Developers act to avoid property bubble this year

By THE STAR
KUALA LUMPUR: There will be no property bubble this year, as developers will accommodate the market’s need by launching smaller units.
“This year property developers would opt for fewer launches with smaller units,’’ said IOI Corp Bhd founder and executive chairman Tan Sri Lee Shin Cheng on the sidelines of Invest Malaysia 2014 yesterday.
Lee added that the IOI group would opt for smaller units but with more varieties.
Affin Investment Research noted that developers in the first quarter of this year had held back their launches due to the new property-cooling measures.
The research house expects property sales to pick up marginally in the second half as developers adjust their pricing strategy for new property launches.
IOI Properties chief executive officer Lee Yeow Seng said this year would be a challenging year due to Government’s several cooling measures.
Earlier in the year, Penang Chief Minister Lim Guan Eng said that foreign property and industry specialists strongly believed that measures such as the state’s 2% levy on sellers disposing of their property within three years would help to ensure there would be no property bubble.
Afiin Investment Research had said the introduction of the cooling measures had affected the number of new property launches, market sentiment and availability of credit and that the first quarter of this year had seen the weakest sales since the second quarter of last year.
Meanwhile, the expected El Niño phenomenon would have a significant impact and was expected to push crude palm oil (CPO) prices up, said IOI Corp chief executive officer Datuk Lee Yeow Chor.
He said, however, that the impact of El Niño would be felt only about two months after the period of prolonged dry weather.
“How bad the impact will be depends on the severity of El Niño this time. But we’re talking about a prolonged dry period of at least five to six months, so it will certainly have a significant impact on production,” he told reporters at the same event.
Lee said he had expansion plans in existing plantations and was also constantly on the lookout for new land banks, especially brownfield plantations.
“We are looking in the South-East Asia region,” he said.