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Wednesday, February 17, 2010

Developers optimistic on 2010 outlook

GEORGE TOWN: Property developers are optimistic that there will be growth in the local sector despite the cooling off of the broader regional market.

This is based on the Government’s projection of a 3.2% gross domestic product (GDP) growth this year, the brisk sales of high-end properties in Kuala Lumpur and Penang in 2009 and the fact that prices of Malaysian properties are still affordable to investors.

Real Estate and Housing Developers Association (Penang) chairman Datuk Jerry Chan said the prices of Malaysian homes, having appreciated 5% to 10% annually, was still affordable.

“The prices, with room to appreciate further, are still attractive to foreign buyers wanting affordable holiday homes and those with the disposable income to upgrade their properties,” he said.

Chan said given the high cost of land in Penang and the increase in building material prices, property values in the state were likely to rise by 5% to 10% this year.

“To build a 1,000-sq-ft apartment on the island will cost RM350,000 to RM380,000, taking into consideration the land and construction costs.

“This means a 1,000-sq-ft apartment will have to be priced close to RM500,000 to generate profit,” he said.

Meanwhile, IJM Land Bhd managing director Datuk Soam Heng Choon expects the recovery of the local property sector in the second half of 2009 to resume into 2010.

“There is a lot of optimism among local investors as the stock market is on the rebound and good liquidity in the market augurs well for the property sector.

“The take-up rate should remain steady with more first-time homebuyers coming into the market while the demand for high-end properties should be good with a ready pool of upgraders and investors.

“Prices should remain stable with reasonable appreciation, given that speculative buying is well under control,” he said.

Mah Sing Holdings Bhd deputy chief operating officer Teh Heng Chong said landed property prices in prime locations in Penang, Klang Valley and Johor Baru would still hold up this year.

Teh said the demand for properties in such locations would come from those with the buying power who preferred homes in a secured environment.

“That is why our recent previews of high-end projects, such as the RM209mil Perdana Residence 2 in Selayang and RM690mil Garden Residence in Cyberjaya, attracted large crowds,” he said.

Perdana Residence 2 and Garden Residence Resort Homes are both super-linked houses priced from RM828,000 and RM738,800 respectively.

“For Perdana Residence, we have potential buyers indicating they will take up 162 units while for Garden Residence Resort Homes, there are people expressing interest to buy 200 units,” he added.

Teh said the group’s main property launches in the Klang Valley this year would be iParc in Bukit Jelutong, Garden Villas in Hijauan Residence, Garden Residence in Cyberjaya, and Perdana Residence 2 in Selayang.

Mah Sing also plans to launch more phases this year in its existing projects like Hijauan Residence in Cheras, Aman Perdana in Meru-Shah Alam, StarParc Point in Setapak, as well as Sri Pulai Perdana and Sierra Perdana in Johor Baru.

SP Setia Bhd property division (north) general manager S. Rajoo said there was still room for property prices in the country to appreciate, unlike in some other neighbouring countries where prices had stagnated.

“The drivers of property demand in the country comes from first-time buyers, those who can afford to upgrade their lifestyle, and investors from Indonesia and Singapore.

“And with land scarcity being a concern on Penang island, buyers would generally jump at the chance of owning a property in the location of their choice,” Rajoo said.

Eastern & Oriental Bhd executive director Eric Chan Kok Leong said the local property sector looked promising this year, with demand expected to pick up.

He said the recovering economy was projected to improve the overall market sentiment, boosted by the attractive mortgage rates which were expected to remain accommodative, given the ample liquidity in the banking system.

“From a broader perspective, investors, anticipating inflation to follow the economic recovery, may decide to hedge their positions by investing in property.

“For us, we have seen a steady take up for our properties as 2009 drew to a close and we are confident of a better performance this year,” he said.

By The Star

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