PEPS anticipates property prices to increase by 2% to 5% this year

• Organising chairman Sulaiman Saheh: “[The property price growth projection] ranges from 2% and could go up to 5%, but it is very much dependent on the locality. Certain areas and developments in good locations can attract a lot of interest [hence a higher growth] but some may not. Nonetheless, I think the [growth] will be on a gradual basis.”

KUALA LUMPUR (Feb 20): The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) projects property prices to grow by 2% to 5% this year, driven by strong domestic housing demand and higher construction costs. It said this at the PEPS 17th Malaysian Property Summit held on Thursday at the Connexion Conference & Event Centre in Bangsar South, Kuala Lumpur.

Speaking to The Edge on the sidelines of the event's press conference, PEPS past president and CBRE | WTW Malaysia adviser Foo Gee Jen said he foresees a single-digit property price growth this year, mainly driven by escalating building costs.

“To be more precise, I think there will be a 4% to 5% increase in property prices this year. It is driven by the high [construction] costs as highlighted by some of our speakers in our discussion sessions today. I think the increase is healthy and sustainable as compared to drastic double-digit growth we once witnessed many years ago,” he said.

During the press conference, the event's organising chairman Sulaiman Saheh said the projection rate of 2% to 5% is very much dependent on the locality.

“[The property price growth projection] ranges from 2% and could go up to 5%, but it is very much dependent on the locality. Certain areas and developments in good locations can attract a lot of interest [hence a higher growth] but some may not. Nonetheless, I think the [growth] will be on a gradual basis. The old days of double-digit growth may not come back, and it is not sustainable. An average of 4% growth may not be attractive to investors, but it is healthy and on par with the bank interest rate.”

He added that the property market's recovery momentum observed in 2024 is expected to continue in 2025 albeit at a slower pace.

“We recorded a 6% increase year-on-year in property transactions in the first nine months of 2024. And the [growth in] 4Q was strong too. We expect the momentum to continue growing steadily in 2025 albeit slower for this year."

Other than the conventional property hotspots, such as Kuala Lumpur, Johor Bahru and Penang, to watch out for, Foo said infrastructure projects like the East Coast Rail Link (ECRL) and Pan Borneo Highway are potential growth catalysts for underdeveloped regions such as Kuantan, which is already seeing more property development activities in the past few years.  

In response to a question from the press, Foo suggested a review of the Bumiputera quota policy as one of the ways to reduce overhang and unsold units.

“It is not an easy subject matter. There is a need to balance between social obligations as well as the economy and free market forces. I think it is time to review the mechanism. If one can afford property priced at RM1 million, there is no need for a subsidy. The bumi quota subsidy should be more targeted to help those who are really in need,” Foo said.

In his welcome remark, PEPS president Subramaniam Arumugam highlighted the importance of correctly navigating the property sector within an ever-evolving economic landscape, and in consideration of the shifting consumer behaviour as well as the various changes in new policies, legislative proposals, infrastructure development and technological advancement.

Meanwhile, Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) president and Valuation and Property Services Department (JPPH) director general Abdul Razak Yusak, who was the guest of honour at the event, emphasised in his opening speech the importance of embracing change and correctly interpreting its impact on the current market to ensure that the market remains attractive to international investors, while enhancing efficiency and vibrancy of the property sector. 

Themed “Numbers Tell, Sentiment Sells: Decoding the Real Estate Market”, the summit is a full-day event with five discussion sessions on topics ranging from the overall property market outlook to a review of economic trends, commercial and retail market trends, the prospect of the industrial property segment, and the residential segment's performance and future. The Edge is the media partner of the event.

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