Property activities set to pick up again
INVESTORS prefer stability to uncertainty. So with the Malaysian general election out of the way, investors are likely to make their way back into the market across the Causeway.
Consultants are confident that Malaysia's economic transformation programme will continue. This will pump some US$440 billion (S$541 billion) into sectors such as oil and gas, tourism, financial services and urban infrastructure.
This bodes well for all investments, not least for the property market which has been a little subdued in the past two months.
Activity is likely to pick up again now, analysts said.
"Now that the election is out of the way, the property market appears to be re-energised and we are confident of seeing substantial gains over the next three years in both Peninsular and East Malaysia," said Mr Christopher Boyd, executive chairman of CB Richard Ellis.
However, this may not have an immediate impact on values, he added, as there will likely be a corresponding rise in supply from developers who held back new releases ahead of the election.
"From the third quarter onwards, we anticipate that continued high liquidity, additional public expenditure on infrastructure and renewed confidence in the future will all combine to bring residential property values to new highs," he said.
Mr Alex Bellingham, director of property consultancy IP Global, is also bullish, saying: "Malaysia has the second-lowest property prices in South-east Asia on a per sq ft basis."
Consultants see good prospects for property in Klang Valley, which includes Kuala Lumpur and its suburbs.
"There are a couple of launches coming up in the KL city centre area, such as Platinum Park," noted Mr Brian Koh, the head of research and consultancy at DTZ Malaysia.
He expects Malaysian property prices to rise by 5 per cent to 10 per cent a year over the next few years, with the steepest increases in the Klang Valley market.
"We haven't seen a lot of launches around KLCC in the past year and a half, so this ... should be quite exciting."
Mr Boyd agreed, saying there are still plenty of prime units in the Klang Valley that can be picked up on the cheap.
"Bargain hunters should be looking at areas like Mont Kiara, where condo prices have lagged in response to a very full supply picture," he said, referring to the affluent township just outside the KL city centre.
"In addition, almost any reasonably well-located terraced house in the Klang Valley under RM1 million (S$414,000) is worth considering. Don't forget foreigners are permitted to buy landed property."
Many Singaporean investors have been keen on Iskandar. Although prices there have doubled in the past two years, analysts warn it is an untested market.
"Who will rent the houses in Iskandar? Will it be easy to sell the units in future? Long-term liquidity is still a concern," said Mr Bellingham.
Mr Koh agreed, saying the price rises in Iskandar might not be backed by fundamentals.
"I would say Klang Valley continues to be fundamentally strong, while Iskandar is more speculative at the moment, at least until commercial activities become more established," he added.
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