Fewer project launches in Penang

GEORGE TOWN: There will be fewer property projects launched this year in Penang due to the rising cost of fuel and building materials.

“This is reflected in the new launches lined up for exhibition at the upcoming Malaysian Property Exhibition (MAPEX) 2008 scheduled to be held on the island from July 11 to July 13.

There are only three new launches this year for MAPEX 2008, with a gross sales value (GSV) of RM44.5mil, compared to seven last year, which had a GSV of RM300mil,” Real Estate Housing & Developers' Association (Rehda) Penang chairman Datuk Jerry Chan said at a press conference.

The three launches would see 207 housing units launched on the island and mainland.

Chan said the majority of the units launched would be priced below RM250,000 a unit but the new houses were 30% more costlier than those available in the market.

There were currently 6,571 units of houses being constructed on the island and mainland with an estimated GSV of RM1.7bil, added Chan.

Chan said in view of soaring energy and building prices, there would be no new developments of low cost and low medium cost houses, which were currently priced at RM42,000 and RM75,000 respectively.

“We are appealing to the state government to revise these prices. Otherwise developers would resort to building only expensive homes comprising less than 150 units per scheme, which does not require them to build affordable housing,'' he said.

“We are also appealing to the state government to allow developers to have higher density and larger built-up areas for projects in the city.”

Chan said Malaysia was the only country where developers had to undertake the building of low and low-medium cost units.

“Worldwide, this responsibility is shouldered by governments as is the case with healthcare and education,” he added.

By The Star (by David Tan)

80 building items may enjoy price adjustment

The Works Ministry has identified 80 items related to the construction sector which need price adjustment.

Works Minister Datuk Mohd Zin Mohamed said the items, including those directly and indirectly related to the construction industry, have been identified to be listed under the variation of price (VOP) list.

There are currently 16 items in the list.

The new items will be put forward to the Finance Ministry before they are included in the list.

"With the VOP, contractors will be able to make price adjustments on the items," Zin told a press conference yesterday after meeting contractors of Works Department (JKR) projects to discuss the rising cost of building materials.

The ministry has also met with contractor associations and come up with several proposals to help the contractors manage their projects, he added.

The proposals include having a stockpile of steel and cement to help meet supply and stabilise prices in the market.

Others include paying contractors' claims within 14 days, renegotiating government projects and imposing a windfall tax on cement and steel producers.

Zin also said it was proposed that the 10 per cent cement import tax be abolished and that contractors who have delayed projects be given extra time to finish their work instead of having action taken against them.

By New Straits Times (by Suganthi Suparmaniam)

Cagamas HKMC launches mortgage guarantee scheme

CAGAMAS HKMC Bhd has launched the country's first mortgage guarantee programme (MGP), a scheme that helps banks free up their capital so that they can give out more loans.

This is the first product rolled out by the company, an equal venture between national mortgage firm Cagamas Bhd and The Hong Kong Mortgage Corp Ltd.

The tie-up is part of Cagamas' plans to expand abroad. Cagamas HKMC plans to offer its services to markets in the Asean and Middle Eastern region after it gauges the reception in Malaysia.

"The launch of the MGP should help banks expand mortgage lending business without compromising their prudent underwriting standards," Cagamas HKMC executive director James H. Lau said.

The MGP, which covers conventional and Islamic loans, will enable financial institutions to pass on a portion of the credit risk associated with mortgage loans to Cagamas HKMC for a fee.

Banks must keep a certain amount of capital against its loans. Passing on this risk frees its money that could be used for new loans.

Cagamas Bhd's president and chief executive officer Steven Choy said the facility is especially relevant with the advent of the Basel II framework, an international standard created to promote better risk management in banks.

Basel II standards require banks to hold an equal amount of capital for the amount of risk it is exposed to, to safeguard its solvency and overall economic stability.

By New Straits Times (by Presenna Nambiar)