Long term view when investing in uncertain times

KUALA LUMPUR (April 28, 2012): “Investment gurus all say that in uncertain times, invest for the long term,” Zerin Properties CEO Previndran Singhe said at The Edge Investment Forum on Real Estate 2012 on Saturday, April 28 at Sime Darby Convention Centre in Kuala Lumpur. Presenting his talk on the Malaysian property market overview and outlook at the forum themed Investing in uncertain times, Previn foresees moderate growth in the property market in the coming months. “For our outlook for next year, there may be a 15-20% drop in transactions but property prices will hold. We do anticipate a small mini boom in 2013.” “Where to put your money? The key for investments for the next few years would be long term. I do not think there will be short term play," he said. “Long term investments, would be between 3-5 years average post completion. Properties below RM1.5 million will be hot picks. Look at locations such as Nusajaya and Iskandar in Johor and Penang. In the Klang Valley, stick to the usual hot spots, but I am also very bullish about properties in Kajang, Jalan Ipoh and Selayang. Landed properties seem to be the flavour of the day but he does not discount commercial and industrial properties. In 2011, volume of transacted properties recorded an increase of about 14.26% more than 2010, with an emphasis on residential properties. “We saw a lot of activities in urban areas – not necessarily within the city centres but around it. Generally, all sectors did well, but on the ground, we saw a phenomenal pick up for residential landed properties priced below RM2 million in the suburbs of Kuala Lumpur, Penang and Johor Baru,” he said. Penang and Johor experienced the highest growth in property prices while Klang Valley saw a marginally lower growth, as its base price is already high. “Sabah, Sarawak and Melaka also showed growth. Kota Kinabalu is a very vibrant market and still under-served in terms of product offerings while there is also demand from in-migration in Penang,” he explained. Average price of agriculture properties in 2011 saw a growth of 56%, which is in line with the commodity growth globally, followed by 10% growth in industrial, which reflects the foreign direct investment for Malaysia, and 5.5% for commercial. Overall, residential properties saw an average price growth of 2.6%. For longer term real estate investments, Previn picked four locations to look at – Melaka, Penang, Kota Kinabalu and Johor Baru. These locations, he said, hold a lot of promise in term of real estate potential. Commenting on Bank Negara’s move to tighten measures to curb speculative buying and household debt, he said, “I agree with the approach but it would be done in a more gradual manner. We should encourage investment but punish upon exit, even up to 50% or 70% via real property gains tax, for example.” The forum entitled is held annually for readers of The Edge Malaysia. The presenting sponsor is Malaysia Building Society Bhd while the supporting sponsor was Sunway Property. For full coverage of The Edge Investment Forum on Real Estate 2012, read the May 7 issue of City & Country, the property pullout of The Edge weekly.