For many years, the phase “over supply” of commercial properties in Malaysia is the key reason about its price. Residential properties prices sky rocketing and in overall higher then commercial properties. Key reasons of residential properties price hike are because of foreign purchase, local investment and whatever you can name it according to local reports.
To me, it is a bit weird as I believe if there is not enough commercial activities, how do you have enough economy value to have good residential property price? Personally I believe this scenario pretty much due to our local developers and weird government policies.
Even though we still have a young population, I am not convince that they grow up just to stay at home but no need to be in office, factory, shops & etc. Foreign purchase will dry or at least slow down one day. Also, is our living environment much better then others. If high end properties are pretty much based on foreign expats. Then how could we justify a lower commercial properties in overall if they need to come here and work? Our house hold debt also shown more then 60% is in properties.
We believe evetually everything will be back to fundamental. Thus back to basis, commercial properties will eventually roar and do much better then residential. If Malaysia economy is going to do well under the ETP program. Not just in oil and gas alone!
Again, I am not buying the concept of over supply as even residential also got many in stocks. Just location depending. We foresee a soft or stagnant residential pricing for the next few years as digestion period and commercial should start adjust its value by itself.