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On 7th Dec 2011, the Singapore government announced that it would impose an Additional Buyer's Stamp Duty (ABSD) to moderate investment demand for private residential property and promote a more stable and sustainable market. This is needed in view of the stubbornly high inflation rate in Singapore amidst the slowing demand from developed markets. For those who don't know, inflation rate in Singapore was mainly contributed by surging property prices. The ABSD was effective 8 Dec 2011. After the  announcement , property-related stocks slumped last week, following by a slump in banking stocks because of an expected slower housing loan growth. The latest measures are a near-term negative for property developers with an anticipated trend in lower average selling prices and transactional volumes, which will hurt profitability. Nevertheless, most large-cap property developers in Singapore are relatively well diversified, not just across sectors (industrial and commercial), but also...

Are you bored of the current small market capitalization of REITs in Malaysia? I think Sunway REIT (the largest REIT right now) is by far sitting there very lonely without anyone closer to it. Come 7th December 2011 , we will witnessed a new contender - Pavilion REIT , to challenge the title. Although it may started-off in 2nd place, the new REIT may grows to clinch the first place from SunREIT. Below is some info taken from RHB Research report on the IPO; Pavilion REIT (PavREIT) has an asset size of RM3.5bn , just after the largest MREIT - Sunway REIT’s RM4.5bn. PavREIT has two assets – Pavilion KL Mall which is worth RM3.4bn and Pavilion Tower (office) RM128m. The Prime Asset Pavilion Mall is one of the only four premium retail malls in KL. It is designed to complement the malls along Jalan Bukit Bintang, developing the street to a key shopping destination in the region. Located at the “Golden Triangle”, which is the business, shopping, entertainment and...

Last year 2010, Malaysia property market recorded the BEST year ever. Will it be another record breaking year in 2011? Many economist and property analysts opine that this year, the property market will appreciates by another 10-15% . So, should we wait some more? Recently, many of my friends keeps on asking the same bold questions. Should I buy house now? Or, should I wait some more? But, when is the property downturn? Modern Design: Swimming pool in the house. Good questions though, but if you ask me when is the property downturn, I really do not know. As a rule of thumb, I will rely on the stock market to give me the indication. Commonly, property market will take a blow one year after the crashing of stock market. Example, the 2008 financial crisis gave us a good timing to invest in property market. For those who buy house during that time, you should know what I am talking about and smile. So what? How about now? Before answering your question, I would like to throw you back a qu...

Malaysia is known as "tax heaven" of the world. Why? Because Malaysia does not impose tax on any capital gains derived from investment, such as shares, unit trust... But, there is only one type of capital gains that attracted tax - property. PARC @ One South, Seri Kembangan Real property gains tax (RPGT) is a form of capital gains tax. RPGT is charged on gains arising from the disposal of real property in Malaysia. These so called real property is defined as: any land situated in Malaysia and any interest, option or other right in or over such land; or shares in a real property company How much? Actually, we have RPGT in our tax system many years ago until 31 March 2007, when government abolished RPGT to attract foreigners to invest in Malaysia. But then, from 1 January 2010, RPGT is re-imposed at the rate of 5% on gains arising from disposals of chargeable assets in respect of real properties that are disposed within 5 years of owning. What is real property company? It is ...

With effective from Year of Assessment (YA) 2009, Malaysian resident who acquired any residential property are given the specially designed tax relief of up to RM10,000 a year for 3 consecutive years from the first year the interest is paid. Residential property means a house, condominium unit, apartment or flat which is built as a dwelling house. This kind of tax relief was given by the Government to counter the property market downturn, or to spur the property mart after the 2008 global financial crisis. It has proven to be a success in Malaysia for the past 2 years, where property prices skyrocketed to a not so comfortable level for most of Malaysians. People are crying foul on the high price to own a house nowadays. What is the Terms and Conditions? To qualify for the tax relief, the following conditions must be met: the taxpayer is a Malaysian citizen and a resident; limited to one residential unit ; the sale and purchase agreement is signed between 10th March 2009 and 31st Decem...

Indeed, there is a insightful write-up by RHB Research today on the US housing market. People are still very curious about the US housing market, but yet to have the courage to BUY . Herd mentality? And, why US housing market is catching the attention of the world? Oh, thanks to Rich Dad Poor Dad , and the world famous property tycoon, Donald Trump . In fact, I am wondering how did Donald fares these few years? That's why Donald had teamed up with Robert Kiyosaki to publish a book last year? People stop buying property because they're buying books nowadays? A Double-Dip in the US Housing Market? ... by RHB Research (30 March 2011) US home prices, as measured by the S&P/Case-Shiller composite index of 20 metropolitan areas, declined by 0.2% mom in January vs -0.4% in December, and dipped for the 7th straight month to the lowest since April 2009. Year-on-year, home prices in 20 major cities fell by a larger magnitude of 3.1% in January, the 4th consecutive month of decline ...

Once again, to address the affordability issues of properties, MyFirst Home Scheme (My1st) was launched by government on 8th March 2011. Thanks for addressing the problem faced by young Malaysians working adults. But, does it really worth to even think about the scheme? Of course, owning a house at young age is a good start to family planning. In fact, we're living in a society where buying a new house tights closely to starting a family. But, this is not necessary a MUST to everyone of us. We must do proper planning before committing for such a long-term loan with such huge amount. Buying a house is not buying an iPad or iPhone. Only apartments are likely with less than RM220,000 price tags in Klang Valley now Highlights of My First Home Scheme... For those earning less than RM3,000 monthly Working in private sector Confirmed employees with a minimum of 6 months in the job Joint applications are allowed (both in private sector and are family members) 100% loan financing for f...

Lately, SP Setia is in full limelight in local bourse due to some of the announcements made. And, yesterday, SP Setia was awarded a contract and proposed some of the corporate exercises subsequently. Below is some of the useful summary for investors keeping abreast with the latest developments: The Bangsar land deal SP Setia was acquiring a 40-acre land along Jalan Bangsar via a land swap deal Government to acquire land in Setia Alam from SP Setia Develop a fully integrated health and research complex to be known as 1NIH Complex in Setia Alam under the Ministry of Health's purview Redevelop the swapped land into an integrated mixed residential and commercial project and give the Government a 20% profit sharing. Source: OSK Researc h The Proposed Corporate Exercises Proposed private placement of up to 15% of paid-up share capital via book-building for the following purposes: - RM6bn KL EcoCity, which comprises a corporate tower block and retail podium - Setia City project, which ...

To capture the feel-good sentiment of local property market, Sunway City Bhd launched its latest integrated mixed development, Sunway Nexis , located at Dataran Sunway, Petaling Jaya. It was launched following the success of Sunway Giza, which open its doors recently. The development is being undertaken by Sunway Damansara Sdn Bhd, with a gross development value (GDV) of RM 500 million . A mixed commercial development sprawling over 5.83 acres Situated at the junction of Persiaran Surian and Jalan PJU 5/1A Located within the main commercial hub in Dataran Sunway Well serviced by a number of highways including NKVE, LDP and SPRINT Modern 3 storey retail shops priced at RM4million and above A 13-storey office suites block, priced more than RM 700,000 each unit A 20-storey flexi office block Source: Sunway City Bhd, Business Times

Strategically located between Puchong, Seri Kembangan and Putrajaya, a new shopping mall within a park was planned to open in October 2011. Said to be first of its kind in Malaysia, the mall was dubbed as an one-stop outdoor living mart. Popular MyFM DJ, Jack Lim (林德荣) The Project:- Undertaken by Green Atmosphere Sdn Bhd (GA) Called " Garden Explore " RM 20 million Gross Development Value Occupying 5.9 ha of land area, which was leased from Tempo Properties Sdn Bhd for 10 years Covering 7 major zones of outdoor retailing lots, a plaza and entertainment hall, offices, cafes, restaurants and one petting zoo Construction will start work after Chinese New Year The People Behind:-  Radio Station MyFM's Jack Lim, director of GA Former actor, Nick JM Wong, managing director of GA Weng Zheng Steel Bhd chariman Tan Ching Kee, adviser Source: Business Times, Bernama

In Malaysia, property investment is gaining momentum since last year. And, the property sector seems unstoppable with record breaking sales. New launches are fully taken up within few hours. Speculators are becoming greedier than ever. Calming down, figuring out, is it so attractive after all? Let's have a look at the 3 big wrong perceptions … Wrong perception #1:  Malaysia's properties still attractive? No doubt, many analysts and researchers comment that the local market price is still low if comparing to regional markets, such as Singapore and Hong Kong. This was wrong because we cannot simply compare with islands, where land is limited . We cannot simply compare with China, where billions of people chasing for limited supply of houses. Wrong perception #2:  KL Developers are going high-end? Yup… KL developers are focusing at launching those high-end residential units. But, do not come into conclusion just that. First, we must look into the locations of these new launche...

The recent spate of mergers have been dominating the trading sentiment of local market, with IJM-MRCB, UEM Land-Sunrise, and Sunway-SunCity. Investors are wondering whether there is any mergers activities else, and the million-dollar question is " Who is the Next " .  Main factors of taking private... Undemanding valuation Strong branding A well-run and profitable company Quayside (Seafront Resort Condominium) of E&O property development   After screening through the list of property counters, E&O could potentially emerged as the next company of being privatized. The main reason being E&O's is trading at a huge discount to its revised net asset value (RNAV) of RM2.72* per share. Other than that, E&O has a very good brand name in the premium market, having some prime land-bank in strategic locations (especially in Penang). Couple with its strong marketing acumen, this company fit nicely into the take-over picture currently. Spicing it up, speculations to...

About the offer… On 4 th November 2010, UEM Land Bhd plans to take control of Sunrise Bhd in a RM 1.4bil deal. Shareholders of Sunrise are given 2 options: UEM Land to acquire Sunrise shares at RM2.80 via the issuance of UEM Land shares at RM2.10 each, or Sunrise shareholders get 2.80 redeemable convertible preference shares ( RCPS ) for every one offer share.   Why Sunrise? Reasons given by UEM Land were: Leveraging on Sunrise Group's robust financial strengths and prospects Accelerate UEM Land's own business expansion To secure new development projects And, to create another Capital Land (Singapore state-own company which is one of Asia's biggest property developers) After the deal is completed… UEM Group's shareholding in UEM Land will fall to around 60% Major shareholder of Sunrise will have stake of around 9% in UEM Land Sunrise will be delisted from Bursa Malaysia But, the brand name of Sunrise will be retained Creating an enlarged group with combine...

On 3rd November 2010, Bank Negara Malaysia wishes to announce with immediate effect the implementation of a maximum loan-to-value (LTV) ratio of 70% , which will be applicable to the 3rd house financing facility onwards taken out by a borrower. Financing facilities for purchase of the 1st and 2nd homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies. Why? The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public.  At the national level, residential property prices have increased steadily in tandem with economic development and the rise in income levels.  This aggregate growth trend remains largely manageable and has not deviated from the long term trend in residential property prices.  In the more recent period, ...

Unlike other countries, Malaysia REIT (M-REIT) has its own characteristic. Therefore, one has to master the following 5 basic rules before investing in M-REIT. 1. Management Good asset management team will stand out from the rest, in case, there is a property bubble. There is cycle in real-estate industry, where required REIT managers to examine and act accordingly. For those experienced managers, any slowdown in real estate industry provided them the opportunities to enhance the trust portfolio. 2. Comparing dividend yield The main purpose to invest in REIT is for its stable dividend yield . M-REIT is popular for its high dividend yield, which ranges from 7-9% currently. Of course, each REIT has its own figure due to different type of assets. 3. Choosing underlying assets There is commercial, industrial, hotel, hospital, shopping mall and plantation REIT in Malaysia. Example, if pandemic flu occurs, hotel and shopping mall based REIT tend to under-perform, while hospital REIT will...

Yesterday, China surprisingly raised its interest rate by 0.25%  as follows: - 1 year lending rate from 5.31% to 5.56% - 1 year deposit rate from 2.25% to 2.50% Why China raise interest rate? 1. To cool down the over-heating property sector. 2. Combat inflation 3. Low liquidity in the banking system While inflation was hovering around 3.5% currently, even though the deposit rate has been raised, the net real interest rate is still in negative territory (3.5% - 2.5% = -1.0%). This is one of the main reason why Chinese were going all out to invests, especially in real-estate, due to its low yield if sitting in the bank (even lower than Malaysia). However, China would be facing another problem... Raising interest rate would attract capital inflows , which could dampen the purpose of containing inflation. Foreign investors view Chinese renmimbi as undervalue , mainly due to interventions by Chinese government. The latest news could ignite a fresh round of thoughts,...