Boosting demand for propertiesNews
It was a mixed year for the Malaysian property sector in 2010.
A few things to note include the implementation of the LRT and MRT systems, the Greater KL Transformation Plans, the New Economic Model, the 10th Malaysia Plan and the Economic Transformation Plan (ETP).
The plans are to pave the way for the country to become a high-income nation, boosting demand for properties in Greater KL, Penang and Johor.
The government also announced plans to open up some of its prized landbank around Kuala Lumpur and the Klang Valley for redevelopment.
Among the government-owned prime land are the 20ha at Jalan Cochrane, some 12ha in Ampang Hilir, and smaller parcels at Jalan Stonor, in Brickfields and Bukit Ledang, off Jalan Duta.
But the crown in the jewel is the redevelopment of the Rubber Research Institute land in Sungai Buloh and the Sungai Besi land, and building of Matrade Centre and the Kuala Lumpur International Financial District (KLIFD)
OSK Research Sdn Bhd head of research Chris Eng said the LRT and MRT projects have added excitement to the market as some homebuyers have begun to speculate which housing areas would benefit from the locations of these stations.
"These projects in the short term will create excitement and attract more capital into the region, thereby potentially boosting or sustaining the values of certain properties," Eng told Business Times.
Malaysia's residential property sector is expected to register the highest sales transactions on record in 2010 of around RM50 billion (2009: RM42 billion).
MIDF senior analyst Syed Muhammed Kifni Syed Kamaruddin said this can be attributed to accommodative home-financing schemes and greater housing demand, especially from upgraders.
"Residential sales transactions are estimated to rise by some 20 per cent annually to breach the RM50 billion mark for the first time in 2010," he said.
Another notable good news is the guaranteed downpayment of 10 per cent for houses below RM220,000 for first-time buyers earning below RM3,000 a month, implying full financing of the value of a property.
Muhammed Kifni said the move will spur demand for affordable housing.
A new scheme where the Employees Provident Fund contributors can withdraw more from their Account 2 savings for their first home will help the market.
The bad news would be the cap on the loans-to-value ratio for third housing mortgages and onwards by Bank Negara Malaysia (BNM) to curb speculation.
Effective November 3 last year, house buyers who have two mortgages and apply for their third loan can only get 70 per cent financing of their house value.
Real Estate and Housing Developers' Association president Datuk Michael Yam had said this will affect the upmarket segment by 20 per cent.
BNM's Overnight Policy Rate (OPR) hike to 2.25 per cent from a record low of 2 per cent in 2010 has softened the market a little.
But Previn Singhe, founder of Zerin Properties, said broad-based landed properties and condominiums in good location will continue to move.