Prices of residential properties are expected to climb further by five to 10 percent this year, said a report by CIMB Research.
While appreciation could be higher than projected, the government will likely remain cautious over ‘runaway' property prices.
The report said 2012 would be another good year for house price appreciation, backed by several advantageous factors and despite the slower real GDP (gross domestic product) growth projection.
"Buying momentum continued to be strong, driven by inflationary fears," said CIMB.
On the other hand, supply growth "should remain depressed as developers have only just started to focus more on affordable homes costing not more than RM500,000 in the Klang Valley." The growth of prices in the Klang Valley will be driven by new infrastructures such as the MRT (My Rapid Transit), covered walkway projects and river rehabilitation.
Although new records will likely set this year, overall transaction values are doomed for a slowdown following two years of high growth of 30 percent on average.
"In view of credit-tightening measures by the central bank, we believe that the growth in transaction value should slow to 10 percent to 12 percent this year," it added.
CIMB also emphasised that the risks to volume and price projections have taken into account the global economic outlook as well as the performance of the local stock market.
Meanwhile, the commercial property market may be on the darker side, as oversupply will likely affect the sector in the coming years. This early, occupancy rates for both retail and office segments have begun to drop.