KUALA LUMPUR (Dec 16): The local property market will see moderate growth in 2012 due to the gloomy outlook of the global economy. Some areas and certain property types may see some price correction, according to real estate valuer and consultant James Wong, director of VPC (KL) Sdn Bhd.

"There is still no solution to the European debt crisis and because of that, export-driven countries like China, India, Brazil and Malaysia will be effected," Wong said.

The correction in prices will be seen in the office sector and luxury condominium and serviced apartments in Kuala Lumpur city centre, while prices for landed homes, industrial and retail property are expected to remain stable, he said.

Wong was addressing a press conference by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) on its upcoming 5th Malaysian Property Summit 2012 on Thursday.

Also present was Foo Gee Jen, organising chairman and managing director of C H Williams Talhar & Wong Sdn Bhd, Datuk Mani Usilappan, retired director-general of the Valuation and Property Services Department and PEPS president Choy Yue Kwong.

Wong said there are several other factors that could drive property price growth flat, including the more cautious approach to lending being taken by financial institutions. Loan margins may be reduced, which will definitely affect buying decisions. Besides, from Jan 1, the debt service ratio of a loan applicant will be calculated based on net income instead of gross income and as a result, fewer buyers will qualify for loans, said Wong.

Political uncertainties caused by the upcoming general election amid whispers of a possible hung parliament are also a cause for concern and impact general market sentiments, he said.

However, Wong said it is not likely that Malaysia will experience a property bubble.

"Malaysia's property prices, despite being high, have increased gradually and because of this, a bubble will not occur as the government is still mindful of such situations and is taking measures to curb speculation," Wong said. "So there won't be a bubble bursting but a minor price correction next year."

The property market this year is projected to hit 400,000 transactions worth RM120 billion. According to Wong, new growth areas in the Klang Valley and Greater Klang Valley will be coming up along the LRT extension lines and the MRT Sungai Buloh-Kajang line.

PEPS is organising the Malaysian Property Summit on Jan 17 at the Sime Darby Convention Centre. Speakers will include Foo, Datuk Abdullah Thalith Mohd Thani, director-general of the Valuation and Property Services Department, Ho Chin Soon, director of Ho Chin Soon Research Sdn Bhd, Danny SK Yeo, deputy managing director of C H Williams Talhar & Wong, Allan Soo, managing director of CB Richard Ellis (M) Sdn Bhd, Anthony Chua, executive director of KGV International Property Consultants (M) Sdn Bhd and Leslie Kho Joo Hee, executive director of Knight Frank Malaysia.

According to Choy, the summit is a much anticipated event due to its "no frills and all information" content.

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