Hi!

I am new in lowyat. What about the impact of PR1MA on property price?

Read that PR1MA plan to build 40k units.

Inputs please?

🎥🎥📺📺🔍🔍🔍💡💡

What is the impact of DIBS removal on property market ?

See below, Reported in the Star on 29 Jun 2013 below:



By LEONG HUNG YEE hungyee@thestar.com.my

THE potential move to impose curbs on the Developer Interest-Bearing Scheme (DIBS) by Bank Negara may be negative for some developers in the short term and has little effect on banks.

StarBiz had reported that Bank Negara was studying the risks arising from the DIBS, with a view of potentially imposing curbs on it.

Basically, if you purchase property from a developer who offers DIBS financing packages, then the developer would bear the interest for the loan during the construction period.

In other words, you don't have to pay anything to the bank until construction is complete. You only start paying the bank instalments after the property is fully constructed.

DIBS has become a popular and easy financing package offered in joint-promotional activities between banks and developers in recent years.

CIMB Investment Bank Bhd research head Terence Wong said if the move by the central bank were true, then it would be "negative" for developers in the short term, although not entirely unexpected, as speculation on such a move had already surfaced in May.

"Although such a policy would have a negative impact on speculative demand, we believe the impact on earnings would be muted, while creating a healthier property market led more by fundamentals," he said, adding that he had heard whispers over the past few weeks on the possibility.

"We remain overweight' on the property sector, with Mah Sing Group Bhd as our top pick, and robust sales and earnings growth as sector catalysts. Any weakness in property stocks is an opportunity to accumulate, in our view," Wong added. Industry players are still awaiting a formal announcement from the central bank, if any.

Mah Sing's group managing director and chief executive Tan Sri Leong Hoy Kum pointed out that there has been no announcement on interest-bearing schemes thus far.

However, he hopes that any implementation would take into consideration the industry's feedback and the current market condition.

In addition, Leong said the lending environment was generally still conducive, with financing liquidity still attractive and interest rates still low.

While Mah Sing offers DIBS packages for some of its projects, it does not offer the scheme for its industrial, commercial and landed residential projects.

Hong Leong Investment Bank Research, meanwhile, believes that developers with a high concentration of high-end, high-rise developments such as Eastern & Oriental Bhd would be the most severely affected.

However, it reckoned that other major developers within its coverage would not be as badly affected, given their exposure to this policy shift would comprise less than 50% of their sales.

Kenanga Research analysts said there was market talk that Bank Negara might want to do without the easy financing packages as part of the property lending curb.

However, they say quick checks with developers under their coverage indicated that the developers were not extending this scheme to many projects at the moment, as banks were also discouraging developers from undertaking the scheme because of speculative activities.

"Notably, Hua Yang Bhd's and Crescendo Corp Bhd's projects do not use this scheme, so they would be least affected in terms of demand. So, in terms of fundamentals, it should not hurt demand too much, particularly for the bigger developers.

"It would affect stock sentiment in the short run, so do expect further sell-downs if the curb on DIBS materialises not even the high dividend-yielding ones would be spared," they opined.

In the medium term, Kenanga Research does not expect prolonged sell-downs, as the Government was already talking about implementing the build-then-sell model, which would restrict future supply and lend strength to demand and larger players such as SP Setia Bhd, Mah Sing, IJM Land Bhd and UEM Sunrise Bhd.

"Currently, our sector is under review. Our existing call is overweight' and we are likely to maintain this, but with a more selective or buy-on-weakness stance. We are likely to continue promoting affordable developers like Hua Yang and Crescendo due to their resilient demand-based profile. We also like Johor-based developers like UEM Sunrise, as we believe there would be more positive news flows towards the year-end, for example, the Malaysia-Singapore Rapid Transit System, the listing of Iskandar Waterfront Holdings Sdn Bhd and more strategic tie-ups," they added.

Concurrently, Maybank Investment Bank Research said assuming DIBS packages were banned, it estimates the worst-case scenario to be a marginal 0.7 percentage point to be shaved off its 2014 industry loans growth forecast of 10.5% to 9.8%.

"We believe domestic banks have been more tempered in their exposure to the mortgage segment, and channel checks point to limited exposure at this stage. We maintain our industry loan and earnings forecasts for the individual banks for now.

"We remain overweight' on the banking sector, with our buys' being AMMB Holdings Bhd, RHB Capital Bhd, BIMB Holdings Bhd and Hong Leong Financial Group Bhd," Maybank said.

It explained that general guidance was that such loans had made up 15%-20% of new mortgage loans over the past few years.

Thus, some dampening effect was to be expected.

"Nevertheless, we believe the impact is likely to be contained by the fact that the housing loan growth of the Big Six' banks has been measured and such loans account for less than 5% of total residential loans for the big banks."

Without DIBS, sales will slow down. How much? That is the question.... Maybe some developer will re-package.

But the impact is on the buyers (ie midfleclass worker bee) as well, I have friends who assume they will get that % of increment over 3 years and willing to take the plunge to take the loan and load up with debt, thus having little cash left at end of day. But with DIBS, they are not worried now as they do not need to service the loan in that period; after completion, majority are tempted to offload seeing 30-40% asking price.

I have friends selling after buying with DIBS, these friends still hunt for new properties; some hold on to the property( for whatever reason) even trying to rent out to minimize negative cash flow(ie rental vs monthly bank payment).

DIBS is a "good candy". Without DIBS, or repackaged variant, these group of people will look for other "investment" scheme.

Those who paid off their loans/debts may be affected if they depend on the rentals and the tenants are having cashflow problems...

But if rented out to banks and MNC (eg Starbucks) ... no impact on cashflow if loans/debts are settled long ago.

I used to work in CBD KL, and there are several makan shops, used to be packed during lunch/dinner time. During the 1997-1998 crisis, slowly one by one close shop, finally left only few. Then you see sign of lelong put up at some of those shops. Also slowly colleagues tau pau food from home. I worked in MNC then, when crisis first hit thailand, they say we have strong investment in Malaysia and good business for 30 years and no retrenchment, then 6 months later
VSS started. Another 6 months, another VSS round....

MacDonald shop survived, KFC shop
survived,... but I am sure those particular branches are not making 💰💰, more like losing and the properly owner still making 💰💰

I am just sharing.....

🎁🎁🎁🎉🎉🎉
From Star today

KUALA LUMPUR: A total of 100,000 houses will be built under the 1Malaysia Civil Servants' Housing Programme (PPA1M) nationwide, said Chief Secretary to the Government Tan Sri Dr Ali Hamsa.
He said besides Putrajaya, the Government would identify strategic locations in the capital and major centres, including in Sabah and Sarawak, to expand the programme.

"The project will be implemented once it is approved by relevant authorities," he told reporters after opening the Parent Teacher Association Carnival and new facilities at Sekolah Menengah Kebangsaan (SMK) Damansara Utama here Sunday.

He was commenting on a call from Cuepacs to the federal and state governments to provide medium-cost houses, priced RM250,000 or below, for civil servants.

Ali said the first phase of the PPA1M programme involving the construction of 10,366 houses was launched in Putrajaya by Prime Minister Datuk Seri Najib Tun Razak in April.

The PPA1M provides public housing with a minimum floor area of between 1,000 and 1,500 sq ft at a price of between RM150,000 and RM300,000.

Meanwhile, Ali said the Putrajaya PPA1M had received an encouraging response with 105,000 applications received to date.

Successful buyers are only required to pay for the houses once they are completed and not while work is still in progress. - Bernama