"Soft landing" for Malaysian property market, says consultant

KUALA LUMPUR: The Malaysian property market especially the Klang Valley market is in for a “soft landing” as property prices plateau in the next three to four years. Christopher Boyd, executive chairman of CB Richard Ellis (Malaysia) shared this with an attentive audience at The Edge Investment Forum on Real Estate 2011, on Saturday, April 9.

“If you look at price trends for landed property for Wilayah Persekutuan, Selangor and KL, you’ll see a trend of growth and then a leveling off,” Boyd explained. “Not a drop in value but a plateau in the value. This leveling off is what I call a soft landing, where perhaps there are two or three years where annual value increases are perhaps two or three percent rather then five or six percent.”

He also highlighted how this upward trend is localised in the Klang Valley area and is not a nationwide phenomenon.

Boyd was a speaker at the forum themed 'Buy, sell or hold' organised exclusively for The Edge readers. it was presented by UOB Malaysia and supported by S P Setia Bhd, the No 1 ranked developer in The Edge Top Property Developers Awards 2010.

On concerns over rising property values, Boyd does not expect a property bubble.

“A bubble means a strong rise in values, followed by someone bursting the bubble,” Boyd emphasized. “But bubbles only happen or burst when there is a sudden sharp increase in interest rates or when people suddenly start to lose their jobs and can’t sustain their repayments. And there is a general disillusionment in the market. We are not going to see that in Malaysia. It is highly unlikely that we will see anything other than a soft-landing.”

Furthermore, the Malaysian property market, Boyd revealed, is largely supported from by young Malaysians. “About 65% of the Malaysian population is below the age of 35 years,” said Boyd.”

For the full coverage of The Edge Investment Forum on Real Estate 2011, read the April 18 issue of City & Country, the property pullout of The Edge Malaysia.