No immediate Impact of US and European Crises on Property Market

Property players have mixed views on effects of US and European crises.

Local real estate valuers, property consultants and the Real Estate Housing & Developers’ Association (Rehda) have mixed views over the impact of the economic crises in the United States and Europe on the local property market.

Property consultant PPC International Sdn Bhd managing director Mark Saw says the softening of the equity market due to the economic crisis in the United States and Europe will impact on property prices in Penang.

High end property: The view from the promenade of the marina enclave at the Straits Quay in Tanjung Tokong in Penang

“Property prices in Penang cannot continue on an upward trend forever. The weakened condition of the equity market will influence the capacity of investors to inject funds into the property market,” he says.

Chartered valuer and property consultant Azmi & Co (Penang) Sdn Bhdmanaging director Chandra Mohan Krishnan says there will be some minor corrections in local property prices due to the crisis in the United States and its impact on the local equity market.

“But I believe that the impact would be short-term. The longer-term impact on local property prices would be political events such as the next general election,” he says.

Sunway City general manager Tan Hun Beng says should the crises in the United States and Europe last for more than six months, there will be an impact on the local property market.

Tan: ‘If the crisis is resolved within six months, then the impact will be minimal’.

“If the crisis is resolved within six months, then the impact will be minimal,” he says

However, registered and chartered valuerC.A. Lim & Co proprietor Lim Chien Aun says the weakening of the equity market may prompt buyers to invest in property as a hedge against inflation.

“The conditions are ripe for another round of investment to move into properties.

“But whether the investments actually come into the local property market will depend on the political stability of the country,” Lim says.

Henry Butcher Malaysia (Penang) director Dr Teoh Poh Huat concurs that the softened equity market will generate positive sentiments and interests in the local property market, as it had proven to be a reliable hedge against inflation.

“I don’t think the US crisis will have a big impact on property prices here. Property prices in Penang, in particular the landed houses, will perform better than the high-rise properties,” he says.

Rehda Penang chairman Datuk Jerry Chan Fook Sing says the crisis will not likely lead to distress selling in the local property market.

“There was no distress selling in 2008 when the country was impacted by the sub-prime crisis in the United States. We don’t think there will be one now either. It all depends on how well the developers can hold on to their projects,” he says.

News Source: The Star

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