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Amid the fallout from the US financial crisis and subdued consumer
sentiment as a result of slow growth and recession, property markets
around the globe including New York, London, Singapore, Hong Kong and
Sydney, have taken a severe beating in terms of price erosion and sales.
Given the looming gloom on the economic front, potential buyers are
adopting a wait-and-see attitude as they believe the worst is yet to
come.
In the US, the sub-prime loans debacle had severely affected property
prices with falls of up to 90% and it is now harder to obtain loans to
fund property purchase. Prices of properties in the other markets have
dropped between 20% and 50%, and the outlook appears bleak for the next
12 months at least.
Despite the gloom and doom in the external front, Malaysia’s property
market is holding out considerably well with property prices in the
major growth areas including Kuala Lumpur, the Klang Valley, Penang and
Johor still stable. This can be largely attributed to the fact that
Malaysia did not experience a “property bubble” over the last few years,
unlike in the other high-cost cities. Annual price increases for local
properties had been relatively moderate.
However, the severe meltdown as a result of the US financial crisis has
resulted in more caution among potential buyers. Developers have slowed
down on new projects or deferred their launches and are resorting to
pre-sale launches to gauge the market’s interest before proceeding with
any project launch.
Going forward, the possibility of prices falling will be there if the
global economy deteriorates further.
Source: The Star Biz.
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