With the property market expected to remain flat this year, real estate firm CBRE-WTW believes more property developers will venture into affordable housing which is high in demand.
This comes as property remains a more popular investment destination in Malaysia, said CBRE-WTW managing director Foo Gee Jen.
“The good side is a lot more developers would be venturing into affordable housing,” he said at the 2017 Asia Pacific Real Estate Market Outlook briefing.
“And generally if the government pushes up the supply of PR1MA homes and others, I think residential part will see a slight improvement but overall commercial and other segments will be very flat.”
However, he noted that it is still the consumers who dictate the prices within the sector. As such, developers are forced to reduce the prices for their projects whenever there is low demand or shift their attention to under supplied segments, such as the affordable housing.
“I believe it starts happening. A lot of them are suffering as some of the high-end products are not selling. So they have to make sure they are selling products that are acceptable to the masses, what the public wants,” said Foo.
Meanwhile, he expects demand for small office home office (SOHO/SOVO) to decline by up to 15 percent from 2015, with the decline lasting by another three to four years.
2017 is also expected to be a difficult year for property developers as consumers become savvier. This will be on top of other factors such as the weak ringgit and commodity prices, he said.
Image sourced from Getty Images
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my
