THE Finance Ministry expects the property market to be flat this year.
The ministry's Department of Valuation and Property Services deputy director general Datuk Mani Usillapan said the department, which saw RM41bil worth of properties transacted last year, expected the number of transactions this year to be maintained at this level.
I'll be very surprised if there is a tremendous increase in the number this year,'' Mani told a press conference on the Malaysian Annual Real Estate Convention 2003 in Kuala Lumpur yesterday.
He said, however, that growth in the property sector this year much depended on the number of properties launched this year as well as the gross domestic product factor.
In 2001, the total value of transactions fell 1.4% to RM38.63bil, but the number of transactions rose 1.1% against the previous years growth of 6.2%.
Mani said he expected a decline in the number of new projects this year compared with last year due to the current property overhang, which involved mainly retail and office units estimated at RM28bil in sales value.
For the housing sector, the current overhang of housing units was mainly due to the slow take-up rate of houses launched last year,'' he said.
Mani said developers embarked on more projects and launched about 120,000 units last year to take advantage of the low-interest rates and stamp duty waiver.
He said the current overhang of residential units was not serious as hardcore units - those not sold after 24 months - which accounted for only 35% to 40% of the total overhang units.
According to Mani, he expects the oversupply of residential units from last year's projects to be largely reduced by the end of this year.
The reasons for the hardcore overhang are mainly wrong places, lack of basic amenities and unsolved certificate of fitness (CF) issues,'' he added.
Meanwhile, Malaysian Institute of Estate Agents (MIEA) president Stephen Tew said that now was a good time to buy properties especially well-located commercial units due to lower prices and lower interest rate offered by certain banks for end-financing of commercial units.
Although rental value for commercial units like shop houses is low now, these units are able to fetch much higher value when the economy recovers,'' he said.
On the overall outlook for the property market this year, Tew said he expected a brighter outlook in 2003 with regard to the setting up of Valuecap Sdn Bhd and the government's plan to introduce its third pump-priming package to boost the country's economy and consequently the local property market.
He added that MIEA's convention this year, to be held on March 8 and 9, was aimed at providing participants with the knowledge and skills needed to reap attractive profits from the property market in the face of the uncertain global investment climate.
The MIEA expects 600 participants to attend the two-day convention themed Profiting through strategies, Part II.