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Showing posts with label house. Show all posts
Showing posts with label house. Show all posts

Saturday 9 January 2021

Generating sustainable retirement income

 


Many Malaysian are EPF contributors and have FDs as well. "You will never understand how bad the feeling is when you have to break your fixed deposit to cover your living expenses."

ONE of the top financial concerns of retirees is running out of money.

Whether you were an executive earning a reasonable income, or if you are making top dollars as a businessman, the fear is still valid.

For example, Tommy, who left the working world soon after selling his factory to a European multinational corporation. Tommy shared during one of our meetings that he was golfing every week and globe trotting almost every other month.

However, there was a problem that greatly bothered him. He found that he was dipping into his fixed deposit every now and then just to maintain his interesting lifestyle.

“Yap, you will never understand how bad the feeling is when you have to break your fixed deposit to cover your living expenses, ” he said.Combing through all of his finances, we discovered that Tommy’s lackadaisical attitude was to be blamed. He has not been paying enough attention to invest and generate income from the RM12mil nest egg that he had painstakingly accumulated. His investment portfolio was a mess.

Over the years, he invested in a few properties but never really bothered to oversee them. When tenants left, he didn’t make an effort to secure new tenants. In fact, some properties were even sitting vacant and idle. His excuse? He was too busy running the business.

Yap Ming Hui
Yap Ming HuiYap Ming Hui

Tommy has also invested in some shares and unit trusts but he seldom monitors and reviews their performances. Imagine his surprise when he went looking for some extra cash but discovered that most of the investments were not making money. Prior to meeting me, he couldn’t decide whether to sell or to keep those underperforming investments.

Consequently, the bulk of Tommy’s wealth is in fixed deposit. The trouble is the interest income from fixed deposit barely covers the impact of inflation. As such, if Tommy continues to spend on his interest income, he will risk having the principal depleted.

Asset rich, income poor

Tommy’s problem is a typical case of “Asset Rich, Income Poor.” His situation is definitely not unique. In fact, I find most self-made millionaires or business owners, typically strong at creating wealth from their business or professional career, but poor at generating income and gain from the created wealth.

For one, all the time spent ensuring their businesses succeed also takes them away from making sure that the wealth created is optimised.Let’s examine Tommy’s assets and see how it measures up (see chart).

The RM6mil in fixed deposit generate approximately 2% interest income. However, notice that the 2% of interest is not sufficient to offset the 4% inflation provision. As a result, there is negative net income coming from Tommy’s fixed deposit asset.

Tommy’s properties are worth RM3mil and only generates RM50,000 in rental income per annum. Nevertheless, this can be considered a net income because inflation will be hedged by capital appreciation (at least 4% per annum) of the properties.

The RM1mil in shares gives a total return of 5%. Factoring 4% inflation, the actual income received from share investment is RM10,000.

Unfortunately, the RM2mil unit trust investments didn’t offer any returns. After inflation provision, his unit trust investment has a net income of RM80,000.

The reality is if nothing is done now, Tommy’s wealth will continue to shrink by RM140,000 a year once inflation is factored to the equation. How does this play out for Tommy? The fact that he needs RM360,000 a year to maintain his current lifestyle will not augur well for him.

So, how can you prevent from ending up in Tommy’s situation?

The optimisation measures

> Remember to review the performance of each of your investment asset classes. In order to generate more income and gains, be proactive in getting rid of poor quality and poor performing investments. Look at each investment and ask yourself, should you keep it or should you sell?

> Consider moving fixed deposit into higher return investment.

Any gains from your fixed deposit would probably be eroded by inflation, especially given the current low interest, which will probably persist for quite some time. After calculating and providing for your emergency fund cash reserves, the balance of your fixed deposit should be invested into other investments that can generate higher return and income to hedge against inflation.

> Diversify the source of retirement income

Even if one investment asset can give you a good income and hedge against inflation, it does not mean that you must bet all or the majority of your wealth in it. For example, property investing. Some investors have found success in it. They were able to generate good capital appreciation and rental income.

As a result, they put a majority, if not all, of their wealth into properties. It may sound logical at first but rental income is not sustainable in the long run. It is subjected to changes, some of which cannot be controlled. Therefore, the best practice is still to diversify your retirement income across different asset classes, like share dividends and capital gains, unit trust gains, bond investment gains, retirement income products and others, so that it is not badly affected by any one impact.

The ability to grow your wealth during retirement years is important. Just because you have stopped working, it does not mean your money should stop working too. The idea behind wealth optimisation is to ensure that you can upkeep your retirement lifestyle and protect your wealth from inflation.

Ideally, one should get a plan done a few years prior to retirement to see how your retirement income would play out. After all, you wouldn’t want to have any unpleasant surprise, like in Tommy’s case. When you have time on your side, you can improve your investing skills and adjust your retirement plan accordingly while still in your active income earning years.

Yap Ming Hui is a licensed financial planner. The views expressed here are the author’s. Any reliance you place on the information https://www.thestar.com.my/business/business-news/2021/01/09/generating-sustainable-retirement-incomeshared is therefore strictly at your own risk.
 

Tuesday 24 September 2019

Home Is Where The Heart Is

https://youtu.be/a_B80AIQegE

Harking after a home: Officials have acknowledged that the lack of affordable housing is one of the issues that sparked the unrest in Hong Kong, which has been going on for months. — AFP
Owning a house is the standard ambition of any individual, however, getting there is increasingly becoming not only a local, but global struggle.

THERE’S a lesson to be learnt from the protests in Hong Kong – politics is about selling hope. So if the young people living in a depressing environment feel they have no future, then the alarm bells should ring loudly.

In the case of Hong Kong, the leaders – mostly technocrats and government officials – didn’t see it coming, or maybe they were just indifferent.

Many young people in Hong Kong feel they stand no chance of becoming a homeowner in their lifetime, and officials have acknow-ledged that the issue is one of the causes that sparked off the unrest.

The controversial Extradition Bill, which allows a Hong Kong resident to be sent to mainland China to face trial, was merely a catalyst. Those protesters couldn’t all possibly believe they’d fall on the wrong side of the law and face the consequences, could they?

Last week, former Hong Kong chief executive Leong Chun-ying was in Kuala Lumpur for appointments with businessmen, opinion leaders and officials, to update them on developments on the island.

I was among the lucky Malaysians picked to hear his thoughts and views on Hong Kong, while he, too, listened to our concerns during the two-hour closed-door meeting.

My co-host and meeting organiser, Datuk Seri Azman Ujang, and I both feel that of all the problems faced by any country in nation- building, none deserves greater priority than housing the people.

What expectation could be more basic than having a roof over our heads, and with it being a decent and affordable one at that? And when we talk about affordable, it should be truly attainable by the low-income people who form the bulk of the population in most countries.

Azman, the Bernama chairman, rightly outlined the consequences of the failure that stems from a lack of will in resolving the housing problem of the masses. And as he said, this could easily lead to people pouring into the streets protesting issues not even directly related to housing.

It’s a fact that many poor Hong Kong people live in a room less than 75sq ft, and millions live in deplorable conditions.

More recently, “nano” flats – tiny apartments less than 200sq ft – have fast become the norm in overcrowded Hong Kong.

According to a South China Morning Post report, the cost began at HK$2.85mil (RM1.52mil) for an apartment no bigger than an average Hong Kong car park space, but the lack of interest forced a rethink by the developer.

But what’s mind-boggling is that while there are plenty of poor people in Hong Kong, or many who feel poor, Hong Kong’s fiscal reserves stood at HK$1.16tril (RM620bil) as at the end of January.

In a report, Financial Services and the Treasury Bureau said there was a surplus of HK$86.8bil (RM46.2bil), bringing the cumulative year-to-date surplus up to HK$59bil (RM31bil).

All this wealth belongs to Hong Kong and not mainland China, so a lot can be done with that money for a population of just seven million people, especially low-cost housing!

In comparison, Malaysia’s official reserve assets amounted to US$102.03bil (RM425bil) as at end November 2018, while other foreign currency assets stood at US$51.6mil (RM215mil) for the same period, Bank Negara said. Malaysia has a population of 32 million.

It can’t be denied that Singapore has done well in housing its population, with over 90% of the seven million population reportedly living in homes of their own, and the home-ownership ratio is said to be the world’s highest.

The Singapore Housing Development Board (HDB) deserves global recognition for its feat in solving the housing problem of the people, especially the poor.

The middle-class and poor must be able to have a roof over their heads. That’s an essential human need. No country can have peace and stability if the poor are not able to own a home in their lifetime.

A prosperous and satisfied middle-class will lead to political stability. A huge middle class will also mean greater purchasing power, and this will lead to a better economy with spillover effects for everyone.

When there are angry citizens protesting everything from the escalating food prices to housing, then even the elite (including politicians and businessmen) will not feel safe. In South Africa, the rich live in houses with high walls and electric fences to protect themselves, but that’s not the best way to live. It’s living dangerously.

Malaysian politicians who still wield the race and religion card will realise that at some point, these will be “dead issues”.

With well-documented shrinking numbers, the Chinese and Indian population will no longer be the proverbial bogeymen in the future. Instead, it is class stratification that will be a matter of concern.

Last year, it was reported that the gap in income between the rich, middle class and poor in Malaysia had widened since 2008, according to a study by Khazanah Research Institute (KRI).

In its “The State of Households 2018” report, the research outfit of sovereign wealth fund Khazanah Nasional Bhd noted that the gap in the real average income between the top 20% households (T20) and the middle 40% (M40) and bottom 40% (B40) households had almost doubled, compared to two decades ago.

The report, titled Different Realities, pointed out that while previous economic crises, in 1987 and the 1997/98 Asian Financial Crisis, saw a reduction in the income gap between the T20 and B40/M40, post-2008/09 Global Financial Crisis (GFC), those disparities had not reduced.

But the Gini coefficient, which measures income inequality in the country, had declined from 0.513 in 1970 to 0.399 in 2016, denoting improvement in income inequality in Malaysia over the past 46 years.

Explaining the phenomenon, Allen Ng, who is the lead author of the KRI report, said income of the T20 households had continued to grow, albeit at a slower pace than that of the M40 and B40 since 2010.

“However, because they (the T20) started at a higher base, the income gap between the T20 and M40/B40 had continued to grow despite the fact that the relative (income growth) is actually narrowing post-GFC, ” Ng explained at a press conference after the launch of the report yesterday.

In his bestselling book The Colour Of Inequality: Ethnicity, Class, Income And Wealth In Malaysia (2014), economist Dr Muhammed Abdul Khalid wrote that “the future does not look rosy for Malaysia; the current policies are encouraging wealth disparity between rich and poor, and between ethnicities.

“Unless bold and drastic actions are taken urgently, a harmonious future for Malaysia is uncertain. There must be an urgency to give every Malaysian economic security, a better and sustainable future.”

Muhammed, the managing director of the research and consulting firm DM Analytics Malaysia, said last year that contrary to popular belief, most Chinese (70%) are wage-earners, as are most Malays (72%). In fact, the poverty gap between races has dropped compared to 40 years ago, though the disparity remains.

And what about Malaysia? We have a disastrous, if not scandalous, record, particularly the pathetic business activities, dealings and performance of the 1Malaysia People’s Housing Programme’s (PR1MA) set up to build affordable homes.

More than RM8bil has gone up in smoke because PR1MA’s management failed to meet its targets, despite all the assistance and facilities accorded to their projects by the previous federal government and most state governments.

PR1MA reportedly built only 11,000 homes, compared with its target of half a million residential units to be delivered by the end of 2018. That’s less than 5% of the original plan.

PR1MA Malaysia was set up to plan, develop, construct and maintain high-quality housing with lifestyle concepts for middle-income households in key urban centres. Its homes are priced between RM100,000 and RM400,000.

PR1MA is open to all Malaysians with a monthly household income of RM2,500 to RM15,000.

A total of 1.42 million people registered for PR1MA, a promise of one million homes by 2020, but only 16,682 units, or 1.6%, of the target, were completed between 2013 and 2018, costing the government billions in public funds.

Poor management, exorbitant land acquisition costs and unsuitable sites have turned the people’s housing project into a major financial flop. PR1MA’s failure, which could cost the new government billions, is apparently already saddled with ballooning debts, rendering the loss-making company untenable.

It’s the responsibility of the government to build affordable homes – not the private developers. Private developers, especially those who helm public listed companies, have profits and dividends to answer for to shareholders. They are in the business of making money, and with the expensive land bank they have acquired, they need to build expensive homes, too.

Even if there are requirements with the obligated mixed homes for social housing needs, it still won’t resolve the problems.

Our politicians shouldn’t pass their responsibilities to them. They just need to have qualified and competent professionals with integrity to run a set-up like HDB. Obviously, the people who ran PR1MA didn’t do their jobs. We can help Malaysians own homes, or at least rent them at affordable rates, if we’re truly committed. The question is, are we?

As for Hong Kong, there is another lesson the young protesters need to learn: a full democracy doesn’t guarantee you a home and a decent job. Just ask the homeless in the United States and Britain.

Source link


Read more:  



Abolish RPGT to avoid penalising non-speculative ..


Property wish list for Budget 2020 | The Star Online


Hong Kong tycoon in the spotlight

Wednesday 15 May 2019

Cracked drain causes road cave-in, house nearby on brink of callapse

https://youtu.be/9yXuW1pdrt4

Danger zone: A JKR personel inspecting the cave-in in Jalan Lembah Permai. — ZAINUDIN AHAD/The Star
Dangert zone: A JKR personel inspecting the cave-in in Jalan Lembah Permai and (inset) the abandon squarter house. — ZAINUDIN AHAD/The Star
The abandon squatter house.

 GEORGE TOWN: A cracked underground drain caused rainwater to flood the earth beneath a road in Tanjung Bungah, causing a retaining wall to burst open and creating a 10m-wide “cavern” beneath the road.

Residents along Lembah Permai woke up last Friday and found part of their street had caved in.

An abandoned house on lower grounds next to the street is teetering on the brink of collapse after water washed away the earth beneath the house’s foundation.

Where the opening of the 40cm-in-diameter underground drain used to be is now a maw around 10m across, with chunks of the wall lying down the slope.

The minor landslide brought back fearful memories for residents because it is less than 1km from the Tanjung Bungah landslide that happened in October 2017, which killed 11 construction workers.

“It was raining so much last week. The water from this drain comes from most of the roadside drains in hillside and it was gushing almost all day and night.

“Luckily, no one lives in that house now. It was abandoned many years ago,” said neighbour Teh Choon Pin.

When the southwest monsoon began on May 6, it was raining almost continuously for five days in Penang and this retaining wall burst open on the fifth day.

Resident Zuhaimi Che Mat, who lives just about 30m from the wall, said it was the first time this has happened in the 50 years she lived there.

R“The water from the drain flows into the stream heading out to sea. When it rains heavily, water from the hills comes gushing down the stream and out of the drain,” she said.

State Works Committee chairman Zairil Khir Johari, who is also Tanjung Bungah assemblyman, said the state approved an emergency fund of RM220,000 and a contractor has been appointed to start repair works.

“The underground drain had cracked and water was seeping into the soil and weakening the road foundation.

“We knew there were problems and the Public Works Department was in the process of calling for a tender before the wall burst open,” he said.

He said the hassle was that there were many utility cables and pipes running under the road that went down too.

“There is an 11kV electricity cable, water pipes, telephone cables and others. So many agencies will be involved in the repairs,” Zairil added.

Source link   


Related post;

Drainage and construction damaged nearby houses since 2014 must complete its mitigation quickly!

Underground Pipe Culverts from IJM Trehaus site on the left and nearby pond on the right

Monday 13 August 2018

Malaysia needs more childcare & daycare centres

https://www.thestar.com.my/news/nation/2018/08/13/malaysia-needs-more-childcare-centres-dpm-we-are-also-in-dire-need-of-qualified-workers-to-ensure-sa/
https://youtu.be/N6GSfiHN6mw

PUTRAJAYA: There is a dire need for more qualified childcare workers and registered childcare centres in the country, says Datuk Seri Dr Wan Azizah Wan Ismail.

The Deputy Prime Minister said that these shortages could adversely affect the safety and quality of care for Malaysian children.

“Data from the Welfare Department showed that up to June this year, the number of childcare workers looking after children four years and below is 16,873.

“Out of this, only 3,173 of them have the minimum qualification of a childcare course,” said Dr Wan Azizah, who is also Women, Family and Community Development Minister.


She was speaking at the launch of the National Childcare Centre Day 2018 themed “Equality” at the IOI City Mall here yesterday.

Dr Wan Azizah added that the rest of childcare workers in the country, all 13,700 or 80.19% of them, did not have the minimum qualification for the job.

She said the lack of qualified childcare workers contributed to the lack of registered childcare centres in the country.

“Calculations based on a census done by Malaysian Statistics Department showed that we need to have 38,333 registered childcare centres.

“However, the actual number at present is only 4,302,” she said.

Dr Wan Azizah said her ministry took a serious view on the safety of children at childcare centres and at the homes of childcare providers. “We are looking at the need to improve on the Child Care Centre Act and regulations on childcare centres to fit the current needs and situation,” she said.

She added that her ministry was also studying how to utilise information and communication technology to be included in the childcare system in the country. The Star

Friday 11 August 2017

Home locked by Penang City Council over RM468 paltry arrears of assessment

 
Hard lesson: After settling his assessment arrears, Chua Yung Lin, 37, finally receives the key (inside envelope) to unlock the chain used to seal up his unit at Taman Seri Hijau in Van Praagh Road, Penang. (Above) A closeup of the notice from the council pasted on the grille gate. — CHARLES MARI ASOOSAY/The Star

A SALESMAN is furious that his apartment unit was padlocked by the Penang Island City Council (MBPP) because he failed to pay two years of assessment arrears amounting to RM468.86.

A council official, however, defended the action, saying that MBPP was empowered to do so under the Local Government Act 1976 if a ratepayer failed to pay a year’s assessment.

Chua Yung Lin, 37, got the keys to the padlock when he paid up the arrears as well as the RM111.86 second half assessment for this year and a RM20 penalty in Komtar on Wednesday after a neighbour informed him a day earlier that the MBPP had sealed the unit.

But he is adamant in not unlocking the padlock himself, saying that the council should do so as its officials were the ones who locked up the unit.

“They gave me all the keys to the padlock and when I asked them if I needed to return the chain and padlock, they told me I could keep them,” Chua told reporters outside the unit at Taman Seri Hijau in Van Praagh Road, Penang, yesterday.

He lodged a police report on Wednesday to inform the police that he had settled the arrears and for his safety should he decide to unlock the place himself.

Chua, who has been renting out the unit for the past three years, said it was dangerous for MBPP to padlock the unit as there could be someone inside who would not be able to escape should there be an emergency.

“Thankfully, there was no one in the apartment as I think my tenants have gone out of town,” he added.

He claimed to have forgotten to pay the assessment because his tenants did not inform him of the bills.

Penang Gerakan vice-chairman Lee Boon Ten said MBPP had acted prematurely and could be charged with criminal negligence for sealing the gate of an occupied home.

“He only owed them a nominal amount. If someone was inside the apartment when they locked it, it would have been false imprisonment,” said Lee who was also present.

MBPP treasury revenue unit head Suhaida Kamalul Ariffin said Section 148(3) of the Local Government Act 1976 empowered the council to seal premises whose owners defaulted in a year’s assessment payment but the council usually only did so after the arrears were accumulated for two years.

“We can actually break down the door and seize the belongings inside. If we don’t do that to avoid destroying the door, we will seal the premises as an indication to the owner. This is however only carried out after we have checked to see if anyone is inside.

“Only after we are sure it is unoccupied, do we seal the premises,” she said when contacted yesterday.

Suhaida also said the council pasted a notice demanding the owner to settle the arrears on the unit’s grille gate in May.

“There was no response, leading us to seal the apartment. Once payment is made, we usually give the owner the keys to the lock as it is standard procedure to let them unlock it themselves,” she said.

Source: The Star

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Tuesday 28 February 2017

Developer has to compensate buyers for delays of projects, Court says


 
Take them to task: According to the liquidated damages clause, condo buyers can claim 10 per annum of the purchase price for the delay

KUALA LUMPUR: The Housing Controller has no power to grant an extension of time to developers who delay the completion of housing projects, the High Court has ruled in a landmark judgment.

This means a housing developer has to pay compensation to the affected buyers for delays in the delivery of vacant possession.

High Court (Appellate and Special Powers) judge Justice Hanipah Farikullah also held that the regulation which empowers the Controller to modify terms of the contract of sale was ultra vires the Housing Development, Control and Licensing Act.

The judge said this in allowing an application for judicial review by 71 buyers of the Sri Istana condominiums in Old Klang Road against the Housing Controller and Urban Well-being, Housing and Local Government Minister.

Their lead counsel Datuk Wong Kok Leong told The Star the judge held that the minister’s decision to grant the developer an extension of time to complete the project via a letter dated Nov 17, 2015 was invalid.

In the letter, the minister had granted the developer a 12-month extension to complete the project.

“This means that the Housing Controller has no power to grant an extension of time to housing developers for any delay in completing their projects,” Wong said.

“Now, the developer has to pay the liquidated damages (a pre-determined sum) for late delivery of vacant possession of those condominium units.”

Wong called the decision a landmark judgment as many project developers seek extensions to complete their projects in Malaysia.

“This is a victory for all house buyers. With this ruling, the housing developer can’t just go to the Housing Controller for an extension of time to complete the project in order to avoid paying the liquidated damages to house buyers.

“This is because if an extension of time is allowed, house buyers lose their rights to claim damages for late delivery of vacant possession,” he added.

Wong explained that according to the liquidated damages clause, the condo buyers can claim 10% per annum of the purchase price for the delay.

In their application for judicial review, the condo buyers stated that they wanted to quash the decision allowing BHL Construction Sdn Bhd an extension of time for the delivery of vacant possession from 36 months to 48 months.

They also asked the court for a declaration that Regulation 11(3) was ultra vires of the Housing Development Act (Control and Licensing) Act.

Wong said the judge has ordered the parties to address the issue of costs on the next date for case management.

When contacted, SFC Mohamad Rizal said the judge also allowed a similar application involving another group of condominium buyers involving the same developer and project.

Source: By  m. mageswari, royce tan, thean lee cheng, eugene mahalingam, The Star

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Wednesday 31 August 2016

Penang low cost housing gone awry?



https://youtu.be/oLDMm9NsLLs


https://youtu.be/tJG2cAQaJLQ


https://youtu.be/N_V48-7vG0c

Probe into housing bribery case


MACC investigating Penang rep’s father for allegedly soliciting money

GEORGE TOWN: The father of Sungai Pinang DAP assemblyman Lim Siew Khim is being investigated by the Malaysian Anti-Corruption Commission for allegedly soliciting money from applicants for low-cost and affordable housing.

It is learnt that MACC has begun calling up several people after a video clip purportedly showing Lim’s father, Keat Seong, was posted on social media on Sunday explaining to some people how to “cut queue” in the state’s housing schemes by paying RM260 for the application form and a few thousand ringgit to one “Uncle Lim”.

Penang MACC director Datuk Abd Aziz Aban could not be reached for comment but it is learnt that the commission had begun gathering information yesterday from the so-called victims, those featured in the video and several Gerakan leaders who held a Monday press conference on this.

Penang MCA deputy chairman Tan Teik Cheng said the case may just be the tip of the iceberg.

He said the Penang government should take action over the alleged soliciting of bribes by Lim’s father, a 68-year-old retiree.

“The state government proudly proclaims its ‘ Competent, Accountable and Transparent’ (CAT) policy, hence it should address the case instead of playing up the drama to divert public attention.

“After all, the demand by Penangites for low-cost housing is still high in view of the exorbitant property prices,” he said in a statement yesterday.

State DAP chairman Chow Kon Yeow has also posted on Facebook the photograph of headlines in three Chinese dailies and The Star, which all referred to Lim’s father.

The caption read: “We are politicians and public figures. What we do matters. Unfortunately, what our parents, spouses, in-laws, and even distant cousins do, also matters.”

Penang Gerakan Anti-Corruption and Land spokesman H’ng Khoon Leng said the party would be seeking an audience with the Penang Yang diPertua to ask for the setting up of a Commission of Inquiry into the matter.

State Housing Committee chairman Jagdeep Singh Deo said there was no need to form a commission as it came under the purview of the police.

By  Arnold Loh Tan Sin Chow The Star

Lim clarifies video comment

DAP rep forced to explain alleged bribery video statement



https://youtu.be/rxtjM3qK8Eo


http://www.thestartv.com/episode/lim-clarifies-video-comment/

GEORGE TOWN: Sungai Pinang DAP assemblyman Lim Siew Khim has been forced to clarify her earlier comments on her father’s alleged corruption case involving affordable housing units after the release of a second video clip on the issue.

“I did receive a call from a youth leader from another party sometime last year but when I confronted my father, he denied any involvement,” she said after opening a Youth Empowerment programme in Sungai Pinang yesterday.

Last Sunday, a video clip purportedly showing Lim’s father, Lim Keat Seong, soliciting bribes to help obtain low-cost housing units in the state as early as June 2015 went viral after being posted on social media.

Siew Khim was then quoted as saying: “All this (in the video) was without my knowledge and I only knew about it on Sunday night.”

Now, a second video clip, which lasted about three minutes, was released yesterday.

This time it shows a screen-grab of a Whatsapp conversation between a mediator and a victim.

“I contacted her and gave her (Siew Khim) one day to reply and find ways for her father to return the money,” the mediator was heard as saying to the victim.

In another conversation, a man, who is said to be Siew Khim’s stepbrother Ong Hock Hin, was heard saying that his sister (Siew Khim) had asked for a meeting to be arranged with the aggrieved parties.

Siew Khim refused to comment on the contents of the second video, urging the person who released it to lodge a police report.

“Why release bits and pieces? They should report it to the police with their evidence,” she said.

Siew Khim also denied asking her stepbrother Ong to arrange for a meeting with any of the victims.

Asked why she only confirmed she had confronted her father when the second video surfaced, she said she could not remember it.

While her father has been remanded for seven days, Siew Khim was grilled for two hours by the Malaysian Anti Corruption Commission (MACC) on Friday.

When contacted, Penang MACC director Datuk Abdul Aziz Aban said he was not aware of the second video but would direct his officers to investigate it.

Siew Khim’s counsel Ram Karpal said it was an offence to withhold information on the case as it was now investigated by the MACC.

“I urge anyone with information on the matter to pass it to MACC,” he said in Air Itam yesterday.

Penang DAP chairman Chow Kon Yeow said the uploading of the two videos showed it was a politically motivated move against Siew Khim, the state government and DAP.

Source: The Star Malaysia4 Sep 2016By R. SEKARAN rsekaran@thestar.com.my

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Saturday 9 April 2016

Lessons from Penang affordable housing



AS we all know, affordable housing is the saving grace for the middle to low income group in our common dream to pursue the “roof over our heads”.

Most often, aspiring homebuyers are sandwiched between increasing property price and developers’ tendency to build high-end apartments especially in greater KL for the last decade.

The introduction of PR1MA and other affordable housing agencies by the federal government is aimed at addressing this gap and to promote better home ownership as part of the prime minister’s national transformation programme. Nonetheless, not many realised that affordable housing is also a state initiative whereby state governments are free to introduce affordable housing schemes given that land and development are within the exclusive power of the state under the Federal Constitution. For instance, Penang is fully behind the notion of affordable housing by placing their top priority on increasing homeownership ratio within the state.

Checking online, there are currently 29 affordable housing projects in Penang with 12 being developed by the state government and the other 17 by the private sector. Penang is delivering a commendable amount of affordable housing by trading plot ratio of built-up area in exchange for more units to be built.

The state government is constantly reviewing and updating the criteria for the purchase of affordable housing in Penang. A person who already owns a property can still purchase affordable housing in Penang provided the person can satisfy the conditions imposed.

For example, the house to be purchased must be of higher value than the one already owned.

In addition, for those who are not born in Penang, under the talented and skilled category, they may also purchase affordable housing in Penang provided they undertake to reside there for a minimum of five years. In short, affordable has become a driver for talent retention. This ultimately helps to upgrade living standard in Penang.

On the flip side, Penang has uncovered a problem. Those who are entitled to affordable housing may not qualify for financing, especially those from the lower income group as they are considered as high risk by banks.

Job and income security at this level are extremely vulnerable given the high cost of living that in effect reduces disposal income. Bank and financial institution are after all profit-making entities. Loan disbursements below a certain threshold amount does not always generate their desire margin. Many expiring home owners are left helpless.

While nothing is perfect, one can only achieve success through lessons learned along the way and from history. The federal government is aware of the high loan rejection rate. It has, therefore, provided a 10% loan guarantee and First House Deposit Financing to help purchasers with their downpayments. The “Rent to Own” scheme was also introduced to circumvent the stricter loan financing situation.

Penang has introduced a similar Rent to Own scheme. Under this scheme, the state government provides 30% of the home price so that the house buyer can seek a 70% loan margin.

PR1MA, on the other hand, is facing difficulties finding suitable land as land is state matter. There is also a tendency for the state government to allocate land for this purpose in areas they want to urbanise, but which are often far from amenities and transportation links.

We all know that to develop affordable housing is not the best commercial decision to make because profit margins are definitely lower. As such, we cannot expect private sector developers to always bear the cost.

Penang, on the other hand, is able to overcome this problem by reducing the development charges via an increase in plot ratio. This then attracts private sector developers to come in.

A recent survey conducted by PR1MA shows that buyers prefer to purchase residential projects close to schools, clinics and shops. They also prefer access to transportation. Penang is closer to achieving its objective in the affordable housing arena because it “focuses on the homeowners”.

Under the recently announced Penang Transport Master Plan, the state government is mulling over RM8bil worth of projects that will enhance connectivity.

The development of an underground tunnel from Gurney Drive to Bagan Ajam, Gurney Drive to Jelutong Expressway and an alternative road connecting Gurney Drive right up to Batu Feringhi will really improve connectivity.

Penang is ambitious in executing its affordable housing plans. It is also spot-on when it comes to addressing the different issues connected with this subject.

The banking sector must buy into it. Banking and financial institutions are governed by the fiscal policy of the federal government. Maybe some mandatory quota or corporate social responsibility initiatives can be imposed on banks to provide loans to deserving house buyers. So it is timely that Bank Negara has called for a comprehensive and carefully designed National Planning Policy to support the Government’s aim in delivering more social housing in its recently released annual report.

By Chris Tan

Chris Tan is the founder and managing partner of Chur Associates.

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Saturday 12 March 2016

Little by little, a little becomes a lot


NOW that Christmas, New Year and Chinese New Year are over, many of us have started to reconcile the amount spent for these celebrations.

Not surprisingly, many have underestimated the current cost of living and have therefore overspent.

Hence, it did not come as a surprise to me when I overheard one of my relatives saying that the price of an eight-course Chinese New Year package at the restaurant that she often frequents has increased by 15% from RM898++ to RM1,028++ within a year. Not only has the price increased, she also noticed the serving portions were smaller than the previous year.

The rising cost of living caused by the depreciating ringgit, hike in transportation costs, the goods and services tax implementation, etc, was the hottest topic of discussion during these festive gatherings. Among the various counter-measures, some young ones welcomed the option to reduce the Employees Provident Fund (EPF) contributions, citing that it would help relieve their burden.

The reduction in EPF contribution came about early this year when the Government announced that employees had the option to reduce their EPF contribution by 3% from March 2016 until December 2017 to spur economic growth and at the same time, put more money into the rakyat’s pockets. According to our Prime Minister who is also the Finance Minister, this move is expected to increase consumer spending by RM8bil a year.

It sounds good as we now have the option to have more disposable income. Yet, should we encourage spending or saving during this challenging time.

Before answering this question, let’s ask ourselves what we should do with the extra disposable income. Repay credit card instalments, go after items such as expensive household goods, electronic gadgets or gourmet food?

If we are not careful, we will end up spending based on our desire instead of necessity. Hence, having more money to spend is not necessarily good. It depends on how we plan our future finances, and whether we spend the money on “good debt” or “bad debt” as explained in my previous articles.

If we unnecessarily spend the additional income on luxury goods such as a new car which depreciates over time, we are practically paying for “bad debt”, as these items are liabilities instead of assets.

In contrast, if we convert the additional income into “good debt” such as investing in commodities/ shares or to fund our housing loan, we can enjoy the long-term benefits as the value of these assets will likely appreciate over time.

At a glance, 3% taken out from the EPF per month may not be seen as a lot. However, it will become a significant amount in the long term.

For an individual earning RM5,000 a month, 3% equals to RM150. As such, the total amount is RM3,300 for the duration of 22 months (March 2016 to December 2017). Assuming the average EPF interest rate at 6.5% per year (based on the dividend declared this year), the compounding rate for RM3,300 could potentially become RM23,190.64 after 30 years!

Therefore, unless there are really good reasons to use this additional disposable income, it is better to retain this seemingly small amount as retirement funds, giving its potential to grow significantly in the longer term. Besides, the savings in the EPF can also be withdrawn during rainy days to fund the payment for children’s education, purchase a new home and payment of medical expenses for treatment of critical illnesses.

At this testing time when many are faced with the burden of rising costs and economic slowdown, it is important to resist the temptation of instant gratification, be prudent in spending, and be able to differentiate between “good debt” and “bad debt” in making financial decisions.

For those who have yet to opt out from reducing the EPF contribution from 11% to 8%, it is important to use the additional money wisely so as to ensure that your retirement fund is not affected. Every ringgit saved or invested is essential in making a difference in our future financial position.

When I was a kid, my parents encouraged me and my siblings to save. Each of us would have our own piggy banks and they would continue to remind us about the beauty of saving. Until today, I still like this Malay proverb – ‘Sedikit, sedikit, lama-lama jadi bukit’ (little by little, a little becomes a lot).

Datuk Alan Tong has over 50 years of experience in property development. He is the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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