Malaysia not facing property bubble

KUALA LUMPUR: The Malaysian property market is not in any danger of facing a bubble as prices have been stable, industry players said at a panel discussion at the 13th National Housing and Property Summit on Thursday, July 29.

Malaysia Property Incorporated (MPI) CEO, Kumar Tharmalingam, who was part of the panel, said that the economic fundamentals and infrastructure in Malaysia are strong,  and the local regulatory system is transparent.

"You can't buy many landed property in Singapore nor can you buy in Vietnam without a local partner," he compared.

Kumar said that Malaysian property is undervalued and under-sold as the country has not done enough to promote Malaysian property.

He said that Malaysia should do more to promote its property sector as well as promot it as a tourism destination.

"Thailand is an example of having balanced itself as a tourism and investment destination. They have overcome many obstacles and still have FDIs going into the country," he said.

"As opposed to that, whatever news that comes out of Malaysia is negative... we constantly shoot ourselves in the foot," Kumar added.

Managing director of Khong & Jaafar Sdn Bhd Elvin Fernandez agreed with Kumar, adding that Malaysia's market is fundamentally strong, but the fellow panelist stressed that not all sectors are equally strong.

"We have never been much of a bubble," Fernandez said.

Fernandez added that property and home loans have been rising from 39% as of 1996 to 73% currently.

Fernandez added that the office market, especially in Kuala Lumpur is also increasing in terms of space, and is expected to add at least two million sq ft of space annually.

"The idea is to match demand and supply as the market has so many players," he said.

Meanwhile, the director for Southeast Asia, Corporate Network, Economist Intelligence Unit, The Economist from Singapore, Rajiv Biswas said that Malaysia is an attractive place for real-estate investors as the valuations aren't high and there are plans for structural transformation.

"If Malaysia shifts towards a higher income economy, in five years' time, Malaysia will be very attractive," the panelist said.

Biswas said that Asia had benefited from the Asian Financial Crisis in 97/98 and has learnt its lesson.

"The banking system in Asia is resilient, and credit can also be expanded, which is a crucial matter not seen in the US and Europe," he said.

He said that Malaysia is expected to see a growth of 6.8% in 2010, driven mainly by private consumption, with the export sector contributing, to both and this  would support the growth of the property sector.

Baswis said that as Malaysia's fundamental continues to improve, it will support the uptrend in the property market "which is not dramatic, but a gradual uptrend".
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