KUALA LUMPUR, 25th September 2012 - As the 2013 Malaysian Budget (Budget 2013) is slated to be announced later this month, growing concerns in the past year towards escalating property prices and availability of affordable homes are perceived to pique the interest of real estate industry players and the general public towards the upcoming amended or new policies regarding Malaysian properties.
At the start of 2012's second quarter (Q2 2012), the federal government was reported to have begun mulling the hike of minimum floor prices for residential property that may be bought by foreigners from RM500,000 to RM1 million, a move which has been strongly supported by the state government of Penang.
Country Manager of PropertyGuru Malaysia, John Paul Sta Maria foresees that though Budget 2013 will determine that this floor price increase will be mandatory across the country, the move will not likely affect the affordability of homes for local buyers whether positively or otherwise.
Sta Maria states, "Based on PropertyGuru's online Malaysia Property Sentiment Survey Q2 2012, 30% of respondents may feel that the hike would help improve property affordability for locals, but take note that a close 29% do not believe there will be any major impact on Malaysian property prices."
He further reveals that the Q2 2012 Survey found 82% of respondents believe current residential property prices to be expensive, while 74% feel all property types in Malaysia are expensive as compared to 65% in Q1 2012.
Sta Maria shares, "Some 36% of the respondents believe developers are responsible for pushing the rising construction costs and high land prices to consumers, 20% indicate it's the herd mentality of buyers which is causing an uptrend in prices, while 10% indicate competition with foreigners as the main reason. Moreover, 70% also feel that property prices will further increase in the next six months."
The perception of escalating property prices is not limited to first-time homeowners or those looking to buy a property. Compared to Q1, only 25% of respondents instead of 33% are willing to upgrade their existing property in the next 12 months.
Concurring with findings of PropertyGuru's Q2 2012 Survey, CEO of Malaysia Property Incorporated (MPI), Kumar Tharmalingam informs: "An increase of house prices is evidenced by results of our own (MPI's) research with the National Property Information Centre (NAPIC), which revealed that the average price of houses below RM500,000 had risen by 25.8% between the period of 2004 and 2011."
Tharmalingam adds: "As seen from last year whereby seven out of 13 states showed double-digit house price increases, the core issue on price increase seems to be state dependent."
However, despite the increase in prices, the market is expected to grow due to increasing demand. Some 68% of respondents compared to 64% in Q1 2012 believe the number of property transactions would increase in the next six months.
On this note, Sta Maria says: "While homebuyers are concerned about growing prices, there are other factors that support market growth. This could be certain groups of first time homeowners such as newly-weds, those who have just started a family and who still need a home.
"Rural-urban migration is also another factor, and of course, people could be buying homes in new locations further from the city instead of urban centres. Thus, while people are concerned about pricing, they are still buying. This will contribute to the expected moderate to healthy market growth for the next six months."
Meanwhile, PropertyGuru's Q2 2012 Survey revealed what survey-participants predict to be future residential hotspots in Malaysia, namely Kajang for its close vicinity to Kuala Lumpur, Putrajaya and Cyberjaya as well as George Town for its heritage area, touristic attractions, favourable foreign investment opportunities as well as limited land space in Penang Island.
The Iskandar Malaysia region down south is also seeing brisk take-up of property because of its proximity to Singapore and its choice for having more affordable homes compared to the Lion City.
While the market seems healthy, all eyes will be fixed on the government and Budget 2013 as to how policy-makers will act in response to current market sentiments. Previously, the Budget included the reintroduction of Real Property Gains Tax (RPGT) for properties sold within the first two years of purchase (up to 10%) to curb speculation and the launch of the PR1MA programme to provide affordable homes.
Budget 2013 Malaysia is scheduled to be tabled in Parliament by Prime Minister Datuk Seri Najib Tun Razak on 28th September 2012.
For the full report of PropertyGuru's Q2 Malaysia Property Sentiment Survey 2012, please visit:
http://www.propertyguru.com.my/market-research/propertyguru-s-q2-malaysia-property-sentiment-surv
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