Findings Show – Malaysians Are Wary Of A Possible Property Bubble, But Remain Upbeat

A total of 3,459 people responded to the online survey on from 5th December 2011 to 19th January 2012.

The results showed that 62.3% of survey respondents were keen on purchasing property in the next 6 to 12 months, with 71.3% stating that they had a budget under RM 500,000. Interestingly as well, 28% of respondents wished to purchase property as investment for resale, more than in other survey respondents in the other regions.

The low barriers to property ownership and the healthy property price growth in the country, makes Malaysia an attractive country for not just locals but also foreigners to invest in. This can be attributed to several factors such as low mortgage rates, financing of up to 100%, stamp duty exemptions, long repayment periods, up to 30 years, or until age 75, which makes homeownership for Malaysians easy.

The most important issue for concern in the Malaysian property market was that of rising house prices. However, a significant number of people surveyed also expressed high concern about home financing policies and interest rates, as well as errant developers and building quality.

A full copy of the report can be downloaded at: Malaysia’s Site Search H1 2011

Below is a compilation of searches from Google Analytics Site Search from Jan – June 2011. The searches are categorized into New Development, Sale (Sub-sale) & Rental.

Top Search Terms (New Development) – Jan-June 2011

Top Search Terms (New Development) – Jan-June 2011

Petaling Jaya appears to be a favourite with buyers and investors as it was the top search area for 1H 2011. Petaling Jaya encompasses parts of Damansara, Kelana Jaya, PJ Old & New Town, Mutiara Damansara, Kota Damansara and etc. It’s also conveniently divided into PJS (Petaling Jaya Selatan) & PJU (Petaling Jaya Utara). This is one of the most popular areas in the Klang Valley due to the conducive living environment and proximity to Kuala Lumpur City Centre.

Top Property Types (Sale) – Jan-June 2011

Top Search Terms (New Development) – Jan-June 2011

Despite the popularity of property priced at RM500K and below, landed properties such as semi-Ds and bungalows in prime areas still command a lot of interest. Almost 50% of total property type search are on semi-Ds/bungalows and terrace/link houses.

Property Types (Rent) – Jan-June 2011

Top Search Terms (New Development) – Jan-June 2011

For the rental market, most people still prefer apartments/flats and condominiums/serviced residences due to the security and conveniences offered. As such, these should continue to do well for investment purposes.

Golden Era for Malaysian Property?

Editor’s Opinion: It’s not just OSK Research and IP Global, a property consultancy which are of the view that the Malaysian property market is poised for some serious uptrend this year. While OSK gushes about a residential property “super cycle”, Hwang DBS has recently projected a golden era for the Malaysian property sector as a result of spin-offs from the massive MRT project. It believes that the RM43 bil project, scheduled to commence this year, will have a “structural impact” on KL real estate, pushing up prices in certain locations. Some of these locations include Sentul, KLCC – Bukit Bintang area and KL Sentral. The biggest beneficiaries would be YTL Land and Bolton Bhd which have strategic landbanks in these areas.

Estimates have put the spin-offs at RM8 – RM12 bil while it is expected to generate some RM3 – RM4 billion of Gross National Income.

Recently, OSK predicted that SP Setia’s share price might test its post-1997 crisis high of RM6.58 and edge higher if foreign hot money comes in. Last week, UEM Land’s share price jumped 35 sen to a record high of RM2.90 on news of its imminent takeover of Sunrise Bhd. Credit Suisse Group AG even expected the property developer to become a blue chip proxy for improved Singapore-Malaysia relations.

Share prices are not always a gauge of the property market as their cycles sometimes are not aligned. Be that as it may, the positive perception of better times ahead in the property sector does often translate into bullish sentiments on share prices of major developers. This is especially so against a backdrop of overall bullish sentiments of the share market.

So, can we expect some good times to roll our way? Some of us do. To be on the safe side however, like some wise professional soothsayers, I would prefer to describe the outlook as “conditionally optimistic.” Provided that all the conditions are in place, eg. a supportive internal environment on the back of much-needed structural reforms coupled with conducive external conditions , the sector looks set for a golden era.

Guidelines on Foreign Acquisition of Properties in Malaysia

With the announcement by the Prime Minister on the liberalization of Foreign Investment Committee (FIC), the Government through Economic Planning Unit, Prime Minister’s Department has introduced the Guideline on the Acquisition of Properties, effective 30 June 2009. However, the said guideline has been amended and replaced with a new Guideline on the Acquisition of Properties, effective 1January 2010 until further notice. See the guidelines attached (relevant portions are in yellow highlights).

Download Guidelines on Foreign Acquisition of Properties in Malaysia (PDF format, 109kb) PDF format