VALUERS say Malaysian residential property prices are likely to continue on their upward trend this year, despite criticism of developers and speculators by a senior government adviser for pushing house prices to ridiculous heights, according to the Business Times in Singapore. Daim Zainuddin, economic adviser to the government, recently described prices for Kuala Lumpur land and houses as ridiculous, artificial and inflationary. He blamed developers and speculators for the rise and called them greedy. 'We should not give in to these greedy developers and speculators,' he said. 'It is your money and you can afford to wait out this artificial craze.' But the executive chairman of property valuer Rahim & Co, Abdul Rahim Rahman, said the residential property market would be a star performer this year. 'We find the best type of property is the residential market, especially for properties below M$300,000 (about HK$906,000),' he said. Mr Rahim cited factors such as strong economic growth and relaxation of the Employees Provident Fund as being likely to result in higher demand. The fund now allows its members to withdraw up to 30 per cent of their savings to finance the purchase of their first residential property. A recent report by brokerage Barclays de Zoete Wedd said the budget, which allowed Malaysian dollar borrowing by foreigners, would further boost the residential property sector. Prices of residential properties had risen between 30 per cent and 50 per cent since the end of 1993, it said. A Rahim & Co report said prices in Penang and Kuching had risen by 23 per cent and house prices in Kuala Lumpur and its suburbs rose 16 to 18 per cent last year. While prices of residential properties look set to increase, Rahim & Co is not so bullish on three other sectors - office, hotels and industrial. Mr Rahim said that with the Kuala Lumpur City Centre project coming on stream next year, two million square feet would flood into the market. Rahim & Co research suggests hotels are unlikely to fare well until Kuala Lumpur hosts the Commonwealth Games in 1998.
