Currently Malaysia Property Market
The property market in Malaysia continues to face challenges, albeit with a few bright areas.
Moderated by PropertyGuru Malaysia’s Nation Manager Sheldon Fernandez, the forum’s panellists consisted of Dato’ Charon Mokhzani, Managing Director of Khazanah Research Institute (KRI); Datuk Seri FD Iskandar, President of the Real Estate and Housing Developers’ Association Malaysia (REHDA); Prem Kumar, Executive Director of Jones Lang Wootton; Gary Chua, CEO of BRIGHT Funding, and Chris Tan, Managing Partner of CHUR Associates.
Apart from the property market, issues discussed at the forum contained Budget 2017 and its particular consequences for the Malaysian economy and property sector, in addition to recent global developments which have affected the worth of the Ringgit Malaysia (RM).
The Guru PPI
At exactly the same time, the PropertyGuru Property Price Index was introduced at the event. The index monitors the asking prices of properties in Malaysia, providing greater cost transparency based on key variables for example location, unit size and unit type and tenure to buyers. Additionally, it suggests a further fall in asking prices in 2017; prices dropped from an average of RM586 psf in mid-2015 in mid to RM554 psf -2016.
Continuing affordability problems, the high rate of rejection of loan applications, and macroeconomic problems for example rising living costs and smaller income growth mean prices are likely to keep dropping in 2017 (by around RM35 psf to RM40 psf), particularly for high-rise dwellings, where particular segments are confronting an oversupply. Homes priced between the RM500,000 and RM700,000 are likely to see the most amount of loan rejections, leading
Explanation of numbers
Based on the official and index data, Fernandez said “2017 is anticipated to be an additional slow year for the property market”. He included: “ there’s likely to be a drop in selling price because of the dearth of demand With the market being flooded by the conclusion of many new developments in 2017; some may be motivated to move their units fast as a result of their lack of power that was holding.”
However, there will probably be certain properties — particularly landed homes in strategic places — that will keep their valuations or view price appreciation that is marginal. Malaysia’s rental marketplace anticipated to remain strong, thanks to a growing pool of young, aspiring first-time home buyers who, in deferring their home purchase choices, will look to the rental marketplace.
Particular places known for their higher-end rental properties may see rents reduced due to outside variables, i.e., the present downturn in the oil and gas sector, which has seen many expats leave the nation and hence resulted in more vacant units in the city centre.
The Cap Implementation
Also, the Selangor Housing and Property Board (LPHS) has implemented a cost cap for affordable SOHOs, SOVOs and SOFOs at RM230,000, while serviced apartment costs are limited at RM270,000.
For Singaporeans, this could prove advantageous, whether they truly are seeking to dwell and work in Malaysia or to invest. As a result of the dropping RM against the Singapore dollar, purchasing property in Malaysia now presents particularly great value for money. Obviously, they need to likewise be prepared to invest long term, as it may be some time before they’re able to see positive returns on their investments (ROI).
Transit Oriented Developments (TODs) were also identified as a godsend to Malaysia’s property sector.
The TOD notion will grow more significant, with seven TOD projects being built by Prasarana in Selangor over the following four years. In reality, any development targeted at the middle income section will most probably need to adopt a TOD theory to support buying interest.
The mega project HSR
The High Speed Rail (HSR) is expected to commence construction in 2018, and conversations of a similar HSR project to Bangkok from Malaysia have emerged. Moreover, the 51km Sungai Buloh-Kajang MRT line will connect the North and South of Greater KL and is expected to carry 400,000. The HSR is believed to create a boost to Singapore economy and its property market as more expats from the South East Asia will travel to Singapore. We expect the new launches like Artra Condo that going to launch lately will enjoy good price increase when it is completed.
Fernandez said: Like 2016, it’s going to be a challenging year for demand and the supply sides of the property market, but by adopting the right strategy, you’ll manage to weather it. The just established PropertyGuru Property Price Index is a great place to start for assessing market valuations.” for those trying to find price comparison and transparency