BY Roznah Abdul Jabbar
The property market, especially the residential sector, will remain flat, not only in the second half of the year but for a period beyond it, said managing director of valuation firm, Khong & Jaafar Sdn Bhd, Elvin Fernandez.
Speaking at the press conference at the Malaysian Property Summit mid-year Review 2016, Fernandez said that despite the “flat-line” which is largely due to global factors as well as domestic economy, conditions can still be considered relatively good.
“So long as we do not witness a further drop… but given current scenario, an increase is unlikely,” he said.
According to the director general of Valuation and Property Services Department (JPPH), Datuk Faizan Abdul Rahman, the slowdown in the market in 2015 continued in the first half of 2016 and is expected to remain in the second half.
However, he said, the situation would still be manageable, especially for the residential sector, as it is driven by the supply of affordable housing.
“We expect to see a price correction and slow growth in the house price index due to the supply of affordable housing by both the public and private sectors,” Faizan said.
Faizan added that the market has been steadily declining since 2012 in terms of volume and value, with the House Price Index (HPI) at 7.2 per cent increase in the fourth quarter of last year (4Q15).
National Property Information Centre (Napic) data shows that the rate of increase in index points have been declining since 3Q13, from 12.2 per cent year-on-year growth to 7.4 per cent in 3Q15 and 7.2 per cent in 4Q15.
Faizan said the preliminary growth for 1Q16 is 6.8 per cent, and it can still be considered “healthy” if the rate is kept within the region of 3 per cent and 5 per cent.
On the Overnight Policy Rate (OPR), PPC International Sdn Bhd managing director, Datuk Siders Sittampalam said the reduction in cost of borrowing will not drastically improve the residential property sector as lending guidelines are still stringent.
“If we look at the figures, it’s only about 40 per cent of the loans that were approved. Lending guidelines continue to be stringent, so by reducing the cost of borrowing, it only benefits those who are already committed to financing,” Sittampalam said.
“However, the rate reduction would probably assist in reducing, or at least prevent further increases on, non-performing loans,” he added.