-----------------------------------------------------------------
FOR SALE
: << Double-Storey Semi-D >><< 3-Storey Shophouses >>
-----------------------------------------------------------------
ABOUT US

Friday, July 13, 2007

'Incredible' value in Malaysia

Investors in Asian property should look no further than Malaysia for good value and user-friendly regulation, according to a developer.

Project director for planning and business development at E&O Property Development, Mohd Razeek Hussain, claims that foreign investors are initially attracted by architectural style, tropical weather and scenery but the bottom line is that Malaysian property is well priced....

Article Date : Thursday, July 12, 2007

Speaking to Property Report, he said: "For me, the biggest lure is the value when compared to other countries.

"Where else can you buy a landed property this close to the water at such prices?"

Mr Hussain said an additional bonus was that other areas like Phuket and Bali demand cash up front for the property but in Malaysia only a ten per cent deposit was required.

"The value in Malaysia is incredible, while ownership regulations and access to funds are straightforward," he added.

The Foreign Investment Committee recently relaxed legislation for foreign buyers, suggesting that this would boost the country's potential for property investment from abroad, the Malaysian Star reported recently.

Source: Property Showrooms

Wednesday, July 11, 2007

SPK unit plans quality homes in Shah Alam

Malaysia Property News by Bernard Yong on Jul 11, 2007

By THE STAR

SHAH ALAM: Sharikat Permodalan Kebangsaan Bhd's (SPK) property division, SPK Homes, aims to develop quality homes at its Cahaya SPK development.

SPK head of property division Steven Lim says the company also plans to use the surrounding lush tropical area to encourage greater outdoor activities.

When fully completed in 10 years, Cahaya SPK township, on 500 acres of leasehold, will have commercial properties, schools, shop-lots and a mix of residential properties.

Lim said the RM1.2bil low-density resort township was targeted at the mid to high-end market.

SPK head of property division Steven Lim showing a show unit of Superlink Homes at Cahaya SPK in Shah Alam
"Cahaya SPK is our signature development and has been meticulously planned with great care for minor details," he said after a media tour of the project site in Shah Alam yesterday.

Phase 1 of Cahaya SPK, to be launched on July 21 and scheduled to be completed by mid-2009, will comprise 142 units of Superlink Homes, priced from RM361,000 onwards.

"We expect to sell all the units (in phase 1) within six months," Lim said, adding that the gross development value (GDV) of Superlink Homes was RM63mil.

He said 84 semi-detached linked houses with GDV of about RM55mil and 80 bungalows would be launched next month.

SPK Homes also plans to develop high-rise properties, including apartments and condominiums, in Cahaya SPK in the future.

"With the launching of this 500-acre Cahaya SPK project, we will be a major player in property development," Lim said.

Currently, SPK Homes has a land-bank of 7,500 acres, of which 6,500 are in Sungai Petani. The rest are in Kuala Lumpur, Johor and Penang.

Lim also said the RM444mil joint-venture project secured recently in Abu Dhabi by construction arm SPK-Sentosa Corp Bhd had given SPK Homes an opportunity to expand overseas.

Good response seen for green homes

Malaysia Property News by Bernard Yong on Jul 11, 2007

By THE STAR

PUTRAJAYA: Half of Putrajaya Perdana Bhd's D'Heron at the Lakes should be sold by the time the company launches the "green homes" in September, said senior general manager Mak Hong Seng.

The construction and property developer's latest project comprises 19 energy-efficient bungalows on 6.4 acres overlooking a lake in Putrajaya's Precinct 16.

Mak said at a media preview yesterday the bungalows would be equipped with building integrated photovoltaic (BIPV) panels to generate electricity to supplement owners' consumption.

The homes are made energy-efficient as heat transmission into the buildings is minimised by having large roof overhangs, thermally insulated roof, walls and low-emission glass windows.

"We have started constructing four units, of which some are already sold or to be turned into a show unit. The remainder will be available for sale once construction of the show unit is completed next month.

Mak Hong Seng
"The bungalows, with lot sizes of 10,000 sq ft to 16,000 sq ft, will have built-up areas ranging between 4,604 sq ft and 4,897 sq ft. There are five designs to choose from," he added.

The bungalows are priced between RM2.9mil and RM3.7mil. The entire project has a gross development value (GDV) of RM54mil.

Putra Perdana Development Sdn Bhd general manager Bu Teng Cheng hoped all the units would be sold off in six months. Putra Perdana Development is a wholly owned subsidiary of Putrajaya Perdana.

"About 30% of the units are reserved for civil servants and we hope to attract retirees for these homes," he added.

Mak said the company also welcomed purchasers from other countries. As D'Heron at the Lakes is a niche development, the company will arrange special preview for selected groups of buyers.

Putrajaya Perdana has a landbank of 136 acres in Putrajaya, with 113 acres in Precinct 16 and the rest in Precincts 2 and 3. It also has small parcels of land in Malacca.

Mak said the land in Precinct 16 would last between five and eight years with an estimated GDV of RM700mil.

"The company is focused on constructing energy-efficient buildings, so property development accounts for a very small percentage of revenue. For the financial year 2008, we are targeting for property development to contribute 10% of revenue," he said.

Bu said as work on D'Heron at the Lakes took off, 49 more energy efficient bungalows were being planned in Precinct 16. Good response seen for green homes

Putrajaya Perdana eyes higher real estate income

Malaysia Property News by Bernard Yong on Jul 11, 2007
By BUSINESS TIMES

BUILDER Putrajaya Perdana Bhd's (PPB) real estate income may constitute up to a tenth of revenue in fiscal 2008 as it develops more commercial properties and buys more land.

Its commercial units may be partially rented out, company officials say. Leasing out properties allows it to earn recurring income and shield itself from a cyclical construction sector.

"For next year, we are targeting up to 10 per cent. We are pretty strong in commercial development," PPB senior general manager Mak Hong Seng said at a media preview of its "D'Heron at the Lakes" bungalows in Putrajaya yesterday.

"We can adopt the build-lease-transfer mode for a client who wants a building, but does not have the financial resources," Mak added.

Real estate accounted for one per cent of main board-listed PPB's fiscal 2007 turnover, according to its filings to Bursa Malaysia.

Going forward, PPB, a 50.8 per cent subsidiary of real estate group Eastern and Oriental Bhd, also plans to acquire more land outside the Klang Valley. Mak did not specify the locations.

PPB's present landbank includes some 94ha across Putrajaya and Malacca.

Meanwhile, the developer aims to sell up to half of its RM54 million "D'Heron at the Lakes," bungalows upon its launch this September.

The ongoing project comprises 19 energy-efficient homes on a three-hectare freehold site in Putrajaya's Precinct 16.

The two-storey units, priced from RM2.9 million each, will have built-ups of between 423.6 sq m and 450.5 sq m.

PPB's financial year to March 2007 net profit rose 18 per cent to RM38.5 million, or 29.9 sen a share. Revenue grew 23 per cent to RM537.3 million.

Its current real estate jobs here include the "Danau Ayu Townvillas" and "Danau Point" commercial properties.

PPB's construction portfolio, meanwhile, includes the upcoming RM64.6 million Suruhanjaya Tenaga head-quarters in Putrajaya, and the RM186 million Malaysia Technical University's main campus in Malacca.

Shares of PPB closed unchanged at RM2.13, valuing the company at RM287.6 million yesterday. The stock's price had risen 22 per cent so far this year compared with the benchmark Kuala Lumpur Composite Index's 25 per cent gain.

KFH boost for 'Malaysia, My Second Home' scheme

Malaysia Property News by Bernard Yong on Jul 11, 2007
By BUSINESS TIMES

KUWAIT Finance House (Malaysia) Bhd (KFH) and the Tourism Ministry have introduced a financing programme aimed at "Malaysia, My Second Home" (MM2H) participants.

"The KFH MM2H Hijrah-I programme is designed to provide participants full access to all banking and other financial facilities required during their stay in Malaysia," KFH managing director K. Salman Younis said at the launch of the new programme by Tourism Minister Datuk Seri Tengku Adnan Tengku Mansor in Kuala Lumpur yesterday.

External products and services including accommodation, education, medical as well as vehicle services will also be packaged into this programme.

"MM2H Hijrah-I's participants will benefit from the hassle-free services, before and after their application have been approved," Salman said.

Apart from the Tourism Ministry, KFH is collaborating with other local and foreign companies especially for education and property under this programme.

"We have established a joint venture with a South Korean property developer to sell two en-bloc condominiums to South Korean tourists in Malaysia. We also plan to promote this programme in other foreign countries where we have opened our KFH branches," Salman said.

KFH will help MM2H participants to expedite the process of obtaining visas.

"The Government will try to approve the visa application (of MM2H participants) within a month as we know that they need to do various security check-ups in order to stay in this country," Tengku Adnan.

He said last year, 1,728 foreign nationals have been accepted to participate under the MM2H programme, mainly from China, Bangladesh and the UK.

The ministry's target is to attract 100,000 under the MM2H programme by 2010.

There are two categories under the programme: Participants aged below 50 years and those above 50 years. A foreign national is required to provide a deposit of between US$75,000 and US$150,000 (RM257,250 and RM514,500) to participate.

"They can withdraw their money after a year's stay in Malaysia with approval from the ministry," Tengku Adnan said.

Monday, July 9, 2007

Race on to draw foreign investors

Malaysia Property News by Bernard Yong on Jul 09, 2007 By THE STAR

Malaysia has the potential to attract more foreign investors to its real estate sector and plans are already in the pipeline to do just that

MALAYSIA will be on track to become one of the favourite real estate investment destinations if further liberalisation measures and conducive conditions are in place to raise its ranking in the international market.

Faced with strong competition from other major cities around the world to attract foreign real estate investors, Malaysia has to raise its ratings in various aspects, including quality of life index and international-standard property offerings.

Globally, real estate investment markets are experiencing unprecedented growth and many countries are opening up their markets to bring in investors to their shores. From Singapore to Hanoi and Manila, the race to bring in the foreign dollars is on.

The recent relaxation of Foreign Investment Committee rulings for foreign buyers and the exemption of real property gains tax augur well for Malaysia as a destination for property investments.

Malaysia's comparative advantages include having one of the lowest property prices in the region and a relatively low cost of living, good infrastructure and its transparent land and property ownership laws.

To kick-start efforts to draw foreigners to our shores, a joint public-private sector initiative is expected to be implemented soon to make Malaysia an international property destination.

Under the plan, Malaysia's premier properties will be showcased at exhibitions overseas, with target markets in the Middle East, South Korea and Japan.

The plan to attract RM20bil worth of investment will definitely help stimulate the property industry and 140 other industries which are directly related to the industry.

Welcoming the latest public-private initiative to set up a centralised coordinating body to plan and coordinate international property promotions and road shows as timely, developers are eager to throw in their full support behind the latest initiative.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin said collectively, the package of incentives had sent a strong message to the international community that the Government was "pulling out all stops" to woo them to invest in the country's properties.

"Developers should take the cue from the Government's actions to step up marketing and promotion efforts to capture a bigger share of the global real estate market which is forecast to reach US$450bil next year," Liew said.

To ensure sustained demand from the foreigners, Liew said, greater efforts were needed to create a sizeable expatriate community in the country.

"This can only be achieved through policies that welcome foreign talent to live and work here and if the country continues to attract significant foreign direct investment in various sectors of the economy.

"The Government also needs to accelerate efforts to create a more favourable business climate with investment-friendly policies in place. The corporate tax regime plays a part - at 27% (2008: 26%), our corporate tax rate is still higher than Singapore (2007: 20%, 2008: 18%) and Hong Kong (2007: 17.5%)," he said.

Sunway City Bhd senior managing director Datuk C.K. Wong said that to raise Malaysia's competitiveness, the local councils and state agencies must be prepared to change their mindsets and move towards a more efficient delivery system.

"There is also a need to overhaul the restrictive regulations, which make it difficult for foreigners to buy properties, especially at the state level.

"It takes about four to five months to register a property transaction, while countries like Singapore can have this done in seven days. The proper implementation of the public delivery system will improve our competitiveness with the more efficient countries," Wong said.

Zerin Properties chief executive officer Previndran Singhe said although a recent Real Estate Transparency Index study by JLL Research listed Malaysia as one of the most "real estate transparent" countries in the world, a lot still needed to be done to enhance its position in terms of regional attractiveness, based on the Quality of Life Index (see tables).

"We are ranked rather low in the globally accepted Quality of Life Index, which attracts private wealth. Singapore and Hong Kong, which are high in the ranking, attract huge amounts of private wealth.

"This private wealth indirectly translates into real estate investments. The future financial markets will be private wealth and private equity, and Malaysia needs to position itself to attract such funds," Previn said.

The liberalisation of the financial markets has contributed to the boom in the commercial real estate market and will be driving the market for 2007. "These institutions and funds are flushed with cash and are looking for exposure to Malaysia's commercial and residential property sectors," Previn said.

Malaysia to bank on relatively low entry cost

Property News by Bernard Yong on Jul 09, 2007 By THE STAR

WHILE cities around the region are seeing a spike in their property prices, the relatively low entry cost to invest in real estate in Malaysia will be a strong magnet for foreign investors to partake in the country's buoyant market.

Coupled with the many pluses enjoyed by the country, including the transparent land laws and system, sustainable market growth, good construction management and investor-friendly incentives, Malaysia has the ingredients to become an international property hub.

Industry players are confident that the upcoming joint public-private sector initiative to promote Malaysian properties to the international community would help the industry substantially.

The regional property boom has the potential to spill over to Malaysia as investors start looking around for better bargains.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin said besides the good value of its properties, the country's stable socioeconomic climate, comprehensive infrastructure, and a good balance of thriving cities and natural wonders would endear Malaysia to many foreigners.

"Kuala Lumpur is between 30% and 1,000% cheaper than other regional cities such as Beijing and Hong Kong. In Singapore, property prices are pegged at US$1,500 per sq ft while in Beijing, the price is US$188 versus Kuala Lumpur's US$148.

"From the pricing standpoint, Malaysia still has a lot of catching up to do and offers ample upside for investors," Liew said.

The availability of loan margins of up to 70% for foreigners also makes it easy for them to purchase property here.

According to Mah Sing Group Bhd president Datuk Leong Hoy Kum, international investors have ample opportunity to pick up reasonably priced real estate with good upside potential in the residential, commercial and tourism sectors.

"It is time to tell the world the package of goodies that Malaysia offers, which include the attractive value upside in a broad range of properties that we have," Leong said.

Zerin Properties chief executive officer Previndran Singhe, Malaysia has most of the ingredients to become an international property hub and "what is lacking is to convey its story in a cohesive and holistic manner to the markets that need to know." He said the commercial sector could also look forward to stronger take-up from foreign buyers. Last year, a whopping 45% of the value of office transactions involved foreigners, as compared to 19.3% the year before and 1.9% in 2004 (see chart).

"Foreign ownership in the office and retail sectors is on the rise, and the latest initiative will attract greater interest in the other commercial sub-sectors, which are also generally undervalued," he said.

Sunrise Bhd managing director Datuk Michael Yam said foreigners could look forward to acquiring high yielding world-class quality properties at a fraction of what they had to pay abroad.

"Overall, Malaysian properties are attractive compared to those around the region, especially when it comes to luxury housing.

"Based on JP Morgan's estimates on comparison of Asia's luxury housing affordability, Malaysia has the highest ranking as the most affordable country. As a comparison, a prime property in the KLCC area costs an average of RM900 per sq ft (psf), which compares very favourably with an equivalent property in Hong Kong island at RM10,000 psf and Singapore at RM6,000 psf.

"Only properties in Bangkok and Manila are similarly priced as those in Kuala Lumpur," he said.

Economic growth and incentives to win over investors


THE increasing demand for luxury properties such as condominiums in Malaysia is due largely to the nation's socio-political stability, accommodative policies and positive image globally, analysts said.

Prime properties located within the vicinity of the Kuala Lumpur City Centre (KLCC) cost an average of RM900 per sq ft (psf), lower than the RM6,000 psf in Singapore and RM10,000 psf in Hong Kong.

OSK Investment Bank research analyst Mervin Chow said the recent exemption from the real property gains tax (RPGT), the sustainable economic growth and a slew of other incentives to attract more foreign investors would continue to stimulate the local property market and the number of transactions was expected to increase.

He is optimistic about the high-end property segment, but is still concerned about the overhang that continues to plague the overall sector.

According to the Malaysian Property Market Report, in the fourth quarter of 2006, the total unsold residential units in Malaysia fell by 11% quarter-on-quarter.

Chow said although there was a slight relief, the total unsold residential and unsold newly launched units in 4Q'06 amounted to 170,583, of which the bulk was represented by Selangor and Johor (28.7% and 25.4% respectively).

“The bulk of the overhang units were represented by those units priced less than RM250,000 in Selangor (24.4%) and Johor (21.1%).

“On a macro scale, total overhang of residential units priced less than RM250,000 (the lower-end properties) in the country represented about 84.4% of the total country’s residential overhang,” he said.

Chow added that the oversupply situation of the lower-end residential properties in the country might potentially hamper the sales and future launches by developers with prime focus on this segment.

“Nonetheless, the success story still ultimately depends on many other factors, including the “perfect” location, right product mix, niche market catchments and the right strategy deployed,” he said.

Meanwhile, analysts expect the liberalisation of the property market to put the sector on a level playing field with regional countries.

The Government's move earlier this year to waive the RPGT and relax foreign ownership restrictions on residential properties worth over RM250,000 has benefited the high-end segment of residential properties and has set new benchmark prices.

Analysts believe the low-to-medium property segment may be the next in line to receive a government boost.

“We believe that the level of foreign property buyers' interest in Malaysia has increased recently, but not significantly.

“With our relatively affordable property prices, cost of living factor and security, we are an attractive country for foreigners. In the past, Kuala Lumpur, Penang and Malacca were the top choices among foreigners when it came to owning homes. However, of late Johor has become a focus and is attracting investors,” an analyst said.

High-end property prices in Kuala Lumpur, Penang and Johor rose faster at 8% annually, surpassing the national housing price index's average gain of 3.7%.

Moreover, the gradual strengthening of the ringgit against the US dollar is also good news for foreign buyers due to the potential foreign exchange gains and capital upside.

An industry player pointed out that price aside, international buyers were also attracted to prime areas like the KLCC, which was “world class” in terms of accommodation and facilities.

“The residential market is getting very competitive, with developers starting to sell homes as 'lifestyle' products,” he said.

He said foreign buying interest, particularly in Kuala Lumpur's prime and established locales, had seen steady growth.

Wednesday, July 4, 2007

Malaysia’s housing industry

Wednesday, March 21st, 2007 Posted by Overseas Property Mall in International Real Estate Trends, Malaysian Property, South-East-Asia Property

Malaysia´s housing property market is taking a breather due to the current excess supply and cautious consumer sentiment, analysts say, citing hikes in fuel prices and interest rates last year as dampening the enthusiasm of property buyers.

According to government data, the overhang in the residential market increased to 22,185 units in the first half of 2006 from 15,083 units in the same period a year earlier.
Housing developers said the soft market has continued right up to the end of 2006. The Malaysian Developers Council says it expects the industry to show negative growth in the fourth quarter of 2006, continuing the weak trend of the last eight quarters.


Outlook
Housing developers and real estate agents have mixed views on the outlook of the property market. Housing developers are bracing for a softer market with continued slow take-up rates and flat earnings. A recent survey by the Real Estate And Housing Developers´ Association Malaysia (Rehda) shows a general decline in the earnings of property players. The study on the housing sector conducted during the first half of 2006 said the hike in interest rates as well as stricter consumer financing criteria by banks is hampering the industry´s growth.

Rehda deputy president Datuk Michael K.C. Yam said: “Overall, respondents expressed a neutral outlook towards the property market until year-end, with a small percentage expressing pessimism.” He expects the property market to be more stable with the continued focus on residential development. “In Penang and Kuala Lumpur, developers are likely to focus on mixed and higher-end market with renewed interests in commercial and mixed development project,” he said.

Yam, who is also managing director of property group Sunrise Bhd, said the local industry is likely to be skewed toward residential properties. Analysts said the current oversupply of residential properties has not occurred across the board as take-up rates continue to be strong in prime and established locations.

Demand in the high-end and niche sector is getting bullish and is expected to continue flourishing after the government in December 2006 eased rules on foreign ownership of residential properties. Analysts said buyers need to pick their properties carefully, noting that the most important factor for the success of housing investment is location. The sought after projects are those in growth centres such as the Klang Valley and Penang.

In the Klang Valey, the bluechip areas include Bangsar, Damansara Heights, Mont´Kiara and Bandar Utama. Developers such as Sunrise, S P Setia and Mah Sing group, which are focused in the Klang Valley, are not likely to face problems in selling their properties. Demand for high-end serviced apartments and well-located houses for investment and to rent has also been driven by the large number of expatriates working in Kuala Lumpur.

Real estate agents said rental rates chargeable in Kuala Lumpur are comparable with other major cities worldwide. New off the plan properties in Kuala Lumpur are being sold to international property developers with guaranteed rental yields of between six and ten per cent. Apart from Kuala Lumpur, property investment opportunities are abundant in growth centres in Penang and Johor as well as tourism areas where rental rates are also impressive. Despite their neutral property outlook for this year, analysts believe high-end developers will continue to report robust earnings.

“Those with a focus on high-end segment such as IGB Corp Bhd, Sunrise Bhd and E&O Property Development Bhd have seen significant earnings growth this year, while the ones with focus on the mass market, such as MK Land Holdings Bhd and LBS Bina Group Bhd, have seen earnings down sharply due to poor sales,” OSK Investment Research said. Analysts said the government´s easing of foreign ownership rules for houses worth more than RM250,000 will also help boost sales in the high-end market.

Second Finance Minister Tan Sri Nor Mohamed Yakcop was reported as saying that the government is implementing the new policy in line with the “Malaysia: My Second Home” programme. Malaysia is increasingly popular as a tourist destination, especially with the government´s ongoing campaign during Visit Malaysia Year 2007.

The tourist attraction and appeal of the country — with a stable government and economy — has spawned a secondary holiday home market, bolstering the long-term investment prospects of the property market.

There is a wide range of properties available for foreigners looking for second homes in exotic locations in the country. There are also other positive factors: The Malaysian ringgit is cheap when compared to the US dollar, Euro or British pound. Also international buyers can get more value for their real
estate investment in Malaysia.

Malaysian property is therefore regarded as an exceptional choice for international investors over the medium term because the real estate industry has tremendous growth potential, analysts said.

Meanwhile, Deputy Prime Minister Datuk Seri Najib Razak expects the property market to grow in the first three months of 2007, boosted by the implementation of the Ninth Malaysia Plan (9MP), a better stock market outlook and the manageable interest rate.

“Based on the analysis done by various parties, it is expected that the property sector will expand. The implementation of the projects under the 9MP will contribute to the growth of the property sector,” the deputy PM said.

He noted that if the domestic stock market continues to improve, the property market should also move upward in tandem. Najib also said that with the interest rates for loans at a reasonable level, financial institutions can provide good financing packages for homebuyers.

Rehda president Ng Seing Liong said consumers appear to be more confident about the property market because prices have stabilised.

Government Regulations
The Malaysian government has introduced major changes to rules on foreign ownership of property. Foreigners can purchase residential properties valued above RM250,000 a unit without the Foreign Investment Committee´s approval from Dec 21, 2006 onwards. On Dec 20, the Prime Minister´s Department said in a statement that there would no longer be a limit to the number of residential properties that foreigners can own or any conditions upon their usage.

The move was to encourage foreign investors to purchase high-end residential properties, increase the inflow of foreign currency as well as spur the development of the property and construction sectors, it added. The new rules are a major change to previous regulations relating to foreign ownership of property.

Apart from the requirement to get FIC approval for purchases above RM250,000, foreigners were previously only allowed to buy properties for their own use. They could not hold these for investment purposes. The housing industry is also receiving indirect support from the government´s promotion of “Malaysia: My Second Home Programme”. The programme allows people from all over the world who fulfil certain criteria, to stay in the country as long as possible on a social visit pass with a multiple entry visa.

The Social Visit Pass is initially for a period of ten years depending on the validity of the applicants passport and is renewable. The programme is open to all citizens of countries recognized by Malaysia regardless of race, religion, gender or age. Applicants are allowed to bring along their spouse and children (provided they are below 18 years of age and unmarried).

Source: Asia Property Report - Bernard Lim

Honey Comb

Layouts

Terrace House

Honeycomb

Floor Plans

Views

Ground Floor

First Floor

See a Slide show

Johor Jaya Survey

DOES HONEYCOMB HOUSING CONFLICT WITH FENG SHUI?

A RANDOM HOUSEHOLD SURVEY IN JOHOR JAYA, A PREDOMINANTLY CHINESE TOWNSHIP


Mohd Peter Davis, Bukryman Sabri and Nurizan Yahaya
Universiti Putra Malaysia

A Report Commissioned by RENEWED DEVELOPMENT SDN. BHD.
12C Metropolis Tower, Johor Bahru.

Report Published
13 April 2006

IN BRIEF

Honeycomb Housing is a new Malaysian innovation from Arkitek M. Ghazali in collaboration with Universiti Putra Malaysia and offers an affordable and environmentally friendly alternative to terrace housing. It is gaining wide support from potential house buyers in exhibitions, amongst housing professionals at seminars and now the Sarawak Government for the Ninth Malaysia Plan. However, Developers are concerned that the departure from rectangular shaped building lots to triangular housing compounds, which link up to form hexagonal cul-de-sacs then honeycomb communities, is too radical and may conflict with Feng Sui beliefs. If true, this cultural objection may deter Chinese house buyers, a major section of the Housing market. To test this serious commercial risk a pioneering Developer (Renewed Group based in Johor Baru) commissioned the University to conduct a random household survey comparing as fairly as possible a RM220,000 Honeycomb house with an equivalent RM220,000 Terrace house in a predominantly Chinese township.

The simple and novel 3 day survey of 150 households randomly selected from about 9000 households comprising Johor Jaya, revealed over 1000 potential customers for the Honeycomb house compared to fewer than 300 for the Terrace house. Although 50% of the Chinese in Johor Jaya agreed that the Honeycomb house conflicted with Feng Sui beliefs, only 33% said they would consult a Feng Sui expert before buying such a house. Whilst the Honeycomb house had particular appeal to Malays (84% of Malays, 56% of Chinese and 58% of Indian respondents preferred the RM220,000 Honeycomb house) there was little resistance amongst the Chinese residents in Johor Jaya. The potential buyers of the Honeycomb house were 352 Chinese, 364 Malays and 294 Indians.

The concern of Developers that Honeycomb housing conflicts with Feng Sui is largely unfounded. The Chinese, Malays and Indians will buy Honeycomb houses in strong preference to terrace houses.

INTRODUCTION
Universiti Putra Malaysia, in close collaboration with Arkitek M. Ghazali, has recently published a book “Thermal comfort Honeycomb housing” (1) describing 17 years of pioneer research to develop an affordable and environmentally friendly alternative to terrace housing. Cluster houses consisting of 2, 3, 4 or 6 units, rather than long rows of terrace houses, are arranged like bungalows in a honeycomb pattern around small neighbourhood parks planted with fruit bearing rainforest trees to shade the roads and provide food for birds and small wildlife. The honeycomb arrangement, offering the same or higher density than terrace housing, reduces the roads and through traffic, discouraging burglary and making the area outside the home much safer for children and more sociable for the residents. This new Malaysian architectural concept has been widely presented to housing industry seminars and displayed at Inventors exhibitions and Home Ownership campaigns. Scientific surveys conducted by UPM at these events, although they cannot claim to be random, have shown over 90% acceptance for the Honeycomb concept and a strong demand (80%) amongst potential house buyers. This new housing form, representing the third wave of Malaysian housing following traditional kampong housing and post Independence urban terrace housing, has been accepted by the Sarawak Government for State housing under the Ninth Malaysia Plan.

However almost without fail, Developers have expressed the concern that Honeycomb housing with its triangular land and sharp angles in parts of the house conflicts with Feng Sui beliefs and might not be acceptable to Chinese house buyers. The purpose of this study is not to discuss or question Feng Sui as a cultural belief but to measure its influence amongst the house buying public. A random household survey was commissioned by a Johor Developer to determine how strongly Feng Sui beliefs were held by estimating the acceptability of Honeycomb housing in Johor Jaya, a predominantly Chinese area. The survey took the form of a preference study comparing, as fairly as possible, a medium cost Honeycomb house with a Terrace house of the same price and similar features such as 4 bedrooms, 3 bathrooms and 2 car ports.

METHODS
Random Survey


stratified random survey of 150 respondents was performed, selecting first the housing areas, then the roads and finally the households to be interviewed by three teams of enumerators. Using a street map of Johor Baru, Taman Johor Jaya (a 15 to 20 year Township covering 520 hectares selected by the Developer,Renewed Development Sdn. Bhd., Registration Number 202807-H) was divided into eight areas defined by the major roads. On the first morning of the survey (24-26 March 2006) three areas were randomly selected from a tin containing the name of the area written on 8 separate pieces of folded paper. The selection was performed publicly by the group of 6 female enumerators led by UPM Lecturer, Bukryman Sabri. In the same manner 10 roads from each of the 3 areas were randomly selected. Selecting 5 houses in each road was performed on site by determining the number of even numbered houses in each road and dividing by five. For example, if the randomly selected road contained 32 even numbered houses then every 6th even numbered house was selected.

If a selected house was clearly not occupied, the nearest occupied house to the right was chosen. The 150 selected houses were letterboxed with a UPM Letter in English and Malay (see Appendix 1) describing the purpose of the survey and requesting the cooperation of the resident. Together with the letter was an A4 colour print of a Terrace House and neighbourhood designed by the developer and a separate print of an equivalent Honeycomb House (left panel) designed by Arkitek M. Ghazali.
Residents of the selected houses were interviewed, usually outdoors, by 3 teams of enumerators, during 10am to 7pm on Friday, Saturday and Sunday. Where a resident of the selected house was unwilling to be interviewed or not at home after a few visits, the house to the right was selected then if still no response the house to the left. This second round of random selection was more difficult for the enumerators since the residents were ‘cold’ and did not have the benefit of a prior reading of the letter and house descriptions.


Johor Jaya Street Directory


Interview
Techniques


The three survey teams worked in pairs and introduced themselves as the UPM Housing Survey team. Generally, the teams were met with a favourable response, especially if the residents had already studied the UPM material. Respondents were shown a set of 8 A3 colour prints, describing in more detail the features of the Terrace House versus the Honeycomb House (appendix 4) The enumerators, skilled in survey techniques and knowledgeable on the new housing technology, were allowed to brief the respondents and answer clarification questions but were instructed not to “sell” the new Honeycomb concept.
The respondents were asked to fill out a questionnaire in English (appendix 5) or Malay (appendix 6) consisting of demographic data and 24 statements by ticking the appropriate box:- Strongly Agree, Agree, Disagree, Strongly disagree.

Statistical Analysis of Questionnaires

Back at UPM, the responses to the questionnaire statements were punched into a standard SPSS computer program “Statistical Package for the Social Sciences”. A Sample printout of the results is given (appendix 7). Further cross tabulation analysis and t-tests were performed within the same statistical package.

RESULTS & DISCUSSION
Random Survey


The purpose of a random survey is to minimise the number of people that need to be surveyed in a given population. The results obtained from this small sample can then be applied to the whole population, thereby greatly reducing the amount of work and expense to obtain the desired objective. A random survey is the highest form of sampling but can only be conducted where the population is fixed, such as the residents in a housing area, the workers in a factory or the staff and students in a university (2). Earlier UPM surveys to determine the acceptability of Honeycomb housing were conducted in exhibitions where it is not possible to carry out a random survey since the populations is continually changing according to uncontrollable reasons such as time of day, the weather, other human factors such as the intention to visit the exhibition and other competing events in the area.

The recommended sample size for a random survey is 3% of the population size, in this case the number of houses in Johor Jaya. The Informal estimate (guestimate) of the number of houses given by the staff of the company commissioning this study was 4000. The chosen sample size of 150 respondents was more than adequate at 3.75% for 4000 houses. However, the calculation of the number of houses in Johor Jaya, conducted after the survey was completed and based on a direct counting of all the residential houses from a Johor Jaya Street Directory (3) revealed 8830 houses which ideally require a sample size of 265 respondents. The below optimum number of 150 respondents used in this study (1.7% sample size) does not invalidate the random survey; it merely increases the sample error, rendering the findings less accurate.

The selection of respondents in a random survey can be done by various methods but all must follow generally accepted strict procedures. A stratified random sampling technique, selecting areas within the housing estate, then roads then houses (figure 1) was followed in this study as the fastest method since the survey teams had to complete the survey during a 3 day weekend.


Figure 1

The three randomly selected areas in Johor Jaya are shown in figure 2. Each area consisted of a mixture of houses and the predominant value of the houses is also shown. Thus the area called Jalan Anggerik was typified by medium-high cost houses.


Figure 2

Consumer Preference Test


A comparative description of the test Terrace house and the test Honeycomb house is shown in figure 3. The Terrace house was a commercial design supplied by the Developer. The Honeycomb house was designed by Arkitek M.Ghazali to be as comparable as possible in terms of price (RM220,000 with land), number of bedrooms, bathrooms and carports. However, land sizes and built up areas could not be exactly matched due to the different design constraints imposed by terrace and honeycomb housing and the requirements of the Authorities. The honeycomb house had 11% less built-up area but 24% more land.


Figure 3

The results of the consumer preference test are shown in figure 4. Almost two thirds (66%) of the 150 respondents preferred the Honeycomb House compared to the Terrace house with similar price and features.


Figure 4

The preference by race was also determined. The demographics of the 150 Johor Jaya respondents (figure 5) show them to consist of 58% Chinese, 33% Malays and 8% Indians. Their preference was all considerably higher for the Honeycomb house; 56% amongst Chinese respondents, 58% amongst Indian and 84% amongst Malays. The much higher cultural acceptance amongst Malays confirms our informal surveys at exhibitions and is not surprising since Honeycomb


Figure 5

Housing is a scientific urban recreation of the Malay kampong, featuring the essential elements of traditional housing such as a close secure neighbourhood, child friendly outdoor areas and shady native landscaping.
The 58% preference for the Honeycomb house amongst Chinese respondents compared to the terrace house indicated that cultural objections were not strong. This was tested directly in the questionnaire with the statement “This Honeycomb house conflicts with Feng Sui principles”. The response amongst Chinese was equally divided; 50% agreed and 50% disagreed (figure 6).



Figure 6

However, to the next statement in the questionnaire “I will consult a Feng Sui expert before buying a Honeycomb house” (figure 7) only 33 % of Chinese respondents agreed. It would seem that as much as two thirds of Chinese residents in Johor Jaya do not hold strong Feng Sui beliefs and do not consider it necessary to consult an expert before buying a Honeycomb house. Some 61% of the respondents were under 40 years (figure 5). However, in Honeycomb presentations given by Arkitek M.Ghazali to Chinese Developers, their age in general has been over 50 years. It is these Developers, rather than the potential house buyers who are expressing the strong concern that Honeycomb may conflict with Feng Sui and prevent Chinese from buying Honeycomb houses.



Figure 7

Perhaps it is the older Chinese who hold strong Feng Sui beliefs?

We tested this hypothesis that that Feng Sui beliefs were stronger amongst older Chinese, and that these beliefs were ‘diluted’ in their children’s generation by conducting a 2 tailed t-test. We found the hypothesis to be false. Chinese under 40 versus over 40 years of age showed no significant differences in their responses to the Feng Sui statements shown in figures 6 and 7. Similarly, there were no significant differences between the under and over 50 year old Chinese.



Comparing Terrace and Honeycomb Houses

In this preference test considerable effort was made by Arkitek M. Ghazali to fairly match a Honeycomb house with the Terrace house chosen and designed by the Developer as a suitable house for their next project. Each house type was presented as a fair to the respondents with pictures in similar styles and colours (see appendix 4). The questionnaire required responses to identical set of 8 statements, first about the Terrace house followed by the Honeycomb house (appendix 6)
A scoring system was devised according to the response to each statement:-


Strongly agree 10 points
Agree 7 points
Disagree 4 points
Strongly disagree 1 point

This enabled the response to each statement to be given a ranking on a 1-10 scale which is easily comprehended by the general public. Thus a perfect score of 10 would show that every respondent strongly agreed with the statement; a score of 1 that everyone strongly disagreed. Rather than a crude ‘agree or disagree’comparison this scoring system permitted a detailed quantitative comparison of the Terrace house and the Honeycomb House.

The comparative ‘House Scores’, all beween 6.1 and 7.1 out of 10, are shown in figure 8.

Figure 8

The response to “I like this house” was 6.6 out of 10 for the Terrace house and slightly higher at 6.8 for the honeycomb house showing that both houses were well accepted. Likewise Honeycomb scored higher than Terrace for the other five statements shown in figure 8. The biggest difference was for the community layout. The Terrace scored 6.3 versus 7.1 for the Honeycomb.

The mean overall scores were 6.27 out of 10 for Terrace house and 7% higher at 6.74 out of 10 for the Honeycomb house.

Satisfaction with Present House

The questionnaire (see results in figure 9) also found that 35% of respondents wanted to buy a house within the next 1-4 years, with 22% unsure. Some 37% could afford the RM220,00 price of the Honeycomb and Terrace houses. These two findings were used to calculate the number of potential buyers for either the Honeycomb or the Terrace houses amongst Johor Jaya residents (71% house owners, 29% house renting).

The survey also confirmed earlier findings regarding the most common defects of Malaysian terrace houses (1). The surveyed areas in Johor Jaya consisted entirely of terrace housing. Some 57% of respondents agreed their kitchen was too small,70% agreed their house was too hot and 74% wanted space in their compound for 2 cars (figure 9).


Figure 9

Potential Honeycomb house buyers


We have devised a simple general method, based on random sampling, for determining the number of potential buyers of specific houses amongst residents in a housing area, in this case Johor Jaya. The results are shown in figure 10.


Figure 10

Of the 150 respondents 53 agreed they wanted to buy a house within the next 4 years of which 22 agreed they could afford the selling price of RM220,000 for each of the houses presented.

Seventeen out of 22 preferred the Honeycomb house and only 5 preferred the Terrace house. So out of 150 respondents 17 (11.3%) have clearly indicated they are potential buyers of the Honeycomb house on the basis that they want to buy a house within 4 years, they can afford the RM220,000 price and that they prefer the Honeycomb house.

We can estimate, albeit based on the less than optimum number of respondents, that just over 1000 households (11.33% of 8830 households in Johor Jaya) are potential buyers of the RM220,000 Honeycomb house (figure 11). The corresponding potential customers for the competing RM220,000 Terrace house amongst all races is much less at 298 (5 households in 150 surveyed = 3.33% of 8930 households.


Figure 11

Comparison with Kuala Lumpur Survey

The same questionnaire used in this Johor Jaya survey was used a week earlier to survey those attending a Home Ownership campaign at the Kuala Lumpur Convention Centre (17-19 March 2006). A random survey cannot be carried out at an exhibition or for that matter on the streets or in a shopping centre since the population is continually changing. The next best survey is a systematic survey whereby for instance every tenth adult passing a particular point in the exhibition hall is surveyed. This type of survey was conducted and 101 respondents were shown the set of drawings of the RM220,000 Honeycomb house and the RM220,000 Terrace house. Respondents were also shown a model of a honeycomb community displaying cluster houses surrounding neighbourhood parks. The Kuala Lumpur systematic survey fully confirmed the findings of the Johor Jaya random survey.



The comparison of the Kuala Lumpur housing survey with the Johor Jaya survey is shown in figure 12. Some 77% of the visitors to the Kuala Lumpur Home Ownership Campaign (43% Chinese, 40% Malay and 7% Indian) wanted to buy a house within the next 4 years, 75% preferred honeycomb and 30% were potential buyers of the RM220,000 Honeycomb house. As in the Johor Jaya survey both house types were well accepted in Kuala Lumpur but the House Scores were much higher, reaching 8.7 out of 10 for the Honeycomb house. (figure 13). The percentage of potential Honeycomb house buyers was also very high, 30% of those visiting the exhibition. Feng Sui beliefs were not strong and 24% of Chinese visitors to the housing exhibition were potential Honeycomb house buyers.


Figure 12


Figure 13


SUMMARY

The Honeycomb house was preferred by two thirds of Taman Johor Jaya residents compared to an equivalent Terrace house. A novel scoring system was used to determine the acceptability of each house. The Honeycomb house scored 6.7 out of 10 whilst the Terrace house scored 7% lower at 6.3 out of 10.

Johor Jaya has 1010 potential customers for the RM220,000 Honeycomb House (352 Chinese, 364 Malays and 294 Indians). This is more than 3 times the 298 potential customers of the equivalent RM220,000 Terrace house.

Considerably higher house scores were obtained for the same houses in an earlier survey of visitors to a Kuala Lumpur housing exhibition where 77% wanted to buy a house within 4 years; the Honeycomb house scored 8.7 out of ten compared to 7.8 for the Terrace house.

Amongst the 3600 Chinese visitors to the Kuala Lumpur housing exhibition 880 (24%) were regarded as potential customers for the RM220,000 Honeycomb house.

CONCLUSIONS

The cultural concern of Developers that Honeycomb housing conflicts with Feng Sui beliefs is largely unfounded. Feng Sui beliefs will not prevent most Chinese from buying a Honeycomb house.

The simple and economic survey techniques described in this study can greatly reduce the commercial risk to Developers and Town Planners. By measuring consumer perception at a very early concept stage of a housing project, the affordability, cultural acceptability and many other factors of new houses and their surroundings can be forecast amongst different sections of the house buying public. This market intelligence can be used to ‘give the customer what they want’ and unite all sections of the housing industry into an efficient supply chain satisfying consumer aspirations for a an affordable quality home in a well planned neighbourhood.


ACKNOWLEDGEMENTS
We thank the Survey enumerators for their excellent and cheerful work. Final year students at Universiti Putra Malaysia:-
Ng Jen Tyng
Ng Chai Moong
Ng Lim Cheng
Tee Chai Ling

Staff of Arkitek M. Ghazali, Desa Pandan, Kuala Lumpur:-
Syuhana binti Khalidi
Ismayanty binti A. Razak


References

1. Mohd Peter Davis, Mazlin Ghazali and Nor Azian Nordin (2006) in ‘Thermal Comfort Honeycomb Housing, the Affordable Alternative to Terrace Housing’, Hardback 186 pages, published by Universiti Putra Malaysia, Serdang. Malaysia.

2. Fred N. Kerlinger (1973) in ‘Foundation of Behavioural Research’, published by Holt, Reinhart and Wilson Inc. New York.

3. Johor Jaya Street Directory (2002), published by Rimman International, containing house numbers.

Malaysia Investment Property is Hot in Kuala Lumpur and Other Cities

March 3, 2007 @ 8:46 am · Filed under Malaysia Properties

kuala-lumpur.jpgCash-rich Indians, including high-profile businessmen and film stars, have found a new property market in Malaysia. Wealthy Indians are investing heavily in residential properties in Kuala Lumpur and other cities after the Malaysian government relaxed rules regarding foreign ownership of property in December 2006.

The move has breathed fresh life into the Malaysian housing property market, which has been witnessing a slump for the past two years. During the past two months, more than 700 Indians have purchased properties in various Malaysian cities, according to government officials. However, they were reluctant to divulge the names of buyers. “They include businessmen with business interests in South East Asia, high net worth individuals and film stars,” the sources said.

As per the changes in ownership rules, foreigners can purchase residential properties valued above Malaysian Ringgit (RM) 250,000 a unit (which works out to around Rs 32 lakh), without the Foreign Investment Committee’s approval from December 21, 2006 onwards.

On December 20, the Prime Minister’s department said in a statement that there would no longer be a limit to the number of residential properties that foreigners can own, or any conditions upon their usage.

“We have launched a marketing initiative called ‘Malaysia: My Second Home Programme’. The programme allows people from all over the world, who fulfil certain criteria, to stay in the country as long as possible, on a social visit pass with a multiple entry visa,” Malaysian tourism minister Datuk Seri Tengku Adnan Tengku Mansor told ET. According to government data, the total number of residential units on sale during the first half of 2006 went up to 22,185 from 15,083 units in the same period a year earlier.

The move has encouraged foreign investors to purchase high-end residential properties in the country. Owing to this, the foreign currency inflow into Malaysia shot up, and the property and construction sectors got a boost. “We have sold over 10,000 houses already, bringing around $1.5 billion to the government’s kitty,” said Malaysian government officials.

Each buyer is allowed to purchase up to two residential houses at a minimum price of RM150,000 each, except for certain states like Johor, Malacca and Penang, where the minimum price remains RM 250,000. The rules relating to foreign ownership of property have been changed drastically to make the sector more attractive.

Earlier, foreigners needed an approval from the Foreign Investment Committee (FIC) for any purchase above RM 250,000. Moreover, though they were allowed to buy properties for own use, they could not use these assets for investment purposes. The demand for high-end serviced apartments and well-located houses is also being driven by the large number of expatriates working in Kuala Lumpur. Real estate agents said that new properties in Kuala Lumpur are being sold to international property developers with guaranteed rental yields of between 6% and 10%.

Source: Economic Times

Oil rises to 10-month high


LONDON (Reuters) -- Oil prices struck a 10-month high on Tuesday on strong summer driving demand in top consumer the United States.

U.S. crude for August delivery settled up 32 cents to $71.41 on the New York Mercantile Exchange, its highest since last August.

Experts have been concerned about U.S. gasoline supplies as domestic refiners strain to meet rising summer demand. U.S. refiners have faced a long, deep maintenance season that helped draw down refined product inventories ahead of the summer.

Unexpected refinery outages have also plagued the U.S. market, with Coffeyville Resources shutting a 108,000 barrels per day refinery in Coffeyville, Kansas, following flooding.

"All of the ducks are lining up in terms of upward price pressure," said Frances Hudson, investment director at Standard Life Investments.

"We're reaching the peak of the driving season and I do wonder how much we are also seeing a rise in the geopolitical element of the oil price," she added, referring to attempted bombings in London and an attack on Glasgow airport.

Police suspect an al Qaeda plot and the attacks have helped put some markets on edge.

Although crude stocks in the United States are at a nine-year high, some analysts are forecasting they will drop rapidly as refiners there return from maintenance.

The next snapshot of U.S. fuel stocks is due on Thursday, a day later than usual because of the Independence Day holiday on July 4.

A Reuters poll pointed to a decline of 700,000 barrels in U.S. crude inventories and a 0.9 percentage point rise in refinery operations.

The International Energy Agency, representing 26 consumer nations, repeated its call on Monday for the Organization of Petroleum Exporting Countries to increase output.

So far, the group, which pumps over a third of the world's oil, has resisted, arguing crude oil supplies are ample and any tightness in refined products is beyond its control.

According to a Reuters survey, OPEC kept a lid on output in June, pumping 30.19 million barrels per day. The 10 members subject to production limits produced 26.64 million bpd, up 50,000 bpd against May.


"The issue is not oil production. We have enough ... oil in the market," Venezuelan Energy Minister Rafael Ramirez told an Iranian newspaper in remarks published on Tuesday.

source