THE overall outlook for the local property sector this year is promising, except for concerns on potential surplus in residential units. "There is no doubt, based on the overall picture of the economy and the better performance of the property market in 2003, that the forecast for 2004 is positive," Ravindra Dass Property Services Sdn Bhd managing director Ravindra Dass said yesterday.

Dass was speaking at a press conference to present the company's analysis of the property market based mainly on the Property Market Report 2003 released by the National Property Information Centre Valuation and Property Department (Napic).

He said the company agreed with Napic's forecast that the industry's key driver, the residential sector, would improve further in 2004, based on the strong momentum in 2003.

"The warning sign to be noted is that new launches in 2003 achieved only 52.3% sales. While the official overhang numbered only 9,300 units, the report stated that there were also about 71,000 units unsold," he said.
He said the lower take-up rate was attributed mainly to properties developed in poor locations by less prominent developers.

There were a still case of project launches which received overwhelming response and were sold out within weeks, he said.

"Some developers have also resorted to launching projects with smaller number of units to build up stronger demand for upcoming launches," Ravindra said.

Due to the weaker demand for affordable houses, residential launches this year are like- ly to include many upper-end units priced between RM 1mil and RM5mil. "It is hoped these launches will record better sales than the national average of 523%," he said.

Ravindra said the outcome of the new launches would still be dictated by properties' location, developers' reputation and the potential of capital gain on investment He said it was urgent for the industry to work on strategies to achieve good sales performance or the increasing overhang in the market was likely to bring serious problems.

'There is also an urgent and increasing need for developers to carry out professional feasibility and serious market studies before embarking on their schemes," he added.

On the "build and sell" concept, Ravindra said most house buyers welcomed the idea but it might not meet the aspiration of the property development industry.

He said for an industry used to solely depend on funds raised from house buyers for construction, the concept would affect small developers adversely.

"It may take time, but similar to the banking industry, developers can merge and form large viable companies," he added.