KUALA LUMPUR: The recent 25 basis points (bps) hike of the overnight policy rate (OPR) to 3% from 2.75%, effective since July last year, is mainly due to concerns about asset bubble rather than inflationary pressures, said Dr Yeah Kim Leng, chief economist of RAM Holdings Bhd.

“If we look at the core CPI (consumer price index) growth, which is slightly above 2%, it is still manageable,” said Yeah, indicating that the current level of inflation is still under control and could be absorbed by consumers. Inflation in Malaysia rose to 3% in March from a year ago on higher food and fuel prices. He said the 3% inflation rate recorded in March was in line with the country’s long-term level, which has been sustained over the last three decades.

Curbing inflation was one of the reasons for the increase in the OPR and statutory reserve requirement (SRR) by Bank Negara Malaysia (BNM) last week.

Yeah told The Edge Financial Daily on the sidelines of RAM Holdings Bhd’s annual general meeting on Monday, May 9 that asset prices had been increasing lately, especially in the high-end property sector in cities such as Kuala Lumpur and Penang as a result of ample liquidity, low interest rates and inflationary expectations as investors looked to investing in property as a hedge against inflation.

“That is why BNM did not only raise the OPR, but the SRR as well, as it wants to reduce liquidity and curb excessive lending,” he explained.

However, Yeah said the emerging asset bubble was segmented, based on the location and type of property. In this case, high-end properties are seen to be in demand as they are the targets for speculation.

According to Yeah, if it is left unchecked, the situation will create a ripple effect that will also inflate prices of property which are farther away from the city centre areas.

“The rising prices of high-end properties have also lifted the prices of lower- to mid-range properties, especially within urban areas,” he said.

Yeah noted that property bubbles are normally fuelled by easy credit. By increasing the OPR and SRR, the central bank will tighten lending and the supply of easy money. Speculative pressure would also eventually decrease due to the tightening measures, added Yeah.

On inflationary pressures, the economist noted that for a country which has successfully maintained relatively high annual growth rates of between 5% and 6%, inflation is still manageable and under control.

“They (inflationary pressures) will gradually raise prices, but even if the inflation rate reaches 3.5%, it would still be manageable because if we look at 2008, just before the global financial crisis, we had a CPI rising up to close to 5%. We are not likely to revisit those high-inflation levels,” Yeah explained.

He expected inflation to be moderate throughout the year, with an inflation rate of 3% to 3.3%.

Source: TheEdgeProperty

THE state is looking at imposing surcharge on super condominiums, and the amount collected will be used to build affordable housing for the people, said Penang Chief Minister Lim Guan Eng.

He said such a move would help the state government to absorb the cost of building affordable homes.

“This will come under the charge of Penang Housing Board which will be established on July 1,” he said in his winding up speech at the state assembly.

At this juncture, Muhammad Farid Saad (BN-Pulau Betong) stood up and urged Lim to come up with a mechanism meant to compensate the people whose houses have to be demolished to make way for development.

To this, Lim said the state would ensure that nobody, including the landowners, squatters or developers, is short-changed even though they are still coming up with a mechanism on this issue.

“If the imposing of a charge on super condominiums for the construction of affordable housing was implemented in the state, it would also be a first in the country.

“The state was studying the move where the amount collected would be used to supply and provide affordable housing to the people in Penang.

“We are imposing a contribution, not a tax. We cannot impose taxes,” he said in a press conference after the state assembly sitting.

He added: “We don’t know the price to be imposed. Maybe before the occupation certificate (OC) is issued, they (the developer) will have to pay a certain contribution if they build houses above a certain limit.”

State Town and Country Planning, Housing and Arts Committee chairman Wong Hon Wai and Local Government and Traffic Management Committee chairman Chow Kon Yeow have been directed to look into the move.

Earlier, the water conservation surcharge became a matter of contention again between Lim and Datuk Arif Shah Omar Shah (BN-Seberang Jaya).

The latter said the surcharge would be unfair to big households and would be a burden to the head of the family.

To this, Lim said the surcharge of 24 sen per 1,000 litre for domestic users who use more than 35,000 litres of water was meant to encourage Penangites to conserve water.

“The Penang Water Supply Corporation (PBAPP) had carried out studies on the matter before deciding on the implementation.

“Since the implementation of surcharge, the average usage of water for domestic users had dropped to 286 litres from 291 litres per day. We hope to achieve the national average of 202 litres per day,” he said.

Source: The Star

GEORGE TOWN: Under the new Penang Heritage Act 2011, owners of heritage sites must first inform the state heritage commissioner in writing before selling the property.

The notification must be made in writing 28 days before the sale and purchase agreement is signed.

The state heritage commissioner, which is a new position, is also empowered to act against owners who fail to take “reasonable steps” to restore and maintain their sites.

The Act also states that the heritage commissioner can undertake repair works on premises after issuing a 14-day notice to the owner or resident who would have to foot the bill.

“A fine of RM500,000 or imprisonment of five years or both can be imposed on those responsible for the destruction of such premises, in addition to them having to pay for the repair,” said state Town and Country Planning, Housing and Arts Committee chairman Wong Hon Wai (DAP — Ayer Itam), who tabled the enactment.

Wong added that the Act covered more than just the George Town World Heritage Site.

SOURCE: The Star

Some 100 residents of the Gurney Park condominiums have signed a petition urging the Penang Municipal Council (MPPP) to shorten the working time of a neighbouring project.

Stating that loud noises coming from the upscale Gurney Paragon construction were affecting their daily lives, the group asked for daily working hours to be brought down to until 6pm instead of 10pm.

“For 14 hours daily, we have to keep our windows and doors shut to keep the dust out and to minimise the noise disturbance caused by the construction works,” read a letter accompanying the petition that was recently sent to MPPP president Patahiyah Ismail and Chief Minister Lim Guan Eng.

The group’s legal advisor Gooi Hsiao Leung said they had been made aware that the project’s latest work permit, which allowed construction to go on until 10pm, had expired on May 2.

“Following this, we hope MPPP will consider the residents’ request that the next permit limits working hours to between 8am to 6pm,” Gooi said in a press conference at his office. Currently, the working hours are from 8am to 10pm.

Gurney Paragon, an integrated development project, includes twin 43-storey buildings, a lifestyle mall, festival square and the restored St Joseph’s Novitiate — a 1925 heritage building.

Calls to MPPP president Patahiyah Ismail were not returned.

When contacted, Datuk Khor Teng Tong, executive chairman of Gurney Paragon’s developer Hunza Properties Berhad, said if construction hours were shortened, it would take a longer time to complete the project.

“I know there is inconvenience, but with shorter hours, the inconvenience will be prolonged.

“Give me 15 months and we’ll finish the project,” Khor said, adding that the construction project was located in a commercial area where longer construction hours should be allowed.

He also said that residents in the area stood to gain in the long run as property prices were set to rise with the building of Gurney Paragon.

SOURCE: The Star

TM Residency is located along Jalan Dato Ismail Hashim within the established township of Relau, Penang. It comes with two layout types with build-up area ranging from 820 to 1240 sq.ft.

Property Project : TM Residency
Location : Relau, Penang
Property Type : Condo/Apartment
Tenure : Freehold
Total Units : 80 (Type A & A1), 20 (Type B – Penthouse)
Developer : Koperasi Tunas Muda Sungai Ara Bhd.
Contact No: 04-643 8515
Indicative Price: RM 250,000 onwards