My journey to the new flat

Image by JP Canada via Flickr It seems that my occupation of the new flat is not an easy case after all. I’m now in a transitory abode, a flat which we are renting, so I’m spending a monthly rental, for 2 months at most (or so for what we estimated).

Anyway, there are issues that would make it seem harder every time. Now owner wants to vacate by end of October, when initially it was said to be 3rd week of October.

Anyway, I know that these problems would simply make the occupation and takeover a more cherished event.

So till then.

Adieu!

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CHINA TIGHTENS BANK LENDING RULES

Image via Wikipedia

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BEIJING - Banking regulators in China have ordered institutions to tighten controls on risk and carefully scrutinise borrowers' ability to pay their debts in a new step to rein in lending.

The government order comes as Beijing tries to prevent excessive lending that it says could lead to financial problems while ensuring adequate credit to keep the economic recovery on track.

Chinese leaders are worried that a stimulus-driven torrent of lending is fuelling a dangerous bubble in stock and real estate prices. Beijing has ordered banks to set aside additional reserves and to keep lending stable, but the central bank has avoided raising interest rates, which might slow growth.

The China Banking Regulatory Commission said in a statement that it issued two regulations to increase risk management on personal and working capital loans.

The rules took effect on Feb 12.

The regulation on working capital loans stated that banks must calculate borrowers' actual needs and also consider their cash flow, liabilities, repayment abilities and other factors when assessing loan applications.

On personal lending, the regulation says that borrowers may not obtain loans if they do not specify what the money is to be used for.

Chinese leaders have warned banks repeatedly to keep lending stable this year and avoid financing real estate and industrial projects that are not needed due to fears they might fuel inflation or leave banks burdened with bad debts if poorly planned projects fail.

Banks were ordered on Feb 12 to increase reserves by half a percentage point - to 16.5 per cent for large lenders and to 14.5 per cent for smaller institutions.

The government reported earlier this month that January bank lending rocketed to 1.4 trillion yuan ($290 billion) - nearly one-fifth of the planned 2010 total. AP

From TODAY, Monday, 22-Feb-2010

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Nearly-completed Shanghai high-rise falls over

This early fall means no matter the disaster, it still saved a lot of other unspeakable disasters – were it have been already occupied…

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Posted: 28 June 2009 1434 hrs

The collapsed 13-floor residential building which was under construction in Shanghai, China

SHANGHAI: A nearly-completed 13-storey Shanghai apartment building toppled over, killing a worker and raising concerns in China's largest city over construction standards, state media reported Sunday.

Shanghai Mayor Han Zheng ordered a full investigation into the cause of the incident, which occurred Saturday in the southwestern part of the city, the Shanghai Daily reported.

"It was horrible. The building fell down very quickly after several workers ran out of it," Fang Zenghui, whose home faces the building from across the creek, was quoted as telling the newspaper.

"It was very loud. I was stunned and couldn't believe what I'd just seen," he said.

A 28-year-old migrant worker, surnamed Xiao, who entered the building to collect his tools, was killed after trying to jump out of a window as the building fell, the newspaper reported.

About 130 nearby households were evacuated and inspectors were examining the foundations of seven other identical buildings in the "Lotus Riverside" compound, saying they appeared to be intact Saturday evening, the report said.

The incident was a new blow for Chinese property developers, who have been severely hit by a sagging market amid the global financial crisis.

Those who bought apartments in the development were demanding refunds and explanations, the report said.

Developer Shanghai Meidu Real Estate and Shanghai Zhongxin Construction Co said they were contacting owners and negotiating refunds, the newspaper said, adding 77 per cent of the homes had been sold.

The building fell Saturday morning a day after about 83 metres (272 feet) of the nearby riverbank collapsed, apparently due to the construction of an underground parking garage being built on the site, the report said.

Construction company employees had been working through the night Friday to shore up the riverbank, the report said.

Concerns over poor construction and low-quality materials have plagued China's construction industry as the country rapidly builds up its cities and infrastructure needed to maintain its growing economy.

Anger over poor construction boiled over during after last year's earthquake in central China after about 7,000 schools collapsed and relatives of dead children spoke out against graft they believed led to shoddy construction.

- AFP/yb

From ChannelNewsAsia.com; see the source article here.

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New site to test the waters

Properties, properties, in the midst of the worldwide recession, how I wish, how I wish, I have the means to buy new possession…

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THE first sale site at the proposed Kallang Riverside waterfront lifestyle precinct was made available yesterday — after a scheduled six-month delay.

The 0.74-ha land parcel along the Kallang River with a permissible gross floor area of nearly 20,917 sq m — is envisaged to be a waterfront hotel development catering to business travellers and tourists. It can house hotel rooms and shops like retail and food outlets.

The parcel was scheduled to be available on the Reserve List last December, but as more time was needed to finalise the planning and development conditions of the Kallang River, the URA deferred the release.

The site will show how well the sector is doing, said Cushman and Wakefield managing director Donald Han. "(This) is going to be a litmus test particularly for developers to ascertain whether this is the right timing in view that generally the market has seen some positive news ..." he said.

Based on the plot ratio, the site is expected to be of a "manageable size" that can house 300 to 380 rooms. Price would also range between $150 to "maybe at most" $190 per square foot per plot ratio, he said.

"Mainly on the basis that this is going to be a first mover for a developer to develop a fairly new area ... I think a discount factor for the market would probably be expected."

Under the system, a site would be released for sale only if it receives a bid with a minimum price that is acceptable to the government. 938LIVE

From TODAYonline.com; see the source article here.

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Amid the signs of recovery...

CHANNELNEWASIA: MONEY MIND

Is now the time to invest in Asian property stocks?

Frederick Lim, frederickl@mediacorp.com.sg

THE 20- to 30-per-cent rally in Asian property stocks in the past few months is not sustainable, say experts, who believe prices are likely to fall further for most markets in the months ahead.

Henderson Global Investors thinks the current rally in property counters is not being backed by fundamentals.

“In the physical property market, values are clearly falling in most, if not all, markets,” said Mr Patrick Sumner, head of Property Securities at Henderson Global Investors. He believes there is a strong chance property values in Asia could fall further if banks that have been holding back on forced-selling of distressed assets bring them onto the market.

“You have quite a large volume of properties which are not being sold. If the banks actually start forcing the sales of these properties, they would make their own balance sheets look rather shaky. I think it will take some time for the whole market to clear at a price that both sellers and buyers find satisfactory,” said Mr Sumner.

According to Henderson, the recent rally in property securities has been driven by positive sentiment in the equity markets.

But property developers suggest there are signs that the property market is turning positive, based on sales volumes, and that could provide some support for property stocks ahead.

Yanlord, a high-end property developer based in China, said certain segments of the Chinese real estate market are showing signs of recovery.

“We have seen our transaction volumes increase from about 200 million yuan in November and December last year to 1 billion yuan ($215 million) in March this year,” said Ms Michelle Sze, head of Investor Relations at Yanlord.

Mr Justin Chiu, executive director of Hong Kong developer Cheung Kong Holdings, said the time is ripe to look for opportunities in the real estate sector.

“As real estate fluctuates in tandem with economic cycles, the current downtrend in Asia has opened up opportunities for favourable entry,” he said.

He believes the best opportunities are likely to be found in markets like Hong Kong, Singapore and, in particular, China.

As for the Singapore property market, developer CapitaLand is seeing a medium-term rebound for the high-end segment, especially with Singapore trying to attract top foreign talent.

“Singapore aims to become a global city focusing on wealth management, high-end talent and lifestyle. Does this strategy have legs? I, for one, am very confident,” said Mr Olivier Lim, group chief financial officer at CapitaLand.

For more on this story and other investment-related topics, catch Money Mind this Sunday at 9.30pm on Channel NewsAsia.

From TODAY, Business; Friday, 15-May-2009

How about property liberalisation?

BUSINESS COMMENT

CHUA TEE YONG


Low property sales and construction
slowdown have caused some developers
to brace for hard times.
BLOOMBERG

RECENTLY, the Malaysian government announced a few major decisions that have been positive and I hope that there are more to come.

On the economic front, the decision to scrap the 30-per-cent bumiputera equity requirement for the 27 services subs-sectors and also to allow a higher foreign equity participation for insurers and investment banks would augur well to attract more investment.

Even though some may argue that these are only "baby steps", they are steps in the right direction to raise Malaysia's competitiveness in the global business front.

In view of the gloomy economic climate, the government should also consider liberalising or relaxing the property sector. Given its link to the other 160 industry subsectors, the property industry plays a pivotal role to breathe more life and activities in the local economy with its multiplier effect.

This is evident from the government's allocation of funds in the first stimulus package to build more low-cost houses through Syarikat Perumahan Negara Berhad.

With lower property sales, construction slowdown and deferment of new launches and huge inventory built up, some developers are facing difficulties and bracing for more hard times.

The few major areas relating to the national housing policy that may require some amendments or improvement are the applicability of the bumiputera discount, varying range of quota needed to be reserved and the mechanism for automatic release from bumiputera to non-bumiputera.

In Parliament, I have raised the need to review and abolish the discount for the purchase of luxury properties by bumiputera.

Typically the bumiputera discount for property ranges from 5 to 15 per cent. The discount is intended to make property affordable to bumiputeras. However, discounts provided for luxury property is not equitable to the rest of the buyers as it may result in non-bumiputera buyers having to purchase property at inflated price.

Example, for a RM1 million ($419,743) condominium in Klang Valley, a 5-percent discount would cost the developer RM50,000, equivalent to a low cost house. If there are 1,000 units being launched and 30 per cent are reserved for the bumiputera quota, thus the discounts on 300 units cost the developer RM15 million. The cost would be higher if it is a massive township development or if the discount is 15 per cent.

Providing discounts to some buyers would decrease the margin of the developer and hence the developer would think of other ways to compensate for the margin loss or pass the cost to the other customers. This results in inflated purchase price.

On Nov 25 last year, the Minister of the Housing and Local Government announced that they are in discussion on a proposal to scrap discounts for bumiputera who buy luxury property valued at RM500,000 and above. Hopefully the discussion is still in process and any amendments would be announced in due course.

FOREIGN INVESTORS
There are also contradictions between the federal government's initiatives to attract foreign investors and state rules.

The abolition of Foreign Investment committee approval for foreigners purchasing properties costing more than RM250,000 and the exemption of property gain tax would create foreigner interest in the local property market.

However, state governments still impose their own rules on foreign property sales and purchase, resulting in conflicting signals to investors.

Even though opening the property market to foreigners would spur the growth of the Malaysian property market, the minimum price for eligibility should be raised to at least RM1million, depending on the state.

This is to ensure that we attract quality investors and avoid forcing Malaysians to compete with foreigners to buy a house for themselves as the amount of RM250,000 is too low for certain areas like the Klang Valley.

In summary, a bumiputera discount for property at a certain value should be maintained to ensure affordability of home ownership but a better policy is to not confine the discount to one race or religion.

This is an edited excerpt of an opinion piece that appeared in The Malaysian Insider on May 4. The writer, Mr Chua Tee Yong, is an MCA MP for Labis.

From TODAY, Property – Thursday, 07-May-2009

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