No reduction in property launches

Should there be any softening of the broad property market, one of the first segments that may soften will be the high-end segment of the condominium market. The landed housing segment is still seeing strong demand, particularly in the Klang Valley and Penang, says OCBC Bank (Malaysia) Bhd country chief risk officer Choo Yee Kwan.

“For the residential segment, no clear signs of any softening have been observed. As the broad property market' would cover commercial properties, we have observed that the applications for the financing of commercial properties have held up in March 2011,” Choo says in an e-mail.

He says the indication is that there will be an increase in housing loan applications in March this year, higher than the comparative volumes they saw during the preceding first two months of the year.

It was reported earlier that housing loan application totalled RM12.56bil in January and RM10.26bil in February, which prompted questions whether the drop in application will lead to a slowdown in the property sector.

Choo says the drop in housing applications from November to Febuary is not conclusive as the period was also subject to seasonal trends relating to the year-end holiday period and festive season during the beginning of the year. Typically, volumes tend to be lower during this period.

“It is useful to note that there has, indeed, been no reduction in housing launches since the beginning of this year, and that the take-up rate has been good, particularly of landed properties in the more affordable price ranges. New launches for both landed property and condominiums (particularly those in the affordable price ranges) are still being well received.

“However, for the high-end segment of the condominium market, there have been comparatively fewer launches which can also suggest that the demand for luxury high-rise units has somewhat waned.

“The bottom-line is that we still need to observe developments over a longer period before making any conclusive assertions in respect of this matter,” he says.

Choo says generally, the bank has observed that the loan quantum has been steadily increasing in line with upward price movements of residential properties, notably in the key areas of urban concentration such as the Klang Valley and Penang.

One of the factors that can affect the selling prices of houses is the underlying cost of the core building materials like cement, steel and timber. - By Thean Lee Cheng (The Star)

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