By Farah Wahida:
A shortage in residential properties is expected to hit Malaysia next year as property developers held back their launches due to the stricter lending guidelines of the central bank, reported The Sun Daily.
On average, 110,000 new homes enter the market each year. This year, developers only added 65,000 to 70,000 new houses, according to Previndran Singhe, CEO of Zerin Properties.
“Many developers held back (their launches) due to stricter lending guidelines (that took effect on 1 January 2012),” he said during the media briefing for the Malaysia Institute of Estate Agents’ (MIEA) property outlook report for 2013.
“The shortage will be felt next year…We will run out of properties to sell next year on the secondary market.”
Previndran explained that the new guidelines introduced by Bank Negara Malaysia dampened property buying in 1H2012.
“At the end of the six months, bankers started to realise that they were not hitting targets. Also (by then), buyers began to understand the guidelines better,” he noted, adding that activity began to pick up in 2H 2012.
Prices of residential properties are also expected to remain at their current level, said Nixon Paul, President of MIEA.
However, “those highly geared and dependent on rental income to pay their mortgage will definitely be affected but generally, prices are holding.” He added that most investors are no longer flipping properties.
“Instead of buying and flipping (to profit), most investors are holding on to their properties for five years before selling.”
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
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