Daily Archives: February 5, 2014

Penang — the good and the bad

Unidentified substance: The black discharge contaminating the public beach behind Bayview Beach Resort at Batu Ferringhi.

PETALING JAYA: Penang has been ranked number one in a list of places for foodies to go to that will appear in a book to be published this Valen­tine’s Day by Lonely Planet.

The article by Robin Barton says Malaysian hawker food had spread worldwide via food trucks and pop-ups but nothing compared to hitting the northern island for a food journey.

“Its food reflects the intermingling of the many cultures that arrived after it was set up as a trading port in 1786, from Malays to Indians, Acehnese to Chinese, Burmese to Thais.

“State capital George Town is its culinary epicentre,” Barton wrote.

Other destinations listed were Victoria in Australia, north-west of Spain, deep south of the United States, Lake District in Britain, Puglia in Italy and Georgia and Oaxaca in Mexico.

The eight countries listed were edited extracts taken from The Food Book. It appeared on Sunday on www.independent.co.uk (a British news website) under the headline “Where are the foodies going in 2014?”.

Barton suggested readers “make sure” they try char kway teow, hokkien mee and asam laksa.

The list also compiled food that readers “should think twice” before consuming and Barton “warned” readers of sago grubs (locally known as ulat mulung), the 4cm-long larvae of a South-East Asian beetle.

Esplanade Food Centre was recommended for hawker favourites with a seafront location as well as pasar malam (night markets) such as in Jelutong on Fridays and Macallum Street Market on Mondays.

“The highlight (of the pasar malam) is always the food: at 2am a different world of stalls serves peppery pork-rib soups, skewered fish balls and sweets such as chendol (cold coconut-milk dessert),” Barton wrote.

The writer highlighted the cooling air bandung and praised it as “a great accompaniment to Malay food”.

The Food Book is priced at £14.99 (RM81.80) and will be published on Feb 14.

 

… and there’s a stink by the beach but IWK says it’s not responsible

 

GEORGE TOWN: Indah Water Konsortium (IWK) has denied accusations that it is responsible for the black discharge flowing from Sungai Batu Ferringhi into the sea.

“IWK sewerage pipe networks are in good condition and no leakages have been found,” the national sewerage company said in a press statement yesterday.

“Sampling results of the water also meet the parameters set by regulators. There could be other sources causing the pollution.”

IWK treats the waste water in the Sungai Batu Ferringhi vicinity and the statement said the sewerage pipes serving the 30,000 users in the area were in good condition.

Separately, the Penang Municipal Council (MPPP) said Drainage and Irrigation Depart­ment (DID) and council officers visited the affected area on Monday.

“Water samples have been obtained by the Department of Environment (DOE) and DID and the result will be known after two weeks,” said an MPPP statement.

The media yesterday reported that the black discharge flowing from Sungai Batu Ferringhi into the sea behind a hotel in the tourism belt was believed to contain E. coli bacteria.

Hoteliers have disagreed that the public beach affected by the black discharge be closed.

“We have advised guests not to swim in the sea,” said Bayview Beach Resort general manager Edwin Yap.

State Health, Welfare, Caring Society and Environment Committee chairman Phee Boon Poh said MPPP, DOE, DID, IWK and other related agencies met yesterday to discuss the matter, which was being investigated.

Penang Chief Minister Lim Guan Eng said MPPP president Datuk Patahiyah Ismail informed him that the incident was an “IWK issue” and declined to comment further.

DOE officials declined comment when contacted.

Year of change for property

The outlook for 2014 points to an evolving landscape of possibilities, tempered by current local sentiment.

DIFFERENT rules of engagement seem to be leading the winds of change in the property market this year. Some may be tempted to think that the elements of a perfect storm are brewing with the new measures outlined by Budget 2014, i.e. revised RPGT (Real Property Gains Tax) and the barring of DIBS (Developer Interest Bearing Scheme), etc.

There is also stricter Loan-to-Value (LTV) ratio calculations, electricity tariff hikes and the increase in assessment rates to contend with. Still, others opine that the property market will continue to climb upwards in the second quarter – albeit taking off on a more sluggish pace during the first quarter of 2014. This is due to the current sentiment of the market, with most adopting a wait-and-see approach.

In view of people tightening their belts and the rising need for affordable housing, a few savvy developers are already tapering down their high-end offerings to roll-out more affordable housing projects for the people. In the past few years, the property market has been riding on an upward trend. In some cases, prices of residential properties surging upwards by 30% to 35% have been nothing out of the ordinary. Fuelled by what seemed to be like an unending game, uncontrolled speculative buying and a lack of supply meeting demand have caused prices to rise, of which property prices have been especially robust.

In fact, an upward spiralling trend – that witnessed property prices surging way past the perceived boom cycle to reach unprecedented highs, has proven that the property market has been especially resilient. So much so, that purchasing a property may seem like an impossibility for the average wage earner – even in his lifetime.

Another restriction spells that the days of easy financing too is fast fading – with Bank Negara Malaysia (BNM) stepping in to exercise stricter control with regards to also imposing tighter lending criteria for developers and property buyers alike. Additionally, with the Goods and Services Tax (GST) coming into force on April 1, 2015, some argue that the prices of properties will only increase in the future, given the fact that rising material and construction costs inevitably contribute to the domino effect. Industry experts share their views below.

 REI Group of Companies CEO and co-founder Dr Daniele Gambero

2014 is going to see a change in the rules of property investment. The Government, BNM and all the bank systems are following the direction by BNM which has changed the rules of the game. RPGT and DIBS are minor changes. The big change is the imposed transparency developers will face on selling values. This brings back the basic value of the brick.

Developers were selling bricks wrapped up with the financial package – air-conditioners, water heaters, kitchen cabinets and what I call “free-but not- so-free” items like free loan agreements and MOT(Memorandum of Transfer). Some developers even became “travel agents” – even offering trips to China. Others offered lucky draws for cars but all these items are not part of the value of the house. These additional values that developers are including in their sales are against the regulations as the purchaser is at the losing end. With the new rules, the purchaser will buy “a-brick-for-a-brick” and get finance on the brick for the real value.

I am happy there is a slow readjustment to a healthier market, provided investors will start looking at property as a long-term investment. Everything is mapped out in the property price. It will take six months for my forecast to readjust. The next 10 to 15 years or so, I think, will be positive.

Iskandar Malaysia in Johor, Klang Valley, Penang, Ipoh and Kuantan are present and future hotspots as they offer a strategically sustainable location for investors. Malaysia has been legislated, so there is no reason for a property bubble. Speculations and prices are pushed up because the number of properties offered are low, as compared to the current actual demand.

In this kind of situation, developers start building houses to the point where the offer is much higher than the demand. At that point, the bubble will burst, but if you were to look at the current prices in Malaysia and the house index value, we cannot find any huge jump in prices. The demand for property units is so much higher compared to what’s on offer, so the outlook is definitely very positive.

 Axis REIT Managers Bhd chief executive officer (CEO) and executive director Datuk Stewart Labrooy

We have to reboot how we think about everything and how we develop the housing market in the country. I think there are going to be a lot of changes. No one has really digested the effects. I believe that everyone is trying to do some sort of simulation of how things are going to work out.

I see a lot of very positive signs in the sector I am in and I wish to focus on that rather than the market in general. The industrial property sector, to me, is showing tremendous resurgence and we are trying to work hard to create products to boost the demand for industrial properties.

The problem is, it has been a very much ignored sector for many years. We see this as a real opportunity for developers to refocus on rolling out more industrial products. However, they should make them a part of their overall mixed development townships. I think the industrial property sector is definitely positive because the demand drivers are there and a lot of opportunities await the industrial sector moving forward.

I think the big challenge in the residential sector is the affordable housing sector, which is huge. With the rising prices, many houses are beyond the reach of a lot of serious buyers. I personally do not see how people can afford to purchase properties. Everyone now looks at property as a property play rather than a long-term investment. And, this is what is driving up prices. So the outlook will be focused on developers who are already switching to producing affordable housing now because they see that the high end market is saturated and they will be able to actually continue their growth by switching over to the affordable sector.

I think that growth will not be hampered but the products being offered in the market will be increasingly different than what it was before. This means that luxury residences will be tapered down and be replaced by more affordable housing projects.

Malaysia Property Incorporated general manager Veena Loh

I think the market outlook will be soft in the first half of this year as investors take stock of the new Budget 2014 ruling and the tighter BNM measures that have been implemented in the second half of last year which will make it less conducive for buyers in 2014.

Other factors include the removal of DIBS effective Oct 2013, further tightening of the LTV ratio for property purchases issued in Nov 2013, the shortening of personal financing to a maximum of 10 years and the capping of the maximum tenure for residential and non-residential property financing at 35 years that was announced in July 2013.

On top of this, the uncertainty of when exactly the ruling limit on the threshold of the minimum purchase price of RM1 mil for residential properties will apply to foreign buyers from the previous RM500,000 limit.

Foreigners constitute less than 10% of the buyers in Malaysia, but the big bulk of luxury properties in Iskandar, Johor are targeted at Singaporeans. I think that luxury condominiums there are likely to be hit. Within Johor, the constitution of foreigners who are buying quite a large portion are currently purchasing units priced at less than RM1mil.

This percentage is larger in the three popular states – Penang, KL and Johor. I think that although all will be hit, Johor will be the worst. Penang has been hit since they raised the minimum property purchase price for foreigners to RM2mil on the island last July.

According to the newest tax ruling for foreigners, there will be a 3% levy on foreigners who buy properties in Penang. The same is true for Johor with its levy of RM10,000 for foreign buyers. Now, they are raising it to 2%. When exactly this will be imposed is uncertain as the finer details are yet unknown. This is causing a wait-and-see attitude. In the second half, there is concern of the likelihood of rising interest rates on property affected by external measures as the United States tapers its quantitative easing measures. Although the short-term situation may not be so good, in the long-term – the property market in Malaysia will still be sustainable.

 

Andaman Property Management Sdn Bhd managing director Datuk Seri Dr Vincent Tiew

2014 will be extremely challenging because the biggest obstacle that the developers face are the bankers. The first challenge is when developers want to buy land and try to get the loan for land purchase as well as the bridging loan. The second challenge that will be faced by 99% of the developers is the difficulties buyers will have in securing loans.

So, I feel that what will determine the success of developers in 2014 is actually their ability to manage the two points mentioned above. My outlook is that there will be slightly fewer property launches in 2014. However, the volume of transactions should remain the same and will pick up in the second half of 2014. The first half will be a confusing transition period for developers and buyers because of the new measures of Budget 2014.

This is coupled by the BNM measures with more restrictions on the lending ratio and loan policies. I anticipate that the first half of 2014 will be very much a slow period whereas the second half should pick up very steeply and competitively. This is the time when buyers and investors will return to the market with their investment and wealth creation strategies.

In 2014, one of the key things I would like to see is how successfully the concept of affordable housing will be implemented. This is because it will directly affect the developers’ strategies across the various states as each of the respective states will have different policies. Additionally, there are many states that may choose to develop their own affordable housing programme instead of linking up with the Federal Government’s 1Malaysia People’s Housing Scheme (PR1MA) project.