general population, Lim said that KL is still cheap compared to some of its Asean neighbours.

“We know at the moment that prices are low compared to Thailand and Singapore,” he said. “We are talking about the coming three to five years (for house price increases) after which there is a stabilising period.”

Lim said that the government was monitoring the situation and had taken pro-active steps to avoid a sub-prime crisis from happening in Malaysia.

“We will intervene when we find the figure (for property) has shot up too high,” he said.

He said, however, that one of the measures introduced last year to combat rampant property speculation — the increase of the real property gains tax (RPGT) from five to 10 per cent for houses sold within two years — had not met with stiff resistance.

“A lot of people find it (the increase in RPGT) reasonable,” he said.

Property prices in urban areas such as Penang and Kuala Lumpur rose by up to 40 per cent in 2010 fuelled by low interest rates and a surge in speculative buying, although prices grew slower last year due to dampened sentiment from tightening measures such as a hike in the real property gains tax for early disposals.

Some reports have also estimated that property prices jumped from 5.9 times income in
1989 to 10.9 times in 2010.

The Demographia International Housing Affordability Survey rates markets, whose property prices are 5.1 times median income or more, as “severely unaffordable”.

The House Price Index (HPI), as prepared by the Valuation and Property Services Department, rose 7.5 per cent in the second quarter of last year as compared with the same period in 2010.

For urban centres like KL, to which young working adults are gravitating, the HPI has seen a rapid increase since 2004, growing relatively slowly from 100 in 2000 to 108 in 2003, before rising sharply from 115 in 2004 to 167 in the second quarter of last year.

Lim said in a speech today that the overall HPI has increased 6.6 per cent to 156.9 in the fourth quarter of last year.

He said that the value of All House Price in Malaysia hit RM217,297 in the fourth quarter.

Kuala Lumpur had the highest All House Price at RM487,219 followed by Selangor at RM327,237.

While Asia appeared to have escaped the house price crash that affected the US and parts of Europe, some governments in the region took steps to cool the rapid increase in house prices in an effort to avert a property bubble.

The value of Singapore’s private homes suffered their first quarterly drop in nearly three years following government-imposed measures to cool the property market.

Advance estimates from the Urban Redevelopment Authority (URA) yesterday showed that private home prices fell 0.1 per cent in January-March as compared to the last three months of 2011.

Chinese Premier Wen Jiabao was also reported as saying on March 14 that home prices in the world’s second largest economy were still far too unreasonable and the Chinese government could not relax curbs on the property market as it could result in “chaos”.

Wen also said that reasonable housing prices should reflect personal income, investment and reasonable profits.

----------Vulcan agreed----------
HBA Secretary General Chang Kim Loong said in October last year that the increase of RPGT from five to 10 per cent for houses sold within two years of purchase would be meaningless to short-term speculators looking to flip houses for profit.

He pointed out that properties are typically not allowed to be sold during the construction stage, which takes two to three years, and therefore, raising the RPGT from five to 10 per cent for properties sold within two years would have little impact.

Chang said that under the revised RPGT, speculators could purchase properties from developers during a launch and flip the properties on completion after two years and would have to pay only the same existing five per cent up to the fifth year, after which all profits are not taxable.
----------Vulcan agreed----------

Source reference link: http://www.themalaysianinsider.com/mobile/malaysia/article/10-20pc-increase-in-house-prices-healthy-says-donald-lim/

Lim said the government wanted to ensure healthy growth in the property market which would give better returns than money parked in fixed deposit accounts.

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Singapore Real Estate | Foreign buyers retreat from property market

Friday March 23, 2012

THE hefty new stamp duty imposed late last year seems to have cooled foreign demand for property here.

The share that non-permanent resident (PR) foreigners have of the private housing sector fell by about 10 percentage points this year compared with November — right before the Dec 8 measures kicked in.

In November, foreigners bought 385 units, including new sales, resales and subsales, for a 16% slice of the entire market, excluding executive condominiums (ECs).

But they bought only 53 units in January and 96 units last month, giving them a market share of about 6.5%, according to analysis of Urban Redevelopment Authority data by consultancy Savills Singapore. In 2010, foreign buyers comprised 12% of the market, rising to a record 17% last year. Sales by PRs have held steady at about 13% for both 2010 and last year.

Experts say the 10% additional buyer’s stamp duty applied to all foreign purchases was the main cause of the steep drop.

The measures would have caused a reaction, making foreigners think twice about whether Singapore was still an attractive investment destination.

Ku Swee Yong, chief executive of International Property Advisor, said the frequent shifts in policy could also have dampened demand.

The slew of policy changes over the past two years may have prompted foreigners to opt to rent before deciding on whether they want to buy, he noted.

Some of his Malaysian clients are considering investing in commercial space or smaller homes with lower overall prices, to completely avoid the duty or pay a smaller fee.

Ku expects foreign demand to be subdued for the rest of this year.

Tan Kok Keong, OrangeTee’s research and consultancy head, also noted that with no major bad news between November and last month, the additional stamp duty was clearly the main cause.

Some experts say the drop might be a temporary lull as foreign buyers take time to get used to the idea of the higher tax.

Alan Cheong, director of research and consultancy at Savills, believes foreign demand will inch up over time.

“Foreign buyers at the moment may baulk at the extra 10% premium, but once they see this as the new norm, they may merely treat the additional buyer’s stamp duty as sort of a ‘cover charge’ for parking their funds in a safe haven,” he added.

OrangeTee’s Tan said foreign buyers could creep back in the second half of the year but they are unlikely to match the figures seen before the measures.

Chinese buyers made up about 28% of all foreign purchases — by PRs and foreigners — last year, bypassing Malaysians, the traditional leaders. Tighter home-buying policies in China, such as restrictions on residents in major cities buying a second or third home, prompted more Chinese to look further afield.

Despite the dip in foreign demand, home sales remained strong in the first two months of the year as Singaporean buyers continued to power the market. Last month, a record 3,138 homes, including ECs, were sold as buyers flocked to mass market projects with affordable, small-sized units. — The Straits Times / Asia News Network

Source reference link: http://thestar.com.my/news/story.asp?file=/2012/3/23/asia/10969572&sec=asia

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