KUALA LUMPUR: A COMBINATION of cooling measures and disappointing economic performance continues to make for weak performance of the real estate market in much of Malaysia and Singapore, said independent global property consultancy Knight Frank.
“In much of Southeast Asia and India, the story continued to be one of slow or sluggish performance,” Knight Frank said in its 2016 round-up and 2017 outlook for real estate markets across the Asia Pacific region.
Knight Frank Malaysia Sdn Bhd said 2016 had been subdued and it expects the same next year.
The company expects the commercial property market to see more sales activity with vendors having more realistic expectations and purchasers looking for bargains next year. However, the residential properties segment is likely to continue the weak performance next year.
Knight Frank Malaysia managing director Sarkunan Subramaniam said transactions of commercial and investment properties are anticipated to be priced between 10 per cent to 20 per cent below perceived market value with realistic and increased yields.
“Developers will face lower demand while implementing strategies to attract and improve sales,” he said.
Knight Frank also attributed the softer industry performance in Kuala Lumpur and other Southeast Asian cities, including Singapore and Perth, to the reliance on commodities, banking and finance, oil and gas and shipping industries.
“These industries have all seen a knock-on impact on the commercial property markets and Kuala Lumpur is one of those to have seen weaker demand for commercial space over the last 12 months,” said the property consultancy.