Saturday, 24 July 2010

Property boom coming

THE property market in the country is expected to rise soon as there is a strong connection between the stock market and property values.

Capital Sanctuary managing director Dr Christopher Shun said over an 18-year period from 1992, the average positive correlation between the Malaysian equity and property market was 76.54%.

“Thus one can safely conclude that a 20% increase in the Malaysian equity market would adduce a 15.3% increase in the Malaysian property market.

“A similar thing would happen if the equity market was to reverse with a 20% decrease,” he said.

Property talk by Dr Christopher Shun Kong Leng during the The Star Property Fair 2010 held at G hotel. 
 
He was speaking at the talk ‘Is It a Good Time to Invest in Real Estate?” during the three-day Star Property Fair 2010 organised by Star Publications (M) Bhd in collaboration with Henry Butcher Malaysia Penang.
Shun said the property market was also expected to be boosted by the growth in trade surpluses of the country.

“Our ringgit is depreciating, making our exports cheaper, and enabling the countries in the region to buy more from us.

“This creates an overwhelming tide of liquidity which will first make its way into the equity markets and then spill over into the property and commodity markets,” he said.

Shun added that although the present base lending rate for housing loan was 6.3%, it was still the lowest in three decades.


“These are the reasons to invest in property especially landed ones and make investments in real estate.”

Earlier, Iskandar Associates principal Dr Iskandar Ismail, in his talk titled ‘Profiting from Real Estate
Investment’, said the next 18 months would be the best time to indulge in property investment in Penang.

“Although the economy is slightly uncertain, the local property market has solid long term fundamentals.

“You will make a good return once the boom comes in a few years. Income from rental plus capital growth and tax benefits make property an unbeatable investment,” he said.

Armed with a doctorate in Corporate Property Management from the University of Reading, United Kingdom, Iskandar was the brainchild behind the Malaysia House Price Index that is used by investors to track the property market.

Meanwhile, George Town World Heritage Incorporated general manager Maimunah Mohd Sharif, who gave a talk on ‘The Economics for Heritage Conservation’ said there might be no direct transaction happening in heritage conservation but the heritage value was priceless.

“We may not be able to label them with the dollar sign but the economics of heritage conservation is all about retaining a sustainable and liveable city.

“Investments may not see profit in hard cash but it is the sense of belonging, cultural memories and pride that counts,” she said.


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