23.

In “KLCP 2020”, I heard that Kuala Lumpur City Hall (DBKL) has tightened the floor area ratio
of commercial buildings and high-rise condominiums (1000%and under), then Is there any
influence on the real estate prices?

 For residential projects (under residential land) the density in the city will not exceed
1,000 ppa. This only applicable to 100% affordable housing project. Previous approval
was given for 2,000 ppa.
 For free market projects are remained the same which can get up to 400 ppa.
Meanwhile, for mixed projects with affordable homes and free market properties can
go up to 600 ppa.

 For commercial buildings, the maximum plot ratio for city development has been set at
1:10 applies to all type development which include commercial and residential in the
capital city.
 This exclude projects which have been granted D.O are not affected.
 This capped may not be good news for some developers as fewer units are allowed to
be built on the same plot of land that will affect the profitability of the projects as less
units are allowed to be built and drive down the pricing of the land.
 With less units permitted to be built, its likely impact on the prices as affordability of
some development in city centre may be a concern. However, this may not impact the
property prices in KL Fringe.

24. In this six month,are there any changes to the impact to high-end condominium market situation.
We do not think that some of the following policies will affect the luxury condominium market,
how do you think?

"Rent to own (RTO)"

 Discount 10% or more on those who bought unsold homes during the "Home
Ownership
Campaign (HOC)" （until this June)
 Exemption of stamp duty when people without owning house purchase house of 1
million ringgit or less by budget plan in 2019.
 In the 2019 budget draft, central bank establishes a fund of one-billion-dollar scale and
supports the house purchase less than 150,000 ringgits.
Answer:
Rent-To-Own (RTO)

 The RTO scheme established by 1Malaysia People’s Housing Programme (PR1MA)

in 2014 aims to help lower-income families involving into property market, despite they
don’t have the downpayment for the house, or don’t qualify for bank housing loans.
This scheme is suitable for young families and working professionals who don’t have
the earning power to qualify for housing loans. Luxury condominiums usually located
in KL area don’t provide this RTO scheme.

HOC
 Home Ownership Campaign (HOC) is initiated to encourage property ownership and
reduce the overhang units issue in Malaysia. From 1/1/2019 to 31/12/2019, Malaysian
citizen who’s looking for house ranging from RM100,000 to RM2,500,000 will enjoy a
minimum 10% discount from developer, 100% stamp duty exemption (3% for
RM1,000,001 to RM2,500,000 house) on Instrument of Transfer and Instrument of
Loan Agreement. However, not all developers are joining the HOC Campaign. Hence,
 with HOC being introduced, the volume of transaction for luxury condominium market
is expected to increase from previous period.

Stamp Duty Exemption

 For first time home buyers who are purchasing homes priced between RM300,001 to
RM1 million, the stamp duty is exempted on the instrument of transfer for the purchase
of homes from 01 January 2019 to 30 June 2019. This does provide a platform for first
time home buyers an option to purchase an ideal home with consideration price less
than RM1 millions. Hence, the luxury condominium market will not be affected much
under this policy.

Bank Negara Malaysia’s RM1 billion Fund for Affordable Homes

 The 1 billion funds established by Bank Negara Malaysia for affordable homes aims to
help home buyers from lower income group (B40) to finance of their first homes. This
initiatives will takes effect on 1/9/2019, with the criteria outlined as below:
a. Maximum monthly household income is increased to RM4,360
b. Maximum property price is increased to RM300,000
 The main target on this scheme is focusing on lower income group, which will not affect
the luxury condominium market.

25. About "About Home Ownership Campaign (HOC)"

Does HOC have an impact on the luxury condominium market?
Even if it is not a campaign, I think each developer will discount the unsold units. What is
characteristic of HOC campaign ? Does the government give subsidies to developers?
Answer:
As mentioned above in Question 24, HOC Scheme might affect the luxury condominium market
in Malaysia as a whole. This is because the Government aims to boost the property ownership
among Malaysians and meanwhile solving the property overhang issue in Malaysia. As a result,
various initiatives have been introduced in HOC in order to attract more potential buyers. As
far as we concern, government doesn’t provide subsidization to developers.

The characteristics of HOC are stated below:

a) Full Stamp Duty Exemption Until RM1 Million

Under the scheme, successful applicants enjoy 100% stamp duty exemption on Instrument of
Transfer for any residential home purchase up to the value of RM1 million.
b) Partial Stamp Duty Exemption until RM2.5 Million
For properties worth more than RM1 million up to RM2.5 million, buyers will have to pay 3%
stamp duty on the Instrument of Transfer for the amount that's more than RM1 million.

Property Price Stamp Duty

First RM100,000 Exempted

RM100,001 to RM500,000 Exempted

RM500,001 to RM1,000,000 Exempted

 RM1,000,001 to RM2,500,000 3% (as compared to the 4% which
was to have come into effect in July
2019)

c) Instruments On Securing Loans Exemption

All properties within the scheme enjoy a further stamp duty exemption on the Instrument of
Securing Loan.

Property Price Stamp Duty

Up to RM2,500,000 Exempted

d) 10% House Discount

As well as the stamp duty exemption, potential buyers enjoy a minimum 10% reduction on the
purchasing price of properties listed under the scheme.

26. How does the following policy affect the luxury condominium market?
a. Introduction of loan between individuals Real Estate Cloud Founding Platforms" (when
will it start?).
o Already started since early this year. 25th September 2019 the Securities
Commission (SC) Malaysia announced that it has registered EdgeProp Sdn
Bhd as the first recognised market operator to establish and operate a property
crowdfunding platform (FundMyHome) in Malaysia.

b. Real estate transfer profit tax and stamp duty will pull up in budget proposal of 2019

o The stamp duty on the transfer of property valued at more than RM1,000,000
will increase from 3% to 4%.

Stamp Duty Rate

Value of Property Current Rates Budget 2019
RM1 to RM100,000 1% 1%
RM100,001 to RM500,000 2% 2%
RM500,001 and RM1,000,000 3% 3%
Above RM1,000,000 3% 4%
Source: Stamp Act 1949 (Act 378) / Budget 2019

o For first time homebuyers, stamp duty waiver up to RM300,000 on sale and
purchase agreements, as well as loan agreements for a period of two years
until December 2020, for those purchasing residential properties priced up to
RM500,000.
o The revision of property taxes increases the disposal and transfer cost,
however the impact to luxury market is significant.
28. Development of Bandar Malaysia and HSR restarted under Chinese support, how does
Malaysian people think about these project? Is it welcome?

 There’s always two side of a coin. The revival of Bandar Malaysia under Chinese
support is seen as positively or negatively, depending on where one stands.
 Some may concern about the massive development of Bandar Malaysia will give
tremendous addition to the already over-supplied residential, commercial, office and
retail segments in the Klang Valley. On the flip side, Bandar Malaysia may stimulate
new demand and might draw in major international financial institutions, multi-national
corporations and Fortune 500 Companies to locate their regional headquarters.
 The developers might concern of the stiff competition from the proposed 10,000
affordable homes in Bandar Malaysia with strategic location and connectivity coupled
with subsidized pricing. However, the affordable homes is seen as a great opportunity
for the low-income group to own a home near to KL City Centre and right next to major
transportation hub.

29. In Japan, there are several of land price data, led by the government and published regularly
(once every six months, once every three years, etc.). This is set up by multiple survey point
which are regularly evaluated by a real estate appraisal.
Is there such a system in Malaysia?
Are there any scenes where it would be convenient if the land price was announced?

 Yes. There are several source relating to land / property price data led by the
government including Valuation and Property Services Department of Malaysia (JPPH),
Department of Statistics Malaysia (DOSM), National Property Information Centre
(NAPIC), etc. Alternatively, there are land / property price data made available to the
public led by private companies such as EdgeProp and Brickz.
 It would be convenient if the land / property price information was made available to
assist land / property buyers to make their purchase decision or to guide the
landowners to put up selling price. Besides that, it would be helpful for investors and
researchers to have some insights on market trends, prices or any correlation for some
property, location or even land uses.

30. How is the investment trend from Malaysia to Japan?

Net Flow DIA from Malaysia to Japan 2015 - 2018 (RM million)

Year 2015 2016 2017 2018

Japan -162 43 39 120
Sources: DOSM

Based on the table above, we can see that the investment from Malaysia to Japan is
increasing significant in the year of 2018.

31. I heard that demand for serviced apartments is increasing recently. What is the reason for.
What kind of people is main consumer? Is their main purpose of purchase for these serviced
apartments for investment?

 In the first half of 2019, there is a growth in demand for serviced apartments. One of
the main reasons is the decrease of median price making the property type more
affordable – with a slightly lower entry price and provides higher standard of facilities
and services compare to condominiums within and around city centres.
 For homeowner point of view, residential titled or commercial title residences under the
jurisdiction of the HDA would be more suitable for homeowner who is purchasing a unit
 solely for dwelling purpose. Condominiums, apartments and serviced apartment have
house rules and regulations to ensure the ease of management and protect the interest
of residents.
 For investment point of view, commercial titled residence (services apartment) may be
more suitable for property investor who looks for rental income and higher capitalization
rate. The location of these commercial titled residences are usually more centralized
with good accessibility and connectivity. Sizing of the units are generally smaller and
fit the lifestyle of expatriates, professionals, young couples, retirees, small families etc.
Also, with smaller unit sizing, the quantum pricing may be more palatable to potential
buyers and investors

32. Could you tell us about any new policies or events that affect the market.

 There are currently 2 new ongoing policies in the property market, namely National
Housing Policy 2.0 and Peer-2-Peer Lending Platform. The objective of National
Housing Policy 2018-2025 aims to gather public and private sector resources to solve
the demand and supply mismatch problem. While P2P Lending is when investors lend
money to individuals and business through P2P Financing platform to allow borrowers
obtain loans without going through bank’s strict requirements.