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Location is everything for Malaysia property
While the Asia Pacific region is not immune from economic uncertainties in the Western world, economic growth is still predicted for Malaysia in 2012.
The Malaysian Institute of Economic Research (MIER) reported that GDP growth is forecasted at 5%, with the construction sector expected to be the biggest contributor to GDP at 7%.
A report from Savills Rahim & Co says several major construction projects will get underway this year, which will cause property prices to escalate on completion. These include the highly anticipated Klang Valley MRT link, which could result in property price increases of 15–30%. In the short term, however, property growth is expected to slow slightly in the first quarter.
"A double dip recession is not what analysts have in mind. Instead of a recession, the property market will experience a minor correction in pricing," says the report.
Selling prices for high-end condominiums in Kuala Lumpur are expected to flatten, with smaller units with lower rentals being preferred by many investors.
Prices will remain strong for landed properties in prime and established neighbourhoods such as Bangsar, Mont Kiara, Cyberjaya, Taman Tun Dr Ismail, Damansara Heights, Damansara Jaya, and Damansara Utama. Demand for medium cost housing with prices below RM400,000 will also be sustained, especially from first-time home buyers with the introduction of My First Home Scheme and 1Malaysia Peoples' Housing.
"There is an increasing gap in pricing of newly launched properties and those in the secondary market. Investors hoping to flip their property to gain an easy 20–30% when selling the house upon completion would be unlikely as prices are beginning to stabilize. In addition, the market is faced with a risk of oversupply especially in some well known high-end condominium markets."
In other parts of Malaysia such as Johor, the proposed high speed rail link from Kuala Lumpur to Singapore will also affect prices of properties in the Iskandar Malaysia region as travelling time will be cut to around 70 minutes.
"Meanwhile in Penang, we expect to see more high-end projects moving towards southern part of the island, as well as along the Jelutong Expressway augmented by the new commercial facilities."
For more information, contact Savills Rahim & Co, Level 17, Menara Uni Asia, 1008, Jalan Sultan Ismail, 50250, Kuala Lumpur, Malaysia. Tel: (+603) 2691 9922. Email: firstname.lastname@example.org. Website:www.rahim-co.com .
First published date: 11 February 2012