The market is subdued for now, but the sentiments are getting better, says a property player
by FARA AISYAH / Pic by MUHD AMIN NAHARUL
Malaysia’s real estate market is likely to start improving in the second half of 2018 (2H18) on the back of positive market sentiments, as well as high gross domestic product (GDP) growth forecast.
PPC International Sdn Bhd MD Datuk Siders Sittampalam said although the market is softening right now, the value of transactions in the sector has increased in 1H17 compared to the previous year.
“In Malaysia, the general volume of transactions is down 6%, even though the value has increased 5%. In the Klang Valley alone, the volume dropped 7.7% despite the fact that the value has improved 1.3%.
“This indicates that the market does stabilise to some level as sentiments improved. I foresee the market to strengthen further in 2H18,” he told The Malaysian Reserve (TMR).
Siders said the positive sentiments are also believed to be resulting from the rise in oil prices, as well as high GDP growth next year.
TMR recently reported that Malaysia’s economy is likely to increase around 5% to 5.5% next year, lower than 2017’s GDP growth forecast of 5.2% to 5.7%.
According to the Economic Report 2017/18, the services and manufacturing sectors will continue to spearhead the expansion of the country’s economy next year.
Meanwhile, the information and communications technology, real estate and business services, finance and insurance, and utilities industries are expected to register higher growth into 2018.
Laurelcap Sdn Bhd property valuer Kit Au Yong concurred that the real estate market is expected to see a recovery in 2H18.
“The market is subdued for now, but the sentiments are getting better. I believe the market will start recovering in 2H18 and shift to more affordable housing.
“It’s more of a qualitative measurement than quantitative, because we cannot see it through the numbers reported,” he told TMR.
Having said that, Kit added that property prices in the secondary market for urban areas like Petaling Jaya are still holding up.
Siders said the situations for landed and residential properties are different from the high-rise ones.
For that reason, it is difficult to distinguish the overall industry in one word.
Kit also lauded the government’s initiatives in pushing for more affordable housing.
In Budget 2018, RM2.2 billion is allocated for housing, of which RM1.5 billion is given for PR1MA (1Malaysia People’s Housing) — to build 210,000 units priced at RM250,000 and under per unit — over a period of two years.
Siders also said that it is a good move by the government in focusing more on affordable housing rather than rendering additional cooling measures.
“If the government relaxes the real estate market, it will give room for more speculations to rise,” Siders concluded.