Kuala Lumpur – The residential subsector of the property market is expected to face added challenges this year, according to research and consultancy firm CH Williams Talhar & Wong.
After a persistently sluggish preceding year, low sentiments in the market have driven many property players to expect growth to remain flat in 2016.
According to CH Williams Talhar & Wong managing director Foo Gee Jen, a visible drop in residential property value as well as transaction volume in the sub-sector could be expected this year, compared with 2015, due to prevailing uncertainties in the job market and the cautious outlook of home buyers.
“We see the secondary property market being more aggressive versus the primary market, but it [the secondary market] will not be as active as it was compared with two to three years back,” said Foo.
Foo also pointed out that there is currently a mismatch of supply and demand in the high-rise residential sub-sector, especially within the Klang Valley.
“Yes there is still demand for high-rise units but there is also a high supply of shoebox-sized units. These might take a long time to fill, perhaps a year or longer,” he said.
On the other hand, some developers have countered the claim that the prices in the primary market will see a major dip anytime soon.
Zulkifly Garib, senior manager of UEM Sunrise Bhd, said prices in primary market will not drop as the cost for construction continues to be high. However, he said that buyers can expect to see more products being offered in the affordable range which are tailored to suit the current market demand.
Also concurring on the issue, chairman of Real Estate and Housing Developers’ Association Malacca Datuk Anthony Cho said property prices will go up in tandem with building material costs, which is also in an upward trend.
Cho said that the depreciation ringgit has also contributed to the increasing cost of development. I addition foreign labourers have demanded a pay-rise, due to the fact that they are now earning 30 per cent less that used to after converting the cash back to their respective home currencies.
He also said that the tough times ahead have urged many developers to design innovative marketing schemes, so buyers should use the opportunity to shop for affordable property. – Kent Tan