“Currently, we do not feel there is pull back on banks in financing for high-end projects and the property overhang in this sector is not as serious as perceived,” Real Estate And Housing Developers’ Association Malaysia (Rehda) president Datuk Michael Yam told StarBizWeek.
The overhang could be in specific locations that refer mainly to strata titled properties such as condominiums in prime locations that cost RM500 per sq ft, and these comprise probably less than 5% of all properties sold in Malaysia,
Under this category, there may be some high-end properties in Mont’Kiara, KLCC and possibly, some condo projects in prime areas located in Penang and Johor.
On a possible financial crunch on developers post budget, he said: “That is left to be seen but it is likely that financial institutions would apply due diligence in giving out credit, based on track records of individual developers.”
However, Yam pointed out that this small high-end segment should not be overlooked.
“This high-value property segment can have a significant impact on economic growth. The economic stimulus vis-a-vis the Economic Transformation Programme are critical to the future vibrancy of this segment,” he said.
On the Government’s proposed deposit requirement on homebuyers to cool down property speculation, Yam said Rehda suggested that for the first and second properties, it would be better to allow the banks to assess the homebuyers’ financial position for deposit requirement on the property.
Real estate property consultant Amy Chung, who focuses on high-end condos in the Golden Triangle area in Kuala Lumpur, said more locals were buying these condos, backed by access to financing and the rental market.
“They mostly buy from foreigners, who are the first homebuyers, paying a minimum of 25% above the foreigner’s purchase price about one and a half years ago,” Chung said.
However, the situation was different during the downturn when most of the buyers were foreigners.
A property agent in the Golden Triangle agreed that the take-up rate for high-end condos was improving each year.
“But we feel it could be much better. There are still many high-end condos not sold and many of these properties are above the means of locals.”
She estimated the occupancy rates in various property projects as: K-Residence (less than 55%); Hampshire Residence (about 50%); Pavilion Tower 2 (30% to 45%); Marc Residence (70% to 75%) and Berjaya Times Square (90%).
According to Chung, high-end condos in the Golden Triangle would sell for RM850 per ft to RM1,200 per sq ft.
In Johor, developers are more worried if the ruling were to be imposed on the non-high end residential properties.
“Buyers of high-end residential properties are those with money and coming out with 30% downpayment (should the property loans be capped at 70%) is not a problem to them,” Johor Real Estate Housing Developers Association chairman Simon Heng said.
In Johor Baru, high-end properties comprised those just RM400,000 and above.
Curbs on property loans are not likely to affect Singaporean buyers because of the strong Singapore dollar.
“In fact for years, Singaporeans and foreigners taking up housing loans from local banks have only been getting 70% from the banks,” said Heng.
Berinda Properties Group sales manager Lim Sung Heng said demand for high-end houses in Johor Baru was good with many wanting to upgrade from mostly single-storey terrace houses.
From Berinda’s experience, most buyers of its high-end residential properties paid more than 10% downpayment for their houses.
Berinda’s projects in Johor Baru include Taman Molek, Molek Pine, Impian Molek, Molek Groover, Taman Redang and the houses are prices between RM500,000 and RM3mil.
He said the property market there also benefited from Iskandar Malaysia due to rising demand for high-end residential properties in southern of Johor.
In Penang, SP Setia property (North) general manager S. Rajoo said sales of high-end properties had increased in the past two to three months.
Sales of SP Setia’s residential landed properties priced between RM647,880 and RM1.4mil had registered RM102mil in sales revenue over from July to August compared with RM60.4mil three months earlier.
“The higher sales in the second half were mainly due to the introduction of the easy home ownership campaign where the buyer pays up to 3% down payment. Since the beginning of this month, sales have hit RM208mil,” he said.
The bulk of SP Setia’s sales came from its Setia Pearl Island three-storey semi-detached houses which are priced from RM1.4mil onwards and Setia Vista double-storey houses which are going from RM647,880 onwards.
IJM Land’s sales for July and August were about 40% higher than May and June.
This was due to the launch of The Light Collection 1, comprising 176 units of condominiums and water villas, priced from RM800,000 to RM2.6mil.
To date, IJM Land has sold about 60% of The Light Collection 1.
However, a Penang-based valuer said investors were now taking a cautious approach when buying residential properties priced from RM1mil onwards.
“They want to know more about the directions of the Government first before making further commitments,” he said.
Another property consultant based on the island said there was a slow-down in the high-end property segment priced between RM600,000 and RM3.5mil.
“This is due to concerns about the property market being over-heated. The forthcoming budget will have a lot of impact on the future trends of the property market,” he said.
By The Star
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