IJM Perennial Development Sdn Bhd topped-out the Penang Waterfront Convention Centre (PWCC) on Tuesday.

PWCC, located in Gelugor, Penang, is set to be completed in 2Q2025, according to a press release dated Jan 23.

The Light City is jointly developed by IJM Corporation Bhd and Perennial Holdings Pte Ltd.

IJM Corporation group CEO and managing director Lee Chun Fai and Perennial Holdings executive chairman and CEO Pua Seck Guan concurred that PWCC will boost the Meetings, Incentives, Conferences and Exhibitions (MICE) sector and tourism industry in Penang.

“This event signifies more than just the nearing completion of a structure; it represents the realisation of our vision for The Light City. At the heart of the vision lies PWCC, a modern, state-of-the-art venue designed to facilitate connections, collaborations and innovation for both local and international communities. Its central role within The Light City underscores IJM’s commitment not only to constructing buildings but also creating spaces that actively contribute to the vibrancy and economic growth of Penang,” Lee said.

“Leveraging on our expertise in large-scale integrated mixed-use development, we are on track to not only elevate the MICE and retail standards in Penang, but also realise our vision of establishing The Light City as the finest integrated waterfront mixed-use development in Penang and the region for locals and the international community,” Pua commented.

PWCC sits atop retail mall The Waterfront Shoppes and has a gross floor area (GFA) of 330,000 sq ft. It features customisable column-free event space to host and support all kinds of events and scale such as international conferences, exhibitions, trade shows, seminars and live performances. The amenities provided in PWCC are a catering kitchen, sizable pre-function area, an open rooftop area, over 2,900 parking lots, 19 meeting rooms. It will also have a direct link to the hotels in The Light City.

The Light City is a 4.1 million sq ft freehold integrated development which is part of the 152-acre The Light Waterfront Penang masterplan. The Light City is developed in two phases with phase one consisting of PWCC; The Waterfront Shoppes with GFA of 1 million sq ft; residential project named Mezzo; as well as hotels and offices. Phase two will include an additional GFA of 500,000 sq ft to The Waterfront Shoppes; Lightwater Residences and other future developments.

Source: TheEdgeMalaysia.com

About Lucerne Residences

The final phase of residential development by Ideal Property Group at Ideal Vision Park in Bayan Lepas. It is just a short drive to Penang International Airport, 10 minutes walking distance to Straits International School. The project will see two blocks of 36-storey skyscrapers featuring a European living concept. It offers 480 residential units with a 5-storey parking podium.

Find out more about Lucerne Residences

In its recent meeting, the Monetary Policy Committee (MPC) of Bank Negara Malaysia announced the decision to maintain the Overnight Policy Rate (OPR) at 3%. The move is in line with the current assessment of the global and domestic economic landscape.

Globally, the economy continues to expand, driven by robust domestic demand and a resilient labor market. While signs of recovery are emerging in the electrical and electronics sector, global trade remains soft due to a shift from goods to services and ongoing trade restrictions. China’s economy shows improvement, but its recovery remains modest, primarily due to weaknesses in the property market. Although global inflation has edged downwards, it continues to be above average. The growth outlook is subject to downside risks, including geopolitical tensions, unexpected inflation outcomes, and increased volatility in global financial markets.

For Malaysia, the fourth-quarter GDP estimates confirm that the overall growth for 2023 aligned with expectations. Looking ahead, 2024 is anticipated to see improved growth supported by export recovery and resilient domestic expenditure. Factors such as employment and wage growth, increased tourist arrivals and spending, and ongoing investment activities contribute to the positive outlook. However, risks remain, including weaker external demand and larger declines in commodity production.

Inflation in Malaysia moderated in the fourth quarter, and both headline and core inflation for 2023 remained within expectations. For 2024, inflation is projected to remain modest, reflecting stable cost and demand conditions. The outlook is contingent on domestic policies regarding subsidies and price controls, along with global commodity prices and financial market developments. The government’s plan to review price controls and subsidies in 2024 will impact the inflation and demand outlook.

The recent movements in the ringgit are attributed to external factors and do not accurately reflect the current domestic economic performance. To mitigate the risk of increased volatility in global financial and foreign exchange markets, Bank Negara Malaysia will maintain sufficient liquidity to support the orderly functioning of the domestic foreign exchange market.

With the OPR at the current level, the monetary policy stance continues to be supportive of the economy, aligning with the assessment of inflation and growth prospects. The MPC emphasizes its vigilance to ongoing developments and commits to ensuring that the monetary policy remains conducive to sustainable economic growth while maintaining price stability.

The traditional housing affordability measure of median multiple is too conservative, whereas measures of residual income and housing cost burden are more realistic, Rehda Institute shared on Tuesday during a stakeholders’ discussion held at Wisma Rehda in Petaling Jaya for an upcoming report titled Affordable Housing II: Closing the Gap — A Strategic Approach to Balancing Supply and Demand.

The final report, which will be categorised into five parts — Housing Affordability Measures, Affordability of the Rakyat, Sustainability/Supply of Affordable Housing, Government’s Initiatives, and Way Forward — will be officially launched at the Regional Housing Conference at end-April.

The event gathered stakeholders from more than 40 organisations, including those from government agencies, property developers, associations as well as financial institutions, whereby they engaged in roundtable discussions moderated by Rehda Malaysia president Datuk NK Tong on the five categories of the report, to ensure that the findings and insights compiled by Rehda Institute align with the current market realities and conditions.

In presenting a summary of the upcoming report, Rehda Institute executive director, research and education Malathi Thevendran noted that if the housing affordability measure of median multiple is adopted, there will be a need to provide more affordable housing, which is not an accurate reflection of the true situation, and therefore, the residual income approach is a more accurate measure of housing affordability. “There is a need to be aware that income will improve over time, but the challenge lies in obtaining detailed statistics pertaining to demographic, income and expenditure.

“However…the information from the Sistem Pangkalan Data Utama (PADU) database could be utilised to ensure a sustainable real estate market via the residual approach,” she added.

Thavendran also noted that median household income rose from RM5,228 (2016) to RM6,338 (2022), with growth declining from 4.0% (2016 to 2019) to 2.6% (2019 to 2022), which could be due to Covid-19. In addition, income growth of 2.6% from 2019 to 2022 is slower against expenditure growth of 5.4% during the same period. On a national level, the income level below RM2,000 has been on a downward trend since 2014.

The report findings also showed that 61% of the property developers surveyed for the report have actively decided to incorporate affordable housing in their portfolios, even though it is not mandatory, and half of the developers surveyed implemented cross-subsidy by expanding their business interest to construction and commercial enterprises.

According to the findings, the developers surveyed have also increased their open market pricing up to 20% for products priced between RM600,001 and RM800,000 and up to 12% for products priced above RM800,000. “Price increase on the open market units to compensate for the negative returns in the development of affordable housing [is an] unhealthy practice which will affect the open market buyers who are still the Rakyat,” said Thavendran.

“Public housing should be the responsibility of the government and [there should be] constant review of the pricing and target market. The government should provide incentives and support and [there should not be a mandatory percentage] ruling by the authorities on the provision for affordable housing.”

As for government initiatives, Thavendran noted that some targets are not achieved with the budget allocated, and there has been limited access to comprehensive data on public housing.

“There is also no check and balance on whether demand is met.

“All these lead to a lack of synergy between federal and state governments in terms of provision of public housing and inconsistent policies. Therefore, there is a need for the government to identify demand based on micro location, and build houses in line with local market demand. The government should also streamline public housing programmes,” she said.

On the way forward, Rehda Institute emphasised the importance of having a centralised database, such as Padu, which was launched early this month. Such database, said Thavendran, helps to distribute aid to subsidies efficiently and accurately. She added that Padu should be an integrated social-economic database, a government’s central hub for data for citizens aged 18 and above with their basic personal information.

In his closing remarks, Rehda Institute chairman Datuk Jeffrey Ng corrected the general perception on developers’ profit margins, especially after the reduction of compliance cost. “Profit margins of 10% to 15% is where we are at, and this is over a period of three years,” he said.

Ng pointed out that 26% of the total overhang properties, priced RM300,000 and below, as shown in the National Property Information Centre (NAPIC) third quarter of 2023 (3Q2023) report, is due to the mismatch of demand and supply, and hence solutions are needed to solve the discrepancy. He added that Rehda Institute supports the establishment of Padu, whereby having a centralised database allows for a clearer understanding of the rakyat.

“Lastly, housing affordability also has to do with household income growth. This is dependent on the government bringing in investors and creating job opportunities for the income to move up,” added Ng.

Source: TheEdgeMalaysia.com

The aspiration of owning a home, a cornerstone of financial stability and future planning, remains an uphill battle for many Malaysian millennials residing in major cities. The intertwining factors of skyrocketing property prices and an unyielding surge in the cost of living create a formidable barrier, leaving the younger generation, aged 25 to 45, grappling with deferred homeownership despite government initiatives like the National Affordable Housing Policy.

Over-commitment

A comprehensive study conducted by Universiti Putra Malaysia underscores the financial challenges gripping the younger generation. Dr. Mohammad Mujaheed Hassan, from the Urban and Regional Planning Department, reveals a stark reality: high financial commitments, including monthly car installments, credit card debts, and rental expenses, are stifling the ability to accumulate savings for a home. The symbolism attached to car ownership, despite some individuals relying on public transport, leads to over-commitment, leaving limited disposable income for savings or investment.

Wrong Estimates

Contrary to their financial capacity to afford homes based on monthly rental payments, many millennials prefer the perceived financial safety net of renting. Dr. Mohammad Mujaheed’s insights suggest that additional costs associated with homeownership, such as taxes, maintenance fees, and the perceived distance from workplaces, deter the younger generation from taking the homeownership plunge. Personal loans and credit card debts further contribute to their financial quagmire, pushing homeownership down the list of priorities.

Worrying Trends

The trend of prioritizing short-term financial commitments over the long-term goal of homeownership raises red flags. Dr. Mohammad Mujaheed warns that such prioritization could lead to prolonged debts, potential blacklisting by financial agencies, and a cascade of issues, including financial stress and limited housing options in the future. The urgent need to address these concerns is underscored by the looming possibility of a segment of the younger generation facing homelessness or perpetual renting from one generation to the next.

Housing Affordability Gap

Dr. Azizul Azli from Universiti Teknologi Mara sheds light on the widening chasm between income levels and house prices, characterizing it as a significant roadblock to homeownership. Annual salary increments fall far behind the rapid surge in property values, creating an insurmountable gap. Azli advocates for proactive government intervention, emphasizing the necessity of incentives for developers to construct more affordable landed houses and a streamlined approach to bureaucratic processes that contribute to escalating construction costs.

The financial stretch of urban living in Malaysia, coupled with the millennials’ penchant for immediate gratification, places the dream of homeownership at a critical juncture. Overcoming over-commitment, dispelling wrong estimates, addressing worrying trends, and bridging the housing affordability gap require a concerted effort from both policymakers and developers. Government initiatives, coupled with strategic incentives for affordable housing development, hold the key to transforming the homeownership dream from an elusive pursuit into a tangible reality for the younger generation. As the nation grapples with economic dynamics, ensuring that millennials can secure a stable housing foundation becomes paramount for their future and the overall socioeconomic landscape.