DTZ To Property Investors: Tough Year For Malaysian Property Market

Cautious sentiments due to an anticipated economic slowdown have resulted in a generally subdued real estate market which is expected to face a tough year ahead, according to DTZ Research. It stated that Malaysia's investment activities experienced a slow start this year, with volumes in the first quarter falling to RM427.5 million. "However, the decline does not reflect waning investors' interest for good assets as dismal market conditions in Europe diverted attention to Malaysia and the region, leading to an increase in enquiries," said the property services company. "New real estate investment trust (REIT) listings in the pipeline are also expected to give investment activity a boost in the later part of the year." The group noted that the largest transaction recorded in the first quarter was the IGB Bhd's purchase of a 50 percent share in the holding company of Renaissance Hotel. Meanwhile, the tougher regulations on personal loans have shifted the focus of local property developers on smaller and more affordable units, said Eddy Wong, Executive Director and Head of Residential Marketing at DTZ. "The imposition of tighter lending guidelines requiring housing loans to be approved based on the net household income instead of gross income should, to some extent, cool an overheated market that has run up substantially in terms of pricing in the last two years, as well as focus developments toward the more affordable housing segment."