The prices of homes in Malaysia are currently more expensive than those in the United States, the UK and even Singapore, according to a report by Khazanah Research Institute entitled “State of Households”.
On average, houses here cost 5.5 times the annual median income. In comparison, the multiple for the US is merely 3.5 times, while that for the UK and Singapore stands at 4.7 times and 5.1 times respectively.
Aside from that, local home builders have a high profit margin of 21 percent, versus 12 percent for the US, 14 percent for Thailand and the UK with 17 percent, while those in Singapore have a larger cut of 25 percent.
Nevertheless, many experts believe that Malaysia’s property market has somehow stabilised. There are also fewer speculators and there are more genuine home buyers.
“A lot of the speculators have been removed with the various cooling measures and stringent banking requirements. Prior to this, developers took care of their own marketing and do not need the services of marketing agents,” said Jerome Hong, Managing Director at PA International Property Consultants (KL) Sdn Bhd.
On top of that, investors clubs are no longer recruiting many members as before.
However, the country’s property leasing market across all sub-segments remains subdued, noted Das Gupta, Principal at Stocker Roberts & Gupta Sdn Bhd.
As a matter of fact, many sectors are “flat” and there are many empty condominiums and office buildings. Consequently, many landlords will be compelled to reduce their rents.