BY Roznah Abdul Jabbar
While some property experts see a recovery in the market in 2017, many others still expect it to remain passive.
Industry experts opined that the market, especially the residential sector, will stay flat, saying the market condition will be good as long as it does not drop further.
According to Property Guru’s Property Outlook Report 2017 (POR17), the market’s condition is expected as such due to reasons that include new cooling measures to reduce property flipping, an increasing supply of residential properties and the continuous low average of gross monthly household income.
The market is also expected to see a temporary oversupply with completion of new developments, and slightly higher prices of newly launched developments due to cross subsidising and rising land costs.
With loan approval rates on a declining trend and with no let-up in the mortgage loan guidelines, 2017 is also expected to see a high rate of loan rejections.
According to Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Seri FD Iskandar Mohamed Mansor, the challenging trend from 2015, which saw a significant drop in property offerings, is expected to continue in the first half of next year.
The weak market saw a 30 per cent decline in the volume of property offerings in the third quarter of this year compared to the same period last year.
Iskandar said sales also declined significantly to about 30 per cent of the offerings in the first half of this year from 52 per cent in the same period last year.
According to National Property Information Centre (Napic), the number of transactions fell by about 11 per cent in the third quarter of 2016.
The total transaction value dropped from RM32.88 billion in the second quarter of 2016 to RM30.79 billion in the third quarter.
Residential properties continued to dominate with a total of 49,640 units worth RM15.61 billion sold in the third quarter of 2016.
However, the volume and value of transactions have dwindled compared to the second quarter with volume down 6.1 per cent and value 6.6 per cent.
Meanwhile, UK-based property specialist Worldwide Group said 2017 will be good for tenants and cash-rich investors, with the expectation of the return of foreign investors.
It said with the large number of high-rise residential properties completed in 2016, there is a glut but not many takers. Hence, tenants are expected to be “the happiest” next year.
“With the number of rental properties increasing across Malaysia, we expect rents to decline further in 2017. So tenants will be the biggest beneficiaries.
“They should take full advantage of this opportunity to lock the rental prices at a desirable rate for the long term,” it added.
It also said with several government measures to curb speculations, speculators are no longer running the roost in the housing market as they no longer have the power of leverage to help them with their purchases.
This means cash-rich investors have all the cards in their favour. Therefore, 2017 will be a great time for them to hunt for great bargains as certain properties for sale in Malaysia are available at rock-bottom prices.
It added that the craze for luxury homes in Malaysia is expected to meet a natural death in 2017.
“We expect the demand for affordable housing to pick up as people are becoming more realistic about their expectations. Many Malaysians are also complaining about how they cannot afford to own a house in their own country.”
According to Property Guru’s POR17, the cooling measures will deter property flippers. On top of that, official statistics show sales of newly launched projects have dropped from 29.8 per cent in the first half of 2015 to 25.6 per cent in the same period this year.
Based on the mean monthly household gross income from previous years and the country’s GDP growth rates, the average household income in 2017 is not expected to rise by much. Thus, property affordability is going to remain stagnant.
Accumulatively, the data indicate that 2017 is expected to be another slow year for the property market, it added.