OSK Research predicted that, Malaysia’s property sector is set to see its biggest residential boom in a decade, led mainly by medium- to high-end landed properties.
The sector may peak sometime in 2012 to 2013 before going into a potential slump.
OSK Research said a major mass housing boom will likely occur in the first half of this decade. It added that the sector was already entering the early stage of a property “super cycle”.
Although the expected peak in 2012 – 2013 may have dire consequences, the phenomenal boom that immediately precedes it gives investors an excellent opportunity to profit from the trend for at least the next 12 months.
Location is a key to identifying real estate opportunities, but timing is equally important but often overlooked.
The current 20-year boom in the medium- to high-end residential properties since the early 1990s might peak in 2012 – 2013, after which mass affordable housing could dominate the real estate industry around 2015 to 2016.
Country’s current boom in higher-end residential properties is probably in its longest “bull run” ever, spanning almost two decades since the early 1990s.
This, unfortunately, has also given rise to the illusion of the infallibility of properties. We are now entering the final phase of this secular boom, which will be characterised by a period of fast-rising property prices in the medium- to high-end residential segment, particularly landed ones.
OSK Research also observed that those born in the 1950s had become more risk-averse in their investments since 2003/04.
As they approach retirement, they will divert a significant portion of their wealth into savings and traditionally perceived defensive asset classes such as real estate. However, their eventual absence may bring an end to the boom if there is no credible demand force to fill the void.
Mercury Securities head of research said the boom will only benefit certain areas and selected developers. There is a property overhang project in Mont’Kiara and some buyers are facing financing problems.
Independent property valuation surveyor see that the trend right now is to go for boutique projects complete with gated communities and modern facilities and townships, such as UEM Land’s Symphony Hill which saw units snapped up within days of its launch.
The boom, however, only benefits the rich and does not benefit the general public.