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Tuesday, August 10, 2010

Rehda optimistic of property market outlook

KUALA LUMPUR: The Real Estate and Housing Developers’ Association Malaysia (Rehda) is optimistic of the future prospects of the property market in Malaysia.

Datuk Michael Yam: Majority of developers expect prices to rise.

“For the first half of this year, the Rehda Property Industry survey for the first half 2010 showed that 62% of the developers were more optimistic of the market conditions compared with 43% for the second half of last year,” said Rehda president Datuk Michael KC Yam at a media briefing jointly held by Rehda and RAM Ratings Services Bhd yesterday.

The survey showed that 58% of the respondents had launched new projects in the first half of this year, a significant increase compared with 31% in the previous half, Yam said.

He said with the current favourable market conditions, the survey showed that 69% of the respondents would launch new products in the second half of this year.

“The majority of the developers also anticipated prices to rise in the next six months.

“About 41% said their properties will increase in value by less than 10%, while another 40% of the developers expect their property prices to increase from 10% to 20%,” he said.

On the opportunities in the housing industry, Yam said the financial sector has been accommodative.

“The banking sector is liquid, credit for construction players has improved and housing non-performing loans have declined,” he said.

Yam said the regeneration of brownfield sites and the improvement in government policies had also been lauded for contributing to the favourable market conditions.

He said although the business has gained momentum, the industry still faced challenges like the increase in the base lending rate, removal of subsidies and the high production cost.

Yam said the current state of the housing industry was simmering and not boiling.

“It is still business as usual, but it needs continuous government support and accommodative policies to ensure its stability,” he said.

RAM Ratings chief economist, Dr Yeah Kim Leng, said the current monetary and financial conditions were conducive for sustainable growth.

“Following a 10.1% gross domestic product growth in the first quarter of this year, and with second quarter growth estimated at 8.8%, Malaysia’s first-half GDP growth will likely hit 9.4% year-on-year,” Yeah said.

The Rehda survey is conducted twice a year to assess the current housing industry conditions faced by its members.

By Bernama

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