Property market on wait-and-see attitude pre-GE14

However, we expect some market movements in 2H18, says MD


THE highly anticipated outcome of the upcoming 14th General Election (GE14) is creating a mixed market sentiment in the property market, which has resulted in ideated downward pressure on buyers’ purchasing decisions.

Savills (M) Sdn Bhd MD Datuk Paul Khong (picture) told The Malaysian Reserve (TMR) that buyers are now adopting a wait-and-see attitude against subdued and lacklustre transaction activities in the property market.

“It is no surprise to the sector that 2018 is an election year, of which market sentiment is quite mixed. We, therefore, foresee the property market to be rather flattish this year with nominal excitement.

“We do, however, expect some market movements in the later second half of 2018 (2H18) — especially if the GE14 goes well and the confidence factor returns,” he said.

Khong said due to dwindling demand for property investments, developers have moved away from the residential investment market to the homebuyer segment, given the fact that speculation elements have since softened in the last three years.

“The key focus now are on the mid-price and affordable range products that are aimed at home occupiers or upgrades, as well as first-time homebuyers.

“In the current market conditions, we will still expect to see some auctions coming through along with bargains floating up,” he noted.

According to Khong, investors are no longer buying on pure speculation as it is a buyers’ market presently on the back of increasing number of supplies in both the primary and secondary markets.

He said there are some bargains and fire sales in the secondary market, especially in the strata-based segment, which would present some opportunities for good buys over the next six to 12 months.

He added that the local housing market remains resilient with no major reasons to trigger any alarming descends in capital values.

“There are still inherent strengths in our residential market. Many owner-occupiers who form a large segment of homeownership still have strong holding power — especially for houses in good, matured and established neighbourhoods.

“But generally, residential prices have seen 10%-20% discounts and some may be going for more,” Khong said.

Henry Butcher Real Estate Sdn Bhd COO Tang Chee Meng said the difficulties in securing end-financing, buyers’ fret over job security, oversupply in certain locations and cap on loan margins, along with other cooling measures introduced by the government since 2010, also deter speculators and investors.

“The reduced interest from investors has certainly resulted in more sluggish sales take-up rates for developers as they usually cannot rely only on those who are buying for their own occupation,” he told TMR.

“As a result, developers are taking a longer time to achieve 100% sales, simultaneously increasing the overhang statistics,” he said.

Laurelcap Sdn Bhd ED Stanley Toh Kim Seng said the property market is less vibrant in recent times — especially in the Klang Valley area due to stagnating growth rate in rentals for properties.

“New developments are moving at such a high rate, which makes it more difficult for the rental market to keep up,” he told TMR.

According to Toh, this is due to the present glut and oversupply along with the overbuilding of projects over the past 10 years, as well as the influx of players from other industries into the property market.

“Many have bought pockets of land in established areas at a high price, which resulted in the high selling price of the units.

“In addition, the fast turnaround time of these land developments are very attractive to them, hence the glut.”

Bank Negara Malaysia in its annual report noted 129,052 unsold housing units as at end-September 2017. More than 80% of the unsold units were priced at RM250,000 and above.

In the second quarter of 2017, the total unsold residential properties rose to a decade high of 146,497 units.


Wednesday, June 29, 2022

Gamuda’s earnings surged 47% in 3Q22

Saturday, April 28, 2018

Tian Chua out of GE14

Thursday, September 12, 2019

PR1MA sales surge by 80% in past 2 months

Wednesday, September 6, 2017

Property shows no sign of immediate recovery