HEALTHY ECONOMIC GROWTH MIGHT FINALLY PULL PROPERTY SECTOR OUT OF THE RUT THIS YEAR
Malaysians can expect the property market to finally stabilise in 2018, says the Malaysian Institute of Real Estate Agents (MIEA).
This outlook, it said, was based on the general consensus of active agents engaged in the market, 66.5% of whom agree that this would be a much-needed steady year due to healthy economic growth and a prudent financial system.
In particular, confidence is growing in the affordable residential housing subsector, which registered a “Good Outlook” score among 53.7% of the participants in a recent market survey conducted by MIEA.
The survey also found that 84.3% of the respondents see the freshly-launched Digital Free Trade Zone (DFTZ) to be a significant economic catalyst for Malaysia this year.
According to MIEA president Eric Lim, the overall feel-good sentiment among real estate practitioners went beyond the affordable residential segment, with positive sentiments also registered for mid-range, high-rise and landed residential properties as well as the hospitality sector.
Less enthusiastic, however, was the general outlook for the retail property sector, where more than 50% of the respondents indicated that the outlook was poor. Equally poor, was the outlook for high-end service apartments and SOHOs.
This could be in light of the current oversupply of such property products and diminishing demand in these segments. The overhang, according to other market watchers, may also result in price cuts in the near future or a low rental environment as investors look to recover loss.
Malaysian real estate agents are also indicating that there is rising potential in the mid-price range of properties among urban professionals with a household income of RM15,000 and above.
A 2016 report on a Household and Basic Amenities Survey found that some 7.1% of Malaysians (which represents about 2.27 million) have household earnings of RM15,000 and above. This group can be ideally targeted with properties that start from the RM600,000 mark.
Recent figures from the National Property Information Centre (Napic) indicate that there are more than 130,600 unsold residential properties that are priced from RM800,000 mark. Some market watchers have suggested that these properties should reassess and readjust their pricing to more closely accommodate the household incomes of urban professionals to solve this issue.
Overall, most market players also expect some form of disruption this year in light of the upcoming general election. However, 72.2% of the respondents to MIEA’s survey said they expected the market to improve following the 14th General Elections.