#The Edge Forum* Property prices are expected to rise moderately

PETALING JAYA: Property prices this year are expected to increase moderately despite less supply coming onto the market, said Zerin Properties CEO Previndran Singhe.

"Property prices are not falling. This year, prices will maintain their upcycle but at a modest rate because of the high base from last year. A lack of launches is causing pent-up demand and inching up of prices," he said during his presentation at The Edge Investment Forum on Real Estate 2014 on April 19.

According to the National Property Information Centre (Napic), transaction volume fell 12% as at 3Q last year from a year ago, but transaction value only dipped by a mere 0.5% to RM105.7 billion from RM106.3 billion over the same period.

Fewer loan applications coupled with more careful lending by banks as well as developers scaling back their launches have reduced supply, he added.

"The market moving forward... banks must still make money. So now their focus is on existing clients instead of recruiting new clients. We are now also seeing private bank practices, where they resell to existing clients including property loans to ensure liquidity," he observed.

“So, should you buy, sell or hold? Do all three. Buy when there is good value and infrastructure coming up. Look at Hong Kong and Singapore and Japan, where they see what the lifestyle is like and where tenants want to go,” he said when delivering his presentation titled 'Are property prices falling? What to expect in 2014'.

“Sell if your investment goals are met, such as where your capital appreciation is enough, so that you can recycle your capital into something bigger and better. Hold if you have a landed property that is freehold and in a good location,” he said.

“Invest in properties that are not necessarily iconic, but distinct from incoming supply and from reputable developers,” he said.

In terms of high-end residences, he notes that asking prices on the secondary market have dropped following cooling measures.

"There is demand. Currently there is a mismatch in prices but it won't take long to correct. Once an offer is made, prices should come down. And we have a lot of buyers," he said.

Most of the transactions are happening in Bangsar and Damansara Heights, followed by some interest in KLCC's condominium market.

Over in Penang, he expects the secondary market to see less transactions. However, prices of properties especially those above RM500,000 will rise.

"In Iskandar Malaysia, we have projects like Petronas’ Refinery and Petrochemical Integrated Development (Rapid) that will further spur activity. This is to create over 70,000 jobs in the next five years,” he said.

However, he is less bullish on the prospects of properties in Iskandar Malaysia, saying prices are expected to stay flat except for landed properties in choice locations and projects in Medini, which enjoys exemptions from numerous policies affecting the property market.

The forum, organised by The Edge Malaysia, was sponsored by Hong Leong Bank and supported by Sunway Bhd.

For the full coverage of The Edge Investment Forum on Real Estate 2014, read the coming April 28 issue of City & Country, the property pullout of The Edge weekly.