It was reported by the Business Times today that Malaysian property players are remaining positive about the future of the residential segment, in spite of challenges facing the domestic market and the uncertainty of the global economy. It has also been observed that the local residential market is moving towards smaller sized units which are built in city suburbs.
The challenges that face the domestic Malaysia property market include the increasing price of building materials, potential changes in government policies, a shortage of labour and high land prices which have been pushed up because of a shortage of new areas in prime locations that are available for development.
In spite of property prices rising, market experts and developers maintain that there is demand for new housing which has been held back, particularly for high-rise residential properties located in the Klang Valley. They also maintain that new launches were still attracting foreigners, particularly those priced above MYR500,000 (US$159,821). Malaysia is considered a popular place to live for foreigners because of the low-cost of living and comparatively better healthcare.
The former president of the Real Estate & Housing Developers’ Association of Malaysia, Datuk Ng Seing Liong, said that current trends show that domestic investors are directing their attention to the mid-range segment of the market. He also noted that the demand for smaller sized units had caused an increase in the number of launches of that kind. Ng said that as well as the increased demand, developers are building smaller sized units because of the low supply of land and the high land costs.
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 yesterday during the fifteenth National Housing & Property Summit. He also added that smaller units are becoming more popular as low-density and large units are becoming more and more expensive.
The managing director of Ho Chin Soon Research Sdn Bhd, Ho Chin Soon, has asserted that urban migration, favourable demographics, improving institutions and a booming middle class are all factors which will create a successful property market.