ASEAN KEY DESTINATIONS
Global economy hits property market
Concerns about the global economy are real. Whether one is an avid property watcher or a young person considering a down payment on one's first home, there are certain things to take into account.
Elvin Fernandez of the Khong & Jaafar group of companies says: “It is clear and becoming clearer by the day that the growth will slow down because it cannot keep up with just continuous stimulus around the world. Whether this state of affairs will continue depends on how sales fare as we complete this year and move into next. It is also clear that volatility will continue into the new year, which explains why developers are revamping their plans and changing strategies.” Analysts have downgraded the property sector or had a negative outlook on it after they noted that average take-up rates of launches by property developers dropped from 80 percent-90 percent a year ago to a forecast 50 percent-65 percent in the second half of this year.
To understand what is going on in Malaysia’s current property market and to get some pointers about its future direction, history is a good teacher.
When property prices began to inch upwards in the second half of 2009, in the wake of the fall of Lehman Brothers in September 2008, there was cheer all round. But as prices continue to escalate into the first half of 2010 and then the second half, property watchers and buyers began to take note of the ballooning values in the landed property sector. The momentum shifted to high-rise, although to a lesser degree.
In response, developers fast-tracked their launch programs. Some were quick enough to launch products in the second half of 2010, while many of the rest were able to do so this year.
Housing Buyers Association vice-president Brig-Gen (R) Datuk Goh Seng Toh said: “People bought in anticipation of higher prices later on.”
This situation of “buying before price goes up further” is evident not only in the Klang Valley but was especially so on Penang island.
Says Real Estate & Housing Developers' Association (Penang) chairman Datuk Jerry Chan: “Because of land scarcity and worries that prices will go even further, people bought. Why? Because it was anybody's guess what was the ceiling. Is it too much to pay? That was difficult to answer because prices seem to have gone beyond what people expected.”
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