STRONG OUTLOOK: People willing to buy but it’s very selective and not across the board, says MIEA president

THE secondary residential property market is expected to remain strong this year with prices continuing to rise if the current stock remains tight, the Malaysian Institute of Estate Agents (MIEA) said.

Its president, Nixon Paul said based on a survey done by MIEA, the number of properties available for sale where the asking price is close to market value was low.

“The market is there. People are willing to buy and there is a lot of activity but it’s very selective, not across the board,” he said at a media briefing yesterday.

According to Nixon, residential terrace and semi-detached houses would remain the best sellers this year.

He added that the condominium market, which was badly hit because of the sub-prime crisis in the United States, will stand to improve this year.

“Our prediction for this segment is that it will continue to grow. Rentals are expected to slowly improve through 2013 as more projects under the Economic Transformation Programme start to bear fruits and many expatriates are relocating here,” he said.

For industrial properties, Nixon said the rental markets in Johor and Penang are getting more attractive.

He said the situation is more vibrant in Penang because of a shortage of new industrial space.

“Industrial properties are mostly taken up by the electrical and electronic industry, which is thriving in Penang. Rentals continue to increase and this has made the market more attractive than the Klang Valley,” he said.

For Johor, Nixon said the success of the Port of Tanjung Pelepas as well as better political relations between Malaysia and Singapore have helped to improve the demand for industrial space in the state in the past few years.

Meanwhile, based on a survey carried out by the Real Estate and Housing Developers’ Association Malaysia (Rehda), it has been estimated that the overall cost of doing business has increased by 10 per cent to 20 per cent in the second half of 2012 and similar trend is expected this year.

From the total 170 respondents, 82 per cent said the Revised Real Property Gains Tax had a slight to moderate impact on them, while 74 per cent felt that the 50 per cent stamp duty exemption for properties below RM400,000 had impacted the sector moderately.

Overall, Rehda is upbeat on growth in the real estate sector for the first half of this year and the driving factors would include the economic stability and higher domestic demand.

Rehda president Datuk Seri Michael Yam Kong Choy said the existing trend of high demand and steady prices in 2012 will continue this year.

Yam also expects higher demand for strata residential properties this year.

“If the growth momentum remains steady, then we do expect the property market to remain firm for the rest of the year, primarily driven by domestic buying,” he said.

In terms of challenges, labour shortage, increasing cost of building materials, as well as obtaining end-financing for potential buyers will remain the concerns.

Source: Business Times