At the end of 2017, the National Property Information Centre (Napic) confirmed that there was a slowdown in the property market, and recent reports from real estate consultancy firm Rahim & Co International and property consultant Knight Frank Malaysia indicate that the property market – especially the luxury market – is expected to be sluggish this year. Suffice to say, it looks to be another worrying year. In an attempt to navigate the market’s shrouded path, The Peak hears from some of the industry’s brightest faces who are helping shape Malaysia’s landscape for the future.
What’s your outlook for the local property market in 2018?
The property market is in a consolidation mode this year, especially with the new controls by Putrajaya on commercial and residential developments priced at MYR1 million and above. Adjustment of Base Rate (the main reference rate for retail floating rate loans) from Bank Negara Malaysia will also notably affect the lending patterns. However, approval rates have gone up from the banks, indicating their support for property purchases. We will also be seeing more genuine buyers rather than speculators. Therefore, my outlook for the market relatively positive although sales may be subdued.
Despite numerous doomsday predictions of a burst in the property market through the years, it has yet to happen. However, we do see that the market is continually softening. What’s going on?
Property prices have been relatively flat for the last three years. If we peel back the layers and look deeper into this issue, the source of the problem is a great mismatch between the supply and demand of the types of properties available and their price points. Prime examples would be the oversupply of offices and residences in the KLCC area and the empty homes in Iskandar Malaysia. The problem is then exacerbated by the lack of economic development around the area and property prices are affected when there are no employment opportunities. A study of population needs and affordability is crucial to support capital appreciation.
Following that, what would you say are the needs of the market when it comes to property right now?
This story is from the May 2018 edition of The PEAK Malaysia.
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This story is from the May 2018 edition of The PEAK Malaysia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
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