Rosnah gives an update on the Pan-Borneo Highway upgrading work

Posted on August 16, 2013 Insightsabah.gov.my By Elaine Mah, Picture by Oliver Majaham

 

Minister of Works Datuk Rosnah Shirlin (right) in discussion with Azlan Jamaluddin, an official in the Ministry of Works (left) and the press conference on the Pan-Borneo Highway

Deputy Minister of Works Datuk Rosnah Shirlin today gave an update on the progress of the upgrading works done on the 2, 239 kilometre-long Pan-Borneo Highway.

The Pan-Borneo Highway was built in 1986 to link the two East Malaysian states of Sabah and Sarawak. It begins in the district of Sematan in Sarawak, and passes through Kuching, Serian, Sri Aman, Sarikei, Sibu, Bintulu, Miri, Limbang, Lawas, Kota Kinabalu, Sandakan and Tawau. As of today, the Pan-Borneo Highway is 93 percent completed, with a remainder of a 50-kilometre missing link from Kalabakan to Serudong.

Through the Highway Network Development Plan Phase 2, the Ministry of Works plans to upgrade the whole stretch of the Pan-Borneo Highway to dual carriageway in stages at an estimated cost of RM22 billion. Upgrading works began in 2011 and is estimated to be completed by 2025.

Speaking at a press conference, Rosnah disclosed that the Pan-Borneo road is fully tarred, with a total of 284. 65 kilometres already upgraded to dual carriageway.

1, 166 kilometres of the Pan-Borneo Highway is located in Sabah. Approximately 9.5 billion of the RM22-billion allocation will be spent to upgrade the highway in the state.

Currently, two main upgrading projects are underway in Sabah – the Petagas-Putatan-Lok Kawi Phase 1A and 1B road and the Donggongon-Papar Phase 1 road – costing over RM369 million. The Ministry expects that the upgrading works on these roads will completed in a little over two years’ time.

Other projects currently done on the Pan-Borneo Highway in Sabah include addressing the black spot problems in certain areas, repairing roads and slopes, and the upgrading of roads in areas that are prone to flooding. There are 86 projects of this nature in the state, incurring a cost of RM277 million. Of this number, 70 projects have already been completed.

The Ministry faces many challenges in completing the Pan-Borneo upgrade, including the problem of heavy vehicles carrying loads that exceed the 38-tonnes load limit, which frequent the Pan-Borneo highway. This causes the roads to become damaged prematurely, thus incurring high maintenance costs.

Rosnah explained that this is a concern of her Ministry. To tackle the issue, the Ministry is in talks with other authorities including the Road Transport Department to find a lasting solution to the problem. The feedback has so far been positive, she said.

“The government is committed to complete and upgrade the Pan-Borneo Highway to increase access to areas of economic growth as well as to cater to the well being of the people,” she said. - Insight Sabah

Source: http://insightsabah.gov.my/article/read/4427

‘Property price hike in Sabah because of TM’

Publiched on August 17, 2013 by Queville To | FreeMalaysiaToday.com

Sabah Developers say Telecom Malaysia is overcharging for providing basic infrastructure and this is affecting property prices.

PENAMPANG: Trouble is brewing between the Sabah Housing and Real Estate Developers Association (Shareda) and Telekom Malaysia Bhd (TM) over charges being imposed for providing basic infrastructure.

Developers claim that the telecommunications giant is passing off cost-sharing charges to all developers and buyers in Sabah and this has increased property prices in the state.

The association wants the federal and state cabinets to step in and determine a fair breakdown of the responsibilities.

Shareda deputy president Chew Sang Hai highlighted the matter during a specially convened press conference at its office here on Friday.

He explained that prior to 2007, in order to subscribe for a telephone fixed line facility, developers were requested by TM to provide basic infrastructure such as public utility manholes following which cables and other equipment would be provided by TM.

However this arrangement changed in 2007 when TM requested developers to share the cost for its installations before the supply of telecommunication cables.

“Their proposal was rejected by developers in West Malaysia and Sarawak and until today the status quo remains unchanged in both West Malaysia and Sarawak,” he said.

In Sabah however, a dialogue session was held between TM and Shareda on April 20, 2009 and  TM agreed to waive the cost-sharing if developers could provide a database of owners to subscribe for fixed line services in the initial period of three years.

This arrangement included 50% confirmed applicants with minimum of one fixed line and one broadband connection per unit for urban residential projects and three fixed lines and one broadband connection per unit for 70% of commercial projects.

The arrangement however is now discretionary and cost-sharing is the order of the day.

Shareda feels that forcing developers to be the marketeers for TM is preposterous and a gross injustice to the people of Sabah.

Chew said his association did not see how TM could take such a stand in Sabah and at the same time dispense with the policy in the peninsula.

“The question prevails as to whether the action taken by TM in Sabah is justifiable for the people of Sabah and developers to bear higher cost than our West Malaysia counterparts,” he asked.

TM, he said, had inevitably contributed to higher property cost in Sabah since the developers had no option but to pass the additional cost incurred to the property buyers.

The cost-sharing charges usually costs between RM1,000 to RM3,000 more per unit of property depending on location.

“TM charge us (and) we have no choice but to charge the house buyers. No one else in Malaysia are paying more (for the property),” he said.

He claimed that TM is making the developers in Sabah a tool to make faster and bigger profits by using the excuse of share capital contribution.

“Name us any business that you do not need any capital investment? The so called capital contribution is actually the capital investments ought to be invested and paid for by TM in order to provide the basic infrastructure before TM can receive payment charges from the end users.

“Such kind of capital investments can be recovered through a nominal factor built on to the billing to their end users such as registration fees, deposit payment or connection charges,” he said.

Since recently passing a resolution to name and shame TM, Shareda has also urged all real estate developers in the state not to pay the cost-sharing (Capital Contribution) bills issued by TM.

“It’s rather ridiculous … we have been very accommodating all this while. Enough is enough,” he said.

On legal implication of such a move, Chew said Shareda had prior to this conducted its own study on such concerns and found that there are no existing law which allows TM to impose such charges.

He further noted that unlike in the past house buyers  or end users could now source for alternative telco providers for telecommunication services.

He claimed that there was evidence of Shareda members being charged by TM more than RM5.3 million for a total of 27 projects.

Shareda has also appealed to State Ministry of Local Government and Housing to exclude TM representatives from the development council as well as issue Occupational Certificates as soon as developers had constructed the basic utility infrastructure for TM.

Source: http://www.freemalaysiatoday.com/category/nation/2013/08/17/property-price-hike-in-sabah-because-of-tm/

Is there a Property Bubble Danger in Kota Kinabalu?

Published on November 17, 2012 by discoverborneo.com

Kota Kinabalu, in Malaysian north Borneo, is an emerging property market. Property has been booming. Especially among condo developments. In the last 5 years the number of condos and apartments in Kota Kinbalu has mushroomed. There are 1000's of units on the market for sale currently with the average 1000 sq ft condo in KK is priced between RM400,000 to RM800,000.

The price of property in Kota Kinabalu has apparently doubled in the last 4 years and is now beyond the reach of all but the very high-income groups.

This is because in Kota Kinabalu the average wage (and the average standard of living), for low and middle class families, is still quite stagnant. It seems inflation is outstripping the standard of living for all but the high income groups.

Therefore buyers will have to rely on foreigners looking for "lifestyle" properties if they want to sell and compete with Bali, Phuket, Koh Samui, and so on as places foreigners like to buy "lifestyle" properties.

It is likely the properties will attract low rental yields on the rental market as most renters cannot afford and may be traded at a very slow pace on the secondary market. It is predicted that the secondary market for these apartments in the next 2 to 5 years will be extremely slow moving. Therefore investors it is likely many will stop investing in KK apartments and look elsewhere for better prospects which will leave many local buyers "hanging".

Will this lead to a bubble burst?

This depends on the "holding power" of the initial buyers. Any new buyers who might not have "holding power" will be hurt. Any potential buyers thinking of entering the market better be careful.

How many apartments developments in KK?

It is estimated that the numbers have more than double in the last 5 years. Prior to 2007 it seems there were less than 30 medium cost apartments and condo developments in KK. Between 2008 and 2012 an additional 40 medium cost apartments and condo developments have been built or are currently under construction, with an additional 10+ in planning.

What is the affordability for local residents?

According to this article on Malaysia's Property Bubble from the New Straits Times:

High Income family earning RM14,000 per month can afford property up to RM550,000 with repayments of RM3000 per month.

Middle Income family earning RM8,000 per month can afford property up to RM390,000 with repayments of RM1800 per month.

Low Income family earning RM3,000 per month can afford property up to RM140,000 with repayments of RM700 per month.

What is the population of Kota Kinabalu, and what is the average salary?

550,000 people live in KK. The population grows at a steady rate, though not as fast as the speed at which condos are built in the last 4 years. The average worker salary is RM1200 a month. The average middle class professional salary in KK is RM2000 to RM5000 a year.

What is the rental price of Kota Kinabalu aparments?

Most people in KK live in low cost properties, or kampung houses. Mostly sharing rooms to keep costs lower. The average worker salary is RM1200 a month, and they can afford to spend RM250 on sharing a room.

For the high end earners, the rental prices vary. It is easy to find good condo aparments in KK renting for RM1500 a month. They are in plentiful supply and many remain empty.

Currently it is generally agreed that the average rental yield across newly completed apartments in KK is about 30% less than what it would cost to service a 90% mortgage on such a property over 30 years.

Who is buying Kota Kinabalu apartments?

A diverse mix of buyers :
- Corporations
- International Investment firms (through lawyers)
- Palm oil millionnaires
- Buy-to-flip investors
- Buy-to-let investors
- Owner-occupiers
- Property developers

In some properties the purchasers are the developers themselves. In one condo we visited there are some 15 unsold apartments held by the developer. The developer has priced them at over RM600,000. This is despite the fact that others in the same block are selling at less that RM550,000.

What is hot money?

Since the 2008 global financial crisis the price of property in KK has doubled. Why?

Since the 2008 Global Financial Crisis, investors have sought to invest in emerging markets as a way of diversifying away from investments in slow-growing American and European economies. Unfortunately, the vast ocean of "hot money" that has poured into emerging markets has created a massive economic bubble throughout nearly the entire emerging world, including overheating economies and property bubbles everywhere from Brazil to Indonesia to Turkey: http://www.thebubblebubble.com/emerging-markets-bubble/

What is a property bubble?

From WIKI article on Real Estate Bubbles: A real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels and then decline.

Do people in Kota Kinabalu know what a property bubble is?
Yes, they do. But like with all property bubbles many people think that "this time is different". Fear and greed are pushing and pulling. Currently greed is winning and people with spare cash are buying property in the hopes of double-digit gains. Unfortunately those who want to jump on that bandwagon in 2012 or 2013 may be sticking their money where it is going to hurt.

Why do property bubbles hurt?

Property bubbles cause economic hardships not just for those who bought when the price was high (and who then have to face losses), but also for the entire economy.

This happenned in Japan in 1991, and then across the world in 2008.

The consequences have been severe. Real estate bubbles are invariably followed by severe price decreases (also known as a house price crash) that can result in many owners holding mortgages that exceed the value of their homes. As of the end of 2010, 11.1 million residential properties, or 23.1% of all U.S. homes, were in negative equity at Dec. 31, 2010. Commercial property values remain around 35% below their mid-2007 peak in the United Kingdom.

See this article on the effects of the Japan 1991 crash: Take it from Japan: Bubbles Hurt

Is the Malaysian government taking steps to avoid a bubble burst?

Yes, many have expressed their worries and they do not want a locals to face unaffordable housing, nor do they want buyers and banks facing a bubble burst:
http://malaysiapropertyinvestment.com/blog/malaysia-property-prices-crazy-daim/

The following measures are being taken:
- Bank Negara has tightened up lending so that anyone buying their 3rd property cannot get a loan more than 70% of the price of the property. See Malaysia Takes Measures to avoid Property Bubble.
- The government has imposed a 5% capital gains tax on property starting in 2013. SeeMalaysian Property Downgraded.
- The government plans to build more low cost affordable housing for the vast majority of the population who have been completely priced out of the market. See Malaysian Government Committed to Building More Affordable Homes.
- In Sabah the government has recently imposed that 30% of all new developments to be priced below RM250,000. See Affordable Housing Units Underway in Sabah.

LIST OF KOTA KINABALU APARTMENT AND CONDO:

On Sale or Under construction or Recently Completed Apartment and Condo in Kota Kinabalu

1. 1 Sulaman
2. Alam Damai
3. Angkasa Apartment
4. Bayshore Phase 3
5. Cyber City Apartments 2
6. Hartamas Height
7. KK City Waterfront
8. KK Times Square Phase 2 - The Loft
9. Peak Vista Tower B
10. Puncak Luyang Tower B
11. Putatan Platinum Apartment
12. Surian Residence Condo
13. University Condo Apartment 2
14. Canggih Heights
15. The Pinnacle
16. 8 Avenue
17. Bay 21 Condo
18. D'Vantage Condo
19. Elements at Likas Condo
20. Jade Residence Condo
21. Jesselton Villa Condo
22. Legenda Saujana Apartment
23. Millennium Residency Apartment
24. Peak Vista Tower A Condo
25. Puncak Menggatal Condo
26. R55 Condo
27. Signal Hill Residence Condo
28. Taman Nelly Studio Condo
29. Suritz Condo
30. Lido 4 Seasons
31. Inti Suites
32. Aeropod
33. Jesselton Residences
34. Kasigui Tower - Central Million Properties
35. Pacific City / Pacific Parade / Pacific Residences
36. 1 Likas Condo
37. The Bay Residences Condo
38. 1 Borneo
39. Grace Gardens
40. Cyber City Apartments 1
41. Hing Tower Condo
42. University Apartments 1
43. University Apartments 2
44. University Condo Apartments 1

Proposed/Planned Apartment and Condo in Kota Kinabalu

1. Alam Bersatu Condo
2. C Park suites
3. Condo - Bina Puri / Kepayan Ridge
4. Condo - Fine Landmark
5. Condo - IJM Land / Likas Hill
6. Condo - New Age Portfolio
7. KK City Waterfront Phase 2
8. Kurnia Perdana Apartment Phase 2
9. Peak SOHO Condo
10. Puri Fantasi - CL Pertama Development
11. Riverside Condo - KK Land
12. University Prime Condo
13. Titijaya Sdn Bhd - 1. Mixed waterfront containing serviced apartments, shop-offices and a hotel / 2. Green residential enclave with bungalows and condominiums near Tun Fuad Stephen Park.

Existing Apartment and Condo in Kota Kinabalu

1. Bayshore Condo
2. Beverly Hills Apartment
3. Bundusan Villa Apartment
4. City Apartments
5. Colonnades Condo
6. Country Heights Apartments
7. Delta Heights Apartment
8. Eden Heights Condo
9. Fairway Mansion Condo
10. Grace Court Apartment
11. Grace Ville Apartment
12. Habiba Suites
13. Hing Apartment
14. Indah Court Apartment
15. Jesselton Condo
16. Kendara Court Apartment
17. Kurnia Perdana Residence Apartment
18. Lucky Heights Condo
19. Marina Court Condo
20. Nounton Apartment
21. Pearl Tower Condo
22. Public Jaya Apartment
23. Puncak Luyang Tower A Condo
24. Puteri Damai Condo
25. Radiant Court Condo
26. Radiant Masoniette
27. Radiant Tower Condo
28. Rainfield Court Apartment
29. Signal Hill Tower Condo
30. Taman Bakti Ikhlas Apartment
31. Taman Ketiau Apartment
32. Taman Penampang Apartment
33. Taman Seri Borneo Condo
34. Taman Wangsa Apartment
35. Tanjung Aru Condo
36. The Peak Condo
37. Waikiki Condo

Source: http://www.discoverborneo.com/cgi-bin/mt/mt-search.cgi?tag=property&blog_id=2&IncludeBlogs=2