Wednesday, May 16, 2012

Malaysia: Property prices on the up

Rising costs of labour and building materials along with the scarcity of land are expected to push Malaysian property prices up despite the softening in demand.

Taking into consideration the all-house price index, prospective home buyers will likely spend more for their homes. In 2011, the index rose by 10 percent compared to 2010’s seven percent climb.

Over the last few years, the index has steadily risen and broken new records. Last year, property transactions hit RM138 billion (S$57.5 billion), 28 percent higher than the RM107.5 billion (S$43.85 billion) in 2010.

Investment bank ECM Libra expects demand for property, especially in the residential segment to remain stable. Penang and Klang Valley will continue to be highly sought-after locations, along with Johor’s Nusajaya and other areas that are well-connected to amenities and expressways.

In Petaling Jaya, new condo launches are being marketed from around RM700 psf (S$285 psf) to RM1,000 psf (S$407 psf), similar to prices in Mont Kiara and Bangsar.

Over at Cyberjaya, state government agency Perbadanan Kemajuan Negeri Selangor (PKNS) launched its 90 degrees condo project at RM475 (S$193) psf.

The surge in prices continues although developers have pulled back some launches and anticipated lower sales on the back of weaker demand, which is due to the 70 percent maximum loan-to-value ratio for third home financing and stricter lending guidelines.

“Meanwhile, property prices are expected to continue to escalate due to the scarcity of prime land and as land prices, building materials and labour costs increase,” noted ECM.

View the original article here

Source From Property Guru

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