Homebuyers expected to be more cautious in 2H2010 on rising interest rates

KUALA LUMPUR: Homebuyers and property investors will be taking a more cautious stance in the second half of 2010 (2H2010) compared with the first half of the year. Nevertheless, the outlook for the Malaysian housing market will remain positive on the back of the recovering economy, said Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng.

The volume and value of transactions are also expected to increase in tandem with the recovery despite expectations of a more cautious behavior among investors and home buyers due to higher borrowing costs, Tang said at the 13th National Housing and Property Summit themed ‘Gearing up for Sustainable Growth during the 10^th Malaysia Plan Period’ on Friday, July 30.

In line with the more cautious outlook, landed residential property prices are expected to stabilize and increase more gradually, compared with the sharper price hikes seen from six to nine months ago, he said.

Citing data from the National Property Information Centre (NAPIC), he cited house prices in the Bandar Utama area in Petaling Jaya which rose by 30% from six to nine months ago while neighbouring Mutiara Damansara homes appreciated by over 40% during the same time.

Tang said residential landed properties in popular locations will continue to be the preferred choice, of buyers followed by condominiums in select locations.

NAPIC director Dr Zailan Mohd Isa echoed the sentiment adding that accessibility, security, attractive financing packages and marketing will continue to influence home-buying decisions.

She identified some districts in Selangor that have seen tremendous appreciation over the past 30 months, namely Bukit Petaling, Gombak, Klang, Petaling, Hulu Kelang, Sepang and Cheras.

Petaling was the priciest district in Selangor, with residential homes within its townships transacting above the state average of RM273,000, with Sepang quickly catching up.

Going forward, she expected government initiatives such as the redevelopment of the 3,300-acre land in Sungai Buloh to drive development within the next few years while green developments will be the “best choice,” especially with the introduction of “green” credits by the government.