L-R: PEPS immediate past president James Wong, current president Choy Yue Kwong, organizing chairman Foo Gee Jen and former director general of the Ministry of Finance’s Valuation and Property Services Department, Datuk Mani Usilappan.
What do you get when you have several Malaysian property valuers all together in one room? Talk about the runaway increase in property prices of course. As we all know, real estate prices together with number of transactions have increased spectacularly over the last two years.
2010 was known to many as a bull run. The first half of 2011 continued galloping with double digit growth of 18.1% in property transactions (to 214,764 transactions) and 29.7% increase in value of transactions (to RM64.75 billion), compared to 2010's first half.
2011's second half slowed down by number of transactions increasing 10.2% and transactions value growing 12.6%, compared to 2H 2010. That's still double digit growth however.
At the same time, global economic uncertainties have been in the background and many industry watchers are whispering caution for next year. "We also have to contend with the possible breaking of the property bubble in China and its concomitant effect on the rest of the world," said the president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private sector, Malaysia (PEPS), Choy Yue Kwong, at its recent press conference for the 5th Malaysian Property Smmit 2012.
Besides discussing such issues, this summit will try to answer the questions on everyone's mind: "Will there be a property bubble bursting?" and "How will prices move next year"?
Speakers lined up include Valuation and Property Services Department (JPPH) director-general Datuk Abdullah Thalith covering an overview of the Malaysian economy and property market for the coming year, as well as Ho Chin Soon, also known as the "property mapping king", who will speak on the topic 'Development Land – Scarcity and Rising Prices'.
The office, retail and industrial sectors of the property market will be covered by CH Williams Talhar & Wong Sdn Bhd's deputy managing director, Danny Yeo, CB Richard Ellis (M) Sdn Bhd's managing director, Allan Soo, and KGV International Property Consultants (M) Sdn Bhd's executive director, Anthony Chua, respectively. Knight Frank Malaysia's managing director Eric YH Ooi will speak on the performance and outlook for the high end condominium and gated and guarded communities market.
The performance and outlook for the oil palm plantation industry market will be covered by Agricultural Research & Advisory Bureau's managing director, Amitabha Guha. "The plantations sector is very crucial because everybody is talking about a slowdown next year," said organizing chairman Foo Gee Jen. "We can always depend on oil and gas but apart from that, plantations would play a critical part during the downturn."
Lastly, 'Property Management – the Way Forward' will be expanded upon by the National House Buyers Assocation of Malaysia's honorary secretary-general Chang Kim Loong.
"The summit is designed to be a no-frills but information filled event where property experts and related parties present their report cards for the previous year and also more importantly, provide the outlook for the rest of the year," continued Choy.
The 5th Malaysian Property Summit 2012 will be held from 8am to 5.30pm on Tue Jan 17 at Sime Darby Convention Centre in Bukit Kiara, Kuala Lumpur. Entrance costs RM988 per participant or RM888 for PEPS members. Fore more information, call PEPS at 03-7960 1318.
Taster of 2011 overview and 2012's upcoming trends
The 5th Malaysian Property Summit 2012's recent press conference brought together current and former leaders of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private sector, Malaysia (PEPS).
Datuk Mani Usilappan, former director general of the Ministry of Finance's Valuation and Property Services Department
"For the whole year, we would have breached 400,000 transactions for the first time; last year it was 376,000," said Datuk Mani, also the summit's founder. "We would also have touched more than about RM120 billion worth of properties. Now just about six years ago, about the time I retired, it was only about RM67 billion. That means within the six years, values have already doubled."
Mani commented about the deluge of new launches at high end prices, offering secured lifestyles from branded developers. "Nowadays they don't develop 1,000 sq ft terrace houses anymore. It's 2,000 sq ft and even two times bigger for detached houses. The master bedroom I saw in one was 1000 sq ft… Of course prices have also gone up because of that kind of thing."
This price increase has not been as acute in the secondary market, noted Mani. "Even in Kajang, the new launches are RM500,000 but you can still get for RM280,000 a 30 year-old house. For old people like me, it doesn't matter. For young people, they don't want to be seen dead in an old house."
Development has moved down towards Semenyih, Beranang, Negeri Sembilan and the Kuala Langat area going down to Bandar Sendayan, added Mani. He cited a study he'd done recently which found 11 townships being developed in northern Negeri Sembilan. In fact, developers are also looking north, asserted Mani. "The north was always a taboo area because of failures in the past. But now a lot of people like Mah Sing are looking at land there, paying RM8 to 9 per sq ft. So you may see more activities in that area."
James Wong, immediate past president of PEPS and chartered surveyor and director for VPC Alliance (KL) Sdn Bhd
"In my opinion, the property market is going to moderate next year," opined Wong. "We don't think that there will be a property bubble but probably a minor property correction for next year. So prices are likely to come down."
Besides the often cited global uncertainties, Wong talks about increased caution in local banks. "In our discussion with a lot of banks, they are now adopting a more cautious approach to lending. They are monitoring the property market and reviewing the loan profile. They're also reducing their loan margin. Previously you could get up to 90%, now they may get 75% or 70%." Then there is also the recently announced Bank Negara guidelines to from next year, "facilitate a sharper focus and more consistent approaches across the industry to assessments of individual affordability" considering all debt obligations, including car and other housing loans.
Wong also mentioned the uncertainty that may be caused by a potential hung parliament as a result of the 13th general elections next year.
There are rising opportunities however. Wong cites smaller towns like Sitiawan, Bentong, Segamat, Kuang, Batu Pahat, Kota Kinabalu and Sandakan, enriched by high commodity prices over the last few years. "We have branches in this areas and I am told by my counterparts that property sales are picking up in these places and property prices too. People here are rich because of high rubber prices and high oil palm prices. They can even come out with 50% downpayment."
Wong also urged developers to look at housing for Malaysia's aging population. "In Japan, seniors' housing for retirees are very popular. A lot of them are actually integrated into normal housing schemes. If they're going to build two or three blocks, they will maybe allocate one block for the senior citizens. These will come with facilities like senior-friendly toilet facilities, ramps and showers all within reach."
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