Post date: Aug 13, 2010 3:28:7 PM
By E. Jacqui Chan of theedgeproperty.com
Monday, 09 August 2010
KUALA LUMPUR: Housing property prices are expected to rise further in the next six months by 10% to 20%, according to a survey conducted by The Real Estate and Housing Developers’ Association of Malaysia (REHDA).
Of the 133 respondents from all 12 states in Penisular Malaysia, 41% expect prices to increase by up to 10%, while 40% expect a hike of between 10% to 20%.
However REHDA president Datuk Michael Yam said: “ While the price hikes are location sensitive, it is also natural and a reflection of inflation”. He was speaking during a media briefing on property updates for1H 2010 on Monday, Aug 9.
Other factors contributing to the price rise include urbanization, rising affluence while housing starts and planned supply for 2H 2010 have decreased from the previous year, said Yam.
Housing starts in the first two quarters of 2010 are 39,015 units compared with 46,112 units in the corresponding quarters in 2009, while new planned supply in 1Q and 2Q 2010 are 34,501 units compared with 43,902 units in the corresponding quarters in 2009.
“Based on these figures, we are looking at about 80,000 units of new houses in 2010. However, our basic housing demand annually shows that an average of about 150,000 to 180,000 units are needed. We also have to take into account the continuous migration into the cities and upgraders. We may face a shortage in the market soon,” said Yam.
According to Yam, a number of developers had deferred their launches because of the financial crisis and the increased cost of steel, contributing to the decreasing housing starts and planned supply.
However, the survey also showed an increasingly positive market sentiment. 58% of the respondents launched new projects in 1H 2010, compared with 31% in 2H 2009. However, of the launches, 52% were small scale projects of less than 100 units per project except for Penang and Kuala Lumpur.
Better sales performance was also reported in 1H 2010, up 12% compared to 2H 2009. First time owners and owner-occupiers top the list of buyers’ profile with a slight increase in local investors since 2H 2009.
"Majority of the respondents think that properties in the RM100,000 to RM250,000 bracket are the most sellable," said Yam.
In relation to government policy, 46% feel that they will be most affected by increases in Base Lending Rates while 68% expect the GST to have a big impact on their property business.