‘Property mart due for consolidation’


KUALA LUMPUR: Some consolidation is due for the Malaysian property market following the “property boom”, says a research house.

A tighter monetary policy and macro prudential measures will help cool the property market, noted Standard Chartered Bank.

“Housing prices have been rallying strongly for some time and some consolidation is due… this will be positive for the economy in the long term,” economists Edward Lee and Jeff Ng said in a report.

Housing prices rose 72 per cent in the first quarter, enjoying a 6.7 per cent average growth annually.

Sabah outperformed with prices more than doubling while prices in Malacca rose the least at 50 per cent. The boom came about from a strong domestic activity-driven economy, low interest rates and favourable labour market conditions.

On the headwinds, they pointed out that the low interest rates may rise amid higher inflation and risk of financial imbalance.

Inventories are still low, but are building up. Growth in new launches picked up strongly to nearly nine per cent year-on-year in the fourth quarter of last year on strong demand and a drop in inventory, before easing to about five per cent as of the first quarter of this year.

“The property market is likely to face supply headwinds, considering the current population growth rate of about 1.5 per cent.”


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