KUALA LUMPUR: The Malaysian Institute of Estate Agents (MIEA) said it sees a steady sales growth of 10% across all sectors of the property market over the rest of the year, leading into early 2014.
MIEA president Siva Shanker told the media at a property seminar yesterday he believes the property market will continue to do well, even though it is playing catch-up to the first half of the year, which saw a lot of launch delays and investor uncertainty before the general election in May.
“The growth number we think we’ll see this year won’t be the same as the 20% to 30% we’ve seen over the last couple of years, but rather a steady, more moderate growth.
“We don’t like seeing growth happening too fast because it could lead to a decline if the market cannot keep up,” he said, emphasising that there is no possibility of a property bubble.
Siva said economic conditions in Europe, the US and China are also contributing factors to the slight slowdown in Malaysia’s property market during the first half.
Commenting on the trends in the Klang Valley property market post election, he said 75% of the transactions seen in the first quarter occurred within the residential sector.
“Purchases of terraced houses and condominiums have been the primary driver for the first quarter, with total purchases in the residential sector amounting to RM7.6 billion so far,” he said.
Siva expects the total value of transactions for 2013 to match 2012’s figure of RM37.5 billion.
As for high-end condos, he said low occupancy rates do not necessarily reflect the take-up rate after a development is launched.
“A lot of condominiums are not actually empty, there is a process to filling it up. When a new block gets finished, people will take time to move in, do renovations, or wait for tenants,” he said.
The capital values of high-end condominiums have been climbing upwards since 2010, ranging from steep climbs in the KLCC/KL city area to more gradual climbs in other areas.
In terms of Klang Valley land prices, MIEA deputy president Erick Kho said within prime locations, land prices range from RM2,000 per sq ft (psf) to RM2,500 psf and are expected to go up further.
“In our view, land in the CBD [central business district] is still cheap considering its development potential,” said Kho.
He said with selling prices in city fringe projects going up to RM1,000 psf, investors are shifting interest back to the KLCC area.
“Mega government and transport projects, like the MRT Blue Line, are expected to support land prices in the Kuala Lumpur CBD,” he said.
He added that several hot spots to watch out for in the Greater Kuala Lumpur region would be Sungai Buloh, Cheras and a development triangle consisting of KL CBD, Klang and the Kuala Lumpur International Airport.
This article first appeared in The Edge Financial Daily, on July 25, 2013.
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