Despite a generally upbeat forecast, the real estate sector is still set to face several risks, according to the Real Estate Report of Business Monitor International (BMI).
A moderation of growth in the country's economy may dampen investments and businesses could put on hold their expansion plans and wait for better growth. Aside from this, some local property developers are also eyeing overseas prospects, following increasing domestic land cost which spoils their interest towards new development opportunities in the country.
Moreover, experts are warning over a possible office supply glut this year, which could greatly affect rental prices which have remained healthy, read the report of BMI.
Despite the risks, BMI still sees many opportunities in Malaysia's real estate sector. For instance, overseas investors are expected to reach Malaysia's shores in the coming months. Middle Eastern businesses that are avoiding the Eurozone and the US due to debt fears will likely select Malaysia as an alternative.
Likewise, infrastructure plans under the Economic Transformation Programme (ETP) will boost the image and reputation of several local companies involved in their development, and these would improve investor perception of Kuala Lumpur, especially its surrounding areas, noted the report.
Furthermore, BMI stated the Malaysia's property sector is reasonably upbeat as the country weathers the downturn in the Eurozone and the US. Based on interviews in December 2011, the market is perceived as not yet being saturated, and investment could continue to climb as players seek more stable markets than the Eurozone and US.
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