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Saturday, April 4, 2009

High-end property value may stabilise in 2009

The value of high-end properties, which has been on the decline by five to 15 per cent as a result of the economic downturn, may stabilise when the economy recovers, according to an industry player.

"High-end properties will start to correct by next year, when the economic conditions recover. We expect it to be either stable or flat. It won't be down anymore but slowly go up again," said Ho Chin Soon of Ho Chin Soon Research Sdn Bhd.

He said despite the current situation, some high-end properties were still able to command good prices, citing those in the KLCC area which went up by more than 15 per cent.

Ho said though the overall demand for the high-end properties has declined, the situation will correct itself over time.

"A lot of developers are holding back their launches, so there will be less supply and after some time, the demand and supply situation will correct itself," he said.

According to Ho, the developers will usually change their layout during an economic downturn to offer more lower-end properties to keep their operations going.

As a result, the demand for low-cost and middle-cost properties has remained stable despite the economic conditions, he said.

Ho also said that the recent interest rate cut by Bank Negara Malaysia was expected to boost demand for properties, especially for lower-end properties.

For lower-end properties, Ho said: "From October last year until last month, we saw no downside. Asking prices are still very strong."

By Bernama

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