Malaysia property mart to moderate

The property market is expected to moderate next year with prices likely to see minor correction due to the fragile global economic environment with the ongoing unresolved Euro-debt crisis and prevailing weaknesses in the US economy.

Immediate past president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia or PEPS, James Wong said the correction in prices will be seen in the office sector, luxury condo and serviced apartments in Kuala Lumpur city centre.

"Prices for landed property, industrial and retail sector, would however remain stable," he said during a media briefing on the fifth Malaysian Property Summit 2012 which wll be held on January 17, next year at the Sime Darby Convention Centre.

He said there will be also less potential buyers as banks adopt a more cautious approach towards lending and tightening in lending rules for property purchases such as the 70 per cent loan-to-value for third property purchases.

New growth areas in property development, Wong said are located within the LRT extension lines and the MRT Sungai-Buloh and Kajang line.

Other up and coming areas, he said are in smaller towns such as Setiawan, Bentong, Segamat, Kota Kinabalu, Batu Pahat and Sandakan, where people have spending power due to the boom in commodity prices such as rubber and crude palm oil prices.

"Property sales and prices in these areas have picked up," he said.

Chartered Surveyor/Registered Property Manager Valuer and Estate agent, Datuk Mani Usilappan said the availability of good transportation system will influence property prices.

"The property market has been good this year with a projection that it will hit 400,000 transactions worth RM120 billion this year," Mani said.

Executive committee and member of PEPS, Foo Gee Jen said rising land cost, labour cost and material cost will continue to pressure property prices.

President of PEPS, Choy Yue Kwong meanwhile said affordability would however remain an issue among many Malaysians as the surge in prices of property was not in synch with salary increases.

Even if the property market have moved towards the high-end market segment with developers promoting expensive houses featuring niche and life-style concept, Choy said rental has not increased significantly as many Malaysians still do not have the earning power to pay high rent.

"Housing affordability has been a major concern by house buyers as rising house prices against stagnant wage earning capacity has been a cause of concern for all," Choy said. - Business Times

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