KUALA LUMPUR: The slowdown in the local property market has bottomed out, with prices seen picking up later this year, according to property consultancy firm Knight Frank Sdn Bhd.
“We predict a stable rate in 2017 and we will possibly see better upside towards the end of the year or early next year,” Knight Frank managing director Sarkunan Subramaniam said.
“The market has had a few years of contraction and we feel that this year, what will clear up one of the major concerns of most investors is the political uncertainty,” he said at the launch of Knight Frank’s 2017 Wealth Report here yesterday.
According to the report, “political uncertainty” was among the top concerns of its respondents in Asia at 25%.
“We’re going to have elections possibly this year. Once they have cleared, there will be positive movement in the market and that’s why I feel now is a good time to buy property in Malaysia.
“Once the elections are out, the economy will generally start picking up and sentiments will improve. Capital will also start coming in,” he said.
According to the wealth report, potential fall in asset values was the highest concern among its Asian respondents at 30%, followed by rising taxes and tighter controls on capital movement at 28% and 27% respectively.
Going forward, Sarkunan said affordable homes would primarily drive the local property market.
“Affordable homes will still be a driver to an extent, but medium-to-high end properties will also pick up again. Also, when the mass rapid transit (MRT) lines come into the city, it will drive the commercial market there as well.
“We’ve had a lot of decentralisation push over the last 10 years and the MRT will bring office workers to the city.”
Sarkunan pointed out that locations with light rail transit (LRT) and MRT lines, such as Damansara Heights, have bucked the trend in terms of condominium values.
“Prices have actually increased compared with some of the other areas in Malaysia. Transport hubs or transport-orientated developments, such as Kota Damansara, have also seen improvements in prices.”
The Knight Frank 2017 Wealth Report tracks the value of luxury homes in 100 key locations worldwide, including 19 destinations from Asia Pacific.
According to the report, values rose globally by 1.4% on average last year, compared with 1.8% in 2015. Asia was the second best performing world region last year, with prices rising 5.1%.
Australasia was the strongest performing world region with prices rising 11.4% year-on-year.
Source: BY EUGENE MAHALINGAM The Star/ANN