Malaysia's property market will take three years to recover from its slump, the slowest revival in more than two decades, reflecting the reach of the worldwide financial crisis, according to Regroup Associates.
"In the past four weeks, I've been staring at an abyss," said Allan Soo, managing director and founder of property consultant Regroup. "What's changed is the global recession."
A worldwide slowdown has sparked real estate slumps from Britain to Singapore, causing Malaysian developers such as Magna Prima to scale back projects. Values of luxury homes in Kuala Lumpur, where prices surged to a record last year, may fall as an oversupply looms, according to Soo, who declined to give a specific forecast. Malaysia's property market took about a year to recover from the 1997-1998 Asian financial crisis, he said. The rebound from the latest slump might start in 2010 and take as long as the recovery from the 1985 recession, Soo added.
Compared with last year, interest from prospective buyers had dried up, he said. "Inquiries would come in right after we put up a signboard on properties. Now, there're none."
Home prices will come under further pressure as the number of high-end apartments in Kuala Lumpur doubles to more than 30,000 in the next three years, according to Regroup.
Economic growth in Malaysia next year is expected to slow to 3.5 per cent from about 5 per cent this year, according to the government's estimates.
Still, losses for homeowners might be capped because most bought properties in 2006 before the peak for less than RM1,000 (HK$2,174) per square foot, Soo said. The entry of foreigners last year pushed prices to more than RM2,000 , he added.
Signs of fewer home purchases have already emerged. Bank loans approved for home purchases in October fell to its lowest since February, according to the central bank.
SP Setia, Malaysia's largest developer, expects a 22 per cent decline in property sales to 1.1 billion ringgit in fiscal 2009, according to Citigroup. The Kuala Lumpur Property Index has slumped 51 per cent this year, outpacing the main index's 40 per cent slide.
Magna Prima said last month it cut the projected revenue from its biggest property development in northern Kuala Lumpur by almost half.
No comments:
Post a Comment