Serious home buyers undeterred

KUALA LUMPUR: Government measures to curb speculative property buying have been rather effective. The reintroduction of the 5% real property gains tax, the limit on loans for a “third house”, and the more stringent lending policies imposed by banks have caused some buyers to postpone their purchases.

It is interesting to note that serious homebuyers have not been deterred from signing sales and purchase agreements.

“Buying activities are affected by the new lending policy guidelines implemented by Bank Negara Malaysia. Speculation has slowed down because buyers are now required to put a higher down payment for new launches,” said Sunway Group property development division COO Daniel Lim.

He added that serious investors and home- buyers are still buying properties in prime and potential areas.

Good location, connectivity, track record of developer and affordable price tag are what purchasers will look at in the current environment. Landed homes and small office home offices (SoHos) seem to be the trend. High-rise homes in suburban areas that offer good connectivity and affordable price tags are also in demand.

(From left) Lim, Boyd and Zaini are panel members of The Edge Investment Forum on Real Estate 2012.

Properties in growth areas within the affordable price range will continue to dominate the market in the near future, Lim said.

CB Richard Ellis (M) Sdn Bhd executive chairman Chistopher Boyd believes that the correct investment strategy is to think long term. “We must look 10 years ahead. Don’t buy on price alone; low and medium low cost units are cheap but they do not offer much upside in the long run. Regrettably the most distressed properties also fall into this category.”

He said the key to getting a good capital appreciation is to buy what people want.

“Right now property with a good level of security is favoured. People are also looking for ease of access and local amenities such as mass rapid transit and the light rail transit. Pick well and your capital values will probably double,” said Boyd.

Malaysia Building Society Bhd CEO Datuk Ahmad Zaini Othman believes that demand for different types of properties varies in different parts of the country.

“High-rise residential units with value below RM500,000 are in demand in big cities like Kuala Lumpur and George Town while landed residential properties below RM500,000 are taken up in the smaller cities,” he said.

SoHos are in demand by young urban customers due to their affordability and location, Zaini added. “The buying crowd is usually made up of single professionals.”

Buyers are advised to consider established developers with good track records and financial standing as they usually continue to reinvest in their own developments.

Lim, Boyd and Zaini will share their views further in a panel discussion — “Buy now or wait?” at The Edge Investment Forum on Real Estate 2012 tomorrow at the Sime Darby Convention Centre in Kuala Lumpur.

This article appeared on the Property page, The Edge Financial Daily, April 27, 2012.

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