Market Update

With the recent global financial turmoil affecting worldwide business, renting of high end property market in Kuala Lumpur remain standing strong against the tide due to strong demand from foreign expatriates and local market. The great news is that this turmoil will mark a lower purchased price for those prime properties resulting in higher rental yield return.

However, we do not expect property price in KLCC area to drop significantly due to continuous strong activity in the market and exceptional stability of these prime area properties in Malaysia. In fact, Malaysia, with the strong and stable emerging market potential in Asia coupled with the helm of new Prime Minister Datuk Seri Najib Tun Razak will embark towards a new era of stable growth and success.

Property boom in Malaysia have been moving in a repetitive cycle starting from 1973 followed by 1985 and 1997. In our view, year 2009 may marks a new platform of property boom and investors will benefit not only from the rental yield but also capital appreciation. Rental yield in Kuala Lumpur have been steadily kept at 4% - 8% p.a for the last 10 years while house price index is steadily appreciating for an average of 6% p.a from year 2000 to year 2008.

Furthermore, Kuala Lumpur is amongst the fastest growing cities in the world with its population increased by 50% every 20 years due to rapid urbanization. This outstanding demographic growth combined with the fact that Malaysian currency is the third most undervalued currency in the world according to the latest Big Mac Index published by The Economist points us to a clearer high positive yield. From the report, Ringgit Malaysia is undervalued by 51% relative to US Dollar and this creates a win-win situation in every angle we look in.

With these factors affecting the market right now, it comes as no surprise that high end property market in Kuala Lumpur is full with exciting profitable potentials!