Selasa, 12/05/2009

Malaysia’s Property Still Attractive Despite Price Slump
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Malaysia’s Property Still Attractive Despite Price Slump

DESPITE A DECLINE PRICES the Malaysian property market remains highly attractive. The country’s property investments also still have quite good prospects. This is because the government guarantees good business climate and security and provides necessary facilities for investors to do business in the country. Malaysia is a country that still can enjoy the sweetness of its businesses amidst the spreading toxics of the current global economic crisis. This is because it has managed to keep under control investors’ big euphoria in its property sector. Like moving up the ladder, property price movements and supply growth in Malaysia have proceeded gradually.

When property prices in several Asian countries declined drastically and accordingly shook their property markets, the other way around occurred in Malaysia. The local real estate market managed to survive although property prices fell. While property prices in Singapore, Vietnam, India and China declined 20-30 percent, on the whole property prices in Malaysia in Q4-2008 fell by only 10-15 percent.

Data at consulting firms like Rahim & Co Chartered Surveyors shows that so far Kuala Lumpur’s residential estate market dropped 10-15 percent. The number of new units in Klang Valley, which were launched early this year, declined 57 percent from last year’s. Also, the number of residential property transactions fell 11 percent by the end of last year.

Home prices in Petaling Jaya, Subang Jaya and Taman Tun Dr Ismail also declined 10 percent from last year’s levels. The prices of rental property that are below RM300,000 per unit and the prices of luxurious condominiums priced at over RM 750,000 per unit are the hardest hit during these times of crisis. Condominium unit prices in Kuala Lumpur City Centre (KLCC) are also estimated to decline by up to 30 percent. Due to the slowing market, also this year the number of new estate projects entering the market will decline.

Abdul Rahim from Rahim & Co advises their clients to delay their new project plans, at least until Q3-2009 when Malaysia’s property sector is predicted to get better and property prices become more competitive. Foreign investors Although the number of foreign investors in Malaysia has fallen over the past six months, some property experts and players in that country remain optimistic that its property market will remain relatively stable.

Up to the moment, many property investors still see Malaysia as a potential market. Lai Voon Hon, executive director of Ireka Corpo Bhd, was quoted by as saying, “A rational property buyer with a long-term perspective would believe that Malaysia’s properties are still at an attractive and sustainable price, as opposed to a lot of the other cities in the world.”

Many factors that make the Malaysian property market attractive to investors. According to International real Estate Federation, Malaysian property prices are five times lower than those in Europe. The price difference is determined by the competitive exchange rates against the euro. Malaysia’s diverse foods, lifestyles, culture and heritage are attractive to buyers from other Southeast Asian countries, Europe and the Middle East. Moreover, there are several factors that help boost foreign investments in Malaysia, including good investment climate, security and investment facilities.

Michael Geh, vice-president for marketing and networking of the International Real Estate Federation, said, “As the Middle East, especially Dubai, is overheated and overbuilt, investors will look at other countries such as Malaysia to average out their risks. Besides, senior lifestyle relocations are gaining popularity in Japan and South Korea.”

Solid macro-economic condition, the availability of domestic liquidity and the relatively solid labor market will support Malaysia in addressing possible meltdown in its property sector notably in terms of prices. The Malaysian property market has financial institutions that are more elastic but remain cautious in lending. Also at this time, property firms have become more established in terms of capital. Also, regulation in the property sector has been introduced for minimizing the risks of property project delays.

Yu Kee Su, Executive Director of Malaysia Property Inc, views that low capital appreciation in the regions has actually made them a more stable market for real estate investors. As property prices have not escalated in a frenzied manner over the last few years, the threat of an oversupply has been kept in check. “Malaysia is not suffering from any sharp price decline. The shortcomings have indeed become a blessing in disguise for Malaysian properties,” he added.

Another factor is high rates of domestic consumption and the big number of young population. Also, easy accesses to loans for buying low-priced homes have made the Malaysian property market more active and attractive. (NS)