Marginal growth forecast for property sector Marginal growth forecast for property sector
Share this on WhatsAppAfter languishing in negative territory for a prolonged period, the property sector could now see 10 per cent growth in transaction... Marginal growth forecast for property sector

After languishing in negative territory for a prolonged period, the property sector could now see 10 per cent growth in transaction volume over the next 24 months, according to international property consultancy Rahim & Co.

The firm said subdued growth in all property sectors in the next 12 to 18 months, foreign investments, particularly from China, could help provide a much-needed boost.

“Chinese investments currently make up about 40 to 50 per cent in Johor’s Iskandar region,” pointed out Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman during the company’s release of its Property Market Review 2016/2017 earlier this week.

In reference to the influx of Chinese investors, he said foreign investments encourage and help spur the economy, indicating that the country was not currently in a position to resist this interest.

Foreign investor attention in Johor could give the sector a much-needed boost.

Foreign investor attention in Johor could give the sector a much-needed boost.

Rahim said the volume of property transactions declined in 2016, with a 239,893 transactions recorded by the third quarter of 2016, a drop of 11.9 per cent against the corresponding period of 2015 at 272,296.

“If we look at the history of the property market, there is a 10-year cycle, with a dip of about two to three years. Eventually, the market will rise again,” he said.

Rahim also expects that the commercial property sector would expand in the next two to five years, with an additional 10 million square feet of space being made available.

The sector will however continue to face challenges, as the occupancy rate was down to 79.7 per cent in 2016, compared to 81 per cent in 2015. This, Rahim said, was largely due to global uncertainties.

All in, 2017 could turn out to be a buyers’ market, with a period of adjustment and price consolidation in closing the gap between the seller’s asking price and expected price of buyers.

Affordable housing will remain the focus of low and middle income groups, as demand currently exceeds supply.

According to The Malaysian House Price Index, published by the Department of Valuation and Property Services, the All-House Price Index grew at a slower rate of 5.3 in the third quarter of 2016.

Major states such as the Federal Territory of Kuala Lumpur, Selangor and Penang showed price increases were happening at a slower momentum of 5.1 per cent, 7.5 per cent and 3.4 per cent respectively.

The slower rate is evident when compared against the third quarter of 2015, when prices in the Federal Territory were rising by 7.7 per cent, while in Selangor it was 8.4 per cent and in Penang it was 6.9 per cent. – Bernama

 

 

 

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