Buyers can enjoy the incentives offered under HOC, the developers and competitive interest rates 

By S BIRRUNTHA / TMR FILE PIX

REAL Estate experts believe the present is an ideal time to invest in residential properties as the prices are stabilising at a lower level and not at risk of falling much further. 

CCO & Associates (KL) Sdn Bhd ED Chan Wai Seen said first-time house buyers and existing owners looking to upgrade or otherwise can look forward to good deals as the market is in favour of buyers. 

He added besides the competitive pricing, buyers can enjoy the incentives offered under the Home Ownership Campaign (HOC), the developers and competitive interest rates. 

“There’s a window of opportunity to buy properties for investment purposes. Many good properties, especially those located at prime locations may not be available for sale previously may be offered for sale during this tough time as some seek to liquidate. 

“So, it offers opportunities for cash-rich investors to acquire good properties for capital appreciation or recurring income when the market improves,” he told The Malaysian Reserve (TMR) yesterday. 

Knight Frank Malaysia deputy MD Keith Ooi stated although there was an improvement in transactional activity in the first quarter of 2021 (1Q21), the average house price for Kuala Lumpur was lower by 3.1% on-year likely due to weaker demand amid rising inventory as potential buyers and investors adopt the “wait and see” approach. 

He added the average house price for Penang remained resilient with 0.2% growth supported by initiatives under the various stimulus packages and the national/state HOCs. 

Keith expects domestic investors to shift from the stock market to safer and less volatile alternative investments like houses although prices, in general, are expected to remain flattish. 

Chan is on the same page and expects the Malaysian property sector to record mixed performances this year. 

He said the residential and industrial property sectors will record commendable performances while the performances of the retail and office property sectors will improve when the country moves into Phase 3 or 4 under the National Recovery Plan.

He also said property developers are expected to focus on launching reasonably priced properties, targeting largely owner-occupiers.

“The low-interest rates, incentives offered under the HOC and aggressive marketing strategies by the developers will continue to fuel the demand for residential property launches.

“These benefits may also convince prospective buyers that had been indecisive previously to make the purchase,” he added. 

Having said that, Chan stressed buyers buy properties when they are financially ready due to the current economic uncertainty. 

He said otherwise, buyers will not only lose their properties through bank auctions but their financial record in the banking system may also be affected. 

Echoing similar views, Centre for Market Education CEO Dr Carmelo Ferlito said for investors with financial means, the present moment could be a good one, as the real estate market prices are very stable and actually declining, if purged of the inflation effect. 

He added the current climate of uncertainty is making every kind of investment decision complicated. 

However, he said these investments would make sense in the long run, looking at the next cycle inversion. 

“As the economy proceeds via business fluctuations, by investing in difficult moments, you are well-positioned to reap good profits when the cycle turns, as it takes time for investments to produce results,” he told TMR. 

Malaysia’s residential property transactions dropped 44.7% year-on-year (YoY) in 1Q21, according to a report by PropertyGuru DataSense recently. 

It noted the decline was mainly due to increased worries among property buyers over Covid-19 cases as well as softer-than-expected GDP performance. 

The report found a majority of 61.2% of transactions in the period were made by first home buyers (FHBs). 

In three of Malaysia’s major property markets — namely Klang Valley, Johor and Penang — FHBs outnumbered purchases made by investors by 13.2%, 65.2% and 0.08% respectively. 

The sub-sale market dominated the market during 1Q21 with many property owners selling their assets at competitive prices for liquidation, offering both FHBs and investors alike an opportunity to purchase them at below market value. 

This was especially prominent in the Klang Valley, which recorded a three-year high for sub-sale transactions at 83.72%.