The Malaysian property market is expected to improve next year despite concerns that the economy may worsen amid tighter credits and falling equity markets.

Real estate firm Zerin Properties said property developers, which have been postponing their launches due to the uncertain economic climate, may launch them from the beginning of 2009.

"(I predict) there will be a flurry of commercial and residential offerings after the Chinese New Year festival (which falls on January 26 and 27) as developers pick up the pieces and start to launch their properties, following the recent drop in the prices of raw materials," its chief executive officer Previndran Singhe told Business Times in an interview.

Previndran's confidence is boosted by a recent report by Merril Lynch, which stated that Malaysia will likely remain relatively unscathed in the global financial turmoil.

"Some developers have held back their launches as they are not able to pin down their costs. (But) after some price adjustments, they will be more geared to launch," he said.

Property hot spots in the Klang Valley will remain centred around the Kuala Lumpur City Centre area, Sri Hartamas, Bangsar, Damansara Heights and Kenny Hills, while upcoming ones include Taman Seputeh, Taman Desa, Sentul and Jalan Chan Sow Lin.

"I do anticipate some upward movement of landed property launches in all these areas due to the easing of inflationary pressure," Previndran said.

On the secondary property market, Previndran said while there was a slowdown at the start of the economic crisis, activities have started picking up for landed properties and condominiums.

He added that of the total sales recorded per year in the property market, 40 per cent were from new launches. But this figure has dropped drastically this year, replaced by the secondary market.

"Transactions for new products have slowed down as people adopted a wait-and-see attitude. Once their confidence builds up, they will start to buy.

"It is still a good time to venture into real estate. Even under the current market circumstances, property prices have not depreciated," he added.

However, concerns will arise if crude palm oil prices drop below production cost or crude oil price fall below US$55 (RM199) per barrel as this would affect the economy and buying power resulting in slower transaction in the property sector, including all other industries.

Already, there is a property overhang for houses priced RM250,000 and a mismatch of products in the market.