Should you invest in high-end condos?

INVESTING your money in property is said to be one of the safest forms of investments.

However, like any form of investment, one can always choose to either “play it safe” and get low, stable returns; or “up the ante, take on high risks and get equally satisfactory gains.”

Investing in high-end condominiums is considered one sure-fire way to make great returns. However, given its risk appetite, it might not be suitable for everyone.

“It’s a very niche form of investment and ideally for the super rich or those with good spending power,” notes Standard Financial Planner Sdn Bhd’s Jeremy Tan.

A good investment?

According to Malaysian Institute of Estate Agents (MIEA) president Nixon Paul, a high-end apartment is more than just about premium pricing.

“It’s more than just about the interior. The criteria for a high-end condominium is defined based on its location, the finishes, managements fees and amenities that comes with it. And of course, there is a premium placed on all of these,” he says.

MIEA deputy president Siva Shanker believes that investing in high-end condominiums is a great form of investment – if you have the money.

“High-end condominiums are good investments but they’re not for everyone as they’re very expensive!”

Still, investing in high-end condominiums is still a very popular investment option for many. According to Siva, take up for Bandar Raya Developments Bhd’s (BRDB) upcoming luxury condominium project, Serai, has been quite overwhelming in just a few short months.

“There has been very low-key marketing done and by the time the advertisements came out, there were a lot of bookings,” he says, adding that over 50% of the units have already been snapped up.

Located at Bukit Bandaraya, Kuala Lumpur, Serai comprises 121 condo units located in two 21-storey towers. Sold at between RM1,300 and RM1,500 per sq ft, the units range from 4,025 to 6,913 sq ft.

There will be two penthouses of 14,000 sq ft, priced between RM19mil and RM22mil.

Serai sits on six acres, the last piece of prime real estate in the Bukit Bandaraya area. Serai will have a gross development value of about RM900mil. According to reports, a majority of the buyers were Malaysians.

“The reason take-up for Serai has been so popular is because the location where the property is being built is one of the last large parcels of land available in the area, and people don’t want to lose out.”

Siva also points out that a selling point was the fact that the project’s developer, BRDB, had a good track record.

He also cites BRDB’s One Menerung high-end condominium development, which was priced at around RM600 per sq ft half a decade ago, but is now hovering at the RM1,200 per sq ft level.

“In five short years or less, you would have doubled your money! That’s a 20% increase on returns per year, which is fantastic!”

Should you invest?

MyFP Services Sdn Bhd managing director Robert Foo says a person who wants to invest in high-end condominiums should first evaluate his wealth position before “taking the plunge”.

“A potential investor should first consider if the investment will take up a big part of his investment. If it’s too much, then it might not be a wise thing to do.”

Age is also something to consider, says Foo, who feels that investing in high-end condominiums should be for older investors with a stable income base.

“If you’re only 25 years old, then you shouldn’t be investing in this, unless you have rich parents,” he enthuses.

Foo adds that one should definitely conduct thorough research if they want to invest in high-end condominiums.

“If the market turns on you and you can’t sell later, then you’re in trouble!”

Nixon says those looking to gain returns on high-end apartments should take a long-term view on it and not hope to make quick gains overnight.

“It’s a good investment but you should only do it for the long-haul – perhaps have a five-year view on it.”

Demographic shift

Siva, however, points out that the increasing level of affluence has seen more Malaysians buying into high-end condominiums – not to invest, but to occupy.

“It’s a trend that is shifting. In the past, you had Malaysians buying low-rise properties but today many are buying condominiums, especially high-end ones, in light of the fact that we are becoming more westernised and affluent.”

He also notes that many expatriates in the past that used to live in high-end condominiums in the city are now living in the suburbs.

“This is to accommodate the international schools that are now being set up in the outskirts of the city,” he says. - The Star

118 abandoned housing projects get new breath of life

KUALA LUMPUR: At least 118 abandoned housing projects have been revived and completed, Housing and Local Government Minister Datuk Seri Chor Chee Heung said.

“We have so far completed 118 and handed them over to buyers without them having to come up with more money,” he said.

He said another 53 were currently being revived.

He said the ministry was now targeting over 100 sick development schemes housing projects that had long exceeded their delivery time.

He said this after launching the Silverlakes Property Gallery yesterday.

Chor said the Government did not spend money in reviving most of the abandoned projects.

Instead, he said that contractors willing to take up the task of finishing them were enticed with rewards.

“It is called social engineering. There may be a bit of available land which we will offer to a contractor.

“We tell them to finish this project and we will give it to them,” he said.

As an example, Chor said that contractors who finished incomplete houses in partially-finished schemes could also keep them.

“Through this method, the Government doesn't need to spend,” he said.

Repeating a Budget 2013 announcement, Chor said the Government was well on its way to build 45 people's housing programme schemes across the country.

Chor said that a high-rise PPR scheme had been outlined in Alor Setar, while areas such as Mukim Naga (Kubang Pasu) and Jerlun would receive landed properties.

Meanwhile, Chor said that it was difficult for Malaysia to have a Housing Development Board scheme like Singapore.

He said this was because Malaysia had to deal with both a state and federal government, unlike its southern neighbour. - The Star

Seberang Prai is expected to be the next big thing in the north

Affordable: Tan showing the model of Amandra gated community three-storey semi-detached model at the company showroom in Alma, Bukit Mertajam.

TWO major development projects with an approximate gross development value (GDV) of RM2.6bil will set a new benchmark for modern lifestyle schemes and their pricing in Seberang Prai next year.

DNP Land Sdn Bhd, a subsidiary of Wing Tai Malaysia Bhd, and the Penang-based Tambun Indah Land Bhd are the two developers with plans to develop high-value mixed-development projects, normally found on the island, in Central and South Seberang Prai.

Seberang Prai is able to attract such investments because of the availability of large plots of land for development that are attractively priced.

“In Seberang Prai, the average price per sq ft for prime development land is around RM40 to RM50, which is roughly 20% more than two years ago.

“Wheras on the island, the present price is RM120 to RM150 per sq ft.

“The size of the land and the lower pricing allow developers to maximise land usage to introduce innovative concepts and themes for their projects and price them competitively against those high-end projects on the island, which are priced 50% higher,” Henry Butcher (Seberang Prai) associate director Fook Tone Huat said.

Since 2010, property prices in Seberang Prai have appreciated because of the second bridge that is being constructed to connect Batu Maung and Batu Kawan and also because of foreign direct investments pledged to Penang.

Bosch Solar Energy, Bose, Aviation, Philip Lumileds, B Braun, Western Digital and AMD are some of the multi-national corporations that have announced investments in Penang since 2010.

“These new investments will generate more executive-level jobs, increasing the demand for housing in Seberang Prai, where property prices are not as high as on the island,” Fook said.

DNP Land plans in the first half of 2013 to launch the RM1bil BM Impiana township in Alma, Bukit Mertajam in Central Seberang Prai, which has a fast growing population.

Condos: An artist’s impression of the 38-storey RM100mil Palma Laguna Water Park Condo, touted as the tallest building in the mainland.

The project comprises over 900 units of landed residential properties, 360 condominiums, and 100 commercial lots on 200-acres of land.

DNP Land (North) general manager K. C. Tan said BM Impiana would be launched in progressive stages over a five-year period.

DNP is kicking off with the launch of the RM70mil Sentinelle Ville and the RM120mil second phase of Jesselton Hills on 150-acre in the first half of 2013.

The Sentinelle Ville is a gated project situated within the prestigious neighbourhood of BM Utama, comprising 66 units of three-storey semi-detached homes.

It comes with four-tier security and a clubhouse that has a gymnasium, lounge, function hall and roof top garden.

“BM Utama is a well-known residential district in Alma, similar to that of Pulau Tikus on the island.

“The Jesselton Hills is a guarded project comprising 198 double-storey super-linked homes. These linked homes, with over 2,400sq ft of built-up area, are as big as semi-detached houses.

“Normally a conventional linked house will have about 1,600sq ft of built-up area.

“Jesselton Hills is designed to provide a five-star living experience, as residents will get to enjoy the thematic landscaped parks, man-made lake garden, jogging tracks, community hall and a clubhouse with roof-top garden,” he said.

Pricing for the three-storey semi-detached houses is expected to start from RM1mil onwards, while the super-linked homes are priced from RM578,000 onwards.

Tan said the future launches for BM Impiana township would include plazas, hotels, luxurious service suites, high-end condominiums, bungalow homes, semi-detached and super-linked houses.

“The existing Tesco hypermarket in Alma and the upcoming Aeon Jusco department store cum supermarket in the same area will further accelerate the property value and economic activities in Alma,” he said.

“The lower land cost in Seberang Prai allow us to develop high-value properties that are about 50% lower than those properties of similar range on the island.

“As the land available for development in Seberang Prai is larger, we can provide better layout planning, landscaping and introduce innovative concepts for housing projects, maximising the usage of the space available,” he said.

Tambun Indah Land Bhd will start the final phase of the RM1.64bil Pearl City project, which comprises the RM640mil Pearl City Business Park and over 5,000 gated and guarded residential properties on 583-acre site in Simpang Ampat.

“The residential component that we will launch in the first half of 2013 is the Pearl Residence, comprising 2,085 double-storey terraced, semi-detached and bungalow houses scheduled for completion in 2015 and 2016.

“These Pearl Residence homes will be launched in 2013 and 2014.

“We will be kicking off with the launch of over 400 homes in the first half of 2013,” Teh said.

The Pearl Residence properties to be launched next year will be priced around RM368,000 and RM568,000 respectively for double-storey terraced and double-storey semi-detached units.

The clubhouse will be equipped with the biggest infinity swimming pool in Simpang Ampat.

“The remaining 3,000 units of Pearl City residential properties will be launched progressively from 2014, with the year 2020 as the targeted completion date,” he said.

The Pearl City Business Park, to be located on 107acre site in Simpang Ampat, is the biggest commercial centre in the northern region.

Phase one of the business park comprises a tenant-mixed control leisure mall with food and beverage and retail outlets, a karaoke and a cineplex.

“Phase one will also feature a RM140mil commercial project with 188 commercial lots, which will start construction in mid-2013, and an international school,” says Tambun Indah managing director K.S. Teh.

The Straits International School and the leisure mall are scheduled to start construction respectively in the first and second quarter of 2013.

“The Straits International School, which follows the Cambridge curriculum, is scheduled to have its first intake in January 2014,” says Teh.

Phase one is scheduled for completion in 2016.

The group is now planning for phase two of the business park which will include a hypermarket, medical and wellness centres, and a furniture village.

The Pearl City Business Park is located close to the second bridge, North South Expressway, and the double-tracking railway, connecting Padang Besar and Ipoh.

There are 12 established and growing industrial parks within a 15km radius of Pearl City Business Centre, providing support for the project.

The Prai Industrial Estate, Penang Science Park, Bukit Minyak Industrial Estate, Bukit Tengah Industrial Estate and Batu Kawan Industrial Park are among the well-known industrial estates.

“Seberang Prai will attract new home seekers who are looking for a quality lifestyle with pricing within their income range,” Teh adds.

Meanwhile, Fook said the total volume and value of property transactions in Seberang Perai recorded a significant decline in the first quarter of 2012 after an overwhelming performance in the previous quarter.

“According to the National Property Information Centre (NAPIC) for the first quarter 2012, the total volume of property transactions for Seberang Perai hit its peak at 8,807 transactions in the fourth quarter 2011, but declined to 3,893 transactions in first quarter 2012, a drastic drop of 126%, while the total value of transactions dipped by 110% from RM2.12b to RM1.01b within the same period.

“This was due to the global economic crisis, the uncertainty regarding the coming General Election and the new guidelines for loans to be based on net income.

“Property prices, however, still remain at the previous quarter’s level without any significant sign of declining. Sales response of residential or commercial projects in certain popular areas still recorded strong performance, despite tougher bank loan regulations,” he said.

Fook said property prices in Central Seberang Prai have appreciated by 20% since 2010.

“In prime locations of Seberang Prai, a semi-detached house is priced at about RM750,000. A terraced house in similar locations is now priced at about RM400,000 compared to about RM330,000 two years ago. A bungalow has a price tag of RM1mil now, about 20% more than two years ago,” he said.

The value of commercial properties in Seberang Prai has also appreciated by about 20% from 2010, Fook added.

“A three-storey shoplot in a business park in Bukit Mertajam is now priced at RM700,000, approximately 20% more than in 2010.

“People are buying properties on the mainland for investment, as the second bridge is scheduled to be completed soon. More funds are coming into the industrial park south of Seberang Prai,” he says.

On the secondary property market, Fook said the sub-sale prices of landed property in the prime locations of Seberang Prai are expected to increase by 5% to 10% this year.

“This is because of strong demand for landed property in the secondary market.

“In the secondary market, a terraced property in prime locations such as Bukit Mertajam, Simpang Ampat and Jalan Raja Uda is now priced around RM385,000, about 10% higher than a year ago but relatively reasonable and attractive, compared to a new terraced property which is now priced over RM400,000,” Fook said.

The stricter conditions of bank lending, a weak global economy and a higher pricing of new landed property would see transactions in Seberang Prai rising only slightly in 2012 over 2011.

“However, we expect more property transactions in the sub-sales market due to the attractive prices,” he said.

He added that last year, there were about 18,000 transactions of new and old properties in Seberang Prai.

“About 50% of the transactions were for new properties, while the sub-sales comprised about 30%,” he said.

Fook said that in general, the Seberang Prai property market for 2012 would be challenging in view of the uncertainty in the global economy and the new set of financing ruling imposed by Bank Negara.

“The take-up rate for those high-end categories is expected to gradually slow down but for those in the medium categories, the sales rate should still maintain,” he said.

However, prices would still be on the upward trend for landed houses priced below RM500,000 and for development land in the prime areas, but the rate would be at a slower pace.

“For those high-end property, prices are expected to be flat. Nevertheless, property prices are not expected to decline in view of the relatively resilient domestic economy and the long-term impact from the new economic transformation programmes,” he said. - The Star

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非政府组织：地方大蓝图未出炉前 勿批准高密度发展

（槟城18日讯）非政府组织强调，不是反对高密度发展，只是在地方大蓝图未出炉前若没良好规划，必会加剧槟岛交通阻塞问题。
马来西亚房地产商公会槟城分会主席拿督陈福星周一开记者会表示，非政府组织及居民因发展密度问题反对公寓计划，导致迄今有15个总值逾10亿令吉的工程遇阻，间接影响发展商供应市场20万至40万令吉的可负担房子。
集合多个非政府组织的“槟城论坛”（Penang forum）代表阿涅尼托受访时指出，非政府组织并非反对高密度发展，只是槟岛地方发展大蓝图报告出炉前，不应批准高密度发展，加剧交通阻塞问题。
“槟岛地方发展大蓝图报告在2008年完成，经过公开展示、聆听等程序，但迄今都还没批准或出炉，在此前为何40层楼高的建筑可以批准？” - 光华

REHDA: Penang’s property sector to remain bullish

Chan said the growth for this year is expected to be between five and 10 per cent, slightly lower than last year. – Picture by Opaly Mok

GEORGE TOWN, Dec 17 – Penang’s property sector is expected to remain bullish next year despite a slight slowdown due to uncertainty of the country’s political situation.

The strong property sector in Penang experienced a growth rate of between five to 15 per cent last year and is expected to remain consistent next year, said state Real Estate and Housing Developers’ Association (REHDA) chairman Datuk Jerry Chan.

“The growth for this year is expected to be between five and 10 per cent, slightly lower than last year,” said Chan.

As for next year, while projections remained positive to be between five and 10 per cent, Chan said transactions may remain stagnant as the business community are more cautious while waiting for the general elections to be held.

“People will be more cautious until after the general elections so we will not know how the outlook will be for next year.”

However, property prices are expected to remain high or continue to increase according to market demands.

“We expect a steady appreciation of property values as Penang still has all the ingredients for a strong property sector,” he said.

However, the commercial sector are lagging behind the residential sector in the industry.

“The transactions for commercial properties did not move a lot while transactions for residential properties are going up steadily,” Chan told a press conference today.

The property industry in Penang has always experienced robust growth throughout the years where prices continue to climb.

According to national committee member of Fiabci (The International Real Estate Federation) Malaysia, Michael Geh, new launches in prime locations are being snapped up making it one of the strongest moving segment of the industry.

Last year, the industry saw a total 39,415 transactions, an increase as compared to 25,986 transactions in 2010.

According to Chan, the industry so far recorded only 24,203 transactions as of the third quarter of this year and it is not expected to reach the high transactions of last year.

However, the lower transactions does not equate to lower value as the value of property transactions continue to increase.

In 2009, a total RM6.5 billion worth of property transactions took place and this increased to RM13.1 billion last year.

As at the third quarter of this year, a total RM9.4 billion worth of property transactions were recorded.

These property transactions include residential, commercial, industrial, agriculture and other development projects.

Property prices in the state have increased between 40 and 60 per cent since 2009, Chan said.

One of the factors driving such strong prices in the property industry are the ever increasing land and construction costs.

Chan said cost of land has more than doubled and increasing far ahead of the selling prices of properties.

Geh also agreed that the asking prices for land are now at a record high.

“Constructions costs have also went up and on top of that, developers will have to also bear the costs of building low cost and low medium cost units for every project we build,” Chan said.

He said the increasing costs of land, construction and the requirement for developers to build low cost and low medium units have also indirectly contributed to the increase in property prices in the state.

“We have to set higher prices to cover the costs and also to subsidise the construction of the low cost and low medium cost units, the pricing of which had not been revised in the last decade,” he said.

Chan also admitted that the free market forces of supply and demand plays a role in driving the prices of property in the state up which is a major concern amongst Penangites.

The escalating prices of housing in the state have resulted in calls for more affordable housing and a rising concern that the middle income group will not be able to afford a home.

According to Geh, another factor that is driving the prices of property is ‘property flipping’ or speculative activities.

He had pointed out that some property developers have been selling RM300,000 units in bulk to speculators who will then sell it at a higher price, perhaps RM100,000 more, to genuine house buyers to make a fast profit.

Chan admitted that there were some developers who are selling units in bulk to investors and property speculators.

“But many developers are now realising that they have a responsibility to give preference to first time house buyers and those looking to upgrade their homes from low-medium cost flats to apartments instead of selling units that are priced between RM200,000 and RM400,000 in bulk to speculators,” he said.

He added that development in Penang is inevitable as it drives the state’s economy which brings about higher demand for properties.

“Higher demand equals to higher prices but rental rates are still affordable so if they can’t afford to buy a property here, then they can still rent a place to stay,” he said. - The Malaysian Insider

More Malaysians now living in posh areas

PETALING JAYA: Many Malaysians are now occupying high-end condominiums and apartments in prime locations in the Klang Valley, including the KLCC and Mont Kiara areas, which were previously exclusive to mostly expatriates.

The Malaysian Institute of Estate Agents (MIEA), which said it has been seeing a demographic shift in the past 10 years, said gone were the days when areas such as the KLCC and Mont Kiara were home to mostly expatriates.

“Previously, condominiums in the Klang Valley were mostly purchased by investors and rented out to expatriates.

“But in the last 10 years, we have been seeing a shift in this,” said MIEA deputy president Siva Shankar during the MIEA's 2013 Property Outlook last week.

He said in the past, many Malaysian families preferred to live on landed property.

But that has changed and many Malaysians are now end-users of condominiums in prime locations including the KLCC and Mont Kiara areas.

MIEA president Nixon Paul also said it was a misconception that expatriates were mostly concentrated within the city centre, especially in locations such as KLCC and Mont Kiara.

“Many expatriates today are choosing to live near the international schools.

“Previously, many of these schools were concentrated in the city but now there are a few in the outskirts.

“So we are actually seeing a lot of expatriates moving away from the city centre,” he said.

On the apartment and condominium, residential terraced/detached market in Penang, Raine & Horne Malaysia director Michael Geh said new launches in prime locations are being snapped up at the developer sale price.

He added that strong banking support for developer direct sales made this segment the “strongest moving segment.”

“The secondary condominium and apartment market are facing challenges due to loans offer at lower margins of 70%,” he said in a note at the same event last week.

He said that the commercial and shophouse segment in Penang also experienced strong take-up and steep capital appreciation this year, adding that there was also strong take-up for industrial land and facilities in Penang.

Geh added that asking and transacted prices of development land reached record high levels this year.

“However, newly imposed regulations and guidelines on development have hampered the planning and development process.

“But we believe that this will stabilise in 2013,” he said. - The Star

‘MPPP demolished my house and sold land’

GEORGE TOWN: A retired mechanic is seeking compensation for his house in Jalan Free School which was demolished by the Penang Municipal Council in 2009 as it was built on council land.

Chew Eng Hoe said the council later sold the 0.24ha land to a company which plans to build a boutique bungalow there.

“I have not been given any compensation until today although I had been paying assessment to the council,” he said at a press conference called by Parti Cinta Malaysia vice-president Huan Cheng Guan at the party’s centre at the Rifle Range flats here.

Chew said he, his two daughters and two grandchildren had to stay at the Rifle Range flats for six months, sponsored by a Christian organisation, before moving again to a relative’s house in Mount Erskine for another six months.

Since last year, he has been staying in a low-cost flat in Sungai Pinang, which was obtained through the help of Jelutong MP Jeff Ooi.

Chew said the family house in Jalan Free School, which was built by his late father about 60 years ago, had been occupied by more than 10 family members during those years.

“In July 2009, we were asked by MPPP to vacate our house within a month. They said that our house was an illegally erected structure. We applied for an extension to the deadline as we couldn’t get a new home in just a month.

“The council’s enforcement personnel demolished our house before we could get a new house,” he said.

Chew said he was angry that the land, which had been occupied by his family for six decades, was sold to a company.

“I used to support DAP but now they are not doing the right thing. They have forgotten us, the people who voted them in,” he said,

Huan said although it was council land, they could have been considerate by issuing a temporary operating licence (TOL) or find a way to relocate them.

“If PCM has a chance to take over the Penang Government, we won’t take away people’s land. Even if we do, we will compensate them,” he said.

In an Aug 16 report, MPPP financial management sub-committee alternate chairman Tan Hun Wooi said the land was sold in January last year for RM5.72mil because it had no plans to develop the site.

He said the money would be channelled into a special fund, which would be utilised to acquire other plots of land for the benefit of the people. - The Star

S'pore interest in M'sian properties more than doubled

KUALA LUMPUR (Dec 11): The Malaysia Property Showcase (MPS) in Singapore organised by PropertyGuru Group over the weekend there saw an overwhelming turnout of 2,127 visitors — 230% more than in February this year.

In terms of sales transactions, the event garnered RM20.3 million with 18 properties sold.

"I believe there will be more sales coming in over the week," Joel Lee, PropertyGuru Group's regional head of events told theedgemalaysia.com over a phone interview.

The showcase also attracted more participating developers from Malaysia. The number rose to nine from six in February.

The nine developers featured were Andaman, UEM Land, Plentitude, Sime Darby, MRCB, The Haven, Denia Developments, Pulai Springs and Tanahsutera.

The number of projects showcased at this MPS doubled at 15 projects, compared to the last two exhibitions held.

Demand for Malaysian residential properties by Singaporeans is growing due to its relatively cheap cost, close proximity to Singapore and the current close bilateral ties between the neighbouring countries, according to PropertyGuru.

Prices of similar properties in Malaysia are about five to six times lower than in Singapore, according to the 2011 Wealth Report, with one Singapore dollar fetching about RM2.50.

Lee of PropertyGuru said that Singaporean interest in the Malaysian property market will grow in time. "It could be a mix of both long-term investments and short-term ones for those seeking rental gains," he said.

In fact, many visitors showed special interest in properties located in Johor Bahru (JB). JB has gained momentum due to the growth potential of Iskandar Malaysia in the south.

According to the Iskandar Regional Development Authority, Iskandar Malaysia has attracted RM32.94 billion worth of investments to the property sector.

"JB and KL will continue to be very hot places that draw buyers," Lee commented.

Penang is an area that Singaporeans traditionally like to own property in, and Lee believes this trend will persist.

While central areas like Penang and KL remain attractive, they are not particularly cheap. "So people start to look for cheaper alternatives like Ipoh, Perak and Malacca," said Lee.

For instance, Perak is a state with a lot of available land in which Lee said property developers may start moving into as there has been inquiries to invest in Perak properties, especially of the high-rise, residential kind. - The Edge Property

Property buyers seen shifting to affordability in 2013

PETALING JAYA (Dec 13): The trend of property buying in the country will shift towards affordability in 2013, which will see buyers gravitating towards products with lower absolute pricing, according to Hong Leong Investment Bank analyst Sean Lim.

He said property developers should respond to the shift in preference, by cutting back on the scale of property launches, reduce absolute selling price by selling smaller units and transit from selling high rise to landed units.

"Going into 2013, we expect the challenges to intensify as both property developers and buyers undergo a transition phase, with buyer preference undergoing a dramatic shift towards affordability," said Lim.

He added launches and sales is expected to moderate in 2013 compared with 2012, dismissing talk that the property market will see a hard landing next year.

"We still do not believe that a hard landing scenario is likely to transpire in 2013. Asset quality for loans continued to improve with NPL (non-performing loans) ratio at all-time low of 1.9% for residential property loans," said Lim.

However, a major risk of rising NPL ratios among banks due to Malaysians losing holding power of their properties still lingers, according to Lim.

Property developers also face the risk of margin erosion in 2013 if material prices spike or pressure from lower selling price of properties, slow down in sales or cut back in launches.

Major catalysts for the industry in 2013 include the RM46 billion worth of investments announced to be implemented in Iskandar Malaysia starting next year, and also the completion of the second Penang bridge.

"The RM46 billion of developments announced in last week's WIEF (World Islamic Economic Forum) should help sustain interest for UEM Land Holdings Bhd.

"Penang mainland is also set to benefit from the opening of Penang Second Bridge in Sept 2013. Within our coverage, Mah Sing looks set to be the biggest beneficiary, as its Southbay City integrated development has balance GDV of RM2.1 billion," he said.

As the responsible financing guideline started to take effect on property transactions, the operating environment of the property sector is expected to get more competitive next year.

Some property analysts are of the opinion that property developers with strong branding and big land bank are the ones who can remain positive above the rest.

Among the property developers with large land bank and strong brand in Malaysia include Sime Darby Bhd, UEM Land Holdings Bhd, IJM Land Bhd, S P Setia Bhd and WCT Bhd.

S P Setia targets an ambitious FY2013 property sales of RM5.5 billion, after managed to surpass its target RM4 billion of sales this year. The group's achieved record new property sales of RM4.2 billion in FY2012, an increase of 28.6% year-on-year.

However, other differs saying that gearing level and valuations are more important for property developers next year, citing the lower expected growth rate.

Meanwhile, Affin Investment Bank's analyst Isaac Chow, whose property stock top pick include UOA Development Bhd and KLCC Property Holdings Bhd, said it is more important for investors to choose property stocks with appealing valuation and strong brand equity.

In a report on UOA Development, Chow stated that the group remains Affin IB's top pick among the property development stocks because of its undemanding valuation, high dividend yield, strong cash position, strong track record and management experience.

"UOA Development remains our top pick for exposure to the property sector and we continue to like the company for its undemanding valuation at 6.5 times CY13 core EPS, 1.1 times NTA and high dividend yield of over 5%,

"Strong cash position of RM274.7 million, strong branding, strong execution track record, and experienced management team who are highly adaptable to changes in market dynamic," stated Chow.

Affin IB has a target price of RM2.40 on UOA Development, based on 25% discount on its revalued net asset value (RNAV) of RM3.17.

UOA Development share stood at RM1.70 per share as at 11.48 am this morning, up 1 sen or 0.59% from yesterday's (Wednesday) close of RM1.69. - The Edge Property