CHIEF executive officers are expecting stronger demand for residential properties, especially landed residential properties, next year, according to a survey by international property consultant C. H. Williams Talhar and Wong (WTW).

WTW managing director Goh Tian Sui said CEOs polled in the survey were also confident that demand for commercial shop-houses/offices would improve next year.

''The general consensus is that we will see improvement in, or at least stable, property prices in all sectors,'' he told reporters at a presentation of the survey findings in Kuala Lumpur yesterday.

''Prices for landed residential (terraced/link, semi-detached/detached) properties are expected to move upwards,'' Goh said, adding that respondents expressed similar sentiments for development land.

He said over one-thirds of the CEOs expected prices of landed residential properties and development land to increase by at least 10%.

Furthermore, more than half of the respondents expect prices of shop-houses/offices to improve in 2005.

Goh Tian Sui.

''This marks a positive shift in sentiments compared with the previous year when less than 40% had such expectations,'' he noted. In total, 150 CEOs participated in the survey.

The WTW annual CEO property sector survey was conducted in September/October to ascertain the views of CEOs on the prevailing market conditions and their expectations for 2005.

The nationwide sample was represented by a cross-section of businesses and professions related to the property sector, comprising property developers (43%), financial institutions (7%), consultants (16%), construction companies (15%), manufacturers and suppliers of building materials (4%), plantation management and utility services companies (4%), and Government agencies and trading companies.

On retail movement, Goh said most CEOs expected rentals for all property sectors as well as hotel room rates to improve or at least remain stable in 2005.

''In the residential sector, about 20% of the respondents felt that rentals for condominiums/apartments would drop, while only 8% to 10% believe rentals for landed residential properties would decline.

''More than 30% of the respondents expected rentals of commercial properties (offices, retail units, shop-houses/offices) to improve next year,'' he said.

The hospitality sector was also expected to do better in 2005 with more than one-third of the respondents projecting hotel room rates to improve.

However, there was general consensus the cost of construction (building materials, labour, plant and equipment costs) would increase next year, Goh said.

''Over half of the respondents expect building material costs to increase by at least 10%,'' he said.

About 60% of the respondents expect more Malaysians to invest in property in 2005, while 50% of respondents expected greater investment by foreigners.

Most CEOs believe that the surplus situation in the office sub-sector would be less acute than the previous year, moving from substantial to moderate.

On the respondents' view on the proposal to abolish certificate of fitness for occupation requirements for completed housing units, Goh said, in general CEOs thought that purchasers would not view it as favourable.

''Whilst it may ensure speedy occupation, there are concerns about abuse by developers that could lead to lower quality end-products.

''On the other hand, CEOs think developers would welcome this proposal as it reduces bureaucracy, time and cost,'' he said.

About 74% of respondents believe that it was the right time to move into Real Estate Investment Trusts (REITs).

''Whilst the topic is not well understood with limited public awareness, its potential as an alternative investment is recognised.

''The most suitable properties for a REITS portfolio (in order of preference) are shopping complex, office building, hospitality and leisure and healthcare,'' he said.

He also said 80% of respondents believe that the 2005 Budget would have a positive effect on general economic growth and consumer demand.

Source : The Star  9/12/2004