Despite the many issues plaguing Malaysia’s property industry, the sector is stable and is not heading towards a property bubble, according to Tan Sri Jeffrey Cheah (pictured), Chairman of Asian Strategy & Leadership Institute and Sunway Bhd.“As a developer I’m convinced as of now that we shall not be experiencing any such property bubble, as our property prices are still affordable compared with some of our neighbouring cities in the region,” said Cheah at the 15th National Housing and Property Summit.
As proof, he cited Bank Negara Malaysia’s gross domestic product (GDP) data for Q2 2012, which showed a 5.4 percent year-on-year growth, indicating that private consumption remained stable despite external challenges. At the same time, the construction industry, which includes civil infrastructure and housing, surged 22 percent.
Cheah also explained that home prices are not driven up by the rise in property purchase among foreigners, since transactions by expatriates had historically hovered at three percent compared with 20 percent in Singapore.
Moreover, 54 percent of their total residential transactions last year were below the RM150,000 level.
Moreover, he pointed out that one of the challenges faced by the construction sector is the lack of skilled workers, which leads to project interruptions. To tackle this problem, the Construction Industry Development Board should continue to talk with non-governmental organisations and industry players.
Aside from that, he urges the government not to implement any “drastic measures” to cool the real estate market because this “can kill market sentiment and slow supply of housing further.”
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