Property values growing at slower pace * Business * News 2011-03-16 16:01 KUALA LUMPUR, Wednesday 16 March 2011 (Bernama) -- Property valu

KUALA LUMPUR, Wednesday 16 March 2011 (Bernama) -- Property values in the Klang Valley, Penang and Johor are expected to grow at a slower pace this year due to high supply and speculation activities, a real estate services company says.

CH Williams Tahir & Wong's managing director, Foo Gee Jen, said this year's growth in the prime areas was seen at between 10 and 15% compared with between 20% and 25% previously.

He, however, considered this healthy taking into consideration last year's gross domestic product (GDP) growth of 7.2%.

"Property prices cannot exceed three times of GDP," he told reporters after a presentation on the local property market outlook for 2011 here today.

A wide gap between the growth in property prices and GDP would make the market more vulnerable to speculations, he said.

Foo said the current high supply of properties was due unsold properties being brought forward after weak sales last year.

The speculation activity, meanwhile, was triggered by fears of property bubble following the government's move last year to impose a maximum lending limit of 70% for third house financing.

"The government announcement to lower the cap on the loan-to-value ratio for third house financing gave a bit of psychological effect on people," he said.

Nevertheless, he said Sungai Buloh, Gombak and Puchong would have the most potential for high price increments, boosted by the proposed mass rapid transit (MRT) project which is scheduled to be completed in 2016.

MySinchew 2011.03.16