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 allure of Penang heritage properties

 

Prized property: The Chimes Heritage building at Jalan Bawasah, Penang. The value of heritage properties has increased by 37 to 157 per sq ft since 2008 due to the investments made by Penangites staying overseas and by Singaporeans.

Value of such assets has jumped by as much as 157% psf

THE heritage property segment is still attracting strong interest from investors despite the softening of the overall property market in Penang.

The value of heritage properties has increased by about 37% to 157% per sq ft (psf) since 2008 due to investments made by Penangites staying overseas and by Singaporeans.

Depending on the location, size, and condition of the heritage properties, the present pricing on a psf basis ranges from RM550 per sq ft (psf) to RM1,800 psf, compared to between RM400 psf and RM700 psf in 2008.

According to the National Property Information Centre (Napic), a locally registered company, World Class Land Sdn Bhd, snapped up over 60 pre-war houses in George Town’s heritage areas for about RM122mil.

Raine & Horne Malaysia senior partner Michael Geh says the properties were sold between late 2013 and August 2015.

“The most expensive pre-war property, with a 1,363q ft land area and located in Chulia Street, was sold for over RM2,000 psf,” he says.

It is learnt that about RM30mil would be spent for restoring the properties, as the cost of restoration is about RM500,000 per unit.

The company also acquired a 30,000 sq ft of land in Magazine Road for about RM36.9mil. “This was the highest transaction for a vacant land in 2015, as the sale was transacted at RM1,250 psf,” Geh adds.

Geh says locals tend not to pay attention to the capital appreciation of heritage properties, although the value had risen substantially since 2008.

“They should invest because the supply of heritage properties is limited.

“There only some 3,853 units of such properties in George Town’s heritage core and buffer areas, according to George Town World Heritage Inc.

“Because the supply is limited, it is safe to invest, as the value would tend to rise than fall.

“I urged Penangites to acquire heritage properties for own use and enjoy the capital appreciation that would occur incrementally,” he says.

Because of the strong appreciation in the value of pre-war houses, the rental yield of such properties has remained unattractive.

In 2008, the rental of heritage properties, depending on the location, size, and condition of the heritage properties, ranged between RM1,000 and RM3,000, compared to the rental today which is between RM3,000 and RM8,000.

“Calculated on a yearly basis, the rental yield is not attractive.

“Today the yield is about 4.8%, compared to about 4.5% in 2008

“This shows that the value has appreciated faster than the rentals, as there is very little demand to rent properties in the state,” he says.

According to Geh, local investors should pay attention in particular to the heritage properties in the Prangin Market or Sia Boey area, as it has been earmarked for the location of the central LRT station on the island, which would boost the value of the properties in the area.

Meanwhile, the Malaysian Institute of Architects (PAM, Northern Chapter) chairman Datuk Lawrence Lim says the cost of restoring heritage properties has increased by about 40% since 2008.

“Today the cost to restore such houses ranged between RM150,000 and RM500,000 per unit.

“A simple restoration for a heritage property with a 2,000 sq ft built-up area can cost about RM150,000.

“It cost just RM50,000 to restore the roof of a heritage house,” he says.

Despite the increased in the cost of restoration, there are local investors who are still investing in heritage properties.

Lim, who is also East Design managing director, says the company was now undertaking restoration projects for heritage houses in Hong Kong Street and Magazine Road.

“We will be restoring the Koon Kee office building at Hong Kong Street, the manufacturer of Penang’s famous white coffee.

“The other project involves the restoration of 10 pre-war units in Magazine Road for commercial usage,” Lim says.

Datuk Ooi Sian Hian, who is also Ghee Hiang group executive chairman, says he will be restoring the heritage property of his family’s maternal grandparents at 123 Macalister Road.

The property, measuring 3,600 sq ft in built-up area, sitting on a 30,000 sq ft site, was built in the 19th century, and came under the ownership of Ooi’s maternal grandparents in the 1950s.

“We are getting local architects and architectural students through the assistance of PAM to come up with a suitable design concept to restore the property.

“It will be up to the architectural fraternity to decide on the appropriate design concept for the property.

“Whether it will be restored for commercial or residential usage will depend on their design.

“We plan to kick off the project in two year’s time,” Ooi says.

Ooi’s family has 10 properties at Prangin Lane, nine of which he will restore at a later date for commercial re-use.

“The properties have been passed down from the maternal grandparents.

“We want to wait and see what the market for restored heritage properties is like first, as there are already in the market many such restored heritage projects.

“We also want to wait for the state government’s Sia Boey project to be completed first, as the site has been earmarked for a LRT project hub,” he adds.

Ooi says he is submitting a plan to restore the tenth heritage terraced property located in Prangin Lane, which has a built-up area of 1,620q ft.

“We are naming it Jumpa@41PranginLane, which will be restored as a event centre for pop-up markets, seminars, stage plays, and culinary events,” he says.

Under Ghee Hiang, the group is now restoring its heritage property at 61 Beach Street, which has over 3,000q ft in built-up area.

“It is the Ghee Hiang Group’s Concept Lifestyle In-Store, which will be designed to accommodate a living heritage museum showcasing the history of the group’s history and tau sar pneah products and a lifestyle themed cafe,” he says.

Khoo Kongsi trustee Datuk Khoo Kay Hock says the clan association has restored 16 pre-war properties and had leased them to a hotel operator.

“The properties are undergoing interior refurbishment now, and scheduled for opening in the second half of 2016.

“About RM4mil was invested to restore the properties, which were completely restored two years,” he says.

According to George Town World Heritage Inc general manager Dr Ang Ming Chee, there are 3771 heritage properties in George Town belonging to category II.

“Category II properties are those residences and business premises that have existed for generations.

“They were built to support the traditional beliefs of the inhabitants and users.

“In the George Town’s World Heritage Site (WHS), there are 82 buildings, gateways, cemeteries, and sites categorised as Category 1.

“Category 1 buildings and monuments are important because they reflect the authenticity of the cultural landscape and therefore the outstanding universal values of the world heritage site (WHS),” she adds.

By David Tan The Star

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Penang is best for property investment in Malaysia

Penang has dislodged Kuala Lumpur's Golden Tringle as the top investment choice

GEORGE TOWN: Penang has now overtaken the Klang Valley as the most attractive place for property investment.

In its Malaysia Commercial Real Estate Investment Sentiment Survey 2016, global property consultancy Knight Frank Ma-laysia said the state had dis-lodged Kuala Lumpur’s Golden Triangle as the top investment choice.

Penang garnered 67% of the overall responses while the Golden Triangle slipped to fourth position with 49%, finishing behind KL Fringe/ Klang Valley (56%) and Johor/Iskandar (55%).

The survey took litmus test for insights and preferences of key players namely fund managers, developers and lenders in the commercial sector for the Year 2016.

It targeted 700 respondents in senior management levels across the property industry.

Half of them (55%) were deve-lopers while the rest were commercial lenders (24%) and fund or real estate investment trust managers (21%).

Last week, George Town was picked as the sixth ‘Best place to retire abroad in 2016’ by CNN Money.

Source: Knight Frank Malaysia/The Star

That’s Right, Penang Just Beat KL To Become The Top Choice For Investments

 It appears that more people are keen to invest in Penang than in Kuala Lumpur, as a survey by Knight Frank Malaysia shows that Penang garnered over 67 percent of the overall response.

The survey also revealed that Kuala Lumpur Central Business District (CBD) (Golden Triangle), which was the top investment choice in 2015, was dethroned and dropped to the fourth ranking with 49 percent of the responses, coming after Kuala Lumpur Fringe/Klang Valley (56 percent) and Joh

• Penang was also voted as the most attractive investment region for hotel or leisure and healthcare or institutional developments, possibly due to George Town being inscribed as one of UNESCO’s World Heritage Sites and the popularity of the state for medical tourism
  

  • 
    • Image via Travel2Penang George Town is recognised as one of Unesco’s World Heritage Sites. 
  • 
    Penang garnered the highest vote from respondents by getting 86 percent of the votes for most attractive investment region for hotel or leisure and 79 percent of votes for healthcare or institutional developments.
    
    Kota Kinabalu came in second for the most attractive investment region for hotel or leisure with 67 percent while Johor clinched the third spot with 59 percent.
    
    As for the healthcare or institutional developments, Klang Valley and Johor gained 72 percent and 69 percent of votes respectively to be the second and third most popular region.
    
    
    
• These results came from the Malaysia Commercial Real Estate Investment Sentiment Survey 2016, which was conducted by global property consultancy Knight Frank Malaysia
  • • Image via Knight Frank Malaysia
       
  • The Malaysia Commercial Real Estate Investment Sentiment Survey 2016 was conducted using an e-survey mechanism distributed throughout Knight Frank’s vast database as well as in-depth interviews with key players in the local commercial sector.
    
    There were some 700 respondents in senior management levels this year, with 55 percent of them being developers, 21 percent fund or real estate investment trust (REIT) managers and 24 percent lenders.
    
    
    • Home of a UNESCO heritage site, Penang's landscape is the perfect blend of old and new. Take a look at how the city has beautifully transformed over the years!
      

      • Penang Then And Now: 35 Photos That Show How Much Has Evolved In The Past Century

        From one of the region's first trading ports to home of a UNESCO heritage site, Penang manages to preserve its old-wo...
        

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    • Making a trip to Penang? Don't forget to check out these places!
      

      • 15 Heritage Boutique Hotels That Add to The Unmistakeable Charm Of Penang

        Come for the food, stay for the hotels. You probably won't bear to leave by the end of your trip!
        

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    • Born and bred in the Pearl of Orient? You'll know what we are talking about! ;)
      

      • 15 Things A #PenangKia Has To Say About Other States (And Their Food)

        Penangites are really proud of their island, aren't they?
        

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Developers of toppled Taiwan building detained

Executives face charges over professional negligence resulting in death

Questions are being asked about the building’s construction (Picture: AP)

Three Taiwanese construction company executives have been detained on charges of professional negligence resulting in death following the collapse of an apartment building in an earthquake, killing dozens.

The district prosecutor's office in the city of Tainan said Wednesday that Lin Ming-hui and architects Chang Kui-an and Cheng Chin-kui were suspected of having overseen shoddy construction of the 17-story Weiguan Golden Dragon building, which crashed onto its side during the earthquake Saturday.

It said the three were detained to prevent collusion or other acts that could disrupt the investigation. Among the accusations was that only half as many fasteners had been used in the supporting columns as required.

The death toll in the 6.4-magnitude quake stood at 44 on Wednesday, with all but two of the deaths coming in the building collapse. About 100 people are believed to still be trapped in the debris.

The broadcaster FTV and other Taiwanese media said Lin had changed his name after a previous bankruptcy and had run multiple property development companies in Tainan in an apparent attempt to avoid creditors and bilked clients.

Although the shallow quake was potentially devastating, few buildings were damaged as a result of strict construction standards in force in Taiwan, an island frequently struck by quakes. The Weiguan Golden Dragon building, built in 1989, was the only major structure to collapse in the temblor.

Most of the 320 people who were rescued from the disaster were saved in the hours immediately after the quake, in which the building's foundation and lower floors gave way before it toppled onto its side.

Earthquakes rattle Taiwan frequently. Most are minor and cause little or no damage, but a magnitude-7.6 quake in central Taiwan in 1999 killed more than 2,300 people. More stringent building standards were introduced following that disaster and appear to have been tightly enforced.

The quake struck during the most important family holiday in the Chinese calendar - the Lunar New Year. Celebrations of the holiday in Taiwan have been subdued. - AP

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 Hills clearing in Penang: NGOs not impressed with mitigation work at Botak Hill 

 Penang Forum tells Chief Minister: the unmitigated diasters on hill projects

Hills clearing in Penang: NGOs not impressed with mitigation work at Botak Hill

http://www.thestar.com.my/metro/community/2016/01/28/searing-queries-on-clearing-ngos-not-impressed-with-mitigation-work-at-botak-hill/
An aerial shot taken from the bald patch on Bukit Relau, George Town, during a visit by the state delegation and NGOs to check on the mitigation work. — Photos: CHARLES MARIASOOSAY.

Chow (left) being briefed by technical consultant Khoo Koon Tai during the visit up Bukit Relau.

THE climb up the steep track on Bukit Relau is an arduous one. And there is little reward now for those who endure the climb.

The infamous Botak Hill seems to be getting balder. It’s a sad sight. What was once a lush hill had become a wide open patch of brown. Now, it is a giant scar of boulder, sand and concrete. The developer General Accomplish-ment Sdn Bhd is carrying out mitigation work which it says will be completed in June this year. For now, however, the hill looks worse than it did before.

The trip up the hill was arranged by the state and led by Local Government Committee chairman Chow Kon Yeow. Others in the entourage included Deputy Chief Minister 1, Datuk Mohd Rashid Hasnon, executive councillors, state assemblyman, Penang Forum and Malaysia Nature Society, Penang.

It was no surprise that the NGO members were not impressed with the mitigation work. The condition of the hill has deteriorated so badly. The only greenery in sight were patches of grass on the boulders.

The NGOs are even more upset that with less than six months before the mitigation work is completed, there seems to be no plan in place to halt the erosion of the hill or to carry out restoration work, which will have to include replanting of trees, the undergrowth and comprehensive hydroseeding.

Roads and drainage systems built right down the hill have destroyed whatever greenery there was. The explanation given was that the roads were needed for the mitigation work rings hollow. “How can you carry out mitigation work and clear more land for the so called roads for mitigation work,” asked a Penang Forum member.

There are metal poles bordering a part of the hill, and it look like some hoarding is about to come up. Is there any development being planned for the spot of the hill?

A spokesman for the developer, General Accomplishment Sdn Bhd said RM20mil has been spent so far for the mitigation work and the amount could rise to RM50mil.

“Why would you want to spend RM50mil for mitigation work if you are not going to do anything with the land,” asked a reporter.

“Well, we are open to development of the land if that is what the people want,” replied the project manager for the developer.

Chow was non-committal when asked if the state would reject any development on the land saying it was a “hypothetical” question as there wasn’t any application (to develop the land).

Despite the long explanation, the burning question remains.

Will the hill be restored to its old state and or is the mitigation work just the start of plans to develop the hill for housing.

It was rezoned for housing in 2012.

By K. Sekaran The Star

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Penang Forum tells Chief Minister: the unmitigated disasters on hill projects

The Penang Forum steering committee released the following ‘executive summary’ to the media during its meeting with the chief minister of Penang

The Penang Forum steering committee released the following ‘executive summary’ to the media during its meeting with the chief minister of Penang:

To address public concerns over hill degradation in Penang, the Penang Forum took the initiative in September 2015 to co-organise a public forum on hill development with the MBPP and relevant Penang state authorities.

But the council and the state decided not to participate in the effort and missed the opportunity to engage with the public.

In organising the public forum, the Penang Forum is non-partisan and has not been influenced by any other body or organisation.

The Penang Forum has not been misinformed. Its information and data came from two sources:

• answers provided by the State Exco to the State Assembly sitting in November 2015 on the number of legal projects and illegal clearings on sensitive hill land between 2008 and 2015; and 
• photographs provided by members of public, resident associations, Google Earth satellite imagery and drone shots. The scarring on Bukit Relau has grown into an unmitigated disaster. Despite a stop work order and a fine against those responsible, major earthworks, including the building of road infrastructure, have taken place.

 While it is technically possible to build safely on hill slopes many stringent conditions must first be in place and complied with. The present approach to environmental and engineering impact assessment done in isolation for individual hill development projects should be reviewed.

The Penang Forum calls on the Penang state government to comply with its own stated policies of prohibiting development on hill land above 76m (250 feet) and/or with a gradient greater than 25 degrees.

Special projects should be limited only to those of public interest.

We recommend that the authorities implement a holistic planning and monitoring system that takes account of cumulative impacts for the whole hill area under development.

We call for violators to be prosecuted to the full extent of the law, including jail sentences and to be blacklisted for future projects.

We call upon the authorities to require all offenders to restore the damaged hills to their original condition.

Penang Forum steering committee 11 January 2016

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Penang construction industry in 2016 to stay flat

It is expected to generate RM6.8bil in jobs in 2015

GEORGE TOWN: Penang’s construction industry is expected to stay flat this year with a value of about RM6.8bil, which is almost the same in 2014.

“The RM6.8bil mark is one of the highest in the history of the construction industry in Penang.

“Due to the economic slowdown, it will be difficult to surpass this figure,” said Penang Master Builders and Building Materials Dealers Association president Datuk Lim Kai Seng.

Lim said the bulk of the projects were hotel and mixed development schemes.

PMBBMDA president Datuk Lim Kai Seng: ‘Due to the economic slowdown, it will be difficult to surpass this figure (RM6.8bil).’

“For the first six months of this year, the value of jobs given out reached RM2.68bil for 171 contracts.

“Of that total, some 153 are from the private sector while the remainder are government contracts,” he added.

The value of contracts from the private sector is around RM2.47bil, while government contracts total RM214mil.

The business contracts generated in 2014 was revised to RM6.8bil from RM4.8bil announced previously, after taking into consideration projects tendered out in late 2014.

Lim said that the association was confident that there were at least over RM4bil contracts given out in Penang in the second half of 2015.

These contracts, he said, were for mainly new hotels and mixed integrated developments.

Some of the big projects are from IJM Land Bhd with a gross development value (GDV) of RM486mil, Eco World Development Group Bhd (GDV: RM600mil), Mah Sing Group Bhd (GDV: RM1.005bil), Sunway Bhd (GDV: RM150mil), Ivory Properties Group Bhd (GDV: RM1.156bil) and Ideal Property Group (GDV: RM1.8bil).

Lim pointed out that the construction cost for the projects would come up to about 40% or about RM2bil of the total RM5bil GDV.

“The renovation will cost about 30% or RM600mil of the RM2bil spending for construction works.

“We can expect spending of over RM800mil for construction and renovation works annually for the next three years from these projects alone,” he added.

Lim said the new shopping malls being planned now would also generate about RM3.5bil worth of jobs for the local construction industry over the next five years.

“This means that there will be about RM800mil to RM1bil worth of construction jobs given out in Penang per annum starting from next year,” he said.

These shopping malls include Penang Times Square Phase 3 which will have a net lettable area (NLA) of 230,000 sq ft, City Mall Bayan City (300,000 sq ft), Southbay Plaza (424,000 sq ft), Penang World City (1 million sq ft), Sunshine Tower (2 million sq ft), The Light Waterfront Mall (1 million sq ft), Mall@Southbay City (750,000 sq ft), The Designer Village (400,000 sq ft), Ikea & Ikano Power Centre (NLA not available), and a mall project by Belleview Goup (1.5 million sq ft).

By David Tan The Star

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Give thanks with a grateful heart

Appreciate the good and bad in your life and be optimistic about the future

WITH two days left for this year, it is time to reflect and make fresh resolutions for 2016.

I have learnt to give thanks for all things – good or bad – that came my way.

But why be thankful even for the bad?

Truth be told, it took me a long time to be willing to accept misfortune and longer still to give thanks for them.

Now I appreciate there are far too many factors that I cannot control despite my best efforts.

So I just learn from the sad experiences to avoid repeating them and hold on to the hope that something good will come out of them later.

2015 has been a victorious year for me with more blessings than woes.

With a grateful heart, I choose to remember the former with rejoicing and overlook or forget the latter.

Wonderful blessings

Firstly, I am thankful that everyone in my family is in good health.

My biggest blessing is my baby, Cat.

My life has completely changed since her arrival in mid-year and everything I do now revolves around this little bundle of joy.

Healthy, joyful and growing well, she sits, crawls and listens whenever we speak to her.

On her second swimming class, she was submerged briefly in water and has been doing this with ease ever since.

In a couple of months she will start her nursery and music appreciation classes.

Meanwhile, she is learning to recognise words being pronounced and images with the aid of picture cards.

Being an inexperienced mother, the help and support from my husband, his parents and my parents has been invaluable.

My mother is a great help in tending to baby Cat and teaching me many valuable lessons about caring for my baby.

Everyone knows how difficult it is to hire a maid these days.

The timely arrival of our maid who is well-mannered and an experienced mother to take care of the many household chores lifted a heavy load of me.

It spite of the current weak economy, our architectural firm has been successful in securing several commercial and residential projects in addition to our appointment to design automotive facilities throughout the Asia-Pacific region for an upmarket marque.

We are continuously developing talented architects and designers while fostering in them a passion and enthusiasm for their work.

My 95-year old grandmother fell very ill in September but has since recovered almost fully.

She has good health except for occasional bouts of sleeplessness for a couple of days after which she will be groggy for two or three days and regale us with funny tales.

I am thankful to have clean air to breathe for the next few months before the haze sets in again, and that our economy is not too bad and personal safety here is much better than most other countries.

Looking forward

Our family has a saying that “next year will be a better year”.

Thankfully, it has been so all these years.

I eagerly await the time when baby Cat begins to talk and walk.

I am certain my heart will melt at the sweet sound of her voice when she calls me “mummy” and the sight of her staggering towards me for a hug.

After several months’ hiatus, I am getting ready to return to work which I miss very much.

Meantime, I have to trim off at least 6kg to get back in shape.

With determination, it will take three to four months.

I am yearning for the opening of our new automotive facility which specialises in the restoration and maintenance of classic and exotic cars.

Renovation work on the premises is in their final stages and business should commence in the first quarter of 2016.

Everything seems bright

Ever since my father told me about the downfall of his arrogant business principal, I have always reminded myself to be more careful when everything seems bright.

After a conference in a five-star hotel in Madrid, he asked the latter why he was wearing dark sunglasses in the coffee house.

Puffing a cigar, the principal replied that his future was too bright.

He lost his job soon after and his fortune has dwindled further ever since.

While I receive blessings, I remember there are many poverty-stricken people.

I shall rekindle my passion for charity and do my part for orphans and old folks.

We cannot do much about the burning national issues but I hope that they will be settled expeditiously so that the government can begin to organise itself to take care of wage-earners who are hard-pressed due to the rising cost of living.

On balance, I am optimistic about the future because the scriptures teaches me to always have hope and that the righteousness of God will bring peace and joy to anyone who puts it into practice.

May you be blessed with peace, joy, love, excellent health and prosperity in 2016 and beyond.

By Chermaine Poo Slice of life

Chermaine Poo is a chartered accountant turned actress, TV host, emcee and columnist. Follow her on www.chermainepoo.com, Facebook.com/ChermainePoo, and Instagram.com/Chermaine Poo or drop her an email at info@chermainepoo.com

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How property prices are determined?

Factors affecting prices - It is not easy to predict trend as the property market involves all kinds of players

THE year 2015 will always be considered one of the more challenging years for the property sector, with several factors coming into play and leaving potential buyers and investors cautious.

Looking back, Jordan Lee & Jaafar executive director Yap Kian Ann says there were many factors – be it microeconomic or macroeconomic, political, social, among others, that affected the property market performance and its pricing either directly, indirectly and/or jointly.

Click for actual size: http://clips.thestar.com.my.s3.amazonaws.com/clips/business/property-prices-chart-1912.pdf

“These factors are inter-related and influence each other. Individually, they give direct and indirect impact to the property market, property transaction volume and property prices at a different direction and degree.

“As the property market involves players (buyers and sellers) with all kinds of behaviour and is subject to a combination of factors that affect its performance at a given point in time, it is not an easy task to predict its trend and degree accurately.”

Looking ahead, property consultancy VPC Alliance (KL) Sdn Bhd managing director James Wong expects 2016 to be more subdued than this year.

Wong says most developers have launched their products aggressively in 2014.

“They knew the market this year would be soft and this softening would be carried forward to 2016. The full impact of the expiry of the developers’ interest bearing schemes (DIBS) will be felt next year.

Under DIBS, property buyers need not service the loan until the property is completed. Introduced in 2009 as an incentive, speculators purchased multiple units under DIBS because of the initial low outlay.

He expects to see softening demand in the high-rise high-end residential sector in the central region of the Klang Valley in 2016. Landed residential property demand is still resilient, especially with the gated and guarded community concept. House prices are expected to “self-correct”, he says.

Wong says foreign investors are actively monitoring residential properties in Kuala Lumpur due to weak ringgit but they remain cautious.

The increase in interest rates by the Federal Reserve after nearly a decade is also keenly watched. Already, reports are filtering out that Federal Reserve’s sway on global interest rates is causing a sharp jump in Singapore’s benchmark borrowing cost, squeezing growth in the small Asian city-state.

On a state by state basis, MIDF Research said earlier this month that Johor’s house price index showed the slowest growth year-on-year at 3%, Penang (3.5%) while Selangor fared better at 6.2%, followed by Kuala Lumpur’s 5.3%.

“We believe that the outlook for property price is better in Greater KL (Selangor and KL) due to support from the urbanisation factor.”

Citing Bank Negara statistics, the research house also noted that demand for property loans declined 13% year-on-year in October 2015 to RM25.19bil.

“This was weaker than September 2015, which declined 9% year-on-year. On a monthly sequential basis, the data was 1% lower. We are negative on the data as the number was showing nine consecutive year-on-year declines since February 2015.

“Year-to-date October 2015, loans were lower by 7% year-on-year to RM253.88bil. In our view, consumer appetite for big ticket items such as property remains low due to the rising cost of living and the weakening ringgit.”

By Eugene Mahalingam The Star/Asia News Network

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