Malaysia Real Estate Industry Hits RM56 billion
This will be good news for the sluggish property market - the government has announced that the real estate sector of our economy recorded RM56 billion (USD$15.1 billion) in terms of transactions for the year 2005, and they expect the new trends to emerge in 2006.
Minister in the Prime Minister’s Department Tan Sri Bernard Dompok said that the government was aware the property market was undergoing new trends from this year onwards as more Malaysians moved to urban areas.
According to the Edge:
Malaysia had a young population with about 62% living in urban areas while fewer people were in the rural areas, he said at the 17th National Real Estate Convention in Kuala Lumpur on March 21.
“This is the trend the real estate sector is heading towards,” Dompok said, adding there were more mega malls and larger and larger shopping centres.
He also said if Malaysia wanted to be a regional shopping paradise, the sector had to provide better services compared to the other countries in this region.
Further on, Tan Sri Bernard Dompok also adds that
On the real estate investment trusts (REITs), Dompok said the government took cognizance of the REITS on the real estate industry as they provided an avenue for investments.
Dompok said the Employees Provident Fund and other government investment bodies also planned to increase their property investments this year.
However, what is interesting is that the minister noted that the government did not intend to initiate policies and strategies to stabilise the oversupply situation and instead allowed the market to find its own equilibrium.
In our opinion, this is a good move by the government in terms of non-interference, it may be a better to let the market mature by itself and find its own footing. While pockets of over supply may appear in limited areas (we’re thinking luxury condos in certain upmarket areas), by and large the market can stabilize itself, barring any international or regional financial crisis.
For the full report, you can read it here.
