PETALING JAYA: Despite a drop on a year-on-year basis, the PropertyGuru Market Index saw a 0.8% increase to 86.2 in the second quarter (Q2) of 2019 from 85.4 in Q1 2019.
PropertyGuru Malaysia country manager Sheldon Fernandez said improved purchasing sentiment was due to initiatives such as the Home Ownership Campaign, stamp duty exemptions and Bank Negara Malaysia’s downward revision of its Overnight Policy Rate to 3%.
“These factors also contributed to upward ticks in asking prices for Kuala Lumpur, Penang and Selangor. However, they were not enough to overcome downward pressures in Johor, including a proposed ban on property sales to foreigners for selected projects in Q3 2018,” he said in a statement today.
Malaysia recorded a property overhang of 53,078 units as of Q1 2019 including 32,936 residential units worth RM19.9 billion.
Jones Lang Wootton executive director Prem Kumar said the key economic drivers of the market, such as supply and demand, do not appear to have achieved a clear-cut equilibrium. There are still gaps which are obvious and need to be plugged before a more definitive direction of the market can be achieved.
“Property developers have taken heed, especially in terms of the profile of market demand, and this recognition of the change in market dynamics will ultimately be the main thrust towards effective stabilisation of the real estate residential market,” he added.
The Kuala Lumpur (KL) market index registered a 0.8% quarter-on-quarter increase in asking prices in Q2 2019. However, it has been trending downward from the long-term perspective.
According to PropertyGuru, the wider downturn is attributed to the ongoing mismatch between property supply and demand, with affordable properties in demand but luxury projects being launched and in the pipeline.
In general, home seekers are looking for properties below RM500,000 in Klang Valley.
Meanwhile, sentiment is more positive moving out from the city centre, as Q2 2019 marked Selangor’s third consecutive quarter in which asking prices have risen.
“A year-on-year increase in supply from Q2 2018 to Q2 2019 of 42% was seen this term, reflecting that sellers are more confident in the market as demand picks up from previous terms,” said Fernandez.
Asking prices have been more volatile in Penang, with its index showing a steady decline from Q1 2016 to Q4 2017.
However, the Penang market has remained resilient since Q4 2018, as its index grew 0.2% from 92.8 in Q1 2019 to 93.0 in the second quarter. Oversupply is less of a concern than in metropolitan areas further south, with a 28% increase in supply registered during the term.
“The appetite for affordable-ranged properties continues, with units below RM250,000 continuously in demand. The state government is increasing its efforts to meet these calls,” said Fernandez.
Johor is the only state with an upward growth trajectory since 2015, ending with a 0.5% quarter-on-quarter downturn in Q2 2019.
Its long-term expansion can be attributed to consistent and heavy investment in the Iskandar Malaysia economic corridor, which is reflected in the state’s 118% increase in supply volume in the second quarter.
Residential properties in Kuala Lumpur, Penang, Selangor and Johor accounted for 75% of new applications for housing loans.
PETALING JAYA: Acme Holdings Bhd proposes a slew of corporate exercises including a bonus issue of free warrants, private placement and the acquisition of two companies for RM22 million.
The plastic parts manufacturer and property developer told Bursa Malaysia that it is acquiring the entire stake in Medan Tropika Sdn Bhd and Focal Products Sdn Bhd for RM20 million and RM2 million, respectively.
Medan Tropika is the registered owner of two parcels of freehold development land in Penang, with an aggregate market value of RM36.6 million.
On the bonus issue, it entails the issuance of up to 59.68 million free warrants on the basis of one warrant for every four existing shares held.
The exercise price for the warrants is 25 sen. If the warrants are fully exercised, Acme could potentially raise up to RM14.92 million which will be used as working capital.
Meanwhile, the private placement entails the issuance of up to 89.53 million shares, representing up to 30% of the enlarged number of its issued shares.
Based on an indicative price of 24.26 sen per share, the group expects to raise between RM16.74 million and RM21.72, will be used for the acquisition of Medan Tropika.
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PETALING JAYA: Mah Sing Group Bhd is acquiring a parcel of land measuring 5.47 acres in Kepong, Kuala Lumpur for RM94.76 million.
It is planning to develop a property project called “M Luna” on the land with a gross development value of RM705 million.
The property developer told Bursa Malaysia that its wholly-owned subsidiary Vienna Home Sdn Bhd had entered into a conditional sale and purchase agreement with JL99 Holdings Sdn Bhd for the purchase.
Mah Sing said the project is planned for two blocks of serviced apartments with a “Luxury You Can Afford” concept. The most affordable units would have an indicative built up from 700 sqft and indicative starting price from RM385,000.
It intends to fund the costs and expenses related to the proposed acquisition and the proposed development through a combination of internally generated funds and bank borrowings.
Speaking of the rationale behind the land acquisition, Mah Sing said the group is making steady progress on increasing its presence in Klang Valley.
“The group is focused on increasing its land bank in Klang Valley where demand remains resilient due to population and economic growth and aims to expand the overall remaining GDV in Klang Valley over the next two to three years.”
“The group is confident of replicating the success for M Luna given the similar characteristics of the proposed development to M Vertica, Cheras, M Centura, Sentul, and Lakeville Residence, Taman Wahyu.”
The proposed acquisition is expected to contribute positively to Mah Sing’s future earnings.
At the midday break, its shares were unchanged at 90.5 sen on 243,500 shares done.
KUALA LUMPUR: With investors from China showing strong interest in properties in Southeast Asia, Chinese investments in Malaysia’s residential real estate are expected to double by 2025.
According to Juwai.com chairman Georg Chmiel, about US$4 trillion (RM16.4 trillion) worth of properties were advertised on the site while some RM9.5 billion worth of properties across key locations in Malaysia were transacted through the online platform last year.
“Historically, the most popular markets for Chinese buyers have been the US, Australia and the UK. Due to political reasons, Brexit, trade war, legislation in Australia which puts a higher stamp duty on foreign buyers, there have been some shifts and new markets have emerged, such as Malaysia, Thailand and Vietnam, or in general, Southeast Asia,” he told SunBiz.
Chmiel said Juwai.com, which is a platform that markets properties worldwide to Chinese investors with about three million listings in a month, has seen a strong increase in Chinese appetite for properties in Malaysia, Thailand and Vietnam.
“We’ve also seen that there was a connection between big trends like the Belt and Road Initiative, investments into Malaysia and investments into real estate,” he said.
Based on data from Juwai.com, demand from Chinese buyers for Malaysian real estate has been growing consistently, soaring 600% since 2017, indicating growing demand for quality projects.
As for incoming enquiries on Juwai.com, 80% are within the RM1 million to RM2 million price range, 10% within RM2 million to RM4 million and 8% for properties priced above RM4 million.
“One of the big themes in Malaysia is affordable housing, which is for local buyers, but I think it is very important for the developers that there is always a fair mix of different categories for them to also make money, to earn money, to also sell higher-end type of properties,” Chmiel said.
He said most of the properties acquired by Chinese investors are located in Kuala Lumpur, Penang, Johor, Malacca and Sabah, with the majority being residential properties and one-fifth comprising industrial, commercial and retail properties.
Realising this growing demand, Malaysian digital real estate marketplace MHub has teamed up with Juwai.com to attract and assist more Chinese investors in their property purchases here.
MHub co-founder and CEO Quek Wee Siong said there are several Malaysian property developers on its platform who are building projects around areas that Chinese investors are interested in, namely Kuala Lumpur, Penang, Johor and Malacca.
“Currently it makes up close to 20% of our entire stock inventory and we intend to grow this with Juwai.com. That’s why we inked this agreement. The idea of this partnership is to help property developers here to streamline the process, to get better leads and better conversion,” he said.
Under the partnership, MHub will provide the inventory of properties while Juwai.com will provide services in China including lead qualifying and identifying the type or properties that Chinese investors want, before passing on the leads to agents in Malaysia and MHub will provide a suite of services to complete the acquisition process.
“In the database, we have about 10% transactions from overseas buyers. With this of course our goal is basically to help property developers in Malaysia, those with high price tag targeting foreign buyers, to increase the conversion rate. At the moment, they are marketing it themselves but if they have the right partners like Juwai.com, I’m sure we can easily double these enquiries and transactions within the platform,” said Quek.
Chmiel said the US-China trade war has, in some ways, diverted Chinese investors to Southeast Asian properties and he believes that the shift is sustainable as investors are now forging strong connections here.
“I think the trade war will shift the dynamics on a global scale more permanently. Growth will obviously resolve but so far Thailand, Vietnam and Malaysia are benefiting to a certain extent from the trade war, for the automotive supply industry as well as supplies for technology and telecommunications which are being produced here,” he said.
Chmiel said the trade war has resulted in many companies looking for partners elsewhere and are unlikely to return to the US once strong relationships are formed and substantial investments made.
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