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Wednesday, August 20, 2008

Property mart expected to shake off lethargy next year

The sluggish property market could recover in six to nine months as the supply of materials stabilises and buyers adapt to the higher cost of living.

"In 2009, the cloud will be clearer," said Datuk Michael K.C. Yam, chairman of the Real Estate and Housing Developers Association (Rehda).

Buyers are cautious about buying property after Malaysia hiked the petrol price by 41 per cent in June. Some are having problems getting financing as banks are more strict when giving out loans due to the tougher economic outlook.

"When there is certainty in fuel price and there is regular cement and steel supply at market driven prices, I think people can plan better," Yam told reporters at a briefing in Kuala Lumpur yesterday.

Construction and operational costs have jumped by 30 per cent and 20 per cent each respectively, resulting in prices of new launches increasing by about 20 per cent.

According to Rehda's Property Survey for the first half of this year, the rising costs of building material and fuel have also impacted developers' production delivery.

"Most members reported having difficulties in getting consistent supply of building materials besides their continuously rising price, especially steel and cement," Yam said.

Rehda, with over 1,000 members under its belt, had 135 respondents for its survey, comprising housing and property development companies.

More than half of the respondents said they are launching new projects for the second half of this year. However, new launches in the first half of the year were almost halved compared with the same period last year.

The average number of units to be launched per developer in the second half of this year is 152 units, lower than the 169 units in the same period last year.

By New Straits Times

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