Malaysian property market set for "skyrocketing demand"

The Malaysian property market is set for "skyrocketing demand", according to officials.

The country's Real Estate and Housing Developers' Association President Datuk FD Iskandar told The Borneo Post is "not at risk of a housing price bubble next year or anytime soon".

"With the implementation of the Economic Transformation Programme and the Greater Kuala Lumpur, the real estate sector is set to experience skyrocketing demand in the coming years," he said.

Indeed, urbanisation in the country is on the up. In the 1970s, it stood at 30 per cent. Now, it is closer to 56 per cent, leading to 200,000 houses being sold in 2011, only half of which were new build properties.

As a result, 1.2 million houses will be needed over the next eight years, predicts Iskandar, "just to cater for the demand of Greater Kuala Lumpur alone", as the population rises from 5.5 million today to over 10 million by 2020.

But the comments follow discouraging news for the international market. Overseas transactions totalled 1,659 properties between 2007 and August 2012, revealed Minister of Tourism Malaysia Datuk Seri Dr Ng Yen Yen, with an overall worth of RM1.5 billion - an "insubstantial" amount compared to the annual total property sales worth RM30 billion.

"The MM2H programme has contributed immensely towards the creation of a vibrant domestic economy and helped spur local economy," Ng told Property Guru.

Iskandar's figures agree. Only 1.8 per cent of last year's real estate transactions in Malaysia went to overseas buyers, compared to Singapore, where international purchases account for 39 per cent of the market.

But the president remains positive, pointing out that property prices in Malaysia remain the lowest in the region, nullifying any fears that the country could be heading for a bubble any time soon.