By FARA AISYAH / Pic By ISMAIL CHE RUS

Property prices in the country are expected to continue declining in the first half of next year (1H19), PropertyGuru Malaysia said.

The online property company’s country manager Sheldon Fernandez (picture)  said as budget remains tight while supply is aplenty, many might choose to look around for the first six months before making a purchase decision later in the year.

He said others might also adopt a “wait-and-see” approach, hoping to benefit from the various home affordability schemes by the government.

“Expect the downward trend to persist in the 1H19, but there is a chance of a market recovery — post third quarter of 2019 (3Q19) or 4Q19.

“The initial optimism expressed post the 14th General Election is beginning to wear off as buyers are adopting a more cautious approach,” Fernandez said in a statement yesterday.

The PropertyGuru Market Index — an analysis of over 250,000 property listings aggregated and indexed — showed that asking prices of homes in Malaysia continue to drop nationwide, as well as the key property epicentres of Kuala Lumpur, Selangor, Johor and Penang.

The PropertyGuru Market Index in 3Q18 revealed that asking prices by real estate developers and individual owners nationwide had dipped by 2.3% year-on-year and 2.3% quarter-on-quarter.

The downward trend persisted despite the overall improved consumer sentiment of 42% with 53% of Malaysians wishing to buy a home by the end of 2018.

However, Fernandez said a continued, but stable price downtrend, is not necessarily a negative development.

The present market conditions have compelled developers and private sellers to be more competitive in terms of quality, design ideas, ownership packages, as well as pricing.

He added that it is a healthy situation as there is plenty of supply for both purchase and rental for Malaysians to choose from and the sluggish conditions are also encouraging greater innovation and ideas to come to the fore, especially in terms of build and design, spatial use and technology, among others.

Meanwhile, Fernandez said the case of absolute high price of homes, when compared to the median income of most Malaysians, is expected to remain the biggest stumbling block to home ownership,
followed by the lack of financing visibility.

“The truth is, home unaffordability is a difficult problem to resolve. Recent initiatives to aggressively manipulate market forces by bringing down home prices will lead to dis-satisfaction among existing homeowners, as they would potentially lose out on the equity and wealth they’ve built over the years.

“A smarter move would be to look into the average annual capital appreciation of homes. This would be more sustainable in the long-term to ensure that prices stabilise over time for wealth preservation potential, while ensuring that aspiring homeowners can still afford to come onboard,” he added.