Slower value growth forecast for property market

KUALA LUMPUR: The local property market is expected to experience slower growth of about 10% in value overall this year compared with 11% in 2011, according to CH Williams Talhar & Wong.

Managing director Foo Gee Jen attributed the slightly lower growth to dampened sentiment, but said that it was nevertheless a good time for bargain hunting.

“We will see further growth but at a very much lower pace,” Foo said at a briefing on the outlook for the property sector this year in Kuala Lumpur.

He said that the appreciation in the market value was mainly driven by cost rather than demand due to labour shortage coupled with higher building material prices.

Foo, however, said the property market would remain buoyant on the back of the strong housing property segment, with growth mainly coming from demand from the young population and migration to urban areas.

Offices and high-end condominiums, on the other hand, would likely experience an oversupply.

Office rentals would remain stagnant or possibly decline for older buildings, but there would be higher asking rentals for newly completed buildings with green certification and Multimedia Super Corridor status, Foo said.

He said luxury condominiums saw a huge increase in supply of up to 50% of current supply, as 13,716 units would be coming onto the market in the next five years and put pressure on yields.

Foo said occupancy rates and condominium rentals for 2012 would see a downtrend.

However, he said buyers were still actively looking for condominium properties in KLCC and Mont' Kiara areas.

By The Star