Building Investment (Mar - Apr 2015).pdf
As our magazine grows to become more of a regional publication, we will be bringing you even more news from around the region and beyond. e biggest change in Malaysia was the implementation of Goods and Services Tax on 1 April 2015 which impacted on property prices, raising costs by up to 2.6 per cent. As an oil-exporter, it is likely to see slower growth due to low oil prices and GST dampening private consumption. Singapore will continue to see property prices falling due to government cooling measures while both Indonesia and Philippines are expected to show strong growth even as China slows its pace to 6.7 per cent growth (World Bank). Overall, growth outlook for the region is expected to hover at 6.4 per cent for 2015 (Asian Development Bank). As we approach the second quarter of 2015, we will continue to work even harder to ensure that our magazine reaches a wider audience as we explore the various distribution channels for the electronic version of our magazine – more on these will be announced in later issues. Meanwhile in this issue, we highlight projects like the futuristic development called Harbour City in the historic city of Melaka (front cover feature); Sherwood Kinrara South residential project in Selangor; Epic Suites also in Selangor; and developer SP Setia’s new corporate headquarters in Shah Alam. In our features section, we report on Malaysian Timber Industry Board’s initiative to promote Malaysian-designed furniture; and market reports from some of the expert analysts like WTW and REHDA. Elsewhere in the magazine, we bring you a roundup on market news and updates on products and services while in the Design Feature section, you can read about some of the exciting designs from US and Canada. If you have suggestions to oer or events that you would like us to cover, please feel free to drop us a note.
As our magazine grows to become more of a regional publication, we will be bringing you even more news from around the region and beyond. e biggest change in Malaysia was the implementation of Goods
and Services Tax on 1 April 2015 which impacted on property prices, raising costs by up to 2.6 per cent. As an oil-exporter, it is likely to see slower growth due to low oil prices and GST dampening private consumption.
Singapore will continue to see property prices falling due to government cooling measures while both Indonesia and Philippines are expected to show strong growth even as China slows its pace to 6.7 per cent growth (World
Bank). Overall, growth outlook for the region is expected to hover at 6.4 per cent for 2015 (Asian Development Bank).
As we approach the second quarter of 2015, we will continue to work even harder to ensure that our magazine reaches a wider audience as we explore the various distribution channels for the electronic version of our magazine
– more on these will be announced in later issues.
Meanwhile in this issue, we highlight projects like the futuristic development called Harbour City in the historic city of Melaka (front cover feature); Sherwood Kinrara South residential project in Selangor; Epic Suites also in
Selangor; and developer SP Setia’s new corporate headquarters in Shah Alam.
In our features section, we report on Malaysian Timber Industry Board’s initiative to promote Malaysian-designed furniture; and market reports from some of the expert analysts like WTW and REHDA. Elsewhere in the magazine,
we bring you a roundup on market news and updates on products and services while in the Design Feature section, you can read about some of the exciting designs from US and Canada.
If you have suggestions to oer or events that you would like us to cover, please feel free to drop us a note.
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Special FeatureREHDA Property Survey 2H 2014From response by 132 developers to its recent property survey, REHDA concludes thatpessimism will carry over into 1H <strong>2015</strong>.REPRESENTING THOSE WITH projectsin hand and/or in the pipeline, only 132members (about 16%) responded to the RealEstate and Housing Developers Association(REHDA) Property Industry Survey for 2H2014. Echoing similar sentiments expressedearlier in the year, REHDA President YBhgDatuk Seri Fateh Iskandar lamented that the“difficulties” of the preceding months willcontinue to plague the industry in <strong>2015</strong>.2014 ScenarioFor starters, whilst sales performanceremained moderate, there was substantialreduction in the number of units launched(residential and commercial) sectors, i.e.,6,569 units (with 2,951 sold) compared to10,189 units in 1H 2014 (4,989 sold). Whilethe majority of the residential launcheswere in the RM200,001 to RM500,000range, similar to 1H 2014, the spectre of endfinancing (low loan-to-value ratio (LTV)of 70%, etc) has put paid to many a loanapplication by would-be buyers. Preferredresidential types remain unchanged with2-3 storey terraced houses topping the list,followed by single storey units and, thirdly,condominiums. Launches of commercialunits, however, have reduced by 18% in theperiod under review with the majority beingin the RM500,000 to RM1.0 million range.Thus far, notwithstanding that unsoldunits are rated “manageable” by affectedREHDA members, the impact on cash flow isconsidered “moderate” in the main although,for unsold Bumiputra lots, REHDA reiteratesthe call for an “automatic release mechanism.”Other reasons for unsold units (27% in the“affordable housing” range of RM250,001to RM500,000 and 31% in up-to-RM1.0million bracket) are low demand/interest,odd/corner/special lots and location. Onbuyers’ profile, REHDA reported that localbuyers (50% first-timers) lead the market(which debunks views of speculation in themarket), purpose of purchase being selfdwelling,upgrading and rental yields.In their business operations, REHDAmembers cite a number of recurrentchallenging issues, e.g.: construction – labour (high wages,shortage of supply and lengthyapproval) and building materials (highprices, shortage of and inconsistentsupply); end financing (bridging), i.e., banksrequesting more documents, highersales required before drawdown,capping of loan amount and no loansfor low cost/controlled housing; utility service providers; local authorities, i.e., slow approval,inconsistent policies and guidelines,excessive contributions, highdevelopment charges and slowBumiputra release (unsold units).<strong>2015</strong> ProspectsAside from and inclusive of the abovementionedissues, REHDA reckons thatpessimism will be the mood, carried overinto 1H <strong>2015</strong> and to worsen in 2H <strong>2015</strong>, withadditional challenge such as: (a) developers(numbers increased) providing affordablehousing face challenges such as increasedoverall cost of doing business, high landprices and cross subsidies from higher endprojects; (b) increase in overall cost of doingbusiness (up to 20%), with added impactfrom GST implementation; and (c) reducedlaunches in the residential segment (landed3,895 units and strata 5,022) and a lownumber of commercial units. 24 <strong>Building</strong> & <strong>Investment</strong> | www.b-i.biz
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