THE local property market is abuzz with new launches once again with reports of good take-up for quite a number of recently launched residential projects especially those in well sought after locations.
Things are looking up for the market, especially in the landed residential sector although the condominium market is still quite soft.
The overall sentiment has certainly improved and developers are reporting much stronger sales compared with the last two years.
In fact, residential property prices have appreciated quite substantially with prices even doubling in some areas.
Property buyers are taking advantage of the prevailing low entry cost and cost of financing to “catch the rising tide”.
Although interest rates have increased slightly, the hike is quite gradual and minimal, and have not impacted sales much.
Mortgage loans easily make up close to 30% to 40% of the total loans disbursed and this shows the importance of the property market to the overall economy.
Although the market has been quite resilient, it is important to ensure it will not be over-geared as too much borrowings could be a prelude to over-speculation and price bubbles.
While more launches mean more choices for buyers, the question is whether the flurry of new project launches is good or bad for the market.
This depends on various factors including the percentage of buyers who are buying for their own occupancy, the holding power of those who buy for investment, the strength of the local economy and market sentiment going forward.
More buyers buying for their own occupancy is a good sign as it shows the market is fundamentally stable and well supported. This seems to be the case for the landed residential market so far.
Those who purchase for investment but do not have the holding power may need to liquidate their positions to cut their losses in the event of a market correction. They are actually speculators and many of them usually resort to bank loans to finance their purchase.
If the market gets too speculative, it is unhealthy as the risk of artificially driven prices and overheating will be higher.
While things still seem to be going well, industry players should plan and build according to what the market actually needs and should not over-price their projects. Affordable housing projects that have good accessibility and infrastructure facilities are still in short supply.
Meanwhile, the commercial property sector is still facing a glut and there should be better planning to space out the developments.
While new project launches take care of the supply side of the equation, the demand side is also important and should be given due attention.
One of the factors driving demand for a project is its accessibility.
News that the Government is looking at a mass rapid transit (MRT) system to improve Kuala Lumpur’s public transportation network will give a boost to buying sentiment, especially for areas that will be serviced by the MRT.
It should be accorded top priority as it is a project that will improve the people’s quality of life.
Having a highly efficient and well integrated public transport system that is dependable upon will take the load off our heavily congested roads.
There are many ways to raise the quality of life for Malaysians and one of the fast tracked ways is to put in place a world-class public transport system right where it is needed most.
Much has been said about how disenchanted Malaysians are with the state of the existing public transport system as the various modes of transport and facilities are not integrated with nor complementary to each other.
Hopefully the latest initiative will look into all the important areas and will be implemented holistically with other ancillary facilities and services to ensure the whole public transportation network is totally integrated and complements each other.
Hopefully it will ply most of the heavily populated neighbourhoods and commercial centres not just in the city but also in other parts of the Klang Valley like Petaling Jaya and the suburbs. Besides the cost savings, it will also be a greener option and ensure a more oxygenated environment for city folks.
·Deputy news editor Angie Ng looks forward to leaving her car at home and enjoying the simple luxury of a cheap and safe mode of travelling around the Klang Valley in public transportation.