BY CHERYL POO
Andaman Property Management Sdn Bhd managing director Datuk Seri Dr Vincent Tiew: “After buyers grasp a better understanding of the central bank guidelines, many will want to keep investing.”
PETALING JAYA: The local property market will pick up in the second half of the year, following further announcements from the central bank on lending guidelines, said Andaman Property Management Sdn Bhd managing director Datuk Seri Dr Vincent Tiew.
“From my observations of the industry in the past, I anticipate further announcements following these five months or so post budget 2014.
“People are somewhat confused and prefer to wait this period out. Once buyers grasp a better understanding of all the guidelines, many will want to keep investing,” he said at the sidelines of Andaman Group’s Loyal Buyers Reward Programme ticket distribution ceremony for its Property Outlook Conference 2014, which took place over the weekend.
To recap, Bank Negara had set the brakes on interest capitalisation schemes and the developer interest bearing scheme last year in an effort to cool speculative activities in the property sector.
Among other guidelines announced during the Budget 2014 included the use of the net selling price of a property – which excludes rebates and discounts – to obtain bank loans , as well as the reimposition of the real property gains tax (RPGT) of 30% for the first three years upon disposal.
“Further announcements by the central bank will not necessarily be negative news to investors. They could be measures to curb or better manage certain classes of property assets in terms of loan financing,” he added.
Tiew speculated that sub-urban areas will perform better in 2014 as small-town residents still had cash to invest.
Andaman Property started in 2005 with its first residential condominium project in Subang USJ, worth RM150mil in gross development value (GDV).
To date, Andaman Property manages more than 15 projects in the residential and commercial market in the peninsula totalling RM3bil in GDV.
Andaman currently owns land in Kota Damansara, Ampang and Subang, which will be developed and launched over the next few years as mixed developments.
The property player is targeting to achieve above RM1bil in sales from all its projects in 2014.
On the RPGT, Tiew said the 30% levy on a profit amount was fair.
“It would affect property holders in the first half of the year to hold on longer to their real estate but to me, it’s an acceptable amount to pay compared with Singapore,” Tiew said.
Currently, the challenge for property developers was to manage the consistency of business flows and billing, Tiew said.
“I expect prices to increase by 10% as more development charges are being imposed on new projects,” he said. “As such, property prices will not fall except in the event of a world economy slump.”
In view of cautious consumer sentiments in the face of rising costs, Tiew urged investors to hedge their financial portfolio by investing into real estate.
“Property players targeting the middle income group will have to restrategise because that market is suffering. Seeing as the affluent are not affected by new rulings and guidelines, the middle income group – whose household income sits between RM2,000 and RM10,000 – needs a lot of reasoning,” Tiew said.