Malaysia's property market 2011

At the recent Property Market Outlook for 2011, Malaysia's Valuation & Property Services Department released the figure that a total of 342,179 property transactions worth RM96.77bil were recorded between January and November last year, which means that last year's transactions almost reach the RM100bil mark. This is the first time transactions value has reached this figure. The event was organized by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector.

In view of this development as well as considering Malaysians penchant for property investments, it was unlikely that property values would fall again in the near future. It may not rise as much as last year, but the uptrend is there. The property value rose between 30% and 40% last year. This is the first time property went up so much there was never such record growth for the property market in 30 years.

On average, the price of the condominium rise between 60% and 100% between 2003 & 2008. The condominium market, in comparison to the rise in value of landed properties, rose as high as 40% in just one year. Hence, on average the rise in condominium prices is about 20% per annum. In Kuala Lumpur alone, the capital city recorded more condominiums changing ownerships at 10,333 units compared to terraced housing at 3,756 units. Nevertheless, terraced houses still dominates the property market, especially in Selangor with 27,165 transactions, Johor with 12,555 transactions and Penang 4,358 transactions.

On the outlook of the Malaysian economy and the Malaysian property market, it was very significant that the transaction volume between the 11-month period increased 12.2% year-on-year, but the value of transactions increased at a higher rate of 35% from RM71.67bil to RM96.77bil. The economy recovery in Malaysian has stimulated the overall property market.

With regards to the loan market for property sector, the purchase of residential properties made up the majority of bank loans at 58.8% compared to the purchase of non-residential properties at 22.1%. The remaining 19.1% attributed to the construction and other sectors.

Credit expansion for the property market leaped from RM342.09bil as at the end of September 2009 to RM391.25bil as at the end of September 2010. In other words, the residential property sub-sector is still the main mover of the market. In this residential market, transactions in Kuala Lumpur recorded a growth of 8.2%, Selangor 7.2%, Johor 3.6% and Penang (island) 9.7%.

In conclusion, 2011 is a good year for the Malaysia property market. The potential is great and serious investors should seize the opportunity to earn some money from property investments.

Based on the article by Hong Yie Chong.