Property prices in Malaysia will remain steady in 2013 as competition between developers intensifies, according to a recent report by Hong Leong Investment Bank (HLIB).
Developers will need to be more selective of new projects, reported HLIB.
HLIB regard landbank location as the market’s key driver, and identify Glomac Bhd as the developer to watch. Glomac Bhd’s flagship Lakeside development at Puchong puts them in a prime position, as the development offers a combination of value at 4.9 percent dividend yield and growth. However, the developer’s liquidity remains lacking, according to HLIB’s report.
Risks in Malaysia’s property market this year include a sharper than expected economic slowdown and the sudden loss of holding power by Malaysia home-buyers, according to HLIB’s report.
On the positive side, asset reflation in Malaysia remains intact, and the affordable property sector remains untapped. The property market in Johor is also expected to show positive results after a long period of low performance.
However, HLIB anticipate a slowdown in the mid to high-end sector and expect banks to begin exercising more restraint in processing and granting loan approvals.
Government measures, including an increase in the level of real property gains tax and a 70 percent loan-to-value ratio for third residential property have had an impact on buyers, according to the managing director of CH Williams Talhar & Wong. Such measures have slowed down transactions in Malaysia.
It is difficult to quantify the financial impact of the government measures at present, according to HLIB’s report, but the macro scenario is applicable to Malaysian developers across the board.
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