By BUSINESS TIMES
MALAYSIA’S property market is expected to worsen this year as the global economic uncertainties deepen.
The Valuation and Property Services Department of the Finance Ministry director-general Datuk Abdullah Thalith Md Thani said the local property market will fall moderately further this year, with signs of pressure looming.
This is based on data collected by the National Property Information Centre in the first quarter of this year.
“It showed negotiated price and rental rates are heading downwards,” he said at the launch of the Malaysian House Price Index and the Property Market Report 2008 by Deputy Finance Minister Datuk Chor Chee Heung in Kuala Lumpur yesterday.
Abdullah Thalith said the number of new housing projects launched in 2009 will remain as last year.
But property transactions and value are expected to drop by 5-10 per cent in the current year, unless the government’s RM67 billion stimulus packages bear fruit soon.
“The effects of the stimulus packages will have to kick in soon to cushion off the effects in the global economic crisis and for the property market to recover,” he added.
Last year, the property market recorded 340,240 transactions with a total worth of RM88.34 billion, indicating a growth of 10 per cent and 14.5 per cent respectively.
The residential segment was the most dominant sub-sector, accounting for 46.8 per cent of the transactions and 63.7 per cent of total volume.
Abdullah Thalith said the industrial sub-sector will be the most pressured this year as the majority of the companies are service or export-oriented and affected by market turbulence.
A total of 8,126 transactions worth RM7.9 billion were recorded last year, which was an increase in volume by 2.6 per cent and 11.5 per cent respectively.
In line with the dismal outlook in industrial activities, the number of industrial overhangs, unsold under construction and unsold not constructed units grew by 30 per cent.
Earlier, Chor urged developers to weigh a project’s viability thoroughly and innovate where possible, before embarking on new developments.
“Lower costs will enable you to offer buyers attractive packages. Make less profit now, but build your goodwill so that when the economy uplifts, you will be the property provider of their choice,” he said.
Chor said there is no doubt that demand for all properties will go through a slow period. But there are no signs of a bubble development as the government is stabilising property prices.
He said based on the Property Market Report, the average price of all property sub-sectors in 2008 was on the uptrend.