Property prices may rise 5% to 10%

KUALA LUMPUR: Property prices in Malaysia are forecast to increase by 5% to 10% this year against last year in line with the recovering economy.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president James Wong said the market did not expect a big jump in property prices this year as the economy was not fully recovered yet.

The economic recovery will largely influence the property market performance and Malaysia’s gross domestic product (GDP) growth rate this year is forecast at 2% to 3% from the estimated contraction of 3% last year.

“Condominiums and apartments are currently selling well and landed property prices, which had held through the economic crisis last year, are expected to grow this year,” Wong said after the opening of the Malaysian Property Summit 2010 yesterday.

Citing examples, Wong said the St Mary’s serviced apartments were 80% taken up within five days of their launch, Sky Residences recorded a 70% take-up rate and the 50-unit Verticas Residensi in Bukit Ceylon achieved a 60% take-up rate during soft launch.

“This shows that condos and apartments are not short of buyers. And developers that postponed property launches last year are not expected to do so this year,” he said, adding that property prices last year were estimated to have dropped by 5%.

However, Wong raised some concerns about tenancy of condominiums and apartments.

“A lot of new developments are facing a hard time in getting tenants,” he said.

Another area of concern would be the office market that saw the supply of four billion sq ft of space last year, according to Wong.

“Thus, there is a slight concern on the take-up rate, especially for tenants that will occupy huge space of 20,000 sq ft and above as well as the effect of the new supply on rental rates,” he said.

Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani said this would be a good year for the property sector as key economic indicators that related to the growth of the industry were expected to perform better than last year.

The expected recovery in the GDP of Malaysia’s main trading partners – the United States, Japan and Singapore – and improved prices for crude oil, crude palm oil and rubber would augur well for the country, he said.

In fact, the property market, which had slumped in the first half of last year, had improved since the second half-year, he added.

By The Star