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2018 is a watershed moment for Malaysia's politics and the subsequent impact on the property market. We list down the key highlights in our 2018 property market roundups and our outlook for 2019. By Khalil Adis  The Malaysian flag, also known as Jalur Gemilang ("Stripes of Glory") against the backdrop of the recently completed Sungai Buloh - Kajang Line (SBK Line) which is a project of national importance. Photo: Khalil Adis Consultancy May 10 2018 was a watershed moment in Malaysia as it marked the first change of government in the country's history. Since 1957, it had enjoyed an uninterrupted reign from the ruling Barisan Nasional (BN) coalition. However, the high cost of living, falling Ringgit, the lack of affordable homes in the market, high unemployment among fresh graduates, the unfettered check on power and the 1MDB scandal proved to be the undoing for BN as Malaysians far and wide casted their protest vote in the ballot box The message from Malaysians is clear - they have had enough and want a new, clean government to lead the way. With the Pakatan Harapan government now in power, all eyes are on the newly elected old Prime Minister Tun Mahathir Mohamad and his team to solve the pressing bread and butter issues. Here are the top five property market roundups for 2018 and our top five outlooks for 2019. Roundups #1: Demand-supply mismatch has resulted in an increasing number of unsold homes  Luxury condominium developments surrounding the iconic Petronas Twin Towers. Malaysia is facing a housing glut in the medium to the high-end segment and a severe undersupply of affordable homes. Photo: Khalil Adis Consultancy. According to Bank Negara, 80 per cent of homes or 146,196 units priced above RM250,000 remained unsold as of end March 2018. In comparison, 130,690 units were unsold during the same period last year. "Imbalances observed in the property market continue to persist," Bank Negara had said in a statement. #2: Rent-to-own scheme being rolled out  Bukit Puchong Sales Gallery by Ayer Holdings. The developer is among one of the few offering a rent-to-own scheme for their Foreston and Epic Residence projects. Photo: Khalil Adis Consultancy To help ease the entry for the first time property buyers, the private sector has come up with a few initiatives. Some private developers like Ayer Holdings have introduced a ‘Stay & Own' scheme for their Epic Residence and Foreston projects whereby part of the rent will be converted to the downpayment. This not only provides a temporary solution for those who urgently need a home but also a form of security. Meanwhile, Maybank has rolled a similar initiative called HouzKEY which they have called as "a rent-to-own solution that helps you to own your dream home." The scheme involves zero per cent downpayment with the monthly rental forming part of the home financing. #3: Ministry of Housing and Local Government studying Singapore's HDB model  A Built-to-Order (BTO) project in Punggol, Singapore by the Housing & Development Board (HDB). Photo: Khalil Adis Consultancy. In July, Zuraida Kamaruddin, the Minister of Housing and Local Government paid an official visit to Singapore to study the HDB model. Singapore has succeeded to build demand driven homes under its Built-to-Order (BTO) scheme to house 80 per cent of the Singapore population. This is especially useful in Malaysia where there is currently a demand-supply mismatch as in point number one. #4: Malaysia looking into having a single housing government agency  The HDB Hub located in Toa Payoh. The HDB is a government housing agency that aims to provide affordable homes for all Singaporeans. Photo: Khalil Adis Consultancy In Malaysia, there are so many affordable housing programmes being rolled out by the state and federal governments such as Rumah Milik Mampu, Rumah Selangorku, PR1MA, My First Home, Program Perumaha Rakyat and the list goes on. This confuses the public. The Malaysian government is currently looking into having a single housing agency to streamline the whole process much like the HDB model. If implemented, this could solve the current Malaysian housing woe. #5: More help for the B40, M40 and first-time homebuyers under Budget 2019  Malaysians shopping for fresh produce at Pudu Wet Market in Kuala Lumpur. Budget 2019 will provide financial assistance to the targetted groups. Photo: Khalil Adis Consultancy. More help is on the way for these group of property buyers as announced under Budget 2019. The measures included the Real Estate and Housing Developers' Association (Rehda) agreement to cut prices by 10 per cent for new launches, the exemption of the Real Property Gains Tax (RPGT) for properties that are priced below RM200,000 and the stamp duty exemption for properties priced in the first RM300,000 up to RM500,000 as well as those priced from RM300,000 to RM1 million. Outlook for 2019 #1: Affordable homes to continue driving the market  Low cost housing near to Cochrane MRT station. There continues to be strong pent-up demand for affordable homes in Malaysia. Photo: Khalil Adis Consultancy. There is currently a strong pent-up demand for affordable homes but where the supply is lacking. As such, the affordable home segment will continue to be in strong demand for 2019. However, there needs to be concerted efforts from both the government and private developers. Under Budget 2019, the federal government has pledged to spend RM1.5 billion on such homes via the 1Malaysia People's Housing (PR1MA) and Syarikat Perumahan Negara Bhd (SPNB). Meanwhile, Rehda has agreed to cut prices as stated above. #2: South KL to be the growth area  The Leafz condominium located next to the Sungai Besi Highway. Southern KL is the next growth area in Kuala Lumpur. Photo: Khalil Adis Consultancy. There are many infrastructure projects and economic drivers that are in the pipeline that will further boost property prices in Southern KL. One such project is Bandar Malaysia will serve as the terminus station for the Kuala Lumpur-Singapore High Speed Rail (KL-Singapore HSR) project linking both cities in 90 minutes flat. The development for the project has been postponed to two years and will now commence construction in 2020 instead of 2018. Meanwhile, the express service will only commence by 1 January 2031 instead of 31 December 2026, as originally planned. Bandar Malaysia has been designated as a site for the Digital Free Trade Zone (DFTZ) initiative by Jack Ma. Home to the Satellite Services Hub, DFTZ is expected to create some 60,000 direct and indirect jobs. It will also possibly serve as the interchange to the MRT Line 3, which has now been postponed. Another economic driver in the vicinity is Tun Razak Exchange (TRX). TRX will be a mixed-use development comprising a Grade A office space as well as residential and commercial precincts. To be developed in several phases over a period of 15 years, the first phase will comprise four investment grade A office towers, a lifestyle retail mall, two 5-star hotels and up to six luxurious residential towers with a target completion date by 2019. In addition, Bandar Malaysia will house two MRT stations - Bandar Malaysia North and Bandar Malaysia South which will form part of the alignment for the Sungai Buloh - Serdang - Putrajaya Line (SSP Line). #3: Properties along Sungai Buloh - Serdang - Putrajaya Line (SSP Line) will be sought after  The alignment of the station along the SSP Line. Map: MRT Corp. Speaking of the SSP Line, properties along the alignment, particularly those situated in the growth areas of Sungai Besi, Bandar Malaysia and Cyberjaya City Centre are worth looking into. Bandar Malaysia will house two MRT stations as stated above and located a few stops away from Tun Razak Exchange MRT station. Meanwhile, Sungai Besi MRT station is an interchange station to the Sungai Besi LRT station. It will serve as an interchange to the upcoming High Speed Rail station located in Bandar Malaysia, also in Sungai Besi. Last but not least, Cyberjaya City Centre MRT station is a transit-oriented development (TOD) project to be developed by Malaysian Resources Corp Bhd (MRCB). With its experience in building the transport hub in KL Sentral, MRCB will be developing a new city that will be integrated with the MRT station. Phase one is expected to generate a gross development value (GDV) of RM5.35 billion. It will feature a 200,000 sq ft convention centre, a 300- to 400-room business hotel, low and high-rise office buildings and a retail podium. Cyberjaya City Centre will have a development plan spanning 20 years. The MRT station is located just opposite Lim Kok Wing University of Creative Technology. #4: Penang to get a boost from Phase 1 of Penang Transport Master Plan (PTMP)  Ferry service from Georgetown to Butterworth. Soon, there will be more transportation options on the island. Photo: Khalil Adis Consultancy. With Lim Guan Eng as Malaysia's Finance Minister, Penang's property market will get a further boost. Just this month, Phase 1 of PTMP was approved. It will comprise the Bayan Lepas Light Rail Transit (LRT) project, Pan Island Link 1 (PIL1) project and several main highways. The proposed Bayan Lepas LRT line will be about 30 km in length with 27 stations running from KOMTAR to the future reclaimed islands in the south. There will be three interchange stations - KOMTAR, Sky Cab Station linking it to the Sky Cab line across the Malacca Straits and The Light Station linking it to the George Town-Butterworth LRT line. The LRT Line will also be integrated with the Sungai Nibong Express Bus Terminal at the Sungai Nibong Station. Meanwhile, PIL 1 is a new 20km highway that will be aligned along the mountainous terrain of the island and will take around 15 minutes from between Gurney Drive to the Second Bridge. There will be six interchanges in all - Dr Lim Chong Eu Expressway (LCE), Awang, Relau, Paya Terubong, Utama and Gurney. #5: Johor Bahru to get a boost from the Rapid Transit System (RTS) Link  View of the Woodlands Checkpoint from the KTM service playing the Johor Bahru - Woodlands route. Soon, commuters can take the MRT from Bukit Chagar to Woodlands North MRT station instead. Photo: Khalil Adis Consultancy. Meanwhile, over in the southern state of Johor, Iskandar Malaysia's muted property market will get a boost as the RTS Link will commence construction next year.
The RTS Link will link Bukit Chagar station in Johor Bahru to Woodlands North MRT station in Singapore when completed in 2024. There are also plans for a Bus Rapid Transit (BRT) system within Bukit Chagar station to link it to the different areas of Iskandar Malaysia. The BRT will feature a dedicated bus lane with three lines - BRT Line 1 will span from Bukit Chagar to Tebrau, BRT Line 2 from Bukit Chagar to Senai and finally, BRT Line 3 from Bukit Chagar to Iskandar Puteri. However, based on market talk in the ground, there is a possibility that the BRT system will be upgraded to an LRT system instead.
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Phase 1 of Penang Transport Master Plan (PTMP) is now approved. Here are the 6 key takeaways11/14/2018 You can soon hop onto the train from Penang International Airport to KOMTAR or take the highway to Gurney Drive in 15 minutes flat. By Khalil Adis  Rapid Penang bus service which runs from Penang International Airport to KOMTAR. Soon, you can hop onto the train instead to Georgetown. Photo: Khalil Adis Consultancy With the Phase 1 of Penang Transport Master Plan (PTMP) now approved, the Pearl of the Orient is set to scale to greater heights. Prior to the Malaysian general election, it looked as though the project will never see the light of day as Penang falls under the opposition state of the Democratic Action Party (DAP) while the federal government was run by Barisan Nasional (BN). However, now that its former Chief Minister Lim Guan Eng is the current Finance Minister under the Pakatan Harapan government, the project is finally gaining traction. Here are six interesting facts on Phase 1 of PTMP #1: PTMP exempted from major review  The Penang Transport Master Plan. Graphics: Khalil Adis Consultancy & World Class Sustainable Summit 2009. It is interesting to note that while other mega-projects such as the East Coast Railway Line (ECRL), High Speed Rail (HSR), Forest City, MRT Circle Line and Light Rail Transit Line 3 (LRT3) were under review, PTMP is the only one that managed to escape unscathed. This is definitely good news for Penangites and for the property market as such infrastructure project will further boost property prices on the main island and on the Seberang Perai and Batu Kawan areas. #2: Phase 1 to comprise an LRT line and several main highways  Phase 1 will comprise the Bayan Lepas LRT line from Penang International Airport to KOMTAR and several highways on the island. Graphics: Khalil Adis Consultancy The PTMP estimated cost is around RM46 billion and comprises two LRT Lines - Bayan Lepas Line and Georgetown- Butterworth Line, three Monorail Lines - Ayer Hitam Line, Tanjung Tokong Line and Raja Uda Bukit Mertajam Line and one BRT Line - Permatang Tinggi - Batu Kawan Line. Phase 1 of PTMP will comprise the Bayan Lepas Light Rail Transit (LRT) project, Pan Island Link 1 (PIL1) project and several main highways. #3: Bayan Lepas LRT line to have 27 stations (including three interchange stations)  Screen grab of the Bayan Lepas LRT line. Source: http://pgmasterplan.penang.gov.my The proposed Bayan Lepas LRT line will be about 30 km in length with 27 stations running from KOMTAR to the future reclaimed islands in the south. The line will pass through important landmarks such as KOMTAR, Bayan Lepas Free Industrial Zone (FIZ) and the Penang International Airport as well as several established and planned residential townships and employment hubs in Jelutong, The Light, Gelugor, Batu Uban, SPICE in Bayan Baru, Sg Tiram and Batu Maung. There will be three interchange stations - KOMTAR, Sky Cab Station linking it to the Sky Cab line across the Malacca Straits and The Light Station linking it to the George Town-Butterworth LRT line. The LRT Line will also be integrated with the Sungai Nibong Express Bus Terminal at the Sungai Nibong Station. #4: Pan Island Line 1 to have six interchanges  Screen grab of the Pan Island Link 1 showing the interchanges. Graphics: http://pgmasterplan.penang.gov.my Meanwhile, the PIL 1 is a new 20km highway to alleviate the heavy traffic load on the Tun Dr Lim Chong Eu Expressway (LCE) and adjacent arterials such as Pengkalan Weld, Jalan Masjid Negeri, Jalan Jelutong and Jalan Sultan Azlan Shah. According to the Penang state government's website, "it is designed with six interchanges to link highly-populated areas and transport hubs on the island from the Second Bridge and the Penang International Airport all the way towards George Town, Paya Terubong, Bayan Baru, and Relau." The six interchanges include LCE interchange, Awang interchange, Relau interchange, Paya Terubong Interchange, Utama Interchange and Gurney Interchange. #5: A travel time of 15 minutes  Aerial view of Penang island. The Pan Island Link will cut through the mountainous terrain of the island. Photo: Khalil Adis Consultancy Upon completion, PIL 1 will be aligned along the mountainous terrain of the island and will take around 15 minutes from between Gurney Drive and the airport, compared with the current 45 minutes under normal traffic conditions on the Tun Dr Lim Chong Eu Expressway (LCE). #6: Toll-free  Aerial view of the Second Bridge. Unlike this bridge, the Pan Island Link 1 will be toll-free. Photo: Khalil Adis Consultancy Good news for drivers as the the 20km highway will be toll-free with limited points of access.
This it to ensure certainty in speed and travel time over the entire length of the highway. The alignment along the mountainous terrain also avoids the possibility of congestions caused by future developments. Funding will be from the sale of reclaimed land owned by the Penang state government |
Khalil AdisAn independent analysis from yours truly Archives
January 2023
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