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Friday, December 26, 2008

Malaysian property mart still resilient

The Malaysian property market, which is expected to enter the down cycle next year, will still be resilient enough to survive the onslaught of a softening global economy.

The government’s RM7 billion stimulus package, including the reduction of Employees’ Provident Fund contributions from 11 to 8.0 percent coupled with lower interest rate and inflation, would provide the bright spark to the market.

The market still has ample liquidity as banks continue to give out financing despite worries about an increasing credit crunch in the US.

Association of Valuers and Property Consultants in Private Practice Malaysia (PEPS) president, James Wong Kwong Onn, said although the property market was expected to see a slowdown in the take-up rate there would not be a major correction as there was still room to grow.
He said Malaysia was in a better position compared to Singapore, Hong Kong and Thailand which were more exposed to the US sub-prime crisis.

“Prices in these three countries have shot up tremendously by 50-100 per cent but in Malaysia, the increase was gradual,” he said.

Wong, however, said the association did not expect the market to burst as there would be a moderate reduction in property prices.

He said the property market, especially for residential and commercial, has been ’red hot’ for three years up to the third quarter of this year but the softening economy has put a pressure on it.

According to Real Estate and Housing Developers’ Association president, Datuk Ng Seing Liong, the property market would see a slowdown of between 5 and 15 per cent in 2009.

He attributed the economic slowdown as a dampener to the enthusiasm of buyers.

Ng said sales generally would be ongoing but in small volume as most purchasers adopted a wait-and-see attitude while most developers downsized their new property launches for next year.

“Prices are likely to moderate by 5-10 per cent from the first quarter 2009,” he said.

An analyst from Aseambankers Malaysia Bhd said buyers were holding back their investments until the economic environment was stable.

He, however, anticipated home buyers to return to the market in the second half of 2009.

“The ’hot’ property items, especially luxury condominiums in the prime locations, such as in the Kuala Lumpur city centre and Month Kiara, would continue to be a focus as demand remains positive.

“Iskandar Malaysia is in the limelight. The most prominent developments are in Nusajaya and Danga Bay, which have attracted buyers from all over the world,” he said.

An analyst from OSK Research, who also shared his view, said given a huge supply expected to hit the market, especially in the high-end condominiums segment commencing late this year, 2009 would prove to be a year of reckoning for the Klang Valley’s luxury condos.

“As the market having to digest the massive supply of high-end condos that will flood the market to at least 2010, this supports the belief that the next property boom cycle will potentially be led by high-end landed properties,” he said.

He said the next phase of the property upcycle could only commence in early 2010 or 2011.

By Bernama

1 comment:

Anonymous said...

Everybody will feel the downturn due to global slowdown however Malaysia in better position than most for a quicker recovery.