Measures to speed up property purchases
19/04/2007 The Star By Goh Ee Koon

KUALA LUMPUR: The Government is taking measures to expedite processes for property purchases and aims to shorten the time periods allocated for the public to make payments.

Deputy Finance Minister I Datuk Dr Ng Yen Yen said the Department of Valuation was currently evaluating its procedures and targets to shorten allowed timeframes for the following payments – eight days each for stamp duty and bank loans, and 14 days each for conversion cases and land alienation.

“It was twice or thrice longer in the past,” she told reporters after officiating at the launch of the National Property Information Centre’s 2006 Property Market Report.

Two years down the line, she said the process would be shortened to five days each for payments of housing loans and stamp duties, and 10 days each for conversion cases and land alienation.

On the outlook of the property market this year, Ng said: “I think it is positive and there will be an upward trend (on property sales).”

Earlier in her speech, Ng said the overhang rate in the country for residential houses went down from 20.4% in 2005 to 17.7% last year, most of it made up by terrace houses and condominium units.

Johor registered the highest number of overhang units at 8,215 and Selangor followed with 5,233 units. About 61% of the properties, though, were priced below RM150,000 per unit.

In total, the number of residential overhang in Malaysia last year was at 25,645 units worth RM4.18bil. About 89.4% of these had been on the market for over two years.

Launches of new properties slowed down last year, with just 38,526 new housing units offered for sale, the lowest number since 2002. Only 40.6% of these were taken up, lower than the 46.2% achieved in 2005.

However, it was also a case of having the right product in the right location – condominium and apartment purchases were prevalent in Kuala Lumpur and Selangor, which comprised 68.4% of total new condominium/apartments offered for sale in the country.

In terms of total loans, loan disbursements to residential properties registered moderated growth, with just 8.9% to RM162bil. In contrast, loans for non-residential properties recorded a higher increase of 30.9% from 2005 to RM45.98bil last year.

On the whole, outstanding loans to the broad property sector amounted to RM256.7bil, comprising 48.7% of total loans in the banking sector.

Prices for homes, though, remained robust. The Malaysian All Houses Prices Index rose 2.1% to 119.3 points last year, and the average price of all houses rose by 2.1% to RM164,861. House prices in Kuala Lumpur were the highest in the country (RM352,335) followed by Selangor (RM242,512).

Commercial properties, though, have been benefiting from strong growth in the wholesale and retail trade, hotels and restaurants sub-sectors. The overall occupancy rate for purpose-built offices increased to 84.7% last year, compared with 84.4% in 2005. For shopping complexes, the occupancy rate was at 79.9%.

Rental rates on the whole were said to be stable, though rentals in popular shopping complexes in Kuala Lumpur, Selangor, Johor and Penang saw increases between 3% and 30% last year. Similarly, office buildings in choice locations rose from 2% to 13%.