Significant decrease in distressed property in Malaysia

Recent figures have shown that Scandinavia, Hong Kong, Australia and Malaysia saw the most significant decrease in distressed property for sale over the last quarter.  While countries such as the USA, South Africa, Spain and Ireland saw the largest increase in the number of distressed properties for sale, Malaysia was amongst the best performing countries.

Fall in distressed property in Malaysia

Property Wire reports that ‘distressed property usually fetches a price that is below its market value. An increased rate of distressed properties entering a country’s market can be seen as a negative economic indicator while a decrease may signal recovery.’

According to the latest index from the Royal Institute of Chartered Surveyors, property agents across the globe continue to be pessimistic about the prospects for the commercial property market in the second three months of 2011.

Two thirds of agents expect an increase in the number of distressed listings in the second quarter of 2011 with half of these anticipating the levels of distressed property available to rise more quickly.

The Global Distressed Property Monitor found that Australia, Hong Kong and Scandinavia saw significant reductions in the amount of distressed property coming to the market, whilst the amount of distressed property in Malaysia also fell.

According to the RICS research, Hungary, Italy, Ireland and Spain expect the highest numbers of distressed properties to come to market in the second quarter of 2011, while Poland, China, South Africa and Russia expect the lowest.

Simon Rubinsohn, RICS chief economist, said: “As the global economy continues to strengthen, central banks must begin to address the spectre of rising inflation; a threat which is compounded in some markets by the continuing European sovereign debt crisis.

“As a result, many central banks have either already tightened, or are thinking of tightening monetary policy; a step which brings new challenges for the commercial real estate market. Consequently, the distressed property forecast remains overcast.”