Property Players Upbeat with Residential Segment

Property players are upbeat on the outlook of the residential segment, despite challenges in the domestic market and global uncertainties.

They also observed the trend in the local residential market, which is moving towards smaller-size units in suburbs.

Among the challenges identified include increasing cost of building materials, high land prices due to scarcity of new areas for development in prime locations, changes in government policies as well as labour shortage.

Property developers and market experts said despite the rise in property prices, there is pent-up demand for new housing, especially for high-rise residences in selected locations within the Klang Valley.

They also said that new launches, especially properties priced above RM500,000, attract foreigners, who are buying to stay because of the low-cost of living and better healthcare facilities in the country.

The Real Estate and Housing Developers’ Association Malaysia past president Datuk Ng Seing Liong said the current trend shows that local buyers are shifting to the mid-range affordable segment.

He also observed an increase in the number of new launches, offering smaller-size units in established and popular suburbs, driven by demand for such properties.

Ng said the scarcity of land and high land cost are putting pressure on developers to keep end-pricing affordable, hence the reason to build smaller-size units.

“Buyers seem to prefer projects with smaller units as they are more affordable and easier to maintain. This trend has started and will continue,” Ng said at the 15th National Housing and Property Summit 2012 here yesterday.

Ng also said that low-density and large units are not as favourable as smaller units as the former have become more expensive.

Ho Chin Soon Research Sdn Bhd managing director Ho Chin Soon said favourable demographics, urban migration, a booming middle class and improving institutions are all ingredients for a successful property market. – Business Times

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