City&Country: Serious homebuyers still investing in properties in prime areas

Homebuyers are naturally attracted to good locations, reliable brands, affordable prices and, of course, easy loan financing. However, new government measures to curb speculative buying may have prompted some to postpone their house purchasing plans. Be that as it may, serious buyers have not been deterred from inking sale and purchase agreements.  The reintroduction of the 5% real property gains tax, a limit on loans for the third house and the more stringent lending policies of banks are forcing homebuyers to ask themselves if this is the right time to invest in property.  “No doubt, buying activity has been affected by Bank Negara Malaysia’s new policies. Speculation has eased because buyers now have to pay higher downpayments at new launches,” says Daniel Lim, COO of Sunway Group’s property development division.  But, he adds, serious investors are still buying if the properties are located in prime and potential areas of growth. Landed property and high-rise developments in these areas that are in the affordable price range will continue to dominate the market. “Urban redevelopment is another area that investors should look out for,” Lim remarks. Christopher Boyd, executive chairman of CB Richard Ellis (Malaysia) Sdn Bhd, believes that the right investment strategy, looking forward, is to think long term. “Don’t buy on price alone; low and medium-low cost is cheap, but they do not offer much upside in the long run. Regrettably, the most distressed properties fall into this category.” He says the key to getting good capital appreciation is to buy what people want. “Right now, property with a decent level of security is favoured. People are also looking for ease of access and local amenities.” Dato’ Ahmad Zaini Othman, CEO of Malaysia Building Society Bhd, says demand varies from place to place in the country. “High-rise residential homes priced below RM500,000 are in demand in big cities like Kuala Lumpur and Penang while landed residential properties valued at below RM500,000 are preferred in the smaller cities.”  Affordably priced landed homes, SoHos (small office/home office) and high-rises in suburban areas that are well connected are also in demand. “Those who buy SoHos are usually professionals who are single. This group wants security and likes the convenience of living in the centre of busy prime areas,” says Ahmad Zaini. All three of them say it is wise to buy from established developers with a good track record and financial standing as they will continue to reinvest in their respective developments by providing more amenities and expand the developments, which, in the long run, will achieve sustainable growth. Lim, Boyd and Ahmad Zaini are panel members of The Edge Investment Forum on Real Estate 2012 and will be sharing their views in a discussion entitled “Buy now or wait?”. The forum will be held at the Sime Darby Convention Centre, Kuala Lumpur, on April 28. This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 907, April 23-29, 2012