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Stricter loan rules

Source from: Property buyers to follow stricter loan rules

Bank Negara has set stricter rules on housing loans, restricting that loans must not be longer than 35 years in an effort to reduce household debt in the country.

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Bank Negara has acted upon these rules as the country’s household-debt-to-Gross Domestic Product (GDP) ratio has reached 83 percent, the highest in emerging Asia.

The guidelines also saw central banks’ prohibition in offering approved personal financing products. These measures will also be extended to all financial institutions as well as credit cooperatives regulated by Bank Negara, Aeon Credit Service (M) Bhd, Malaysia Building Society Bhd, and the Malaysia Co-operative Societies Commission.

All these institutions need to implement lending limits such as giving new borrowers — particularly those with lower incomes — loans amounting to 60 percent of their monthly pay.

The new limits will not affect loan applications made prior to 5 July.

Bank Negara Governor Tan Sri Zeti Akhtar Aziz said the household debt is not yet alarming but would eventually be so based on present trends. She said that long property loan periods “encourage excessive debt accumulation by households and increases the vulnerability of this (the household) sector.”

For industry players, the property market would not be greatly affected by these new measures as “the older generation of Malaysians had already bought into the property cycle” and would mainly affect the younger generation.

“They are the ones who will need loans with the extra tenure, not the older generation who are mainly able to afford (higher monthly repayments),” said IOI Properties’ Director Teh Chin Guan.

“In the short term, the level of affordability for the younger generation will be lower at today’s prices,” he said.

Khong & Jaafar Managing Director Elvin Fernandez said the move by central bank deserves an applause as property loans with over 40 years tenure was not advisable.

Datuk Seri Michael K.C. Yam, President of Real Estate and Housing Developers’ Association, said the new rules were a “good pre-emptive move because Malaysians are not very disciplined when it comes to these matters”.

“In other countries the maximum tenure is usually 25 years or until the person reaches the retirement age of 55,” he said.

Hareez: It’s a good move by BNM to control household debts. However, just wonder how prosperous those “Along” business would be..

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Bad news & Good news

Source:Bank Negara to unveil DIBS curbs?

The Bank Negara may soon impose curbs on the Developer Interest-Bearing Scheme (DIBS), an easy financing package offered by developers in joint-promotion activities with banks.

Once this happens, future primary sales would be negatively affected, said Hong Leong Investment Bank (HLIB), adding that the curbs could be rolled out ‘later this week.’

“While the exact measures are yet to be revealed, we believe the curbs would impact this easy financing scheme,” noted HLIB.

Under the scheme, buyers pay less initial payment for their property purchases as developers absorb the initial interest until the units are delivered. Most of those that avail this scheme have intentions to flip the property upon possession to make extra cash even with less capital. This scenario fuels speculation.

According to a property consultant, “Typically, under the scheme, buyers only foot between five percent and 10 percent of the house price upon signing the sale and purchase (S&P) agreement and only begin payment when the project is completed.”

“There are caveats to this scheme, as buyers commit to a financial obligation upon the signing of the S&P and the interest cost has actually been already passed on to buyers via the higher selling prices.”

Property consultants also argue that the DIBS puts prices at a higher artificial trajectory. The recent slew of sales in the primary market has been attributed to the attractive DIBS scheme, leaving the secondary property market in a laggard movement.

Moreover, putting limits to the scheme also supports the government’s aim to stop the persistently growing household debt.

“In the recent past, Bank Negara has been compiling information on the scheme and studying its impact on the sector,” a source said.

Hareez: “Small time” investors will be more affected, thus affect the sales of new launch projects. On the other hand, it is a good news for secondary market.

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Be a “real” Real estate agent..

From Starproperty.my: Getting real about agents

BEING a real estate agent isn’t as easy as it appears to be on the surface.

While it seems like a simple career that reels in big bucks by selling property with the skillful eloquence of describing how “appealing” it is, these professionals have a lot more to prove of themselves in the real world.

Unless they have credible and recognised qualifications in order to walk the talk, they could end up underserving their clients, says PPC International chief executive officer and Malaysian Institute of Estate Agents (MIEA) president Siva Shanker.

“It sounds unfair, but unqualified, so-called ‘agents’ are a menace to society because they are unscrupulous and dishonest. They collect more in fees than is legally due to them by marking up the prices of the property they are selling and often misrepresent themselves in many instances.

“Unfortunately, such audacious acts are discovered by the buyer when it is too late,” explains Siva.

He says there are more than 1,700 registered real estate agents in Malaysia while those not registered (yet), are called negotiators.

For the layman, a real estate agent, or estate agent, is a professional who sells or lets residential or commercial properties, or land for their clients.

The role generally involves valuing properties by comparing the condition of property with others in the area to get the best price for the client.

A negotiator is a property salesperson who works with or for an estate agent to market the agency to potential clients using skills in negotiation, marketing and sales. One of their primary roles is to convince clients that their agency is the right one to handle the sale or lease of their property.

Get a real real estate agent

As an individual who appears to be forthright and perhaps even brutally honest about his concerns for the industry, Siva is very passionate about his personal views after more than 25 years of experience in the business. He has worked in both large international property consultancies as well as small local outfits.

He hopes to address one of his major concerns with MIEA’s efforts to embark on a mass education and awareness exercise that will teach the general public to recognise and identify illegal agents.

Not easy: While being a real estate agent seems like an uncomplicated career, these professionals have a lot to prove in the real world.“If you do business with them and something goes wrong, you will not be protected by the law and it would be like handing your money to a thief.

“At the moment, strict enforcement against these people is lacking and the general public continues to put their trust in them,” says Siva.

Together with the Board of Valuers, Appraisers and Estate Agents in Malaysia, MIEA will disseminate the message via print and television.

Currently, the campaign is still being planned and Siva indicates that if things go as scheduled, it will be launched between September and October.

These are just one of the major projects that MIEA is in the midst of rolling out this year. The institute’s other endeavours include providing holistic education for those interested in making real estate their career.

“We have tied up with Open University Malaysia (OUM) to provide a professional diploma in estate agency for yearly intakes. This course will be taught by members of the Board of Valuers, Appraisers and Estate Agents.

The courses are available at subsidised rates as MIEA is a non-profit organisation and fees will be used to cover the institute’s basic costs and to continue running its secretariat.

The institute is also hoping to negotiate with OUM to make the course available in more states in Malaysia as well as to have multiple intakes each year. But there is yet to be a proper infrastructure to support these plans at least for the remaining part of this year.

MIEA also runs the Real Estate Professional seminars (Reps). Some of the material covered in the seminars includes opportunities and challenges in the condominium market, sale and purchase agreements, identifying property hot spots and how to sell properties via open houses.

Booming market: The property market in parts of Malaysia, such as Penang (above), the Klang Valley and Johor, is booming, leading to opportunities for those seeking to work as a real estate agent.For negotiators, MIEA organises monthly negotiator training courses. “Those who want to be negotiators can sign up for a two-day course to learn the basics of estate agencies that are taught by professionals in the field.

“Among the subject range, some topics that are covered include ethics and laws, how to make use of social media, making a property posting and how to deal with clients.

“We want as many negotiators as possible to study because we always want to improve the skills set in the industry,” explains Siva.

Soft skills crucial for success

When it comes to the skills required in the industry, Siva says that soft skills are crucial for individuals to succeed in real estate.

The requirements for getting into real estate definitely lower than other professions like medicine, accounting and engineering.

“It’s true that there are fewer paper qualifications required for a real estate agent compared to other highly technical jobs, and that’s why many think they can become an agent.

“But they don’t realise that there is a high failure rate because of the immense pressure and hard work that is expected of them.

“Firstly, a person has to start as a negotiator and from experience, many people don’t make it past six months because they give up. This is because they set very unrealistic expectations and think it’s going to be smooth sailing, but when they are faced with the hard reality of the industry’s ruthless competitiveness, they find that they’re not cut out for it and give up easily.

“That’s why tenacity, perseverance and diligence are the most important attributes someone needs to have to make it as a negotiator and eventually a successful agent,” stresses Siva.

The starting salary for negotiators is RM900, which is the minimum wage, on top of commissions ranging from 10% to 40%.

Another initiative by MIEA that the public can look forward to is the Malaysian Annual Real Estate Convention (Marec) that is held in March every year.

“It is the biggest real estate convention organised by the professionals in the industry so visitors will get first-hand knowledge about the industry and current trends. The convention is attended by about 500 people each year,” says Siva.

The institute also held the Malaysian Secondary Property Exhibition 2013 (Maspex) from April 12 to 14 with a total of 22 exhibitors comprising real estate agents.

They were selling and representing secondary properties worth a total of RM1.8bil in the Klang Valley also Penang.

“Unlike property exhibitions that showcase properties by developers, Maspex is an exhibition featuring secondary properties and units that were purchased by the public and re-exhibited because they want to sell them.

“It was attended by 10,000 people and within the first two days, four properties were sold. Within three weeks of the exhibition another 108 properties were sold and it was an outstanding result,” says Siva.

The institute is currently working together with Maybank to run Maspex in Penang in October and in Johor in November. There will be another Maspex next year in Kuala Lumpur as well as a small secondary property exhibition in Singapore.

MIEA also hosts its annual dinner celebration for achievements and awards for real estate agents that’s held around October.

There are 22 categories of awards that are open nationwide and the institute wants to increase it to 25 categories to encourage more excellence and achievements in the industry.

For more information, visit miea.com.my.

Hareez: There’s a lot institution out there offer a diploma in real estate. Among them that I know of are; UITM, UTM, UCSI, INSPEN, Good Institute, Help university, Ramscott academy & Imperia Institute of Technology.

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Cheap sale err..for S’gporean

From : Property Guru

Sales and inquiries for houses in Iskandar Malaysia, especially in Johor Bahru, rose significantly in May, according to real estate agencies OrangeTee and Propnex.

In the past month alone, OrangeTee’s agents sold nearly 100 homes in Iskandar. This translates to 25 deals per week, surpassing the 10-unit average per week in 2012. Interestingly, four out of five buyers were Singaporeans.

The spike is attributed to Singapore’s additional buyer’s stamp duty (ABSD). Since 12 January, Singaporeans who already have one residential property will need to pay an ABSD of seven percent if they intend to buy a second property, while foreigners are required to fork out a 15 percent tax to purchase a home in the republic.

“We did an informal survey at our exhibition over the weekend — about half of the people we surveyed, about 120 buyers, mentioned that they do not want to pay ABSD in Singapore,” said Christine Li, Head of Research & Consultancy at OrangeTee.

“Some of this demand has shifted to overseas properties, particularly Iskandar Malaysia. We received about a 50 percent jump in enquiries over the past few weeks, especially after the Malaysia General Elections because this sort of signals the political stability in the region for at least another five years.”

Investors are also attracted to Iskandar thanks to its affordable homes prices, which is only a third of the current prices in the city-state, noted Propnex.

Furthermore, the proposed property tax in Johor for foreigners will unlikely deter investors, as the tax hike could be modest and will probably target luxury properties.

Hareez: What should have been done to prioritize local buyers?

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Avenue K to provide KL with a new option

From iproperty.com:http://www.iproperty.com.my/news/6968/avenue-k-to-provide-kl-with-a-new-option

“Currently undergoing a major facelift, Avenue K (AK) hosted their Anchor Tenants Showcase on 31 May, providing guests a sneak preview of their renovated mall, as well as introducing the anchor tenants that have come onboard.

“With the plans that we have moving forward, we believe that AK will provide an extra something for KL’s urban community,” said Ms. Sue Wang, General Manager of AK. “It is wonderful that AK is located in the heart of Kuala Lumpur and we are excited about taking it to the next level,” she added.

Located in the heart of the business district along Jalan Ampang, this prime retail property offers a spectacular view of the iconic twin towers. It also experiences high traffic flow into the city’s shopping precinct, as it is linked to the busiest LRT station in the Klang Valley, with an estimated 12 million people passing through the area annually.

Sue who works for Synergistic Real Estate Management and Network Pte Ltd who have been appointed by City Properties Sdn Bhd to manage the mall, said that working with a new philosophy of ‘Make Friends, Create Trends’, AK will be offering hip and aspirational shoppers with more options and new experiences. It will cater to their day to day requirements, as well as their weekend pleasures.

“KL-ites will soon have a new spot to kick back, relax and enjoy the beauty and offerings of this magnificent city in our F&B outlets on Level 3,” Sue said excitedly.

Swedish fast-fashion retail clothing giant, H&M, has staked its confidence on this prime retail location, with its unique outlet expected to be a key talking point in the region. Australia’s Cotton On has followed suit with plans to open its only Malaysian flagship store, along with multi-brand sportswear company, Original Classics joining in. Other notable brands to mention would be Fitness First, Taste Enclave Food Atrium & Popular Bookstores.

Designed to provide amenities that meet day to day needs of patrons who take the LRT and people who live and work in the vicinity, AK’s concourse and upper concourse will receive patrons with many recognizable brands such as Presto Supermarket, Crocs, Travelex, Chatime, Old Chang Kee, The Loaf, Krispy Kreme, Swensen’s, Marutama Ramen and many more retailers. Various lifestyle and fashion brands are looking forward towards a revitalized Avenue K re-opening its doors.

“The improvements made to AK go beyond the aesthetics as we want to provide a shopping experience that is engaging on a personal level which is not frustrating,” said Sue, explaining that a whole host of mall services will be added to ensure shopper convenience, confidence and comfort.

A concierge service with personalized services, improved and secure parking with car park stewards and security systems, along with a customer rewards program to incentivise regular patrons are some of the many value added services that AK will be offering patrons. Plans and negotiations are also currently being made to offer services that will provide advice and assistance to tourists that visit, so as to enhance their experience in Malaysia.

October will see the new mall revealed, with outlet openings subject to their individual renovation timelines. The opening of the refurbished mall will add spice to Kuala Lumpur’s shopping scene and complement the city’s booming retail business.”

Hareez: Hopefully this move will bring more traffic to AK. The shopping mall looks “dead” from outside. Maybe no “feng-shui” factor. Feels scary when park at the basement.Not enough security. It’s weird since even located next to suria klcc & easy access by lrt,but not seen as a hotspot area in KL. Last time been there at the foodcourt and not much variaties compare to lvl 2 & lvl 4 @ Suria KLCC.