Rehda upbeat on property market

Those who are brave enough to invest in properties now may not have to wait too long to cash in, says a Real Estate and Housing Developers' Association (Rehda) official.

Rehda immediate past president Datuk Jeffrey Ng Tiong Lip expects Asian emerging markets to emerge from the global economic slowdown faster than developed markets.

"This form of 'contrarian attitude', while being cautiously optimistic, will help property market investors five years down the line," he said at a business seminar in Petaling Jaya yesterday.

The property market, especially in the capital, has been red hot with strong demand for commercial and residential properties.

However, an economic slowdown has put the brakes on it.

"The property market has to live with tighter profit margins compared to six months ago."

Malaysian banks are also willing to lend although they are more selective, scrutinising the borrower and the location of the property.

RHB Research Institute executive director and head of research Lim Chee Sing said Malaysia is better off this time round with a stronger banking system and higher external reserves to lower debt ratio.

"Households and businesses also enjoy a higher liquidity," he pointed out.

Lim, however, expects domestic demand to contract in 2009, saying economic activities have started to slow down from the beginning of this year as indicated by the industrial production numbers and exports, which are also falling.

He said many of new property launches have been deferred which has impacted earnings and squeezed margins.

By Rupa Damodaran (Business Times)

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