Pick from Star
By KFH RESEARCH
ALTHOUGH the Malaysian property sector was buoyant in 2007, the market is expected to be somewhat cautious this year given a high base effect from 2007, lower disposable incomes from higher inflationary pressure as well as knock-on effects from foreign buyers given the US credit crisis.
After a period of upcycle in 2003-2006, the Malaysian residential property is expected to reach a plateau in 2008, underpinned by the aggressive launches of mid-to-high developments since 2006. On the demand side, take-up rates of new projects were not encouraging during the first nine months of 2007, with average sales performance of newly launched residential schemes at 44.3% vs 40.6% in 2006, despite higher units launched.
The low medium and medium-cost segments will see softening this year as disposable incomes are affected by the rising cost of living given escalating inflation.
The high-end residential market is expected to witness a period of rationalisation and consolidation this year, and lose significant steam into 2009 on the back of increased supply, i.e. completion of new condominiums during the period.
Given the physical supply of high-end residentials coming onstream in 2008 and 2009, the growth in rentals and capital value is expected to ease by the end of this year. The rate of growth of occupancy levels and rentals will ultimately determine whether strong foreign interest will be sustained.
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