PEPS: There is no bubble!
FocusMEMBERS of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) have rejected the idea that the local property market is experiencing a bubble.
During a press briefing on the 4th Malaysian Property Summit 2011 - to be held on Jan 18 - they said properties are still being purchased at a healthy rate and the outlook for 2011 is positive, with prices continually increasing. This is backed by record increases in the number and value of property transactions since 2009.
"People, both local and foreign, are still buying, especially in the Klang Valley. Malaysia isn't experiencing a property bubble crisis," said PEPS executive committee and organising chairman Eric Ooi.
He said unlike the western market, Asian countries still show strong signs of property buying amidst increasing prices. China, Singapore and other Southeast Asian countries reflect this.
"It is different when it comes to the Asian market. China still show an increase in buying despite soaring interest rates and land prices. This can be attributed to our cultural practice of cash savings and carefully planned investments," added PEPS president Choy Yue Kwong.
"There is also a healthy interest in foreign investments into our country. While our yields aren't the best in the Asian region, Malaysia is still possibly one of the more stable countries to invest in. Along with positive capital gains, we are still much more affordable compared to Hong Kong and Singapore," Choy said.
In addition, the association believes the role of foreign buyers has little to do with the escalating value of local property values and that increased prices are only seen in selected areas in Selangor and Kuala Lumpur.
"The buying ratio of local to foreign buyers in the market was at 50:50 during the 2007-2008 market peak. Since 2009, the ratio has reverted to 70:30 in favour of local buyers," said Ooi.
"Foreigners only target specific locations especially those around the KL city centre or in upmarket suburban areas of the Klang Valley."
They stressed, however, that many of these places are located near financial centres or established land- marks making them prime and strategic locations for the younger generation. But Gen-Yers - especially those who have not owned a property but have intentions to live within KL and Selangor urban centres - would continue to find it difficult to own a property given the imminent increase in land prices.
"Without financial aid or assistance of parents, it just doesn't seem feasible for most of the Gen-Y to afford a home on their own," said PEPS executive committee member Datuk Mani Usilappan.
"The government should seriously look into providing more affordable homes and also improve public transportation, to and from the city centre, in areas outside prime locations."
Mani also suggested that the government implement a new national housing policy to assist the public who represent the bulk of Malaysians who are finding it difficult to own a property.
"Perhaps, the national housing policy could include the different categories of the property market, including the affluent segment. It is difficult for private developers to resolve the issue of affordable homes for the masses by themselves."
Asked to comment on the Building Management Association Malaysia's (BMAM) strong opposition to the amendments to the Valuers, Appraisers and Estate Agents Act, 1981 (VAEA Act), he said PEPS members felt that certain issues raised by BMAM were misinterpreted. As such, they will be seeking to clarify these soon.
Long way to go for BMAM
The Building Management Association of Malaysia's (BMAM) first roadshow and forum on building management in Penang last month was fruitful although it lacked the numbers to back its cause. It plans to hold the second one in January.
"The roadshow in Penang created awareness and the majority who attended signed up with BMAM. The feedback was positive but we still lack the numbers to back our cause.
"We'll continue to heighten awareness about what we're fighting for, which we believe benefits all property managers in the country," said Malaysian Association for Shopping and Highrise Complex Management (PPK) past president and BMAM member, Richard Chan.
BMAM made Penang the first stop of its roadshow because the state alone has an estimated 900 joint management bodies and management corporations.
Chan said the high number makes Penang vital to BMAM's cause in its opposition to the proposed amendments to the Valuers, Appraisers and Estate Agents Act, 1981 (VAEA Act) which BMAM believes will empower valuers and grant them monopoly not only as property managers but also facilities managers, building managers, maintenance managers and managing agents.
"We are not going against the valuers but the VAEA Act itself which we believe contradicts the government's economic liberalisation efforts, the Competition Act 2010 (Act 712) and the Consumer Protection Act 1999 (Act 599)," added BMAM president Datuk Teo Chiang Kok.
According to BMAM, with almost two million strata title residential units in Malaysia, the monopoly could result in valuers earn at least an additional RM1.62 billion annually.
"A low-cost unit with a potential market rent of merely RM500 a month will have people paying RM67.50 per unit per month, which is already above the current maintenance fee of RM20 to RM30 monthly," said Teo.
BMAM is currently represented by members of the Real Estate and Housing Developers' Association, the Associated Chinese Chamber of Commerce and Industry Malaysia, the Institution of Engineers Malaysia, Malaysian Institute of Architects, PPK, Bunga Raya Management Corp, Grandeur Tower Management Corp, Stratified Property Management Sdn Bhd, and Wisma Rampai Owners Association.
It is supported by the Malaysian REIT Managers Association and the Malaysian Retailer-Chains Association.
