PROPERTY GURU. 26TH OCTOBER: The Ministry of Local Government Development warned that it will continue the crackdown on commercial properties converted into small rental rooms, which resemble ‘birds’ nests’.
Meanwhile, Datuk Mohd Jafni Md Shukor, Chairman of the State Housing and Local Government Committee, expects the relaxation of the My Malaysia Second Home (MM2H) conditions and the high rent in Singapore to provide a much-needed boost to Johor’s real estate sector.
1. Crackdown on properties converted into ‘bird’s nests’ rooms to continue
The Ministry of Local Government Development warned that it will continue the crackdown on commercial properties converted into small rental rooms, which resemble ‘birds’ nests’.
Minister Nga Kor Ming revealed that investigations showed that some property owners have conducted renovation works on their property without securing the relevant permission from authorities.
He noted that property owners are mandated to follow the guidelines and specifications set forth by the Malaysian Fire and Rescue Department and the relevant local authorities to avoid fire hazard risks.
Nga added that action would be taken to enforce the law and protect people and property.
“Among the actions to be imposed are issuing fire hazard removal notices under Section 8 of Act 341 (Fire Services Act 1988), providing an appropriate period for the premises owner to comply,” said the minister.
He noted that failure to comply would result in an investigation for possible prosecution.
The warning comes after a Fire Hazard Prevention Operation (MBK) was conducted in Taman Maluri where a property owner failed to comply with a notice to rectify illegal renovations.
2. Relaxation of MM2H requirements, high rental in Singapore to boost Johor real estate
Datuk Mohd Jafni Md Shukor, Chairman of the State Housing and Local Government Committee, expects the relaxation of the My Malaysia Second Home (MM2H) conditions and the high rent in Singapore to provide a much-needed boost to Johor’s real estate sector.
He believes the easing of MM2H requirements will help address the issue of unsold properties as well as revitalize housing projects in Johor.
He pointed that the high rental rates in Singapore have already led to a 17% hike in real estate sales in Johor from Q1 2022 to Q1 2023.
“We are seeing many who work there and Singapore citizens buying properties here. So, certainly, the easing of the strict MM2H requirements will further revive the real estate sector and help resolve the unsold properties issue as well,” said Mohd Jafni.
He noted that the easing of the strict MM2H conditions will not only benefit Johor but the whole country as well.
3. 1,905 MM2H applications approved since November 2021
About 88% or 1,905 of the 2,164 applications for the Malaysia My Second Home (MM2H) programme were approved from November 2021 to end-September this year, said Datuk Seri Tiong King Sing, Minister of Tourism, Arts and Culture.
He shared that the Tourism, Arts and Culture Ministry as well as the Home Ministry always revise the programme’s terms and conditions to make it more interesting and competitive.
He revealed that 57 applications for the Premium Visa Programme (PVIP) were processed, of which 28 were approved while the other 28 applications were recommended for approval.
“PVIP is under the purview of the Home Ministry and the Immigration Department,” said Tiong in a written response in the Dewan Rakyat.
He was replying to Yeo Bee Yin’s (PH-Puchong) question regarding the number of applications and approvals under PVIP and MM2H.
4. Offer letters handed to 45 housing applicants
Forty-five housing applicants were personally handed offer letters for units at Block C of Mutiara Indah Flats within Simpang Ampat, Penang.
Datuk Seri Sundarajoo Somu, Chairman of the State Housing Committee, hoped the new low-cost homes would improve the quality of life of the recipients.
He also reminded the homeowners not to rent out their homes to foreigners, adding that the state plans to enact a law prohibiting property owners from renting their housing units to foreigners.
This comes as the practice of renting out to foreigners has caused discomfort among other residents.
Sundarajoo underscored that the state has fulfilled its duty of providing homes to those in need and expects the owners to be responsible.
He noted that the owners are not allowed to sell the low-cost homes in the next 10 years.
He also introduced a new housing scheme aimed at helping young people with a total household income of RM5,000 own a home.
“The scheme is especially for young people who have just started working after graduating from school, college or university,” said Sundarajoo.
Under the scheme, a 750 sq ft unit is priced at RM100,000.
5. Easing MM2H conditions to boost foreign property investments
Analysts believe the proposal to ease the Malaysia My Second Home (MM2H) conditions would help boost foreign property investments.
AmInvestment Bank said the move would attract more foreign property buyers, helping address overhang issues in the country, especially in Johor, Penang and Kuala Lumpur – which are popular destinations for foreigners looking to live in Malaysia.
Developers focusing on premium pricing homes are the key beneficiaries of the relaxation of MM2H terms, it said.
These include Sunway Bhd, UEM Sunrise Bhd, Sime Darby Property Bhd and IOI Properties Group Bhd.
However, the revision of stamp duty rates for foreign property buyers in Malaysia contradicts the intent of the MM2H programme to attract foreign buyers, said Datuk Paul Khong, Group Managing Director at Savills Malaysia Sdn Bhd.
Starting next year, a stamp duty rate of 4% will be imposed on foreign property buyers.
“The earlier sliding scale of 1% to 3% up to RM1 million is now removed and this 4% is applicable for the entire purchase price instead of from RM1 million onwards,” he said.
This means foreigners would have to pay an additional RM16,000 for properties priced over RM1 million.
6. New Industrial Master Plan to drive industrial demand in Malaysia
UBS expects the New Industrial Master Plan 2030 (NIMP) to have a positive impact on industrial demand in Malaysia.
Historically, domestic direct investment (DDI) and foreign direct investment (FDI) as well as industrial property values, have grown faster than value add.
“Hence, to get to the government’s goal of 6.5% per annum improvement in value added between 2021 and 2030, we think this will imply up to a 10% compounded annual growth rate (CAGR) in FDI/DDI and, consequently, industrial transaction values,” said UBS.
The surge in inbound direct investments is anticipated to lead to significant requirements for industrial land to establish manufacturing and logistics capabilities.
Mature industrial parks located near Senai are witnessing robust interest from small- and medium-sized enterprises (SMEs) as well as multinational companies (MNCs).
UBS noted that industrial land connected to transport hubs are becoming scarcer.
However, it does not expect developers’ landbanking push to industrial to result in oversupply. This comes as developers size up demand potential effectively.