His View on Real Estates Market in Malaysia: extracted from THEEDGE FINANCIALDAILY 13th June 2011:
Snapshot of the residential market
The residential property market was due for correction in 2007/2008 if we subscribe to the view that the property market moves in a 10- to 12-year cycle. The last property downturn was in 1998 brought about by the Asian financial crisis. The property market generally takes six months to a year to react to the economic situation.
The global financial crisis’ impact was felt in our local property market in 2009 and this was seen in the HPI recording a small growth of 1.5% for that year. Since then, the market has rebounded strongly. As the impact was not so severe in 2009, some felt the downturn in the market has been delayed while others believe that we are on a new cycle.
Outlook
Landed house prices are expected to appreciate further in the next 12 months in spite of the recent hike in interest rates. The perceived short supply of landed homes will contribute to their demand. The high-rise residential market is likely to grow at a slower rate mainly due to the large supply. The number of incoming landed houses in Wilayah Persekutuan is 1,575 units compared to apartments/condominium at 17,922 units.
Significant Project since 2007
Sunway Giza by Sunway group is a hybrid of a typical shop development where rows of shops dominate, and a shopping centre. It is designed to overcome the disadvantages of conventional shop lots such as parking and security problems. Prices for a 3-storey in Sunway Giza are about RM4 million while those just outside are about RM2.75million. It is envisaged that this project will set a new trend in coming commercial developments.
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