PETALING JAYA: The Malaysian property sector may be affected in the short-term as a result of the missing flight MH370 but the market is expected to bounce back in the medium to long term, according to two developers and two property consultants.
Kumar Tharmalingam, chairman at property consultancy Hall Chadwick Asia said: “It may not even be a blip on the radar.”
“If the matter drags on, the effect on sales will be much longer,” said a source in a text message.
The MH370 effect has come into focus as a result of strong Chinese interest in the last few years.
Chinese developers have bought land here while individual Chinese, deterred by anti-speculation measures in Hong Kong, Singapore and China, are buying Malaysian properties
Country Garden Holdings Co planned to build 9,000 condominium units in Iskandar Malaysia, Johor.
Other Chinese developers included Guangzhou R&F Properties Co Ltd and Agile Property Holdings Ltd with a combined investment of US$2.7bil and the Greenland Group which announced a US$3.3bil deal in two residential and hotel projects last month.
Kumar, former head of government-funded agency Malaysian Property Inc, said: “If it were a crash and the wreckage is found, we would have mourned for a week and gone home. The problem is we lost the plane.
“People understand death but do not understand loss. It is confusing to be told a member of the family is dead but there is no sign of the body or the plane.
“No government body has the answer, despite all the technology at their disposal. Also, there is a one-child family in China. It means a third of the family is gone. The loss is more acute although there are other nationalities on board.”
Kumar said as far as the investment climate is concerned, he would not relate the incident to the country’s property sector.
“If one were to condemn the country, nobody should invest in the United States after the Sept 11 incident (where planes flew into buildings),” he said.
A Malaysian valuer, who declined to be named, said the property sector might not see the sales volume it would like to for a year or two.
“Do not divide the property market according to country boundaries. Look at it as a global asset. The Chinese government wants them – both developers and house buyers – to go overseas.”
A Wall Street Journal blog China Real Time reported that the shift in mood has started to worry some Chinese developers who have substantial investment building houses in Malaysia to sell to mainland Chinese investors. Property is among their favourite investments.
Country Garden Holdings had initially said it had “received an overwhelming response” from buyers from Malaysia, Singapore and China initially.
“The MH370 incident has brought some negative impressions on Malaysia (and the) Malaysian government, and we do not preclude the possibility that this would also affect our projects in the Malaysian market,” said Country Garden in a statement.
Sales in its Country Garden Danga Bay project in Johor Baru last year reached roughly seven billion yuan, which was the firm’s biggest sales contributor, Wall Street Journal reported.
The company said, however, that it was still confident in its investment in the country.
“We believe that Chinese buyers in the choice of overseas investment are rational,” it said.