Property prices in Malaysia’s popular locations achieved record levels in 2010, and investors in landed properties have enjoyed strong capital appreciation of between 20 percent and 30 percent in recent years.
Many experts said Malaysia’s strong economy will guarantee a continued demand in the property sector this year, especially in areas like the Klang Valley and Penang, and new housing projects and major developments are coming on stream.
Data from the National Property Information Centre showed that reduction in supply after the economic crisis fuelled demand in 2010, and analysts said that this trend will likely continue.
Medium-cost high-rise housing located in well-positioned areas will remain the most popular in the country, with the strong demand coming from younger middle-class buyers, said CB Richard Ellis (CBRE). Trends toward developing smaller and affordable units located near the CBDs will also continue, with new locations such as Iskandar Malaysia and Ipoh drawing demand, albeit at a slower rate.
However, luxury residential areas like Mon’t Kiara and Kuala Lumpur City Centre may face a more challenging market this year, as an oversupply is taking place due to weak rental demand.
Though the 70 percent loan to valuation ratio (LVR) has little impact for wider investment, experts like CBRE executive chairman Christopher Boyd stressed that buyers must be cautious and not over-commit, as property prices may soon level off, making it more difficult to exit the market.