Property to remain buoyant in 2011News
The property market in Malaysia is expected to remain buoyant next year, seeing a moderate uptrend in prices, in line with economic growth and growing interest among foreigners.
Speakers at a press conference on the Fourth Malaysian Property Summit 2011 here today said, no property bubble is expected in the foreseeable future, due to pent up demand for certain upmarket condo launches.
The Malaysian Property Summit is scheduled to be held on Jan 18, 2011 at the Sime Darby Convention Centre in Kuala Lumpur.
More than 200 participants, including developers, property owners, investors, bankers, financial analysts, economists, and property consultants are expected to attend.
Property consultant and valuer, James Wong said, the sharp increase in prices, is only to be seen in certain landed properties in choice locations with a huge demand for it in Kuala Lumpur and Penang.
James Wong is also the managing director of VPC Alliance (Malaysia) Sdn Bhd and regional chairman of VPC Asia Pacific Limited, a regional grouping of property consultants operating in eight countries.
"With escalating prices of property, one of the challenges for the government is to boost income, and move the country towards a high income economy," he said.
"This can be achieved by providing clear guidelines under the Economic Transformation Programme (ETP), especially on Private Finance Initiatives (PFI), as a majority of the funding under it comes from private initiatives," he told a press conference.
The president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS), Choy Yue Kwong said in 2011, property prices would improve but the office market will remain soft.
"The property market currently is still very buoyant. Market prices are at record new highs. Interest rate is still relatively low," Choy said during the same press conference.
Choy emphasised that the high Asian savings will also cushion against a property bubble.
"It is challenging to own a house with a salary of just only RM4,000 a month. In 1975, a house in the Klang Valley was around RM30,000 and graduates earned about RM700 a month.
"Today, a graduate earns about RM2,000 but a house in the Klang Valley could easily cost RM400,000," he elaborated. Thus, Choy said, owning a house is only possible if the government made an effort to uplift income.
Eric Ooi, managing director of Knight Frank Malaysia, a global residential and commercial property consultancy, said this problem is prevalent in Asian countries.
"Funds and investment money is moving into Asia as the United States and the European economies are still struggling to come out of the doldrums.
"There is a lot of interest from buyers from China who are agressively buying into properties in Australia and Singapore. If these buyers start buying into Malaysian properties, then prices will further escalate," he said.
According to Ooi, there is a lot of interest at present from Singaporean and Hong Kong buyers, for Malaysian properties.
He highlighted that foreigners are looking at the yield in making decisions on property purchases.
"Currently, the Kuala Lumpur property market has a positive yield. Investors also like stability in the country and election results will have an impact on their investment mood," he explained.
He also said another factor to affect the property market is any increase in interest rates as it will impact the repayment of loans.
"However, there are expectations that the interest rate will not increase susbstantially," Choy added.